Document:

ex10-2.htm

    EXHIBIT
10.2

     

    

      

       

      

      

      

      

      PROFESSIONAL
ENGAGEMENT AGREEMENT

      GENERAL
TERMS

      

      BETWEEN

      

      CALPINE
CORPORATION

      

      AND

      

      PA
CONSULTING GROUP, INC.

      

      

      

      

      

      

      

      

      

      

      

      

      Calpine
Corporation

      717
Texas Avenue, Suite 1000, Houston, Texas 77002

      Telephone
(713) 830-2000

      

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      PROFESSIONAL
ENGAGEMENT AGREEMENT

      GENERAL
TERMS

      

      THIS
PROFESSIONAL ENGAGEMENT AGREEMENT (“Agreement”) is made and entered into as of
the 2nd day of May, 2008 (“Effective Date”) between Calpine Corporation, a
Delaware corporation ("CALPINE"), with a principal office located at 717 Texas
Avenue, Suite 1000, Houston, Texas 77002; and PA Consulting Group, Inc, a New
Jersey corporation, with an office located at 1700 Lincoln Street Suite 4600,
Denver, CO 80203 ("PROFESSIONAL"). CALPINE and PROFESSIONAL may be collectively
referred to as "the Parties" or individually as a "Party." In consideration of
the mutual agreements herein contained, it is agreed as follows:

      

      
        	
                1.

              	
                ENGAGEMENT,
      SERVICES AND LIMITATION ON
AUTHORITY

              

      

       

      
        	
                 
      

              	
                1.1.

              	
                ENGAGEMENT
      of PROFESSIONAL shall be made pursuant to the general terms set forth in
      this PROFESSIONAL ENGAGEMENT AGREEMENT – GENERAL
  TERMS.

              

      

       

       

      
        	
                 
      

              	
                1.2.

              	
                PROFESSIONAL
      agrees to perform the services described in each “Statement of
      Work/Work-Stream” or Addendum No. 1 (hereafter collectively the “Statement
      of Work”), and any attachments thereto, entered into and executed by the
      Parties from time to time (hereinafter, collectively referred to as the
      "Services"). Services under this Agreement are limited to Services
      provided by PROFESSIONAL’s energy group. Each Statement of Work shall: (i)
      be separately numbered; and, (ii) contain, at minimum, the name of
      contracting Parties, date of this Agreement, date of Statement of Work,
      description of Services to be performed, date when Services are to be
      performed or delivered, and rate of compensation payable to PROFESSIONAL
      for the Services. PROFESSIONAL will determine the method, details and
      means of performing the Services. Each Statement of Work is incorporated
      herein as if fully set forth herein and each Statement of Work is subject
      to all the terms and provisions hereof. Notwithstanding the foregoing, if
      any terms or conditions in an applicable Statement of Work (including
      Addendum No. 1) are inconsistent or in conflict with the Agreement, the
      Statement of Work (or Addendum No. 1 as the case may be) shall
      control.  A sample Statement of Work is attached to this
      Agreement as Exhibit A.

              

      

       

      

      
        	
                 
      

              	
                1.3.

              	
                PROFESSIONAL
      shall have no right, power or authority to control or direct the
      performance or activities of any officer, employee or agent of CALPINE, or
      to enter into any contract, agreement or arrangement or incur any
      obligation or liability on behalf of or for the account of CALPINE, unless
      stated otherwise in the Statement of
Work.

              

      

       

      
        	
                 
      

              	
                1.4.

              	
                CALPINE
      will designate an individual to be responsible for the administration of
      the terms of this Agreement and all Statements of
  Work

              

      

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      pursuant
to which the PROFESSIONAL shall provide services to CALPINE.  The
individual designated by CALPINE will be referred to as the “Calpine Contact
Person” and will be the person with whom the PROFESSIONAL should communicate
regarding any matters related to the provision of services, payment of fees and
expenses and any other matters related to the PROFESSIONAL’s relationship with
CALPINE.

       

       

      
        	
                 
      

              	
                1.5

              	
                The
      “Calpine Contract Person” is:

              

      

       

      Name
Robert P. May

      Position
CEO

      Address
717 Texas Ave, Houston, Texas, 77002

      Office
Phone (713) 830-2029

      Email
mayb@calpine.com

      

      

      
        	
                1.6

              	
                CALPINE
      will provide such facilities, materials, information and resources for the
      performance of the Services as reasonably requested by PROFESSIONAL, and
      will liaise with PROFESSIONAL as appropriate during the performance of the
      Services and shall respond promptly to PROFESSIONAL’s reasonable requests
      for consultation, information, decisions and
  approvals.

              

      

      

      
        	
                2.

              	
                TERM
      AND TERMINATION

              

      

      

      
        	
                 
      

              	
                2.1

              	
                This
      Agreement shall be for a term of one (1) year from the date first
      specified above, unless terminated earlier pursuant to this Agreement or
      extended by a mutual written agreement executed by both Parties. Provided
      that for any Statement of Work executed during the one (1) year term of
      this Agreement, should the performance of the Services extend beyond the
      one (1) year term of this Agreement, then the terms of this Agreement
      shall be extended solely for and until completion of the
      Services.

              

      

      

      
        	
                 
      

              	
                2.2

              	
                Either
      Party may terminate this Agreement (or any Statement of Work) upon fifteen
      (15) days’ prior written notice in the event of substantial failure by the
      other Party to perform in accordance with the terms of this Agreement (or
      such Statements of Work) through no fault of the terminating Party; provided that
      such notice shall specify in reasonable detail the nature of such
      substantial failure of performance; and further provided that
      if during such fifteen-day period such other Party substantially
      remedies such performance, this Agreement (or such Statement of Work)
      shall not be terminated.  However, the non-performing Party
      shall not be relieved of the obligation to complete such performance or
      from liability for any damages caused to the other Party by such failure
      of performance.  This Agreement (including any or
      all

              

      

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      Statement
of Work) may also be terminated by CALPINE for its convenience without penalty
or termination fee, but only upon fifteen (15) days’ prior written notice to
PROFESSIONAL and CALPINE shall pay PROFESSIONAL for all authorized expenses and
work performed under any terminated Statement of Work through the date of
termination.

