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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000950123-01-504795.txt : 20010730
<SEC-HEADER>0000950123-01-504795.hdr.sgml : 20010730
ACCESSION NUMBER:		0000950123-01-504795
CONFORMED SUBMISSION TYPE:	S-3
PUBLIC DOCUMENT COUNT:		7
FILED AS OF DATE:		20010727

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CALPINE CORP
		CENTRAL INDEX KEY:			0000916457
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				770212977
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		S-3
		SEC ACT:		
		SEC FILE NUMBER:	333-66078
		FILM NUMBER:		1691097

	BUSINESS ADDRESS:	
		STREET 1:		50 WEST SAN FERNANDO ST
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95113
		BUSINESS PHONE:		4089955115

	MAIL ADDRESS:	
		STREET 1:		50 W SAN FERNANDO
		STREET 2:		SUITE 500
		CITY:			SAN JOSE
		STATE:			CA
		ZIP:			95113
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-3
<SEQUENCE>1
<FILENAME>f74069s-3.txt
<DESCRIPTION>CALPINE CORPORATION
<TEXT>

<PAGE>   1

     AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 27, 2001

                                                 REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------

                                    FORM S-3
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------

                              CALPINE CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                  <C>                                  <C>
              DELAWARE                               4911                              77-0212977
 (STATES OR OTHER JURISDICTIONS OF       (PRIMARY STANDARD INDUSTRIAL               (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)        CLASSIFICATION CODE NUMBERS)           IDENTIFICATION NUMBERS)
</TABLE>

                          50 WEST SAN FERNANDO STREET
                           SAN JOSE, CALIFORNIA 95113
                                 (408) 995-5115
  (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
                   REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)

                                PETER CARTWRIGHT
      CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, CALPINE CORPORATION
                          50 WEST SAN FERNANDO STREET
                           SAN JOSE, CALIFORNIA 95113
                                 (408) 995-5115
 (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                             OF AGENT FOR SERVICE)

                                   COPIES TO:

<TABLE>
<S>                                                   <C>
               BRUCE C. BENNETT, ESQ.                                 JOSEPH A. COCO, ESQ.
                 COVINGTON & BURLING                        SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
             1330 AVENUE OF THE AMERICAS                                FOUR TIMES SQUARE
              NEW YORK, NEW YORK 10019                              NEW YORK, NEW YORK 10036
                   (212) 841-1000                                        (212) 735-3000
</TABLE>

    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement as determined by
market conditions.
    If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box:  [ ]
    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box:  [X]
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering:  [ ]
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering:  [ ]
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box:  [ ]

                        CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                           PROPOSED            PROPOSED
                                                                            MAXIMUM             MAXIMUM
               TITLE OF EACH CLASS                   AMOUNT TO BE       OFFERING PRICE         AGGREGATE           AMOUNT OF
         OF SECURITIES TO BE REGISTERED              REGISTERED(1)        PER UNIT(1)      OFFERING PRICE(1)   REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>                 <C>                 <C>                 <C>
 Zero-Coupon Convertible Debentures Due April 30,
   2021 of Calpine Corporation(2)................      1,000,000           $1,000.00        $1,000,000,000         $250,000
- ---------------------------------------------------------------------------------------------------------------------------------
 Common Stock, par value $.001 per share, of
   Calpine Corporation...........................         (3)                 (3)                 (3)                 (3)
- ---------------------------------------------------------------------------------------------------------------------------------
 Total...........................................         --                  --            $1,000,000,000         $250,000
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Estimated solely for the purpose of determining the registration fee in
    accordance with Rule 457(o) under the Securities Act and exclusive of
    accrued interest and dividends, if any.
(2) $1,000,000,000 in aggregate principal amount of Calpine Corporation's
    Zero-Coupon Convertible Debentures Due April 30, 2021 (the "Debentures")
    were issued by Calpine Corporation on April 30, 2001 in an offering exempt
    from registration under Section 4(2) of the Securities Act of 1933 and Rule
    144A thereunder. Pursuant to a Registration Rights Agreement, dated April
    30, 2001, Calpine Corporation is obligated to file this Registration
    Statement to permit registered resales of the Debentures and related common
    stock from time to time by holders thereof.
(3) The Debentures are convertible into common stock, par value $.001 per share
    (the "Common Stock") of Calpine Corporation at an initial conversion rate of
    13.2714 shares of Common Stock per $1,000 principal amount at maturity of
    the Debentures (or a total of 13,271,400 shares of Common Stock assuming
    conversion of all of the Debentures), subject to adjustment under certain
    circumstances. Shares of Common Stock issued upon conversion of the
    Debentures will be issued without the payment of additional consideration.
    Pursuant to Rule 457(i) of the Securities Act, no registration fee is
    attributable to the Common Stock registered hereby.

    THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>   2

THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION RELATING TO THESE SECURITIES IS EFFECTIVE.
THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SEEKING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.

                   SUBJECT TO COMPLETION, DATED JULY 27, 2001

PROSPECTUS

                                 $1,000,000,000

                              CALPINE CORPORATION

                 Zero-Coupon Convertible Debentures Due April 30, 2021
                            ------------------------
[CALPINE LOGO]

THE SECURITIES

    The Zero-Coupon Convertible Debentures Due April 30, 2021, or the
Debentures, represent Calpine Corporation's senior unsecured obligations. The
Debentures are convertible into shares of our common stock, par value $.001, as
described below. We will not pay interest on the Debentures unless an upward
interest adjustment becomes payable. The issue price represents a yield to
maturity of 0% per annum unless an upward interest adjustment becomes payable.

    An upward interest adjustment to the yield to maturity on the Debentures
equivalent to 7.25% per annum may be made on April 30, 2004, 2006, 2008, 2011 or
2016. An upward interest adjustment will be made on each upward interest
adjustment date if the trading price of the Debentures is less than 98% of the
accreted value as of such upward interest adjustment date for 20 out of the last
30 New York Stock Exchange trading days ending 90 days prior to such upward
interest adjustment date. If an upward interest adjustment is in effect for a
particular semi-annual period, we will pay a portion of the upward interest
adjustment as cash interest at a rate of 0.25% per annum or 0.125% per
semi-annual period, of the accreted value as of the beginning of the applicable
semi-annual period and the remaining interest of 7.0% per annum will be accrued
and payable at the earlier of maturity or the redemption or repurchase of the
Debentures. "Accreted Value" means, as of any date, the sum of the issue price
of the Debentures and the accrued and unpaid interest as of such date (excluding
any accrued and unpaid interest which will be paid as cash interest).

    If an upward interest adjustment is in effect during a semi-annual period,
other than a semi-annual period immediately preceding an upward interest
adjustment date, and the trading price of the Debentures is greater than or
equal to 98% of the accreted value as of the next following interest payment
date for 20 out of the last 30 NYSE trading days ending on such interest payment
date, the upward interest adjustment will be adjusted downward on such interest
payment date, such that, from and including such date, the Debentures will cease
to accrue interest unless and until there is a subsequent upward interest
adjustment. If an upward interest adjustment is in effect during a semi-annual
period immediately preceding an upward interest adjustment date, a downward
interest adjustment will be made on the next upward interest adjustment date if
the trading price of the Debentures is greater than or equal to 98% of the
accreted value as of such upward interest adjustment date for 20 out of the last
30 NYSE trading days ending 90 days prior to such upward interest adjustment
date. If a downward interest adjustment is made, no upward interest adjustment
may be made until the next upward interest adjustment date.

    We will not pay cash interest on the Debentures prior to maturity unless an
upward interest adjustment occurs or we elect to do so following a tax event.

    On or after April 30, 2004, we may redeem for cash all or part of the
Debentures at a redemption price equal to the issue price plus any accrued and
unpaid interest to the redemption date. On April 30, 2002, 2004, 2006, 2008,
2011 and 2016 any holder may require us to repurchase such holder's Debentures.
The initial repurchase price will be $1,000 per Debenture, but will be higher if
an upward interest adjustment applies for one or more semi-annual periods. We
may choose to pay the repurchase price in cash or shares of our common stock or
a combination of cash and shares of our common stock, except in 2016, when we
may only pay the repurchase price in cash. The Debentures will mature on April
30, 2021, unless earlier redeemed or repurchased. At maturity, we will pay the
accreted value of the Debentures in cash.

    The Debentures are convertible at the option of the holder into shares of
our common stock at a conversion rate of 13.2714 shares of common stock per
$1,000 principal amount at maturity of the Debentures, subject to adjustment
upon certain events. This is equivalent to an initial conversion price of $75.35
per share of common stock based on the issue price of the Debentures.

    The Debentures are evidenced by global notes deposited with a custodian for
and registered in the name of a nominee of The Depository Trust Company, or DTC.
Except as described in this prospectus, beneficial interests in the global notes
will be shown on, and the transfers thereof will be effected only through,
records maintained by DTC and its direct and indirect participants.

    The Debentures are eligible for trading in the Private Offerings, Resale and
Trading through Automatic Linkages (PORTAL) Market of the National Association
of Securities Dealers, Inc.

THE OFFERING

    The Debentures and the common stock issuable upon conversion of the
Debentures may be offered and sold from time to time pursuant to this prospectus
by the holders of those securities or by their transferees, pledgees, donees or
successors (all of which we refer to as selling holders).

    The securities may be sold by the selling holders directly to purchasers or
through agents, underwriters or dealers. The names of any selling holders,
agents, underwriters or dealers involved in the sale of the securities, and the
agent's commission, dealer's purchase price or underwriter's discount, if any,
will be provided in supplements to this prospectus. The selling holders will
receive all of the proceeds from the sale of the securities and will pay all
underwriting discounts and selling commissions, if any, applicable to any sale.
We are responsible for the payment of all other expenses incident to the offer
and sale of the securities. The selling holders and any broker-dealers, agents
or underwriters that participate in the distribution of the securities may be
deemed to be "underwriters" within the meaning of the Securities Act, and any
commission received by them and any profit on the resale of the securities
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act.

    Calpine's common stock is traded on The New York Stock Exchange under the
symbol "CPN." On July 26, 2001, the last reported sales price of the common
stock on that exchange was $36.89.

    INVESTING IN THE DEBENTURES INVOLVES RISKS. SEE "RISK FACTORS" ON PAGE 17.

    NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

                The date of this prospectus is          , 2001.
<PAGE>   3

                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                              PAGE
                                                              ----
<S>                                                           <C>
SUMMARY.....................................................    4
RISK FACTORS................................................   17
WHERE YOU CAN FIND MORE INFORMATION.........................   18
FORWARD-LOOKING STATEMENTS..................................   19
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES.............   20
USE OF PROCEEDS.............................................   20
SELLING HOLDERS.............................................   21
PLAN OF DISTRIBUTION........................................   22
PRICE RANGE OF COMMON STOCK.................................   23
DIVIDEND POLICY.............................................   23
CAPITALIZATION..............................................   24
SECURITIES OFFERED..........................................   25
DESCRIPTION OF DEBENTURES...................................   26
REGISTRATION RIGHTS.........................................   43
DESCRIPTION OF CAPITAL STOCK................................   45
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES.......   49
LEGAL MATTERS...............................................   55
INDEPENDENT AUDITORS........................................   55
</TABLE>

                           -------------------------

     This document is called a prospectus and is part of a registration
statement that we filed with the SEC using a "shelf" registration or continuous
offering process. Under this shelf process, selling holders may from time to
time sell the securities described in this prospectus in one or more offerings.

     This prospectus provides you with a general description of the securities
that the selling holders may offer. Each time a selling holder sells securities,
the selling holders are required to provide you with a prospectus supplement
containing specific information about the selling holder and the terms of the
securities being offered. That prospectus supplement may include additional risk
factors or other special considerations applicable to those securities. The
prospectus supplement may also add, update or change information in this
prospectus. If there is any inconsistency between the information in this
prospectus and any prospectus supplement, you should rely on the information in
that prospectus supplement. You should read both this prospectus and any
prospectus supplement together with the additional information described under
the heading "Where You Can Find More Information."

     The registration statement containing this prospectus, including the
exhibits to the registration statement, provides additional information about us
and the securities offered under this prospectus. The registration statement,
including the exhibits, can be read at the SEC web site or at the SEC offices
mentioned under the heading "Where You Can Find More Information."

     You should rely only on the information incorporated by reference or
provided in this prospectus and the prospectus supplement. We have not
authorized anyone to provide you with different information. We are not making
an offer or soliciting a purchase of these securities in any jurisdiction in
which the offer or solicitation is not authorized or in which the person making
the offer or solicitation is not qualified to do so or to anyone to whom it is
unlawful to make the offer or solicitation. You should not assume that the
information in this prospectus or the prospectus supplement is accurate as of
any date other than the date on the front of the document.

                                        2
<PAGE>   4

     The prospectus incorporates business and financial information about us
that is not included in or delivered with the document. YOU MAY REQUEST AND
OBTAIN THIS INFORMATION FREE OF CHARGE BY WRITING OR TELEPHONING US AT THE
FOLLOWING ADDRESS: CALPINE CORPORATION, 50 WEST SAN FERNANDO STREET, SAN JOSE,
CALIFORNIA 95113, ATTENTION: LISA M. BODENSTEINER, ASSISTANT SECRETARY,
TELEPHONE: (408) 995-5115.

     Unless we have indicated otherwise, references in this prospectus to
"Calpine," "we," "us," and "our" or similar terms are to Calpine Corporation and
its consolidated subsidiaries, unless the context requires otherwise.

                                        3
<PAGE>   5

                                    SUMMARY

     This summary highlights information contained elsewhere or incorporated by
reference in this prospectus. This summary is not complete and does not contain
all of the information that you should consider before investing in the
Debentures. You should carefully read the entire prospectus, including the risk
factors, the financial statements and the documents incorporated by reference.

     All information in this prospectus reflects the 2 for 1 stock split that
became effective on October 7, 1999, the 2 for 1 stock split that became
effective on June 8, 2000 and the 2 for 1 stock split that became effective on
November 14, 2000.

                                  THE COMPANY

     Calpine is a leading independent power company engaged in the development,
acquisition, ownership and operation of power generation facilities and the sale
of electricity predominantly in the United States. We have experienced
significant growth in all aspects of our business over the last five years.
Currently, we own interests in 56 power plants having a net capacity of 8,615
megawatts. We also have 25 gas-fired projects under construction having a net
capacity of 14,092 megawatts and have announced plans to develop 33 gas-fired
projects (power plants and expansions of current facilities) with a net capacity
of 17,750 megawatts. Upon completion of the projects under construction, we will
have interests in 80 power plants located in 23 states and Canada, having a net
capacity of 22,707 megawatts. Of this total generating capacity, 96% will be
attributable to gas-fired facilities and 4% will be attributable to geothermal
facilities. As a result of our expansion program, our revenues, cash flow,
earnings and assets have grown significantly over the last five years, as shown
in the table below. Financial information in this summary does not reflect any
impact on Calpine's financial position or results of operations that will result
from our business combination under the pooling of interests method of
accounting consummated on April 19, 2001 with Encal Energy Ltd.

<TABLE>
<CAPTION>
                                                                      COMPOUND ANNUAL
                                                1996        2000        GROWTH RATE
                                                ----        ----      ---------------
                                                 (IN MILLIONS)
<S>                                           <C>         <C>         <C>
Total Revenue...............................  $  214.6    $2,282.8           81%
EBITDA......................................     110.7       825.9           65%
Net Income..................................      18.7       323.5          104%
Total Assets................................   1,031.4     9,737.3           75%
</TABLE>

     Since our inception in 1984, we have developed substantial expertise in all
aspects of the development, acquisition and operation of power generation
facilities. We believe that the vertical integration of our extensive
engineering, construction management, operations, fuel management, power
marketing and financing capabilities provides us with a competitive advantage to
successfully implement our acquisition and development program and has
contributed to our significant growth over the past five years.

     We are a corporation organized and existing under the laws of the State of
Delaware. Our principal executive office is located at 50 West San Fernando
Street, San Jose, California 95113. Our registered office is located at 9 East
Loockerman Street, Dover, Delaware 19901, c/o National Registered Agents, Inc.

                CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
                                        THREE MONTHS
      YEAR ENDED DECEMBER 31,          ENDED MARCH 31,
- ------------------------------------   ---------------
1996   1997    1998    1999    2000         2001
- -----  -----   -----   -----   -----        ----
<S>    <C>     <C>     <C>     <C>     <C>
1.46x  1.72x   1.69x   1.77x   2.04x        1.37x
</TABLE>

                                        4
<PAGE>   6

                                   THE MARKET

     The power industry represents the third largest industry in the United
States, with an estimated end-user market of over $215 billion of electricity
sales in 2000 produced by an aggregate base of power generation facilities with
a capacity of approximately 860,000 megawatts. In response to increasing
customer demand for access to low-cost electricity and enhanced services, new
regulatory initiatives have been and are continuing to be adopted at both the
state and federal level to increase competition in the domestic power generation
industry. The power generation industry historically has been largely
characterized by electric utility monopolies producing electricity from old,
inefficient, high-cost generating facilities selling to a captive customer base.
Industry trends and regulatory initiatives have transformed the existing market
into a more competitive market where end-users purchase electricity from a
variety of suppliers, including non-utility generators, power marketers, public
utilities and others.

     There is a significant need for additional power generating capacity
throughout the United States, both to satisfy increasing demand, as well as to
replace old and inefficient generating facilities. Due to environmental and
economic considerations, we believe this new capacity will be provided
predominantly by gas-fired facilities. We believe that these market trends will
create substantial opportunities for efficient, low-cost power producers that
can produce and sell energy to customers at competitive rates.

     In addition, as a result of a variety of factors, including deregulation of
the power generation market, utilities, independent power producers and
industrial companies are disposing of power generation facilities. To date,
numerous utilities have sold or announced their intentions to sell their power
generation facilities and have focused their resources on the transmission and
distribution business segments. Many independent producers operating a limited
number of power plants are also seeking to dispose of their plants in response
to competitive pressures, and industrial companies are selling their power
plants to redeploy capital in their core businesses.

                                    STRATEGY

     Our strategy is to continue our rapid growth by capitalizing on the
significant opportunities in the power market, primarily through our active
development and acquisition programs. In pursuing this growth strategy, we
utilize our management and technical knowledge to implement a fully integrated
approach to the acquisition, development and operation of power generation
facilities. This approach uses our expertise in design, engineering,
procurement, finance, construction management, fuel and resource production,
acquisition, operations and power marketing, which we believe provides us with a
competitive advantage. The key elements of our strategy are as follows:

     - Development of new and expansion of existing power plants. We are
       actively pursuing the development of new and expansion of our existing
       highly efficient, low-cost, gas-fired power plants to replace old and
       inefficient generating facilities and meet the demand for new generation.

     - Acquisition of power plants. Our strategy is to acquire power generating
       facilities that meet our stringent criteria, provide significant
       potential for revenue, cash flow and earnings growth and provide the
       opportunity to enhance the operating efficiencies of the plants.

     - Enhancement of existing power plants. We continually seek to maximize the
       power generation and revenue potential of our operating assets and
       minimize our operating and maintenance expenses and fuel costs.

                                        5
<PAGE>   7

                              RECENT DEVELOPMENTS

     In addition to the recent developments described below, please see the
recent developments described in Calpine's Annual Report on Form 10-K for the
year ended December 31, 2000, our Quarterly Report on Form 10-Q for the quarter
ended March 31, 2001 and our Current Reports on Form 8-K dated April 19, 2001,
June 26, 2001, July 6, 2001, July 12, 2001 and July 26, 2001 which are
incorporated by reference in this prospectus.

     Second Quarter 2001 Earnings.  On July 26, 2001, we announced earnings for
the quarter ended June 30, 2001. Net income from recurring operations (before
deduction of nonrecurring merger costs incurred in connection with the Encal
pooling of interests transaction) was $132.2 million for the quarter ended June
30, 2001, representing a 122% increase over 2000 second quarter net income of
$59.5 million. Diluted earnings per share from recurring operations (before
deduction of nonrecurring merger costs of $0.07 per share) for the second
quarter rose 95% to $0.39 per share, from $0.20 per share for the same period
last year. Revenue for the quarter increased 284% to $1.6 billion, from $417
million a year ago. Total assets at June 30, 2001 were approximately $16.0
billion as compared to $10.3 billion at December 31, 2000. As a result of the
completion of the Encal pooling of interests transaction, the financial results
for the quarter and six months ended June 30, 2000, and for the quarter ended
March 31, 2001 have been restated to include Encal. Earnings for the quarter and
six months ended June 30, 2001, benefited primarily from the continued execution
of our program to own and operate low-cost generating facilities in key power
markets throughout the United States and Calpine Energy Services' successful
power systems program.

     Acquisitions.  On April 19, 2001, Calpine closed the acquisition of all of
the common shares of Encal Energy Ltd. (which was thereafter merged with and
into Calpine Canada Resources Ltd.), a Calgary, Alberta-based natural gas and
petroleum exploration and development company, through a stock-for-stock
exchange in which Encal shareholders received, in exchange for each share of
Encal common stock, .1493 shares of Calpine common equivalent shares (called
"exchangeable shares") of Calpine's subsidiary, Calpine Canada Holdings Ltd. A
total of 16,603,633 exchangeable shares were issued to Encal shareholders in
exchange for their Encal common stock. Each exchangeable share is exchangeable
for one share of our common stock. The aggregate value of the transaction is
approximately U.S. $1.1 billion, including the assumed indebtedness of Encal.
With the addition of Encal's assets, which currently produce approximately 230
million cubic feet of gas equivalent ("mmcfe") per day, net of royalties,
Calpine's net production increased to 390 mmcfe per day in North America, enough
to fuel approximately 2,300 megawatts of Calpine's power fleet.

     On May 15, 2001, we announced that our wholly-owned subsidiary, Canada
Power Holdings Ltd., had entered into a letter of intent to acquire from British
Columbia-based Westcoast Energy, Inc. a 100% interest in Westcoast's 250
megawatt facility located on Vancouver Island and a 50% interest in its 50
megawatt facility located in Ontario for approximately U.S.$255 million. The
acquisition is expected to close in the third quarter of this year and is
subject to final documentation and third party and regulatory approvals.

