EXHIBIT 10.2
CALPINE
CORPORATION
EXECUTIVE SIGN ON
NON-QUALIFIED STOCK OPTION
AGREEMENT
OPTION granted
on August 10, 2008 (the “ Grant Date ”), by
Calpine Corporation, a Delaware corporation (the
“Company”), to Jack Fusco (the “ Grantee
”) pursuant to this Non-Qualified Stock Option Agreement
(“ Stock Option Agreement ”).
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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 Employment Agreement between
the Company and the Grantee, dated August 10, 2008 (the “
Employment Agreement ”), and (except as otherwise
provided herein) the Plan (as defined below), 5,394,000 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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1,075,000
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$15.99
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Tranche 2
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1,271,000
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$19.19
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Tranche 3
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1,435,000
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$21.59
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Tranche 4
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1,613,000
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$23.99
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Options in
Tranche 1 and 175,000 of those Options in Tranche 2 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 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 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 or as provided in the
Employment Agreement.
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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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EXERCISE OF
OPTION. Except to the extent otherwise provided in
Sections 4 and 8 of the Employment Agreement, 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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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 other than in connection
with a Potential Change in Control or a Change in Control, Section
8(c)(vi) of the Employment Agreement shall govern. In
the event that the Grantee’s employment with the Company is
terminated for Disability or by reason of the Grantee’s
death, Section 8(b)(iii) of the Employment Agreement shall
govern. 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. All
capitalized terms in this Section 4 shall have the definitions
ascribed to them in the Employment Agreement.
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CHANGE IN
CONTROL. In the event of a Change in Control (as defined
in the Employment Agreement), Section 4(a)(i) of the Employment
Agreement shall govern, and accordingly, 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 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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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
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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
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