UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): March 30, 2000
CALPINE CORPORATION
(A Delaware Corporation)
Commission File Number: 033-73160
I.R.S. Employer Identification No. 77-0212977
50 West San Fernando Street
San Jose, California 95113
Telephone: (408) 995-5115
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ITEM 5. OTHER EVENTS
On March 30, 2000, Calpine Corporation, a Delaware Corporation, announced a
50-megawatt expansion of its 117-megawatt natural gas-fired, cogeneration power
plant in Morris, Ill. Calpine also announced it has signed a power sales
agreement to deliver approximately 100 megawatts of capacity from the Morris
Cogeneration Facility to Commonwealth Edison Company through the end of 2000.
The Annual Management Incentive Plan provides annual incentive payments
based on Calpine's performance to all full-time regular employees of Calpine
other than operations and maintenance hourly employees.
In 1998 and 1999 George Stathakis, a member of the Board of Directors of
Calpine, served as a consultant to Calpine pursuant to two separate Consulting
Agreements.
In June 1999, Calpine made an interest free loan to Thomas R. Mason,
Executive Vice President of Calpine, secured by a deed of trust on Mr. Mason's
residence.
(C) Exhibits.
99.0 Press release dated March 30, 2000 announcing 50-megawatt expansion of
the Morris, Ill. power plant and a power sales agreement with Commonwealth
Edison Company.
99.1 Calpine Corporation Annual Management Incentive Plan
99.2 1998 Consulting Contract Between Calpine Corporation and George J.
Stathakis
99.3 1999 Consulting Contract Between Calpine Corporation and George J.
Stathakis
99.4 Thomas R. Mason Promissory Note
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CALPINE CORPORATION
By: /s/ Charles B. Clark, Jr.
-------------------------
Charles B. Clark, Jr.
Vice President and Controller
Chief Accounting Officer
March 31, 2000
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EXHIBIT 99.0
NEWS RELEASE
Contact: 408/995-5115
Public Relations: Katherine Potter, X1168
Investor Relations: Rick Barraza,X1125
CALPINE ADDS 50 MEGAWATTS TO MORRIS, ILL. POWER PLANT
Company Signs Power Sales Agreement with Commonwealth Edison Company
(SAN JOSE, CALIF.) March 30, 2000 -- Calpine Corporation [NYSE:CPN],
one of the nation's leading independent power companies, today announced a
50-megawatt expansion of its 117-megawatt natural gas-fired, cogeneration power
plant in Morris, Ill. Calpine also announced it has signed a power sales
agreement to deliver approximately 100 megawatts of capacity from the Morris
Cogeneration Facility to Commonwealth Edison Company ("COMED") through the end
of 2000. COMED is currently purchasing 50 megawatts of electricity, and, upon
completion of the expansion in June 2000, will take the second 50-megawatt
segment.
To increase output, Calpine began installation of a steam turbine in
the Morris facility in January 2000. With the steam turbine in place, the
facility will operate in a combined-cycle configuration to maximize fuel
efficiency, lower operating costs and reduce emissions on a per megawatt basis.
Calpine purchased an 80 percent interest in the Morris facility through its
acquisition of Cogeneration Corporation of America, Inc. in December 1999. The
Morris facility is located at Equistar Chemical's Morris, Ill. plant. The
majority of the electricity and all of the steam produced from the plant are
sold to Equistar Chemicals, L.P. under the terms of a long-term agreement that
expires in 2023.
"Recent disruptions in the electricity markets in the Midwest -- including
severe price spikes -- signal the need for new sources of clean,
cost-competitive generation," stated Calpine Senior Vice President Diana Naylor.
"The Morris expansion will help increase reliability for Equistar and will help
meet growing power demand."
"With a vital product like electricity," continued Naylor, "customers
demand the highest quality product at affordable prices. We appreciate COMED's
confidence in Calpine's ability to meet their customers' needs."
Calpine Corporation is a leading independent power company dedicated to
providing customers with reliable and competitively priced electricity and
thermal energy. Calpine is active in 20 states, with headquarters in San Jose,
Calif. and regional offices in Houston, Texas; Pleasanton, Calif.; and Boston,
Mass. Calpine currently has approximately 17,000 megawatts of capacity in
operation, under construction or in announced development -- enough energy to
power approximately 17 million households. The company was founded in 1984 and
is publicly traded on the New York Stock Exchange under the symbol CPN.