     On July 5, 2001, we announced an agreement to acquire a 1,200 megawatt
natural gas-fired power plant at Saltend near Hull, Yorkshire, England from
Entergy Wholesale Operations for approximately L560 million (approximately
U.S.$800 million at current exchange rates). The Saltend facility, a
cogeneration facility, provides electricity and steam for BP Chemical's Hull
Works plant under a 15-year agreement. The balance of Saltend facility's
electricity output is sold into the deregulated UK power market. The Saltend
transaction will be our first acquisition of a power facility in Europe. The
acquisition is expected to close in the third quarter of this year and is
subject to third party approvals.

     On July 10, 2001, we announced an agreement to acquire approximately 85% of
the voting stock of Michael Petroleum Corporation, a Houston, Texas-based
natural gas exploration and
                                        6
<PAGE>   8

development company, for approximately $270 million and the assumption of $49.5
million of debt. The acquisition includes 204 billion cubic feet equivalent of
proven natural gas reserves currently producing 43 mmcfe per day and an
inventory of high quality, low risk drilling locations within a 94,000 acreage
position in close proximity to our South Texas Magic Valley and Hidalgo Energy
Centers. The acquisition is expected to close August 15, 2001.

     Turbine Contract.  On April 19, 2001, we announced the purchase of 35 model
7FB and 11 model 7FA gas-fired turbines from GE Power Systems. We expect to take
delivery of five turbines in 2002, with the remainder of the contract to be
filled by the end of 2005. With this purchase, we have firm orders in place for
the delivery of 203 turbines which, when operated in a combined-cycle
configuration, will produce approximately 50,000 megawatts of baseload capacity.

     Securities.  On April 25, 2001, Calpine Canada Energy Finance ULC ("Energy
Finance"), our indirect wholly-owned subsidiary, issued $1.5 billion in
aggregate principal amount of its 8 1/2% Senior Notes Due 2008. The Senior Notes
Due 2008 are fully and unconditionally guaranteed by us.

     On June 7, 2001, we redeemed all $105 million in aggregate outstanding
principal amount of our 9 1/4% Senior Notes Due 2004 at a redemption price of
100% of the principal amount of the Senior Notes Due 2004, plus accrued interest
to the redemption date.

     California Power Market.  The deregulation of the California power market
has produced significant unanticipated results in the past year. The
deregulation froze the rates that utilities can charge their retail and business
customers in California and prohibited the utilities from buying power on a
forward basis, while wholesale power prices were not subjected to limits.

     In the past year and a half, a series of factors have reduced the supply of
power to California, which has resulted in wholesale power prices that have been
significantly higher than historical levels. Several factors contributed to this
increase. These included:

     - significantly increased volatility in prices and supplies of natural gas;

     - an unusually dry fall and winter in the Pacific Northwest, which reduced
       the amount of available hydroelectric power from that region (typically,
       California imports a portion of its power from this source);

     - the large number of power generating facilities in California nearing the
       end of their useful lives, resulting in increased downtime (either for
       repairs or because they have exhausted their air pollution credits and
       replacement credits have become too costly to acquire on the secondary
       market); and

     - continued obstacles to new power plant construction in California, which
       deprived the market of new power sources that could have, in part,
       ameliorated the adverse effects of the foregoing factors.

     As a result of this situation, two major California utilities that are
subject to the retail rate freeze, including Pacific Gas & Electric Company
("PG&E"), have faced wholesale prices that far exceed the retail prices they are
permitted to charge. This has led to significant under-recovery of costs by
these utilities. As a consequence, these utilities have defaulted under a
variety of contractual obligations, including payment obligations to power
generators. PG&E has defaulted on payment obligations to Calpine under Calpine's
long-term qualifying facility ("QF") contracts, which are subject to federal
regulation under the Public Utility Regulatory Policies Act of 1978, as amended
("PURPA"). The PG&E QF contracts are in place at 11 of our facilities and
represent nearly 600 megawatts of electricity for Northern California customers.

     PG&E Bankruptcy Proceedings.  On April 6, 2001, PG&E filed for bankruptcy
protection under Chapter 11 of the United States Bankruptcy Code. As of April 6,
2001, Calpine had recorded

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<PAGE>   9

approximately $266 million in accounts receivable with PG&E under our QF
contracts, plus a $69 million note receivable not yet due and payable. Calpine
is currently selling power to PG&E pursuant to our long-term QF contracts, and
PG&E is paying on a current basis for these purchases since its bankruptcy
filing. With respect to the receivables recorded under these contracts on July
6, 2001, Calpine announced that it had entered into a binding agreement with
PG&E to modify all of Calpine's QF contracts with PG&E and that, based upon such
modification, PG&E had agreed to assume all of the QF contracts. Under the terms
of this agreement, Calpine will continue to receive its contractual capacity
payments under the QF contracts, plus a five-year fixed energy component of
approximately 5.37 cents per kilowatt-hour. In addition, all past due
receivables under the QF contracts will be elevated to administrative priority
status in the PG&E bankruptcy proceeding and will be paid to Calpine, with
interest, upon the effective date of a confirmed plan of reorganization.
Administrative claims enjoy priority over payments made to the general unsecured
creditors in bankruptcy. The bankruptcy court approved the agreement on July 12,
2001. We cannot predict when the bankruptcy court will confirm a plan of
reorganization for PG&E.

     CPUC Proceedings Regarding QF Contract Pricing.  Our QF contracts with PG&E
provide that the California Public Utilities Commission ("CPUC") has the
authority to determine the appropriate utility "avoided cost" to be used to set
energy payments for certain QF contracts, including those for all of our QF
plants in California which sell power to PG&E. Section 390 of the California
Public Utility Code provided QFs the option to elect to receive energy payments
based on the California Power Exchange ("PX") market clearing price. In
mid-2000, our QF facilities elected this option and were paid based upon the PX
zonal day ahead clearing price ("PX Price") from summer 2000 until January 19,
2001, when the PX ceased operating a day ahead market. Since that time, the CPUC
has ordered that the price to be paid for energy deliveries by QFs electing the
PX Price shall be based on a natural gas cost-based "transition formula." The
CPUC has conducted proceedings (R. 99-11-022) to determine whether the PX Price
was the appropriate price for the energy component upon which to base payments
to QFs which had elected the PX based pricing option. The CPUC has issued a
proposed decision to the effect that the PX price was the appropriate price for
energy payments under the California Public Utility Code. However, a final
decision has not been issued to date. Therefore, it is possible that the CPUC
could order a payment adjustment based on a different energy price
determination. We believe that the PX Price was the appropriate price for energy
payments but there can be no assurance that this will be the outcome of the CPUC
proceedings.

     California Long-Term Supply Contracts.  California has adopted legislation
permitting it to issue long-term revenue bonds to provide funding for wholesale
purchases of power. The bonds will be repaid with the proceeds of payments by
retail customers over time. The California Department of Water Resources ("DWR")
sought bids for long-term power supply contracts in a publicly announced
auction. Calpine successfully bid in that auction and signed several long-term
power supply contracts with DWR.

     On February 7, 2001, we announced the signing of a 10-year, $4.6 billion
fixed-price contract with DWR to provide electricity to the State of California.
Calpine committed to sell up to 1,000 megawatts of electricity, with initial
deliveries of 200 megawatts starting October 1, 2001, which increases to 1,000
megawatts by January 1, 2004. The electricity will be sold directly to DWR on a
24-hour, 7-day-a-week basis. This contract is contingent upon our satisfaction,
in our sole discretion, that adequate provisions have been made by DWR to assure
us of full payment under the terms of that contract (including the terms and
conditions of any bonds issued by DWR to provide funds for payment of its
obligations under the contract).

     On February 28, 2001, we announced the signing of two long-term power sales
contracts with DWR. Under the terms of the first contract, a $5.2 billion,
10-year, fixed-price contract, Calpine committed to sell up to 1,000 megawatts
of generation. Initial deliveries began July 1, 2001 with 200 megawatts and
increase to 1,000 megawatts by as early as July 2002. Under the
                                        8
<PAGE>   10

terms of the second contract, a 20-year contract totaling up to $3.1 billion,
Calpine will supply DWR with up to 495 megawatts of peaking generation,
beginning with 90 megawatts as early as August 2001, and increasing up to 495
megawatts as early as August 2002. Each of these contracts is also contingent
upon our satisfaction, in our sole discretion, that adequate provisions have
been made by DWR to assure us of full payment under the terms of that contract
(including, but not limited to, the terms and conditions of any bonds issued by
DWR to provide funds for payment of its obligations under that contract).

     FERC Investigation into California Wholesale Markets.  In response to the
increase in wholesale energy prices in the California markets, on June 28, 2000,
the Board of Governors of the California Independent System Operator (the
"ISO"), which controls the long-distance high-voltage power lines that deliver
electricity throughout California and the adjoining states, reduced the price
cap applicable to the ISO's wholesale energy and ancillary services markets from
$750/MWh to $500/MWh. The ISO subsequently reduced the price cap to $250/MWh
effective August 7, 2000. During this period, however, the PX maintained a
separate price cap set at a much higher level applicable to the "day-ahead" and
"day-of" markets administered by the PX. On August 23, 2000, the Federal Energy
Regulatory Commission ("FERC") denied a complaint filed August 2, 2000 by San
Diego Gas & Electric Company ("SDG&E") that sought to extend the ISO's $250
price cap to all California energy and ancillary service markets, not just the
markets administered by the ISO. However, in its order denying the relief sought
by SDG&E, FERC instructed its staff to initiate an investigation of the
California power markets and to report its findings to FERC and held further
hearing procedures in abeyance pending the outcome of this investigation. Under
FERC regulations, QF contracts are exempt from regulation under the Federal
Power Act, which is the legislation that provides the authority for FERC to
investigate the California power markets and frame equitable relief with respect
to the California wholesale markets. Therefore, any such relief will only apply
to sales by Calpine in the short-term market. None of Calpine's receivables
related to power produced under its long-term QF contracts with PG&E should be
affected by any FERC findings pursuant to the proceedings described below. See
"Government Regulation -- Federal Energy Regulation -- Federal Power Act
Regulation" set forth in our Annual Report on Form 10-K for the year ended
December 31, 2000, which is incorporated by reference in this prospectus.

     On November 1, 2000, FERC released a Staff Report detailing the results of
the staff investigation, together with an "Order Proposing Remedies for
California Wholesale Markets" (the "November 1 Order"). In the November 1 Order,
FERC found that the California power market structure and market rules were
seriously flawed, and that these flaws, together with short supply relative to
demand, resulted in unusually high energy prices. The November 1 Order proposed
specific remedies to the identified market flaws, including (a) imposition of a
so-called "soft" price cap at $150/MWh to be applied to both the PX and ISO
markets, which would allow bids above $150/MWh to be accepted, but would subject
such bids to certain reporting obligations requiring sellers to provide cost
data and/or identify applicable opportunity costs and specifying that such bids
may not set the overall market clearing price; (b) elimination of the
requirement that the California utilities sell into and buy from the PX; (c)
establishment of independent non-stakeholder governing boards for the ISO and
the PX; and (d) establishment of penalty charges for scheduling deviations
outside of a prescribed range. In the November 1 Order FERC established October
2, 2000, the date 60 days after the filing of the SDG&E complaint, as the
"refund effective date." Under the November 1 Order, rates charged for service
after that date through December 31, 2002 will remain subject to refund if
determined by FERC not to be just and reasonable. While FERC concluded that the
Federal Power Act and prior court decisions interpreting that act strongly
suggested that refunds would not be permissible for charges in the period prior
to October 2, 2000, it noted that it was willing to explore proposals for
equitable relief with respect to charges made in that period.

                                        9
<PAGE>   11

     On December 15, 2000, FERC issued a subsequent order that affirmed in large
measure the November 1 Order (the "December 15 Order"). Various parties have
filed requests for administrative rehearing and for judicial review of aspects
of FERC's December 15 Order. The outcome of these proceedings, and the extent to
which FERC or a reviewing court may revise aspects of the December 15 Order or
the extent to which these proceedings may result in a refund of or reduction in
the amounts charged by the Company's subsidiaries for power sold in the ISO and
PX markets, cannot be determined at this time.

     On June 19, FERC ordered price mitigation in 11 states in the western
United States in an attempt to reduce the dependence of the California market on
the spot markets in favor of longer-term committed energy supplies. The order
provides for price mitigation in the spot market throughout the 11-state western
region during "reserve deficiency hours," which is when operating reserves in
California fall below 7%. This price will be a single market clearing price
based upon the marginal operating cost of the last unit dispatched by the
California ISO. In addition, FERC implemented price mitigation in non-reserve
deficiency hours, which will be set at 85% of the market clearing price during
the last reserve deficiency period. These price mitigation procedures went into
effect on June 20, 2001 and will remain in effect until September 30, 2002.

     The retention by FERC of a market-based, rather than a cost-of-service
based, rate structure, will enable us to continue to realize benefits from our
efficient, modern power plants. We believe that Calpine's marginal costs will
continue to be below any price cap imposed by FERC, whether during reserve
deficiency hours or at other times. Therefore, we believe that FERC's mitigation
plan will not have a material adverse effect on Calpine's financial condition or
results of operations.

     FERC also ordered all sellers and buyers in wholesale power markets
administered by the California ISO, as well as representatives of the State of
California, to participate in a settlement conference before a FERC
administrative judge. The settlement discussions were intended to resolve all
issues that remain outstanding to resolve past accounts, including sellers'
claims for unpaid invoices, and buyers' claims for refunds of alleged
overcharges, for past periods. The settlement discussions began on June 25, 2001
and ended on July 9, 2001. The Chief Administrative Law Judge issued his report
and recommendation to FERC on July 12, 2001. On July 25, 2001, FERC ordered an
expedited fact-finding hearing to calculate refunds for spot market transactions
in California. The hearing must be completed within 45 days from the date the
California ISO provides certain critical data for the purpose of developing the
factual basis needed to implement the refund methodology and order refunds.
While it is not possible to predict the amount of any refunds until the hearings
take place, based upon the information available at this time, we do not believe
that this proceeding will result in a material adverse effect on Calpine's
financial condition or results of operations.

                          PRINCIPAL EXECUTIVE OFFICES

     Our principal executive offices are located at 50 West San Fernando Street,
San Jose, California 95113. Our telephone number is (408) 995-5115, and our home
page on the world wide web is at http://www.calpine.com. The contents of our
website are not part of this prospectus.

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<PAGE>   12

                                  THE OFFERING

     The Debentures being registered were originally issued and sold to Goldman,
Sachs & Co. (the "Initial Purchaser"). The Initial Purchaser simultaneously sold
the Debentures in transactions exempt from the registration requirements of the
Securities Act to persons reasonably believed by them to be qualified
institutional buyers as defined in Rule 144A under the Securities Act.

SECURITIES REGISTERED...........   $1,000,000,000 aggregate initial principal
                                   amount of Zero-Coupon Convertible Debentures
                                   Due April 30, 2021 (the "Debentures") and
                                   13,271,400 shares of common stock (subject to
                                   adjustments described in this prospectus).

ISSUE PRICE.....................   Each Debenture was issued at $1,000 per
                                   Debenture.

MATURITY........................   April 30, 2021.

RANKING.........................   The Debentures are senior unsecured
                                   obligations of Calpine and rank equally with
                                   all of our existing and future senior
                                   unsecured indebtedness.

INTEREST ADJUSTMENT.............   An upward interest adjustment to the yield at
                                   maturity on the Debentures equivalent to
                                   7.25% per annum (an "Upward Interest
                                   Adjustment") will be made on April 30, 2004,
                                   2006, 2008, 2011 or 2016 (each an "Upward
                                   Interest Adjustment Date") if the Trading
                                   Price (as defined below) of the Debentures is
                                   less than 98% of the Accreted Value as of
                                   such Upward Interest Adjustment Date for 20
                                   out of the last 30 NYSE trading days ending
                                   90 days prior to such Upward Interest
                                   Adjustment Date. If an Upward Interest
                                   Adjustment is in effect for a particular
                                   semi-annual period, we will pay a portion of
                                   the Upward Interest Adjustment as cash
                                   interest at a rate of 0.25% per annum (0.125%
                                   per semi-annual period) of the Accreted Value
                                   as of the beginning of the applicable
                                   semi-annual period and the remaining interest
                                   (7.0% per annum) will be accrued and payable
                                   at the earlier of maturity or the redemption
                                   or repurchase of the Debentures.

                                   If an Upward Interest Adjustment is in effect
                                   during a semi-annual period (other than a
                                   semi-annual period immediately preceding an
                                   Upward Interest Adjustment Date) and the
                                   Trading Price of the Debentures is greater
                                   than or equal to 98% of the Accreted Value as
                                   of the next following interest payment date
                                   for 20 out of the last 30 NYSE trading days
                                   ending on such interest payment date, the
                                   Upward Interest Adjustment will be adjusted
                                   downward on such interest payment date (such
                                   adjustment, a "Downward Interest
                                   Adjustment"), such that, from and including
                                   such date, the Debentures will cease to
                                   accrue interest unless and until there is a
                                   subsequent Upward Interest Adjustment. If an
                                   Upward Interest Adjustment is in effect
                                   during a semi-annual period immediately
                                   preceding an Upward Interest Adjust-

                                        11
<PAGE>   13

                                   ment Date, a Downward Interest Adjustment
                                   will be made on the next Upward Interest
                                   Adjustment Date if the Trading Price of the
                                   Debentures is greater than or equal to 98% of
                                   the Accreted Value as of such Upward Interest
                                   Adjustment Date for 20 out of the last 30
                                   NYSE trading days ending 90 days prior to
                                   such Upward Interest Adjustment Date. If a
                                   Downward Interest Adjustment is made in
                                   accordance with the preceding sentence, no
                                   Upward Interest Adjustment may be made until
                                   the next Upward Interest Adjustment Date.
                                   Upward Interest Adjustment Dates may occur on
                                   April 30, 2004, 2006, 2008, 2011 or 2016.

CASH INTEREST PAYMENT...........   We will not pay cash interest on the
                                   Debentures unless an Upward Interest
                                   Adjustment is in effect or we elect to do so
                                   following a Tax Event (as defined below),
                                   each as described below. If an Upward
                                   Interest Adjustment is in effect for a
                                   particular semi-annual period, we will pay a
                                   portion of the Upward Interest Adjustment as
                                   cash interest at a rate of 0.25% per annum
                                   (0.125% per semi-annual period), of the
                                   Accreted Value as of the beginning of the
                                   applicable semi-annual period. If we elect to
                                   pay cash interest upon the occurrence of a
                                   Tax Event, the amount of cash interest
                                   payable for each semi-annual period will be
                                   determined based on the Restated Principal
                                   Amount (as defined below). Cash interest, if
                                   any, will be paid semi-annually in arrears on
                                   each April 30 and October 30 to the holders
                                   of record of the Debentures as of the
                                   preceding April 15 and October 15,
                                   respectively.

CONVERSION RIGHTS...............   For each Debenture surrendered for
                                   conversion, a holder will receive 13.2714
                                   shares of our common stock. This represents
                                   an initial conversion price of $75.35 per
                                   share of common stock. The conversion ratio
                                   and the equivalent conversion price may be
                                   adjusted for certain reasons, but will not be
                                   adjusted for accrued interest. Upon
                                   conversion, holders will not receive any cash
                                   payment representing accrued interest.
                                   Instead, accrued interest will be deemed paid
                                   in full by the common stock received by
                                   holders on conversion.

                                   Holders may surrender Debentures for
                                   conversion into common stock at any time
                                   prior to 5:00 p.m., New York City time, on
                                   April 29, 2021. Debentures called for
                                   redemption may be surrendered for conversion
                                   until the close of business in New York City
                                   on the business day immediately preceding the
                                   redemption date.

REDEMPTION OF THE DEBENTURES AT
OUR
  OPTION........................   On or after April 30, 2004, we may redeem for
                                   cash all or part of the Debentures at any
                                   time, upon not less than 30 nor more than 60
                                   days notice by mail to holders of Debentures,
                                   for a cash price equal to the issue price
                                   plus any accrued and unpaid interest to the
                                   redemption date or, if we elected to pay cash
                                   interest on the

                                        12
<PAGE>   14

                                   Debentures following a Tax Event, the
                                   Restated Principal Amount, plus any accrued
                                   and unpaid cash interest through the
                                   redemption date.

PURCHASE OF DEBENTURES AT YOUR
  OPTION........................   You have the right to require us to
                                   repurchase the Debentures on April 30, 2002,
                                   2004, 2006, 2008, 2011 and 2016. In each
                                   case, the repurchase price payable will be
                                   equal to the issue price plus any accrued and
                                   unpaid interest to the repurchase date, or,
                                   if we elected to pay cash interest on the
                                   Debentures following a Tax Event, the
                                   Restated Principal Amount, plus any accrued
                                   and unpaid cash interest through the
                                   repurchase date. We may choose to pay the
                                   repurchase price in cash or shares of our
                                   common stock, or a combination of cash and
                                   shares of our common stock, except on April
                                   30, 2016 when we may only pay the repurchase
                                   price in cash.

TAX EVENT.......................   We have the option, under limited
                                   circumstances, to elect to pay cash interest
                                   at a rate of 7.25% per annum on the
                                   Debentures from and after the date a Tax
                                   Event occurs instead of accruing interest
                                   pursuant to an Upward Interest Adjustment.
                                   Such cash interest would only be payable
                                   during periods in which an Upward Interest
                                   Adjustment is in effect. If we make such an
                                   election, the principal amount on which we
                                   pay interest will be restated (the "Restated
                                   Principal Amount") and will be equal to the
                                   issue price plus accrued and unpaid interest
                                   payable pursuant to an Upward Interest
                                   Adjustment to the date on which we exercise
                                   our option to commence paying cash interest.
                                   See "Description of Debentures -- Tax Event."

