As filed with the Securities and Exchange Commission on April 27, 1999
Registration No. 333-_____
==========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
PG&E CORPORATION
(Exact name of registrant as specified in its charter)
California 94-3234914
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
One Market, Spear Street Tower, Suite 2400
San Francisco, California 94105
(Address of principal executive offices) (zip code)
PG&E CORPORATION RETIREMENT SAVINGS PLAN
(Full title of the Plan)
Gary P. Encinas, Esq.
One Market, Spear Tower
Suite 400
San Francisco, California 94105
(Name and address of agent for service)
Telephone number, including area code, of agent for service:(415) 267-7000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================
Title of each class Amount to be Proposed Proposed
of securities to be Registered maximum maximum Amount
registered: offering aggregate of
price per offering registration
share (1) price fee
<S> <C> <C> <C> <C>
Common stock, 20,000,000 shs $31.375 $627,500,000 $174,445
no par value
- ---------------------------------------------------------------------------
</TABLE>
(1) The registration fee was calculated pursuant to Rules 457(h)(1) and
457(c) of the Securities Act of 1933, on the basis of the average of the
high and low prices of the registrant's common stock on April 23, 1999 as
reported on the New York Stock Exchange.
In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
<PAGE>
PART I
Information required by Items 1 and 2 of Part I of Form S-8 is
not required to be filed as part of this registration statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Certain Documents by Reference
The following documents are incorporated by reference in
this registration statement: (i) the latest annual report of PG&E
Corporation (the "Registrant"), and the latest annual report on
Form 11-K for each of the following plans that have been or will
be merged into the PG&E Corporation Retirement Savings Plan: the
Pacific Gas and Electric Company Savings Fund Plan for Non-Union
Employees, the PG&E Gas Transmission, Northwest Corporation
Savings Fund Plan for Management Employees, the PG&E Gas
Transmission, Texas Corporation Savings Fund Plan, the PG&E
Energy Services Corporation Retirement Plan, the U.S. Generating
Company 401(k) Profit-Sharing Plan, and the U.S. Generating
Company 401 (k) Profit-Sharing Plan for Bargaining Unit
Employees, filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
(ii) all other reports filed by the Registrant pursuant to
Section 13(a) or 15(d) of the Exchange Act since the end of the
fiscal year covered by the annual report referred to in clause
(i) above; and (iii) the description of the Registrant's common
stock ("Common Stock") filed pursuant to the Exchange Act,
including any amendment or report filed for the purpose of
updating such description. All documents filed by the Registrant
or by the PG&E Corporation Retirement Savings Plan, after the
date of this registration statement pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment (that indicates all securities offered
have been sold or deregisters all securities then remaining
unsold), shall be incorporated by reference in this registration
statement and to be a part hereof from the date of filing of such
documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
<PAGE>
Item 6. Indemnification of Officers and Directors.
Section 317 of the California Corporations Code and Article SIXTH
of the Registrant's Articles of Incorporation provide for
indemnification of the Registrant's directors and officers under
certain circumstances. The Registrant's Board of Directors has
adopted a resolution regarding the Registrant's policy of
indemnification and the Registrant maintains insurance that
insures directors and officers of the Registrant against certain
liabilities.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
5. Undertaking re Status of Favorable Determination Letter
regarding the Plan -
The Registrant has submitted the Plan described herein
to the Internal Revenue Service ("IRS") with a request
for a favorable determination that the Plan qualifies
under Section 401(a) and related provisions of the
Internal Revenue Code of 1986, as amended, and the
Registrant will make all changes that may be required
by the IRS in order to receive such favorable
determination.
23 Consent of Arthur Andersen LLP.
24.1 Powers of Attorney.
24.2 Resolution of the Board of Directors authorizing the
execution of this Registration Statement.
99 PG&E Corporation Retirement Savings Plan
Item 9. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made of the securities offered hereby, a post-
effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
<PAGE>
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the registration statement; and
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
registration statement or any material change to such
information in this registration statement;
provided, however, that the undertakings set forth in
-------- -------
paragraphs (i) and (ii) above do not apply if the
information required to be included in a post-effective
amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof;
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of such
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, such
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such
indemnification
<PAGE>
by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the
Securities Act of 1933, the Registrant certifies that it has
reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City and County of
San Francisco, State of California, on the 26th day of April,
1999.
PG&E CORPORATION
(Registrant)
GARY P. ENCINAS
By ---------------------------
GARY P. ENCINAS
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities indicated and on the dates indicated.
Signatures Title Date
---------- ----- ----
A. Principal Executive
Officer
*ROBERT D. GLYNN, JR. Chairman of the April 26, 1999
Board, President,
and Chief
Executive Officer
B. Principal Financial
Officer
*MICHAEL E. RESCOE Senior Vice President
and Chief Financial April 26, 1999
Officer
C. Controller or
Principal Accounting
Officer
*CHRISTOPHER P. JOHNS Vice President
and Controller April 26, 1999
D. Directors April 26, 1999
*ROBERT D. GLYNN, JR.
*RICHARD A. CLARKE
*DAVID A. COULTER
<PAGE>
*C. LEE COX
*WILLIAM S. DAVILA
*DAVID M. LAWRENCE
*RICHARD B. MADDEN
*MARY S. METZ
*REBECCA Q. MORGAN
*JOHN C. SAWHILL
*BARRY LAWSON WILLIAMS
GARY P. ENCINAS
* By ------------------------------
(Gary P. Encinas,
Attorney-in-Fact)
The Plan. Pursuant to the requirements of the Securities
Act of 1933, the administrators of the Plan listed below has duly
caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City and
County of San Francisco, State of California, on the 26th day of
April, 1999.
PG&E CORPORATION RETIREMENT SAVINGS PLAN
BRUCE R. WORTHINGTON
By _______________________
Bruce R. Worthington
Chairman, Employee Benefit
Committee
<PAGE>
EXHIBIT INDEX
23 Consent of Arthur Andersen LLP.
24.1 Powers of Attorney.
24.2 Resolution of the Board of Directors authorizing the
execution of this Registration Statement
99 PG&E Corporation Retirement Savings Plan
Exhibit 23
[ARTHUR ANDERSEN LLP LETTERHEAD]
To the Board of Directors of PG&E Corporation:
As independent public accountants, we hereby
consent to the use of our report included in this
registration statement and to the incorporation by
reference in this registration statement of our
report dated February 8, 1999 included in PG&E
Corporation's Form 10-K for the year ended December,
31, 1998 and to all references to our Firm included
in this registration statement.
Arthur Andersen LLP
---------------------------------
Arthur Andersen LLP
San Francisco, California,
April 23, 1999
Exhibit 24.1
POWER OF ATTORNEY
Each of the undersigned Directors of PG&E Corporation
hereby constitutes and appoints LESLIE H. EVERETT, LINDA
Y.H. CHENG, WONDY S. LEE, ERIC MONTIZAMBERT, GARY P.
ENCINAS, JOHN E. FORD, and KATHLEEN HAYES, and each of them,
as his or her attorneys in fact with full power of
substitution to sign and file with the Securities and
Exchange Commission in his or her capacity as such Director
of said corporation one or more registration statements
relating to the offer and sale of 20 million shares of said
corporation's common stock and participant interests under
the Retirement Savings Plan maintained by said corporation,
and any and all amendments or supplements thereto, and
hereby ratifies all that said attorneys in fact or any of
them may do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, we have signed these presents this
17th day of February, 1999.
Robert D. Glynn, Jr. Richard A.Clarke
- ----------------------- ----------------------
Robert D. Glynn, Jr. Richard A. Clarke
- ----------------------- ----------------------
David A. Coulter Rebecca Q. Morgan
- ----------------------- ----------------------
David A. Coulter Rebecca Q. Morgan
- ----------------------- ----------------------
C. Lee Cox Mary S. Metz
- ----------------------- ----------------------
C. Lee Cox Mary S. Metz
- ----------------------- ----------------------
Barry Lawson Williams Richard B. Madden
- ----------------------- ----------------------
Barry Lawson Williams Richard B. Madden
- -----------------------
William S. Davila
- -----------------------
William S. Davila
- -----------------------
David M. Lawrence
- -----------------------
David M. Lawrence
- -----------------------
John C. Sawhill
- -----------------------
John C. Sawhill
<PAGE>
POWER OF ATTORNEY
ROBERT D. GLYNN, JR., the undersigned, Chairman of the
Board, Chief Executive Officer, and President of PG&E
Corporation, hereby constitutes and appoints LESLIE H.
EVERETT, LINDA Y.H. CHENG, WONDY S. LEE, ERIC MONTIZAMBERT,
GARY P. ENCINAS, JOHN E. FORD, and KATHLEEN HAYES, and each
of them, as his attorneys in fact with full power of
substitution to sign and file with the Securities and
Exchange Commission in his capacity as Chairman of the Board
and Chief Executive Officer (principal executive officer) of
said corporation one or more registration statements
relating to the offer and sale of 20 million shares of said
corporation's common stock and participant interests under
the Retirement Savings Plan maintained by said corporation,
and any and all amendments or supplements thereto, and
hereby ratifies all that said attorneys in fact or any of
them may do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed these presents
this 17th day of February, 1999.
Robert D. Glynn, Jr.
----------------------
Robert D. Glynn, Jr.
<PAGE>
POWER OF ATTORNEY
MICHAEL E. RESCOE, the undersigned, Senior Vice
President and Chief Financial Officer of PG&E Corporation,
hereby constitutes and appoints LESLIE H. EVERETT, LINDA
Y.H. CHENG, WONDY S. LEE, ERIC MONTIZAMBERT, GARY P.
ENCINAS, JOHN E. FORD, and KATHLEEN HAYES, and each of them,
as his attorneys in fact with full power of substitution to
sign and file with the Securities and Exchange Commission in
his capacity as Senior Vice President and Chief Financial
Officer (principal financial officer) of said corporation
one or more registration statements relating to the offer
and sale of 20 million shares of said corporation's common
stock and participant interests under the Retirement Savings
Plan maintained by said corporation, and any and all
amendments or supplements thereto, and hereby ratifies all
that said attorneys in fact or any of them may do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed these presents
this 17th day of February, 1999.
Michael E. Rescoe
----------------------
Michael E. Rescoe
<PAGE>
POWER OF ATTORNEY
CHRISTOPHER P. JOHNS, the undersigned, Vice
President and Controller of PG&E Corporation, hereby
constitutes and appoints LESLIE H. EVERETT, LINDA Y.H.
CHENG, WONDY S. LEE, ERIC MONTIZAMBERT, GARY P. ENCINAS,
JOHN E. FORD, and KATHLEEN HAYES, and each of them, as his
attorneys in fact with full power of substitution to sign
and file with the Securities and Exchange Commission in his
capacity as Vice President and Controller (principal
accounting officer) of said corporation one or more
registration statements relating to the offer and sale of
20 million shares of said corporation's common stock and
participant interests under the Retirement Savings Plan
maintained by said corporation, and any and all amendments
or supplements thereto, and hereby ratifies all that said
attorneys in fact or any of them may do or cause to be done
by virtue hereof.
IN WITNESS WHEREOF, I have signed these presents
this 17th day of February, 1999.
Christopher P. Johns
------------------------
Christopher P. Johns
Exhibit 24.2
RESOLUTION OF THE
BOARD OF DIRECTORS OF
PG&E CORPORATION
February 17, 1999
WHEREAS, this corporation has adopted a tax-qualified
savings plan, the PG&E Corporation Retirement Savings Plan (the
"Plan"), for the benefit of employees of this corporation and its
subsidiaries;
WHEREAS, it is desirable that this Plan offer
participants an opportunity to select a fund invested in common
stock of this corporation on a continuing basis;
WHEREAS, in order to effectuate the purposes of the
Plan, it is desirable that 20 million shares of the common stock
of this corporation be authorized for offer and sale under the
Plan; and
WHEREAS, such 20 million shares shall be shares which
already are issued and outstanding;
NOW, THEREFORE, BE IT RESOLVED that 20 million shares
of the common stock, no par value, of this corporation are
authorized for offer and sale under the Plan; and
BE IT FURTHER RESOLVED that the officers and counsel of
this corporation are hereby authorized, jointly and severally, to
take such action and execute such agreements and documents on
behalf of this corporation as may in their judgment be necessary,
convenient, or appropriate to carry out this resolution,
including the preparation, execution, and filing of a
registration statement under the Securities Act of 1933 with the
Securities and Exchange Commission, and any amendments or
supplements thereto to effect the registration under said Act of
the offer and sale of said 20 million shares of common stock and
participant interests under the Plan; and
<PAGE>
BE IT FURTHER RESOLVED that LESLIE H. EVERETT, LINDA
Y.H. CHENG, WONDY S. LEE, ERIC MONTIZAMBERT, GARY P. ENCINAS,
JOHN E. FORD, and KATHLEEN M. HAYES are hereby authorized,
jointly and severally, to sign on behalf of this corporation said
registration statement and all amendments and supplements thereto
to be filed with the Securities and Exchange Commission covering
the offer and sale of said 20 million shares of common stock and
participant interests, and to do any and all acts necessary to
satisfy the requirements of the Securities Act of 1933 and the
regulations of the Securities and Exchange Commission adopted
pursuant thereto with regard to the filing of said registration
statement and all amendments or supplements thereto.
<PAGE>
I, LINDA Y.H. CHENG, do hereby certify that I am an
Assistant Corporate Secretary of PG&E CORPORATION, a corporation
organized and existing under the laws of the State of California;
that the above and foregoing is a full, true, and correct copy of
a resolution which was duly adopted by the Board of Directors of
said corporation at a meeting of said Board which was duly and
regularly called and held at the office of said corporation on
February 17, 1999; and that this resolution has never been
amended, revoked, or repealed, but is still in full force and
effect.
WITNESS my hand and the seal of said corporation
hereunto affixed this 23rd day of April, 1999.
Linda Y.H. Cheng
_______________________________
Linda Y.H. Cheng
Assistant Corporate Secretary
PG&E CORPORATION
C O R P O R A T E
S E A L
Exhibit 99
PG&E CORPORATION
RETIREMENT SAVINGS PLAN
(AMENDED AND RESTATED AS OF JUNE 1, 1999)
<PAGE>
TABLE OF CONTENTS
1. ELIGIBILITY 1
2. PARTICIPATION 2
3. EMPLOYEE CONTRIBUTIONS 2
4. EMPLOYER CONTRIBUTIONS 3
5. ROLLOVER CONTRIBUTIONS 5
6. LIMITATIONS 5
7. SELECTION OF INVESTMENT FUNDS 12
8. PG&E CORPORATION STOCK FUND (EMPLOYEE STOCK OWNERSHIP
PLAN) 12
9. LARGE COMPANY STOCK INDEX FUND (LCSF) 15
10. SMALL COMPANY STOCK INDEX FUND (SCSF) 15
11. INTERNATIONAL STOCK INDEX FUND (ISF)) 15
12. STABLE VALUE FUND (SVF) 15
13. BOND INDEX FUND (BIF) 15
14. MUTUAL FUND WINDOW 15
15. CONSERVATIVE ASSET ALLOCATION FUND (CAAF) 15
16. MODERATE ASSET ALLOCATION FUND (MAAF) 16
17. AGGRESSIVE ASSET ALLOCATION FUND (AAAF) 16
18. VALUE OF NON-PG&E CORPORATION STOCK FUND UNITS 16
19. EXCHANGE OF INVESTMENT FUND BALANCES 16
20. PARTICIPANT ACCOUNTS 17
21. VESTING 17
22. IDENTIFICATION OF SOURCE 17
23. ACCOUNT STATEMENTS 17
24. LOAN ADMINISTRATION 18
25. CONDITIONS OF LOANS 18
26. ACCOUNTING FOR LOANS 19
27. DISTRIBUTION TO PARTICIPANT WITH LOAN 20
28. CALL FEATURE 20
29. WITHDRAWAL DURING SERVICE 20
30. TERMINATION OF PARTICIPATION 23
31. DISTRIBUTION OF PLAN BENEFITS 24
<PAGE>
TABLE OF CONTENTS
(continued)
32. DIRECT ROLLOVERS 25
33. COMPANY'S POWERS AND DUTIES 25
34. FUNDING AND INVESTMENT PROVISIONS 25
35. ADMINISTRATION 26
36. CLAIMS AND APPEALS PROCEDURE 26
37. QUALIFIED DOMESTIC RELATIONS ORDERS 27
38. LOST PARTICIPANT OR BENEFICIARY 28
39. BENEFITS ARE NOT ASSIGNABLE 28
40. FACILITY OF PAYMENT 28
41. MILITARY SERVICE 28
42. FUTURE OF THE PLAN 28
43. DEFINITIONS 29
SPECIAL PROVISION A 41
APPENDIX A 46
<PAGE>
PG&E CORPORATION
RETIREMENT SAVINGS PLAN
-----------------------
This is the controlling and definitive statement of the PG&E
CORPORATION(1) Retirement Savings Plan in effect on and after June
1, 1999, except as provided otherwise in this PLAN document. The
PLAN, which covers ELIGIBLE EMPLOYEES of the COMPANY and other
participating EMPLOYERS, is a restatement of the PREDECESSOR PLAN
and is intended to (i) evidence the transfer of sponsorship of
the PLAN from Pacific Gas and Electric Company to the COMPANY,
and (ii) merge into the PLAN certain other defined contribution
retirement plans previously sponsored by participating EMPLOYERS
(a MERGED PLAN) as of the PLAN EFFECTIVE DATE. The PLAN is
intended to satisfy all applicable requirements of (i) the
Internal Revenue CODE and its regulations as a stock bonus plan
(within the meaning of CODE Section 401(a)) which includes a
qualified cash or deferred arrangement (within the meaning of
CODE Section 401(k)) and which contains a component effective as
of June 1, 1999, that consists of both a stock bonus plan and an
EMPLOYEE STOCK OWNERSHIP PLAN intended to qualify under Sections
401(a) and 4975(e)(7) of the CODE and designed to invest
primarily in stock of PG&E CORPORATION, and (ii) ERISA, including
Section 404(c) thereof and all applicable regulations issued by
the United States Department of Labor. The PLAN may be amended
retroactively in order to meet such applicable statutory
requirements.