      

      
        	
                 
      

              	
                2.3

              	
                Upon
      receipt of notice of termination from CALPINE, unless otherwise permitted
      by the foregoing provisions or otherwise instructed within the body of
      such notice, PROFESSIONAL shall discontinue its Services, and as soon as
      reasonably possible thereafter, shall deliver to CALPINE all data,
      documents, drawings, reports, files, estimates, summaries and such other
      information and materials, as may have been accumulated by PROFESSIONAL in
      the performance of this Contract, whether completed or in
      process.

              

      

      

      

      
        	
                3.

              	
                COMPENSATION

              

      

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                3.1

              	
                Compensation
      to PROFESSIONAL for the Services rendered pursuant to this agreement or
      related Statement of Work shall be calculated as described in the
      Statement of Work covering such Services and shall be paid in United
      States dollars. No expenses of PROFESSIONAL shall be reimbursable by
      CALPINE unless the obligation and manner of reimbursement is expressly set
      forth in such Statement of Work. The compensation provided for in each
      Statement of Work shall be the only payment to which PROFESSIONAL shall be
      entitled for the Services covered by such Statement of
    Work.

              

      

       

      
        	
                 
      

              	
                3.2

              	
                PROFESSIONAL
      shall invoice CALPINE for services rendered pursuant to this agreement and
      each related Statement of Work on the  basis set out in the
      applicable Statement of Work.  CALPINE will pay the amounts
      properly invoiced pursuant to the terms of this agreement and each related
      Statement of Work within thirty (30) days of invoice
      receipt.  All invoices will be submitted in an electronic format
      as specified by CALPINE. Overdue invoice are subject to simple interest at
      the rate of one-half of one percent per
month.

              

      

       

       

      
        	
                 
      

              	
                3.3

              	
                Invoices
      and communications regarding invoices shall be sent directly to the
      Calpine Contact Person identified in this agreement and in each Statement
      of Work, unless otherwise directed by said Statement of
    Work.

              

      

       

       

      
        	
                 
      

              	
                3.4

              	
                CALPINE
      reserves the right to audit upon reasonable notice and at reasonable times
      all records of PROFESSIONAL pertaining to the invoiced fees, costs and
      expenses of the Services provided to CALPINE during and for a two (2) year
      period following the term of this Agreement. Any such audit will be
      conducted in a manner that minimizes disruption to Professional’s business
      operations.

              

      

       

      

      
        	
                4.

              	
                PROFESSIONAL
      STANDARDS

              

      

       

      PROFESSIONAL
assumes complete professional and technical responsibility for performance of
all Services and will  provide Services in a good and workman like
manner, in accordance with recognized prudent professional standards applicable
in the industry of PROFESSIONAL, and in accordance with all applicable laws,
regulations, standards and codes. PROFESSIONAL warrants that all Services and
deliverables will conform to agreed specifications.  If
within  90 days following completion of the Services or provision of
the deliverables, CALPINE notifies PROFESSIONAL in wiring that certain SERVICES
or deliverables do not conform to agreed specifications,  PROFESSIONAL
shall promptly re-perform such Services or correct defective deliverables,
without charge to CALPINE.

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

      
        	
                5.

              	
                INDEPENDENT
      CONTRACTOR

              

      

       

      
        	
                 
      

              	
                5.1.

              	
                PROFESSIONAL
      enters into this Agreement as an independent contractor. Under no
      circumstances shall PROFESSIONAL look to CALPINE as its employer, nor as a
      partner, agent or principal. PROFESSIONAL shall not be entitled to any
      benefits accorded to CALPINE's employees, including, without limitation,
      workers compensation, disability insurance, and vacation or sick pay.
      PROFESSIONAL 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 its Services
      hereunder.

              

      

      

      
        	
                 
      

              	
                5.2.

              	
                PROFESSIONAL
      shall pay, when and as due, any and all taxes, duties and other similar
      charges assessed or incurred as a result of PROFESSIONAL’s Services or
      compensation hereunder, including estimated taxes. PROFESSIONAL hereby
      agrees to indemnify CALPINE for any third party claims, losses, costs,
      fees, liabilities, damages or injuries suffered by CALPINE arising out of
      PROFESSIONAL’s breach of this Section or arising out of a determination by
      a court or agency that PROFESSIONAL or PROFESSIONAL’s employees are not
      independent contractors. CALPINE is hereby authorized to make all
      withholding, value added tax or similar payments required by law as a
      deduction against the amount of compensation paid to PROFESSIONAL
      hereunder.

              

      

      

      

       

      
        	
                 
      

              	
                5.3.

              	
                PROFESSIONAL
      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.  PROFESSIONAL shall have sole discretion
      and control of the Services and the manner in which they are
      performed.  PROFESSIONAL agrees to follow workplace standards
      that adhere to the CALPINE Code of Conduct promptly upon receipt of a
      written copy of such CALPINE Code of
Conduct.

              

      

       

      

      

      
        	
                6.

              	
                PROFESSIONAL
      INSURANCE

              

      

      

      6.1.           PROFESSIONALS
providing Services for CALPINE are expected to maintain insurance coverage that
is reasonable and prudent in relation to the Services provided by
PROFESSIONAL.    If PROFESSIONAL does not have coverage or
if coverage is cancelled and not immediately replaced with comparable coverage,
PROFESSIONAL must immediately report this to the Calpine Contact Person.
However, PROFESSIONAL shall at a minimum maintain Workers Compensation insurance
with statutory limits with coverage as required under laws and regulations,
and

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      Employer’s
Liability insurance with limits of not less than $1,000,000. Such policy shall
include a waiver of subrogation in favor of CALPINE.