CHANGE IN CONTROL...............   If we undergo a change in control, you will
                                   have the option to require us to repurchase
                                   all of your Debentures not previously called
                                   for redemption or any portion thereof for
                                   cash or, at our option, registered shares of
                                   our common stock (which are valued at 95% of
                                   the average closing prices of our common
                                   stock for the five NYSE trading days
                                   immediately preceding and including the third
                                   NYSE trading day prior to the repurchase
                                   date). We will pay a repurchase price equal
                                   to the issue price plus any accrued and
                                   unpaid interest to the repurchase date, or,
                                   if we elected to pay cash interest on the
                                   Debentures following a Tax Event, the
                                   Restated Principal Amount, plus any accrued
                                   and unpaid cash interest through the
                                   repurchase date. See "Description of
                                   Debentures -- Change in Control."

EVENTS OF DEFAULT...............   If there is an event of default on the
                                   Debentures, an amount equal to the issue
                                   price plus any accrued and unpaid interest
                                   may be declared immediately due and payable.
                                   These amounts automatically become due and
                                   payable in some circumstances.

                                        13
<PAGE>   15

                                   The following are events of default with
                                   respect to the Debentures:

                                   - our failure for 30 days to pay when due any
                                     interest on the Debentures (after any
                                     Upward Interest Adjustment or after our
                                     election to pay cash interest on the
                                     Debentures following a Tax Event);

                                   - our failure to pay principal of the
                                     Debentures (or, if we have elected to pay
                                     cash interest on the Debentures following a
                                     Tax Event, the Restated Principal Amount)
                                     and accrued interest (including any
                                     interest payable pursuant to an Upward
                                     Interest Adjustment) at maturity, upon
                                     redemption, repurchase or following a
                                     change in control, when the same becomes
                                     due and payable;

                                   - our material failure to comply with any of
                                     our covenants or agreements in the
                                     Debentures or the Indenture (as defined in
                                     this prospectus) for 30 days after written
                                     notice is given by the Trustee (as defined
                                     below) or by the holders of at least 25% in
                                     principal amount of all outstanding
                                     Debentures;

                                   - our default under any of our other
                                     instruments of indebtedness with an
                                     outstanding principal amount of $50,000,000
                                     or more, individually or in the aggregate,
                                     which has caused the holders of such
                                     indebtedness to declare such indebtedness
                                     due and payable prior to its stated
                                     maturity;

                                   - our failure to pay when due any portion of
                                     principal under any of our other
                                     instruments of indebtedness, which default
                                     is individually or in an aggregate
                                     principal amount exceeding $50,000,000 and
                                     continues unremedied or unwaived for more
                                     than 30 days; and

                                   - certain events involving the bankruptcy,
                                     insolvency or reorganization of Calpine.

REGISTRATION RIGHTS.............   Pursuant to a registration rights agreement
                                   entered into in connection with the initial
                                   offering of the Debentures to the Initial
                                   Purchaser, we have agreed to use our best
                                   efforts to keep the registration statement,
                                   of which this prospectus is a part,
                                   continuously effective and useable (subject
                                   to certain exceptions) until the earliest of
                                   (1) two years, (2) the expiration of the
                                   period referred to in Rule 144(k) of the
                                   Exchange Act (or any successor provision
                                   thereto) with respect to the Debentures and
                                   common stock issuable upon conversion of the
                                   Debentures that are covered by the
                                   registration statement or (3) the sale of all
                                   of the Debentures and common stock issuable
                                   upon conversion of the Debentures that are
                                   covered by the registration statement.

                                   Additional interest will accrue on the
                                   Debentures if we are not in compliance with
                                   these requirements. See

                                        14
<PAGE>   16

                                   "Registration Rights" for a further
                                   discussion of our obligations to maintain the
                                   effectiveness of the registration statement
                                   of which this prospectus is a part.

TAX.............................   Each holder agreed in the Indenture, for U.S.
                                   federal income tax purposes, to treat the
                                   Debentures as "contingent payment debt
                                   instruments" and to be bound by our
                                   application of the Treasury regulations that
                                   govern contingent payment debt instruments,
                                   including our determination that the rate at
                                   which interest will be deemed to accrue for
                                   federal income tax purposes will be 9.44% per
                                   annum, which is the rate comparable to the
                                   rate at which we would borrow on a
                                   noncontingent, nonconvertible borrowing.
                                   Based on the agreement(i) each holder will be
                                   required to accrue interest on a constant
                                   yield to maturity basis at that rate, with
                                   the result that a holder will recognize
                                   taxable income significantly in excess of
                                   cash received while the Debentures are
                                   outstanding, and (ii) a holder will recognize
                                   ordinary income upon a conversion of a
                                   Debenture into our stock equal to the excess,
                                   if any, between the value of the stock
                                   received on the conversion and the sum of the
                                   original purchase price of the Holder's
                                   Debenture and accrued but unpaid interest.
                                   Non-U.S. Holders should be aware that special
                                   tax consequences may apply to them due to the
                                   fact that we believe we are likely to be a
                                   "United States real property holding
                                   corporation." See discussion below under
                                   "Certain United States Federal Income Tax
                                   Consequences -- Non-U.S. Holders" and
                                   "-- Foreign Investment in Real Property Tax
                                   Act."

                                   The proper application of the regulations
                                   that govern contingent payment debt
                                   instruments to a holder of a Debenture is
                                   uncertain in a number of respects, and if our
                                   treatment were successfully challenged by the
                                   Internal Revenue Service, it might be
                                   determined that, among other differences, a
                                   holder should have accrued interest income at
                                   a lower rate, should not have recognized
                                   income or gain upon the conversion, and
                                   should not have recognized ordinary income
                                   upon a taxable disposition of its Debenture.
                                   In addition, if the Internal Revenue Service
                                   successfully asserts that the Debentures are
                                   not debt, Non-U.S. Holders would generally be
                                   subject to a 30% United States federal
                                   withholding tax on payments of contingent
                                   interest made in respect of the Debentures.
                                   See "Certain United States Federal Income Tax
                                   Consequences."

                                   HOLDERS SHOULD CONSULT THEIR TAX ADVISORS
                                   REGARDING THE FEDERAL, STATE, LOCAL AND
                                   FOREIGN TAX CONSEQUENCES OF AN INVESTMENT IN
                                   DEBENTURES AND WHETHER AN INVESTMENT IN THE
                                   DEBENTURES IS ADVISABLE IN LIGHT OF THE

                                        15
<PAGE>   17

                                   AGREED UPON TAX TREATMENT AND THE HOLDER'S
                                   PARTICULAR TAX SITUATION.

USE OF PROCEEDS.................   The net proceeds of this offering will be
                                   used to extinguish certain project finance
                                   debt and for working capital and general
                                   corporate purposes.

BOOK-ENTRY FORM.................   The Debentures have been issued in book-entry
                                   form and are represented by permanent global
                                   certificates deposited with, or on behalf of,
                                   DTC and registered in the name of a nominee
                                   of DTC. Beneficial interests in any of the
                                   securities will be shown on, and transfers
                                   will be effected only through, records
                                   maintained by DTC or its nominee and any such
                                   interest may not be exchanged for
                                   certificated securities, except in limited
                                   circumstances. See "Description of
                                   Debentures -- Book-Entry System."

ABSENCE OF MARKET FOR THE
  DEBENTURES....................   The Debentures were initially sold in
                                   transactions exempt from the registration
                                   requirements of the Securities Act. As a
                                   result of the effectiveness of the
                                   registration statement of which this
                                   prospectus is a part, the Debentures are no
                                   longer restricted securities under the
                                   Securities Act. However, there is currently
                                   no market for the Debentures. Although the
                                   Initial Purchaser informed us at the time of
                                   the initial offering and sale of the
                                   Debentures that it planned to make a market
                                   in the Debentures, the Initial Purchaser is
                                   not obligated to do so, and they may
                                   discontinue any such market making at any
                                   time without notice. Accordingly, we cannot
                                   assure you as to the development or liquidity
                                   of any market for the Debentures.

TRADING.........................   Our common stock is listed on the New York
                                   Stock Exchange under the symbol "CPN." The
                                   common stock issuable upon conversion of the
                                   Debentures has been listed on the New York
                                   Stock Exchange.

                                        16
<PAGE>   18

                                  RISK FACTORS

     Investing in these Debentures involves risk. In addition to the risk
factors described in Calpine's Annual Report on Form 10-K for the year ended
December 31, 2000 and in our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2001, which are incorporated by reference in this prospectus, and the
other information contained in this prospectus, you should carefully consider
the risk factors described below before making an investment decision. The risks
and uncertainties described below and incorporated by reference are not the only
risks we face. Additional risks and uncertainties not presently known to us or
that we currently deem immaterial may also impair our business operations.

                           RISKS RELATING TO CALPINE

     Please see the risk factors described in Calpine's Annual Report on Form
10-K for the year ended December 31, 2000 for a description of the risks
relating to Calpine.

                        RISKS RELATING TO THE DEBENTURES

WE MAY BE UNABLE TO REPAY THE DEBENTURES WHEN DUE OR REPURCHASE THE DEBENTURES
WHEN WE ARE REQUIRED TO DO SO.

     At final maturity, the entire outstanding principal amount of the
Debentures will become due and payable, plus accrued and unpaid interest, if
any. At any accelerated maturity prior to final maturity, the issue price plus
any accrued and unpaid interest, if any, will become due and payable. A holder
may also require us to repurchase all or a portion of that holder's Debentures
at certain times during the term of the Debentures including if a Change of
Control (as defined in this prospectus) occurs. At maturity or at any time when
a holder may require us to repurchase Debentures, we may not have sufficient
funds or may be unable to arrange for additional financing to pay the amount
due.

     Our borrowing arrangements or agreements relating to indebtedness to which
we may become a party may limit our ability to repay or repurchase the
Debentures with cash. Our failure to repay or repurchase any tendered Debentures
or Debentures due upon maturity would constitute an event of default under the
Indenture. Any such default, in turn, may cause a default under the terms of our
other indebtedness.

BECAUSE THERE IS NO PUBLIC MARKET FOR THE DEBENTURES, YOU MAY NOT BE ABLE TO
RESELL THE DEBENTURES EASILY OR AT A FAVORABLE PRICE.

     There is no public market for the Debentures and we are not certain of:

     - the liquidity of any market that may develop;

     - the ability of the holders to sell their Debentures; or

     - the price at which holders would be able to sell their Debentures.

     If such a market were to develop, the Debentures could trade at prices that
may be higher or lower than the issue price to the public plus any accrued
interest, depending on many factors, including prevailing interest rates, the
market for similar debentures and our financial performance.

     The Initial Purchaser advised us at the time of the initial offering and
sale of the Debentures that it planned to make a market in the Debentures. The
Initial Purchaser is not obligated, however, to make a market in the Debentures,
and the Initial Purchaser may discontinue any such market-making activity at any
time at its sole discretion. In addition, such market-making activity will be
subject to the limits imposed by the Securities Act of 1933 and the Securities
Exchange Act of 1934. Accordingly, no assurance can be given as to the
development or liquidity of any market for the Debentures.

                                        17
<PAGE>   19

                      WHERE YOU CAN FIND MORE INFORMATION

     We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may obtain any document we file with the SEC at
the SEC's public reference rooms in Washington, D.C., Chicago, Illinois and New
York, New York. You may obtain information on the operation of the SEC's public
reference facilities by calling the SEC at 1-800-SEC-0330. You can request
copies of these documents, upon payment of a duplicating fee, by writing to the
SEC at its principal office at 450 Fifth Street, N.W., Washington, D.C.
20549-1004. Our SEC filings are also accessible through the Internet at the
SEC's Web site at http://www.sec.gov.

     The SEC permits us to "incorporate by reference" into this prospectus the
information in documents we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and later information that we file with the SEC will update and
supersede this information. We incorporate by reference the documents listed
below and any future filings we make with the SEC under Section 13(a), 13(c),
14, or 15(d) of the Securities Exchange Act of 1934, as amended, until the
offering is completed:

     - Calpine's Annual Report on Form 10-K for the year ended December 31,
       2000;

     - Calpine's Quarterly Report on Form 10-Q for the quarter ended March 31,
       2001;

     - Calpine's Current Reports on Form 8-K dated February 6, 2001, April 9,
       2001, April 19, 2001, April 26, 2001, June 26, 2001, July 6, 2001, July
       12, 2001, July 16, 2001 and July 26, 2001; and

     - the description of Calpine's common stock contained in Calpine's
       Registration Statement on Form 8-A (File No. 001-12079), filed with the
       SEC on August 20, 1996, pursuant to Section 12 of the Securities Exchange
       Act of 1934, as amended.

     If you request a copy of any or all documents incorporated by reference,
then we will send to you the copies requested at no charge. However, we will not
send exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such documents. You should direct requests for such
copies to: Calpine Corporation, 50 West San Fernando Street, San Jose,
California 95113, attention: Lisa M. Bodensteiner, Assistant Secretary,
telephone: (408) 995-5115.

     We have filed with the SEC a registration statement on Form S-3 under the
Securities Act, covering the securities described in this prospectus. This
prospectus does not contain all of the information included in the registration
statement. Any statement made in this prospectus concerning the contents of any
contract, agreement or other document is only a summary of the actual contract,
agreement or other document. If we have filed any contract, agreement or other
document as an exhibit to the registration statement, you should read the
exhibit for a more complete understanding of the document or matter involved.
Each statement regarding a contract, agreement or other document is qualified in
its entirety by reference to the actual document.

                                        18
<PAGE>   20

                           FORWARD-LOOKING STATEMENTS

     Some of the statements contained in this prospectus and incorporated by
reference into this prospectus are forward-looking statements within the meaning
of Section 27A of the Securities Act and Securities 21E of the Securities
Exchange Act and are subject to the safe harbor created by the Private
Securities Litigation Reform Act of 1995. These statements include declarations
regarding our or our management's intents, beliefs or current expectations. In
some cases, you can identify forward-looking statements by terminology such as
"may," "will," "should," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," or "continue" or the negative of such
terms or other comparable terminology. Any forward-looking statements are not
guarantees of future performance and actual results could differ materially from
those indicated by the forward-looking statements. Forward-looking statements
involve known and unknown risks, uncertainties, and other factors that may cause
our or our industry's actual results, levels of activity, performance, or
achievements to be materially different from any future results, levels of
activity, performance, or achievements expressed or implied by such forward-
looking statements.

     Among the important factors that could cause actual results to differ
materially from those indicated by such forward-looking statements are:

     - changes in government regulations, including pending changes in
       California and anticipated deregulation of the electric energy industry;

     - 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;

     - cost estimates are preliminary and actual costs may be higher than
       estimated;

     - the assurance that Calpine will develop additional plants;

     - a competitor's development of lower-cost generating gas-fired power
       plants;

     - the risks associated with marketing and selling power from power plants
       in the newly competitive energy market;

     - the risks associated with marketing and selling combustion turbine parts
       and components in the competitive combustion turbine parts market;

     - the risks associated with engineering, designing and manufacturing
       combustion turbine parts and components;

     - delivery and performance risks associated with combustion turbine parts
       and components attributable to production, quality control, suppliers and
       transportation;

     - the successful exploitation of an oil or gas resource that ultimately
       depends upon the geology of the resource, the total amount and costs to
       develop recoverable reserves and operations factors relating to the
       extraction of natural gas;

     - the uncertainty of the California power market. We are working closely
       with a number of parties to resolve the current uncertainty. This is an
       ongoing process and, therefore, the outcome cannot be predicted. It is
       possible that any such outcome will include changes in government
       regulations, business and contractual relationships or other factors that
       could materially affect us; however, we believe that a final resolution
       will not have a material adverse impact on us; and

     - other risks identified from time to time in our reports and registration
       statements filed with the SEC, including the risk factors identified in
       "Risk Factors" and in our Annual Report on

                                        19
<PAGE>   21

Form 10-K for the year ended December 31, 2000 and Quarterly Report on Form 10-Q
for the quarter ended March 31, 2001, which are incorporated by reference in
this prospectus.

     Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of such statements. We
are under no duty to update any of the forward-looking statements after the date
of this prospectus to conform such statements to actual results.

                CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES

<TABLE>
<CAPTION>
                                        THREE MONTHS
      YEAR ENDED DECEMBER 31,          ENDED MARCH 31,
- ------------------------------------   ---------------
1996   1997    1998    1999    2000         2001
- -----  -----   -----   -----   -----        ----
<S>    <C>     <C>     <C>     <C>     <C>
1.46x  1.72x   1.69x   1.77x   2.04x        1.37x
</TABLE>

     For purposes of computing our consolidated ratio of earnings to fixed
charges, earnings consist of pretax income before adjustment for minority
interests in our consolidated subsidiaries or income or loss from equity
investees, plus fixed charges, amortization of capitalized interest, and
distributed income of equity investees, reduced by interest capitalized and the
minority interest in pretax income of subsidiaries that have not incurred fixed
charges. Fixed charges consist of interest expensed and capitalized (including
amortized premiums, discounts and capitalized expenses related to indebtedness),
an estimate of the interest within rental expense, and the distributions on the
company-obligated mandatorily redeemable convertible preferred securities of
subsidiary trusts ("HIGH TIDES"(SM)). This information does not reflect any
impact on Calpine's financial position or results of operations that will result
from our business combination under the pooling of interest method of accounting
consummated on April 19, 2001 with Encal Energy Ltd.

                                USE OF PROCEEDS

     The selling holders will receive all of the net proceeds of the resale of
the Debentures, and the common stock issuable upon conversion of the Debentures.
We will not receive any of the proceeds from the resale of any of those
securities.

                                        20
<PAGE>   22

                                SELLING HOLDERS

     The Debentures were originally issued and sold to the Initial Purchaser.
The Initial Purchaser immediately sold the Debentures in transactions exempt
from the registration requirements of the Securities Act to persons reasonably
believed by them to be qualified institutional buyers as defined in Rule 144A
under the Securities Act.

     The selling holders may from time to time offer and sell pursuant to this
prospectus any or all of the Debentures and the common stock issuable upon
conversion of the Debentures. Any selling holder may also elect not to sell any
Debentures or common stock issuable upon conversion of the Debentures held by
it. The term "selling holder" includes the holders listed below and the
beneficial owners of the Debentures and their transferees, pledgees, donees or
other successors. Only those Debentures and shares of common stock issuable upon
conversion of the Debentures listed below may be offered for resale by the
selling holders pursuant to this prospectus.

     The selling holders may offer and sell any or all of the Debentures and the
common stock issuable upon conversion of the Debentures listed below by using
this prospectus. Because the selling holders may offer all or only some portion
of the Debentures or the common stock issuable upon conversion of the Debentures
listed in the table, no estimate can be given as to the amount of those
securities that will be held by the selling holders upon termination of any such
sales. In addition, the selling holders identified in the table below may have
sold, transferred or disposed of all or a portion of their Debentures or shares
of common stock issuable upon conversion of the Debentures since the date on
which they provided the information regarding their ownership of those
securities included in this prospectus.

     The following table sets forth recent information with respect to the
selling holders of the Debentures and the respective number of Debentures and
shares of common stock issuable upon conversion of the Debentures beneficially
owned by each selling holder that may be offered for such selling holder's
account pursuant to this prospectus. We prepared the table based on information
supplied to us by the selling holders.

<TABLE>
<CAPTION>
                                                              AGGREGATE PRINCIPAL
                                                              AMOUNT AT MATURITY
                       SELLING HOLDER                            OF DEBENTURES
                       --------------                         -------------------
<S>                                                           <C>
[to come]

</TABLE>

     To our knowledge, none of the selling holders has, or has had within the
past three years, any position, office or other material relationship with
Calpine or any of its predecessors or affiliates, except that Goldman, Sachs &
Co. acted as the Initial Purchaser of the Debentures and acts as an adviser to
Calpine from time to time with respect to other matters.

                                        21
<PAGE>   23

                              PLAN OF DISTRIBUTION

     The Debentures and the common stock issuable upon conversion of the
Debentures may be offered and sold from time to time to purchasers directly by
the selling holders. Alternatively, the selling holders may from time to time
offer those securities to or through underwriters, broker-dealers or agents, who
may receive compensation in the form of underwriting discounts, concessions or
commissions from the selling holders or the purchasers of the securities for
whom they act as agents. The selling holders and any underwriters,
broker-dealers or agents that participate in the distribution of the securities
may be deemed to be "underwriters" within the meaning of the Securities Act, and
any profit on the sale of such securities and any discounts, commissions,
concessions or other compensation received by any such underwriter,
broker-dealer or agent may be deemed to be underwriting discounts and
commissions under the Securities Act.

     The securities may be sold from time to time in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at varying prices
determined at the time of sale or at negotiated prices. The sale of the
securities may be effected in transactions, which may involve crosses or block
transactions:

     - on any national securities exchange or quotation service on which the
       securities may be listed or quoted at the time of sale,

     - in the over-the-counter market,

     - in transactions otherwise than on such exchanges or in the
       over-the-counter market, or

     - through the writing and exercise of options.

     At the time a particular offering of the securities is made, if required, a
prospectus supplement will be distributed, which will set forth the names of the
selling holders, the aggregate amount and type of securities being offered and
the terms of the offering, including the name or names of any underwriters,
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling holders and any discounts,
commissions or concessions allowed or reallowed to paid broker-dealers.

     To comply with the securities laws of certain jurisdictions, if applicable,
the securities will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain jurisdictions
the securities may not be offered or sold unless they have been registered or
qualified for sale in such jurisdictions or any exemption from registration or
qualification is available and is complied with.

     The selling securityholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act and the rules and regulations thereunder, including, without limitation,
Regulation M of the Exchange Act, which may limit the timing of purchases and
sales of any of the offered securities by the selling securityholders and any
other such person. Furthermore, Regulation M may restrict the ability of any
person engaged in the distribution of the offered securities to engage in
market-making activities with respect to the particular offered securities being
distributed. All of the foregoing may affect the marketability of the offered
securities and the ability of any person or entity to engage with respect to the
offered securities.

