EXHIBIT 10.6

AMENDED AND RESTATED
CALPINE CORPORATION
2008 EQUITY INCENTIVE PLAN
Notice of Performance Share Unit Grant

Participant:
[●]

Corporation:
Calpine Corporation

Notice:
You have been granted the following Performance Share Units in accordance with
the terms of this notice, the Performance Share Unit Award Agreement attached
hereto as Attachment A (such notice and agreement, collectively, this
“Agreement”) and the Plan identified below.

Type of Award:
Performance-based Restricted Stock Units, referred to herein as “Performance
Share Units”. A Performance Share Unit is an unfunded and unsecured obligation
of the Corporation to pay the cash equivalent of up to two (2) shares of Common
Stock, as determined in accordance with this Agreement and subject to the terms
and conditions of this Agreement and those of the Plan.

Plan:
Amended and Restated Calpine Corporation 2008 Equity Incentive Plan.

Grant:
Grant Date: February [●], 2013        

Number of Performance Share Units:  [●]

Acknowledgement
and Agreement:
The undersigned Participant acknowledges receipt of, and understands and agrees
to, the terms and conditions of this Agreement and the Plan.

CALPINE CORPORATION

By:                                                                           
      Name:
      Title:
Date:                                                                        

PARTICIPANT

                                                                                   

Date:                                                                          

 
 

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Attachment A

AMENDED AND RESTATED
CALPINE CORPORATION
2008 EQUITY INCENTIVE PLAN
Performance Share Unit Award Agreement

This Performance Share Unit Award Agreement, dated as of the Grant Date set
forth in the Notice of Performance Share Unit Grant to which this Performance
Share Unit Award Agreement is attached (the “Grant Notice”), is made between
Calpine Corporation (the “Corporation”) and the Participant set forth in the
Grant Notice. The Grant Notice is included in and made part of this Performance
Share Unit Award Agreement.
1.Definitions. Capitalized terms used but not defined herein have the meanings
set forth in the Plan.
2.    Grant of Performance Share Units. Subject to the provisions of this
Agreement and the provisions of the Plan, the Corporation hereby grants to the
Participant, pursuant to the Plan, the number of Performance Share Units set
forth in the Grant Notice.
3.    Vesting Criteria Applicable to Performance Share Units.
(a)Performance Cycle. The Performance Cycle for the Performance Share Units
shall commence on January 1, 2013, and shall end on December 31, 2015.
(b)Performance Goal. The performance goal for the Performance Cycle is the
cumulative total return per share of Common Stock to the Corporation’s
shareholders, inclusive of dividends paid, during the Performance Cycle in
comparison to the cumulative total return per share of common stock, inclusive
of dividends paid, during the Performance Cycle achieved by the companies (each,
an “S&P 500 Company,” and collectively, the “S&P 500 Companies”) comprising the
Standard & Poor’s 500 index on January 1, 2013, as set forth in this Section
3(b). For purposes of this Agreement, such cumulative total shareholder return
(“TSR”) for the Corporation and each of the S&P 500 Companies shall be measured
by dividing (A) the sum of (1) the dividends paid (regardless of whether paid in
cash or property) on the common stock of such company during the Performance
Cycle, assuming reinvestment of such dividends in such stock (based on the
closing price of such stock on the date such dividend is paid), plus (2) the
difference between the average closing price of a share of such company’s common
stock on the principal United States exchange on which such stock trades for the
twenty (20) trading days occurring immediately prior to the first day of the
Performance Cycle (the “Beginning Average Value”) and the average closing price
of a share of such stock on the principal United States exchange on which such
stock trades for the twenty (20) trading days immediately prior to and including
the last day of the Performance Cycle (appropriately adjusted for any stock
dividend, stock split, spin-off, merger or other similar corporate events
affecting such stock), by (B) the Beginning Average Value. For the avoidance of
doubt, it is intended that the foregoing calculation of TSR shall take into
account not only the reinvestment of dividends in a share of common stock of the
Corporation or any S&P 500 Company, as applicable, but also capital appreciation
or depreciation in the shares deemed acquired by such reinvestment. All
determinations under this Section 3 shall be made by the Committee.
(c)TSR Percentile Ranking. Except as provided in Section 4 or Section 6 hereof,
the Performance Share Units shall be earned based on the Corporation’s TSR
percentile ranking in comparison to the TSRs of the S&P 500 Companies during the
Performance Cycle. As soon as practicable after the completion of the
Performance Cycle, (i) the TSRs of the Corporation and each of the S&P 500
Companies shall be calculated, and (ii) the relative ranking of the
Corporation’s TSR for the Performance Cycle as compared to the TSRs for the S&P
500 Companies for the Performance Cycle shall be determined and expressed as a
percentile ranking (the “TSR Percentile Ranking”). If at any time during the
Performance Cycle, an S&P 500 Company ceases to be a publicly-traded company,
such company