       

      

      
        	
                7.

              	
                MUTUAL
      INDEMNITY AND LIMITATION OF
LIABILITY

              

      

       

      
        	
                 
      

              	
                7.1.

              	
                CALPINE
      and PROFESSIONAL (the Indemnifying Party) agree to indemnify, defend and
      hold harmless the other  and its affiliates, and all of their
      employees, officers, directors, shareholders, and joint ventures (the
      Indemnified Party) from and against any and all third party claims,
      demands, losses, damages, liabilities, expenses, obligations, judgments,
      recoveries and deficiencies (Losses), arising out of or due to the
      negligent acts or omissions or willful misconduct of the Indemnifying
      Party excluding any portion of such Losses which are directly attributable
      to the Indemnified Party’s negligent acts or omissions or willful
      misconduct. For the avoidance of doubt, “third party” does not include the
      Parties or their affiliates, directors, officers or
      employees.  The Indemnifying Party’s obligation to indemnify
      hereunder is predicated upon the Indemnified Party (a) giving prompt
      written notice of any Loss, (b) giving the Indemnifying Party the
      opportunity to assume sole control over the defense and settlement, if
      applicable, of the Loss, and (c) providing, at the Indemnifying Party’s
      sole expense, all reasonably requested and relevant information,
      assistance and authority to enable the Indemnifying Party to perform it
      obligations hereunder. The Indemnifying Party agrees not to settle any
      Loss without the Indemnified Party’s written consent, which shall not be
      unreasonably withheld.

              

      

       

      

      
        	
                7.2

              	
                In
      addition, CALPINE will indemnify PROFESSIONAL for the costs and expenses
      that PROFESSIONAL reasonably incurs to produce documents and electronic
      records, and to provide oral or written testimony, in response to
      discovery requests related to any of the Services PROFESSIONAL provides
      from January 31, 2008 through the term of this Agreement.  For
      purposes of clarity, discovery requests include subpoenas in civil or
      criminal suits, as well as orders from administrative agencies in any
      other type of proceeding or investigation; and costs and expenses include
      the cost of searching archived records, the cost of production, and the
      cost of retaining outside counsel.  This section does not apply
      to any suit by CALPINE against
PROFESSIONAL.

              

      

      

      
        	
                 
      

              	
                7.3.

              	
                Any
      statutory limitations in effect now or hereafter which affect the validity
      or enforceability of the indemnification provisions in this Agreement are
      made a part hereof in the respective jurisdiction where the statute
      applies and any such statutory limitations shall operate to amend the
      indemnity provisions hereof to the minimum extent necessary to bring such
      provisions into conformity with the requirements of the statute. So
      modified, the indemnity provisions of this Agreement shall continue in
      full force and effect.

              

      

      

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      
        	
                 
      

              	
                7.3.

              	
                IN
      NO EVENT SHALL CALPINE OR PROFESSIONAL BE LIABLE FOR CONSEQUENTIAL,
      SPECIAL, INDIRECT OR INCIDENTAL DAMAGES ARISING OUT OF OR IN CONNECTION
      WITH THIS AGREEMENT  WHETHER IN AN ACTION BASED ON CONTRACT,
      TORT OR ANY OTHER LEGAL THEORY EVEN IF THE PARTY HAS BEEN ADVISED OF THE
      POSSIBILITY OF SUCH DAMAGES.

              

      

      

      
        	
                 
      

              	
                7.4

              	
                For
      each Statement of Work, except for third party indemnity claims pursuant
      to Section 7.1 which shall not be limited as to a dollar amount,
      PROFESSIONAL agrees to indemnify and hold harmless CALPINE under the
      following terms and conditions:

              

      

      

      (i)
without limitation, for death or personal injury to any person due to its
negligence or the negligence of its employees;

      

      (ii) for
physical damage to or loss of the CALPINE’s tangible property, including loss of
data, if the damage or loss is due to PROFESSIONAL’s negligence or breach of
contract, in the amount of $750,000 for any one incident or series of connected
incidents, with an aggregated cap in the amount of $3,000,000 per statement of
work; and

      

      (iii) for
all other causes of action, PROFESSIONAL’s total liability arising out of or in
connection with the Agreement shall not exceed in aggregate 150% of the fees
paid by the CALPINE.

      

      
        	
                8.

              	
                INTELLECTUAL
      PROPERTY AND CONFIDENTIALITY

              

      

      

      
        	
                 
      

              	
                8.1.

              	
                The
      Parties may either receive or disclose Confidential Information under this
      Agreement and may therefore be referred to either as the "Recipient" or
      the "Disclosing Party" as the case may be. Recipients of Confidential
      Information promise to protect and maintain the confidentiality nature of
      the  information they receive. “Confidential Information” means
      information that is marked or otherwise identified as confidential, or
      information that can reasonably be understood to be confidential, but
      excludes:

              

      

      

      
        	
                 
      

              	
                (i)

              	
                Information
      that is known Recipient, without restriction, prior to obtaining the same
      from Disclosing Party; or

              

      

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      
        	
                 
      

              	
                (ii)

              	
                Information
      that is in the public domain at the time of disclosure;
  or

              

      

       

       

      
        	
                 
      

              	
                (iii)

              	
                Information
      that is rightfully obtained by Recipient from a third party who did not
      receive the same, directly or indirectly, from Disclosing Party, and who
      has no obligation of confidentiality with respect thereto;
    or

              

      

       

      

      
        	
                 
      

              	
                (iv)

              	
                Information
      that is independently developed without use of Disclosing Party’s
      information.

              

      

       

      

      Either
Party may disclose Confidential Information to its employees, subcontractors and
advisors, and to the employees, subcontractors and advisors of affiliated
companies, on a need-to-know basis, who are in all cases contractually obliged
to keep the information confidential. Neither Party shall acquire any
intellectual property rights in any Confidential Information disclosed by the
other.

