CALPINE CORPORATION CHIEF EXECUTIVE OFFICER NON-QUALIFIED STOCK OPTION AGREEMENT (Pursuant to the 2008 Equity Incentive Plan)
EXHIBIT
10.2.3
CALPINE
CORPORATION
CHIEF
EXECUTIVE OFFICER
(Pursuant
to the 2008 Equity Incentive Plan)
This OPTION is granted on March
25, 2008 (the "Grant Date"), by Calpine Corporation, a Delaware corporation (the
"Corporation"), to ▇▇▇▇▇▇ ▇. May (the "Grantee") pursuant to this Non-Qualified
Stock Option Agreement ("Stock Option Agreement").
1.
RELEASE. For
and in consideration of the Option granted under this Stock Option Agreement,
Grantee on Grantee's own behalf and on behalf of Grantee's related persons,
KNOWINGLY AND VOLUNTARILY RELEASES, ACQUITS AND FOREVER DISCHARGES the
Corporation from any and all claims, obligations or liabilities related to
Grantee's right to purchase 348,700 shares of Corporation's Common Stock as set
forth in the Chief Executive Officer Emergence Non-Qualified Stock Option
Agreement wherein the stated "Grant Date" was January 31, 2008 ("Former
Option"), and Grantee does hereby surrender and release to the Corporation the
option to purchase 348,700 shares of Common Stock and any and all other rights
under the Former Option.
2.
GRANT OF
OPTION. The Corporation hereby grants to the Grantee the
irrevocable Option to purchase, on the terms and subject to the conditions set
forth herein and in the Plan (as defined below), up to 325,500 fully paid and
nonassessable shares ("Total Shares") of the Corporation's Common Stock, par
value $.001 per share, at the option price of $17.53 per share, being not less than
100% of the fair market value of such Common Stock on the Grant
Date.
The
Option is granted pursuant to the Corporation's 2008 Equity Incentive Plan (the
"Plan"), a copy of which is attached hereto. The Option is subject in its
entirety to all the applicable provisions of the Plan as in effect on the Grant
Date, which are hereby incorporated herein by reference. The Option
is not intended to qualify as an “incentive stock option” within the meaning of
Section 422 of the Code. Except as otherwise provided herein, or
unless the context clearly indicates otherwise, capitalized terms not otherwise
defined herein shall have the same definitions as provided in the
Plan.
3.
PERIOD OF
OPTION. The period of the Option shall commence on the Grant
Date and expire on the tenth (10th)
anniversary of the Grant Date ("Option Period"). Notwithstanding the
provisions of Section 4 below, the Option shall become exercisable as set forth
in (a) and (b) below:
(a) If
the Corporation terminates the Grantee's employment or service with the
Corporation before 5:00 p.m. Central Time on December 31, 2008 without "Cause"
(as defined in the Plan) or if the Grantee terminates his employment or service
with the Corporation before 5:00 p.m. Central Time on December 31, 2008 for
"Good Reason" (as defined in Exhibit "A" attached hereto), then the entire
Option shall be immediately exercisable thereafter until the end of the Option
Period; and
(b) If
the Grantee's employment or service with the Corporation terminates by reason of
the Grantee's death prior to 5:00 p.m. Central Time on December 31, 2008, then
the entire Option shall be immediately exercisable thereafter until December 31,
2009, whereupon any unexercised portion of the Option shall
terminate.
The
provisions of Section 13(a) of the Plan are not incorporated herein and shall
not apply to the Option.
Except as
provided in Sections 3(a) and (b) above, the Option (or any lesser amount
thereof) may be exercised after 5:00 p.m. Central Time on December 31, 2008 as
set forth in Section 4 below, from time to time during the remaining Option
Period with regard to the number of Total Shares.
4.