     Pursuant to a registration rights agreement, we have borne all fees and
expenses incurred in connection with the registration of the securities, except
that selling holders will pay all broker's commissions and underwriting
discounts and commissions, if any, in connection with any sales effected
pursuant to this prospectus. The selling holders will be indemnified by us
against certain civil liabilities, including certain liabilities under the
Securities Act or the Securities Exchange Act or otherwise, or alternatively
will be entitled to contribution in connection with those liabilities.

                                        22
<PAGE>   24

                          PRICE RANGE OF COMMON STOCK

     Our common stock is traded on the New York Stock Exchange under the symbol
"CPN." Public trading of the common stock commenced on September 20, 1996. Prior
to that, there was no public market for the common stock. The following table
sets forth, for the periods indicated, the high and low sale price per share of
the common stock on the New York Stock Exchange. The information in the
following table reflects the 2 for 1 stock split that became effective on
October 7, 1999, the 2 for 1 stock split that became effective on June 8, 2000
and the 2 for 1 stock split that became effective on November 14, 2000.

<TABLE>
<CAPTION>
                                                          HIGH        LOW
                                                         -------    -------
<S>                                                      <C>        <C>
1999
  First Quarter........................................  $ 4.672    $ 3.157
  Second Quarter.......................................    7.375      4.391
  Third Quarter........................................   11.969      6.852
  Fourth Quarter.......................................   16.375     10.633
2000
  First Quarter........................................  $30.750    $16.094
  Second Quarter.......................................   35.219     18.125
  Third Quarter........................................   52.250     32.250
  Fourth Quarter.......................................   52.969     32.250
2001
  First Quarter........................................  $ 58.04    $ 29.00
  Second Quarter.......................................    57.35      36.20
  Third Quarter (through July 26, 2001)................    46.00      32.50
</TABLE>

     As of July 26, 2001, there were approximately 844 holders of record of our
common stock. On July 26, 2001, the last sale price reported on the NYSE for our
common stock was $36.89 per share.

                                DIVIDEND POLICY

     We do not anticipate paying any cash dividends on our common stock in the
foreseeable future because we intend to retain our earnings to finance the
expansion of our business and for general corporate purposes. In addition, our
ability to pay cash dividends is restricted under certain of our indentures and
our other debt agreements. Future cash dividends, if any, will be at the
discretion of our board of directors and will depend upon, among other things,
our future operations and earnings, capital requirements, general financial
condition, contractual restrictions and such other factors as the board of
directors may deem relevant.

                                        23
<PAGE>   25

                                 CAPITALIZATION

     The following table sets forth, as of March 31, 2001, (1) our actual
consolidated capitalization; and (2) the consolidated capitalization of Calpine
as adjusted to reflect the net effect of (a) our acquisition of WRMS
Engineering, Inc. on April 3, 2001, including the issuance of our common stock
in connection therewith, (b) our business combination with Encal, including the
issuance of our common stock upon exchange of the exchangeable securities
offered thereby, (c) the sale of $1.5 billion in aggregate principal amount of
Energy Finance's 8 1/2% Senior Notes Due 2008, guaranteed by us and the use of
proceeds thereof, (d) the sale of $1.0 billion in aggregate principal amount of
the Debentures offered hereby and the use of proceeds thereof and (e) the
redemption of $105 million in aggregate principal amount of our 9 1/4% Senior
Notes Due 2004. The adjustments do not reflect normal day-to-day operations.
This table should be read in conjunction with the consolidated financial
statements and related notes thereto and the unaudited pro forma combined
condensed financial statements and related notes thereto incorporated by
reference in this prospectus.

<TABLE>
<CAPTION>
                                                                   MARCH 31, 2001
                                                              -------------------------
                                                                ACTUAL      AS ADJUSTED
                                                                ------      -----------
                                                                     (UNAUDITED)
                                                                   (IN THOUSANDS,
                                                                EXCEPT SHARE AMOUNTS)
<S>                                                           <C>           <C>
SHORT-TERM DEBT:
  Notes payable and borrowings under lines of credit,
     current portion........................................  $      851    $       851
  Project financing, current portion........................      91,571          1,177
  Capital lease obligation, current portion.................       2,050          2,050
  Zero-Coupon Convertible Debentures Due 2021...............          --      1,000,000
                                                              ----------    -----------
                                                                  94,472      1,004,078
LONG-TERM DEBT:
  Notes payable and borrowings under lines of credit, net of
     current portion........................................     133,955          7,713
  Project financing, net of current portion.................   1,646,564        841,958
  Senior notes..............................................   3,701,750      5,096,750
  Capital lease obligation, net of current portion..........     208,840        209,065
                                                              ----------    -----------
     Total long-term debt...................................   5,691,109      6,155,486
                                                              ----------    -----------
  Company-obligated mandatorily redeemable convertible
     preferred securities of subsidiary trusts..............   1,122,686      1,122,686
Minority interests..........................................      41,180         41,180
                                                              ----------    -----------
STOCKHOLDERS' EQUITY:
  Preferred stock, $.001 par value:
  10,000,000 shares authorized; no shares outstanding,
     actual, and one share outstanding, as adjusted.........          --             --
                                                              ----------    -----------
  Common stock, $.001 par value: 1,000,000,000 shares
     authorized, 285,113,768 shares outstanding, actual, and
     301,868,577 shares outstanding, as adjusted............         285            302
  Additional paid-in capital................................   1,734,202      1,938,183
  Retained earnings.........................................     631,394        607,413
  Accumulated other comprehensive loss......................     (56,694)       (77,344)
                                                              ----------    -----------
     Total stockholders' equity.............................   2,309,187      2,468,554
                                                              ----------    -----------
     Total capitalization...................................  $9,258,634    $10,791,984
                                                              ==========    ===========
</TABLE>

                                        24
<PAGE>   26

                               SECURITIES OFFERED

     Using this prospectus, selling holders may offer for sale the Debentures
and the common stock into which the Debentures are convertible. We registered
all of these securities under the Securities Act using a "shelf" registration
statement. This shelf registration statement allows the selling holders to offer
and sell any combination of these securities. Each time selling holders offer
securities during the period of time that we are required by the Registration
Rights Agreement to keep the shelf registration statement effective, such
selling holder must provide this prospectus, which names the selling holders and
describes the specific securities offered. This prospectus may be amended or
supplemented by one or more prospectus supplements, which may provide new
information or update the information in this prospectus.

                                        25
<PAGE>   27

                           DESCRIPTION OF DEBENTURES

     We issued the Debentures under an indenture (the "Indenture") between the
Company and Wilmington Trust Company, as trustee (the "Trustee").

     In this section, references to "Calpine," "we," "our" or "us" refer solely
to Calpine Corporation and not its subsidiaries.

GENERAL

     The Debentures are senior unsecured obligations of Calpine, are limited to
an aggregate initial principal amount of $1,000,000,000, plus accrued interest
pursuant to any Upward Interest Adjustments. The Debentures will mature on April
30, 2021. The Debentures rank equally with all of our existing and future senior
unsecured indebtedness.

     We issued the Debentures at a price to investors of $1,000 per Debenture.
We will not pay interest on the Debentures unless an Upward Interest Adjustment
becomes payable or we elect to do so following a Tax Event. The maturity value
of each Debenture may exceed $1,000 in the event an Upward Interest Adjustment
becomes payable on the Debentures. The issue price represents a yield to
maturity of 0% per annum unless an Upward Interest Adjustment occurs. The
Debentures issued only in denominations of $1,000 principal amount and multiples
of $1,000 principal amount.

     You have the option, at any time on or prior to 5:00 p.m., New York City
time, on April 29, 2021, unless previously redeemed or otherwise repurchased by
Calpine, to convert your Debentures into shares of our common stock at a
conversion rate of 13.2714 shares of common stock per $1,000 principal amount of
the Debentures. This is equivalent to an initial conversion price of $75.35 per
share of common stock based on the price to investors of the Debentures. The
conversion rate is subject to adjustment if certain events occur. Upon
conversion, you will receive only shares of common stock. You will not receive
any cash payment for any accrued interest to the conversion date. To calculate
earnings per share following this offering, we will be using the as-converted
method to account for the potential dilutive effect of the Debentures.

     Each holder agreed in the Indenture, for U.S. federal income tax purposes,
to treat the Debentures as "contingent payment debt instruments" and to be bound
by our application of the Treasury regulations that govern contingent payment
debt instruments, including our determination that the rate at which interest
will be deemed to accrue for federal income tax purposes will be 9.44% per
annum, which is the rate comparable to the rate at which the Issuer would borrow
on a noncontingent, nonconvertible borrowing. Based on the agreement, (i) each
holder will be required to accrue interest on a constant yield to maturity basis
at that rate, with the result that a holder will recognize taxable income
significantly in excess of cash received while the Debentures are outstanding,
and (ii) a holder will recognize ordinary income upon a conversion of a
Debenture into our common stock equal to the excess, if any, between the value
of the common stock received on the conversion and the sum of the original
purchase price of the holder's Debenture and accrued but unpaid interest.
However, the proper application of the regulations that govern contingent
payment debt instruments to a holder of a Debenture is uncertain in a number of
respects, and if our treatment were successfully challenged by the Internal
Revenue Service, it might be determined that, among other differences, a holder
should have accrued interest income at a lower rate, should not have recognized
income or gain upon the conversion, and should not have recognized ordinary
income upon a taxable disposition of its Debenture. In addition, if the Internal
Revenue Service successfully asserts that the Debentures are not debt, Non-U.S.
Holders would generally be subject to a 30% Unites States federal withholding
tax on payments of contingent interest made in respect of the Debentures. See
"Certain United States Federal Income Tax Consequences."

                                        26
<PAGE>   28

     HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE TAX TREATMENT OF
THE DEBENTURES AND WHETHER A PURCHASE OF THE DEBENTURES IS ADVISABLE IN LIGHT OF
THE AGREED UPON TAX TREATMENT AND THE INVESTOR'S PARTICULAR TAX SITUATION.

INTEREST ADJUSTMENT

     An Upward Interest Adjustment (equivalent to 7.25% per annum) may be made
on April 30, 2004, 2006, 2008, 2011 or 2016. An Upward Interest Adjustment will
be made on each Upward Interest Adjustment Date if the Trading Price of the
Debentures is less than 98% of the Accreted Value as of such Upward Interest
Adjustment Date for 20 out of the last 30 NYSE trading days ending 90 days prior
to such Upward Interest Adjustment Date. If an Upward Interest Adjustment is in
effect for a particular semi-annual period, we will pay a portion of the Upward
Interest Adjustment as cash interest at a rate of 0.25% per annum (0.125% per
semi-annual period) of the Accreted Value as of the beginning of the applicable
semi-annual period and the remaining interest (7.0% per annum) will be accrued
and payable at the earlier of maturity or the redemption or the repurchase of
the Debentures. We will pay cash interest on each April 30 and October 30 for
which an Upward Interest Adjustment is in effect, to the holders of record on
the preceding April 15 and October 15, respectively. Interest will be determined
on the basis of a 360-day year, consisting of twelve 30-day months.

     If an Upward Interest Adjustment is in effect during a semi-annual period
(other than a semi-annual period immediately preceding an Upward Interest
Adjustment Date) and the Trading Price of the Debentures is greater than or
equal to 98% of the Accreted Value as of the next following interest payment
date for 20 out of the last 30 NYSE trading days ending on such interest payment
date, the Upward Interest Adjustment will be subject to a Downward Interest
Adjustment on such interest payment date, such that from and including such date
the Debentures will cease to accrue interest unless and until there is a
subsequent Upward Interest Adjustment. If an Upward Interest Adjustment is in
effect during a semi-annual period immediately preceding an Upward Interest
Adjustment Date, a Downward Interest Adjustment will be made on the next Upward
Interest Adjustment Date if the Trading Price of the Debentures is greater than
or equal to 98% of the Accreted Value as of such Upward Interest Adjustment Date
for 20 out of the last 30 NYSE trading days ending 90 days prior to such Upward
Interest Adjustment Date. If a Downward Interest Adjustment is made, no Upward
Interest Adjustment may be made until the next Upward Interest Adjustment Date.

     The "Trading Price" of the Debentures on any date of determination means
the average of the secondary market bid quotations per Debenture obtained by the
bid solicitation agent for $10,000,000 principal amount at maturity of the
Debentures at approximately 3:30 p.m., New York City time, on such determination
date from three independent nationally recognized securities dealers we select,
provided that if at least three such bids are not obtained by the bid
solicitation agent, but two such bids are obtained, then the average of the two
bids shall be used, and if only one such bid is obtained by the bid solicitation
agent, this one bid shall be used. If the bid solicitation agent cannot obtain
at least one bid for $10,000,000 principal amount at maturity of the Debentures
from a nationally recognized securities dealer or in our reasonable judgment,
the bid quotations are not indicative of the secondary market value of the
Debentures, then the Trading Price of the Debentures will equal (a) the
then-applicable conversion rate of the Debentures multiplied by (b) the closing
price on the NYSE of our common stock on such determination date.

     The bid solicitation agent will initially be The Bank of New York. We may
change the bid solicitation agent, but the bid solicitation agent will not be
our affiliate. The bid solicitation agent will solicit bids from securities
dealers that are believed by us to be willing to bid for the Debentures.

                                        27
<PAGE>   29

     In the event of any Upward Interest Adjustment, we will disseminate a press
release not later than three business days prior to the relevant Upward Interest
Adjustment Date through Dow Jones & Company, Inc. or Bloomberg Business News
containing this information and publish the information on our Website on the
World Wide Web or through such other public medium as we may use at that time.

TAX EVENT

     We have the option, under limited circumstances, to elect to pay cash
interest at a rate of 7.25% per annum on the Debentures from and after the date
a Tax Event occurs instead of accruing interest pursuant to an Upward Interest
Adjustment. Such cash interest would only be payable during periods in which an
Upward Interest Adjustment is in effect. If we make such an election, the
principal amount on which we pay interest will be restated and will be equal to
the issue price plus accrued and unpaid interest payable pursuant to an Upward
Interest Adjustment to the date on which we exercise our option to commence
paying cash interest. The Restated Principal Amount will be the amount due at
maturity. If we elect this option, interest will be based on a 360-day year,
consisting of twelve 30-day months. Interest will accrue from the date we
exercise our option to declare the occurrence of a Tax Event and will be payable
semi-annually in arrears on each April 30 and October 30 to the holders of
record on the preceding April 15 and October 15, respectively.

     The term "Tax Event" means the receipt by us of an opinion of a nationally
recognized independent tax counsel experienced in such matters to the effect
that as a result of:

     - any amendment to or change (including any announced prospective change
       (which will not include a proposed change), provided that a Tax Event
       will not occur more than 90 days before the effective date of any
       prospective change) in the laws (or any regulations thereunder) of the
       United States or any political subdivision or taxing authority of the
       United States or any political subdivision; or

     - any judicial decision or official administrative pronouncement, ruling,
       regulatory procedure, notice or announcement, including any notice or
       announcement of intent to adopt such procedures or regulations (an
       "Administrative Action"); or

     - any amendment to or change in the administrative position or
       interpretation of any Administrative Action or judicial decision that
       differs from the theretofore generally accepted position, in each case,
       by any legislative body, court, governmental agency or regulatory body,
       irrespective of the manner in which such amendment or change is made
       known, which amendment or change is effective or such Administrative
       Action or decision is announced, in each case, on or after the date of
       original issuance of the Debenture;

there is more than an insubstantial risk that interest, including original issue
discount, payable on the Debentures either:

     (1) would not be deductible on a current accrual basis; or

     (2) would not be deductible under any other method, in whole or in part, by
         us for United States federal income tax purposes.

INTEREST

     We will not pay cash interest on the Debentures unless there is an Upward
Interest Adjustment in effect or if we elect to do so following a Tax Event.
Interest will be based on a 360-day year, consisting of twelve 30-day months,
and will be payable semi-annually in arrears on each April 30 and October 30.
Cash interest as a result of an Upward Interest Adjustment will be paid at the
rate of 0.25% per annum (0.125% per semi-annual period). Cash interest following
a Tax Event and our election to pay the interest in cash will be paid at a rate
of 7.25% per

                                        28
<PAGE>   30

annum on the Debentures during any period in which an Upward Interest Adjustment
is in effect. The record date for the payment of cash interest to holders will
be April 15 and October 15 of each year. We will give notice to the holders of
the Debentures, no later than 30 days prior to each record date, of the amount
of cash interest to be paid as of the next interest payment date. We will pay
interest on the Debentures by check mailed to the address of the registered
holders of the Debentures as of the record date relating to each interest
payment date.

     You should be aware that interest, including any adjustments occurring as a
result of an Upward Interest Adjustment, accruing for the period you hold the
Debentures must be included in your gross income for federal income tax purposes
in accordance with the Treasury Regulations governing debt instruments providing
for contingent payments. For more information, see the discussion below in the
section captioned "Certain United States Federal Income Tax Consequences."

REDEMPTION RIGHTS

     We must repay the Debentures at their stated maturity on April 30, 2021,
unless earlier redeemed. The circumstances in which we may, or we are required
to, redeem the Debentures prior to their stated maturity are described below.

     We have the right to redeem the Debentures in whole or in part, at any time
or from time to time, on or after April 30, 2004 upon not less than 30 nor more
than 60 days' notice by mail to holders of the Debentures for a cash price equal
to the issue price plus any accrued and unpaid interest to the redemption date.

     If we decide to redeem fewer than all of the outstanding Debentures, the
Trustee will select the Debentures to be redeemed by such method as the Trustee
considers fair and appropriate and which may provide for the selection for
redemption of portions of the Debentures.

     If we have previously exercised our option to pay cash interest instead of
accruing interest on the Debentures following a Tax Event, the redemption price
will be equal to the Restated Principal Amount plus any accrued and unpaid cash
interest through the redemption date. See "-- Tax Event."

     If the Trustee selects a portion of your Debentures for partial redemption
and you convert a portion of the same Debentures, the converted portion will be
deemed to be the portion selected for redemption. Each Debenture selected for
redemption will be redeemed in whole.

     In the event of any redemption in part, we will not be required to:

     - issue, register the transfer of or exchange any Debenture during a period
       beginning at the opening of business 15 days prior to the mailing of the
       relevant notice of redemption and ending at the close of business on the
       day of mailing of the notice, or

     - register the transfer of or exchange any Debenture so selected for
       redemption, in whole or in part, except the unredeemed portion of any
       Debenture being redeemed in part.

CONVERSION RIGHTS

     You may surrender your Debentures for conversion into common stock at any
time prior to 5:00 p.m., New York City time, on April 29, 2021. You may convert
each Debenture, pursuant to the initial conversion ratio, into 13.2714 shares of
our common stock (equivalent to an initial conversion price of $75.35 per share
of common stock). The conversion ratio and the equivalent conversion price in
effect at any given time are referred to in this prospectus as the applicable
conversion ratio and the applicable conversion price, respectively, and will be
subject to adjustment as described below. If a Debenture has been called for
redemption, you will be entitled to convert the Debenture from the date of
notice of the redemption until the close of business on the business day
immediately preceding the date of redemption. You may convert

                                        29
<PAGE>   31

fewer than all of your Debentures so long as the Debentures converted are a
multiple of $1,000 principal amount.

     Upon conversion of any Debentures you will not receive any cash payment
representing accrued interest with respect to the converted Debentures. Instead,
upon conversion we will deliver to you a fixed number of shares of common stock
and any cash payment to account for fractional shares. The cash payment for
fractional shares will be based on the closing price of our common stock on the
NYSE trading day immediately prior to the conversion date. Delivery of shares of
common stock will be deemed to satisfy our obligation to pay the principal
amount of the Debentures, including accrued interest. Accrued interest will be
deemed paid in full rather than canceled, extinguished or forfeited. We will not
adjust the conversion ratio to account for the accrued interest.

     If you wish to exercise your conversion right, you must deliver an
irrevocable conversion notice, together, if the Debentures are in certificated
form, with the certificated security, to the conversion agent who will, on your
behalf, convert the Debentures into shares of our common stock. You may obtain
copies of the required form of the conversion notice from the conversion agent.

     Based upon our treatment of the Debentures for U.S. federal income tax
purposes, as discussed above, a holder would be required to recognize ordinary
income upon a conversion of a Debenture into our common stock equal to the
excess, if any, between the value of the stock received on the conversion and
the sum of the original purchase price of the holder's Debenture and accrued but
unpaid interest. For a more detailed discussion, see "Certain United States
Federal Income Tax Consequences."

     The conversion rate will be subject to adjustment upon the following
events:

     - the payment of dividends and other distributions payable exclusively in
       our common stock on our common stock;

     - the issuance to all holders of our common stock of rights or warrants
       that allow the holders to purchase shares of our common stock at less
       than the current market price; provided that no adjustment will be made
       if holders of the Debentures may participate in the transaction on a
       basis and with notice that our board of directors determines to be fair
       and appropriate or in some other cases;

     - subdivisions or combinations of our common stock;

     - the payment of dividends and other distributions to all holders of our
       common stock, consisting of evidences of our indebtedness, securities or
       capital stock, cash or assets, except for those rights or warrants
       referred to in the second bullet point above and dividend and other
       distributions paid exclusively in cash; provided that no adjustment will
       be made if all holders of the Debentures may participate in the
       transactions;

     - the payment to holders of our common stock in respect of a tender or
       exchange offer, other than an odd-lot offer, by us or any of our
       subsidiaries for our common stock to the extent that the offer involves
       aggregate consideration that, together with (1) any cash and the fair
       market value of any other consideration payable in respect of any tender
       offer by us or any of our subsidiaries for shares of our common stock
       consummated within the preceding 12 months not triggering a conversion
       price adjustment and (2) all-cash distributions to all or substantially
       all stockholders made within the preceding 12 months not triggering a
       conversion price adjustment, exceeds an amount equal to 12.5% of the
       market capitalization of our common stock on the expiration date of the
       tender offer; and

     - the distribution to all or substantially all holders of our common stock
       of all-cash distributions in an aggregate amount that, together with (1)
       any cash and the fair market value of any other consideration payable in
       respect of any tender offer by us or any of our

                                        30
<PAGE>   32

       subsidiaries for shares of our common stock consummated within the
       preceding 12 months not triggering a conversion price adjustment and (2)
       all other all-cash distributions to all or substantially all holders of
       our common stock made within the preceding 12 months not triggering a
       conversion price adjustment, exceeds an amount equal to 12.5% of the
       market capitalization of our common stock on the business day immediately
       preceding the day on which we declare the distribution.