      

       

      8.2.           Subject
to 8.1 above, PROFESSIONAL further agrees that it will not, without the prior
written consent of CALPINE, disclose to any third party any of such Confidential
Information developed or obtained by PROFESSIONAL in the performance of this
Agreement. If so requested by CALPINE, PROFESSIONAL further agrees to require
its employees to execute a nondisclosure agreement prior to performing Services
under this Agreement.

       

       

      
        	
                 
      

              	
                8.3.

              	
                It
      shall not be a breach of the confidentiality obligations hereof for
      Recipient to disclose Confidential Information where, but only to the
      extent that, such disclosure is required by law or applicable legal
      process, provided in such case the Recipient shall (i) give the earliest
      notice possible to Disclosing Party that such disclosure is or may be
      required, and (ii) cooperate in protecting such confidential or
      proprietary nature of the Confidential Information which must so be
      disclosed.

              

      

       

      

      
        	
                 
      

              	
                8.4

              	
                Intellectual
      Property (“IP”) owned or licensed by a Party on the date a Statement of
      Work is fully signed, as well as modifications or adaptations to that IP
      made during the performance of any Services (“Background IP”), will remain
      the property of that Party.

              

      

      

      
        	
                 
      

              	
                8.5

              	
                Unless
      otherwise provided IP developed by PROFESSIONAL in the course of
      performing the Services (“Foreground IP”) will be owned by PROFESSIONAL.
      Upon completion of all phases of the Services and on receipt of payment in
      full by PROFESSIONAL, PROFESSIONAL grants CALPINE a royalty-free,
      non-exclusive, world-wide licence to (i) use the Foreground IP for the
      purposes set out in the relevant Statement of
  Work,

              

      

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

      and (ii)
use PROFESSIONAL’s Background IP to the extent required for CALPINE to fully
utilize the Services and any deliverables provided by PROFESSIONAL.

      

      
        	
                 
      

              	
                8.6

              	
                Notwithstanding
      anything to the contrary in this Agreement, the Parties and their
      employees providing Services shall be free to use Residuals for any
      purpose, including use in development, marking  and provision of
      their own services and products to other third parties. “Residuals” means
      the Confidential Information disclosed under this Agreement that may be
      retained in intangible form (e.g., not in written or other documentary
      form, including in any electronic media) by the Recipient’s personnel
      having had access to that Confidential Information in connection with
      providing the services so long as the Recipient’s personnel do not
      intentionally retain Confidential Information for the purpose of its
      reuse.

              

      

      

      
        	
                9.

              	
                DISPUTE
      RESOLUTION

              

      

      

      
        	
                 
      

              	
                9.1.

              	
                Dispute
      Resolution.

              

      

       

      
        	
                 
      

              	
                9.1.1

              	
                General
      Provisions.  The Parties shall attempt to resolve
      disputes of any kind or nature (“Disputes”) by utilizing the provisions of
      Section 9.1.2 prior to instituting legal
action.

              

      

       

      
        	
                 
      

              	
                9.1.2

              	
                Referral to Senior
      Management.

              

      

       

      
        	
                 
      

              	
                9.1.2.1

              	
                Upon
      the occurrence of a Dispute, either Party may deliver a notice to the
      other Party requesting that the Dispute be referred to the senior
      management of the Parties for resolution.  Any such notice shall
      include the names of the senior management of the Party nominated (such
      senior management shall be limited to 3 individuals) to attempt to resolve
      the Dispute, and a schedule of their availability to meet and confer
      during the thirty (30) day period following the date of the
      notice.  Any such notice shall be delivered within a reasonable
      time after the Dispute arises, but in no event shall it be delivered less
      than sixty (60) days before the institution of legal or equitable
      proceedings based on such Dispute would be barred by any applicable
      statute of limitations.

              

      

       

      
        	
                 
      

              	
                9.1.2.2

              	
                Within
      seven (7) days after receipt of a notice pursuant to Clause 9.1.2.1 of
      this Section, the other Party shall provide a reply to the requesting
      Party indicating the names of the senior management of the Party nominated
      to meet and confer to resolve the Dispute, and a schedule of their
      availability during the remainder of the thirty (30)
  day

              

      

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      period
following the date of the notice of referral to senior management.

       

      
        	
                 
      

              	
                9.1.2.3

              	
                Within
      ten (10) days after notice is given pursuant to clause 9.1.2.1, and during
      the remainder of the thirty (30) day period following delivery of the
      notice, the nominated members of the senior management of the Parties
      shall meet as frequently as reasonably possible, and shall attempt in good
      faith to resolve the Dispute.

              

      

       

      
        	
                 
      

              	
                9.1.2.4

              	
                Senior
      Management shall include employees of the Parties, but not outside
      counsel, experts or other third
parties.

              

      

       

      
        	
                10.

              	
                 JURISDICTION,
      COMPLIANCE WITH LAW AND FORUM
SELECTION

              

      

       

      
        	
                    
          10.1  

              	
                PROFESSIONAL
      shall, and shall cause PROFESSIONAL’s affiliates to, comply with all laws
      applicable to its or their performance under this Agreement, including,
      without limitation, laws dealing with improper or illegal payments, gifts
      or gratuities. PROFESSIONAL shall not pay, promise to pay, or authorize
      the payment of any money or other thing of value, directly or indirectly,
      to any person (whether a government official or private individual) for
      the purpose of inducing any government official, political party or
      official thereof to illegally or improperly assist in obtaining or
      retaining business for, or to take any other action favorable to, CALPINE,
      and shall take all reasonable steps to assure that all agents and
      representatives engaged by PROFESSIONAL comply with all laws applicable to
      the activities and obligations of PROFESSIONAL hereunder, including laws
      dealing with improper or illegal payments as described
    above.