EXERCISE OF
OPTION. Except as provided in Sections 3(a) and 3(b) above,
the Option is exercisable ("vested") after 5:00 p.m. Central Time on December
31, 2008, provided the Grantee has been continuously employed by the Corporation
for the period beginning on the Grant Date and ending at 5:00 p.m. Central Time
on December 31, 2008. Continuous employment includes any paid leaves
of absence, but does not include any unpaid leaves of absence. Except
as provided in Sections 3(a) and (b) above, if the Grantee is not continuously
employed from the Grant Date until 5 p.m. Central Time on December 31, 2008,
then, upon the Grantee's termination of employment or service with the
Corporation, the entire Option shall immediately terminate.
5.
SECURITIES ACT
REQUIREMENTS. In addition to the requirements set forth herein
and in the Plan, (i) the Option shall not be exercisable in whole or in part,
and the Corporation shall not be obligated to issue any shares of Common Stock
subject to any such Option, if such exercise and sale or issuance would, in the
opinion of counsel for the Corporation, violate the Securities Act of 1933 (the
"1933 Act") or other Federal or state statutes having similar requirements, as
they may be in effect at that time; and (ii) each Option shall be subject to the
further requirement that, at any time that the Committee shall determine, in its
discretion, that the listing, registration or qualification of the shares of
Common Stock subject to such Option under any securities exchange requirements
or under any applicable law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the issuance of shares of Common Stock, such Option may not be exercised
in whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to the Committee.
6.
METHOD OF EXERCISE OF
OPTION. Subject to the provisions of the Plan and Sections 3
and 4 hereof, the exercise price of Common Stock acquired pursuant to an Option
shall be paid, to the extent permitted by applicable statutes and regulations,
either (i) in cash or by certified or bank check at the time the Option is
exercised or (ii) in the discretion of the Committee, upon such terms as the
Committee shall approve, the exercise price may be paid: (A) by
delivery to the Corporation of other Common Stock, duly endorsed for transfer to
the Corporation, with a Fair Market Value on the date of delivery equal to the
exercise price (or portion thereof) due for the number of shares being acquired,
or by means of attestation whereby the Grantee identifies for delivery specific
shares of Common Stock that have a Fair Market Value on the date of attestation
equal to the exercise price (or portion thereof) and receives a
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number of
shares of Common Stock equal to the difference between the number of shares
thereby purchased and the number of identified attestation shares of Common
Stock (a “Stock for Stock Exchange”); (B) a “cashless” exercise program
established with a broker; (C) by reduction in the number of shares of Common
Stock otherwise deliverable upon exercise of such Option with a Fair Market
Value equal to the aggregate exercise price at the time of exercise, or (D) in
any other form of legal consideration that may be acceptable to the
Committee. The purchase price of Common Stock acquired pursuant to an
Option that is paid by delivery (or attestation) to the Corporation of other
Common Stock acquired, directly or indirectly from the Corporation, shall be
paid only by shares of the Common Stock of the Corporation that have been held
for more than six months (or such longer or shorter period of time required to
avoid a charge to earnings for financial accounting
purposes). Notwithstanding the foregoing, during any period for which
the Common Stock is publicly traded (i.e., the Common Stock is listed on any
established stock exchange or a national market system) an exercise by Grantee
that involves or may involve a direct or indirect extension of credit or
arrangement of an extension of credit by the Corporation, directly or
indirectly, in violation of Section 402(a) of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act (codified
as Section 13(k) of the Exchange Act) shall be prohibited with respect to this
award.
7.
TRANSFERABILITY. The
Option is not transferable otherwise than by will or pursuant to the laws of
descent and distribution, and is exercisable during the Grantee's lifetime only
by the Grantee.
8.
BINDING
AGREEMENT. This Stock Option Agreement shall be binding upon
and shall inure to the benefit of any successor or assign of the Corporation,
and, to the extent herein provided, shall be binding upon and inure to the
benefit of the Grantee's beneficiary or legal representatives, as they case may
be.
9.
