Item 1.01. Material Definitive Agreement.
As previously disclosed, on January 29, 2019, PG&E Corporation (the “Corporation”) and its subsidiary, Pacific Gas and Electric
Company (the “Utility,” and together with the Corporation, the “Debtors”) filed voluntary petitions for relief under chapter 11 of title 11 (“Chapter 11”) of the United States Code in the U.S. Bankruptcy Court for the Northern District of California
(the “Bankruptcy Court”). The Debtors’ Chapter 11 cases are being jointly administered under the caption In re: PG&E Corporation and Pacific Gas and Electric Company, Case No. 19-30088 (DM) (the “Chapter 11 Cases”). On June 19, 2020, the Debtors,
certain funds and accounts managed or advised by Abrams Capital Management, L.P., and certain funds and accounts managed or advised by Knighthead Capital Management, LLC filed the Debtors’ and Shareholder Proponents’ Joint Chapter 11 Plan of
Reorganization dated June 19, 2020 [Docket No. 8048] with the Bankruptcy Court (as may be further modified, amended, or supplemented from time to time and, together with all exhibits and schedules thereto, the “Plan”). On June 20, 2020, the
Bankruptcy Court entered an order [Docket No. 8053] (the “Confirmation Order”) confirming the Plan, which incorporates the Bankruptcy Court’s prior order approving the Plan funding transactions and documents [Docket No. 7909].
Also as previously disclosed, the Corporation announced that it expected to pursue underwritten offerings of up to $5.75 billion of
equity securities to finance the transactions contemplated by the Plan (the “Offerings”), of which up to $523 million (the “Option Amount”) would be issuable pursuant to customary options granted to the underwriters thereof to purchase additional
securities (the “Option Securities”). In connection therewith, the Corporation had entered into separate agreements with investors (each, a “Backstop Party”) holding 100% of the equity backstop commitments to provide for the entry into a prepaid
forward contract (a “Forward Stock Purchase Agreement”) between each Backstop Party and the Corporation, under which each Backstop Party would purchase its pro rata share of the Option Amount (such amount, each Backstop Party’s “Greenshoe Backstop
Purchase Amount”).
On June 19, 2020, the Corporation entered into the Forward Stock Purchase Agreements with the Backstop Parties. Each Forward Stock
Purchase Agreement provides that, subject to certain conditions, the Backstop Party will purchase on the effective date of the Plan, and receive on the Settlement Date (as defined in each Forward Stock Purchase Agreement) an amount of common stock of
the Corporation equal to the Greenshoe Backstop Purchase Amount, at a price per share equal to the lesser of (i) the lowest per share price of common stock sold on an underwritten basis to the public in an offering of common stock of the Corporation,
as disclosed on the cover page of the prospectus or prospectus supplement, and (ii) the price per share payable by the investors party to the Investment Agreement dated as of June 7, 2020, as disclosed by the Corporation in a Current Report on Form
8-K filed on June 8, 2020 (such lesser price, the “Settlement Price”). The term of each Forward Stock Purchase Agreement is 30 days from the date that the underwriting agreements for the Offerings are executed by the Corporation and the underwriters.
If, during the term of each Forward Stock Purchase Agreement, the underwriters of the Offerings exercise their options to purchase the
Option Securities, the Corporation will redeem a portion of the rights under each Forward Stock Purchase Agreement to receive common stock and return to each Backstop Party a portion of their Greenshoe Backstop Purchase Amount equal to their pro rata
share of the gross proceeds received by the Corporation from the sale of the Option Securities to the underwriters. If the underwriters do not exercise or only partially exercise their option to purchase the Option Securities, then shortly after the
expiration of the Forward Stock Purchase Agreements, the Corporation will issue and deliver to each Backstop Party a number of shares of common stock equal to the unredeemed portion of such Backstop Party’s Greenshoe Backstop Purchase Amount divided
by the Settlement Price (such shares of common stock, each Backstop Party’s “Greenshoe Backstop Shares”).
Additionally, each Forward Stock Purchase Agreement provides that, subject to the consummation by the Corporation of the Offerings, the
Corporation will issue to each Backstop Party its pro rata share of 50,000,000 shares of common stock (such shares, each Backstop Party’s “Additional Backstop Premium Shares”).
Under the terms of the Forward Stock Purchase Agreements, each Backstop Party is entitled to certain customary registration rights with
respect to the Greenshoe Backstop Shares delivered thereunder, which, among other things, require the Corporation to register the resale of such shares under the Securities Act of 1933, as amended (the “Securities Act”) shortly following the delivery
thereof and to use commercially reasonable efforts to maintain such registration.
The foregoing description of the terms of each Forward Stock Purchase Agreement and the transactions contemplated thereby does not
purport to be complete and is subject to, and qualified in its entirety by, the full text of the Form of Forward Stock Purchase Agreement, which is attached hereto as Exhibit 10.1, and is incorporated herein by reference.