              

      

       

      

      
        
          	
                         
       10.2  

                	
                  This
      Agreement and any Statement of Work (including Addendum No. 1) will be
      governed by and construed in accordance with the laws of the State of
      Delaware (without giving effect to principles of conflicts of
      laws).  The Parties hereto agree that all actions or proceedings
      arising in connection with this Agreement and any and all
      Statements of Work, or any attachments thereto, shall be conducted, tried
      and litigated exclusively in the State and Federal courts located in the
      County of Harris, State of Texas. The aforementioned choice of venue is
      intended by the Parties to be mandatory and not permissive in nature,
      thereby precluding the possibility of litigation between the Parties with
      respect to or arising out of this Agreement in any jurisdiction other than
      that specified in this paragraph. Each Party hereby waives any right it
      may have to assert the doctrine of forum non conveniens or similar
      doctrine or to object to venue with respect to any proceeding brought in
      accordance with this paragraph, and stipulates that the State and Federal
      courts located in the County of Harris, State of Texas shall have in
      personam jurisdiction and venue over each of them for the purpose of
      litigating any dispute, controversy,
or

                

        

      

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      
        proceeding
arising out of or related to this Agreement. Each Party hereby authorizes and
accepts service of process sufficient for personal jurisdiction in any action
against it as contemplated by this paragraph by registered or certified mail,
return receipt requested, postage prepaid, to its address for the giving of
notices as set forth in this Agreement. Any final judgment rendered against a
Party in any action or proceeding shall be conclusive as to the subject of such
final judgment and may be enforced in other jurisdictions in any manner provided
by law.

      

      

      
        	
                11.

              	
                PUBLICATION

              

      

       

      PROFESSIONAL
shall make no media releases, public announcements and other disclosures
relating to this Agreement or related Statement of Work or the subject matter
hereof, including promotional or marketing material, but excluding announcements
intended solely for internal distribution or to meet legal or regulatory
requirements, without prior written approval from the CALPINE CORPORATE
COMMUNICATIONS DEPARTMENT, provided however, it is agreed by the Parties that
PROFESSIONAL shall be permitted, without the approval of CALPINE, to state in
materials that PROFESSIONAL provides to prospective clients and or employers
that PROFESSIONAL provided services to CALPINE and the nature of the services
provided.

       

      

      

      
        	
                12.

              	
                SURVIVAL

              

      

       

      In the
event of expiration or termination of this Agreement for any reason whatsoever,
Sections 2.2 (last two sentences), 2.3, 3, 5.2, 7.4, 8, 9.1, 10.2, 11, 12 and 20
of this Agreement and those section identified in Addendum No. 1 shall survive
such expiration or termination and remain in full force and effect in accordance
with their terms.  The rights and obligations of the Parties which by
their nature are normally intended to survive the termination or completion of
any Statement of Work shall remain in full force and effect following
termination of this Agreement for any reason.

       

      

      
        	
                13.

              	
                ENTIRE
      AGREEMENT AND AMENDMENTS

              

      

       

      
        	
                 
      

              	
                13.1

              	
                This
      Agreement, together with any and all Statements of Work entered into
      pursuant to this Agreement, contain the entire Agreement between the
      Parties hereto with respect to the subject matter hereof. No amendment to
      this Agreement or to any Statement of Work 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. This Agreement supersedes all previous Agreements, whether written
      or

              

      

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      oral,
including all prior agreements entered into between the Parties relating to the
subject matter hereunder.

       

      

      14.  ASSIGNMENT
AND SUBCONTRACTING

      

      PROFESSIONAL
shall not have the right to assign this Agreement or subcontract any of the
Services without the prior written consent of CALPINE.  PROFESSIONAL
shall supervise all work subcontracted by PROFESSIONAL in performing the
Services and shall be responsible for all work performed by a subcontractor as
if PROFESSIONAL itself had performed such work. The assignment or subcontracting
of any work to subcontractors shall not relieve PROFESSIONAL from any of its
obligations under this Contract with respect to the Services.  CALPINE
may assign its rights and obligations hereunder to an affiliate or another
entity involved in the subject matter of the Services or in connection with any
merger, acquisition or similar event.  CALPINE shall provide
PROFESSIONAL written notice of any such assignment.

      

      
        	
                15.

              	
                BINDING
      EFFECT

              

      

       

      This
Agreement shall be binding upon and inure to the benefit of the Parties hereto,
and to their successors and permitted assigns.

       

       

      
        	
                16.

              	
                PERSONNEL
      POLICIES & PROCEDURES INCLUDING SAFETY AND HEALTH
    PROGRAMS

              

      

       

       

      
        	
                 
      

              	
                16.1

              	
                PROFESSIONAL
      shall take all reasonable steps and precautions to comply with all
      federal, state or local laws and regulations applicable to protect the
      health and safety of its employees, agents, representatives and other
      personnel with regard to the
Services.

              

      

       

       

      
        	
                 
      

              	
                16.2

              	
                PROFESSIONAL
      shall comply with all CALPINE site programs and procedures when performing
      Services onsite at CALPINE
facilities.

              

      

       

      

      
        	
                17.

              	
                DRUGS,
      ALCOHOL AND WEAPONS

              

      

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      PROFESSIONAL
agrees to comply with CALPINE's policy regarding drugs, alcohol and weapons and
shall advise and enforce this policy with its employees, subcontractors and
agents. CALPINE's policy prohibits: (a) the use, possession and/or distribution
of illegal or unauthorized drugs, drug-related paraphernalia or weapons on
CALPINE's premises; and (b) the use or possession of alcoholic beverages, except
where authorized by CALPINE's management. PROFESSIONAL shall immediately remove
and bar from CALPINE's premises any employee or contractor who is in violation
of this policy. CALPINE reserves its rights to remove and bar any person who is
found in violation of this policy.

       

      

      18. 
AUTHORITY

      

      PROFESSIONAL
possesses all requisite power and authority to enter into and perform the
services contemplated in this Agreement and all related Statement of
Works.  PROFESSIONAL has all legal power and authority to own and use
its properties and to transact the business in which it engages or proposes to
engage, and holds or expects to obtain all Authorizations necessary and required
therefore.