     The applicable conversion price will not be adjusted:

     - upon the issuance of any shares of our common stock pursuant to any
       present or future plan providing for the reinvestment of dividends or
       interest payable on securities of Calpine and the investment of
       additional optional amounts in shares of our common stock under any plan,

     - upon the issuance of any shares of our common stock or options or rights
       to purchase those shares pursuant to any present or future employee,
       director or consultant benefit plan or program of Calpine,

     - upon the issuance of any shares of our common stock pursuant to any
       option, warrant, right, or exercisable, exchangeable or convertible
       security outstanding as of the date the Debentures were first issued, or

     - upon the issuance of any rights, any distribution of separate
       certificates representing the rights, any exercise or redemption of any
       rights or any termination or invalidation of the rights, pursuant to our
       stockholders rights plan.

     We may increase the conversion rate for at least 20 days, so long as the
increase is irrevocable during that 20-day period. No adjustment in the
applicable conversion price will be required unless the adjustment would require
an increase or decrease of at least 1% of the applicable conversion price. If
the adjustment is not made because the adjustment does not change the applicable
conversion price by more than 1%, then the adjustment that is not made will be
carried forward and taken into account in any future adjustment. Except as
specifically described above, the applicable conversion price will not be
subject to adjustment in the case of the issuance of any of our common stock, or
securities convertible into or exchangeable for our common stock.

     If you submit your Debenture for conversion after we have elected to
exercise our option to pay cash interest instead of accruing interest following
a Tax Event or if we are required to make a cash payment pursuant to an Upward
Interest Adjustment, after a record date and prior to the opening of business on
the next interest payment date (except for Debentures or portions of Debentures
called for redemption on a redemption date on a date in such period), you must
pay funds equal to the interest payable on the converted principal amount.

REPURCHASE RIGHT

     You have the right to require us to repurchase your Debentures on April 30,
2002, 2004, 2006, 2008, 2011 and 2016. We will be required to repurchase any
outstanding Debentures for which you deliver a written repurchase notice to the
paying agent. This notice must be delivered during the period beginning at any
time from the opening of business on the date that is 20 business days prior to
the relevant repurchase date until the close of business on the last business
day prior to such repurchase date. If the repurchase notice is given and
withdrawn during the period, we will not be obligated to repurchase the related
Debentures. Our repurchase obligation will be subject to some additional
conditions. Also, our ability to satisfy our repurchase obligations may be
affected by the factors described in "Risk Factors" under the caption "We May Be
Unable to Repay the Debentures When Due or Repurchase the Debentures When We Are
Required to Do So."

     The repurchase price payable will be equal to the issue price plus any
accrued and unpaid interest to such repurchase date.

                                        31
<PAGE>   33

     We may choose, in our sole discretion, to pay the repurchase price in cash
or shares of our common stock, or a combination of cash and shares of our common
stock except on April 30, 2016 when we may only pay the repurchase price in
cash. For a discussion of the tax treatment of a holder receiving cash, shares
of our common stock or any combination thereof, see "Certain United States
Federal Income Tax Consequences."

     If we have previously exercised our option to pay cash interest instead of
accruing interest on the Debentures following a Tax Event, the repurchase price
will be the Restated Principal Amount plus any accrued and unpaid cash interest
through the repurchase date. See "-- Tax Event."

     If we choose to pay the repurchase price, in whole or in part, in shares of
our common stock or a combination of cash and shares of our common stock, we
will be required to give notice on a date not less than 20 business days prior
to each repurchase date to all holders at their addresses shown in the register
of the registrar, and to beneficial owners as required by applicable law (i.e.
if no notice is given, we will pay the repurchase price with cash), stating
among other things:

     - whether we will pay the repurchase price of the Debentures in cash, in
       shares of our common stock, or any combination thereof, and specifying
       the percentages of each;

     - if we elect to pay with common stock, the method of calculating the price
       of the common stock; and

     - the procedures that holders must follow to require us to repurchase their
       Debentures.

     If we pay with shares of our common stock, they will be valued at 100% of
the market price for our common stock.

     The "market price" means the average of the sale prices of our common stock
on the NYSE for the five NYSE trading day period ending on the third business
day prior to the applicable repurchase date (if the third business day prior to
the applicable repurchase date is a NYSE trading day, or if not, then on the
last NYSE trading day prior to the third business day), appropriately adjusted
to take into account the occurrence, during the period commencing on the first
of the NYSE trading days during the five NYSE trading day period and ending on
the repurchase date, of some events that would result in an adjustment of the
conversion rate with respect to our common stock.

     The "sale price" of our common stock on any date means the closing per
share sale price on the NYSE (or if no closing sale price is reported, the
average of the bid and ask prices or, if more than one in either case, the
average of the average bid and the average asked prices) on that date as
reported on the NYSE.

     Your notice electing to require us to repurchase your Debentures must
state:

     - if certificated Debentures have been issued, the Debentures certificate
       numbers, or if not certificated, your notice must comply with appropriate
       DTC procedures;

     - the portion of the principal amount of Debentures to be repurchased, in
       multiples of $1,000;

     - that the Debentures are to be repurchased by us pursuant to the
       applicable provisions of the Debentures; and

     - in the event we elect, pursuant to the notice that we are required to
       give, to pay the repurchase price in shares of common stock, in whole or
       in part, but the repurchase price is ultimately to be paid to the holder
       entirely in cash because any of the conditions to payment of the
       repurchase price or portion of the repurchase price in shares of common

                                        32
<PAGE>   34

       stock is not satisfied prior to the close of business on the last day
       prior to the repurchase date, as described below, whether the holder
       elects:

          (1) to withdraw the repurchase notice as to some or all of the
              Debentures to which it relates, or

          (2) to receive cash in respect of the entire repurchase price for all
              Debentures or portions of Debentures subject to the repurchase
              notice.

     If the holder fails to indicate the holder's choice with respect to the
election described in the final bullet point above, the holder will be deemed to
have elected to receive cash in respect of the entire repurchase price for all
Debentures subject to the repurchase notice in these circumstances. For a
discussion of the tax treatment of a holder receiving cash instead of shares of
common stock, see "Certain United States Federal Income Tax Consequences."

     You may withdraw any repurchase notice by a written notice of withdrawal
delivered to the paying agent prior to the close of business on the last day
prior to the repurchase date. The notice of withdrawal must state:

     - the principal amount of the withdrawn Debentures;

     - if certificated Debentures have been issued, the certificate numbers of
       the withdrawn Debentures, or if not certificated, your notice must comply
       with appropriate DTC procedures; and

     - the principal amount, if any, which remains subject to the repurchase
       notice.

     If we elect to pay the repurchase price, in whole or in part, in shares of
common stock, the number of shares to be delivered by us will be equal to the
portion of the repurchase price to be paid in common stock divided by the market
price of one share of common stock as determined by us in our repurchase notice.
We will pay cash based on the market price for all fractional shares.

     Because the market price of our common stock is determined prior to the
applicable repurchase date, holders of Debentures bear the market risk with
respect to the value of the common stock to be received from the date the market
price is determined to the repurchase date. We may pay the repurchase price or
any portion of the repurchase price in shares of common stock only if the
information necessary to calculate the market price is published in a daily
newspaper of national circulation or is otherwise publicly available (e.g., by
dissemination on the World Wide Web or by other public means).

     Upon determination of the actual number of shares of common stock to be
paid upon repurchase of the Debentures, we will disseminate a press release not
later than three business days prior to the relevant interest payment date
through Dow Jones & Company, Inc. or Bloomberg Business News containing this
information and publish the information on our Website on the World Wide Web or
through such other public medium as we may use at that time.

     A holder must either effect book-entry transfer or deliver the Debentures,
together with necessary endorsements, to the office of the paying agent after
delivery of the repurchase notice to receive payment of the repurchase price.
You will receive payment on the later of the repurchase date or the time of
book-entry transfer or the delivery of the Debentures. If the paying agent holds
money or securities sufficient to pay the repurchase price of the Debentures on
the business day following the repurchase date, then:

     - the Debentures will cease to be outstanding;

     - interest, including any interest payable pursuant to an Upward Interest
       Adjustment (including any cash interest) will cease to accrue; and

                                        33
<PAGE>   35

     - all other rights of the holder will terminate.

     This will be the case whether or not book-entry transfer of the Debentures
is made or whether or not the Debentures are delivered to the paying agent.

     We will comply with the provisions of Rule 13e-4 and any other tender offer
rules under the Securities Exchange Act which may be applicable at the time. We
will file Schedule TO or any other schedule required in connection with any
offer by us to repurchase the Debentures at your option.

RANKING

     The Debentures constitute senior debt, rank equally with all of our
existing and future senior unsecured debt, and rank senior to any future
subordinated indebtedness.

     We currently conduct substantially all our operations through our
subsidiaries, and our subsidiaries generate substantially all of our operating
income and cash flow. As a result, distributions or advances from our
subsidiaries are the principal source of funds necessary to meet our debt
service obligations. Contractual provisions or laws, as well as our
subsidiaries' financial condition and operating requirements, may limit our
ability to obtain cash from our subsidiaries that we require to pay our debt
service obligations, including payments on the Debentures. In addition, holders
of the Debentures will have a junior position to the claims of creditors of our
subsidiaries on their assets and earnings. As of March 31, 2001, our
subsidiaries had approximately $1.7 billion of project finance debt, without
giving effect to the anticipated use of proceeds, to which the Debentures would
have been structurally subordinated.

CHANGE IN CONTROL

     If a Change in Control as defined below occurs, a holder of Debentures will
have the right, at its option, to require us to repurchase all of its Debentures
not previously called for redemption, or any portion of the principal amount
thereof, that is equal to $1,000 or an integral multiple of $1,000. The price we
are required to pay is equal to the issue price plus any accrued and unpaid
interest to such repurchase date, or, if we elected to pay cash interest on the
Debentures following a Tax Event, the Restated Principal Amount plus any accrued
and unpaid cash interest through the repurchase date.

     At our option, instead of paying the repurchase price in cash, we may pay
the repurchase price in registered shares of our common stock valued at 95% of
the average of the closing prices of our common stock for the five NYSE trading
days immediately preceding and including the third NYSE trading day prior to the
repurchase date. We may only pay the repurchase price in our common stock if we
satisfy conditions provided in the Indenture.

     Within 30 days after the occurrence of a Change in Control, we are
obligated to give to the holders of Debentures notice of the Change in Control
and of the repurchase right arising as a result of the Change in Control. We
must also deliver a copy of this notice to the Trustee. To exercise the
repurchase right, a holder of Debentures must deliver on or before the 30th day
after the date of our notice irrevocable written notice to the Trustee of the
holder's exercise of its repurchase right, together with the Debentures with
respect to which the right is being exercised. We are required to repurchase the
Debentures on the date that is 45 days after the date of our notice.

     A Change in Control will be deemed to have occurred at the time after the
Debentures are originally issued that any of the following occurs:

          (1) any person, including any syndicate or group deemed to be a
     "person" under Section 13(d)(3) of the Exchange Act, acquires beneficial
     ownership, directly or indirectly, through a purchase, merger or other
     acquisition transaction or series of transactions, of

                                        34
<PAGE>   36

     shares of our capital stock entitling the person to exercise 50% or more of
     the total voting power of all shares of our capital stock that is entitled
     to vote generally in elections of directors, other than an acquisition by
     us, any of our subsidiaries or any of our employee benefit plans; or

          (2) we merge or consolidate with or into any other person, any merger
     of another person into us, or we convey, sell, transfer or lease all or
     substantially all of our assets to another person, other than any
     transaction:

        - that does not result in any reclassification, conversion, exchange or
          cancellation of outstanding shares of our capital stock, or

        - pursuant to which the holders of our common stock immediately prior to
          the transaction have the entitlement to exercise, directly or
          indirectly, 50% or more of the total voting power of all shares of
          capital stock entitled to vote generally in the election of directors
          of the continuing or surviving corporation immediately after the
          transaction, or

        - which is effected solely to change our jurisdiction of incorporation
          and results in a reclassification, conversion or exchange of
          outstanding shares of our common stock solely into shares of common
          stock of the surviving entity.

     However, a Change in Control will not be deemed to have occurred if either
(A) the closing price per share of our common stock on the NYSE for any five
NYSE trading days within the period of 10 consecutive NYSE trading days ending
immediately after the later of the Change in Control or the public announcement
of the Change in Control, in the case of a Change in Control relating to an
acquisition of capital stock, or the period of 10 consecutive NYSE trading days
ending immediately before the Change in Control, in the case of Change in
Control relating to a merger, consolidation or asset sale, equals or exceeds
105% of the conversion price of the Debentures in effect on each of those NYSE
trading days or (B) all of the consideration (excluding cash payments for
fractional shares and cash payments made pursuant to dissenters' appraisal
rights) in a merger or consolidation otherwise constituting a Change in Control
under clause (1) and/or clause (2) above consists of shares of common stock
traded on a national securities exchange or quoted on the Nasdaq National Market
(or will be so traded or quoted immediately following the merger or
consolidation) and as a result of the merger or consolidation the Debentures
become convertible into such common stock.

     For purposes of these provisions:

     - the conversion price is equal to $1,000 divided by the conversion rate;

     - whether a person is a "beneficial owner" will be determined in accordance
       with Rule 13d-3 under the Exchange Act; and

     - "person" includes any syndicate or group that would be deemed to be a
       "person" under Section 13(d)(3) of the Exchange Act.

     Rule 13e-4 under the Exchange Act requires the dissemination of prescribed
information to security holders in the event of an issuer tender offer and may
apply in the event that the repurchase option becomes available to the holders
of Debentures. We will comply with this rule to the extent it applies at that
time.

     The definition of Change in Control includes a phrase relating to the
conveyance, transfer, sale, lease or disposition of "all or substantially all"
of our assets. There is no precise, established definition of the phrase
"substantially all" under applicable law. Accordingly, the ability of a holder
of Debentures to require us to repurchase its notes as a result of the
conveyance, transfer, sale, lease or other disposition of less than all of our
assets may be uncertain.

                                        35
<PAGE>   37

     The foregoing provisions would not necessarily provide the holders of
Debentures with protection if we are involved in a highly leveraged or other
transaction that may adversely affect the holders.

     If a Change in Control were to occur, we may not have enough funds to pay
the Change in Control repurchase price. See "Risk Factors" under the caption "We
May Be Unable to Repay the Debentures When Due or Repurchase the Debentures When
We Are Required to Do So." In addition, we have, and may in the future incur,
other indebtedness with similar change in control provisions permitting its
holders to accelerate or to require us to repurchase our indebtedness upon the
occurrence of similar events or on some specified dates. If we fail to
repurchase the Debentures when required following a Change in Control, we will
be in default under the Indenture.

MERGER AND SALES OF ASSETS BY CALPINE

     We may not consolidate with or merge with or into any other person or sell,
assign, convey, transfer, or lease or otherwise dispose of all or substantially
all of our properties and assets as an entirety to any person unless:

     - we shall be the surviving corporation;

     - the person formed by the consolidation or into which we are merged or the
       person to which our properties and assets are so sold, assigned,
       conveyed, transferred, leased or otherwise disposed of, shall be a
       corporation, organized and existing under the laws of the United States,
       any State within the United States or the District of Columbia and shall
       expressly assume, in a form reasonably satisfactory to the Trustee, all
       of our obligations under the Indenture and the Debentures; and

     - immediately after giving effect to the transaction, no event of default
       with respect to the Debentures will have occurred and be continuing.

EVENTS OF DEFAULT

     The following are events of default with respect to the Debentures (each,
an "Event of Default"):

     - default for 30 days in payment of any interest installment due and
       payable on the Debentures (after any Upward Interest Adjustment or any
       election by us to pay cash interest on the Debentures following a Tax
       Event);

     - default in payment of principal of the Debentures (or, if we have elected
       to pay cash interest on the Debentures following a Tax Event, the
       Restated Principal Amount) and accrued interest (including any interest
       payable pursuant to an Upward Interest Adjustment) at maturity, upon
       redemption, repurchase or following a change in control, when the same
       becomes due and payable;

     - material default in our performance of any other covenants or agreements
       in the Debentures or the Indenture which default continues for 30 days
       after the date on which written notice of such default is given to us by
       the Trustee or to us and Trustee by the holders of at least 25% in
       principal amount of the then outstanding Debentures;

     - default by us under any instrument or instruments under which there is or
       may be secured or evidenced any of our indebtedness (other than the
       Debentures) having an outstanding principal amount of $50,000,000 (or its
       equivalent in any other currency or currencies) or more, individually or
       in the aggregate, that has caused the holders thereof to declare such
       indebtedness to be due and payable prior to its stated maturity, unless
       such declaration has been rescinded within 30 days;

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<PAGE>   38

     - default in the payment of the principal of any bond, debenture, note or
       other evidence of our indebtedness, in each case for money borrowed, or
       in the payment of principal under any mortgage, indenture, agreement or
       instrument under which there may be issued or by which there may be
       secured or evidenced any indebtedness of ours for money borrowed, which
       default for payment of principal is individually or in an aggregate
       principal amount exceeding $50,000,000 (or its equivalent in any other
       currency or currencies) when such indebtedness becomes due and payable
       (whether at maturity, upon redemption or acceleration or otherwise), if
       such default shall continue unremedied or unwaived for more than 30 days
       after the expiration of any grace period or extension of the time for
       payment applicable thereto; and

     - certain events of bankruptcy, insolvency and reorganization.

     The Indenture requires that we file annually with the Trustee a certificate
describing any default by us in the performance of any conditions or covenants
that has occurred under the Indenture and its status. We must give the Trustee,
within 30 days after the occurrence thereof, written notice of any event which
with the giving of notice or lapse of time or both would become an Event of
Default described in the fourth, fifth and sixth bullet points above.

     The Indenture provides that if an Event of Default (other than an Event of
Default relating to certain events of bankruptcy, insolvency and reorganization)
occurs and is continuing with respect to the Debentures, either the Trustee or
the registered holders of at least 25% in aggregate principal amount of the
Debentures, may declare the issue price plus accrued and unpaid interest on the
Debentures to be due and payable immediately. If an Event of Default relating to
certain events of bankruptcy, insolvency or reorganization occurs, the issue
price plus accrued and unpaid interest on the Debentures will become immediately
due and payable without any action on the part of the Trustee or any holder. At
any time after a declaration of acceleration, but before a judgment or decree
for payment of money has been obtained, if all Events of Default with respect to
the Debentures have been cured or waived (other than the nonpayment of the issue
price or accrued and unpaid interest on the Debentures which has become due
solely by reason of the declaration of acceleration), then the declaration of
acceleration shall be automatically annulled and rescinded.

     A holder of Debentures may pursue any remedy under the Indenture only if:

     - the holder gives the Trustee written notice of a continuing Event of
       Default for the Debentures;

     - the holders of at least 25% in principal amount of the outstanding
       Debentures make a written request to the Trustee to pursue the remedy;

     - the holder offers to the Trustee security and indemnity reasonably
       satisfactory to the Trustee against any loss, liability or expense;

     - the Trustee fails to act for a period of 60 days after receipt of notice,
       request and offer of security or indemnity; and

     - during that 60-day period, the holders of a majority in principal amount
       of the Debentures do not give the Trustee a direction inconsistent with
       the request.

     This provision does not, however, affect the right of a holder of
Debentures to sue for enforcement of payment of the principal of or interest,
including Liquidated Damages (as defined below) on the holder's Debenture on or
after the respective due dates expressed or provided for in its Debenture or the
holder's right to convert its Debenture in accordance with the Indenture.

     The Trustee is entitled under the Indenture, subject to the duty of the
Trustee during a default to act with the required standard of care, to be
indemnified before proceeding to exercise any right or power under the Indenture
at the direction of the registered holders of the

                                        37
<PAGE>   39

Debentures or which requires the Trustee to expend or risk its own funds or
otherwise incur any financial liability. The Indenture also provides that the
registered holders of a majority in principal amount of the outstanding
Debentures may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee with respect to the Debentures. The Trustee, however,
may refuse to follow any such direction that the Trustee determines is unduly
prejudicial to the rights of other registered holders of the Debentures, or
would involve the Trustee in personal liability; provided that the Trustee may
take any other action deemed proper by it that is not inconsistent with such
direction.

     The Indenture provides that while the Trustee generally must mail notice of
a default or Event of Default to the registered holders of the debt securities
of any series issued under the Indenture within 90 days of the Trustee's actual
knowledge of the occurrence, the Trustee may withhold notice of any default or
Event of Default (except in payment on the debt securities) if the Trustee in
good faith determines that the withholding of such notice is in the interest of
the registered holders of that series of debt securities.

MODIFICATION AND WAIVER

     We may amend or supplement the Indenture if the holders of a majority in
principal amount of the Debentures consent to it. Without the consent of the
holder of each Debenture affected, however, no modification may:

     - reduce the amount of Debentures whose holders must consent to an
       amendment, supplement or waiver;

     - reduce the rate of interest or change the time for payment of interest on
       the Debentures;

     - make any change in the method of determining whether an Upward Interest
       Adjustment shall be made for a semi-annual period;

     - reduce the issue price of the Debentures or change its stated maturity;

     - make any change in any redemption or repurchase right to the detriment of
       such holder;

     - make payments on the Debentures payable in currency or consideration
       other than as originally stated in the Debentures;

     - impair the holder's right to receive payment of principal and interest on
       the Debentures or to institute suit for the enforcement of any payment on
       the Debentures;

     - make any change in the percentage of principal amount of Debentures
       necessary to waive compliance with some provisions of the Indenture or to
       make any change in this provision for modification; or

     - waive a continuing default or Event of Default regarding any payment on
       the Debentures.