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shall be removed and treated as if it had never been an S&P 500 Company for
purposes of determining the TSR Percentile Ranking.
(d)Earned Percentage. The Earned Percentage shall be determined in accordance
with the following schedule based on the TSR Percentile Ranking, with any Earned
Percentage for any TSR Percentile Ranking between the levels set forth in such
schedule determined by linear interpolation:
TSR Percentile Ranking
 
Earned Percentage
90th percentile
 
200%
80th percentile
 
175%
70th percentile
 
150%
60th percentile
 
125%
50th percentile
 
100%
40th percentile
 
75%
30th percentile
 
50%
Less than 30th percentile
 
0%

(e)Earned Performance Share Units. The number of Performance Share Units earned
(the “Earned Performance Share Units”) shall be the product of the number of
Performance Share Units set forth in the Grant Notice multiplied by the Earned
Percentage, subject to Committee certification pursuant to paragraph (f) of this
Section 3.
(f)Committee Certification. As soon as practicable after completion of the
Performance Cycle, the Committee shall determine and certify in writing the TSR
Percentile Ranking attained, the Earned Percentage and the number of Earned
Performance Share Units (which written certification may be in the form of
approved minutes of the Committee meeting in which such certification is made).
(g)Failure to Become Earned Performance Share Units. To the extent that the
Performance Share Units do not become Earned Performance Share Units pursuant to
this Section 3, such Performance Share Units shall be automatically forfeited.
4.    Termination of Employment. Any Performance Share Units that have not been
settled in accordance with Section 5 hereof prior to the date on which the
status of employment of the Participant with the Corporation or its Affiliates
shall terminate (including by reason of such an Affiliate ceasing to be an
Affiliate of the Corporation) (any such termination, “Termination of
Employment”) shall be immediately and automatically forfeited upon such date,
except as follows:
(a)    Death. Upon Termination of Employment by reason of the Participant’s
death, then, notwithstanding such Termination of Employment, the Earned
Percentage shall be 100%, and the Earned Performance Share Units shall be
settled in accordance with Section 5 hereof.
(b)    Retirement Eligible. In the event that the Participant is, or becomes,
eligible to Retire, then, effective on the later to occur of: (i) the date on
which the Participant initially becomes eligible to Retire, and (ii) the
one-year anniversary of the Grant Date, notwithstanding any Termination of
Employment occurring after such later date, the Performance Share Units shall be
eligible to become Earned Performance Share Units, and any Earned Performance
Share Units shall be settled subject to the same terms and conditions hereunder
had the Participant not incurred such Termination of Employment. For the
avoidance of doubt, if the Participant incurs a Termination of Employment prior
to such later date, then this paragraph (b) of Section 4 shall not apply.
5.    Settlement of Earned Performance Share Units. During calendar year 2016,
as soon as reasonably practicable following completion of all determinations and
certifications contemplated by Section 3, but in no event later than March 15,
2016, subject to satisfaction of applicable tax withholding obligations in
accordance with

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Section 7, the Corporation shall cause to be paid to the Participant an amount
in cash equal to the product of the number of Earned Performance Share Units
multiplied by the Fair Market Value of a share of Common Stock as of the last
trading day of the Performance Cycle, provided, however, that if the Participant
incurs a Termination of Employment as described in Section 4(a) hereof, then
such payment shall be made within sixty (60) days after the date of such
Termination of Employment and such Fair Market Value shall be determined as of
the date of such Termination of Employment, less applicable taxes in accordance
with Section 7. Notwithstanding the foregoing provisions of this Section 5 to
the contrary, if at the time of the Participant’s separation from service within
the meaning of Code Section 409A, the Participant is a “specified employee”
within the meaning of Code Section 409A, any payment hereunder that constitutes
a “deferral of compensation” under Code Section 409A and that would otherwise
become due on account of such separation from service shall be delayed, and
payment shall be made in full upon the earlier to occur of (a) a date during the
thirty-day period commencing six months and one day following such separation
from service and (b) the date of the Participant’s death.
6.    Change in Control.