      

      
        	
                19.

              	
                CONFLICTS
      OF INTEREST

              

      

      

      PROFESSIONAL
agrees during the term of this agreement to disclose to CALPINE any consulting
engagements that it enters into with competitors of CALPINE involving services
similar to those provided by PROFESSIONAL to CALPINE hereunder. If requested by
CALPINE, PROFESSIONAL and CALPINE will discuss in good faith implementation of
customary measures by PROFESSIONAL designed to ensure the maintenance of the
confidentiality of CALPINE’s Confidential Information (such as firewalls).
PROFESSIONAL shall not be required to disclose any information to CALPINE which
could reasonably be expected to violate any applicable securities or other laws,
any obligation of confidentiality to any other client of PROFESSIONAL or any
professional standard applicable to PROFESSIONAL.

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

      

      
        	
                20.

              	
                NOTICES

              

      

       

      All
notices, correspondence and other communications under this Agreement shall be
in writing and shall be deemed to have been duly given when actually received.
Such notices may be given by first class, registered or certified mail, email or
by facsimile transmission.

       

       

      If to
CALPINE:

       

       

      Calpine
Corporation

      717 Texas
Ave, Ste. 1000

      Houston,
Texas 77002

      Attention:
Gregory L. Doody, EVP, GC

      Email:
DoodyG@calpine.com

      

       

      with a
copy to:

       

       

      Calpine
Corporation

      717 Texas
Avenue, Suite 1000

      Houston,
TX 77002

      Attention:
General Counsel

      

      If to
PROFESSIONAL:

      

       

      PA
Consulting Group, Inc.

      1700
Lincoln Street, Suite 4600

      Denver,
CO 80203

      Attention: Jeremy Fagot

      Email:
Jeremyrf@PACONSULTING.COM

      

      

      

       

      
        	
                21.
      

              	
                 COUNTERPARTS

              

      

       

      

      This
Agreement may be signed in any number of counterparts with the same effect as if
the signatures to each counterpart were upon a single instrument, and all such
counterparts together shall be deemed an original of this Agreement. Execution
and delivery of this Agreement by exchange of facsimile copies or PDF bearing
the facsimile or electronic signature of a Party hereto shall constitute a valid
and binding execution and delivery of this Agreement by such Party. Such
facsimile or PDF copies shall constitute enforceable original
documents.

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

      

       

      IN
WITNESS WHEREOF, this Agreement is executed effective as of the day and year
first above written.

       

      

      

      

      
        	
                CALPINE
      CORPORATION

              	 
      	
                PA
      CONSULTING GROUP, INC.

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                By:

              	  
      /s/  R. P. May	 
      	
                By:

              	  
      /s/  Todd Filsinger
	 
      	 
      	 
      	 
      	 
      
	
                Name: 
      Robert
      May

              	 
      	
                Name: 
      Todd
      Filsinger

              
	 
      	 
      	 
      	 
      	 
      
	
                Title: 
      Chief
      Executive Officer

              	 
      	
                Title: 
      Managing
      Partner

              
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
                Address:

              	
                717
      Texas Ave, Suite 1000

              	 
      	
                Address:

              	
                1700
      Lincoln Street, Suite 4600

              
	 
      	
                Houston,
      Texas 77002

              	 
      	 
      	
                Denver,
      Colorado 80203

              

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      [SIGNATURE
PAGE TO THE PROFESSIONAL ENGAGEMENT AGREEMENT]ex10-3.htm

    EXHIBIT
10.3

     

    

    Addendum
No. 1

     

    To

     

    Professional
Engagement Agreement General Terms

     

    Between

     

    Calpine
Corporation

     

    And

     

    PA
Consulting Group, Inc.

    

    THIS
ADDENDUM NO. 1 (“Addendum No. 1”) is
made and entered into as of May 2, 2008 by and between Calpine Corporation
(“CALPINE”) and
PA Consulting Group, Inc. (“PROFESSIONAL”).  This
Addendum No. 1 is entered into under and pursuant to the terms of that certain
Professional Engagement Agreement General Terms Between Calpine Corporation and
PA Consulting Group, Inc. dated as of May 2, 2008 (the “MSA”) by and between
CALPINE and PROFESSIONAL.  Capitalized terms not defined in this
Addendum No. 1 have the meanings given to such terms in the MSA.

    

    This
Addendum No. 1 is incorporated into the MSA as if fully set forth
therein.  Except to the extent otherwise provided herein, this
Addendum No. 1 is subject to all the terms and provisions of the
MSA.  Notwithstanding the foregoing or anything else to the contrary
in this Addendum No. 1 or the MSA, if any terms or conditions in this Addendum
No. 1 are inconsistent or in conflict with the MSA, the provisions of this
Addendum No. 1 shall control.

    

    
      	
              1.
      Purpose;

              Statement of

              Services;

              Compensation

            	
              This
      Addendum No. 1 sets forth the terms and conditions on which PROFESSIONAL
      will make Todd Filsinger, a Member of PROFESSIONAL’S Management Group
      (“SECONDEE”), available to serve as
      the interim Chief Operating Officer (“COO”) of CALPINE (the “COO Services”).  Compensation
      will be provided to PROFESSIONAL for the COO Services in the fixed fee
      amount of $220,000 per month plus expenses.  This fee includes
      the services of SECONDEE plus an additional PROFESSIONAL consultant to
      support SECONDEE in this role.  In addition, it may be necessary
      to use up to two additional Full Time Equivalents ( FTEs) from
      PROFESSIONAL’s staff to support SECONDEE.  The two FTEs will be
      billed on a time and material basis at rates provided
      separately.  The fees billed by these two FTEs will be included
      in the COO Services budget.  SECONDEE and PROFESSIONAL will
      provide other services outside of the scope of this Addendum No. 1
      (litigation support and other activities) at the hourly billing rate
      pursuant to the applicable Statement of Work.  PROFESSIONAL may
      be entitled to a success fee at the discretion of the Chief Executive
      Officer.

