Pacific Gas & Electric (PCG)

Section 4. Payments if a Short-Fall of The Trust Assets Occurs

(a)

If there are not sufficient assets for the payment of benefits pursuant to Section 2 or Section 3(c) hereof and the Company does not otherwise make such payments within a reasonable time after demand from the Trustee, the Trustee shall make payment of benefits from the Trust to the Participants or their Beneficiaries in the following order of priority:

(1)

retired Participants and their Beneficiaries;

(2)

vested Participants over the age of 55 who were terminated within two years following a Change of Control and their Beneficiaries;

4

(3)

vested active Participants over the age of 55 and their Beneficiaries;



(4)

any other vested active Participants and their Beneficiaries;



(5)

vested former Participants and their Beneficiaries; and



(6)

non-vested Participants and their Beneficiaries

(b)

Within each category set forth under Section 4(a), payments shall be prioritized in the following order:

(c)

Upon receipt of a contribution from the Company necessary to make up for a short-fall in the payments due, the Trustee shall resume payments to all the Participants and Beneficiaries under the Arrangements. Following a Change of Control, the Trustee shall have the right to compel a contribution to the Trust from the Company to make-up for any short-fall.