     We may amend or supplement the Indenture or waive any provision of it
without the consent of any holders of Debentures in some circumstances,
including:

     - to cure any ambiguity, omission, defect or inconsistency;

     - to provide for the assumption of our obligations under the Indenture by a
       successor upon any merger, consolidation or asset transfer permitted
       under the Indenture;

     - to provide for uncertificated Debentures in addition to or in place of
       certificated Debentures or to provide for bearer Debentures;

     - to provide any security for or guarantees of the Debentures;

     - to comply with any requirement to effect or maintain the qualification of
       the Indenture under the Trust Indenture Act of 1939;

                                        38
<PAGE>   40

     - to add covenants that would benefit the holders of Debentures or to
       surrender any rights we have under the Indenture; or

     - to make any change that does not adversely affect the rights of any
       holder of the Debentures, including, without limitation, changing any
       payment record dates as necessary to conform to the then current market
       practice.

     The holders of a majority in principal amount of the outstanding Debentures
may waive any existing or past default or Event of Default. Those holders may
not, however, waive any default or Event of Default in any payment of principal
or interest on any Debenture or compliance with a provision that cannot be
amended or supplemented without the consent of each holder affected.

CALCULATIONS IN RESPECT OF DEBENTURES

     We will be responsible for making all calculations called for under the
Debentures. These calculations include, but are not limited to, determinations
of the market prices of the Debentures and of our common stock, accrued interest
payable on the Debentures, the Accreted Value of the Debentures, the Restated
Principal Amount of the Debentures and the Accreted Conversion Price of the
Debentures. We will make all these calculations in good faith and, absent
manifest error, our calculations will be final and binding on holders of
Debentures. We will provide a schedule of our calculations to the Trustee, and
the Trustee is entitled to rely upon the accuracy of our calculations without
independent verification. The Trustee will forward our calculations to any
holder of Debentures upon the request of that holder.

LIMITATIONS OF CLAIMS IN BANKRUPTCY

     If a bankruptcy proceeding is commenced in respect of us, the claim of a
holder of Debentures is, under Title 11 of the United States Code, limited to
the issue price of the Debentures plus accrued interest from the date of issue
to the commencement of the proceeding.

GOVERNING LAW

     The Indenture and the Debentures will be governed by, and construed in
accordance with, the laws of the State of New York.

TRUSTEE

     Wilmington Trust Company will initially act as Trustee and paying agent for
the Debentures. Wilmington Trust Company currently acts as trustee under:

     - an indenture with Calpine and Calpine's subsidiary, Calpine Capital Trust
       III, dated as of August 9, 2000,

     - an indenture with Calpine dated as of August 10, 2000, and

     - an indenture with Calpine's subsidiary, Calpine Canada Energy Finance
       ULC, pursuant to which Calpine has guaranteed Senior Notes issued by such
       subsidiary.

     A number of Calpine's series of debt securities are presently outstanding
under certain of the above indentures. We may have in the future other
relationships with Wilmington Trust Company.

     If an Event of Default occurs and is continuing, the Trustee will be
required to use the degree of care and skill of a prudent man under the
circumstances in the conduct of his own affairs. The Trustee will become
obligated to exercise any of its powers under the Indenture at the request of
any of the holders of any Debentures only after those holders have offered the
Trustee indemnity reasonably satisfactory to it.

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<PAGE>   41

     If the Trustee becomes one of our creditors, it will be subject to
limitations in the Indenture on its rights to obtain payment of claims or to
realize on some property received for any such claim, as security or otherwise.
The Trustee is permitted to engage in other transactions with us. If, however,
it acquires any conflicting interest, it must eliminate that conflict or resign.

FORM, EXCHANGE, REGISTRATION AND TRANSFER

     We issued the Debentures in registered form, without interest coupons. We
will not charge a service charge for any registration of transfer or exchange of
the Debentures. We may, however, require the payment of any tax or other
governmental charge payable for that registration.

     Debentures are exchangeable for other Debentures, for the same total
principal amount and for the same terms but in different authorized
denominations in accordance with the Indenture. Holders may present Debentures
for registration of transfer at the office of the security registrar or any
transfer agent we designate. The security registrar or transfer agent will
effect the transfer or exchange when it is satisfied with the documents of title
and identity of the person making the request.

     We have appointed the Trustee as security registrar for the Debentures. We
may at any time rescind that designation or approve a change in the location
through which any registrar acts. We are required to maintain an office or
agency for transfers and exchanges in each place of payment. We may at any time
designate additional registrars for the Debentures.

     In the case of any redemption, the security registrar will not be required
to register the transfer or exchange of any Debentures either:

     - during a period beginning 15 days prior to the mailing of the relevant
       notice of redemption and ending on the close of business on the day of
       mailing of the notice, or

     - if the Debentures have been called for redemption, in whole or in part,
       except the unredeemed portion of any Debentures being redeemed in part.

PAYMENT AND PAYING AGENTS

     Payments on the Debentures will be made in U.S. dollars at the office of
the Trustee. At our option, however, we may make payments by check mailed to the
holder's registered address or, with respect to global Debentures, by wire
transfer. We will make interest payments to the person in whose name the
Debentures is registered at the close of business on the record date for the
interest payment.

     The Trustee is designated as our paying agent for payments on Debentures.
We may at any time designate additional paying agents or rescind the designation
of any paying agent or approve a change in the office through which any paying
agent acts.

     Subject to the requirements of any applicable abandoned property laws, the
Trustee and paying agent shall pay to us upon written request any money held by
them for payments on the Debentures that remain unclaimed for two years after
the date upon which that payment has become due. After payment to us, holders
entitled to the money must look to us for payment. In that case, all liability
of the Trustee or paying agent with respect to that money will cease.

NOTICES

     Except as otherwise described in this prospectus, notice to registered
holders of the Debentures will be given by mail to the holders at the addresses
as they appear in the security register. Notices will be deemed to have been
given on the date of such mailing.

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<PAGE>   42

REPLACEMENT OF DEBENTURES

     We will replace any Debentures that become mutilated, destroyed, stolen or
lost at the expense of the holder upon delivery to the Trustee of the mutilated
Debentures or evidence of the loss, theft or destruction satisfactory to us and
the Trustee. In the case of lost, stolen or destroyed Debentures, indemnity
satisfactory to the Trustee and us may be required at the expense of the holder
of the Debentures before a replacement note will be issued.

PAYMENT OF STAMP AND OTHER TAXES

     We will pay all stamp and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or taxing authority thereof
or therein with respect to the issuance of the Debentures. We will not be
required to make any payment with respect to any other tax, assessment or
governmental charge imposed by any government or any political subdivision
thereof or taxing authority thereof or therein.

BOOK-ENTRY SYSTEM

     The Debentures are represented by one or more Global Securities (each a
"Global Security"). Each Global Security is deposited with, or on behalf of, DTC
and registered in the name of a nominee of DTC. Except under circumstances
described below, the Debentures have been issued in definitive form.

     Upon the issuance of a Global Security, DTC will credit on its book-entry
registration and transfer system the accounts of persons designated by the
underwriter with the respective principal amounts of the Debentures represented
by the Global Security. Ownership of beneficial interests in a Global Security
will be limited to persons that have accounts with DTC or its nominee
("participants") or persons that may hold interests through participants.
Ownership of beneficial interests in a Global Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
DTC or its nominee (with respect to interests of persons other than
participants). The laws of some states require that some purchasers of
securities take physical delivery of the securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
a Global Security.

     So long as DTC or its nominee is the registered owner of a Global Security,
DTC or its nominee, as the case may be, will be considered the sole owner or
holder of the Debentures represented by that Global Security for all purposes
under the Indenture. Except as provided below, owners of beneficial interests in
a Global Security will not be entitled to have Debentures represented by that
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of Debentures in definitive form and will not be
considered the owners or holders thereof under the Indenture. Principal and
interest payments, if any, on Debentures registered in the name of DTC or its
nominee will be made to DTC or its nominee, as the case may be, as the
registered owner of the relevant Global Security. Neither our company, the
Trustee, any paying agent nor the registrar for the Debentures will have any
responsibility or liability for any aspect of the records relating to, or
payments made on account of beneficial interests in, a Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
interests.

     We expect that DTC or its nominee, upon receipt of any payment of principal
or interest, if any, will credit immediately participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of the relevant Global Security as shown on the records of
DTC or its nominee. We also expect that payments by participants to owners of
beneficial interests in a Global Security held through these participants will
be governed by standing instructions and customary practices, as is the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of the participants.

                                        41
<PAGE>   43

     If DTC is at any time unwilling or unable to continue as a depositary and a
successor depositary is not appointed by us within 90 days, we will issue
Debentures in definitive form in exchange for each entire Global Security. In
addition, we may at any time and in our sole discretion determine not to have
Debentures represented by Global Securities and, in such event, will issue
Debentures in definitive form in exchange for each entire Global Security
relating to the Debentures. In any such instance, an owner of a beneficial
interest in a Global Security will be entitled to physical delivery in
definitive form of Debentures represented by the Global Security equal in
principal amount to such owner's beneficial interest and to have the Debentures
registered in its name. Debentures so issued in definitive form will be issued
as registered Debentures in denominations of $1,000 and multiples thereof,
unless otherwise specified by us.

                                        42
<PAGE>   44

                              REGISTRATION RIGHTS

     We entered into a registration rights agreement with the Initial Purchaser
(the "Registration Rights Agreement"). In the Registration Rights Agreement we
agreed, for the benefit of the holders of the Debentures and the shares of
common stock issuable upon conversion of the Debentures (together, the
"Registrable Securities") that we would, at our expense:

     - file with the SEC, within 90 days after the date the Debentures were
       originally issued, a shelf registration statement covering resales of the
       Registrable Securities;

     - use our best efforts to cause the shelf registration statement to be
       declared effective under the Securities Act within 180 days after the
       date the Debentures were originally issued, subject to our right to
       postpone having the shelf registration statement declared effective for
       an additional 90 days in limited circumstances; and

     - use our best efforts to keep effective the shelf registration statement
       until two years after the date the Debentures were issued or, if earlier,
       until there are no outstanding Registrable Securities (the "Effectiveness
       Period").

     We may suspend the use of the prospectus that is part of the shelf
registration statement in connection with the sales of Registrable Securities
during prescribed periods of time for reasons relating to the acquisition or
divestiture of assets, pending corporate developments, and similar events. We
will provide to each holder of Registrable Securities copies of the prospectus
that is a part of the shelf registration statement, notify each holder when the
shelf registration statement has become effective and take certain other actions
required to permit public resales of the Registrable Securities.

     We may, upon written notice to all the holders of Registrable Securities,
postpone having the shelf registration statement declared effective, for a
reasonable period not to exceed 90 days if we possess material non-public
information, the disclosure of which would have a material adverse effect on us
and our subsidiaries, taken as a whole. Notwithstanding any such postponement,
additional interest ("Liquidated Damages") will accrue on the Debentures (or on
the common stock into which any Debentures have been converted) if either of the
following events ("Registration Defaults") occurs:

     - on or prior to 90 days following the date the Debentures were originally
       issued, a shelf registration statement has not been filed with the SEC;
       or

     - on or prior to 180 days following the date the Debentures were originally
       issued, the shelf registration statement is not declared effective.

     In that case, Liquidated Damages will accrue on the Registrable Securities
from and including the day following the Registration Default to but excluding
the day on which the Registration Default has been cured. Liquidated Damages
will be paid semi-annually in arrears, with the first semi-annual payment due on
the first interest payment date following the date of such Registration Default.
Liquidated Damages accrue either on the principal amount of the Debentures on
the date following the Registration Default or based on the Accreted Conversion
Price (as defined below) on the day following the Registration Default (whether
or not any Debentures remain outstanding after that date). "Accreted Conversion
Price" shall mean, as of any date, the Accreted Value divided by the number of
shares of our common stock issuable upon conversion of a Debenture on such date.

     The rates at which Liquidated Damages will accrue will be as follows:

     - 0.25% of the principal amount of the Debentures (or the Accreted
       Conversion Price) to and including the 90th day after the Registration
       Default; and

     - 0.50% of the principal amount of the Debentures (or the Accreted
       Conversion Price) from and after the 91st day after the Registration
       Default.

                                        43
<PAGE>   45

     We have agreed in the Registration Rights Agreement to use our best efforts
to cause the shares of common stock issuable upon conversion of the Debentures
to be listed on the NYSE or other stock exchange or trading system on which our
common stock primarily trades on or prior to the Effective Time of the shelf
registration statement.

     This summary of certain provisions of the Registration Rights Agreement may
not contain all the information important to you. You may request from us a copy
of the Registration Rights Agreement.

CALCULATIONS IN RESPECT OF DEBENTURES

     We will be responsible for making all calculations called for under the
Debentures. These calculations include, but are not limited to, determinations
of the market prices of the Debentures and of our common stock, accrued interest
payable on the Debentures, the Accreted Value of the Debentures, the Restated
Principal Amount of the Debentures and the Accreted Conversion Price of the
Debentures. We will make all these calculations in good faith and, absent
manifest error, our calculations will be final and binding on holders of
Debentures. We will provide a schedule of our calculations to the Trustee, and
the Trustee is entitled to rely upon the accuracy of our calculations without
independent verification. The Trustee will forward our calculations to any
holder of Debentures upon the request of that holder.

LIMITATIONS OF CLAIMS IN BANKRUPTCY

     If a bankruptcy proceeding is commenced in respect of us, the claim of a
holder of Debentures is, under Title 11 of the United States Code, limited to
the issue price of the Debentures plus accrued interest from the date of issue
to the commencement of the proceeding.

GOVERNING LAW

     The Indenture and the Debentures will be governed by, and construed in
accordance with, the laws of the State of New York.

                                        44
<PAGE>   46

                          DESCRIPTION OF CAPITAL STOCK

     Our authorized capital stock consists of 1,000,000,000 shares of common
stock, $.001 par value, and 10,000,000 shares of preferred stock, $.001 par
value. The following summary is qualified in its entirety by the provisions of
our certificate of incorporation and by-laws, which have been incorporated by
reference as exhibits to the Registration Statement of which this prospectus
constitutes a part. The information provided below reflects the 2 for 1 split of
our common stock that became effective on October 7, 1999, the 2 for 1 split of
our common stock that became effective on June 8, 2000 and the 2 for 1 split of
our common stock that became effective on November 14, 2000.

COMMON STOCK

     The holders of common stock are entitled to one vote per share on all
matters to be voted upon by stockholders. Subject to preferences that may be
applicable to any outstanding preferred stock, the holders of common stock are
entitled to receive ratably such dividends, if any, as may be declared from time
to time by the board of directors out of legally available funds. See
"-- Dividend Policy." In the event of our liquidation, dissolution or winding
up, the holders of common stock are entitled to share ratably in all assets
remaining after payment of liabilities, subject to prior liquidation rights of
preferred stock, if any, then outstanding. The common stock has no preemptive or
conversion rights or other subscription rights. There are no redemption or
sinking fund provisions applicable to the common stock. All shares of common
stock to be outstanding upon the redemption or exchange of the exchangeable
shares will be fully paid and non-assessable. Pursuant to a rights agreement
entered into in June of 1997, our shares of common stock outstanding prior to
the occurrence of events specified in the rights agreement have certain
preferred share purchase rights, which are set forth in more detail in the
rights agreement which is available from us upon request as described in "Where
You Can Find More Information." See "-- Anti-Takeover Effects of Provisions of
the Certificate of Incorporation, Bylaws, Rights Plan and Delaware Law -- Rights
Plan."

DIVIDEND POLICY

     We do not anticipate paying any cash dividends on our common stock in the
foreseeable future because we intend to retain our earnings to finance the
expansion of our business and for general corporate purposes. In addition, our
ability to pay cash dividends is restricted under certain of our indentures and
our other debt agreements. Future cash dividends, if any, will be at the
discretion of our board of directors and will depend upon, among other things,
our future operations and earnings, capital requirements, general financial
condition, contractual restrictions and such other factors as the board of
directors may deem relevant.

PREFERRED STOCK

     As of July 26, 2001, there was one share of preferred stock outstanding.
Our board of directors has the authority, without further vote or action by the
stockholders, to issue from time to time up to 10,000,000 shares of preferred
stock in one or more series, and to fix the rights, preferences, privileges,
qualifications, limitations and restrictions granted to or imposed upon any
wholly unissued shares of undesignated preferred stock, including without
limitation dividend rights, if any, voting rights, if any, and liquidation and
conversion rights, if any. Our board of directors has the authority to fix the
number of shares constituting any series and the designations of such series
without any further vote or action by the stockholders. Our board of directors,
without stockholder approval, can issue preferred stock with voting and
conversion rights which could adversely affect the voting power of the holders
of our common stock. The issuance of preferred stock may have the effect of
delaying, deferring or preventing a change in control of our company, or could
delay or prevent a transaction that might otherwise give our

                                        45
<PAGE>   47

stockholders an opportunity to realize a premium over the then prevailing market
price of the common stock.

     Our board of directors has authorized the issuance of up to 1,000,000
shares of Series A Participating Preferred Stock, par value $.001 per share,
pursuant to a rights plan adopted by Calpine's board of directors on June 5,
1997. As of July 26, 2001, no shares of our participating preferred stock were
outstanding. A description of the rights plan and the participating preferred
stock is set forth under "-- Anti-Takeover Effects of Provisions of the
Certificate of Incorporation, Bylaws and Delaware Law -- Rights Plan," below.

     Upon consummation of the Encal acquisition, a series of preferred stock of
Calpine, consisting of one share, was designated as special voting preferred
stock of Calpine, having a par value of $.001 per share, and a liquidation
preference of $.001. Except as otherwise required by law or our certificate of
incorporation, the one share of special voting preferred stock possesses a
number of votes for the election of directors and on all other matters submitted
to a vote of Calpine's stockholders equal to the number of outstanding Calpine
common equivalent shares issued by our wholly-owned subsidiary from time to time
and not owned by us or any entity controlled by us. The holders of our common
stock and the holder of the share of special voting preferred stock vote
together as a single class on all matters on which holders of common stock are
eligible to vote. In the event of our liquidation, dissolution or winding-up,
all outstanding Calpine common equivalent shares will automatically be exchanged
for shares of our common stock, and the holder of the special voting preferred
stock will not be entitled to receive any of our assets available for
distribution to our stockholders. The holder of the share of special voting
preferred stock will not be entitled to receive dividends. The share of special
voting preferred stock was issued to CIBC Mellon Trust Company, as trustee under
a voting and exchange trust agreement among us, Calpine Canada Holdings Ltd. and
the trustee. At such time as the one share of special voting preferred stock has
no votes attached to it because there are no Calpine common equivalent shares
outstanding not owned by us or an entity controlled by us, the one share of
special voting preferred stock will be canceled.

ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE CERTIFICATE OF INCORPORATION, BYLAWS
AND DELAWARE LAW

  Certificate of Incorporation and Bylaws

     Our certificate of incorporation and bylaws provide that our board of
directors is classified into three classes of directors serving staggered,
three-year terms. The certificate of incorporation also provides that directors
may be removed only by the affirmative vote of the holders of two-thirds of the
shares of our capital stock entitled to vote, voting together as a single class.
Any vacancy on the board of directors may be filled only by vote of the majority
of directors then in office. Further, the certificate of incorporation provides
that any business combination (as therein defined) requires the affirmative vote
of the holders of two-thirds of the shares of our capital stock entitled to
vote, voting together as a single class. The certificate of incorporation also
provides that all stockholder actions must be effected at a duly called meeting
and not by a consent in writing. The by-laws provide that our stockholders may
call a special meeting of stockholders only upon a request of stockholders
owning at least 50% of Calpine's capital stock. These provisions of the
certificate of incorporation and bylaws could discourage potential acquisition
proposals and could delay or prevent a change in control of our company. These
provisions are intended to enhance the likelihood of continuity and stability in
the composition of the board of directors and in the policies formulated by the
board of directors and to discourage certain types of transactions that may
involve an actual or threatened change of control of our company. These
provisions are designed to reduce our vulnerability to an unsolicited
acquisition proposal. The provisions also are intended to discourage certain
tactics that may be used in proxy fights. However, such provisions could have
the effect of discouraging others from making tender offers for our shares and,
as a consequence, they also may inhibit fluctuations in the

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<PAGE>   48

market price of our shares that could result from actual or rumored takeover
attempts. Such provisions also may have the effect of preventing changes in our
management.

  Rights Plan

     On June 5, 1997, we adopted a stockholders' rights plan to strengthen our
ability to protect our stockholders. The rights plan is designed to protect
against abusive or coercive takeover tactics that are not in the best interests
of Calpine or its stockholders. To implement the rights plan, we declared a
dividend of one preferred share purchase right for each outstanding share of our
common stock held on record as of June 18, 1997, and directed the issuance of
one preferred share purchase right with respect to each share of our common
stock that shall become outstanding thereafter until the rights become
exercisable or they expire as described below. Each right initially represents a
contingent right to purchase, under certain circumstances, one one-thousandth of
a share, called a "unit," of our Series A Participating Preferred Stock, par
value $.001 per share, at a price of $80.00 per unit, subject to adjustment. The
rights become exercisable and trade independently from our common stock upon the
public announcement of the acquisition by a person or group of 15% or more of
our common stock, or ten days after commencement of a tender or exchange offer
that would result in the acquisition of 15% or more of our common stock. Each
unit purchased upon exercise of the rights will be entitled to a dividend equal
to any dividend declared per share of common stock and will have one vote,
voting together with the common stock. In the event of our liquidation, each
share of the participating preferred stock will be entitled to any payment made
per share of common stock.

