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EXHIBIT 10.2
CALPINE CORPORATION EXECUTIVE SIGN ON
NON-QUALIFIED STOCK OPTION AGREEMENT
OPTION granted on September 1, 2008 (the “Grant
Date”), by Calpine Corporation, a Delaware corporation (the
“Company”), to John B. Hill (the “Grantee”)
pursuant to this Non-Qualified Stock Option Agreement (“Stock
Option Agreement”).
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1.
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GRANT OF OPTION. The Company hereby grants to the
Grantee the irrevocable Option to purchase, on the terms and
subject to the conditions set forth herein and in the letter
agreement between the Company and the Grantee, dated September 1,
2008 (the “Letter Agreement”), and (except as otherwise
provided herein) the Plan (as defined below), 1,314,734 fully paid
and nonassessable shares of the Company’s Common Stock, par
value $.001 per share. The Company grants the Option to
the Grantee in four (4) tranches (each a
“Tranche”). The corresponding number of
shares of Company Common Stock and the corresponding exercise price
per share for each Tranche is set forth below.
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Tranche
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Number of Shares
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Exercise Price
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Tranche 1
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262,083
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$18.00
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Tranche 2
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309,920
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$21.60
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Tranche 3
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349,705
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$24.30
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Tranche 4
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393,026
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$27.00
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Options in Tranches 1, 2 and 3, and 328,292 of those
Options in Tranche 4 which are scheduled to vest on the first
anniversary of the Grant Date in accordance with Section 3 below
are granted pursuant to the Company’s 2008 Equity Incentive
Plan (the “Plan”), a copy of which is attached
hereto. The remaining Options shall be granted outside
of the Plan but shall be deemed and treated for all purposes
hereunder as though granted under the Plan and subject to its terms
and conditions to the same extent as the Options granted hereunder
which are granted pursuant to the Plan. Except as
otherwise set forth herein, the Option is subject, or deemed
subject, as applicable, 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 provided
in Section 15 herein, or unless the context clearly indicates
otherwise, capitalized terms not otherwise defined herein shall
have the same definitions as provided in the Plan.
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2.
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PERIOD OF OPTION. The period of the Option shall commence on the
Grant Date and shall expire on the seventh (7th) anniversary of the
Grant Date (the “Option Period”). The Option (or any
lesser amount thereof) may be exercised from time to time during
the Option Period as to the number of Total Shares allowable under
Section 3 below and the Plan.
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3.
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EXERCISE OF OPTION. Except to the extent otherwise
provided in the Letter Agreement or herein, each Tranche of the
Option shall vest ratably on each of the first, second, third,
fourth, and fifth anniversaries of the Grant Date; provided,
however, that the Grantee must be continuously employed by the
Company beginning on the Grant Date through each applicable vesting
date.
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4.
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TERMINATION OF EMPLOYMENT. In the event that the
Grantee’s employment with the Company is terminated by the
Company without Cause or by the Grantee for Good Reason, in each
case, prior to a Change in Control, the portion of the Option
scheduled to vest within a period of thirty-six (36) months
following the Grantee’s date of termination shall become
immediately vested and exercisable and shall remain exercisable for
a period of two (2) years following the Grantee’s date of
termination but in no event beyond its original term; and the
remaining portion of the Option shall be forfeited as of the date
of the Grantee’s termination of employment. In the
event that the Grantee’s employment with the Company is
terminated for Disability or by reason of the Grantee’s
death, the Option shall become immediately vested and exercisable
and shall remain exercisable for its full original
term. In the event that the Grantee’s employment
with the Company is terminated by the Company for Cause, any
portion of the Option that remains outstanding, whether vested or
unvested, shall immediately terminate as of the date of such
termination. In the event of termination of employment
by the Grantee without Good Reason, any unvested portion of the
Option shall immediately terminate, and any vested portion of the
Option shall remain exercisable for a period of 90 days following
such termination and shall terminate thereafter.
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5.
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CHANGE IN CONTROL. In the event of a Change in
Control, each Option shall become fully vested and shall
immediately be cancelled, and, in exchange therefor, the Grantee
shall be entitled to receive an amount per share equal to the
excess, if any, of the per share merger consideration, over the per
share exercise price of such Option. The Grantee shall
in all cases be entitled to receive such amount fully in cash.
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6.
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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 Company 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 Company, violate the Securities Act of 1933 (the
“1933 Act”) or other Federal or state statutes having
similar requirements, as th
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