This news release discusses certain matters that may be considered
"forward-looking" statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended, including statements regarding the intent, belief or current
expectations of Calpine Corporation ("the Company") and its management.
Prospective investors are cautioned that any such forward-looking statements are
not guarantees of future performance and involve a number of risks and
uncertainties that could materially affect actual results such as, but not
limited to, (i) changes in government regulations and anticipated deregulation
of the electric energy industry; (ii) commercial operations of new plants that
may be delayed or prevented because of various development and construction
risks, such as a failure to obtain financing and the necessary permits to
operate or the failure of third-party contractors to perform their contractual
obligations (iii) the assurance that the Company will develop additional plants,
(iv) a competitor's development of a lower-cost generating gas-fired power plant
or (v) the risks associated with marketing and selling power from power plants
in the newly competitive energy market. Prospective investors are also referred
to the other risks identified from time to time in the Company's reports and
registration statements filed with the Securities and Exchange Commission.
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EXHIBIT 99.1
CALPINE CORPORATION
ANNUAL MANAGEMENT INCENTIVE PLAN
I. Purpose
The purpose of the Calpine Corporation Annual Management Incentive Plan
("the Plan") is to assist the Calpine Corporation (the "Company") in
attracting and retaining the desired management talent, building team
effort, recognizing achievement of predetermined business objectives
and providing increased performance motivation through established
bonus opportunities associated with achieving or exceeding these
objectives.
II. Participation
All full time regular non-operations and maintenance hourly employees
of the Company are eligible to participate in the Plan.
III. Administration
The Plan shall be administered by the President of the Company. The
President shall have broad authority to interpret the Plan, subject to
the following decisions reserved for the Board of Directors of the
Company (the "Board"):
1. The approval of the funding formula discussed in Section IV of this
document.
2. The approval of the amount of aggregate incentive payments made
under the Plan in any one year.
3. Interpretation of the Plan on any matters in which the President is
not a disinterested party.
Any decisions of the President in the interpretation of the Plan may be
appealed in writing to the Board. However, all participants agree that
any decision of the majority of the Board is final and binding on all
parties.
IV. Funding
The building block for establishing the bonus funding is target
bonuses. A target bonus amount will be communicated to each participant
when first hired, expressed as a percentage of his/her base salary. The
target bonus amount is that which the Company will be willing to pay if
the participant and the Company achieve planned performance objectives.
The target bonus pool for each bonus year will be equal to the base
salaries of all eligible employees times the target bonus percentage
established in Section V of this document for each employee level.
The target performance for the Company will be established by the Board
or a committee thereof in December of the year preceding the bonus
year. The target performance will consist of two elements:
- Target profits before taxes for the bonus year, and
- Other targets including new business booked and such other
non-objective targets as the Board may establish.
The maximum bonus pool will be:
Actual Performance Before Taxes
-------------------------------
Target Bonus Pool x Target Performance Before Taxes
(Up to a maximum of 2X target bonus pool)
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The bonus pool will be:
Actual Performance
------------------
Maximum Bonus Pool x Target Performance
The actual performance will be determined by the Board in the first
quarter after the end of the bonus year based on its judgment of the
overall achievement of the Company in meeting/exceeding the target
performance. The Board's judgment will be final.
V. Allocation
The allocation of the bonus pool to individual participants is based on
three factors.
