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EXHIBIT 99.9
CALPINE CORPORATION
SALARY INVESTMENT STOCK OPTION AGREEMENT
RECITALS
A. The Corporation has implemented a special salary investment stock
option program under the Plan pursuant to which selected employees may, by prior
irrevocable election, apply a portion of their base salary each year to the
acquisition of a special stock option grant.
B. Optionee has made the requisite election to apply a portion of his
or her base salary to the acquisition of the special option, and this Agreement
is executed pursuant to, and is intended to carry out the purposes of, the Plan
in connection with the Corporation's grant of such special option to Optionee.
C. All capitalized terms in this Agreement shall have the meaning
assigned to them in the attached Appendix.
NOW, THEREFORE, it is hereby agreed as follows:
1. GRANT OF OPTION. The Corporation hereby grants to Optionee,
as of the Grant Date, a Non-Qualified Option to purchase up to the number of
Option Shares specified in the Grant Notice. The Option Shares shall be
purchasable from time to time during the option term specified in Paragraph 2 at
the Exercise Price.
2. OPTION TERM. This option shall have a term of ten (10)
years measured from the Grant Date and shall accordingly expire at the close of
business on the Expiration Date, unless sooner terminated in accordance with
Paragraph 5 or 6.
3. LIMITED TRANSFERABILITY. This option may, in connection
with the Optionee's estate plan, be assigned in whole or in part during
Optionee's lifetime to one or more members of the Optionee's immediate family or
to a trust established for the exclusive benefit of one or more such family
members. The assigned portion shall be exercisable only by the person or persons
who acquire a proprietary interest in the option pursuant to such assignment.
The terms applicable to the assigned portion shall be the same as those in
effect for this option immediately prior to such assignment and shall be set
forth in such documents issued to the assignee as the Corporation may deem
appropriate. Should the Optionee die while holding this option, then this option
shall be transferred in accordance with Optionee's will or the laws of descent
and distribution.
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4. DATES OF EXERCISE. This option shall become exercisable for
the Option Shares in a series of successive monthly installments as specified in
the Grant Notice. As the option becomes exercisable for one or more of those
installments, the installments shall accumulate and the option shall remain
exercisable for the accumulated installments until the Expiration Date or sooner
termination of the option term under Paragraph 5 or 6.
5. CESSATION OF SERVICE. The option term specified in
Paragraph 2 shall terminate (and this option shall cease to be outstanding)
prior to the Expiration Date should any of the following provisions become
applicable:
(i) Should Optionee cease to remain in Service
for any reason while this option is outstanding, then the exercise
period for this option shall be reduced to a period of two (2) years
measured from the date of such cessation of Service, but in no event
shall this option be exercisable at any time after the Expiration Date.
(ii) Should Optionee die while this option is
outstanding, then the personal representative of Optionee's estate or
the person or persons to whom the option is transferred pursuant to
Optionee's will or in accordance with the laws of descent and
distribution shall have the right to exercise this option. Such right
shall lapse and this option shall cease to be outstanding upon the
earlier of (i) the expiration of the two (2)-year period measured from
the date of Optionee's cessation of Service or (ii) the Expiration
Date.
(iii) During the applicable post-Service
exercise period, this option may not be exercised in the aggregate for
more than the number of Option Shares for which the option is
exercisable at the time of Optionee's cessation of Service. Upon the
expiration of such limited exercise period or (if earlier) upon the
Expiration Date, this option shall terminate and cease to be
outstanding for any exercisable Option Shares for which the option has
not been exercised. However, this option shall immediately, upon
Optionee's cessation of Service for any reason, terminate and cease to
be outstanding with respect to any and all Option Shares for which the
option is not otherwise at that time exercisable.
(iv) In the event of a Corporate Transaction
or Change in Control, the provisions of Paragraph 6 or Paragraph 7
shall govern the period for which this option is to remain exercisable
following Optionee's cessation of Service and shall supersede any
provisions to the contrary in this Paragraph 5.
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6. CORPORATE TRANSACTION.
(a) This option, to the extent outstanding at the
time of a Corporate Transaction but not otherwise fully exercisable for all the
Option Shares, shall automatically accelerate so that this option shall,
immediately prior to the effective date of such Corporate Transaction, become
exercisable for all the Option Shares at the time subject to this option and may
be exercised for any or all of those Option Shares as fully-vested shares of
Common Stock.