ENTIRE
AGREEMENT. This Stock Option Agreement and the Plan set forth
the entire agreement of the parties with respect to the Option granted hereby
and may not be changed orally but only by an instrument in writing signed by the
party against whom enforcement of any change, modification or extension is
sought.
10.
ELECTRONIC DELIVERY AND
SIGNATURES. The Corporation may, in its sole discretion,
decide to deliver any documents related to the Option or to participation in the
Plan or to future options that may be granted under the Plan by electronic means
or to request the Grantee's consent to participate in the Plan by electronic
means. Grantee hereby consents to receive such documents by
electronic delivery and, if requested, to agree to participate in the Plan
through an on-line or electronic system established and maintained by the
Corporation or another third party designated by the Corporation. If
the Corporation establishes procedures of an electronic signature system for
delivery and acceptance of Plan documents (including any Award Agreement like
this Option), the Grantee hereby consents to such procedures and agrees that his
or her electronic signature is the same as, and shall have the same force and
effect as, his or her manual signature.
11.
WITHHOLDING OF
TAX. To the extent that the exercise of the Option or the
disposition of shares of Corporation's Common Stock acquired by exercise of the
Option results in compensation income to the Grantee for federal or state income
tax purposes, the Grantee shall pay to the Corporation at the time of such
exercise or disposition such amount of money or,
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if the
Corporation so determines, shares of Common Stock, as the Corporation may
require to meet its obligation under applicable tax laws or regulations and, if
the Grantee fails to do so, the Corporation is authorized to withhold from any
cash remuneration then or thereafter payable to the Grantee, any tax required to
be withheld by reason of such resulting compensation income or the Corporation
may otherwise refuse to issue or transfer any shares otherwise required to be
issued or transferred pursuant to the terms hereof.
12.
ADJUSTMENTS/CHANGES IN
CAPITALIZATION. This award is subject to the adjustment
provisions set forth in the Plan.
Subject
to Section 10 above, if the foregoing is in accordance with your understanding
and approved by you, please so confirm by signing and returning the duplicate of
this Stock Option Agreement enclosed for that purpose.
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CALPINE
CORPORATION
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By:
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/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | ||
| ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ | |||
| Executive Vice President, | |||
| General Counsel and Secretary | |||
The
foregoing is in accordance with my understanding and is hereby confirmed and
agreed to as of the Grant Date.
| /s/ ▇▇▇▇▇▇ ▇. May | ||
|
▇▇▇▇▇▇
▇. May
|
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Exhibit
A
"Good
Reason" shall mean, when used with reference to any Employee, any of the
following actions or failures to act, but in each case only if it occurs while
such Employee is employed by the Company and then only if it is not consented to
by such Employee in writing:
(1) assignment
of a position that is of a lesser rank than held by the Employee prior to the
assignment and that results in such Employee ceasing to be an executive officer
of a company with securities registered under the Securities Exchange Act of
1934;
(2) a
material reduction in such Employee's base salary or target bonus opportunity
(including an adverse change in performance criteria or a decrease in ultimate
target bonus opportunity) in effect the day prior to the Effective Date of the
Plan; or
(3) any
change of more than fifty (50) miles in the location of the principal place of
employment of such Employee immediately prior to the effective date of such
change.
For
purposes of this definition, none of the actions described in clauses (i) and
(ii) above shall constitute "Good Reason" with respect to any Employee if it was
an isolated and inadvertent action not taken in bad faith by the Company and if
it is remedied by the Company within thirty (30) days after receipt of written
notice thereof given by such Employee (or, if the matter is not capable of
remedy within thirty (30) days, then within a reasonable period of time
following such thirty (30) day period, provided that the Company has commenced
such remedy within said thirty (30) day period); provided that "Good Reason"
shall cease to exist for any action described in clauses (i) through (iii) above
on the sixtieth (60th) day following the later of the occurrence of such action
or the Employee's knowledge thereof, unless such Employee has given the Company
written notice thereof prior to such date.
Exhibit
A-1