1. The individual's target bonus amount.
2. The level of funding of the pool, as described above.
3. A measure of individual performance.
A portion of each participant's bonus will be paid at the same level as
the funding level. For example, if the funding level is 125 percent of
target, a designated portion of each participant's bonus will be paid
at 125 percent of target bonus amount. For the President, 100 percent
of the target bonus amount will be paid at the same level as the
funding level. The balance of each participant's bonus will be based on
achievement of individual objectives. The levels of target bonuses and
the allocation of the bonus fund for each level is as follows:
INDIVIDUAL BONUS ALLOCATION FORMULA
TARGET COMPANY INDIVIDUAL
CLASSIFICATION BONUS PERFORMANCE PERFORMANCE
- -------------- ------ ----------- -----------
President 75% 100% 0%
Sr. Management
Sr. VP - Bus. Mgmt. 40% 50% 50%
Sr. VP - Operations 40% 50% 50%
VP - Bus. Development 30% 50% 50%
VP - Finance 30% 50% 50%
VP - Asset Management 30% 50% 50%
Management 20% 50% 50%
Professional 15% 50% 50%
Administrative/Technical 10% 50% 50%
Clerical 5% 50% 50%
VII. Employment Rights
The selection of an employee of the Company as a participant will in no
way enhance the employee's right to continued employment with Calpine
nor limit the Company in its right to terminate or otherwise change the
employment relationship with the employee.
VIII. Governing Law
The Plan shall be administered in accordance with California law,
unless a superseding Federal law is applicable.
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EXHIBIT 99.2
CONSULTING CONTRACT
BETWEEN
CALPINE CORPORATION
AND
GEORGE J. STATHAKIS
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TABLE OF CONTENTS
Page
1. SCOPE OF SERVICES 8
2. TERM 8
3. COMPENSATION 8
4. WARRANTY 9
5. INDEPENDENT CONTRACTOR 9
6. INSURANCE 9
7. INDEMNITY 9
8. ASSIGNMENT AND SUBCONTRACTING 10
9. CONFIDENTIALITY 10
10. JURISDICTION 10
11. PUBLICATION 10
12. SURVIVAL 10
13. ENTIRE CONTRACT AND AMENDMENTS 10
14. BINDING EFFECT 11
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CONSULTING CONTRACT
THIS CONSULTING CONTRACT ("Contract") is made and entered into
effective as of the Effective Date, as defined below, between Calpine
Corporation, a Delaware corporation, of 50 West San Fernando Street, San Jose,
California 95113 ("CALPINE") and GEORGE J. STATHAKIS, 120 Montgomery Street,
13th Floor, San Francisco, California 94104 ("CONSULTANT"), with reference to
the following:
In consideration of the mutual agreements herein contained, it is
agreed as follows:
1. SCOPE OF SERVICES.
1.1 CONSULTANT agrees to:
(a) Provide advice and guidance on various management issues to the
President and members of his senior staff.
(b) Provide advice and guidance to CALPINE's Business Development
staff with regard to domestic and international business.
2. TERM
2.1 This Contract shall commence and be effective as of the day
(the "Effective Date") the Board of Directors of CALPINE
approve this Contract and last until December 31, 1998, unless
earlier terminated pursuant to this Contract or extended by
mutual agreement of the parties.
2.2 Notwithstanding the above, either party may terminate this
Contract at any time by giving thirty (30) days written notice
to the other party, provided, however, that any payments due
and payable upon termination shall be paid.
3. COMPENSATION
Compensation to CONSULTANT for services rendered shall be as follows:
(a) CALPINE will pay CONSULTANT a monthly retainer (the
"Retainer") of Five Thousand Dollars ($5,000.00), commencing
January 1, 1998, which amount will be payable at the beginning
of each month under the Term hereof.
(b) In addition to the cash compensation stated in (a) above,
CALPINE will grant to CONSULTANT ten thousand (10,000) stock
options under the Calpine Corporation 1996 Stock Incentive
Plan. The grant will be effective January 1, 1998; the option
price for this grant will be the fair market value of Calpine
Corporation stock at the close of business on the effective
date of the grant. The options will be 25% vested on the
effective date of the grant, and the balance will vest 25% on
April 1, 1998, July 1, 1998 and October 1, 1998.
(c) In addition to the above, CALPINE agrees to reimburse
CONSULTANT for all travel and other actual out-of-pocket
expenses incurred in support of this Contract. Such expenses
will not be incurred by CONSULTANT without prior approval of
CALPINE. CONSULTANT shall furnish copies of all receipts with
invoices for expenses incurred in support of this Contract.