The PLAN is maintained for the exclusive benefit of participants
or their BENEFICIARIES, and contributions or benefits under the
PLAN do not discriminate in favor of HIGHLY COMPENSATED
EMPLOYEES. Unless specified otherwise in this PLAN document, the
provisions of the PLAN, as amended and restated, are effective as
of June 1, 1999.
ELIGIBILITY AND PARTICIPATION
-----------------------------
1. Eligibility
-----------
(a) All EMPLOYEES who were participants as of the day
before the PLAN EFFECTIVE DATE in the PREDECESSOR
PLAN or a MERGED PLAN shall automatically become
ELIGIBLE EMPLOYEES for all purposes under the PLAN
on the PLAN EFFECTIVE DATE.
(b) An EMPLOYEE who is not an ELIGIBLE EMPLOYEE
pursuant to Subsection 1(a) shall become an
ELIGIBLE EMPLOYEE upon commencement of employment
for all purposes under the PLAN except MATCHING
EMPLOYER CONTRIBUTIONS as described in Subsection
4(a).
(c) Except as provided otherwise in Subsection 1(d)
below, an EMPLOYEE who is not an ELIGIBLE EMPLOYEE
pursuant to Subsection 1(a) shall become an
ELIGIBLE EMPLOYEE for purposes of MATCHING
EMPLOYER CONTRIBUTIONS as described in Subsection
4(a) after completing twelve (12) months of
SERVICE, as defined in Section 43.
- --------------------
(1) Words in all capitals are defined in Section 43.
<PAGE>
(d) An EMPLOYEE who is not an ELIGIBLE EMPLOYEE pursuant to
Subsection 1(a) and who was hired by an EMPLOYER prior
to the PLAN EFFECTIVE DATE shall become an ELIGIBLE
EMPLOYEE for purposes of MATCHING EMPLOYER
CONTRIBUTIONS as described in Subsection 4(a) after
completing the shorter of (i) the eligibility period
required for matching employer contributions under the
MERGED PLAN or PREDECESSOR PLAN of such EMPLOYEE's
EMPLOYER, or (ii) one YEAR of SERVICE, as defined in
Section 43.
(e) Once eligibility occurs as provided herein, it
continues as long as the EMPLOYEE remains an EMPLOYEE
and SERVICE continues.
2. Participation
-------------
(a) Each EMPLOYEE shall become a PLAN participant
within thirty (30) days after becoming an ELIGIBLE
EMPLOYEE pursuant to
Subsections 1(a) or 1(b) with respect to the
allocation of BASIC EMPLOYER CONTRIBUTIONS as
provided in Subsection 4(b) and the creation of a
participant account as described in Section 20.
(b) An ELIGIBLE EMPLOYEE shall become a contributing
participant within the meaning of Section 3 within
thirty (30) days after providing NOTICE to the
PLAN ADMINISTRATOR of the ELIGIBLE EMPLOYEE's
election to participate and to be bound by the
terms of the PLAN. Through such NOTICE, the
ELIGIBLE EMPLOYEE shall:
(1) authorize the EMPLOYER to reduce his COVERED
COMPENSATION by a stated percentage and to
contribute such amount to the PLAN as a PRE-
TAX CONTRIBUTION; and/or
(2) elect to make AFTER-TAX CONTRIBUTIONS, if
any, to the PLAN; and
(3) instruct the PLAN ADMINISTRATOR as to the
manner in which EMPLOYEE contributions and
BASIC EMPLOYER CONTRIBUTIONS are to be
invested.
CONTRIBUTIONS
-------------
3. Employee Contributions
To become a contributing participant, an ELIGIBLE EMPLOYEE
must make PRE-TAX CONTRIBUTIONS, AFTER-TAX CONTRIBUTIONS, or
a combination of both to the PLAN through payroll deduction.
All contributions withheld by the EMPLOYER from COVERED
COMPENSATION are paid over to the TRUSTEE no later than the
15th day of the month which follows the month in which the
related COVERED COMPENSATION was paid, unconditionally
credited to the participant's account and invested in
accordance with the participant's instructions.
(a) PRE-TAX CONTRIBUTIONS. A PRE-TAX CONTRIBUTION is
an election to defer the receipt of a specified
whole percentage of COVERED
<PAGE>
COMPENSATION which
would otherwise be currently payable to a
participant. The EMPLOYER shall reduce the
participant's COVERED COMPENSATION by an amount
equal to the percentage of the PRE-TAX
CONTRIBUTION elected by the participant. Under
current law, PRE-TAX CONTRIBUTIONS deferred by a
participant under the PLAN are not subject to
federal or state income tax until actually
withdrawn or distributed from the PLAN. The sum
of all PRE-TAX CONTRIBUTIONS and AFTER-TAX
CONTRIBUTIONS made by a participant may not exceed
16 percent of the participant's COVERED
COMPENSATION.
(b) FLEXDOLLARS. For PLAN YEARS beginning before January
1, 2000, by giving NOTICE, a participant in an
EMPLOYER's Flex Plan may elect to have any unused
FLEXDOLLARS contributed to this PLAN. Any FLEXDOLLARS
contributed to this PLAN shall be deemed PRE-TAX
CONTRIBUTIONS and shall be subject to all restrictions
and limitations applicable to PRE-TAX CONTRIBUTIONS.
FLEXDOLLAR contributions shall not be eligible for
MATCHING EMPLOYER CONTRIBUTIONS as described in
Section 4. A participant may not elect to have unused
FLEXDOLLARS contributed to this PLAN for PLAN YEARS
beginning on or after January 1, 2000.
(c) AFTER-TAX CONTRIBUTIONS. AFTER-TAX CONTRIBUTIONS
differ from PRE-TAX CONTRIBUTIONS in that a participant
has already paid taxes on the amounts contributed to
the PLAN or the PREDECESSOR PLAN. AFTER-TAX
CONTRIBUTIONS must be made in whole percentages of
COVERED COMPENSATION, and the sum of all PRE-TAX
CONTRIBUTIONS and AFTER-TAX CONTRIBUTIONS made by a
participant may not exceed
16 percent of the participant's COVERED COMPENSATION.
(d) Changing Contributions. By giving NOTICE to the
PLAN ADMINISTRATOR, a participant may direct the
PLAN ADMINISTRATOR to cease or resume making
contributions or to change the rate of
contributions. Any such change shall become
effective within thirty (30) days of receipt by
the PLAN ADMINISTRATOR of such NOTICE.
4. Employer Contributions
----------------------
(a) Each and every time a participant makes PRE-TAX
CONTRIBUTIONS or AFTER-TAX CONTRIBUTIONS to the
PLAN eligible for MATCHING EMPLOYER CONTRIBUTIONS,
the COMPANY shall make a MATCHING EMPLOYER
CONTRIBUTION to the PLAN in cash or in whole
shares of COMMON STOCK, or partly in both, which
shall be invested in the PG&E CORPORATION STOCK
FUND. The COMPANY shall charge to each EMPLOYER
its appropriate share of MATCHING EMPLOYER
CONTRIBUTIONS, which in turn shall be determined
according to one of the schedules provided in
Subsections 4(a) (1) or (2) as follows:
(1) If an EMPLOYEE is accruing service under a
defined benefit pension plan sponsored by an
EMPLOYER, MATCHING EMPLOYER CONTRIBUTIONS
shall be limited to an amount equal to three-
quarters of the aggregate participant
contributions
<PAGE>
eligible for MATCHING EMPLOYER
CONTRIBUTIONS under the provisions of this
Subsection 4(a)(1). Although a participant
who is an EMPLOYEE of such an EMPLOYER may
elect to defer up to 16 percent of COVERED
COMPENSATION to the PLAN as Section 401(k)
and/or AFTER-TAX CONTRIBUTIONS, the maximum
amount of such a participant's PRE-TAX
CONTRIBUTIONS and/or AFTER-TAX CONTRIBUTIONS
eligible for MATCHING EMPLOYER CONTRIBUTIONS
shall be one of the following percentages of
COVERED COMPENSATION:
a) up to 3 percent, for participants with
at least one but less than three years
of SERVICE;
b) up to 6 percent, for participants with at
least three years of SERVICE; or
c) for a participant who is absent from work and
receiving COVERED COMPENSATION as of the PLAN
EFFECTIVE DATE, (1) the percentage calculated
under this Subsection 4(a)(1) a) or b), whichever
is applicable, or (2) in the event that a
participant had so elected prior to the PLAN
EFFECTIVE DATE, the dollar amount which was eligible
for MATCHING EMPLOYER CONTRIBUTIONS immediately
before the participant's absence began.
(2) For an EMPLOYEE who is not accruing service under a
defined benefit pension plan sponsored by an EMPLOYER,
MATCHING EMPLOYER CONTRIBUTIONS shall be an amount equal
to 100 percent of the aggregate participant contributions
eligible for MATCHING EMPLOYER CONTRIBUTIONS under the
provisions of this Subsection 4(a)(2). Although a
participant who is an EMPLOYEE of such an EMPLOYER may
elect to defer up to 16 percent of COVERED COMPENSATION
to the PLAN as Section 401(k) and/or AFTER-TAX
CONTRIBUTIONS, the maximum amount of such a participant's
PRE-TAX CONTRIBUTIONS and/ or AFTER-TAX CONTRIBUTIONS
eligible for MATCHING EMPLOYER CONTRIBUTIONS shall
be 5 percent.(2)
(b) For an EMPLOYEE who is not accruing service under a defined
benefit plan sponsored by an EMPLOYER, the COMPANY shall make a
BASIC EMPLOYER CONTRIBUTION, which shall be allocated to the
ACCOUNT of each such ELIGIBLE EMPLOYEE in an amount equal to 5
percent of each such ELIGIBLE EMPLOYEE's COMPENSATION for such
PLAN YEAR. The COMPANY shall charge to each EMPLOYER its
appropriate share of BASIC EMPLOYER CONTRIBUTIONS.
- --------------------
(2) With respect to a Valero heritage employee who is eligible to
receive a MATCHING EMPLOYER CONTRIBUTION of 6 percent under a
MERGED PLAN, a MATCHING EMPLOYER CONTRIBUTION shall be
allocated to the ACCOUNT of such an ELIGIBLE EMPLOYEE equal to
6 percent of such ELIGIBLE EMPLOYEE's COMPENSATION earned
through July 31, 1999. Thereafter, the MATCHING EMPLOYER
CONTRIBUTION allocated to the ACCOUNTS of such EMPLOYEES will
be subject to the 5 percent allocation rate of Section 4(a)(2).
<PAGE>
(c) Investment of EMPLOYER CONTRIBUTIONS. All
MATCHING EMPLOYER CONTRIBUTIONS made to the PLAN
shall be invested by the TRUSTEE in the PG&E
CORPORATION STOCK FUND. BASIC EMPLOYER
CONTRIBUTIONS will be directed in accordance with
a participant's INVESTMENT FUND directions as
described in
Subsection 2(b)(3).
5. Rollover Contributions
----------------------
(a) With the approval of the PLAN ADMINISTRATOR, an
ELIGIBLE EMPLOYEE may make a rollover to the PLAN
in cash equal to an amount which constitutes all
or part of an eligible rollover distribution (as
defined in CODE Section 402(c)(4)). However, a
direct or indirect transfer to this PLAN from
another qualified plan shall not be permitted if
such transfer would subject this PLAN to the
qualified joint and survivor rules of CODE Section
401(a)(11). The PLAN ADMINISTRATOR shall develop
such procedures and may require such information
from the individual who is requesting to make a
rollover to the PLAN, as necessary or desirable in
order to determine that the proposed rollover
shall meet the requirements of this Section 5;
provided, however, that the EMPLOYER, the PLAN
ADMINISTRATOR, and the TRUSTEE have no
responsibility for determining the propriety of,
proper amount or time of, or status as a tax-free
transaction of any transfers. The PLAN
ADMINISTRATOR in its discretion may direct the
return to the participant (or the transfer to
another TRUSTEE or custodian designated by the
participant) of any ROLLOVER CONTRIBUTION and any
earnings thereon to the extent the PLAN
ADMINISTRATOR determines that such return may be
necessary to ensure the continued qualification of
this PLAN under CODE
Section 401(a).
(b) A rollover shall be credited to the participant's
account and shall be recorded separately as a
ROLLOVER CONTRIBUTION by the PLAN ADMINISTRATOR as
soon as practicable following the receipt thereof
by the TRUSTEE.
(c) ROLLOVER CONTRIBUTIONS may be directed for
investment in any INVESTMENT FUND.
6. Limitations
-----------
(a) Average Deferral Percentage Limitation. In any
PLAN YEAR, the average rate of PRE-TAX
CONTRIBUTIONS as a percentage of compensation for
all participating HIGHLY COMPENSATED ELIGIBLE
EMPLOYEES shall not exceed the larger of:
(1) the average rate of PRE-TAX CONTRIBUTIONS as
a percentage of compensation for all other
participating ELIGIBLE EMPLOYEES for the
preceding PLAN YEAR multiplied by
125 percent; or
(2) the lesser of:
<PAGE>
a) the average rate of PRE-TAX
CONTRIBUTIONS as a percentage of
compensation for all other participating
ELIGIBLE EMPLOYEES for the preceding
PLAN YEAR multiplied by 2; or
b) the average rate of PRE-TAX
CONTRIBUTIONS as a percentage of
compensation for all other participating
ELIGIBLE EMPLOYEES for the preceding
PLAN YEAR plus 2 percentage points, or
such lesser amount as the Secretary of
the Treasury may prescribe in order to
prevent the multiple use of this
alternative limitation with respect to
any HIGHLY COMPENSATED participant. If
multiple use of the alternative
limitation occurs with respect to the
Average Deferral Percentage Limitation
and Average Contribution Percentage
Limitation in this PLAN, it shall be
corrected in the manner described in
Subsection 6(c), below.
The average rate of PRE-TAX CONTRIBUTIONS for a
PLAN YEAR for a designated group of ELIGIBLE
EMPLOYEES shall be the average of the ratios,
calculated separately for each participating
ELIGIBLE EMPLOYEE in the group, of the amount of
PRE-TAX CONTRIBUTIONS made by each EMPLOYEE for
the PLAN YEAR or preceding PLAN YEAR, as
applicable, to the EMPLOYEE's compensation for
such PLAN YEAR or preceding PLAN YEAR, as
applicable. For purposes of calculating the
Average Deferral Percentage Limitation for a PLAN
YEAR beginning on or after January 1, 1997 (under
this PLAN or the PREDECESSOR PLAN, as applicable)
for that group of participating ELIGIBLE EMPLOYEES
who are not HIGHLY COMPENSATED, the EMPLOYEE
BENEFIT COMMITTEE may elect to use the average
rate of PRE-TAX CONTRIBUTIONS as a percentage of
compensation determined for such group for the
current PLAN YEAR rather than the preceding PLAN
YEAR, provided that any such election may not
subsequently be changed except as provided by the
Secretary of the Treasury. As used in this
Subsection 6(a)(2), compensation shall mean
compensation paid by an EMPLOYER to the
participant during the PLAN YEAR which is required
to be reported as wages on the participant's Form
W-2 and shall also include compensation which is
not currently includable in the participant's
gross income by reason of the application of CODE
Section 125 and Section 402(e)(3).
For purposes of this Subsection 6(a)(2), the ratio
of the amount of PRE-TAX CONTRIBUTIONS to a
participant's compensation for any participant who
is HIGHLY COMPENSATED for the PLAN YEAR and who is
eligible to have elective deferrals or qualified
employer deferral contributions allocated to his
account under two or more plans or arrangements
described in CODE Section 401(k) of the CODE that
are maintained by an employer or affiliated
employer shall be determined as if all such PRE-
TAX CONTRIBUTIONS, elective deferrals and
qualified employer deferral contributions were
made under a single arrangement.
The determination and treatment of PRE-TAX
CONTRIBUTIONS of any participant shall satisfy
such other requirements as may be prescribed by
the Secretary of the Treasury.
<PAGE>
(b) Average Contribution Percentage Limitation. In
any PLAN YEAR, the average rate of AFTER-TAX
CONTRIBUTIONS and MATCHING EMPLOYER CONTRIBUTIONS
as a percentage of compensation for all
participating HIGHLY COMPENSATED ELIGIBLE
EMPLOYEES shall not exceed the larger of:
(1) the average rate of AFTER-TAX CONTRIBUTIONS
and MATCHING EMPLOYER CONTRIBUTIONS as a
percentage of compensation for all other
participating ELIGIBLE EMPLOYEES for the
preceding PLAN YEAR multiplied by 125
percent; or
(2) the lesser of:
a) the average rate of AFTER-TAX
CONTRIBUTIONS and MATCHING EMPLOYER
CONTRIBUTIONS as a percentage of
compensation for all other participating
ELIGIBLE EMPLOYEES for the preceding
PLAN YEAR multiplied by 2; or
b) the average rate of AFTER-TAX
CONTRIBUTIONS and MATCHING EMPLOYER
CONTRIBUTIONS for all other
participating ELIGIBLE EMPLOYEES for the
preceding PLAN YEAR plus 2 percentage
points, or such lesser amount as the
Secretary of the Treasury may prescribe
in order to prevent the multiple use of
this alternative limitation with respect
to any HIGHLY COMPENSATED participant.