(b) This option shall be assumed by the successor
corporation (or parent thereof) in connection with such Corporate Transaction
and shall be appropriately adjusted, immediately after such Corporate
Transaction, to apply to the number and class of securities which would have
been issuable to Optionee in consummation of such Corporate Transaction had the
option been exercised immediately prior to such Corporate Transaction, and
appropriate adjustments shall also be made to the Exercise Price, provided the
aggregate Exercise Price shall remain the same.
(c) This option, as so accelerated and assumed, shall
remain exercisable until the earlier of (i) the expiration of the two (2)-year
period measured from the date of Optionee's cessation of Service or (ii) the
specified Expiration Date.
(d) This Agreement shall not in any way affect the
right of the Corporation to adjust, reclassify, reorganize or otherwise change
its capital or business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
7. CHANGE IN CONTROL/HOSTILE TAKE-OVER.
(a) All Option Shares subject to this option at the
time of a Change in Control but not otherwise vested shall automatically vest so
that this option shall, immediately prior to the effective date of such Change
in Control, become fully exercisable for all of the Option Shares at the time
subject to this option and may be exercised for all or any portion of such
shares as fully-vested shares of Common Stock. This option shall remain
exercisable for such fully-vested Option Shares until the earliest to occur of
(i) the specified Expiration Date, (ii) the sooner termination of this option in
accordance with Paragraph 5 or 6 or (iii) the surrender of this option under
Paragraph 7(b).
(b) Optionee shall have an unconditional right
(exercisable during the thirty (30)-day period immediately following the
consummation of a Hostile Take-Over) to surrender this option to the Corporation
in exchange for a cash distribution from the Corporation in an amount equal to
the excess of (i) the Take-Over Price of the Option Shares at the time subject
to the surrendered option (whether or not those Option Shares are otherwise at
the time vested) over (ii) the aggregate Exercise Price payable for such shares.
This Paragraph 7(b) limited stock appreciation right shall in all events
terminate
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upon the expiration or sooner termination of the option term and may not be
assigned or transferred by Optionee.
(c) To exercise the Paragraph 7(b) limited stock
appreciation right, Optionee must, during the applicable thirty (30)-day
exercise period, provide the Corporation with written notice of the option
surrender in which there is specified the number of Option Shares as to which
the option is being surrendered. Such notice must be accompanied by the return
of Optionee's copy of this Agreement, together with any written amendments to
such Agreement. The cash distribution shall be paid to Optionee within five (5)
business days following such delivery date, and neither the approval of the Plan
Administrator nor the consent of the Board shall be required in connection with
such option surrender and cash distribution. Upon receipt of such cash
distribution, this option shall be cancelled with respect to the shares subject
to the surrendered option (or the surrendered portion), and Optionee shall cease
to have any further right to acquire those Option Shares under this Agreement.
The option shall, however, remain outstanding for the balance of the Option
Shares (if any) in accordance with the terms and provisions of this Agreement,
and the Corporation shall accordingly issue a new stock option agreement
(substantially in the same form as this Agreement) for those remaining Option
Shares.
8. STOCKHOLDER RIGHTS. The holder of this option shall not
have any stockholder rights with respect to the Option Shares until such person
shall have exercised the option, paid the Exercise Price and become a holder of
record of the purchased shares.
9. ADJUSTMENT IN OPTION SHARES. Should any change be made to
the Common Stock by reason of any stock split, stock dividend, recapitalization,
combination of shares, exchange of shares or other change affecting the
outstanding Common Stock as a class without the Corporation's receipt of
consideration, appropriate adjustments shall be made to (i) the number and/or
class of securities subject to this option and (ii) the Exercise Price in order
to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder.
10. MANNER OF EXERCISING OPTION.
(a) In order to exercise this option with respect to
all or any part of the Option Shares for which this option is at the time
exercisable, Optionee (or any other person or persons exercising the option)
must take the following actions:
(i) Execute and deliver to the
Corporation a Notice of Exercise for the number of Option Shares for
which the option is exercised.
(ii) Pay the aggregate Exercise Price
for the purchased shares in one or more of the following forms:
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(A) cash or check made payable to
the Corporation;
(B) shares of Common Stock held by
Optionee (or any other person or persons exercising the
option) for the requisite period necessary to avoid a charge
to the Corporation's earnings for financial reporting purposes
and valued at Fair Market Value on the Exercise Date; or
(C) through a special sale and
remittance procedure pursuant to which Optionee (or any other
person or persons exercising the option) shall concurrently
provide irrevocable written instructions (I) to a
Corporation-designated brokerage firm to effect the immediate
sale of the purchased shares and remit to the Corporation, out
of the sale proceeds available on the settlement date,
sufficient funds to cover the aggregate Exercise Price payable
for the purchased shares plus all applicable Federal, state
and local income and employment taxes required to be withheld
by the Corporation by reason of such exercise and (II) to the
Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete
the sale.