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4. WARRANTY
CONSULTANT assumes professional and technical responsibility for
performance of Services to be provided hereunder in accordance with
recognized professional standards. If within one year following
completion of the Services, the Services fail to meet the aforesaid
standards, and CALPINE promptly advises CONSULTANT in writing,
CONSULTANT agrees to reperform deficient Services without charge to
CALPINE up to a maximum amount equivalent to the compensation received
for the deficient Services rendered.
5. INDEPENDENT CONTRACTOR
5.1 CONSULTANT acknowledges and agrees that it enters into this
Contract as an independent contractor. Under no circumstances
shall CONSULTANT look to CALPINE as its employer, nor as a
partner, agent or principal. CONSULTANT shall not be entitled
to any benefits accorded to CALPINE's employees including,
without limitation, workers compensation, disability
insurance, and vacation or sick pay. CONSULTANT shall be
responsible for providing, at its expense and in its name,
disability, workers' compensation or other insurance as well
as licenses and permits usual or necessary for conducting the
Services hereunder.
5.2 CONSULTANT shall pay, when and as due, any and all taxes
incurred as a result of CONSULTANT's compensation hereunder,
including estimated taxes. CONSULTANT hereby indemnifies
CALPINE for any claims, lost costs, fees, liabilities, damages
or injuries suffered by CALPINE arising out of CONSULTANT's
breach of this section.
5.3 CONSULTANT represents that he or she has the qualifications
and ability to perform the Services in a professional manner,
without the advice, control or supervision of CALPINE.
CONSULTANT shall be solely responsible for the professional
performance of the Services, and shall receive no assistance,
direction or control from CALPINE. CONSULTANT shall have sole
discretion and control of its work and the manner in which it
is performed.
6. INSURANCE
6.1 CONSULTANT shall maintain in full force and effect during the
term of this Contract, the insurance described below, as well
as such other insurance as deemed reasonably necessary by
CALPINE to insure the services performed hereunder.
6.1.1 Automobile liability insurance covering owned,
non-owned and hired automobiles for a combined single
limit of $100,000/$300,000 for bodily injury and
property damage.
6.2 CONSULTANT shall, upon request, furnish certificates showing
that the above insurance will be in effect during the term of
this Contract and shall specify that CALPINE must be given, in
writing, thirty (30) days notice of cancellation, termination,
or alternation of the policies evidenced by certificates. It
is acknowledged, understood and agreed that no payment shall
be due from CALPINE under this Contract at any time when
CONSULTANT is not in full compliance with this provision
dealing with insurance.
7. INDEMNITY
7.1 CALPINE agrees to indemnify CONSULTANT and hold him harmless
against any claim by any person that CONSULTANT's performance
arising from or in connection with CONSULTANT's relationship
with CALPINE renders CONSULTANT liable to such person, and
against any losses or damages suffered by CALPINE and its
affiliates as a result of any such claim (including legal fees
and expenses); provided, however, that such indemnity will not
extend to any action taken or omitted by CONSULTANT as a
result of gross negligence or willful misconduct.
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7.2 CONSULTANT shall not be liable for any consequential or
indirect damages occurring as a result of any recommendation,
opinion or advice given by CONSULTANT, or from any
implementation of CONSULTANT's recommendations by CALPINE, or
from any other services performed hereunder by CONSULTANT for
CALPINE.
8. ASSIGNMENT AND SUBCONTRACTING
CONSULTANT shall not have the right to assign this Contract or
subcontract any of the work without the prior written consent of
CALPINE. CONSULTANT shall supervise all work subcontracted by
CONSULTANT in performing the Services and shall be responsible for all
work performed by a subcontractor as if CONSULTANT itself had performed
such work. The assignment or subcontracting of any work to
subcontractors shall not relieve CONSULTANT from any of its obligations
under this Contract with respect to the Services.
9. CONFIDENTIALITY
All data, information, work papers, technology and reports furnished or
disclosed by CALPINE to CONSULTANT or its personnel in the course of
performing the Services ("Information") are and shall remain the sole
property of CALPINE and shall be kept confidential by CONSULTANT, and
shall be delivered over to CALPINE at CALPINE's request. CONSULTANT
agrees not to divulge all or any part of the Information to third
parties, without the prior written consent of CALPINE, unless:
(a) The Information is known to CONSULTANT prior to obtaining the
same from CALPINE;
(b) The Information is, at the time of disclosure by CONSULTANT,
then in the public domain; or
(c) The Information is obtained by CONSULTANT from a third party
who did not receive same, directly or indirectly, from CALPINE
and who has no obligation of secrecy with respect thereto.