If multiple use of the alternative
limitation occurs with respect to the
Average Deferral Percentage Limitation
and Average Contribution Percentage
Limitation in this PLAN, it shall be
corrected in the manner described in
Subsection 6(c), below.
The average rate of AFTER-TAX CONTRIBUTIONS and
MATCHING EMPLOYER CONTRIBUTIONS for a PLAN YEAR
for a designated group of ELIGIBLE EMPLOYEES shall
be the average of the ratios, calculated
separately for each participating ELIGIBLE
EMPLOYEE in the group, of the amount of AFTER-TAX
CONTRIBUTIONS and MATCHING EMPLOYER CONTRIBUTIONS
made by and on behalf of each EMPLOYEE for the
PLAN YEAR or the preceding PLAN YEAR, as
applicable, to the EMPLOYEE's compensation for
such PLAN YEAR or the preceding PLAN YEAR, as
applicable. For purposes of calculating the
Average Contribution Percentage Limitation for a
PLAN YEAR beginning on or after January 1, 1997
(under this PLAN or the PREDECESSOR PLAN, as
applicable) for that group of participating
ELIGIBLE EMPLOYEES who are not HIGHLY COMPENSATED,
the PLAN ADMINISTRATOR may elect to use the
average rate of AFTER-TAX CONTRIBUTIONS and
MATCHING EMPLOYER CONTRIBUTIONS as a percentage of
compensation determined for such group for the
current PLAN YEAR rather than the preceding PLAN
YEAR, provided that any such election may not
subsequently be changed except as provided by the
Secretary of the Treasury. As used in this
Subsection 6(b)(2), compensation shall mean
compensation paid by an EMPLOYER to the
participant during the PLAN YEAR which is required
to be reported as wages on the participant's Form
W-2 and shall also
<PAGE>
include compensation which is
not currently includable in the participant's
gross income by reason of the application of CODE
Section 125 and Section 402(e)(3).
For purposes of this Subsection 6(b)(2), the ratio
of the amount of AFTER-TAX CONTRIBUTIONS and
EMPLOYER CONTRIBUTIONS to a participant's
compensation for any participant who is HIGHLY
COMPENSATED for the PLAN YEAR and who is eligible
to have elective deferrals or qualified employer
deferral contributions allocated to his account
under two or more plans or arrangements described
in CODE Section 401(k) that are maintained by an
employer or affiliated employer shall be
determined as if all such AFTER-TAX CONTRIBUTIONS
and EMPLOYER CONTRIBUTIONS, elective deferrals and
qualified employer deferral contributions were
made under a single arrangement.
The determination and treatment of AFTER-TAX
CONTRIBUTIONS and MATCHING EMPLOYER CONTRIBUTIONS
of any participant shall satisfy such other
requirements as may be prescribed by the Secretary
of the Treasury.
(c) In the event that the PLAN ADMINISTRATOR, in its
sole and absolute discretion, determines that the
rate of PRE-TAX CONTRIBUTIONS and/or the rate of
AFTER-TAX CONTRIBUTIONS and EMPLOYER CONTRIBUTIONS
shall exceed either or both of the maximum
limitations contained in Subsections 6(a) and
6(b), the PLAN ADMINISTRATOR shall instruct the
EMPLOYER to reduce the amount of contributions
made by HIGHLY COMPENSATED participants so that
the limitations shall be met.
The PLAN ADMINISTRATOR shall first determine the
maximum dollar amount of contributions which can
be made by the HIGHLY COMPENSATED participants.
The contributions made by HIGHLY COMPENSATED
participants shall then be reduced, on a
prospective basis, until the limitations are met.
Any necessary reduction shall be made by first
reducing the highest dollar amount of PRE-TAX
CONTRIBUTIONS or AFTER-TAX CONTRIBUTIONS and
EMPLOYER CONTRIBUTIONS as may be appropriate,
based on contribution rates as currently
authorized by participants, with such dollar
amount to be reduced until the maximum permissible
amount of contributions is met.
Notwithstanding any other provision of the PLAN,
if, as of the end of a PLAN YEAR, the PLAN fails
to meet either or both of the tests described in
Subsections 6(a) or 6(b), the PLAN ADMINISTRATOR
shall, on or before December 31 of the following
PLAN YEAR, distribute to each HIGHLY COMPENSATED
participant, beginning with the participant having
the highest dollar amount, such excess portion of
the participant's PRE-TAX CONTRIBUTIONS and/or
AFTER-TAX CONTRIBUTIONS and EMPLOYER CONTRIBUTIONS
(and any income allocable to such portion), until
the PLAN satisfies both of the tests.
Distributions made to satisfy the limitations
described in Subsection 6(b) shall include both
AFTER-TAX CONTRIBUTIONS and related MATCHING
EMPLOYER CONTRIBUTIONS in accordance with the
requirements of Treasury Regulation Section
1.401(m)-l(e)(4). If there is a loss allocable to
such
<PAGE>
excess amount, the amount of the distribution
shall in no event be less than the lesser of the
(i) participant's account or (ii) the
participant's PRE-TAX CONTRIBUTIONS or AFTER-TAX
CONTRIBUTIONS and EMPLOYER CONTRIBUTIONS, as
appropriate, for the PLAN YEAR.
For purposes of determining whether the PLAN meets
either or both of the limits set forth in
Subsections 6(a) and 6(b), the PLAN ADMINISTRATOR
may elect to make the look-back year calculation
as provided in Treas. Reg. 1.414(q)-1T.A-14(b)(1)
for any determination YEAR on the basis of the
calendar YEAR ending with the applicable
determination YEAR.
(d) Annual Section 401(k) Limitation. No participant
shall be permitted to have aggregate elective
deferrals made to this PLAN, to a PREDECESSOR
PLAN, or to any other qualified plans maintained
by an EMPLOYER during any taxable YEAR in excess
of the dollar limitation of Section 402(g)(l) of
the CODE in effect at the beginning of such
taxable YEAR ($10,000 for the 1999 PLAN YEAR).
For these purposes, a participant's "elective
deferrals" include: (i) a participant's PRE-TAX
CONTRIBUTIONS to this PLAN or a PREDECESSOR PLAN
(excluding any PRE-TAX CONTRIBUTIONS returned to
the participant under this Section 6; (ii)
employer contributions made on behalf of the
participant pursuant to an election to defer under
any other plan with a qualified cash or deferred
arrangement under Section 401(k) of the CODE, any
simplified employee pension as described in
Section 402(h)(1)(B) of the CODE, any eligible
deferred compensation plan as described in
Section 457 of the CODE, or any plan as described
in Section 501(c)(18) of the CODE; and (iii)
employer contributions made on behalf of a
participant pursuant to a salary reduction
agreement to purchase an annuity contract under
Section 403(b) of the CODE.
If a participant has made excess elective
deferrals for any taxable YEAR, the participant
may assign to this PLAN any portion of such excess
elective deferrals by notifying the PLAN
ADMINISTRATOR in writing no later than the first
March 1 following the close of the taxable YEAR.
Such written notification shall certify that the
participant has made excess elective deferrals for
the taxable YEAR and shall specify the amount of
such excess elective deferrals to be allocated to
this PLAN for the taxable YEAR. A participant
shall be deemed to have notified the PLAN
ADMINISTRATOR if excess elective deferrals arise
as a result of taking into account only those
elective deferrals made on behalf of the
participant to this PLAN and any other plans
maintained by an EMPLOYER. In such event, the
participant also shall be deemed to have elected
to have assigned those excess elective deferrals
to this PLAN.
Notwithstanding any provision of the PLAN to the
contrary, if a participant has assigned excess
elective deferrals to this PLAN for a taxable
YEAR, the amount of such excess elective
deferrals, plus any income or minus any loss
allocable thereto, shall be distributed to the
participant from the participant's PRE-TAX
CONTRIBUTIONS no later than the first April 15
following the close of the taxable YEAR. The
income or loss allocable to the amount of excess
elective deferrals referred to in this subsection
shall include all allocable income or loss for the
taxable YEAR of the excess elective deferral and
shall be calculated using
<PAGE>
any reasonable method
for computing income or loss, provided such method
is used consistently for all participants and for
all corrective distributions under the PLAN for
the relevant YEAR.
Notwithstanding the preceding paragraph, the PLAN
may elect to calculate the income or loss
allocable to the amount of excess elective
deferrals by multiplying the total investment
income or loss (including dividends, interest,
realized gains or losses, and unrealized
appreciation or depreciation) allocated to the
participant's PRE-TAX CONTRIBUTIONS for the
taxable YEAR of the excess elective deferrals by a
fraction, the numerator of which is the excess
elective deferral amount to be distributed to the
participant by the PLAN for the taxable YEAR, and
the denominator of which is the total account
balance attributable to the participant's PRE-TAX
CONTRIBUTIONS as of the end of the taxable YEAR,
reduced by the investment gain or increased by the
investment loss allocated to such total amount for
the taxable YEAR.
(e) CODE Section 415 Limitation. Anything herein to
the contrary notwithstanding, in no event shall
the annual additions to a participant's accounts
in a PLAN YEAR exceed the lesser of (i) 25 percent
of the participant's compensation (as defined in
subparagraph 6(e)(1), below) for the PLAN YEAR or
(ii) $30,000 (as adjusted in accordance with CODE
Section 415(c)). For purposes of applying the
limitations of CODE Section 415, the annual
additions, which must be kept within the limits
set forth above, shall mean the sum credited to a
participant's account for any PLAN YEAR of (i)
EMPLOYER CONTRIBUTIONS and PRE-TAX CONTRIBUTIONS;
(ii) AFTER-TAX CONTRIBUTIONS; (iii) any amounts
allocated to an individual medical account, as
defined in CODE Section 415(l)(2) and Section
419A(d)(2); and (iv) any amount attributable to
post-retirement medical benefits allocated
pursuant to CODE
Section 419A(d) allocated to a participant's
separate account under a welfare benefits fund
(within the meaning of CODE Section 419(e)). The
compensation limitation percentage referred to
above shall not apply to (i) any contribution for
medical benefits, as defined in CODE
Section 419A(f)(2), after a participant's
separation from SERVICE which is otherwise treated
as an annual addition; or (ii) any amount which is
otherwise treated as an annual addition under CODE
Section 415(l)(1).
(1) As used in this Subsection 6(e), compensation
shall mean compensation paid by an EMPLOYER to the
participant during the PLAN YEAR which is required
to be reported as wages on the participant's Form
W-2 and shall also include compensation which is
not currently includable in the participant's
gross income by reason of the application of CODE
Section 125 and Section 402(e)(3).
(2) In the event that the annual additions to a
participant's accounts would exceed the CODE
Section 415 limitations, the PLAN
ADMINISTRATOR shall first reduce the
participant's AFTER-TAX CONTRIBUTIONS until
the CODE Section 415 limitations are met.
(f) For PLAN YEARS beginning before December 31, 1999,
if a participant of the PREDECESSOR PLAN or of
this PLAN is also a participant in a RETIREMENT
PLAN sponsored by his or her Employer, CODE
<PAGE>
Section 415 of the CODE imposes a combined benefit
limitation. Contributions to this PLAN shall
nevertheless be permitted to the maximum extent
permitted by CODE Section 415 of the CODE and the
terms of the PLAN. If the combined maximum
benefit permitted would be exceeded, the benefit
from the EMPLOYER's RETIREMENT PLAN shall be
reduced so that the limitation shall be met. The
combined maximum benefit for a participant shall
be determined pursuant to the provisions of CODE
Section 415(e). This Subsection 6(f) shall have
no force or effect with respect to PLAN YEARS
beginning on or after January 1, 2000.
At the election of the PLAN ADMINISTRATOR, special
transitional rules may apply for both the defined
benefit fraction and the defined contribution
fraction for EMPLOYEES who were participants in
the PREDECESSOR PLAN as of December 31, 1982.
(g) Top Heavy Provisions. In the event that the
PREDECESSOR PLAN or the PLAN is or becomes "Top
Heavy," as that term is defined in CODE
Section 416(g), the provision contained in Special
Provision A shall supersede any conflicting
provision of the PLAN.
(h) For purposes of determining all benefits under the
PREDECESSOR PLAN, for PLAN YEARS beginning after
1988 and before 1994, the maximum compensation of
each EMPLOYEE that may be taken into account each
PLAN YEAR shall not exceed $200,000 (as adjusted
by the Secretary of the Treasury under CODE
Section 401(a)(17). For purposes of determining
all benefits under the PREDECESSOR PLAN or the
PLAN for PLAN YEARS beginning after 1993, the
maximum compensation of each EMPLOYEE that may be
taken into account each PLAN YEAR shall not exceed
$150,000 (as adjusted by the Secretary of the
Treasury under CODE Section 401(a)(17)).
(i) Effective as of June 1, 1999, for purposes of
applying the limitations of this Section 6, and
for all other purposes under CODE Sections
401(a)(4), 410(b), 401(k) and 401(m), all
contributions to the PLAN shall be treated as
having been made to the non-EMPLOYEE STOCK
OWNERSHIP PLAN (ESOP) portion of the PLAN, so that
the ESOP portion of the PLAN will not require
separate testing under any of the above-referenced
limitations. As of the business day immediately
prior to each quarterly record date for the
payment of dividends on PG&E CORPORATION STOCK,
all PG&E CORPORATION STOCK held in the PG&E
CORPORATION STOCK FUND that is not then held in
the ESOP portion of the PLAN shall be deemed to be
automatically transferred to the ESOP portion of
the PLAN and treated for all purposes under the
PLAN as held under an employee stock ownership
plan in accordance with CODE Sections 404(k) and
4975(e)(7). Any stock of PG&E CORPORATION in the
PG&E CORPORATION STOCK FUND that is held in the
ESOP portion of the PLAN and that is liquidated or
otherwise invested in an INVESTMENT FUND other
than the PG&E CORPORATION STOCK FUND shall be
deemed to be automatically transferred to the non-
ESOP portion of the PLAN, as of the date of such
liquidation or investment.
<PAGE>
SELECTION OF INVESTMENT FUNDS
-----------------------------
7. Selection of Investment Funds
-----------------------------
(a) PRE-TAX CONTRIBUTIONS, AFTER-TAX CONTRIBUTIONS, and BASIC
EMPLOYER CONTRIBUTIONS. By giving NOTICE, a participant shall
instruct the PLAN ADMINISTRATOR to invest his PRE-TAX
CONTRIBUTIONS, AFTER-TAX CONTRIBUTIONS, and BASIC EMPLOYER
CONTRIBUTIONS in one or more INVESTMENT FUNDS. The minimum
amount which can be invested in any single INVESTMENT FUND shall
be 1 percent of a participant's current contributions to the
PLAN. A participant may elect to invest more than the minimum
amount in any INVESTMENT FUND, provided that any such increase
must be in increments of 1 percent. EMPLOYER CONTRIBUTIONS other
than BASIC EMPLOYER CONTRIBUTIONS (such as MATCHING EMPLOYER
CONTRIBUTIONS) are initially invested in the PG&E CORPORATION
STOCK FUND. In the event that a participant fails to instruct
the PLAN ADMINISTRATOR as to the manner in which the
participant's contributions are to be invested, the PLAN
ADMINISTRATOR shall invest the BASIC EMPLOYER CONTRIBUTIONS
allocated to the participant's account in the MODERATE ASSET
ALLOCATION FUND.
(b) CHANGE OF INVESTMENT FUND ALLOCATIONS. By giving
NOTICE to the PLAN ADMINISTRATOR, a participant
may (i) change the percentage levels of future
contributions, or (ii) change the INVESTMENT FUND
or FUNDS in which his future contributions are to
be invested. Each election regarding investment
of future contributions shall be effective with
the next deposit of contributions.
THE INVESTMENT FUNDS(3)
--------------------
8. PG&E CORPORATION STOCK FUND (EMPLOYEE STOCK OWNERSHIP PLAN)
------------------------------------------------------------
Investments in COMMON STOCK of PG&E CORPORATION under the
PLAN are governed under the terms of the PG&E CORPORATION
STOCK FUND as described herein,(4) as maintained pursuant to
the EMPLOYEE STOCK OWNERSHIP PLAN.
- --------------------
(3) The PLAN also maintains a fund invested in United States
Savings Bonds. This fund holds all United States Savings Bonds
attributable to participant contributions made to a PREDECESSOR
PLAN prior to July 1, 1991. This fund is a closed fund and
does not accept new contributions or exchanges. Income from
bonds is reflected in the greater redemption values of the
bonds. Bonds held in this fund can be exchanged to another
INVESTMENT FUND or FUNDS upon completing a power of attorney
authorizing the PLAN ADMINISTRATOR to re-register the bonds
under the exchange provisions of Section 19.
(4) Words in all capitals with respect to the PG&E CORPORATION
STOCK FUND or the EMPLOYEE STOCK OWNERSHIP PLAN are also
defined in Section 43.
<PAGE>
Effective as of June 1, 1999, the portion of the PG&E
CORPORATION STOCK FUND that consists of the ESOP portion
of the PLAN is determined as provided under
Section 6(i). The ESOP portion of the PLAN is a subset of
the PG&E CORPORATION STOCK FUND and is both a stock bonus
plan and an employee stock ownership plan intended to
qualify under CODE Section 401(a) and Section 4975(e)(7),
and as such is designed to invest primarily in employer
securities described in CODE Section 409(l).