(a)Accelerated Payment of Performance Share Units. Notwithstanding Sections 3
and 5, in the event a Change in Control occurs prior to the end of the
Performance Cycle, and provided that the Performance Share Units have not been
forfeited pursuant to Section 4 prior to the date of such Change in Control,
then: (i) the Corporation’s TSR, the TSR for each S&P 500 Company and the TSR
Percentile Ranking shall be determined in accordance with Section 3(a), (b) and
(c) for the portion of the Performance Cycle that ends on the last trading day
that is on or immediately prior to the fifth (5th) day immediately prior to the
date of the Change in Control; (ii) the number of Earned Performance Share Units
shall be equal to the product of (A) the greater of (x) the Earned Percentage
determined in accordance with Section 3(d) based on the TSR Percentile Ranking
determined in accordance with clause (i) of this Section 6(a), and (y) 100%,
multiplied by (B) the number of Performance Share Units set forth in the Grant
Notice, and (iii) subject to satisfaction of applicable tax withholding
obligations in accordance with Section 7, the Corporation shall cause to be paid
to the Participant an amount in cash equal to the product of such number of
Earned Performance Share Units multiplied by the Change in Control Price (as
defined in paragraph (b) of this Section 6) on, or within five (5) business days
after, the date of such Change in Control, based on the Change in Control Price;
provided, however, that if such Change in Control does not constitute a “change
in control event,” within the meaning of Treasury Regulations Section
1.409A-3(i)(5), then any amounts payable under this Section 6 that constitute a
“deferral of compensation” under Code Section 409A shall be made at the time
specified in Section 5 notwithstanding the occurrence of such Change in Control.
All determinations under this Section 6 shall be made by the Committee as
constituted immediately prior to the applicable Change in Control.

(b)Change in Control Price. For purposes of this Section 6, “Change in Control
Price” means the closing price of a share of the Common Stock on the principal
United States exchange on which Common Stock trades on the last trading day
occurring immediately prior to the date of the Change in Control.

7.    Taxes. Upon settlement of the Earned Performance Share Units, or as of any
other date on which the value of any Performance Share Units otherwise becomes
includible in the Participant’s gross income for Federal, state, local or
non-United States income tax or other tax or social security purposes (or
results in any other taxes of any kind), the Participant shall deliver to the
Corporation at the time of such settlement or such other date such amount of
cash as the Corporation or its Affiliate may require to meet its obligations
under applicable tax and other laws or regulations, provided that the
Corporation may determine that any such tax obligations shall be satisfied by
the Corporation withholding any amount otherwise payable to the Participant
pursuant to this Agreement. The Corporation or an Affiliate may, in the
discretion of the Committee, provide for alternative arrangements to satisfy
applicable tax withholding requirements in accordance with Section 21 of the
Plan. Regardless of any action the Corporation or any Affiliate takes with
respect to any or all tax withholding obligations, the Participant acknowledges
that the ultimate liability for all such taxes is and remains the Participant’s
responsibility.
8.    Dividend Equivalents. With respect to the number of Performance Share
Units set forth in the Grant Notice, the Participant shall be credited with
Dividend Equivalents with respect to each such Performance Share Unit equal to
the amount per share of Common Stock of any ordinary cash dividends declared by
the Board with record dates during the period beginning on the first day of the
Performance Cycle and ending on the earliest to occur

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of: (a) the last day of the Performance Cycle; (b) the date of a Change in
Control and (c) the date such Performance Share Unit terminates or is forfeited
under Section 3 or Section 4. The Corporation shall pay in cash to the
Participant an amount equal to the product of (i) sum of the aggregate amount of
such Dividend Equivalents credited to the Participant, multiplied by (ii) the
Earned Percentage, such amount to be paid as and when the related Performance
Share Units are paid in accordance with Section 5 or Section 6, as applicable.
Any Dividend Equivalents shall be forfeited as and when the related Performance
Share Units are forfeited in accordance with Section 3 or Section 4.
9.    No Rights as a Shareholder. Neither the Participant nor any other person
shall at any time be or become the beneficial owner of any shares of Common
Stock underlying the Performance Share Units, nor have any rights to dividends
or other rights as a shareholder with respect to any such shares.
10.    Transferability. The Performance Share Units shall not be transferable
otherwise than by will or the laws of descent and distribution; provided,
however, that the Participant may file with the Company a written designation of
a beneficiary on such form as may be prescribed by the Company and may, from
time to time, amend or revoke such designation, and, in the event of the
Participant’s death, any payment due under Section 5 shall be made to the most
recently designated such beneficiary, and if no designated beneficiary survives
the Participant, any such payment shall be made to the executor or administrator
of the Participant’s estate.

