A potential or actual conflict of interest exists if you participate in or attempt to influence a decision or transaction that could materially affect the value of a financial interest held by you, a member of your family, or another person with whom you have a close relationship. A "financial interest" is (a) any investment in a privately held business or (b) an investment equal to one month of your base salary or more in the publicly traded stock of another company that is conducting or seeking to conduct business with PG&E. (Do not include indirect holdings of stock via mutual funds when considering this threshold.)

If you have a potential conflict of interest, take the following steps:

1. Disclose the financial interest and potential conflict to your supervisor in writing.
2. Based on the criteria described above, your supervisor must determine if there is a conflict of interest. Document the decision in writing and obtain the written concurrence of your supervisor and any other appropriate decision-maker.
3. If there is a conflict of interest, your supervisor must exclude you from participating in the decision or transaction, or adopt other effective measures that would prevent the conflict.

Close personal relationships can interfere with an employee's independent judgment, create employee morale issues, and lead to claims of conflict of interest or even sexual harassment. Such relationships also can negatively impact or disrupt the workplace and create the appearance of impropriety. Even if a relationship does not violate our conflict of interest standards or anti-nepotism policy, charges of sexual harassment or other inappropriate conduct may develop. It is the company's expectation that employees will take personal responsibility for adhering to all company policies and standards and to ensure that they do not engage in relationships that disrupt or negatively impact the workplace.

To avoid these problems and to foster a positive team environment, you must promptly report to your Human Resources representative any close personal relationship that results, or could result, in a conflict with a policy or standard. After reviewing the facts, the Company will take appropriate action.

• Q. I am dating a co-worker who occasionally serves as the acting supervisor for my group. Do we have to bring this to the attention of our supervisor or Human Resources?
• A. Yes. This situation creates a conflict of interest in your group. Even if you and your colleague are currently equals in the same group, you should advise your supervisor of the relationship so that your supervisor can prevent an inappropriate reporting relationship.

PG&E-funded gifts between employees must be made in accordance with PG&E's Rewards and Recognition program. All other gifts must be in compliance with the requirements listed below.

Accepting Gifts
You, or a member of your immediate family, may not accept a gift from a contractor, vendor, consultant, or similar business contact doing business with or seeking to do business with PG&E unless all six of the following conditions are met:

• The value of the item must be less than $100, and the value of all gifts from one business contact during a 12-month period must not exceed $250. A gift that exceeds either value must be approved by your officer. Any such gift to an officer must be approved by the officer's supervisor.
• The item is customary and does not create any appearance of impropriety.
• The item imposes no sense of obligation on the receiver.
• The item results in no special or favored treatment.
• The item could not be considered extravagant, excessive, or too frequent considering all of the circumstances, including your ability to reciprocate at company expense.
• The item is not concealed in any way.

If circumstances make it appropriate to accept a gift that exceeds either value threshold, the officer granting approval must retain the following documentation:

• The identities of the giver and recipient of the gift,
• The date the officer approved the gift,
• A brief description of the gift,
• The business reason for the gift, and
• An estimated value of the gift.

A gift is no longer considered a gift if within 30 days, the recipient either (1) returns the gift to the giver or (2) reimburses the value of the gift to the giver from personal funds.

"Customary business meals" are not considered gifts. These are routine meals, similar in cost to your own meals when you entertain clients.

In addition to the restrictions on gifts, you and members of your family must never accept a loan, guarantee, service, or payment from a contractor, vendor, consultant, or similar business contact under terms that aren’t available to the general public.

Giving Gifts
You may not give a gift funded by PG&E unless all six of the following conditions are met:

• The value of the item must be less than $100 and the value of all gifts to one business contact during a 12-month period must not exceed $250. A gift that exceeds either value must be approved by your officer. Any such gift from an officer must be approved by the officer's supervisor.
• The item is customary and does not create any appearance of impropriety.
• The item imposes no sense of obligation on the receiver.
• The item results in no special or favored treatment.
• The item could not be considered extravagant, excessive, or too frequent considering all of the circumstances, including the recipient's ability to reciprocate.
• The item is not concealed in any way.

If circumstances make it appropriate to give a gift that exceeds the employee's authority to approve, the officer granting approval must retain the following documentation:

• The identities of the giver and recipient of the gift,
• The date the officer approved the gift,
• A brief description of the gift,
• The business reason for the gift, and
• An estimated value of the gift.

"Customary business meals" generally are not considered gifts. These are routine meals of reasonable cost provided for business contacts. However, a business meal for an elected or appointed governmental official may be considered a gift under the laws governing the conduct of public officials. Before making any gift to a federal, state, or local government official or employee, confirm its value and contact Corporate Affairs to ensure that the gift is in compliance with applicable gift limits and restrictions.

Special rules apply in certain gift-giving situations:

• All gifts to non-profit entities, including "in-kind" gifts, (e.g., used construction or office equipment) must be approved by Charitable Contributions.
• A gift, including an "in-kind" gift, a contribution, a donation, entertainment, or another courtesy to a political candidate, committee, governmental entity, public official, or elected or governmental figure must be approved in advance by Corporate Affairs.
• An "in-kind" gift is also considered disposal of a company asset. For more information, see the Company Assets section of this Code.
• Federal law governs gift giving when working with a foreign official, either inside or outside the United States. For more information, see the Foreign Corrupt Practices Act section of this Code.

If you hold an elected or appointed office while employed by PG&E, notify Corporate Affairs and the Law Department, and excuse yourself from participation in or involvement with any official issue or decision that could create or appear to create a conflict of interest. Seek advice from your civic organization's legal counsel and from the PG&E Law Department.

If you plan to run for public office, contact Corporate Affairs to discuss potential conflicts of interest and how those issues should be handled.

If you hold a public office or position, your job at PG&E is your primary responsibility during work hours. Your supervisor may, however, from time to time and work load permitting, authorize you to perform public service on company time.

The types of activities to avoid include the planning, design, manufacture, sale, installation, or maintenance of any commodity, equipment, or service that PG&E currently provides or has known plans to provide.

Also, even if these requirements are met, take the following precautions to avoid a conflict of interest:

• Don't participate in an outside employment activity or business venture that could have an adverse effect on your ability to perform your duties for PG&E.
• Don't use company time or assets for your own business or other job.
• Don't solicit work from PG&E for your business or other employer based on inside knowledge of the company or contacts, and don't solicit PG&E employees, vendors, or customers while at work. Local management has discretion to allow passive solicitation, such as a poster on a bulletin board or a catalog on a lunchroom table.
• If, during non-business hours, you solicit vendors or customers with whom you interact for PG&E, you must ensure that your solicitation does not create an appearance of impropriety or in any way imply that the vendor's or customer's dealings with PG&E will be affected by the response to your solicitation.
• Don't attempt to obtain personal advantage or benefit due to your association with PG&E or by using the company name.

If you are, or plan to be, engaged in outside employment activities and you are unsure if they might be in conflict with this Code, discuss them with your supervisor and document your joint conclusion. If you are a supervisor and your employee comes to you with questions about outside employment, notify your director of the employment activities that your employee will be involved in.

• Q. I am a licensed electrician and work in the electric department. Occasionally, I'm asked by family members, friends, and customers to replace the electrical panels inside their homes. May I do the work?
• A. Since the company does not replace electrical panels inside customers' homes, you may perform the work as long as you follow the guidance provided in this section of the Code.