(a) Up to 100 percent of the assets of the PG&E
CORPORATION STOCK FUND may be invested in COMMON
STOCK, with a small portion invested in cash
equivalents. MATCHING EMPLOYER CONTRIBUTIONS made
by the COMPANY and PRE-TAX CONTRIBUTIONS, AFTER-
TAX CONTRIBUTIONS, and BASIC EMPLOYER
CONTRIBUTIONS which are directed to be invested in
the PG&E CORPORATION STOCK FUND on or after the
PLAN EFFECTIVE DATE shall be invested in UNITS of
the PG&E CORPORATION STOCK FUND.
(b) The PG&E CORPORATION STOCK FUND shall also hold
COMMON STOCK and the earnings thereon attributable
to PRE-TAX CONTRIBUTIONS, AFTER-TAX CONTRIBUTIONS
and EMPLOYER CONTRIBUTIONS made to the COMMON
STOCK funds of the MERGED PLANS and PREDECESSOR
PLAN as they existed prior to the PLAN EFFECTIVE
DATE.
(c) Whenever the TRUSTEE invests cash in the PG&E
CORPORATION STOCK FUND, the EMPLOYEE BENEFIT
COMMITTEE shall direct the TRUSTEE to purchase
COMMON STOCK either (a) directly or indirectly
from the COMPANY or any shareholder of the
COMPANY, including a person deemed to be a "party
in interest" within the meaning of ERISA Section
3(14) or a "disqualified person" within the
meaning of CODE Section 4975, or (b) through
transactions on a national securities exchange.
COMMON STOCK shall be valued at the closing price
on the New York Stock Exchange.
In purchasing COMMON STOCK on a national
securities exchange, the TRUSTEE shall give due
regard to the trading volume, if any, of COMMON
STOCK at the time of each purchase and accordingly
regulate the amount and timing of such purchases
so as to minimize the effect on market price
fluctuations which may be caused by such
purchases. The TRUSTEE shall comply with all
federal and state securities laws and with all
applicable provisions of ERISA when purchasing
COMMON STOCK, including, if required, the
condition that no more than adequate consideration
(as defined in Section 3(18) of ERISA) be paid for
such COMMON STOCK and no commission be charged
when a purchase of COMMON STOCK is made from a
"party in interest" or a "disqualified person."
(d) Voting of COMMON STOCK held under the PG&E
CORPORATION STOCK FUND. Each and every time
common shareholders of PG&E CORPORATION who are
not participants in the PLAN are entitled to vote
COMMON STOCK, participants shall have an absolute
right to vote COMMON STOCK. Whenever participants
are given the opportunity to vote COMMON STOCK,
the TRUSTEE shall inform each participant of all
relevant material received by the TRUSTEE with a
written request for
<PAGE>
confidential voting
instructions. The TRUSTEE is required to vote the
COMMON STOCK credited to a participant's account
as the participant directs. A signed but
otherwise uncompleted proxy returned to the
TRUSTEE shall be deemed to be a direction to the
TRUSTEE by the participant to vote all of the
participant's shares in accordance with the
recommendations of the BOARD OF DIRECTORS. If the
participant does not give such direction within
the required time, the TRUSTEE may not vote any
COMMON STOCK credited to a participant's account.
(e) Cost of UNITS. The cost of a UNIT shall be the
current value of a UNIT as determined by the
TRUSTEE as of the valuation date immediately
preceding the date that the TRUSTEE invests cash
in, or receives contributions to, the PG&E
CORPORATION STOCK FUND.
(f) Diversification. Notwithstanding any other provision of the
PLAN, a participant may at any time exchange up to 100 percent of
those MATCHING EMPLOYER CONTRIBUTIONS made on his or her behalf
pursuant to Subsection 4(a) of the PLAN on or after the PLAN
EFFECTIVE DATE contributed to the PG&E CORPORATION STOCK FUND,
into any of the other INVESTMENT FUNDS, using such form and in
such manner as approved by the PLAN ADMINISTRATOR.
(g) Value of PG&E CORPORATION STOCK FUND UNITS. The value of a
PG&E CORPORATION STOCK FUND UNIT is the value of the assets of
the PG&E CORPORATION STOCK FUND including dividends receivable,
as determined by the TRUSTEE, less any liabilities (other than
the interests of participants in the PG&E CORPORATION STOCK
FUND), divided by the number of UNITS. COMMON STOCK shall be
valued at the closing price on the New York Stock Exchange. Each
payment (including dividends received) into the PG&E CORPORATION
STOCK FUND shall increase, and each payment out of the PG&E
CORPORATION STOCK FUND shall decrease, the number of UNITS by a
number equal to the value of the payment divided by the last UNIT
value determined immediately preceding the date of the payment.
(h) Dividends. As of June 1, 1999, UNITS purchased
with cash dividends paid on COMMON STOCK held in
the PG&E CORPORATION STOCK FUND which are
allocated to a participant's account on a
quarterly basis will be paid out to the
participant, unless the participant elects by the
tenth business day prior to the dividend payment
date to have such dividends retained in the
participant's account. Dividends retained in a
participant's account will be reinvested in the
PG&E CORPORATION COMMON STOCK FUND and will
purchase additional UNITS in accordance with
procedures established by the PLAN ADMINISTRATOR.
<PAGE>
9. Large Company Stock Index Fund (LCSF)
-------------------------------------
This FUND is maintained for the purpose of investing in a
diversified portfolio consisting principally of common stock
of large U.S. companies and securities convertible into
common stock.
10. Small Company Stock Index Fund (SCSF)
-------------------------------------
This FUND is maintained for the purpose of investing in a
diversified portfolio consisting principally of common stock
of small and medium capitalization U.S. companies and
securities convertible into common stock. When combined
with the LARGE COMPANY STOCK INDEX FUND, this FUND is
designed such that exposure to the entire universe of U.S.
company stocks can be achieved.
11. International Stock Index Fund (ISF)
------------------------------------
This FUND is maintained for the purpose of investing in a
diversified portfolio consisting principally of common stock
and securities convertible into common stock of non-U.S.
companies.
12. Stable Value Fund (SVF)
-----------------------
This FUND is designed to provide participants with
preservation of principal while earning a stable and
consistent rate of return.
13. Bond Index Fund (BIF)
---------------------
This FUND is maintained for the purpose of investing in a
diversified portfolio consisting principally of marketable
fixed-income securities.
14. Mutual Fund Window
------------------
The MUTUAL FUND WINDOW is maintained for the purpose of
allowing participants to invest in a variety of mutual funds
managed by various investment management firms. The
investment objectives of the funds in the MUTUAL FUND WINDOW
range from conservative to aggressive. Participants
investing in the MUTUAL FUND WINDOW are responsible for
obtaining the information necessary to make informed
decisions and selecting funds that are appropriate to meet
their individual financial goals. Detailed prospectuses
that describe the investment objectives, performance and
expenses associated with these mutual funds are available
from the PLAN ADMINISTRATOR.
15. Conservative Asset Allocation Fund (CAAF)
-----------------------------------------
This FUND is maintained for the purpose of investing in a
diversified portfolio with a primary emphasis on bonds and a
secondary emphasis on stocks. This FUND has an allocation
to each of the following FUNDS: the SMALL COMPANY STOCK
INDEX FUND (SCSF), the LARGE COMPANY STOCK INDEX FUND
(LCSF), the INTERNATIONAL STOCK INDEX FUND (ISF), and the
BOND INDEX FUND (BIF).
<PAGE>
16. Moderate Asset Allocation Fund (MAAF)
-------------------------------------
This FUND is maintained for the purpose of investing in a
diversified portfolio with an emphasis on stocks and bonds.
This Fund has an allocation to each of the following FUNDS:
the SMALL COMPANY STOCK INDEX FUND (SCSF), the LARGE COMPANY
STOCK INDEX FUND (LCSF), the INTERNATIONAL STOCK INDEX FUND
(ISF), and the BOND INDEX FUND (BIF).
17. Aggressive Asset Allocation Fund (AAAF)
---------------------------------------
This FUND is maintained for the purpose of investing in a
diversified portfolio with a primary emphasis on stocks and
a secondary emphasis on bonds. This FUND has an allocation
to each of the following FUNDS: the SMALL COMPANY STOCK
INDEX FUND (SCSF), the LARGE COMPANY STOCK INDEX FUND
(LCSF), the INTERNATIONAL STOCK INDEX FUND (ISF), and the
BOND INDEX FUND (BIF).
18. Value of Non-PG&E CORPORATION STOCK FUND UNITS
----------------------------------------------
The value of a UNIT is the value of a particular INVESTMENT
FUND's assets (including interest or dividends and interest
or dividends receivable), as determined each BUSINESS DAY by
the TRUSTEE, less any liabilities (other than the interests
of participants in the respective FUND), divided by the
number of UNITS. Each payment of contributions into the
respective INVESTMENT FUND shall increase, and each payment
out of the INVESTMENT FUND shall decrease, the number of
FUND UNITS by a number equal to the amount of the payment
divided by the last UNIT value determination immediately
preceding the date of the payment.
19. Exchange of Investment Fund Balances
------------------------------------
(a) Except as limited by Subsection 19(b) below, by
giving NOTICE to the PLAN ADMINISTRATOR, a
participant may elect at any time to exchange any
portion of the contributions held in his account,
plus the earnings thereon, from any INVESTMENT
FUND to another INVESTMENT FUND or FUNDS. An
exchange shall be effective and shall be valued on
the day it is made, if such day is a BUSINESS DAY,
and the participant provides NOTICE of such
exchange prior to the closing time of the New York
Stock Exchange. All other exchanges shall be
effective and valued as of the next BUSINESS DAY.
Upon receipt of a exchange NOTICE, the TRUSTEE
shall value the UNITS to be exchanged between the
FUNDS. The FUND account of the participant shall
be debited with the number of UNITS exchanged from
that FUND and the TRUSTEE shall purchase with the
cash proceeds realized from the converted UNITS,
UNITS in the appropriate FUND or FUNDS, as
designated by the participant. The cost of the
UNITS purchased shall be the value of the FUND
UNITS as determined on the date of exchange, and
the number of UNITS purchased shall be credited to
the appropriate INVESTMENT FUND account of the
participant. The provisions of the PLAN for
exchanges between INVESTMENT FUNDS at all times
shall permit participants to make such exchanges
at a minimum of four times per each PLAN YEAR and
otherwise be designed to permit the PLAN to
qualify as a 404(c) plan (within the meaning of
Section 404(c) of ERISA).
<PAGE>
(b) STABLE VALUE FUND. Direct exchanges from the
STABLE VALUE FUND to money market or short- to
intermediate-term bond funds in the MUTUAL FUND
WINDOW are not allowed. Assets exchanged from the
STABLE VALUE FUND must remain in funds other than
money market or short- to intermediate-term bond
funds for at least three months before they are
eligible for subsequent transfer to a money market
or short- to intermediate-term bond fund. A list
of the money market and short- to intermediate-
term bond funds ineligible to receive direct
transfers from the STABLE VALUE FUND is available
from the PLAN ADMINISTRATOR.
PARTICIPANT'S INTEREST IN THE PLAN
----------------------------------
20. Participant Accounts
--------------------
A separate account shall be maintained for each PLAN
participant which records the participant's interest in each
of the INVESTMENT FUNDS, which is charged with participant
exchanges and withdrawals and credited with its appropriate
share of contributions and FUND earnings. The account
maintained by the PLAN ADMINISTRATOR for each participant
also records separately the participant's PRE-TAX
CONTRIBUTIONS, AFTER-TAX CONTRIBUTIONS, EMPLOYER
CONTRIBUTIONS made on his behalf, ROLLOVER CONTRIBUTIONS,
the UNITS purchased therewith, and the earnings thereon. To
the extent necessary to continue the availability of certain
provisions of a MERGED PLAN which are preserved under the
PLAN pursuant to Appendix A, the account maintained by the
PLAN ADMINISTRATOR for each participant also records
separately amounts transferred to the PLAN from a MERGED
PLAN.
21. Vesting
-------
A participant is at all times fully vested in his or her own
contributions and all EMPLOYER CONTRIBUTIONS credited to his
account, together with earnings attributable thereto.
22. Identification of Source
------------------------
Whenever UNITS attributable to a participant's PRE-TAX
CONTRIBUTIONS are transferred to another FUND OR FUNDS, the
resulting UNITS are also recorded as attributable to PRE-TAX
CONTRIBUTIONS. Similarly, UNITS attributable to AFTER-TAX
CONTRIBUTIONS which are transferred to another FUND or FUNDS
are also recorded as AFTER-TAX CONTRIBUTIONS.
23. Account Statements
------------------
As soon as practicable after the end of each CALENDAR
QUARTER, all participants shall receive from the PLAN
ADMINISTRATOR a statement of their interest in the PLAN.
<PAGE>
LOANS
-----
24. Loan Administration
-------------------
The PLAN ADMINISTRATOR shall administer the loan program in
accordance with the provisions under this Section 24 in a
uniform and nondiscriminatory manner. All loans existing
under the PREDECESSOR PLAN or a MERGED PLAN as of the PLAN
EFFECTIVE DATE shall continue in force under this PLAN
according to the terms under which each loan was granted
under the PREDECESSOR PLAN or respective MERGED PLAN. Such
loans shall, however, be subject to the conditions of the
PLAN for disposition in the event of default, as specified
in Section 25.
Upon application by a participant who is an ELIGIBLE
EMPLOYEE, the PLAN ADMINISTRATOR may direct the TRUSTEE to
make a loan to the participant from his account. A
participant may obtain a loan only if he executes a
promissory note in a form approved by the PLAN
ADMINISTRATOR. A participant may only have three
outstanding loans at any given time.(5) The PLAN
ADMINISTRATOR shall consider any outstanding loan under the
PREDECESSOR PLAN or a MERGED PLAN as of the PLAN EFFECTIVE
DATE in determining this limit; provided, however, that the
maximum amount of all loans, whether under a PREDECESSOR
PLAN, a MERGED PLAN or this PLAN, may not exceed the limits
specified in Section 25.
25. Conditions of Loans
-------------------
(a) Loan Amount. The minimum loan amount shall be
$1,000, and the maximum amount of any loan shall
not exceed the lesser of (i) $50,000 reduced by
the highest outstanding loan balances during the
one-year period ending on the day before the date
the current loan is made, or (ii)
50 percent of the market value of the
participant's account balance.
(b) Interest Rate. The interest rate shall be set at
the time of the loan application at the prime rate
as determined monthly by the TRUSTEE, plus one
percentage point and shall be fixed for the term
of the loan.
(c) Security for Repayment. Each loan hereunder,
including existing loans under the PREDECESSOR
PLAN or a MERGED PLAN as described in Section 24,
shall be a participant directed investment for the
benefit of the participant requesting such loan;
accordingly, any default in the repayment of
principal or interest of any loan hereunder shall
reduce the amount available for distribution to
such participant (or his BENEFICIARY). Any loan
hereunder, including existing loans under the
PREDECESSOR PLAN or a MERGED PLAN shall be secured
by 50 percent of the participant's account
balance.
(d) Repayment Period and Repayment. The term of the
loan shall be for such number of months as
selected by the participant, but in no event for a
term greater than five years. If the purpose of
the loan is to purchase the participant's
principal residence, however, the term of the loan
may be for a period not to exceed fifteen years.
- ---------------------
(5) In the event that a participant has more than three
outstanding loans under a PREDECESSOR PLAN or PREDECESSOR PLANS
as of the PLAN EFFECTIVE DATE, the participant shall not be
eligible to obtain a new loan until such time as the number of
outstanding loans is two or fewer.
<PAGE>
A loan must be repaid in level installments
consisting of amortized principal and interest by
payroll deduction. If a participant is granted an
unpaid leave of absence, ceases to have sufficient
compensation from which the loan payment can be
made or if such participant's SERVICE is
terminated for any reason, the participant may
continue to make timely level installment payments
of principal and interest by such means as
approved by the PLAN ADMINISTRATOR. A participant
may partially or fully prepay a loan at any time
and without penalty. After any partial prepayment
of a loan, the loan will be reamortized to provide
for continued level installments for the original
term of the loan.
(e) Costs and Fees. Any costs or fees associated with
the origination of a loan from the PLAN shall be
borne by the participant requesting the loan. Any
costs or fees associated with the origination of a
loan shall be deducted from the participant's
account after the loan issuance.
(f) Default. A loan is treated as a default if
scheduled loan payments are more than sixty (60)
days late. A participant shall then have 30 days
from receipt of written NOTICE of the default and
a demand for past due amounts to cure the default
before it becomes final.
In the event of a default, the PLAN ADMINISTRATOR
may direct the TRUSTEE to report the default as a
taxable distribution. As soon as a PLAN
withdrawal or distribution to such participant
would otherwise be permitted, the PLAN
ADMINISTRATOR may instruct the TRUSTEE to execute
upon its security interest in the participant's
account by distributing the note to the
participant.
26. Accounting For Loans
--------------------
(a) Source of Loan. Whenever the PLAN ADMINISTRATOR
is required to process a loan under this Section
26, the PLAN ADMINISTRATOR shall first withdraw
UNITS and earnings thereon attributable to a
participant's AFTER-TAX CONTRIBUTIONS, followed by
UNITS and earnings thereon attributable to
ROLLOVER CONTRIBUTIONS, followed by UNITS and
earnings thereon attributable to MATCHING EMPLOYER
CONTRIBUTIONS, followed by UNITS and earnings
thereon attributable to BASIC EMPLOYER
CONTRIBUTIONS, followed by UNITS and earnings
thereon attributable to a participant's PRE-TAX
CONTRIBUTIONS.