     If we are acquired in a merger or other business combination transaction
after a person or group has acquired 15% or more of our common stock, each right
will entitle its holder to purchase at the right's exercise price a number of
the acquiring company's shares of common stock having a market value of twice
the right's exercise price. In addition, if a person or group acquires 15% or
more of our common stock, each right will entitle its holder (other than the
acquiring person or group) to purchase, at the right's exercise price, a number
of fractional shares of our participating preferred stock or shares of our
common stock having a market value of twice the right's exercise price.

     The rights expire on June 18, 2007, unless redeemed earlier by us. We can
redeem the rights at a price of $.01 per right at any time before the rights
become exercisable, and thereafter only in limited circumstances.

  Delaware Anti-Takeover Statute

     Calpine is subject to Section 203 of the Delaware General Corporation Law
("Section 203"), which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the date that such stockholder
became an interested stockholder, unless: (1) prior to such date, the board of
directors of the corporation approved either the business combination or the
transaction that resulted in the stockholder becoming an interested stockholder;
(2) upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares owned (x) by persons who are directors and also
officers and (y) by employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer; or (3) on or subsequent to
such date, the business combination is approved by the board of directors and
authorized at an annual or special meeting of stockholders, and not by written
consent, by the affirmative vote of at least 66 2/3% of the outstanding voting
stock that is not owned by the interested stockholder.

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<PAGE>   49

     Section 203 defines the term business combination to include: (1) any
merger or consolidation involving the corporation or any of its direct or
indirect majority-owned subsidiaries and the interested stockholder; (2) any
sale, transfer, pledge or other disposition of 10% or more of the assets of the
corporation or any of its direct or indirect majority-owned subsidiaries
involving the interested stockholder; (3) subject to certain exceptions, any
transaction that results in the issuance or transfer by the corporation of any
stock of the corporation or any of its direct or indirect majority-owned
subsidiaries of any stock of the corporation or that subsidiary to the
interested stockholder; (4) any transaction involving the corporation or any of
its direct or indirect majority-owned subsidiaries that has the effect of
increasing the proportionate share of the stock of any class or series of the
corporation or that subsidiary beneficially owned by the interested stockholder;
or (5) the receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or through
the corporation or any of its direct of indirect majority-owned subsidiaries. In
general, Section 203 defines an interested stockholder as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.

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<PAGE>   50

             CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

     The following is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of the Debentures and
common stock into which the Debentures may be converted. Unless otherwise
stated, this summary deals only with Debentures or common stock held as capital
assets by U.S. Holders. As used in this prospectus, "U.S. Holders" are any
beneficial owners of the Debentures or common stock, that are, for United States
federal income tax purposes: (1) citizens or residents of the United States, (2)
corporations created or organized in or under the laws of the United States, any
state thereof or the District of Columbia, (3) estates, the income of which is
subject to United States federal income taxation regardless of its source, or
(4) trusts if (A) a court within the United States is able to exercise primary
supervision over the administration of the trust and (B) one or more United
States persons have the authority to control all substantial decisions of the
trust. As used in this prospectus, "Non-U.S. Holders" are holders of the
securities that are, for United States federal income tax purposes (1)
nonresident alien individuals; (2) foreign corporations; or (3) foreign estates
or trusts that are not subject to United States federal income taxation on their
worldwide income. If a partnership (including for this purpose any entity
treated as a partnership for United States federal income tax purposes) is a
beneficial owner of Debentures or common stock, the treatment of a partner in
the partnership will generally depend upon the status of the partner and upon
the activities of the partnership. A holder of Debentures or common stock that
is a partnership and partners in such partnership should consult their tax
advisors about the United States federal income tax consequences of holding and
disposing of the Debentures or common stock, as the case may be. This summary
does not deal with special classes of holders such as banks, thrifts, real
estate investment trusts, regulated investment companies, insurance companies,
dealers in securities or currencies, or tax-exempt investors and does not
discuss Debentures or common stock held as part of a hedge, straddle, "synthetic
security" or other integrated transaction. This summary also does not address
the tax consequences to U.S. expatriates, persons who own, directly or
indirectly, 10% or more of our voting power or persons that have a functional
currency other than the U.S. dollar or the tax consequences to shareholders,
partners or beneficiaries of a holder of the Debentures or common stock.
Further, it does not include any description of any alternative minimum tax
consequences, United States federal estate or gift tax laws or the tax laws of
any state or local government or of any foreign government that may be
applicable to the Debentures or common stock.

     This summary applies only to the Initial Purchaser that purchases
Debentures at their "issue price." The "issue price" of the Debentures will
equal the first price at which a substantial amount of the Debentures is sold
for cash to the public, not including sales to bond houses, brokers or similar
persons or organizations acting in the capacity of underwriters, placement
agents or wholesalers. This summary is based on the Internal Revenue Code of
1986, as amended, the Treasury regulations promulgated thereunder and
administrative and judicial interpretations thereof, all as of the date hereof,
and all of which are subject to change and differing interpretations, possibly
on a retroactive basis. No statutory, administrative or judicial authority
directly addresses the treatment of the Debentures or instruments similar to the
Debentures for United States federal income tax purposes. Therefore, there can
be no assurance that the Internal Revenue Service (the "IRS") will not challenge
one or more of the conclusions described in this prospectus, and Calpine has not
obtained, nor does Calpine intend to obtain, a ruling from the IRS with respect
to the United States federal income tax consequences of acquiring, holding or
disposing of the Debentures or the common stock.

     You should consult with your own tax advisor regarding the federal, state,
local and foreign income, franchise, personal property, and any other tax
consequences of the purchase, ownership and disposition of the Debentures and
the common stock.

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<PAGE>   51

CLASSIFICATION OF THE DEBENTURES

     Pursuant to the terms of the Indenture, we and each holder of the
Debentures agreed, for United States federal income tax purposes, to treat the
Debentures as indebtedness for United States federal income tax purposes subject
to the regulations governing contingent payment debt instruments and to be bound
by our application of those regulations to the Debentures, including our
determination of the rate at which interest will be deemed to accrue on the
Debentures for United States federal income tax purposes. The remainder of this
discussion assumes that the Debentures will be treated in accordance with that
agreement and our determinations. However, the proper United States federal
income tax treatment of a holder of a Debenture is uncertain in various
respects, and no assurance can be given that the IRS will not assert that the
Debentures should be treated differently or that such an assertion would not
prevail. Such treatment by the IRS and a court could affect the amount, timing
and character of income, gain or loss in respect of an investment in Debentures.
In particular, it might be determined that a holder should have accrued interest
income at a lower rate, should not have recognized income or gain upon the
conversion and should have recognized capital gain upon a taxable disposition of
its Debenture. In addition, if the IRS successfully asserts that the Debentures
are not debt, Non-U.S. Holders would generally be subject to a 30% United States
federal withholding tax on payments of contingent interest made in respect of
the Debentures.

U.S. HOLDERS

  Accrual of Interest on the Debentures

     Under the rules governing contingent payment debt obligations, a United
States person generally will be required to accrue interest income on the
Debentures, in the amounts described below, regardless of whether the U.S.
Holder uses the cash or accrual method of tax accounting. Accordingly, U.S.
Holders would likely be required to include interest in taxable income in each
year in excess of the stated yield to maturity of the Debentures and in excess
of any contingent interest payments actually received in that year.

     A U.S. Holder must accrue an amount of ordinary income, as original issue
discount for United States federal income tax purposes, for each accrual period
prior to and including the maturity date of the Debentures that equals:

     - the product of (i) the adjusted issue price (as defined below) of the
       Debentures as of the beginning of the accrual period; and (ii) the
       comparable yield to maturity (as defined below) of the Debentures,
       adjusted for the length of the accrual period;

     - divided by the number of days in the accrual period; and

     - multiplied by the number of days during the accrual period that the U.S.
       Holder held the Debentures.

     The issue price of a Debenture is the first price at which a substantial
amount of the Debentures is sold to the public, excluding bond houses, brokers
or similar persons or organizations acting in the capacity of underwriters,
placement agents or wholesalers. The adjusted issue price of a Debenture is its
issue price at the beginning of the first accrual period, and for any accrual
period after the first accrual period will be the sum of the issue price
increased by any interest income previously accrued, determined without regard
to any positive or negative adjustments to interest accruals described below and
decreased by the projected amounts of any payments with respect to the
Debentures.

     Under the rules governing contingent payment debt obligations, we are
required to establish the "comparable yield" for the Debentures. We have
determined that the comparable yield for the Debentures is the annual yield we
would incur, as of the initial issue date, on a fixed rate nonconvertible debt
security with no contingent payments, but with terms and conditions

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<PAGE>   52

otherwise comparable to those of the Debentures including the level of
subordination, term, timing of payments and general market conditions, but
excluding any adjustments for liquidity or the riskiness of the contingencies
with respect to the Debentures. Accordingly, we have determined the comparable
yield to be 9.44% per annum compounded semi-annually.

     We are required to provide to U.S. Holders, solely for United States
federal income tax purposes, a schedule of the projected amounts of payments on
the Debentures. This schedule must produce the comparable yield. Our
determination of the projected payment schedule for the Debentures includes
estimates for payments of contingent interest and an estimate for a payment at
maturity taking into account the conversion feature. The comparable yield and
schedule of projected payments is set forth in the Indenture. U.S. Holders may
also obtain the projected payment schedule by submitting a written request for
it to Rick Barazza, Vice-President, Investor Relations, Calpine Corporation, 50
West San Fernando Street, San Jose, CA 95113.

     THE COMPARABLE YIELD AND THE SCHEDULE OF PROJECTED PAYMENTS ARE NOT
DETERMINED FOR ANY OTHER PURPOSE OTHER THAN FOR THE DETERMINATION OF A U.S.
HOLDER'S INTEREST ACCRUALS AND ADJUSTMENTS THEREOF IN RESPECT OF THE DEBENTURES
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES AND DO NOT CONSTITUTE A PROJECTION
OR REPRESENTATION REGARDING THE ACTUAL AMOUNTS PAYABLE TO U.S. HOLDERS OF THE
DEBENTURES.

  Adjustments to Interest Accruals on the Debentures

     A U.S. Holder will be required to recognize additional interest income
equal to the amount of any net positive adjustment, i.e., the excess of actual
payments over projected payments, in respect of the Debentures for a taxable
year. If a U.S. Holder incurs a net negative adjustment, i.e., the excess of
projected payments over actual payments, in respect of the Debentures for a
taxable year, the net negative adjustment will (a) reduce the U.S. Holder's
interest income on the Debentures for that taxable year, and (b) to the extent
of any excess after the application of (a), give rise to an ordinary loss to the
extent of the U.S. Holder's interest income on the Debentures during the prior
taxable years, reduced to the extent such interest was offset by prior negative
adjustments.

     A net negative adjustment is not subject to the two percent floor
limitation imposed on miscellaneous itemized deductions under Section 67 of the
Internal Revenue Code.

  Sale, Exchange, Conversion or Redemption

     Generally, the sale, exchange or conversion of Debentures, or the
redemption of Debentures for cash, will result in taxable gain or loss to a U.S.
Holder. In addition, as described above, our calculation of the comparable yield
and the schedule of projected payments for the Debentures includes the receipt
of stock upon conversion of Debentures into our common stock as a contingent
payment with respect to the Debentures. Accordingly, we intend to treat the
receipt of our common stock by a U.S. Holder upon the conversion of Debentures,
or upon the redemption of Debentures where we elect to pay in common stock, as a
contingent payment under the contingent payment debt rules. As described above,
holders are generally bound by our determination of the comparable yield and the
schedule of projected payments. Under this treatment, a sale or exchange, or
such a redemption, or conversion will also result in taxable gain or loss to the
U.S. Holder. The amount of gain or loss on a taxable sale, exchange or
redemption will be equal to the difference between (a) the amount of cash plus
the fair market value of any other property received by the U.S. Holder,
including the fair market value of any common stock received, in the conversion
or redemption and (b) the U.S. Holder's adjusted tax basis in the Debentures. A
U.S. Holder's adjusted tax basis in Debentures will generally be equal to the
U.S. Holder's original purchase price for the Debentures, increased by any
interest income previously accrued by the U.S. Holder (determined without regard
to any positive or negative

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<PAGE>   53

adjustments to interest accruals described above), and decreased by the amount
of any projected payments on the Debentures to the U.S. Holder. Gain recognized
upon a sale, exchange, conversion or redemption of Debentures will generally be
treated as ordinary interest income; any loss will be ordinary loss to the
extent of interest previously included in income, and thereafter, capital loss
(which will be long-term if the Debentures are held for more than one year). The
deductibility of net capital losses by individuals and corporations is subject
to limitations.

     A U.S. Holder's tax basis in our common stock received upon a conversion of
Debentures or upon a holder's exercise of a put right that we elect to pay in
common stock will equal the then current fair market value of such common stock.
The U.S. Holder's holding period for the common stock received will commence on
the day immediately following the date of conversion or redemption.

  Distributions on Common Stock

     If a U.S. Holder converts the Debentures into common stock, in general,
distributions on the common stock that are paid out of our current or
accumulated earnings and profits, as defined for United States federal income
tax purposes, will constitute dividends and will be includible in income by a
holder and taxable as ordinary income when received or accrued, in accordance
with that holder's method of accounting for United States federal income tax
purposes. If a distribution exceeds our current and accumulated earnings and
profits, the excess will be treated first as a tax-free return of the U.S.
Holder's investment, up to the holder's basis in the common stock. Any remaining
excess will be treated as capital gain.

  Constructive Dividends

     If at any time we make a distribution of property to our stockholders that
would be taxable to the stockholders as a dividend for federal income tax
purposes and, in accordance with the anti-dilution provisions of the Debentures,
the conversion rate of the Debentures is increased, such increase may be deemed
to be the payment of a taxable dividend to holders of the Debentures. For
example, an increase in the exchange rate in the event of distribution of our
evidence of indebtedness or our assets or an increase in the event of an
extraordinary cash dividend will generally result in deemed dividend treatment
to holders of the Debentures, but generally an increase in the event of stock
dividends or the distribution of rights to subscribe for common stock will not.

  Sale or Exchange of Common Stock

     In general, a U.S. Holder will recognize capital gain or loss upon the sale
or exchange of the common stock equal to the difference between the amount
realized on such sale or exchange and such holder's adjusted tax basis in such
shares. The deductibility of net capital losses by individuals and corporations
is subject to limitations. Holders should consult their tax advisors regarding
the treatment of capital gains and losses.

NON-U.S. HOLDERS

     The rules governing United States federal income taxation of Non-U.S.
Holders are complex and no attempt will be made in this prospectus to provide
more than a summary of such rules. Non-U.S. Holders should consult with their
own tax advisors to determine the effect of federal, state, local and foreign
income tax laws, as well as treaties, with regard to an investment in the
Debentures and common stock, including any reporting requirements and, in
particular, the proper application of the United States federal withholding tax
rules.

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  Payments Made With Respect to the Debentures

     Although the matter is not free from doubt, the 30% United States federal
withholding tax will not apply to any payment to a Non-U.S. Holder of principal
or interest (including amounts taken into income as interest under the accrual
rules described above under "-- U.S. Holders" and amounts attributable to the
common stock received upon a conversion of the Debentures) on Debentures,
provided that: (i) the Non-U.S. Holder does not own, actually or constructively,
10% or more of the total combined voting power of all classes of our stock
entitled to vote; (ii) the Non-U.S. Holder is not a controlled foreign
corporation related, directly or indirectly, to us through stock ownership;
(iii) the Non-U.S. Holder is not a bank which acquired the Debentures in
consideration for an extension of credit made pursuant to a loan agreement
entered into in the ordinary course of business; (iv) the Debentures and our
common stock are actively traded within the meaning of Section
871(h)(4)(c)(v)(I) of the Internal Revenue Code and the Non-U.S. Holder's
holdings are deemed not to be a United States real property interest within the
meaning of Section 897(c)(1) of the Internal Revenue Code (as described below
under "-- Foreign Investment in Real Property Tax Act"); and (v) either (A) the
beneficial owner of Debentures certifies to us or our paying agent on IRS Form
W-8BEN, under penalties of perjury, that it is not a United States person and
provides its name, address and certain other information or (B) the beneficial
owner holds its Debentures through certain foreign intermediaries or certain
foreign partnerships and such holder satisfies certain certification
requirements.

     If the Non-U.S. Holder cannot satisfy the requirements described above,
payments of interest (including amounts taken into income under the accrual
rules described above under "-- U.S. Holders" and amounts attributable to the
common stock received upon a conversion of the Debentures) will be subject to
the 30% United States federal withholding tax unless the Non-U.S. Holder
provides us with a properly executed (1) IRS Form W-8BEN (or successor form)
claiming an exemption from or reduction in withholding under an applicable tax
treaty or (2) IRS Form W-8ECI (or successor form) stating that interest paid on
the Debentures is not subject to withholding tax because it is effectively
connected with the Non-U.S. Holder's conduct of a trade or business in the
United States. In addition, if the Debentures are not actively traded, within
the meaning of Section 871(h)(4)(C)(v)(I) of the Internal Revenue Code, any cash
interest attributable to an Upward Interest Adjustment will be subject to a 30%
United States federal withholding tax, unless the Non-U.S. Holder can satisfy
condition (1) or (2) described in the preceding sentence.

     If a Non-U.S. Holder of the Debentures is engaged in a trade or business in
the United States, and if interest on the Debentures is effectively connected
with the conduct of such trade or business, the Non-U.S. Holder, although exempt
from the withholding tax discussed in the preceding paragraphs, will generally
be subject to regular United States federal income tax on interest and on any
gain realized on the sale or exchange of the Debentures in the same manner as if
it were a U.S. Holder. Such a Non-U.S. Holder will be required to provide to the
withholding agent a properly executed IRS Form W-8ECI (or successor form) in
order to claim an exemption from withholding tax. In addition, if such a
Non-U.S. Holder is a foreign corporation, such Non-U.S. Holder may be subject to
a branch profits tax equal to 30% (or such lower tax rate provided by an
applicable treaty) of its effectively connected earnings and profits for the
taxable year, subject to certain adjustments.

  Sale or Exchange of Debentures or Common Stock

     Subject to the discussion below regarding "Foreign Investment in Real
Property Tax Act," a Non-U.S. Holder will generally not be subject to United
States federal income or withholding tax with respect to gain upon the sale,
exchange, or other disposition (other than a conversion) of Debentures or common
stock, unless: (1) the income or gain is "U.S. trade or business income," which
means income or gain that is effectively connected with the conduct by the Non-
U.S. Holder of a trade or business, or, in the case of a treaty resident,
attributable to a

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<PAGE>   55

permanent establishment or a fixed base, in the United States; (2) such Non-U.S.
Holder is an individual who is present in the United States for 183 days or more
in the taxable year of disposition and certain other conditions are met; (3)
such Non-U.S. Holder is subject to tax pursuant to the provisions of the
Internal Revenue Code applicable to certain United States expatriates; or (4) in
the case of an amount which is attributable to original issue discount, the
Non-U.S. Holder does not meet the conditions for exemption from United States
federal withholding tax described above.

     U.S. trade or business income of a Non-U.S. Holder will generally be
subject to regular United States income tax in the same manner as if it were
realized by a U.S. Holder. Non-U.S. Holders that realize U.S. trade or business
income with respect to the Debentures or common stock should consult their tax
advisors as to the treatment of such income or gain. In addition, U.S. trade or
business income of a Non-U.S. Holder that is a corporation may be subject to a
branch profits tax at a rate of 30%, or such lower rate provided by an
applicable income tax treaty.

  Distributions on Common Stock

     A Non-U.S. Holder of our common stock will generally be subject to United
States federal withholding tax at a 30% rate (or lower rate provided under any
applicable income tax treaty) on distributions by us with respect to our common
stock that are treated as dividends paid (and on dividends deemed paid on the
Debentures or common stock, as described above under "U.S.
Holders -- Constructive Dividends"). Except to the extent that an applicable tax
treaty otherwise provides, generally a Non-U.S. Holder will be taxed in the same
manner as a U.S. Holder on dividends paid (or deemed paid) that are effectively
connected with the Non-U.S. Holder's conduct of a trade or business in the
United States, and a corporate Non-U.S. Holder may also be subject to a United
States branch profits tax at a 30% rate or such lower rate as may be specified
in an applicable income tax treaty.

FOREIGN INVESTMENT IN REAL PROPERTY TAX ACT

     Under the Foreign Investment in Real Property Tax Act, any person who
acquires a "United States real property interest" (as described below) from a
foreign person must deduct and withhold a tax equal to 10% of the amount
realized by the foreign transferor. In addition, a foreign person who disposes
of a United States real property interest generally is required to recognize
gain or loss that is subject to United States federal income tax. A "United
States real property interest" generally includes any interest (other than an
interest solely as a creditor) in a United States corporation unless it is
established under specific procedures that the corporation is not (and was not
for the prior five-year period) a "United States real property holding
corporation." We believe that we are likely to be classified as a "United States
real property holding corporation" and we can give no assurance that we will not
continue to be classified as a United States real property holding corporation.
However, so long as our stock is regularly traded on an established securities
market, an exemption should apply to the Debentures and the common stock except
(i) in the case of Debentures, if the Debentures are or become regularly traded,
with respect to a Non-U.S. Holder that owns more than 5% of the Debentures, and
(ii) otherwise, and in the case of the common stock, with respect to a Non-U.S.
Holder whose beneficial and/or constructive ownership of common stock exceeds 5%
of the total fair market value of the common stock.

     Any investor that may approach or exceed the 5% ownership threshold
discussed above, either alone or in conjunction with related persons, should
consult its own tax advisor concerning the United States tax consequences that
may result. A Non-U.S. Holder who sells or otherwise disposes of common stock
may be required to inform its transferee whether such common stock constitutes a
United States real property interest.