CONSULTANT further agrees that it will not, without the prior written
consent of CALPINE, disclose to any third party any of such Information
developed or obtained by CONSULTANT in the performance of this
Contract. If so requested by CALPINE, CONSULTANT further agrees to
require its employees to execute a nondisclosure agreement prior to
performing Services under this Contract.
10. JURISDICTION
This Contract shall be governed by and be construed in accordance with
the laws of the State of California.
11. PUBLICATION
CONSULTANT shall not use CALPINE's name or trademarks, photographs or
otherwise claim any affiliation with CALPINE in any publication or
public forum without obtaining prior written approval from CALPINE.
12. SURVIVAL
The rights and obligations of the parties, which, by their nature, are
normally intended to survive the termination or completion of this
Contract shall remain in full force and effect following termination of
this Contract for any reason.
13. ENTIRE CONTRACT AND AMENDMENTS
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This Contract, together with Exhibits and Schedules, if any, attached
hereto, all of which are incorporated herein as part of this Contract by
this reference, and together with all purchase orders, contain the entire
agreement between the parties hereto with respect to the subject matter
hereof. No amendment to this Contract or to any purchase order shall be
binding upon either party hereto, unless it is in writing and executed on
behalf of each party hereto by a duly authorized representative and
expressly specified as such.
14. BINDING EFFECT
This Contract shall be binding upon and inure to the benefit of the parties
hereto, and to their successors and permitted assigns.
IN WITNESS WHEREOF, this Contract is executed effective as of the day and
year first above written.
CALPINE: CONSULTANT:
CALPINE CORPORATION GEORGE J. STATHAKIS
By: By:
------------------------ ------------------------
Title: Executive Vice President Title:
------------------------ ------------------------
Date: Date:
------------------------ ------------------------
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EXHIBIT 99.3
CONSULTING CONTRACT
BETWEEN
CALPINE CORPORATION
AND
GEORGE J. STATHAKIS
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TABLE OF CONTENTS
Page
1. SCOPE OF SERVICES 14
2. TERM 14
3. COMPENSATION 14
4. WARRANTY 15
5. INDEPENDENT CONTRACTOR 15
6. INSURANCE 15
7. INDEMNITY 15
8. ASSIGNMENT AND SUBCONTRACTING 16
9. CONFIDENTIALITY 16
10. JURISDICTION 16
11. PUBLICATION 16
12. SURVIVAL 16
13. ENTIRE CONTRACT AND AMENDMENTS 17
14. BINDING EFFECT 17
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CONSULTING CONTRACT
THIS CONSULTING CONTRACT ("Contract") is made and entered into
effective as of the Effective Date, as defined below, between Calpine
Corporation, a Delaware corporation, of 50 West San Fernando Street, San Jose,
California 95113 ("CALPINE") and GEORGE J. STATHAKIS, 120 Montgomery Street,
13th Floor, San Francisco, California 94104 ("CONSULTANT"), with reference to
the following:
In consideration of the mutual agreements herein contained, it is
agreed as follows:
1. SCOPE OF SERVICES
1.1 CONSULTANT agrees to:
(a) Provide advice and guidance on various management issues to the
President and members of his senior staff.
2. TERM
2.1 This Contract shall commence and be effective as of the day
(the "Effective Date") the Board of Directors of CALPINE
approve this Contract and last until December 31, 1999, unless
earlier terminated pursuant to this Contract or extended by
mutual agreement of the parties.
2.2 Notwithstanding the above, either party may terminate this
Contract at any time by giving thirty (30) days written notice
to the other party, provided, however, that any payments due
and payable upon termination shall be paid.
3. COMPENSATION
Compensation to CONSULTANT for services rendered shall be as follows:
(a) CALPINE will pay CONSULTANT a monthly retainer (the
"Retainer") of Five Thousand Dollars ($5,000.00), commencing
January 1, 1999, which amount will be payable at the beginning
of each month under the Term hereof.