Loans shall be funded upon the receipt of an
accurately completed application form. The
TRUSTEE shall make payment to the participant as
soon thereafter as administratively feasible.
(b) Loan Investment Account. The PLAN ADMINISTRATOR
shall establish and maintain a loan investment
account for each borrowing participant. A loan
shall be treated by the PLAN ADMINISTRATOR as a
separate investment of the borrowing participant's
account. The unpaid principal and accrued but
unpaid interest on the loan to a participant shall
be reflected for plan accounting purposes in the
participant's loan account. Repayments of
principal and interest by the participant shall be
credited to the participant's account in the
reverse order that they were liquidated to
<PAGE>
make the loan. Repayments shall be invested in the
investment funds according to a participant's
current investment elections.
27. Distribution to Participant with Loan
-------------------------------------
In the case of any participant who terminates employment
with a loan outstanding hereunder, the cash amount available
for distribution to such participant (or the BENEFICIARY)
shall consist of the portion of the participant's account
invested in the INVESTMENT FUNDS. At the time of
distribution, the participant's promissory note also shall
be deemed distributed to the participant (or the
BENEFICIARY), and the TRUSTEE shall report the value of the
promissory note (equal to the amount of unpaid principal) as
income for tax purposes in addition to the cash amount
distributed to the participant.
28. Call Feature
------------
The PLAN ADMINISTRATOR shall have the right to call any
participant loan once a participant's employment with all
affiliated companies has terminated or if the PLAN is
terminated.
PLAN WITHDRAWALS
----------------
29. Withdrawal During Service
-------------------------
Except as provided in this Section 29 or in Appendix A,
withdrawals of any part of a participant's interest in the
PLAN are not permitted as long as SERVICE continues. A
participant may never replace in the TRUST FUND any UNITS or
cash which have been withdrawn. By submitting a withdrawal
form, a participant may make withdrawals as provided below.
(a) PRE-TAX CONTRIBUTIONS.
(1) A participant may withdraw all or part of the
UNITS, including income thereon and including
additional UNITS attributable thereto, bought
with the participant's PRE-TAX CONTRIBUTIONS
upon the occurrence of any of the following
events:
a) the participant is disabled within the
meaning of Treas. Reg. Section 1.401(k)-
1(d)(1)(i); or
b) the participant has attained age 59-1/2.
(2) A participant may withdraw an amount equal to
his PRE-TAX CONTRIBUTIONS, as well as any
income and UNITS attributable to income
accrued thereon prior to January 1, 1989,
upon receipt of satisfactory proof by the
PLAN ADMINISTRATOR that the withdrawal is
required to meet immediate and heavy
financial needs of the participant which
constitute a valid hardship as defined under
the CODE and regulations issued by the
Secretary of
<PAGE>
the Treasury. A request for a
withdrawal for one of the following reasons
shall be deemed to be on account of a valid
hardship:
a) To cover medical expenses (as defined in
CODE Section 213(d)) of the participant, the
participant's spouse or dependents (as
defined in CODE Section 152);
b) The purchase of a participant's
principal place of residence, but not
including mortgage payments;
c) To meet tuition payments for the next
semester or quarter of post-secondary
education for the participant, his
spouse, children or dependents (as
defined in CODE Section 152); or
d) To prevent the eviction of the
participant from his principal place of
residence or to prevent a foreclosure of
the mortgage on the participant's
principal place of residence.
e) To meet unreimbursed expenses directly
related to a fire, explosion, flood ,
hurricane, tornado, earthquake, mudslide or
other similar natural disaster of the
participant's principal place of residence.
f) To meet unreimbursed expenses for taxes or
directly related to the bankruptcy of the
participant.
g) To meet unreimbursed funeral expenses of the
participant's spouse or any dependent of the
participant.
A request for a withdrawal under this
Subsection 29(a)(2) shall not be deemed to be
for immediate and heavy financial needs
unless the participant represents that the
need cannot be met (i) through reimbursement
or compensation by insurance or otherwise;
(ii) by reasonable liquidation of the
participant's resources; (iii) by cessation
of contributions to the PLAN; or (iv) by
other distributions, withdrawals or
nontaxable loans from any plans maintained by
an EMPLOYER or by borrowing from commercial
sources on reasonable commercial terms.
For purposes of this Subsection 29(a)(2), a
participant's resources shall be deemed to
include any assets of his spouse and minor
children that are reasonably available to the
participant. In addition, withdrawals under
Subsection 29(a)(2) may not exceed the amount
actually required to meet the participant's
immediate financial needs.
(3) A participant who withdraws UNITS under
Subsection 29(a) shall automatically be
suspended from the PLAN and shall not be
permitted to resume making contributions to
the PLAN until the first payroll processing
date after the sixth month following the date
upon which the participant's withdrawal form
was processed by the PLAN ADMINISTRATOR.
After suspension ends,
<PAGE>
contributions may be resumed by giving
NOTICE to the PLAN ADMINISTRATOR.
(b) AFTER-TAX CONTRIBUTIONS. A participant may at any
time elect to withdraw all or any part of the
UNITS including income thereon and including
additional UNITS attributable thereto, bought with
the participant's AFTER-TAX CONTRIBUTIONS to the
PLAN. Such an election shall not cause suspension
from the PLAN.
(c) EMPLOYER CONTRIBUTIONS.
(1) A participant may withdraw all or any part of
the UNITS, including the income attributable
thereto, bought with MATCHING EMPLOYER
CONTRIBUTIONS which were made to the PLAN,
the PREDECESSOR PLAN or a MERGED PLAN at
anytime prior to the second YEAR preceding
the current YEAR. For example, UNITS,
including the income attributable thereto,
purchased with EMPLOYER CONTRIBUTIONS made in
1999 and prior YEARS may be withdrawn in 2002
or anytime thereafter. Such an election
shall not cause suspension from the PLAN.
(2) UNITS, including the income attributable
thereto, bought with MATCHING EMPLOYER
CONTRIBUTIONS which would not be available
for withdrawal under Subsection 29(c)(1)
shall nonetheless be available for withdrawal
upon the occurrence of any of the following
events:
a) the participant is disabled within the
meaning of Treas. Reg. Section 1.401(k)-
1(d)(1)(i);
b) the participant attains 59-1/2; or
c) the participant has requested and is
entitled to receive a hardship
distribution which meets the
requirements of Subsection 29(a)(2) but
only if all amounts distributable under
Subsection 29(a) have been exhausted.
A participant shall submit the appropriate
form to the PLAN directing the PLAN
ADMINISTRATOR as to the amount of the
withdrawal. Distribution shall be made as
soon as practicable after approval of the
withdrawal form. Upon each withdrawal, the
UNITS credited to the appropriate FUND or
FUNDS shall be reduced by the number of UNITS
withdrawn. Withdrawals from the PG&E
CORPORATION STOCK FUND may be made in cash or
whole shares of stock at the election of the
participant. Withdrawals of UNITS from any
given INVESTMENT FUND shall be made in cash
at the then current value of the UNITS; or,
at the election of the participant, such
UNITS shall be transferred to the PG&E
CORPORATION STOCK FUND pursuant to
Section 20 and distribution shall be made in
whole shares of COMMON STOCK.
(d) ROLLOVER CONTRIBUTIONS. A participant may at any
time elect to withdraw all or any part of the
UNITS including income thereon bought
<PAGE>
with the participant's ROLLOVER CONTRIBUTIONS to
the PLAN, PREDECESSOR PLAN or MERGED PLAN. Such
an election shall not cause suspension from the PLAN.
(e) ORDERING OF WITHDRAWALS. Whenever the PLAN
ADMINISTRATOR is required to make a distribution
under this
Section 29 or Section 31, the PLAN ADMINISTRATOR
shall withdraw in the following order:
(1) UNITS and earnings thereon attributable to a
participant's AFTER-TAX CONTRIBUTIONS made
prior to 1987 to the PREDECESSOR PLAN or a
MERGED PLAN, as applicable;
(2) UNITS and earnings thereon attributable to
AFTER-TAX CONTRIBUTIONS made after 1986 to
the PLAN, PREDECESSOR PLAN or a MERGED PLAN,
as applicable;
(3) UNITS and earnings thereon attributable to
ROLLOVER CONTRIBUTIONS (including ROLLOVER
CONTRIBUTIONS characterized as such under the
PREDECESSOR PLAN or a MERGED PLAN, as
applicable);
(4) UNITS available for withdrawal under
Subsection 29(c)(1) followed by UNITS
available for withdrawal under
Subsection 29(c)(2), but only if available
for withdrawal under that subsection;
(5) UNITS and earnings thereon attributable to a
participant's PRE-TAX CONTRIBUTIONS to the
PLAN, the PREDECESSOR PLAN or to a MERGED
PLAN, as applicable, but only to the extent
that such UNITS can be withdrawn by the
participant under Subsection 29(a).
30. Termination of Participation
----------------------------
Participation in the PLAN ends as of the date that a
participant ceases to be an ELIGIBLE EMPLOYEE. Although a
former participant may elect to have an account balance held
in the PLAN under Section 31 after participation ends, a
former participant may not contribute to the PLAN, except
that contributions to the PLAN shall be accepted with
respect to retroactive wage payments. A former participant
who has an account balance in the PLAN may make withdrawals
from the account balance, and exchange from one or more
FUNDS to another FUND or FUNDS pursuant to the terms of the
PLAN.
Upon the death of a participant, the PLAN ADMINISTRATOR
shall distribute the participant's account balance to the
participant's BENEFICIARY within a reasonable time but not
later than sixty (60) days after receipt of a completed
withdrawal form or 180 days after the PLAN ADMINISTRATOR
receives NOTICE of the participant's death. If the
BENEFICIARY does not complete a withdrawal form within the
time periods set forth above, the distribution shall be in
cash and paid directly to the BENEFICIARY.
<PAGE>
31. Distribution of Plan Benefits
-----------------------------
(a) Upon a participant's separation from SERVICE, a
distribution shall be made of the balances
allocated to a participant's accounts if the value
of the participant's account is $5,000 or less.
Such distribution shall be made no later than the
60th day following the close of the PLAN YEAR in
which a participant's SEVERANCE FROM SERVICE DATE
occurs, unless the participant elects to receive
distribution at an earlier date.
(b) If the value of a participant's account exceeds
$5,000, distribution shall be made upon receipt by
the PLAN ADMINISTRATOR of the written distribution
request of the participant. Distribution shall be
made within sixty (60) days of the receipt of such
distribution request. Any provision of the PLAN
notwithstanding, for PLAN YEARS under the
PREDECESSOR PLAN and the PLAN beginning on or
after January 1, 1997, if participation continues
beyond the end of the YEAR in which the
participant attains age 70-1/2, distribution of
the participant's interest in the PLAN shall
commence no later than April 1 of the YEAR
following the YEAR in which the participant
actually separates from SERVICE or attains age 70-
1/2, whichever is later, and shall be made in such
amounts and at such times as to meet the minimum
distribution requirements of CODE Section
401(a)(9).
(c) Subject to the provisions of APPENDIX A of the
PLAN with regard to forms of distribution and
other rights for that portion of a participant's
account which is attributable to participation in
a MERGED PLAN, unless otherwise directed by the
participant, all distributions due under the PLAN
shall be made in the form of a single lump sum and
shall be payable only out of the PLAN's assets as
directed by the PLAN ADMINISTRATOR.
(d) For single lump sum distributions made to a
participant pursuant to Subsection 31(c), unless a
cash distribution is requested, the TRUSTEE shall
distribute a certificate for the whole shares of
COMMON STOCK, and the TRUSTEE shall distribute the
TRUSTEE's check for the then current value of all
other UNITS credited to the participant's account,
plus any uninvested cash. Alternatively, at the
direction of the participant, FUND UNITS may be
transferred to the PG&E CORPORATION STOCK FUND
pursuant to Section 19, and distribution shall be
made by the TRUSTEE in whole shares of COMMON
STOCK.
(e) If a participant elects a cash distribution, upon
receipt of the appropriate form requesting such
distribution and liquidation of PG&E CORPORATION
STOCK FUND UNITS by the TRUSTEE, the TRUSTEE shall
distribute the then current value of such
liquidated units and all other INVESTMENT FUND
UNITS and uninvested cash. Until the TRUSTEE
converts INVESTMENT FUND UNITS other than PG&E
CORPORATION STOCK FUND UNITS to cash, all UNITS
shall continue to share in investment gains and
losses.
(f) Distributions hereunder shall be made in
accordance with CODE Section 401(a)(9)
and the regulations thereunder (including Treas.
Reg. Section 1.401-(a)(9)-2)
which are incorporated by reference herein.
<PAGE>
32. Direct Rollovers
----------------
Notwithstanding any provision of the PREDECESSOR PLAN or the
PLAN to the contrary that would otherwise limit a
participant's election under this Section 32, effective
January 1, 1993, a participant or BENEFICIARY who is a
surviving spouse may elect, at the time and in the manner
prescribed by the PLAN ADMINISTRATOR, to have any portion of
an eligible rollover distribution, as defined below, paid
directly to an ELIGIBLE RETIREMENT PLAN, as defined below,
specified by the participant or BENEFICIARY who is a
surviving spouse in a direct rollover. Any taxable portion
of an eligible rollover distribution that is not transferred
directly to an ELIGIBLE RETIREMENT PLAN shall be subject to
mandatory federal income tax withholding.
An eligible rollover distribution shall mean any
distribution of all or any portion of the balance to
the credit of the participant, except that an eligible
rollover distribution does not include any distribution
that is one of a series of substantially equal periodic
payments (not less frequently than annually) made for
the life (or life expectancy) of the participant or the
joint lives (joint life expectancies) of the
participant and his or her designated BENEFICIARY or
for a specified period of 10 YEARS or more; any
distribution to the extent such distribution is
required under CODE Section 401(a)(9); and the portion
of any distribution that is not includable in gross
income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities).
ADMINISTRATIVE PROVISIONS
-------------------------
33. Company's Powers and Duties
---------------------------
The COMPANY, acting through its BOARD OF DIRECTORS, the
Executive Committee or the Nominating and Compensation
Committee, reserves to itself the exclusive power to amend,
suspend or terminate the PLAN as provided below and to
appoint and remove from time to time the individuals
comprising the EMPLOYEE BENEFIT COMMITTEE.
All powers and duties not reserved to the COMPANY are
delegated to the EMPLOYEE BENEFIT COMMITTEE. Action of the
committee shall be by vote of a majority of the members of
the committee present at a meeting, or in writing without a
meeting and evidenced by the signature of any member who is
so authorized by the committee. The COMPANY indemnifies
each member of the committee against any personal liability
or expense arising out of any action or inaction of the
committee or of any member of the committee or of such
individual, except that due to his own willful misconduct.
34. Funding and Investment Provisions
---------------------------------
The EMPLOYEE BENEFIT COMMITTEE has the sole power and duty
from time to time to appoint and remove the TRUSTEE,
INVESTMENT MANAGERS, actuaries, accountants and such other
advisors and consultants as may be needed for the proper
financial administration and investment of the assets of the
PLAN. Supplementing such appointments, the EMPLOYEE BENEFIT
COMMITTEE may enter into appropriate agreements with each
TRUSTEE, INVESTMENT MANAGER or other advisors appointed
under this paragraph and delegate to them appropriate powers
and duties. The EMPLOYEE BENEFIT COMMITTEE may appoint and
delegate to one or more
<PAGE>
individuals the power and duty to
handle the day-to-day financial administration of the PLAN.
Such individuals need not be members of the committee and
shall serve at the pleasure of the committee.
The funding policy is set forth in Sections 3 and 4. The
EMPLOYEE BENEFIT COMMITTEE has the sole power and duty to
establish the investment policy and to review and revise it
from time to time as the committee shall determine in its
sole discretion. A copy of the current investment policy
shall be available for participants' review in the PLAN
OFFICE. Any revision of the investment policy shall not be
an amendment of the PLAN.
35. Administration
--------------
The EMPLOYEE BENEFIT COMMITTEE is the PLAN ADMINISTRATOR and
is responsible for the overall administration of the PLAN.
The PLAN ADMINISTRATOR has the sole power and duty to
establish, and from time to time revise, such rules and
regulations as may be necessary to administer the PLAN in a
nondiscriminatory manner for the exclusive benefit of
participants and all other persons entitled to benefits
under the PLAN. The PLAN ADMINISTRATOR shall also maintain
such records and make such computations, interpretations and
decisions as may be necessary or desirable for the proper
administration of the PLAN. The PLAN ADMINISTRATOR shall
maintain for participants' inspection copies of the PLAN,
TRUST AGREEMENT, investment policy, each agreement with an
INVESTMENT MANAGER, the latest annual report, PLAN
description and summary description and any amendments or
changes in any of these documents. On written request,
participants may obtain from the PLAN ADMINISTRATOR a copy
of any of these documents at a cost established by the PLAN
ADMINISTRATOR from time to time.
The PLAN ADMINISTRATOR may appoint and delegate to one or
more individuals the power and duty to handle the day-to-day
administration of the PLAN. Such individuals need not be
members of the committee and shall serve at the pleasure of
the committee.
The EMPLOYEE BENEFIT COMMITTEE shall appoint one or more
individuals, at least one of whom shall be a member of the
EMPLOYEE BENEFIT COMMITTEE, to serve as the final review
committee under the PLAN, to determine conclusively for all
parties any and all questions arising from the
administration of the PLAN and shall have sole and complete
discretionary authority and control to manage the operation
and administration of the PLAN, including, but not limited
to, the determination of all questions relating to
eligibility for participation and benefits, interpretation
of all PLAN provisions, determination of the amount and kind
of benefits payable to any participant or BENEFICIARY, and
construction of disputed or doubtful terms. Such decisions
shall be conclusive and binding on all parties and not
subject to further review.