Except to the extent the sale and remittance
procedure is utilized in connection with the option exercise,
payment of the Exercise Price must accompany the Notice of
Exercise.
(iii) Furnish to the Corporation
appropriate documentation that the person or persons exercising the
option (if other than Optionee) have the right to exercise this option.
(iv) Make appropriate arrangements with
the Corporation (or Parent or Subsidiary employing or retaining
Optionee) for the satisfaction of all Federal, state and local income
and employment tax withholding requirements applicable to the option
exercise.
(b) As soon as practical after the Exercise Date, the
Corporation shall issue to or on behalf of Optionee (or any other person or
persons exercising this option) a certificate for the purchased Option Shares.
(c) In no event may this option be exercised for any
fractional shares.
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11. COMPLIANCE WITH LAWS AND REGULATIONS.
(a) The exercise of this option and the issuance of
the Option Shares upon such exercise shall be subject to compliance by the
Corporation and Optionee with all applicable requirements of law relating
thereto and with all applicable regulations of any stock exchange (or the Nasdaq
National Market, if applicable) on which the Common Stock may be listed for
trading at the time of such exercise and issuance.
(b) The inability of the Corporation to obtain
approval from any regulatory body having authority deemed by the Corporation to
be necessary to the lawful issuance and sale of any Common Stock pursuant to
this option shall relieve the Corporation of any liability with respect to the
non-issuance or sale of the Common Stock as to which such approval shall not
have been obtained. The Corporation, however, shall use its best efforts to
obtain all such approvals.
12. SUCCESSORS AND ASSIGNS. Except to the extent otherwise
provided in Paragraph 3, the provisions of this Agreement shall inure to the
benefit of, and be binding upon, the Corporation and its successors and assigns
and Optionee, Optionee's assigns and the legal representatives, heirs and
legatees of Optionee's estate.
13. NOTICES. Any notice required to be given or delivered to
the Corporation under the terms of this Agreement shall be in writing and
addressed to the Corporation at its principal corporate offices. Any notice
required to be given or delivered to Optionee shall be in writing and addressed
to Optionee at the address indicated below Optionee's signature line on the
Grant Notice. All notices shall be deemed effective upon personal delivery or
upon deposit in the U.S. mail, postage prepaid and properly addressed to the
party to be notified.
14. CONSTRUCTION. This Agreement and the option evidenced
hereby are made and granted pursuant to the Plan and are in all respects limited
by and subject to the terms of the Plan. All decisions of the Plan Administrator
with respect to any question or issue arising under the Plan or this Agreement
shall be conclusive and binding on all persons having an interest in this
option.
15. GOVERNING LAW. The interpretation, performance and
enforcement of this Agreement shall be governed by the laws of the State of
California without resort to that State's conflict-of-laws rules.
16. EXCESS SHARES. If the Option Shares covered by this
Agreement exceed, as of the Grant Date, the number of shares of Common Stock
which may without stockholder approval be issued under the Plan, then this
option shall be void with respect to such excess shares, unless stockholder
approval of an amendment sufficiently increasing the number of shares of Common
Stock issuable under the Plan is obtained in accordance with the provisions of
the Plan.
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17. LEAVE OF ABSENCE. The following provisions shall apply
upon the Optionee's commencement of an authorized leave of absence:
(i) The exercise schedule in effect
under the Grant Notice shall be frozen as of the first day of the
authorized leave, and the option shall not become exercisable for any
additional installments of the Option Shares during the period Optionee
remains on such leave.
(ii) Should Optionee resume active
Employee status within sixty (60) days after the start date of the
authorized leave, Optionee shall, for purposes of the exercise schedule
set forth in the Grant Notice, receive Service credit for the entire
period of such leave. If Optionee does not resume active Employee
status within such sixty (60)-day period, then Service credit shall be
given for the period of the leave.
(iii) If the option is designated as an
Incentive Stock Option in the Grant Notice, then the following
additional provision shall apply:
(A) If the leave of absence
continues for more than ninety (90) days, then the option
shall automatically convert to a non-qualified option under
the federal tax laws on the ninety-first (91st) day of such
leave, unless the Optionee's reemployment rights are
guaranteed by statute or by written agreement. Following any
such conversion of the option, all subsequent exercises of
such option, whether effected before or after Optionee's
return to active Employee status, shall result in an immediate
taxable event, and the Corporation shall be required to
collect from Optionee the federal, state and local income and
employment withholding taxes applicable to such exercise.