(b) In addition to the cash compensation stated in (a) above,
CALPINE will grant to CONSULTANT ten thousand (10,000) stock
options under the Calpine Corporation 1996 Stock Incentive
Plan. The grant will be effective January 1, 1999; the option
price for this grant will be the fair market value of Calpine
Corporation stock at the close of business on the effective
date of the grant. The options will be 25% vested on the
effective date of the grant, and the balance will vest 25% on
April 1, 1999, July 1, 1999 and October 1, 1999.
(c) In addition to the above, CALPINE agrees to reimburse
CONSULTANT for all travel and other actual out-of-pocket
expenses incurred in support of this Contract. Such expenses
will not be incurred by CONSULTANT without prior approval of
CALPINE. CONSULTANT shall furnish copies of all receipts with
invoices for expenses incurred in support of this Contract.
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4. WARRANTY
CONSULTANT assumes professional and technical responsibility for
performance of Services to be provided hereunder in accordance with
recognized professional standards. If within one year following
completion of the Services, the Services fail to meet the aforesaid
standards, and CALPINE promptly advises CONSULTANT in writing,
CONSULTANT agrees to reperform deficient Services without charge to
CALPINE up to a maximum amount equivalent to the compensation received
for the deficient Services rendered.
5. INDEPENDENT CONTRACTOR
5.1 CONSULTANT acknowledges and agrees that it enters into this
Contract as an independent contractor. Under no circumstances
shall CONSULTANT look to CALPINE as its employer, nor as a
partner, agent or principal. CONSULTANT shall not be entitled
to any benefits accorded to CALPINE's employees including,
without limitation, workers compensation, disability
insurance, and vacation or sick pay. CONSULTANT shall be
responsible for providing, at its expense and in its name,
disability, workers' compensation or other insurance as well
as licenses and permits usual or necessary for conducting the
Services hereunder.
5.2 CONSULTANT shall pay, when and as due, any and all taxes
incurred as a result of CONSULTANT's compensation hereunder,
including estimated taxes. CONSULTANT hereby indemnifies
CALPINE for any claims, lost costs, fees, liabilities, damages
or injuries suffered by CALPINE arising out of CONSULTANT's
breach of this section.
5.3 CONSULTANT represents that he or she has the qualifications
and ability to perform the Services in a professional manner,
without the advice, control or supervision of CALPINE.
CONSULTANT shall be solely responsible for the professional
performance of the Services, and shall receive no assistance,
direction or control from CALPINE. CONSULTANT shall have sole
discretion and control of its work and the manner in which it
is performed.
6. INSURANCE
6.1 CONSULTANT shall maintain in full force and effect during the
term of this Contract, the insurance described below, as well
as such other insurance as deemed reasonably necessary by
CALPINE to insure the services performed hereunder.
6.1.1 Automobile liability insurance covering owned,
non-owned and hired automobiles for a combined single
limit of $100,000/$300,000 for bodily injury and
property damage.
6.2 CONSULTANT shall, upon request, furnish certificates showing
that the above insurance will be in effect during the term of
this Contract and shall specify that CALPINE must be given, in
writing, thirty (30) days notice of cancellation, termination,
or alternation of the policies evidenced by certificates. It
is acknowledged, understood and agreed that no payment shall
be due from CALPINE under this Contract at any time when
CONSULTANT is not in full compliance with this provision
dealing with insurance.
7. INDEMNITY
7.1 CALPINE agrees to indemnify CONSULTANT and hold him harmless
against any claim by any person that CONSULTANT's performance
arising from or in connection with CONSULTANT's relationship
with CALPINE renders CONSULTANT liable to such person, and
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against any losses or damages suffered by CALPINE and its
affiliates as a result of any such claim (including legal fees
and expenses); provided, however, that such indemnity will not
extend to any action taken or omitted by CONSULTANT as a
result of gross negligence or willful misconduct.
7.2 CONSULTANT shall not be liable for any consequential or
indirect damages occurring as a result of any recommendation,
opinion or advice given by CONSULTANT, or from any
implementation of CONSULTANT's recommendations by CALPINE, or
from any other services performed hereunder by CONSULTANT for
CALPINE.