36. Claims and Appeals Procedure
----------------------------
If a claim is denied in whole or in part, the PLAN
ADMINISTRATOR shall furnish to the claimant a written NOTICE
setting forth:
(a) Specific reason(s) for the denial;
(b) The PLAN provision(s) on which the denial is
based;
<PAGE>
(c) A description of any material or information, if
any, necessary for the claimant to perfect the
claim and an explanation of why such material or
information is necessary; and
(d) Information concerning the steps to be taken if
claimant wishes to submit a claim for review.
The above information shall be furnished to the claimant
within ninety (90) days after the claim is received by the
PLAN ADMINISTRATOR.
If a claimant is not satisfied with the written NOTICE
described in the preceding paragraph, such claimant may
request a full and fair review by so notifying the Review
Committee appointed by the EMPLOYEE BENEFIT COMMITTEE in
writing within ninety (90) days after receiving such NOTICE.
If a review is requested, the claimant shall also be
entitled, upon written request, to review pertinent
documents and to submit issues and comments in writing. The
Review Committee shall furnish the claimant with a written
final decision within sixty (60) days after receipt of the
request for review.
37. Qualified Domestic Relations Orders
-----------------------------------
The PLAN ADMINISTRATOR shall apply the provisions of this
Section 37 with regard to a Domestic Relations Order (as
defined below) to the extent not inconsistent with CODE
Section 414(p).
The PLAN ADMINISTRATOR shall establish procedures,
consistent with CODE Section 414(p), to determine the
qualified status of any Domestic Relations Order, to
administer distributions under any Qualified Domestic
Relations Order (as defined below), and to provide to the
Participant and the Alternate Payee(s) (as defined below)
all NOTICES required under CODE Section 414(p) with respect
to any Domestic Relations Order.
Within a reasonable period of time after the receipt of a
Domestic Relations Order (or any modification thereof), the
PLAN ADMINISTRATOR shall determine whether such order is a
Qualified Domestic Relations Order.
For purposes of this Section 37:
(a) Alternate Payee shall mean any spouse, former
spouse, child, or other dependent of a participant
who is recognized by a Domestic Relations Order as
having a right to receive all, or a portion of,
the benefits payable under the PLAN with respect
to such Participant.
(b) Domestic Relations Order shall mean any judgment,
decree, or order (including approval of a property
settlement agreement) which:
(1) relates to the provision of child support,
alimony payments, or marital property rights
to a spouse, former spouse, child, or other
dependent of a participant; and
(2) is made pursuant to a state domestic
relations law (including a community property
law).
<PAGE>
(c) Qualified Domestic Relations Order shall mean a
Domestic Relations Order which meets the
requirements of CODE Section 414(p).
38. Lost Participant or Beneficiary
-------------------------------
If, after three years, the PLAN ADMINISTRATOR cannot locate
a participant or BENEFICIARY who is entitled to a
distribution from an account, the UNITS, cash or COMMON
STOCK in the account shall be applied to reduce the amount
of future EMPLOYER CONTRIBUTIONS payable to the PLAN. A
participant or BENEFICIARY who is entitled to a distribution
from an account which has previously been applied to reduce
EMPLOYER CONTRIBUTIONS under this Section 38 shall, upon
filing a written claim, have the account reinstated in full
and upon such reinstatement shall receive a distribution of
the balance in the reinstated account, with interest at the
prevailing legal rate accrued from the date his account was
applied to reduce EMPLOYER CONTRIBUTIONS. United States
Savings Bonds in the account of a participant or BENEFICIARY
whom the PLAN ADMINISTRATOR cannot locate shall escheat to
the appropriate state or local governmental entity.
39. Benefits Are Not Assignable
---------------------------
Except as may be required by law, a participant's interest
in the PLAN and that of a participant's BENEFICIARY or
spouse shall not be subject in any manner to assignment,
anticipation, alienation, sale, transfer, pledge,
encumbrance or charge, whether voluntary or involuntary, and
any attempt to so assign, anticipate, sell, transfer,
pledge, encumber or charge the same shall be void.
40. Facility of Payment
-------------------
If the PLAN ADMINISTRATOR determines that any individual
entitled to any payment under the PLAN is physically or
mentally incompetent and no guardian or conservator has been
appointed to receive such payment, the PLAN ADMINISTRATOR
may cause all payments thereafter becoming due to such
individual to be applied for and on behalf of and for the
benefit of such individual. Payments made pursuant to this
provision shall completely discharge the COMPANY, the
EMPLOYEE's EMPLOYER, the PLAN ADMINISTRATOR, the TRUSTEE and
all fiduciaries of all further responsibility with respect
to such individual.
41. Military Service
----------------
Notwithstanding any provision of the PLAN to the contrary,
PRE-TAX CONTRIBUTIONS, AFTER-TAX CONTRIBUTIONS, MATCHING
EMPLOYER CONTRIBUTIONS and BASIC EMPLOYER CONTRIBUTIONS with
respect to qualified military service shall be provided in
accordance with CODE Section 414(u). Participant loan
repayments under Section 25 shall be suspended as permitted
under CODE Section 414(u).
42. Future of the Plan
------------------
If participation in the PLAN is ended because a substantial
portion of an EMPLOYER's property is sold or otherwise
disposed of or because an EMPLOYER withdraws from the PLAN,
a participant's interest is determined in accordance with
the provisions of the next paragraphs as if the PLAN itself
has been terminated.
<PAGE>
The COMPANY hopes and expects to continue this PLAN
indefinitely, but because future conditions cannot be
foreseen, its BOARD OF DIRECTORS necessarily reserves the
right to amend or terminate the PLAN at any time. However,
no amendment, merger or consolidation of the PLAN may be
made which would reduce the right that any individual may
then have with respect to the PLAN's assets then being held
under the PLAN or permit any funds to revert to an EMPLOYER
or to be used for any purpose except for the exclusive
benefit of participants, spouses and BENEFICIARIES.
If the PLAN is terminated, all contributions to the PLAN
shall cease but the PLAN shall continue to operate in all
other respects until all of the TRUST assets have been
distributed in accordance with the provisions of the PLAN in
effect on the date of its termination. In the event of a
merger or consolidation with, or transfer of assets or
liabilities to any other plan, if such other plan is then
terminated, participant shall receive a benefit immediately
after such merger, consolidation, or transfer which is equal
to or greater than the benefit which participant would have
received had the PLAN terminated immediately prior to such
merger, consolidation, or transfer.
43. Definitions
-----------
AAAF: The AGGRESSIVE ASSET
---- ALLOCATION FUND.
After-Tax Contributions: EMPLOYEE contributions to
----------------------- the PLAN and the
PREDECESSOR PLAN as
described in Subsection
3(c); all EMPLOYEE
Contributions made prior
to October 1, 1984, under
the PREDECESSOR PLAN and
contributions
characterized as such
under a MERGED PLAN. NON-
PRE-TAX CONTRIBUTIONS are
made with after-tax
dollars.
Aggressive Asset Allocation Fund: A fund invested in a
-------------------------------- diversified portfolio
with a primary emphasis
on stocks and a secondary
emphasis on bonds. (See
Section 17)
Basic Employer Contributions: EMPLOYER CONTRIBUTIONS to
---------------------------- the PLAN as described in
Subsection 4(b).
BIF: The BOND INDEX FUND.
---
Beneficiary: The person or persons
----------- entitled to receive any
distribution due under
the PLAN in the event of
a participant's death.
For a married
participant, the
participant's spouse
shall automatically be
the BENEFICIARY unless
the participant, with the
written consent of his
spouse, elects to
designate
<PAGE>
another person
or persons to be
BENEFICIARY. The consent
of the spouse shall be in
writing, shall
acknowledge the effect of
the consent, and shall be
witnessed by a notary
public or PLAN
representative. A
participant designates a
BENEFICIARY on a
Designation of
BENEFICIARY Form
available from the PLAN
ADMINISTRATOR. In the
event an unmarried
participant does not
designate a BENEFICIARY,
the participant's estate
shall be deemed to be the
BENEFICIARY.
Board of Directors: The BOARD OF DIRECTORS of
------------------ PG&E CORPORATION.
Bond Index Fund: A FUND invested in
--------------- marketable fixed-income
securities. (See Section
13)
Business Day: Any day that the New York
------------ Stock Exchange is open
for business.
CAAF: The CONSERVATIVE ASSET
---- ALLOCATION FUND.
Calendar Quarter: The three-month period
---------------- commencing on January 1,
April 1, July 1 or
October 1.
Code: The Internal Revenue Code
---- of 1986, as amended from
time to time.
Company: PG&E CORPORATION.
-------
Common Stock: The COMMON STOCK issued
------------ by PG&E CORPORATION.
Conservative Asset Allocation Fund:A fund invested
--------------------------------- in a diversified
portfolio with a primary
emphasis on bonds and a
secondary emphasis on
stocks. (See Section 15)
Covered Compensation: Earnings from an
-------------------- EMPLOYER, including
elective PRE-TAX
CONTRIBUTIONS and any
amounts set aside by the
participant from
otherwise taxable income
under a welfare benefit
plan qualified under
Section 125 of the CODE
(a cafeteria plan),
payments by an EMPLOYER
<PAGE>
to provide long-term
disability benefits and,
in the case of EMPLOYEES
of U.S. Generating
Company only, overtime
pay. COVERED COMPENSATION
shall not include the
taxable portion of
bonuses; overtime
compensation (except in
the case of EMPLOYEES of
U.S. Generating Company);
commissions or incentive
compensation; any
reimbursements or other
expense allowances;
fringe benefits; moving
expenses, payments, other
than temporary
compensation, made under
any Workers' Compensation
law, voluntary wage
benefit, or state
disability plan;
severance or disability
compensation or other
deferred compensation or
welfare benefits. For
PLAN YEARS beginning
after 1988 and before
1994, the maximum COVERED
COMPENSATION of each
EMPLOYEE that may be
taken into account each
PLAN YEAR shall not
exceed $200,000 (as
adjusted by the Secretary
of the Treasury under
CODE Section 401(a)(17).
For PLAN YEARS beginning
after 1993, the maximum
COVERED COMPENSATION of
each EMPLOYEE that may be
taken into account each
PLAN YEAR shall not
exceed $150,000 (as
adjusted by the Secretary
of the Treasury under
CODE Section 401(a)(17)).
For PLAN YEARS beginning
prior to
January 1, 1997 under the
PREDECESOR PLAN or the
PLAN, in determining the
COVERED COMPENSATION of a
HIGHLY COMPENSATED
EMPLOYEE for purposes of
this limitation, the
rules of CODE Section
414(q)(6) shall apply,
except that the term
"family" shall include
only the spouse of the
EMPLOYEE and any lineal
descendants of the
EMPLOYEE who have not
attained age 19 before
the close of the YEAR.
If the aggregate COVERED
COMPENSATION of family
members exceeds the
applicable compensation
limit as
<PAGE>
limited by CODE
Section 401(a)(17), then
the amount of COVERED
COMPENSATION considered
under the PLAN for each
family member is
proportionately reduced
so that the total equals
the applicable
compensation limitation
under CODE Section
401(a)(17). This rule
shall have no force nor
effect for PLAN YEARS
under the PREDECESSOR
PLAN or the PLAN
beginning on or after
January 1, 1997.
Eligible Employee: One entitled to become a
----------------- contributing participant,
provided, however, a
"leased EMPLOYEE," as
defined in CODE Section
414(n)(2) shall not be
entitled to become an
ELIGIBLE EMPLOYEE.
Eligible Retirement Plan: An individual retirement
------------------------ account described in CODE
Section 408(a), an
individual retirement
annuity described in CODE
Section 408(b), an
annuity plan described in
CODE Section 403(a), or a
qualified TRUST described
in CODE Section 401(a), that
accepts the participant's
eligible rollover
distribution. However,
in the case of an
eligible rollover
distribution to a
participant's surviving
spouse, an ELIGIBLE
RETIREMENT PLAN is an
individual retirement
account or individual
retirement annuity.
Employee: An EMPLOYEE of an
-------- EMPLOYER not covered by a
collective bargaining
agreement; provided,
however, that such term
shall not mean an
individual who is a
"leased employee" or who
has entered into a
written contract or
agreement with an
EMPLOYER which explicitly
excludes such individual
from participating in an
EMPLOYER's benefit plans.
The provisions of this
definition shall govern
under the PREDECESSOR
PLAN and the PLAN,
whether or not it is
determined that an
individual otherwise
meets the definition of
"common law" employee.
<PAGE>
Employee Benefit Committee: The EMPLOYEE BENEFIT
-------------------------- COMMITTEE referred to in
Section 33.
Employee Stock Ownership Plan: That portion of the
----------------------------- PLAN consisting of an
employee stock ownership
plan as defined in CODE
Section 4975(e)(7).
Employer: PG&E CORPORATION, Pacific
-------- Gas and Electric Company,
PG&E Energy Services
Corporation, PG&E Energy
Trading Corporation, PG&E
Gas Transmission
(Northwest), PG&E Gas
Transmission, Texas
Corporation, U.S.
Generating Company, and
any other company or
association designated by
the BOARD OF DIRECTORS,
the Nominating and
Compensation Committee of
the BOARD, or the
EMPLOYEE BENEFIT
COMMITTEE, as eligible to
participate in this PLAN
as an EMPLOYER.
Employer Contributions: Any contributions to the
---------------------- PLAN by the COMPANY or an
EMPLOYER on or after the
PLAN EFFECTIVE DATE
(including BASIC EMPLOYER
CONTRIBUTIONS and
MATCHING EMPLOYER
CONTRIBUTIONS) and
contributions
characterized as such
made by an EMPLOYER to
the PREDECESSOR PLAN or
a MERGED PLAN.
FlexDollars: Amounts which a
----------- participant elects
pursuant to the COMPANY's
Flex Plan for PLAN YEARS
beginning before January
1, 2000, to contribute as
PRE-TAX CONTRIBUTIONS.
Rules governing
FLEXDOLLARS are contained
in the COMPANY's Flex
Plan; rules governing the
treatment of FLEXDOLLARS
under this PLAN are
contained in Subsection
3(b).
Fund: The PG&E CORPORATION
---- STOCK FUND, the BOND
INDEX FUND, the LARGE
COMPANY STOCK INDEX FUND,
the SMALL
<PAGE>
COMPANY STOCK
INDEX FUND, the
INTERNATIONAL STOCK INDEX
FUND, the STABLE VALUE
FUND, the CONSERVATIVE
ASSET ALLOCATION FUND,
the MODERATE ASSET
ALLOCATION FUND, the
MUTUAL FUND WINDOW and
the AGGRESSIVE ASSET
ALLOCATION FUND or any of
them.
Highly Compensated: Whether an ELIGIBLE
------------------ EMPLOYEE is HIGHLY
COMPENSATED shall be
determined under CODE
Section 414(q) and as
described in applicable
Treasury regulations
thereunder or other
guidance issued by the
Internal Revenue Service.
International Stock Index Fund: A FUND invested in a
------------------------------ diversified portfolio
consisting principally of
non-U.S. common stock.
(See Section 11)
Investment Fund: The PG&E CORPORATION
--------------- STOCK FUND, the BOND
INDEX FUND, the LARGE
COMPANY STOCK INDEX FUND,
the SMALL COMPANY STOCK
INDEX FUND, the
INTERNATIONAL STOCK INDEX
FUND, the STABLE VALUE
FUND, the CONSERVATIVE
ASSET ALLOCATION FUND,
the MODERATE ASSET
ALLOCATION FUND, the
MUTUAL FUND WINDOW and
the AGGRESSIVE ASSET
ALLOCATION FUND or any of
them.
The EMPLOYEE BENEFIT
COMMITTEE, in its
discretion, may modify,
add to or remove one or
more of the INVESTMENT
FUNDS. At least three of
the INVESTMENT FUNDS
shall be diversified,
have materially different
risk and return
characteristics, and
otherwise be designed to
comprise a broad range of
investment
<PAGE>
alternatives
as described under
Section 404(c) of ERISA.
Investment Manager: A fiduciary designated by
------------------ the EMPLOYEE BENEFIT
COMMITTEE under this PLAN
to whom has been
delegated the
responsibility and
authority to manage,
acquire or dispose of
PLAN assets (a) who
(1) is registered as an
investment adviser under
the Investment Advisers
Act of 1940; (2) is a
bank, as defined in that
Act; or (3) is an insur-
ance company qualified to
perform investment
advisory services under
the laws of more than one
state; and (b) who has
acknowledged in writing
that it is a fiduciary
with respect to the
management, acquisition,
and control of PLAN
assets.
ISF: The INTERNATIONAL STOCK
--- INDEX FUND.
Large Company Stock Index Fund: A FUND invested in a
------------------------------ diversified portfolio
consisting principally of
common stock of large
U.S. companies. (See
Section 9)
LCSF: The LARGE COMPANY STOCK
---- INDEX FUND.
Long Term Disability Plan: A plan maintained by an
------------------------- EMPLOYER to provide long-
term disability benefits
to covered individuals.
MAAF: The MODERATE ASSET
---- ALLOCATION FUND.
Matching Employer Contributions: Any contributions to
------------------------------- the PLAN by the COMPANY
or an EMPLOYER on or
after the PLAN EFFECTIVE
DATE under Section 4(a)
and contributions
characterized as such
made by an EMPLOYER to
the PREDECESSOR PLAN or
a MERGED PLAN.
