CALPINE CORPORATION
CHIEF EXECUTIVE OFFICER
NON-QUALIFIED STOCK OPTION AGREEMENT
(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
Robert P. 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 (10
th
) 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 neces