8. ASSIGNMENT AND SUBCONTRACTING
CONSULTANT shall not have the right to assign this Contract or
subcontract any of the work without the prior written consent of
CALPINE. CONSULTANT shall supervise all work subcontracted by
CONSULTANT in performing the Services and shall be responsible for all
work performed by a subcontractor as if CONSULTANT itself had performed
such work. The assignment or subcontracting of any work to
subcontractors shall not relieve CONSULTANT from any of its obligations
under this Contract with respect to the Services.
9. CONFIDENTIALITY
All data, information, work papers, technology and reports furnished or
disclosed by CALPINE to CONSULTANT or its personnel in the course of
performing the Services ("Information") are and shall remain the sole
property of CALPINE and shall be kept confidential by CONSULTANT, and
shall be delivered over to CALPINE at CALPINE's request. CONSULTANT
agrees not to divulge all or any part of the Information to third
parties, without the prior written consent of CALPINE, unless:
(a) The Information is known to CONSULTANT prior to obtaining the same
from CALPINE;
(b) The Information is, at the time of disclosure by CONSULTANT, then
in the public domain; or
(c) The Information is obtained by CONSULTANT from a third party who
did not receive same, directly or indirectly, from CALPINE and
who has no obligation of secrecy with respect thereto.
CONSULTANT further agrees that it will not, without the prior written
consent of CALPINE, disclose to any third party any of such Information
developed or obtained by CONSULTANT in the performance of this
Contract. If so requested by CALPINE, CONSULTANT further agrees to
require its employees to execute a nondisclosure agreement prior to
performing Services under this Contract.
10. JURISDICTION
This Contract shall be governed by and be construed in accordance with
the laws of the State of California.
11. PUBLICATION
CONSULTANT shall not use CALPINE's name or trademarks, photographs or
otherwise claim any affiliation with CALPINE in any publication or
public forum without obtaining prior written approval from CALPINE.
12. SURVIVAL
The rights and obligations of the parties, which, by their nature, are
normally intended to survive the termination or completion of this
Contract shall remain in full force and effect following termination of
this Contract for any reason.
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13. ENTIRE CONTRACT AND AMENDMENTS
This Contract, together with Exhibits and Schedules, if any, attached
hereto, all of which are incorporated herein as part of this Contract
by this reference, and together with all purchase orders, contain the
entire agreement between the parties hereto with respect to the
subject matter hereof. No amendment to this Contract or to any
purchase order shall be binding upon either party hereto, unless it is
in writing and executed on behalf of each party hereto by a duly
authorized representative and expressly specified as such.
14. BINDING EFFECT
This Contract shall be binding upon and inure to the benefit of the
parties hereto, and to their successors and permitted assigns.
IN WITNESS WHEREOF, this Contract is executed effective as of the day
and year first above written.
CALPINE: CONSULTANT:
CALPINE CORPORATION GEORGE J. STATHAKIS
By: By:
------------------------ ------------------------
Title: Executive Vice President Title:
------------------------ ------------------------
Date: Date:
------------------------ ------------------------
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EXHIBIT 99.4
PROMISSORY NOTE SECURED BY DEED OF TRUST
$500,000 June __, 1999
Santa Clara County, California
FOR VALUE RECEIVED, the undersigned THOMAS R. MASON ("Employee") and
DEBRA J. MASON, husband and wife (together "Maker"), hereby promises to pay to
CALPINE CORPORATION, a Delaware corporation, or order ("Payee") at 50 West San
Fernando Street, California 95113, Attn.: General Counsel, or at such other
place or to such other party as Payee may from time to time designate, on the
date that is the fifth (5th) anniversary from the date hereof, the principal sum
of FIVE HUNDRED THOUSAND DOLLARS AND 00/100 ($500,000), which amount shall not
bear interest, in lawful money of the United States of America and in
immediately available funds.
This Note is secured by that certain Deed of Trust and Assignment of
Rents (Modified Long Form Acceleration Clause) of even date herewith (the "Deed
of Trust"), encumbering the property commonly known as 55 Starmont Lane,
Danville, California 94526 and more particularly described in the Deed of Trust
(the "Property").