               

            
	
              2.
      Responsibilities,

              Power and

              Authority of

              SECONDEE

               

            	
              SECONDEE
      will report to the Chief Executive Officer.  SECONDEE will have
      duties and responsibilities customary for a COO, including management of
      the business and affairs of, and direction and supervision of the
      employees of, CALPINE under the

            

    

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
              direction
      of CALPINE’s Board of Directors and CALPINE’s Chief Executive
      Officer.

               

              Notwithstanding
      anything to the contrary in the MSA (including Section 1.3 thereof),
      SECONDEE shall have the rights, power and authority, consistent with that
      normally given to and exercised by chief operating officers in similar
      corporations in CALPINE’s industry, including without limitation (i) to
      control and direct the performance or activities of officers, employees
      and agents of, (ii) to enter into contracts, agreements and/or
      arrangements of and/or for the account of, and (iii) to incur obligations
      and liabilities on behalf of and/or for the account of, CALPINE. SECONDEE
      agrees to abide by all of CALPINE’s posted policies and procedures on the
      CALPINE Today Intranet site or its successor Intranet site, including
      adherence to CALPINE’s Code of Conduct.

               

              SECONDEE
      shall diligently and faithfully perform to the best of his abilities all
      of the duties required of him as COO of CALPINE; provided, that notwithstanding anything to
      the contrary in the MSA, PROFESSIONAL  shall not be held
      responsible for the failure of SECONDEE to so perform. Section 4 of the
      MSA shall be inapplicable to this Addendum No. 1 and the COO
      Services.

               

              Notwithstanding
      anything to the contrary in this Addendum No. 1, the parties intend that
      SECONDEE shall at all times remain an employee of PROFESSIONAL and not of
      CALPINE.  Notwithstanding Section 5.2 of the MSA or anything
      else in the MSA to the contrary, PROFESSIONAL and SECONDEE shall not be
      obligated to indemnify CALPINE in the event that SECONDEE is found not to
      be an independent contractor to CALPINE.  Each of PROFESSIONAL,
      CALPINE and SECONDEE shall be responsible for the taxes, penalties and/or
      interest imposed on such party or for which such party is individually
      responsible with respect to the services provided by SECONDEE through
      PROFESSIONAL under the MSA and this Addendum No. 1, or as a result of any
      re-characterization by any governmental entity, including the Internal
      Revenue Service, of SECONDEE as other than an independent contractor to
      CALPINE with respect to such services.  None of the
      aforementioned parties shall be responsible for any such taxes, penalties
      and/or interest imposed on any other aforementioned party or for which any
      other aforementioned party is individually responsible.

               

              Notwithstanding
      Section 5.3 of the MSA or anything else in the MSA to the contrary, it
      shall be CALPINE that shall have sole discretion and control of the COO
      Services and the manner in which they are performed. CALPINE may give such
      orders and instructions to SECONDEE as CALPINE shall consider appropriate
      in its sole discretion, and PROFESSIONAL shall have no power or authority
      to give any orders or instructions to
SECONDEE

            

    

    

    

    
      
        
           

        

        
          2

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
              with
      respect to the COO Services.   Section 5.3 of the MSA shall
      be inapplicable to this Addendum No. 1 and the COO Services.

               

            
	
              3.  Term and

              Termination of

              COO Services

            	
              Notwithstanding
      Section 2 of the MSA or anything else in the MSA to the contrary, this
      Addendum No. 1 shall continue in effect for the period commencing on the
      first date written above and extend on a month to month basis until
      terminated by either party prior to the expiration of the
      MSA.  In addition to the termination rights of the parties under
      Section 2.2 of the MSA, either party may terminate this Addendum No. 1 at
      any time after the first date written above with thirty (30) days notice
      to the other party.  CALPINE shall pay PROFESSIONAL for all
      authorized expenses and work performed under this Addendum No. 1 through
      the date of termination.

               

            
	
              4.  Release,

              Waiver and

              Indemnity

            	
              Notwithstanding
      Section 7.1 of the MSA or anything else in the MSA to the contrary, the
      parties agree that Sections 7.1 shall not apply to this Addendum No. 1,
      SECONDEE or the COO Services.

               

              CALPINE
      (the “Indemnifying Party”) agrees to indemnify, defend and hold harmless
      PROFESSIONAL and its affiliates, and all of their employees, officers,
      directors, shareholders, and joint ventures, including without limitation
      SECONDEE (as an employee of PROFESSIONAL, individually or otherwise except
      not with respect to SECONDEE individually only to the extent that SECONDEE
      willfully and knowingly violates applicable law by his actions taken in
      his capacity as COO)(collectively the “Indemnified Party”) from and
      against any and all claims, demands, losses, damages, liabilities,
      expenses, obligations, judgments, recoveries and deficiencies
      (collectively “Losses”), in connection with any threatened, pending or
      completed action, suit or proceeding, whether civil, criminal,
      administrative or investigative arising out of, related to, or in
      connection with in any way (x) SECONDEE’s serving as COO of CALPINE and/or
      providing the COO Services or (y) any other acts or omissions of SECONDEE
      while serving as COO of CALPINE (collectively, the “Indemnified
      Matters”).  The Indemnifying Party’s obligation to indemnify
      hereunder is predicated upon the Indemnified Party (a) giving prompt
      written notice of any Loss, (b) giving the Indemnifying Party the
      opportunity to assume sole control over the defense and settlement, if
      applicable, of the Loss, and (c) providing, at the Indemnifying Party’s
      sole expense, all reasonably requested and relevant information,
      assistance and authority to enable the Indemnifying Party to perform its
      obligations hereunder. The Indemnifying Party shall be permitted to settle
      any Losses except that it shall not settle any Losses in any manner which
      would impose any penalty, cost or limitation whatsoever on the Indemnified
      Party or negatively impact the reputation of Indemnified Party without
      Indemnified Party’s written consent, which shall not be unreasonably
      withheld.