Merged Plan: A qualified defined
----------- contribution retirement
plan maintained by an
EMPLOYER which was merged
into
<PAGE>
this PLAN as of the
PLAN EFFECTIVE DATE.
Moderate Asset Allocation Fund: A fund invested in a
------------------------------ diversified portfolio
with an emphasis on
stocks and bonds. (See
Section 16)
Mutual Fund Window: A fund maintained for the
------------------ purpose of allowing
participants to invest in
a variety of mutual funds
managed by various
investment management
firms. (See Section 14)
Notice: Any method of
------ communication, whether
electronic, telephonic,
written or other,
provided that the PLAN
ADMINISTRATOR has
communicated in writing
to participants any such
method and its format as
appropriate and
acceptable.
PG&E Corporation Stock Fund: A fund invested in the
--------------------------- COMMON STOCK issued by
PG&E CORPORATION. (See
Section 8)
Plan: The PG&E CORPORATION
---- RETIREMENT SAVINGS PLAN,
as amended and restated
and set forth herein.
Plan Administrator: EMPLOYEE BENEFIT
------------------ COMMITTEE, PG&E
Corporation, One Market
Street, Spear Tower,
Suite 400, San Francisco,
CA 94105
Plan Effective Date: June 1, 1999, the
------------------- effective date of this
amended and restated
PLAN. Notwithstanding
the foregoing, the PLAN
EFFECTIVE DATE shall be
May 1, 1999, with respect
to any EMPLOYEE of (i)
PG&E Gas Transmission
Corporation or any of its
subsidiaries, (ii) PG&E
Gas Transmission, Texas
Corporation, or any of
its subsidiaries, or
(iii) PG&E Gas
Transmission Teco, Inc.,
or any of its
subsidiaries.
Plan Office: PG&E Corporation, One
----------- Market Street, Spear
Tower, Suite 400, San
Francisco, CA 94105
Plan Year: The calendar YEAR
--------- beginning January 1 and
ending December 31.
<PAGE>
Pre-Tax Contributions: Amounts deferred from a
--------------------- Participant's COVERED
COMPENSATION under the
PLAN or the PREDECESSOR
PLAN as described in
Subsection 3(a) and
contributions
characterized as such
under a MERGED PLAN. PRE-
TAX CONTRIBUTIONS are
made with pre-tax
dollars.
Predecessor Plan: The Pacific Gas and
---------------- Electric Company Savings
Fund Plan for Non-Union
Employees, as originally
placed in effect on April
1, 1959, and amended
thereafter.
Retirement Plan: A defined benefit plan
--------------- that is intended to meet
the requirements of CODE
Section 401(a) and which
is sponsored by an
EMPLOYER.
Rollover Contribution: An amount contributed by
--------------------- a participant which
originated from another
EMPLOYER's qualified PLAN
which is eligible for
rollover under CODE
Section 402(c)(4).
SCSF: The SMALL COMPANY STOCK
---- INDEX FUND.
Service: The period of time
------- commencing with the first
day of employment or
reemployment for an
EMPLOYER and ending on
participant's SEVERANCE
FROM SERVICE DATE. For
an EMPLOYEE covered under
the PREDECESSOR PLAN or a
MERGED PLAN prior to the
PLAN EFFECTIVE DATE,
SERVICE will include such
EMPLOYEE's period of
service as determined
under the PREDECESSOR
PLAN or respective MERGED
PLAN as of the day
preceding the PLAN
EFFECTIVE DATE.
If an EMPLOYEE with less
than one YEAR of SERVICE
is rehired after a period
of severance which
extends for 12 months or
more, the EMPLOYEE shall
be treated as a new
EMPLOYEE for all
purposes, and the SERVICE
and compensation
<PAGE>
before
the SEVERANCE FROM
SERVICE DATE shall not be
recognized for any
purpose of the PLAN.
Participants who have a
period of severance after
they have completed at
least one year of SERVICE
and who are later
rehired, immediately
become ELIGIBLE EMPLOYEES
entitled to contribute in
accordance with their
total years of SERVICE.
SERVICE shall also
include all years of
SERVICE with:
(a) Any corporation
which is a member of
the same controlled
group of
corporations as the
COMPANY or of any
other EMPLOYER
(within the meaning
of CODE
Section 414(b));
(b) Any trade or
business under the
common control of
the COMPANY or of
any other EMPLOYER
(within the meaning
of CODE
Section 414(c));
(c) Any service
organization which
is a member of the
same affiliated
service group as the
COMPANY or of any
other EMPLOYER
(within the meaning
of CODE Section
414(m)).
Severance From Service Date: A. The date on
--------------------------- which an EMPLOYEE
quits, retires, is
discharged or dies;
or
B. The first
anniversary of the
first date of a
period in which a
participant remains
absent from work
for an EMPLOYER for
any reason other
than resignation,
retirement,
discharge, or
death.
C. For the purpose of
determining the
SEVERANCE FROM
SERVICE DATE, the
<PAGE>
following periods
shall not be
considered as
absences from work
for an EMPLOYER:
(1) Absence on a
leave of
absence
authorized by
an EMPLOYER.
(2) Absence because
of illness or
injury as long
as the
participant is
entitled to
receive sick
leave pay or is
entitled to
receive
benefits under
the provisions
of the
Voluntary Wage
Benefit Plan, a
state
disability
plan, the LONG
TERM DISABILITY
PLAN, or a
Workers'
Compensation
Law.
(3) Absence for
military
service or
service in the
Merchant
Marines so long
as reemployment
rights are
protected by
law.
(4) Absence caused
by layoff for
lack of work of
less than 12
continuous
months for a
participant who
has less than
five YEARS of
SERVICE, or 24
continuous
months for a
participant who
has five or
more YEARS of
SERVICE.
Small Company Stock Index Fund: A FUND invested in a
------------------------------ diversified portfolio
consisting principally of
common stock of small
capitalization U.S.
companies. (See Section
10)
Stable Value Fund: A FUND invested in fixed
----------------- rate, fixed term
investment contracts.
(See Section 12)
SVF: The STABLE VALUE FUND.
---
<PAGE>
Trust: The TRUST into which all
----- contributions are
deposited and from which
all distributions are
made.
Trustee: Fidelity Management Trust
------- Company, or such other
bank or trust company
selected by the EMPLOYEE
BENEFIT COMMITTEE which
agrees to act as TRUSTEE
or successor TRUSTEE of
the TRUST pursuant to the
TRUST AGREEMENT.
Trust Agreement: The agreement between the
--------------- COMPANY and the TRUSTEE.
Unit: A measurement of
---- participant's interest in
the INVESTMENT FUNDS.
Year: The calendar YEAR
---- beginning January 1 and
ending December 31.
<PAGE>
SPECIAL PROVISION A
TOP HEAVY PROVISIONS
--------------------
(a) General Rule
------------
For any PLAN YEAR for which the PLAN (or the
PREDECESSOR PLAN) is a "top-heavy plan" as defined in
Subsection (e) below, any other provisions of this PLAN
(or the PREDECESSOR PLAN) to the contrary
notwithstanding, this PLAN (or the PREDECESSOR PLAN)
shall be subject to the following provisions:
(1) The minimum contribution provisions of Subsection
(b).
(2) The limitation on contribution set by Subsection
(c).
(b) Minimum Contribution Provisions
-------------------------------
Each participant who (i) is a non-key EMPLOYEE (as
defined in Subsection (g) below) and (ii) is employed
on the last day of the PLAN YEAR, even if such
individual is excluded from the PLAN (or the
PREDECESSOR PLAN) for failing to make mandatory
contributions to the PLAN (or the PREDECESSOR PLAN),
shall be entitled to have contributions allocated to
his account of not less than
3 percent (the "minimum contribution percentage") of
the participant's compensation (within the meaning of
CODE Section 415). In determining the minimum
contribution percentage to be allocated to an
EMPLOYEE's account, a key EMPLOYEE's PRE-TAX
CONTRIBUTIONS shall be considered as an EMPLOYER
CONTRIBUTION. However, PRE-TAX CONTRIBUTIONS on behalf
of EMPLOYEES other than key EMPLOYEES shall not be
considered as EMPLOYER CONTRIBUTIONS.
The minimum contribution percentage set forth above
shall be reduced for any PLAN YEAR in which the
percentage at which contributions are made (or required
to be made) under the PLAN for the PLAN YEAR for the
key EMPLOYEE for whom such percentage is the highest
for such PLAN YEAR is less than 3 percent. For this
purpose, the percentage with respect to a key EMPLOYEE
(as defined in Subsection (f) below) shall be
determined by dividing the contributions (including
forfeitures and PRE-TAX CONTRIBUTIONS) made for such
key EMPLOYEES by so much of his total compensation for
the PLAN YEAR.
Contributions taken into account under the immediately
preceding sentence shall include contributions under
this PLAN (or the PREDECESSOR PLAN) and under all other
defined contribution plans required to be included in
an aggregation group (as defined in Subsection (e)(3)
below) but shall not include any plan required to be
included in such aggregation group if such plan enables
a defined contribution plan required to be included in
such group to meet the requirements of the CODE
prohibiting discrimination as to contributions or
benefits in favor of EMPLOYEES who are officers,
shareholders or the highly-compensated or prescribing
the minimum participation standards.
Contributions taken into account under this Subsection
(b) shall not include any contributions under the
Social Security Act or any other federal or state law.
<PAGE>
(c) Limitations on Contributions
----------------------------
In the event that the EMPLOYER also maintains a defined
benefit PLAN providing benefits on behalf of
participants in this PLAN, one of the two following
provisions shall apply:
(1) If for the PLAN YEAR this PLAN (or the PREDECESSOR
PLAN) would not be a "top-heavy PLAN" as defined
in Subsection (e) below if "90 percent" were
substituted for "60 percent," then Subsection (b)
shall apply for such PLAN YEAR as if amended so
that "4 percent" were substituted for "3 percent."
(2) If for the PLAN YEAR this PLAN (or the PREDECESSOR
PLAN) would continue to be a "top-heavy PLAN" as
defined in Subsection (e) below if "90 percent"
were substituted for "60 percent," then the
denominator of both the defined contribution PLAN
fraction and the defined benefit PLAN fraction
shall be calculated as set forth in Section 415(e)
of the CODE for the limitation YEAR ending in such
PLAN YEAR by substituting "1.0" for "1.25" in each
place such figure appears, except with respect to
any individual for whom there are no EMPLOYER
CONTRIBUTIONS allocated or any accruals for such
individual under the defined benefit PLAN.
Furthermore, the transitional rule set forth in
Section 415(e) of the CODE shall be applied by
substituting "$41,500" for "$51,875."
(d) Coordination with Other Plans
-----------------------------
In the event that another defined contribution or
defined benefit plan maintained by the EMPLOYER
provides contributions or benefits on behalf of
participants in this PLAN (or the PREDECESSOR PLAN),
such other plan shall be treated as a part of this PLAN
(or the PREDECESSOR PLAN) pursuant to applicable
principles (such as Rev. Rul. 81-202 or any successor
ruling or regulations) in determining whether this PLAN
(or the PREDECESSOR PLAN) satisfies the requirements of
Subsections (b), (c) and (d). Such determination shall
be made upon the advice of counsel by the EMPLOYEE
BENEFIT COMMITTEE.
(e) Top-Heavy Plan Definition
-------------------------
This PLAN (OR THE PREDECESSOR PLAN) shall be a "top-
heavy PLAN" for any PLAN YEAR if, as of the
determination date (as defined in Subsection (e)(1)
below), the aggregate of the accounts under the PLAN
and any required aggregation group or permissive
aggregation group of plans for participants (including
former participants) who are key EMPLOYEES (as defined
in Subsection (f) below but not including accounts of
individuals excluded under CODE Section 416(g)(4)(E))
exceeds 60 percent of the present value of the
aggregate of the accounts for all participants,
excluding former key EMPLOYEES, or if this PLAN is
required to be in an aggregation group (as defined in
Subsection (e)(3) below) which for such PLAN YEAR is a
top-heavy group (as defined in Subsection (e)(4)
below).
(1) "Determination date" means for any PLAN YEAR the
last day of the immediately preceding PLAN YEAR.
(2) "Valuation date" means the last day of each PLAN
YEAR.
<PAGE>
(3) "Aggregation group" means the group of plans, if
any, that includes both the group of plans that
are required to be aggregated and the group of
plans that are permitted to be aggregated.
(A) The group of plans that are required to be
aggregated (the "required aggregation group")
includes
(i) Each plan of the EMPLOYER (as defined in
Subsection (h) below) in which a key
EMPLOYEE is a participant, including
collectively-bargained plans, and
(ii) Each other plan, including collectively-
bargained plans of the EMPLOYER (as
defined in Subsection (h) below) which
enables a plan in which a key EMPLOYEE
is a participant to meet the
requirements of the CODE prohibiting
discrimination as to contributions or
benefits in favor of EMPLOYEES who are
officers, shareholders or the highly-
compensated or prescribing the minimum
participation standards.
(B) The group of plans that are permitted to be
aggregated (the "permissive aggregation
group") includes the required aggregation
group plus one or more plans of the EMPLOYER
(as defined in Subsection (h) below) that is
not part of the required aggregation group
and that the EMPLOYEE BENEFIT COMMITTEE
certifies as constituting a plan within the
permissive aggregation group. Such plan or
plans may be added to the permissive
aggregation group only if, after the
addition, the aggregation group as a whole
continues not to discriminate as to
contributions or benefits in favor of
officers, shareholders or the HIGHLY
COMPENSATED and to meet the minimum
participation standards under the CODE.
(4) "Top-heavy group" means the aggregation group, if
as of the applicable determination date, the sum
of the present value of the cumulative accrued
benefits for key EMPLOYEES under all defined
benefit plans included in the aggregation group
plus the aggregate of the accounts of key
EMPLOYEES under all defined contribution plans
included in the aggregation group exceeds 60
percent of the sum of the present value of the
cumulative accrued benefits for all EMPLOYEES,
excluding former key EMPLOYEES, under all such
defined benefit plans plus the aggregate accounts
for all EMPLOYEES, excluding former key EMPLOYEES,
under such defined contribution plans. If the
aggregation group that is a top-heavy group is a
required aggregation group, each plan in the group
shall be top heavy. If the aggregation group that
is a top-heavy group is a permissive aggregation
group, only those plans that are part of the
required aggregation group shall be treated as top-
heavy. If the aggregation group is not a top-
heavy group, no plan within such group shall be
top-heavy.
(5) In determining whether this PLAN (OR THE
PREDECESSOR PLAN) constitutes a "top-heavy PLAN,"
the EMPLOYEE BENEFIT COMMITTEE (or its agent)
shall make the following adjustments in connection
therewith:
<PAGE>
(A) When more than one plan is aggregated, the
EMPLOYEE BENEFIT COMMITTEE shall determine
separately for each plan as of each plan's
determination date the present value of the
accrued benefits or account balance. The
results shall then be aggregated separately
by adding the results of each plan as of the
determination dates for such plans that fall
with the same calendar YEAR.
(B) In determining the present value of the
cumulative accrued benefit or the amount of
the account of any EMPLOYEE, such present
value or account shall include the amount in
dollar value of the aggregate distributions
made to such EMPLOYEE under the applicable
PLAN during the five-year period ending on
the determination date, unless reflected in
the value of the accrued benefit or account
balance as of the most recent valuation date.
Such amounts shall include distributions to
EMPLOYEES which represented the entire amount
credited to their accounts under the
applicable PLAN.
(C) Further, in making such determination, in any
case where an individual is a "non-key
EMPLOYEE" as defined in Subsection (g) below,
with respect to an applicable plan, but was a
key EMPLOYEE with respect to such plan for
any prior PLAN YEAR, any accrued benefit and
any account of such EMPLOYEE shall be
altogether disregarded. For this purpose, to
the extent that a key EMPLOYEE is deemed to
be a key EMPLOYEE if he or she met the
definition of key EMPLOYEE within any of the
four preceding PLAN YEARS, this provision
shall apply following the end of such period
of time.
(f) Key EMPLOYEE
The term "key EMPLOYEE" means any EMPLOYEE or former
EMPLOYEE under this PLAN who, at any time during the
PLAN YEAR containing the determination date or during
any of the four preceding PLAN YEARS, is or was one of
the following:
(1) An officer of the EMPLOYER having an annual
compensation greater than 50 percent of the amount
in effect under Section 415(b)(1)(A) of the CODE
for such PLAN YEAR. Whether an individual is an
officer shall be determined by the EMPLOYEE
BENEFIT COMMITTEE on the basis of all the facts
and circumstances, such as an individual's
authority, duties and term of office, not on the
mere fact that the individual has the title of
officer. For any such PLAN YEAR, these shall be
treated as officers no more than the lesser of:
(A) 50 EMPLOYEES, or
(B) the greater of three EMPLOYEES or 10 percent
of the EMPLOYEES.
For this purpose, if there are more than 50 officers,
the 50 highest-paid officers shall be the key
EMPLOYEES.
<PAGE>
(2) One of the ten EMPLOYEES owning (or considered as
owning, within the meaning of the constructive
ownership rules of the CODE) the largest interests
in the EMPLOYER (as defined in Subsection (h)).
An EMPLOYEE who has some ownership interest is
considered to be one of the top ten owners unless
at least ten other EMPLOYEES own a greater
interest than that EMPLOYEE. However, an EMPLOYEE
shall not be considered a top ten owner for a PLAN
YEAR if the EMPLOYEE earns an amount equal to or
less than the maximum dollar limitation on
contributions and other annual additions to a
participant's account in a defined contribution
PLAN under the CODE as in effect for the calendar
YEAR in which the determination date falls.