(i) Prepayments. Maker reserves the right to prepay the outstanding
principal amount of this Note in full or in part at any time during the term of
this Note without notice and without premium or penalty.
(ii) Due on Sale. In the event that the Property or any portion thereof, or
any interest therein is sold, agreed to be sold, conveyed or alienated by Maker,
by operation of law or otherwise, the outstanding principal amount of this Note,
irrespective of the maturity date set forth herein shall, at the option of
Holder and without demand or notice, immediately become due and payable.
(iii) Purpose of Loan, Non-transferability, Use of Loan Proceeds,
Certification of Borrower. Employee is acquiring certain real property located
in the City of Danville, Contra Costa County, California (the "New Residence").
The New Residence is being acquired in connection with the transfer of Employee
to a "new principal place of work" as defined in Internal Revenue Code Section
217(c). This Note and the benefits of the interest arrangements hereunder are
not transferable by Maker and are conditioned on the future performance of
substantial services by Employee. The proceeds of this Note shall be used only
to purchase the New Residence which is the new "principal residence" of Maker
within the location of Employee's new principal place of work as such term is
described in Treasury Regulation 1.217-2(b)(8). Maker certifies to Payee that
Maker reasonably expects to be entitled to, and will itemize, deductions for
each year that the loan is outstanding.
(iv) Events of Default and Remedies. Any one of the following occurrences
shall constitute an "Event of Default" under this Note:
(a) Maker fails to make payment of the full principal amount
of this Note as and when the same becomes due and payable in accordance with the
terms hereof.
(b) Maker becomes insolvent or bankrupt, commits any act of
bankruptcy, generally fails to pay its debts as they become due, becomes the
subject of any proceedings or action of any regulatory agency or any court
relating to insolvency, or makes an assignment for the benefit of creditors, or
enters into any agreement for the composition, extension, or readjustment of all
or substantially all of Maker's obligations.
(c) An event of default occurs under the Deed of Trust.
(d) Employee voluntarily resigns from employment with Payee.
Upon the occurrence of any Event of Default hereunder, the
entire unpaid principal balance, together with all accrued interest of this
Note, shall, at the option of the Payee and without notice or demand of any kind
to Maker or any other person, immediately become due and payable, and such
amount shall, at the option of Holder, bear interest at the rate of ten percent
(10%) (the "Default Rate"), until paid, such interest to be compounded annually
and Payee shall have and may exercise any and all rights and remedies available
to it at law or in equity.
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(v) Attorneys' Fees and Costs. Maker promises to pay on demand all
out-of-pocket costs of and expenses of Payee in connection with the collection
of amounts due hereunder, including, without limitation, attorneys' fees and
expenses incurred in connection therewith, whether or not any lawsuit is ever
filed with respect thereto.
(vi) Miscellaneous.
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(a) Waiver. Maker waives diligence, presentment, protest and
demand and also notice of protest, demand, dishonor and nonpayment of this Note.
No extension of time for the payment of this Note shall affect the original
liability under this Note of Maker. The pleading of any statute of limitations
as a defense to any demand against Maker is expressly waived by Maker to the
full extend permitted by law.
(b) Setoff. The obligation to pay Payee shall be absolute and
unconditional and the rights of Payee shall not be subject to any defense,
setoff, counterclaim or recoupment or by reason of any indebtedness or liability
at any time owing by Payee to Maker.
(c) Payment Notice. This Note is subject to Section 2966 of
the California Civil Code, which provides that the Payee of this Note shall give
written notice to Maker,to Maker, or Maker's successor in interest, of
prescribed information at least ninety (90) days and not more than one hundred
fifty (150) days before any balloon payment is due.
(d) Governing Law. This Note shall be governed by and
construed in accordance with the laws of the State of California. This Note has
been delivered to Payee and accepted by Payee in the State of California. If
there is a lawsuit on this Note, Maker shall submit, at Payee's request, to the
jurisdiction of the courts of Santa Clara County, California.
(e) Successors and Assigns. This Note shall inure to the
benefit of Payee and its successors and assigns. The obligations of Maker
hereunder shall not be assignable.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Note as of the date first above written.
MAKER
-----------------
Thomas R. Mason
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Debra J. Mason
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