11.    No Right to Continued Employment. Neither the Performance Share Units nor
any terms contained in this Agreement shall confer upon the Participant any
rights or claims except in accordance with the express provisions of the Plan
and this Agreement and shall not give the Participant any express or implied
right to be retained in the employment or service of the Corporation or any
Affiliate for any period, or in any particular position or at any particular
rate of compensation, nor restrict in any way the right of the Corporation or
any Affiliate, which right is hereby expressly reserved, to modify or terminate
the Participant’s employment or service at any time for any reason. The
Participant acknowledges and agrees that any right to Earned Performance Share
Units is earned only by continuing as an employee of the Corporation or an
Affiliate and satisfaction of other applicable terms and conditions contained in
the Plan and this Agreement, and not through the act of being hired or being
granted the Performance Share Units hereunder.

12.    The Plan. By accepting any benefit under this Agreement, the Participant
and any person claiming under or through the Participant shall be conclusively
deemed to have indicated his or her acceptance and ratification of, and consent
to, all of the terms and conditions of the Plan and this Agreement and any
action taken under the Plan by the Board, the Committee or the Corporation, in
any case in accordance with the terms and conditions of the Plan. This Agreement
is subject to all the terms, provisions and conditions of the Plan, which are
incorporated herein by reference, and to such rules, policies and regulations as
may from time to time be adopted by the Committee. In the event of any conflict
between the provisions of the Plan and this Agreement, the provisions of the
Plan shall control, and this Agreement shall be deemed to be modified
accordingly. The Plan and the prospectus describing the Plan can be found on the
Corporation’s HR intranet. A paper copy of the Plan and the prospectus shall be
provided to the Participant upon the Participant’s written request to the
Corporation at the address indicated in Section 12 hereof.

13.    Notice. All notices required to be given under this Agreement or the Plan
shall be in writing and delivered in person or by registered or certified mail,
postage prepaid, to the other party, in the case of the Corporation, at the
address of its principal place of business (or such other address as the
Corporation may from time to time specify), or, in the case of the Participant,
at the Participant’s address set forth in the Corporation’s records; provided,
however, any such notice to the Participant may be delivered electronically to
the Participant’s email address set forth in the Corporation’s records. Each
party to this Agreement agrees to inform the other party immediately upon a
change of address. All notices shall be deemed delivered when received.

14.    Other Plans. The Participant acknowledges that any income derived from
the Peformance Share Units shall not affect the Participant’s participation in,
or benefits under, any other benefit plan or other contract or arrangement
maintained by the Corporation or any Affiliate.
15.    Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled by binding arbitration in Houston, Texas by
one arbitrator appointed in the manner set forth by the

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American Arbitration Association. Any arbitration proceeding pursuant to this
paragraph shall be conducted in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association. Judgment may be
entered on the arbitrators' award in any court having jurisdiction.
16.    Entire Agreement and Amendments. This Agreement and the Plan contain the
entire agreement of the parties relating to the matters contained herein and
supersede all prior agreements and understandings, oral or written, between the
parties with respect to the subject matter hereof. This Agreement may be amended
in accordance with Section 22 of the Plan.
17.    Separability. If any provision of this Agreement is rendered or declared
illegal or unenforceable by reason of any existing or subsequently enacted
legislation or by the decision of any arbitrator or by decree of a court of last
resort, the parties shall promptly meet and negotiate substitute provisions for
those rendered or declared illegal or unenforceable to preserve the original
intent of this Agreement to the extent legally possible, but all other
provisions of this Agreement shall remain in full force and effect.
18.    Electronic Delivery And Signatures. The Corporation may, in its sole
discretion, decide to deliver any documents related to the Performance Share
Units, this Agreement or to participation in the Plan or to future grants that
may be made under the Plan by electronic means or to request the Participant's
consent to participate in the Plan by electronic means. The Participant hereby
consents to receive such documents by electronic delivery and, if requested, to
agree to participate in the Plan through an on-line or electronic system
established and maintained by the Corporation or another third party designated
by the Corporation. If the Corporation establishes procedures of an electronic
signature system for delivery and acceptance of Plan documents (including this
Agreement or any Award Agreement like this Agreement), the Participant hereby
consents to such procedures and agrees that his or her electronic signature is
the same as, and shall have the same force and effect as, his or her manual
signature.
19.    Section 409A. This Agreement and delivery of shares of Common Stock under
this Agreement are intended to be exempt from or to comply with Section 409A of
the Code and shall be administered and construed in accordance with such intent.
In furtherance, and not in limitation, of the foregoing: (a) in no event may the
Participant designate, directly or indirectly, the calendar year of any payment
to be made hereunder; and (b) notwithstanding any other provision of this
Agreement to the contrary, a Termination of Employment hereunder shall mean and
be interpreted consistent with a “separation from service” within the meaning of
Code Section 409A with respect to any payment hereunder that constitute a
“deferral of compensation” under Code Section 409A that becomes due on account
of such separation from service.

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