(3) Any person who owns (or is considered as owning
within the meaning of the constructive ownership
rules of the CODE) more than 5 percent of the
outstanding stock of the EMPLOYER or stock
possessing more than
5 percent of the combined total voting power of
all stock of the EMPLOYER.
(4) A 1 percent owner of the EMPLOYER having an annual
compensation from the EMPLOYER of more than
$150,000, and who owns more than
1 percent of the outstanding stock of the EMPLOYER
or stock possessing more than 1 percent of the
combined total voting power of all stock of the
EMPLOYER. For purposes of this subsection,
compensation means all items includable as
compensation for purposes of applying the
limitations on contributions and other annual
additions to a participant's account in a defined
contribution plan and the maximum benefit payable
under a defined benefit plan under the CODE.
For purposes of parts (1), (2), (3) and (4) of this
definition, a BENEFICIARY of a key EMPLOYEE shall be
treated as a key EMPLOYEE. For purposes of parts (3)
and (4), each EMPLOYER is treated separately (without
regard to the definition in Subsection (h)) in
determining ownership percentages; but, in determining
the amount of compensation, the definition of EMPLOYER
in Subsection (h) is taken into account.
(g) Non-key EMPLOYEE
----------------
The term "non-key EMPLOYEE" means any EMPLOYEE (and any
BENEFICIARY or an EMPLOYEE) who is not a key EMPLOYEE.
(h) Employer
--------
The term "EMPLOYER" as defined in Section 43 of this PLAN.
<PAGE>
APPENDIX A
OPERATIVE PROVISIONS OF CERTAIN MERGED PLANS
--------------------------------------------
The following provisions of certain MERGED PLANS are deemed to be
"protected benefits" pursuant to CODE Section 411(d)(6) and the
regulations thereunder and accordingly will be applied under this
PLAN respectively for former participants of these MERGED PLANS
who are participants in the PLAN on and after the PLAN EFFECTIVE
DATE. The "protected benefits" specified herein for each MERGED
PLAN shall only apply to former participants of that MERGED PLAN
and only to that portion of a participant's account under this
PLAN which is attributable to prior participation under the
MERGED PLAN.
1. THE PACIFIC GAS TRANSMISSION COMPANY SAVINGS FUND PLAN FOR
MANAGEMENT EMPLOYEES
(a) In addition to the conditions stated in Section 29 of
the PLAN for withdrawals during service, a former
participant of the Pacific Gas Transmission Company
Savings Fund Plan for Management Employees who becomes
a participant in the PLAN may, at any time without
restriction, elect to withdraw from his or her account
under this PLAN amounts transferred, if any, from such
former participant's Prior Company Account under the
Pacific Gas Transmission Company Savings Fund Plan for
Management Employees. Such an election shall not cause
suspension from the PLAN.
(b) In addition to the form of payment stated in Section 31
of the PLAN for distributions following a separation
from service, a former participant of the Pacific Gas
Transmission Company Savings Fund Plan for Management
Employees who becomes a participant in the PLAN may
elect, if the value of his or her account exceeds
$5,000, to receive distribution in the form of (i) any
portion of the distribution to be paid in a cash lump
sum, with the remainder to be paid in cash at a later
time, or (ii) cash installments over a period not to
exceed the life expectancy of the participant and his
or her beneficiary, with such life expectancy to be
computed at the time distribution first commences
(without further recalculation) using the expected
return multiples set forth in Tables V and VI of Treas.
Reg. Section 1.72-9.
2. THE PG&E GAS TRANSMISSION, TEXAS CORPORATION SAVINGS FUND
PLAN
(a) Notwithstanding the definition of SEVERANCE FROM
SERVICE DATE contained in Section 43 of the Plan, a
former participant of the Pacific Gas Transmission,
Texas Corporation Savings Fund Plan who becomes a
participant in the PLAN may retire under the PLAN and
receive a distribution of his or her account if he or
she is found to be disabled as defined herein. A
former participant of the Pacific Gas Transmission,
Texas Corporation Savings Fund Plan who becomes a
participant in the PLAN shall be deemed to be disabled
if such participant, as a result of illness or injury,
suffers from a condition of mind or body which
qualifies the participant for disability benefits from
the Social Security Administration. The PLAN
ADMINISTRATOR will determine the existence of such
disability and may rely on medical evidence by a
licensed physician selected by the PLAN ADMINISTRATOR.
<PAGE>
(b) In addition to the form of payment stated in Section 31
of the PLAN for distributions following a separation
from service, a former participant of the Pacific Gas
Transmission, Texas Corporation Savings Fund Plan who
becomes a participant in the PLAN may elect, if the
value of his or her account exceeds $5,000, to receive
distribution in the form of (i) a combination of a
cash lump sum, with the remainder to be paid in cash
installments (as described in clause (ii)) or (ii)
entirely in substantially equal cash installments
subject to subsequent gains and losses on the account,
provided that such participant may, after installment
payments have commenced, elect at any time to have the
remainder of his or her interest paid in a single cash
lump sum.
(c) In addition to the form of payment stated in Section 31
of the PLAN for distributions following a separation
from service and in addition to the options described
in Section 2(b) of this Appendix A, a former
participant of the Pacific Gas Transmission, Texas
Corporation Savings Fund Plan who is a Shoreline
Affected Employee (as described in the "Statement of
Transfer of Participant Accounts from Omni Hotels
401(k) Plan to Pacific Gas Transmission, Texas
Corporation Savings Fund Plan") and who becomes a
participant in the PLAN may elect, if the value of his
or her account exceeds $5,000, distribution in the form
of:
(1) if the participant has attained age 55, monthly,
quarterly, semiannual or annual installments for a
period of not less than five (5) years, or more
than the life expectancy of the participant or the
joint life expectancy of the participant and
beneficiary, determined under Proposed Treas. Reg.
Section 1.401(a)(9)-2 A-4 which satisfies the
minimum distribution incidental benefit
requirement of CODE Section 401(a)(9)(g); or
(2) if the participant's Employment Commencement Date
(as determined under the Shoreline Operating
Company 401(k) Plan) was prior to
January 1, 1995, a non-transferable fixed or
variable annuity contract purchased with the
vested portion of his Account under the PLAN from
an insurance company selected by the EMPLOYEE
BENEFIT COMMITTEE.
If a participant who is married wishes to elect an
annuity contract, the form of payment will be a
Qualified Joint and Survivor Annuity unless the
participant waives such form with spousal consent
in favor of a Single Life Annuity or Joint and
Survivor Annuity.
For purposes of this Section 2(c) of Appendix A,
(i) a single life annuity shall mean an annuity
providing equal monthly payments for the life of
the participant with no survivor benefits; (ii) a
joint and survivor annuity shall mean an annuity
payable for the life of the participant, and if
the participant's beneficiary survives the
participant, 75 percent or 100 percent of the
participant's annuity payment shall be continued
to the beneficiary for his or her life; (iii) a
qualified joint and survivor annuity shall mean an
annuity which provides a level monthly benefit to
the participant for his or her lifetime, and upon
the participant's death, 50 percent of the
participant's annuity payment shall be continued
to his or her beneficiary for life, where such
beneficiary is the participant's spouse as of the
annuity starting date.
<PAGE>
The PLAN ADMINISTRATOR shall provide notice to a
participant (as described within this Section 2(c)
of Appendix A) who wishes to elect an annuity
contract form of payment in accordance with
Section 11.4 of the Shoreline Operating Company
401(k) Plan, which is incorporated by reference
herein.
3. U.S. GENERATING COMPANY 401(K) PROFIT-SHARING PLAN
(a) Notwithstanding the definition of SEVERANCE FROM
SERVICE DATE contained in Section 43 of the Plan, a
former participant of the U.S. Generating Company
401(K) Profit-Sharing Plan who becomes a participant in
the PLAN may retire under the PLAN and receive a
distribution of his or her account if he or she is
found to be disabled as defined herein. A former
participant of the U.S. Generating Company 401(K)
Profit-Sharing Plan who becomes a participant in the
PLAN shall be deemed to be disabled if, based on
competent medical evidence by a licensed physician
selected by the PLAN ADMINISTRATOR, such participant,
as a result of physical or mental disease or condition,
will be permanently incapable of performing his or her
usual and customary employment with the EMPLOYER.
(b) In addition to the form of payment stated in Section 31
of the PLAN for distributions following a separation
from service (including for disability as provided in
3(a) of this Appendix A), a former participant of the
U.S. Generating Company 401(K) Profit-Sharing Plan who
becomes a participant in the PLAN may elect, if the
value of his or her account exceeds $5,000, to receive
distribution in the form of:
(1) substantially uniform annual (or more frequent)
cash installments, for which the participant or
beneficiary may elect the recalculation rule of
CODE Section 401(a)(9)(D), over (i) if the
beneficiary is the participant's spouse, a period
not to exceed the joint and last survivor life
expectancy of the participant and beneficiary,
computed using the expected return multiples set
forth in Treas. Reg. Section 1.72-9; or (ii) if
the beneficiary is not the participant's spouse, a
period not to exceed the lesser of the joint and
last survivor life expectancy of the participant
and beneficiary, computed using the expected
return multiples set forth in Treas. Reg. Section
1.72-9, or the period determined under Proposed
Treas. Reg. Section 1.401(a)(9)-2 A-4 which
satisfies the minimum distribution incidental
benefit requirement of CODE Section 401(a)(9)(g);
or
(2) if the participant first became eligible to
participate in the U.S. Generating Company 401(K)
Profit-Sharing Plan prior to January 1, 1995, (i)
a Qualified Joint and Survivor Annuity as defined
herein if such participant is married on the date
of distribution (annuity starting date), (ii) a
Single Life Annuity as defined herein, or (iii) a
Joint and Survivor Annuity as defined herein, any
of which shall be purchased with the value of the
participant's account.
For purposes of this Section 3(b) of Appendix A,
(i) a single life annuity shall mean an annuity
providing equal monthly payments for the life of
the participant with no survivor benefits; (ii) a
joint and survivor annuity shall mean an annuity
payable for the life of the participant, and if
the participant's beneficiary survives the
participant, 50 percent, 75 percent or 100 percent
of the participant's annuity payment shall be
continued to the
<PAGE>
beneficiary for his or her life;
(iii) a qualified joint and survivor annuity shall
mean an annuity which provides a level monthly
benefit to the participant for his or her
lifetime, and upon the participant's death,
50 percent of the participant's annuity payment
shall be continued to his or her beneficiary for
life, where such beneficiary is the participant's
spouse as of the annuity starting date.
For purposes of this Section 3(b) of Appendix A, a
participant who is unmarried and wishes to elect
an annuity form of payment may elect either the
Single Life Annuity or Joint and Survivor Annuity.
A participant who is married and wishes to elect
an annuity form of payment will receive payment in
the form of a Qualified Joint and Survivor Annuity
unless the participant waives such form with
spousal consent (as defined in
Section 1.52 of the U.S. Generating Company 401(K)
Profit-Sharing Plan, which is incorporated by
reference herein) in favor of a Single Life
Annuity or Joint and Survivor Annuity.
The PLAN ADMINISTRATOR shall provide notice to a
participant (as described within this Section 3(b)
of Appendix A) who wishes to elect an annuity form
of payment in accordance with Sections 12.4(d)
through (g) of the U.S. Generating Company 401(K)
Profit-Sharing Plan, which are incorporated by
reference herein.
4. U.S. GENERATING COMPANY RETIREMENT PLAN
(a) Notwithstanding the definition of SEVERANCE FROM
SERVICE DATE contained in Section 43 of the Plan, a
former participant of the U.S. Generating Company
Retirement Plan who becomes a participant in the PLAN
may retire under the PLAN and receive a distribution of
his or her account if he or she is found to be disabled
as defined herein. A former participant of the U.S.
Generating Company Retirement Plan who becomes a
participant in the PLAN shall be deemed to be disabled
if, based on competent medical evidence by a licensed
physician selected by the PLAN ADMINISTRATOR, such
participant, as a result of physical or mental disease
or condition, will be permanently incapable of
performing his or her usual and customary employment
with the EMPLOYER.
(b) Notwithstanding the provisions of Section 31 of the
PLAN for distributions following a separation from
service, upon such separation from service (including
disability as provided in 4(a) of this Appendix A) a
former participant of the U.S. Generating Company
Retirement Plan who becomes a participant in the PLAN
shall, if the value of his or her account exceeds
$5,000, receive distribution in the form of:
(1) a Qualified Joint and Survivor Annuity as defined
herein if such participant is married on the date
of distribution (annuity starting date), or
(2) a Single Life Annuity as defined herein if such
participant is unmarried on the date of
distribution.
Notwithstanding the foregoing provisions of this
Section 4(b) of Appendix A, a participant may, in
lieu of such required forms of payment, elect any
of the following forms of payment:
<PAGE>
(3) a lump sum as described in Section 31 of the PLAN;
or
(4) substantially uniform annual (or more frequent)
cash installments, for which the participant or
beneficiary may elect the recalculation rule of
CODE Section 401(a)(9)(D), over (i) if the
beneficiary is the participant's spouse, a period
not to exceed the joint and last survivor life
expectancy of the participant and beneficiary,
computed using the expected return multiples set
forth in Treas. Reg. Section 1.72-9, or (ii) if
the beneficiary is not the participant's spouse, a
period not to exceed the lesser of the joint and
last survivor life expectancy of the participant
and beneficiary, computed using the expected
return multiples set forth in Treas. Reg. Section
1.72-9, or the period determined under Proposed
Treas. Reg. Section 1.401(a)(9)-2 A-4 which
satisfies the minimum distribution incidental
benefit requirement of CODE Section 401(a)(9)(g);
or
(5) a Single Life Annuity as defined herein, which
shall be purchased with the value of the
participant's account.
(6) a Joint and Survivor Annuity as defined herein,
which shall be purchased with the value of the
participant's account.
For purposes of this Section 4(b) of Appendix A,
(i) a single life annuity shall mean an annuity
providing equal monthly payments for the life of
the participant with no survivor benefits; (ii) a
joint and survivor annuity shall mean an annuity
payable for the life of the participant, and if
the participant's beneficiary survives the
participant, 50 percent, 75 percent or 100 percent
of the participant's annuity payment shall be
continued to the beneficiary for his or her life;
(iii) a qualified joint and survivor annuity shall
mean an annuity which provides a level monthly
benefit to the participant for his or her
lifetime, and upon the participant's death,
50 percent of the participant's annuity payment
shall be continued to his or her beneficiary for
life, where such beneficiary is the participant's
spouse as of the annuity starting date.
For purposes of this Section 4(b) of Appendix A, a
participant who is married and wishes to elect a
form of payment other than a Qualified Joint and
Survivor Annuity may do so only with spousal
consent as defined in Section 1.44 of the U.S.
Generating Company Retirement Plan, which is
incorporated by reference herein.
The PLAN ADMINISTRATOR shall provide notice to a
participant (as described within this Section 3(b)
of Appendix A) who wishes to elect an annuity form
of payment in accordance with Sections 9.4(b)-(c)
of the U.S. Generating Company Retirement Plan,
which are incorporated by reference herein.
5. PG&E ENERGY TRADING PROFIT SHARING PLAN
(a) Notwithstanding the definition of SEVERANCE FROM
SERVICE DATE contained in Section 43 of the Plan, a
former participant of the PG&E Energy Trading Profit
Sharing Plan who becomes a participant in the PLAN may
retire under the PLAN and receive a distribution of his
or her account if he or she is found to be totally and
permanently disabled as defined herein. A former
participant of the PG&E Energy Trading Profit Sharing
Plan who becomes a
<PLAN>
participant in the PLAN shall be
deemed to be totally and permanently disabled if, based
on a physical or mental condition, the participant is
rendered incapable of continuing any gainful occupation
and such condition constitutes total disability under
the federal Social Security Act.
6. PG&E ENERGY SERVICES RETIREMENT PLAN
(a) In addition to the form of payment stated in Section 31 of
the PLAN for distributions following a separation from service, a
former participant of the PG&E Energy Services Retirement Plan
who becomes a participant in the PLAN may elect, if the value of
his or her account exceeds $5,000, to receive distribution in the
form of monthly, quarterly or annual cash installments over a
period not to exceed the life expectancy of the participant or
the joint and last survivor life expectancy of the participant
and his or her beneficiary, with such life expectancy to be
computed at the time distribution first commences using the
expected return multiples set forth in Tables V and VI of Treas.
Reg. Section 1.72-9.
(b) As a result of the sale of DALEN Resources Corporation to
Enserch Exploration, Inc., all active DALEN employees who were
participants of the PG&E Energy Services Retirement Plan on the
date of sale, June 8, 1998, are inactive participants of this
PLAN. Inactive participants may (i) receive investment
gains/losses based on the FUNDS elected by the participant; (ii)
make investment direction changes among the FUNDS offered; (iii)
receive statements; and (iv) receive a distribution either during
the window period of June 8, 1995, to December 31, 1997, or at
the time of termination of employment with Enserch Exploration,
Inc. All active employees who were participants on June 8, 1995,
became 100 percent vested on that date.
<PAGE>
I, [ ] , do hereby
certify that I am the [Vice President and Corporate Secretary]
of PG&E CORPORATION, a corporation organized and existing under
the laws of the State of [California], and that the above and
foregoing is a full, true and correct copy of the PG&E
CORPORATION Defined Contribution Plan as the same exists at the
date of this certification.
WITNESS my hand and the seal of the said corporation
hereunto affixed this day of
[Vice President and Corporate
Secretary] of
PG&E CORPORATION