(iv) In no event shall this option
become exercisable for any additional Option Shares or otherwise remain
outstanding if Optionee does not resume Employee status prior to the
Expiration Date of the option term.
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APPENDIX
The following definitions shall be in effect under the
Agreement:
A. AGREEMENT shall mean this Salary Investment Stock Option Agreement.
B. BOARD shall mean the Corporation's Board of Directors.
C. CODE shall mean the Internal Revenue Code of 1986, as amended.
D. COMMON STOCK shall mean the Corporation's common stock.
E. CORPORATE TRANSACTION shall mean either of the following
stockholder approved transactions to which the Corporation is a party:
(i) a merger or consolidation in which securities possessing
more than fifty percent (50%) of the total combined voting power of the
Corporation's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately
prior to such transaction, or
(ii) the sale, transfer or other disposition of all or
substantially all of the Corporation's assets in complete liquidation
or dissolution of the Corporation.
F. CORPORATION shall mean Calpine Corporation, a Delaware corporation.
G. EMPLOYEE shall mean an individual who is in the employ of the
Corporation (or any Parent or Subsidiary), subject to the control and direction
of the employer entity as to both the work to be performed and the manner and
method of performance.
H. EXERCISE DATE shall mean the date on which the option shall have
been exercised in accordance with Paragraph 9 of the Agreement.
I. EXERCISE PRICE shall mean the exercise price per share as specified
in the Grant Notice.
J. EXPIRATION DATE shall mean the date on which the option expires as
specified in the Grant Notice.
K. FAIR MARKET VALUE per share of Common Stock on any relevant date
shall be determined in accordance with the following provisions:
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(i) If the Common Stock is at the time traded on the Nasdaq
National Market, then the Fair Market Value shall be the closing
selling price per share of Common Stock on the date in question, as
such price is reported by the National Association of Securities
Dealers on the Nasdaq National Market or any successor system. If there
are no selling prices quoted for the Common Stock on the date in
question, then the Fair Market Value shall be the closing selling price
on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any Stock
Exchange, then the Fair Market Value shall be the closing selling price
per share of Common Stock on the date in question on the Stock Exchange
determined by the Plan Administrator to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape
of transactions on such exchange. If there are no selling prices quoted
for the Common Stock on the date in question, then the Fair Market
Value shall be the closing selling price on the last preceding date for
which such quotation exists.
X. XXXXX DATE shall mean the date of grant of the option as specified
in the Grant Notice.
X. XXXXX NOTICE shall mean the Notice of Grant of Stock Option under
the Salary Investment Option Grant Program accompanying the Agreement, pursuant
to which Optionee has been informed of the basic terms of the option evidenced
hereby.
N. HOSTILE TAKE-OVER shall mean the acquisition, directly or
indirectly, by any person or related group of persons (other than the
Corporation or a person that directly or indirectly controls, is controlled by,
or is under common control with, the Corporation) of beneficial ownership
(within the meaning of Rule 13d-3 of the 0000 Xxx) of securities possessing more
than fifty percent (50%) of the total combined voting power of the Corporation's
outstanding securities pursuant to a tender or exchange offer made directly to
the Corporation's stockholders which the Board does not recommend such
stockholders to accept.
O. NON-QUALIFIED OPTION shall mean an option not intended to satisfy
the requirements of Code Section 422.
P. NOTICE OF EXERCISE shall mean the written notice of the option
exercise on the form provided by the Corporation for such purpose.
Q. OPTION SHARES shall mean the number of shares of Common Stock
subject to the option as specified in the Grant Notice.
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R. OPTIONEE shall mean the person to whom the option is granted as
specified in the Grant Notice.
S. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
T. PERMANENT DISABILITY shall mean the inability of Optionee to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which is expected to result in death or has lasted
or can be expected to last for a continuous period of twelve (12) months or
more.
U. PLAN shall mean the Corporation's 1996 Stock Incentive Plan.
V. PLAN ADMINISTRATOR shall mean either the Board or a committee of
Board members, to the extent the committee is at the time responsible for the
administration of the Plan.
W. SERVICE shall mean the Optionee's performance of services for the
Corporation (or any Parent or Subsidiary) in the capacity of an Employee, a
non-employee member of the board of directors or a consultant or independent
advisor.
X. STOCK EXCHANGE shall mean the American Stock Exchange or the New
York Stock Exchange.
Y. SUBSIDIARY shall mean any corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each corporation (other than the last corporation) in the unbroken chain owns,
at the time of the determination, stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the other
corporations in such chain.
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