               

            

    

    

    

    
      
        
           

        

        
          3

          
            

          

        

        
           

        

      

    

    

    

    
      	 
      	
               

              CALPINE,
      on behalf of itself and its shareholders, employees, officers, directors,
      agents, affiliates, advisors, consultants, accountants and attorneys
      (collectively, “Representatives”) and their respective assigns and
      successors in interest, hereby releases and forever discharges the
      Indemnified Parties and their assigns and successors from and against any
      and all actions, causes of action, suits, countersuits, debts,
      controversies, damages, claims, demands, rights to contribution or
      indemnification, losses, liabilities, fees or expenses (including
      attorneys’ and other experts’ fees and disbursements), in each case of
      whatsoever kind or nature, whenever occurring, whether fixed or contingent
      or accrued or unaccrued or choate or inchoate (collectively, “Claims”),
      arising out of, related to, or in connection with the Indemnified
      Matters.  This release includes any Claims that may be
      discovered in the future and regardless of whether any Losses therefrom
      occur before or after the execution of this Addendum No. 1, and
      includes claims for actual, consequential and punitive damages, and
      whether arising in contract, tort, strict liability, under statute or
      otherwise.

               

              CALPINE
      AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR
      MISUNDERSTOOD CLAIMS (AS DEFINED IN THE PRECEDING PARAGRAPH) WHICH ARE
      HEREBY RELEASED, AND HEREBY WAIVES AND RELEASES ALL RIGHTS AND BENEFITS
      WHICH IT MIGHT OTHERWISE HAVE UNDER THE ANY APPLICABLE LAW WITH REGARD TO
      THE RELEASE OF UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD
      CLAIMS.  CALPINE ALSO WAIVES ANY OTHER RIGHT WHICH IT MIGHT
      OTHERWISE HAVE UNDER ANY OTHER LAW OF ANY APPLICABLE JURISDICTION WHICH
      MIGHT LIMIT OR RESTRICT THE EFFECTIVENESS OR SCOPE OF THIS
      RELEASE.

               

               

            
	
              5.  Insurance

            	
              Section
      6.1 of the MSA shall not apply to SECONDEE and the COO
      Services.  Notwithstanding Section 5.3 of the MSA or anything
      else in the MSA to the contrary, CALPINE, and not PROFESSIONAL, shall have
      sole responsibility for maintaining insurance covering SECONDEE in his
      capacity as COO.

               

              Without
      limiting the scope of the foregoing, PROFESSIONAL shall cause SECONDEE to
      be covered by (i) its directors’ and officers’ insurance and (ii) all
      other insurance of PROFESSIONAL that may now or hereafter during the term
      of this Addendum No. 1 provide coverage to officers and employees of
      PROFESSIONAL (in each case, whether by rider or otherwise).

               

            
	
              6.  Compliance

              with Law and

            	
              Notwithstanding
      anything in Section 10.1 of the MSA or otherwise to the contrary, it shall
      be CALPINE that shall be responsible for ensuring that
  all

            

    

    

    

    
      
        
           

        

        
          4

          
            

          

        

        
           

        

      

    

    

    

    
      	
              CALPINE’s

              Policies

            	
              COO
      Services, and SECONDEE’s actions taken in his capacity as COO, comply with
      applicable law (except for purposes of this Section 6 only, SECONDEE shall
      be individually responsible in cases where SECONDEE willfully and
      knowingly violated applicable law by his actions taken in his capacity as
      COO), including the responsibility for any and all disclosures and filings
      required by rules and regulations promulgated by the SEC and CALPINE’S
      policies and procedures (other than CALPINE’s posted policies and
      procedures on the CALPINE Today Intranet site or its successor Intranet
      site, including adherence to CALPINE’s Code of Conduct as is consistent
      with Section 2 of this Addendum No. 1 (collectively “CALPINE’s
      Policies”)).  For the avoidance of doubt, PROFESSIONAL shall be
      only responsible for making SECONDEE and any of its employees providing
      the COO Services for CALPINE hereunder aware of the requirement under this
      Addendum No. 1 to adhere to CALPINE’s Policies - as defined
      above.

               

            
	
              7.
      Survivability

            	
              In
      the event of expiration or termination of this Addendum No. 1 or the MSA
      for any reason whatsoever, Sections 2 (last three paragraphs), 4, 5 and 6
      of this Addendum No. 1 shall survive such expiration or termination and
      remain in full force and effect in accordance with their
      terms.

               

            

    

    

    

    

    

    IN
WITNESS WHEREOF, this Addendum No. 1 is executed effective as of the day and
year first above written.

     

    

    

    

    

    

    
      	
              CALPINE
      CORPORATION

            	 
      	
              PA
      CONSULTING GROUP, INC.

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              By:

            	  
      /s/  R. P. May	 
      	
              By:

            	  
      /s/  Todd Filsinger
	 
      	 
      	 
      	 
      	 
      
	
              Name: 
      Robert May

            	 
      	
              Name: 
      Todd Filsinger

            
	 
      	 
      	 
      	 
      	 
      
	
              Title: 
      Chief Executive Officer

            	 
      	
              Title: 
      Managing Partner

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              Address:

            	
              717
      Texas Ave, Suite 1000

            	 
      	
              Address:

            	
              1700
      Lincoln Street, Suite 4600

            
	 
      	
              Houston,
      Texas 77002

            	 
      	 
      	
              Denver,
      Colorado 80203

            

    

    

    

    
      
        
           

        

        
          5

          
            

          

        

        
           

        

      

    

    

    

    

    

    

    

    Accepted
and Agreed to:

     

    
    

     

    
      	By:	  /s/ Todd
      Filsinger	 

    

    Name:  Todd
Filsinger

     

     

     

    6

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