EXHIBIT 10.1
 

 
December 17, 2008

Zamir Rauf
Via hand delivery

Dear Zamir,

On behalf of Calpine Corporation, I am pleased to confirm your promotion to the
regular, full-time position of Executive Vice-President and Chief Financial
Officer for Calpine Corporation located in Houston, Texas effective December 15,
2008.  Details of this offer are provided below:

Title:
Executive Vice-President and Chief Financial Officer
   
Reporting to:
Jack Fusco, Chief Executive Officer
   
Base Salary:
$ 18,269.23 paid bi-weekly (annualized at $475,000.00)
   
Annual bonus Program:
You will be eligible to participate in the Calpine Incentive Plan (CIP), which
provides for annual bonus based both on corporate financial results and
individual performance. Your CIP target will be 90% of your pro-rated annual
base wages with the opportunity to receive a maximum annual cash bonus of 200%
of Base Salary and can be increased or decreased in accordance with the
corporate financial results and your individual performance.

 
We are also recommending that you receive an annual equity grant associated with
your promotion.  This equity grant is based on Calpine's stock price on the
Compensation Committee approval date.  The grant, if approved, will be 100,000
stock options.  The grant would vest within 3 years from the grant date and
would expire after 10 years or when you leave the company, whichever comes
first.  You will be advised of the decision on the grant as soon as is
administratively possible following the Compensation Committee meeting of the
Board of Directors.  In other respects, the options and restricted stock will be
governed by the terms of the Calpine Corporation 2008 Equity Incentive Plan. 
You will be eligible to participate in future equity grants beginning in 2010.

Zamir, we view this promotion as an excellent opportunity for you and are
confident Calpine can continue to provide you with challenging and rewarding
employment.

Very truly yours,

/s/ Jack A. Fusco

Jack A. Fusco
Chief Executive Officer

 
 

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Zamir Rauf
December 4, 2008
Page 2 

/s/ Zamir Rauf
 
December 17, 2008
Zamir Rauf
 
Date