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BACKUP WITHHOLDING AND INFORMATION REPORTING

  U.S. Holders

     Payments of interest or dividends made by us on, or the proceeds of the
sale or other disposition of, the Debentures or shares of common stock may be
subject to information reporting and U.S. federal backup withholding tax
(currently 30.5%) if the recipient of such payment fails to supply an accurate
taxpayer identification number or otherwise fails to comply with applicable
United States information reporting or certification requirements. Any amount
withheld from a payment to a U.S. Holder under the backup withholding rules is
allowable as a credit against the holder's U.S. federal income tax, provided
that the required information is furnished to the IRS.

  Non-U.S. Holders

     A Non-U.S. Holder may be required to comply with certification procedures
to establish that the holder is not a U.S. person in order to avoid backup
withholding tax requirements with respect to our payments of principal and
interest, including cash payments in respect of original issue discount, on the
Debentures. In addition, we must report annually to the IRS and to each Non-U.S.
Holder the amount of any dividends paid to, and the tax withheld with respect
to, such holder, regardless of whether any tax was actually withheld. Copies of
these information returns may also be made available under the provisions of a
specific treaty or agreement to the tax authorities of the country in which the
Non-U.S. Holder resides.

TAX EVENT

     The modification of the terms of the Debentures by us upon a Tax Event
could possibly alter the timing of income recognition by the holders with
respect to the payments of interest due after the option exercise date.

THE PROPER TAX TREATMENT OF A HOLDER OF DEBENTURES IS HIGHLY UNCERTAIN IN A
NUMBER OF RESPECTS. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE
FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF AN INVESTMENT IN THE
DEBENTURES AND WHETHER AN INVESTMENT IN THE DEBENTURES IS ADVISABLE IN LIGHT OF
THE AGREED UPON TAX TREATMENT AND THE HOLDER'S PARTICULAR TAX SITUATION.

                                 LEGAL MATTERS

     The validity of the Debentures and any common stock issuable upon
conversion of the Debenture offered hereby will be passed upon for us by
Covington & Burling, New York, New York.

                              INDEPENDENT AUDITORS

     The financial statements incorporated by reference in this prospectus and
elsewhere in this registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving such reports.

                                        55
<PAGE>   57

                                    PART II

                     INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

     The following table sets forth the costs and expenses payable by Calpine in
connection with resales of the securities being registered. All amounts are
estimates subject to future contingencies except the SEC registration statement
filing fee.

<TABLE>
<S>                                                           <C>
SEC Registration Statement Filing Fee.......................  $250,000
Legal Fees and Expenses.....................................  $ 50,000
Accounting Fees and Expenses................................  $  7,500
Printing Fees...............................................  $100,000
Transfer Agent Fees.........................................  $  5,000
Miscellaneous...............................................  $ 10,000
                                                              --------
Total.......................................................  $422,500
</TABLE>

- -------------------------

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

     Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceedings, whether civil, criminal,
administrative or investigative (other than action by or in the right of such
corporation), by reason of the fact that such person was an officer or director
of such corporation, or is or was serving at the request of such corporation as
a director, officer, employee or agent of another corporation or enterprise. The
indemnity may include expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding, provided that such officer or
director acted in good faith and in a manner he reasonably believed to be in or
not opposed to the corporation's best interests, and, for criminal proceedings,
had no reasonable cause to believe his conduct was unlawful. A Delaware
corporation may indemnify officers and directors in an action by or in the right
of the corporation under the same conditions, except that no indemnification is
permitted without judicial approval if the officer or director is adjudged to be
liable to the corporation in the performance of his duty. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses which
such officer or director actually and reasonably incurred.

     In accordance with Delaware Law, the certificate of incorporation of
Calpine Corporation ("Calpine") contains a provision to limit the personal
liability of the directors of Calpine for violations of their fiduciary duty.
This provision eliminates each director's liability to Calpine or its
stockholders for monetary damages except (i) for any breach of the director's
duty of loyalty to Calpine or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware Law providing for liability of
directors for unlawful payment of dividends or unlawful stock purchases or
redemptions, or (iv) for any transaction from which a director derived an
improper personal benefit. The effect of this provision is to eliminate the
personal liability of directors for monetary damages for actions involving a
breach of their fiduciary duty of care, including any such actions involving
gross negligence. The certificate of incorporation further provides that, if the
Delaware Law is amended to further reduce the liability of a corporation's
directors for breaches of

                                       II-1
<PAGE>   58

fiduciary duty, then a director of Calpine shall not be liable for any such
breach to the fullest extent permitted by the laws as so amended.

     Article Ten of the bylaws of Calpine provides for indemnification of the
officers and directors of Calpine to the fullest extent permitted by applicable
law.

     Calpine has entered into indemnification agreements with its directors and
officers. These agreements provide substantially broader indemnity rights than
those provided under the Delaware Law and the Calpine's bylaws. The
indemnification agreements are not intended to deny or otherwise limit
third-party or derivative suits against Calpine or its directors or officers,
but if a director or officer were entitled to indemnity or contribution under
the indemnification agreement, the financial burden of a third-party suit would
be borne by Calpine, and Calpine would not benefit from derivative recoveries
against the director or officer. Such recoveries would accrue to the benefit of
Calpine but would be offset by Calpine's obligations to the director or officer
under the indemnification agreement. In addition, the directors of Calpine are
insured under officers and directors liability insurance policies.

     Reference is made to Section 5 of the Registration Rights Agreement
incorporated by reference as Exhibit 4.1 hereto for a description of the
indemnification arrangements in connection with the registration of the
Debentures under the Securities Act of 1933.

ITEM 16. EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                            DESCRIPTION
- -------                           -----------
<C>       <S>
   3.1    Amended and Restated Certificate of Incorporation of Calpine
          Corporation(a)
   3.2    Certificate of Correction of Calpine Corporation(b)
  *3.3    Certificate of Amendment of Amended and Restated Certificate
          of Incorporation of Calpine Corporation
   3.4    Certificate of Designation of Series A Participating
          Preferred Stock of Calpine Corporation(b)
   3.5    Amended Certificate of Designation of Series A Participating
          Preferred Stock of Calpine Corporation(b)
  *3.6    Amended Certificate of Designation of Series A Participating
          Preferred Stock of Calpine Corporation
   3.7    Certificate of Designation of Special Voting Preferred Stock
          of Calpine Corporation(c)
   3.8    Amended and Restated By-laws of Calpine Corporation(d)
  *4.1    Registration Rights Agreement, dated April 30, 2001 by and
          between Calpine Corporation and the Initial Purchaser
   4.2    Rights Agreement, dated as of June 5, 1997, between Calpine
          Corporation and First Chicago Trust Company of New York, as
          rights agent(e)
  +5.1    Opinion of Covington & Burling
  +8.1    Opinion of Thelen Reid & Priest LLP as to certain tax
          matters
 *12.1    Statement Regarding Computation of Ratios
 *23.1    Consent of Arthur Andersen LLP, independent public
          accountants
 +23.2    Consent of Covington & Burling (included in opinion filed as
          exhibit 5.1)
 +23.3    Consent of Thelen Reid & Priest LLP
 *24.1    Power of Attorney of Officers and Directors of Calpine
          Corporation (as set forth on the signature pages of this
          Registration Statement)
 *25.1    Statement of Eligibility of Trustee
</TABLE>

- -------------------------
 *  Filed herewith.

 +  To be filed.

                                       II-2
<PAGE>   59

(a) Incorporated by reference to Calpine Corporation's Registration Statement on
    Form S-3 (Registration No. 333-40652) filed with the SEC on June 30, 2000.

(b) Incorporated by reference to Calpine Corporation's Annual Report on Form
    10-K dated December 31, 2000, filed with the SEC on March 15, 2001.

(c) Incorporated by reference to Calpine Corporation's Quarterly Report on Form
    10-Q for the quarter ended March 31, 2001, filed with the SEC on May 15,
    2001.

(d) Incorporated by reference to Calpine Corporation's Registration Statement on
    Form S-1 (Registration No. 333-07497).

(e) Incorporated by reference to Calpine's Registration Statement on Form 8-A
    filed with the SEC on June 18, 1997 and amended by the Corporation's
    Registration Statement on Form 8-A/A filed with the SEC on June 24, 1997
    (File No. 001-12079).

ITEM 17. UNDERTAKINGS

     The undersigned registrant hereby undertakes:

          (1) To file, during any period in which offers or sales are being
     made, a post-effective amendment to this registration statement to include
     any material information with respect to the plan of distribution not
     previously disclosed in the registration statement or any material change
     to such information in the registration statement.

          (2) That, for the purpose of determining any liability under the
     Securities Act of 1933, each such post-effective amendment shall be deemed
     to be a new registration statement relating to the securities offered
     therein, and the offering of such securities at that time shall be deemed
     to be the initial bona fide offering thereof.

          (3) To remove from registration by means of a post-effective amendment
     any of the securities being registered which remain unsold at the
     termination of the offering.

          (4) If the registrant is a foreign private issuer, to file a
     post-effective amendment to the registration statement to include any
     financial statements required by Rule 3-19 of Regulation S-X under the
     Securities Act of 1933 at the start of any delayed offering or throughout a
     continuous offering. Financial statements and information otherwise
     required by Section 10(a)(3) of the Act need not be furnished, provided,
     that the registrant includes in the prospectus, by means of a
     post-effective amendment, financial statements required pursuant to this
     paragraph (4) and other information necessary to ensure that all other
     information in the prospectus is at least as current as the date of those
     financial statements. Notwithstanding the foregoing, with respect to
     registration statements on Form F-3, a post-effective amendment need not be
     filed to include financial statements and information required by Section
     10(a)(3) of the Act or Rule 3-19 of Regulation S-X if such financial
     statements and information are contained in periodic reports filed with or
     furnished to the Commission by the registrant pursuant to Section 13 or
     Section 15(d) of the Securities Exchange Act of 1934 that are incorporated
     by reference in the Form F-3.

     The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.

                                       II-3
<PAGE>   60

     The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 under Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.

     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by them is against public
policy as expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.

                                       II-4
<PAGE>   61

                                   SIGNATURES

     Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Registration Statement on Form S-3 and has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized in the City of San Jose, State of
California, on this 25th day of July, 2001.

                                          CALPINE CORPORATION

                                          By:      /s/ ANN B. CURTIS
                                            ------------------------------------
                                                        Ann B Curtis
                                                  Executive Vice President
                                                and Chief Financial Officer

                               POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS:

     That the undersigned officers and directors of Calpine Corporation do
hereby constitute and appoint Peter Cartwright and Ann B. Curtis, and each of
them, the lawful attorney and agent or attorneys and agents with power and
authority to do any and all acts and things and to execute any and all
instruments which said attorneys and agents, or either of them, determine may be
necessary or advisable or required to enable Calpine Corporation to comply with
the Securities Exchange Act of 1934, as amended, and any rules or regulations or
requirements of the Securities and Exchange Commission in connection with this
Registration Statement on Form S-3. Without limiting the generality of the
foregoing power and authority, the powers granted include the power and
authority to sign the names of the undersigned officers and directors in the
capacities indicated below to this Registration Statement or amendments or
supplements thereto, and each of the undersigned hereby ratifies and confirms
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue hereof. This Power of Attorney may be signed in several
counterparts.

     IN WITNESS HEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated opposite the name.

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
Registration Statement on Form S-3 has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.

<TABLE>
<CAPTION>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----
<C>                                                    <C>                               <S>
                /s/ PETER CARTWRIGHT                      Chairman, President, Chief     July 25, 2001
- -----------------------------------------------------   Executive Officer and Director
                  Peter Cartwright

                  /s/ ANN B. CURTIS                    Executive Vice President, Chief   July 25, 2001
- -----------------------------------------------------   Financial Officer and Director
                    Ann B. Curtis

              /s/ CHARLES B. CLARK, JR.                 Vice President and Controller,   July 25, 2001
- -----------------------------------------------------      Chief Accounting Officer
                Charles B. Clark, Jr.
</TABLE>

                                       II-5
<PAGE>   62

<TABLE>
<CAPTION>
                      SIGNATURE                                     TITLE                    DATE
                      ---------                                     -----                    ----

<C>                                                    <C>                               <S>
                 /s/ KENNETH T. DERR                               Director              July 25, 2001
- -----------------------------------------------------
                   Kenneth T. Derr

                /s/ JEFFREY E. GARTEN                              Director              July 25, 2001
- -----------------------------------------------------
                  Jeffrey E. Garten

                                                                   Director
- -----------------------------------------------------
                  Gerald Greenwald

                                                                   Director
- -----------------------------------------------------
                   Susan C. Schwab

               /s/ GEORGE J. STATHAKIS                             Director              July 25, 2001
- -----------------------------------------------------
                 George J. Stathakis

                 /s/ JOHN O. WILSON                                Director              July 25, 2001
- -----------------------------------------------------
                   John O. Wilson
</TABLE>

                                       II-6
<PAGE>   63

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT
NUMBER                            DESCRIPTION
- -------                           -----------
<C>       <S>
   3.1    Amended and Restated Certificate of Incorporation of Calpine
          Corporation(a)
   3.2    Certificate of Correction of Calpine Corporation(b)
  *3.3    Certificate of Amendment of Amended and Restated Certificate
          of Incorporation of Calpine Corporation
   3.4    Certificate of Designation of Series A Participating
          Preferred Stock of Calpine Corporation(b)
   3.5    Amended Certificate of Designation of Series A Participating
          Preferred Stock of Calpine Corporation(b)
  *3.6    Amended Certificate of Designation of Series A Participating
          Preferred Stock of Calpine Corporation
   3.7    Certificate of Designation of Special Voting Preferred Stock
          of Calpine Corporation(c)
   3.8    Amended and Restated By-laws of Calpine Corporation(d)
  *4.1    Registration Rights Agreement, dated April 30, 2001 by and
          between Calpine Corporation and the Initial Purchaser
   4.2    Rights Agreement, dated as of June 5, 1997, between Calpine
          Corporation and First Chicago Trust Company of New York, as
          rights agent(e)
  +5.1    Opinion of Covington & Burling
  +8.1    Opinion of Thelen Reid & Priest LLP as to certain tax
          matters
 *12.1    Statement Regarding Computation of Ratios
 *23.1    Consent of Arthur Andersen LLP, independent public
          accountants
 +23.2    Consents of Covington & Burling (included in opinion filed
          as exhibit 5.1)
 +23.3    Consent of Thelen Reid & Priest LLP
 *24.1    Power of Attorney of Officers and Directors of Calpine
          Corporation (as set forth on the signature pages of this
          Registration Statement)
 *25.1    Statement of Eligibility of Trustee
</TABLE>

- -------------------------
 *  Filed herewith.

 +  To be filed.

(a) Incorporated by reference to Calpine Corporation's Registration Statement on
    Form S-3 (Registration No. 333-40652) filed with the SEC on June 30, 2000.

(b) Incorporated by reference to Calpine Corporation's Annual Report on Form
    10-K for the year ended December 31, 2000, filed with the SEC on March 15,
    2001.

(c) Incorporated by reference to Calpine Corporation's Quarterly Report on Form
    10-Q for the quarter ended March 31, 2001, filed with the SEC on May 15,
    2001.

(d) Incorporated by reference to Calpine Corporation's Registration Statement on
    Form S-1 (Registration No. 333-07497).

(e) Incorporated by reference to Calpine's Registration Statement on Form 8-A
    filed with the SEC on June 18, 1997 and amended by the Corporation's
    Registration Statement on Form 8-A/A filed with the SEC on June 24, 1997
    (File No. 001-12079).
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.3
<SEQUENCE>2
<FILENAME>f74069ex3-3.txt
<DESCRIPTION>CERTIFICATE OF AMENDMENT
<TEXT>

<PAGE>   1

                                                                     EXHIBIT 3.3

                            CERTIFICATE OF AMENDMENT
                                       OF
                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                               CALPINE CORPORATION


     CALPINE CORPORATION, a corporation duly organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), does
hereby certify that:

     1. The Amended and Restated Certificate of Incorporation of the
Corporation, as amended on March 2, 2001, is hereby amended by deleting
paragraph (a) of Article FOURTH thereof and inserting the following in lieu
thereof:

          (a) The Corporation is authorized to issue 1,010,000,000 shares of
          capital stock, $.001 par value. The shares shall be divided into two
          classes, designated as follows:

<TABLE>
<CAPTION>
                        Designation of Class          Number of Shares
                        --------------------          ----------------
<S>                                                   <C>
                        Common Stock                    1,000,000,000
                        Preferred Stock                    10,000,000
                                                         ------------
                              Total                     1,010,000,000
</TABLE>

     2. The foregoing amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.





<PAGE>   2


     IN WITNESS WHEREOF, Calpine Corporation has caused this Certificate to be
executed by Ann B. Curtis, its duly authorized officer, this 25th day of July,
2001.

                                    CALPINE CORPORATION


                                    By:  /s/ Ann B. Curtis
                                        ---------------------------------------
                                        Name:  Ann B. Curtis
                                        Title: Executive Vice President, Chief
                                               Financial Officer and Secretary


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.6
<SEQUENCE>3
<FILENAME>f74069ex3-6.txt
<DESCRIPTION>AMENDED CERTIFICATE OF DESIGNATION
<TEXT>

<PAGE>   1

                                                                     Exhibit 3.6



                       AMENDED CERTIFICATE OF DESIGNATION
                                       OF
                     SERIES A PARTICIPATING PREFERRED STOCK
                                       OF
                               CALPINE CORPORATION

                         (PURSUANT TO SECTION 151 OF THE
                        DELAWARE GENERAL CORPORATION LAW)
                            ------------------------


     CALPINE CORPORATION, a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Company"), in accordance with the
provisions of Section 103 of the General Corporation Law of the State of
Delaware, certifies as follows:

     1. That by resolution of the Board of Directors of the Company dated June
5, 1997, and by a Certificate of Designation filed in the office of the
Secretary of State of the State of Delaware on June 16, 1997, as thereafter
amended by an Amended Certificate of Designation filed in the office of the
Secretary of State of the State of Delaware on March 2, 2001, the Company
authorized a series of shares of Series A Participating Preferred Stock, par
value $0.001 per share, of the Company (the "Series A Preferred Stock") and
established the powers, designations, preferences and relative, participating,
optional and other rights of the Series A Preferred Stock and the
qualifications, limitations or restrictions thereof.

     2. As of the date hereof, no shares of Series A Preferred Stock are
outstanding and no shares of Series A Preferred Stock have been issued.

     3. The pursuant to the authority conferred on the Board of Directors of the
Company by its Restated Certificate of Incorporation and the provisions of
Section 151(g) of the General Corporation Law of the State of Delaware, the
Board of Directors on July 25, 2001, adopted the following resolution amending
certain provisions of said Certificate of Designation:

          RESOLVED FURTHER, that the Board finds it advisable to amend the
     Certificate of Designation of Series A Participating Preferred Stock of
     Calpine Corporation (as amended on March 2, 2001, the "Series A Preferred
     Certificate of Designation"), and the Series A Preferred Certificate of
     Designation is hereby amended, as follows: the phrase "Five Hundred
     Thousand (500,000)" in the first sentence of Section 1 of the Series A
     Preferred Certificate of Designation is deleted and replaced with the
     phrase "One Million (1,000,000)".



<PAGE>   2


     IN WITNESS WHEREOF, CALPINE CORPORATION has caused this certificate to be
executed by Ann B. Curtis, the Executive Vice President, Chief Financial Officer
and Secretary of the Company, this 25th day of July, 2001.

                                           /s/  Ann B. Curtis
                                       ------------------------------
                                       Ann B. Curtis
                                       Executive Vice President, Chief Financial
                                         Officer and Secretary


                                       2
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>4
<FILENAME>f74069ex4-1.txt
<DESCRIPTION>REGISTRATION RIGHTS AGREEMENT
<TEXT>

<PAGE>   1

                                                                     Exhibit 4.1

                               CALPINE CORPORATION

                             CONVERTIBLE ZERO-COUPON
                          DEBENTURES DUE APRIL 30, 2021


                          REGISTRATION RIGHTS AGREEMENT

                                                 April 30, 2001
Goldman, Sachs & Co.,
85 Broad Street
New York, New York 10004

Ladies and Gentlemen:

         Calpine Corporation, a Delaware corporation (the "Company"), proposes
to issue and sell to the Purchaser (as defined herein) upon the terms set forth
in the Purchase Agreement (as defined herein) its Convertible Zero-Coupon
Debentures due April 30, 2021 (the "Securities"). As an inducement to the
Purchaser to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Purchaser thereunder, the Company agrees
with the Purchaser for the benefit of Holders (as defined herein) from time to
time of the Registrable Securities (as defined herein) as follows:

         1.       Definitions.

         (a)      Capitalized terms used herein without definition shall have
the meanings ascribed to them in the Purchase Agreement. As used in this
Agreement, the following defined terms shall have the following meanings:

         "Act" or "Securities Act" means the United States Securities Act of
1933, as amended.

         "Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

         "Closing Date" means the First Closing Date as defined in the Purchase
Agreement.

         "Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Exchange
Act or the Securities Act, whichever is the relevant statute for the particular
purpose.

         "Common Stock" means the Company's common stock, par value $.001 per
share.

         "DTC" means The Depository Trust Company.

                                       1
<PAGE>   2
         "Effectiveness Period" has the meaning assigned thereto in Section
2(b)(i) hereof.

         "Effective Time" means the date on which the Commission declares the
Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.

         "Electing Holder" has the meaning assigned thereto in Section 3(a)(iii)
hereof.

         "Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.

         "Holder" means, any person that is the record owner of Registrable
Securities (and includes any person that has a beneficial interest in any
Registrable Security in book-entry form).

         "Indenture" means the Indenture, dated as of April 30, 2001 between the
Company and Wilmington Trust Company, as amended and supplemented from time to
time in accordance with its terms.

         "Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, conducted pursuant to Section 7 hereof.

         "NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended from time to time.

         "Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire in a form reasonably agreed to by the
Company and the Purchaser.

         The term "person" means an individual, partnership, corporation, trust
or unincorporated organization, or a government or agency or political
subdivision thereof.

         "Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus, any final prospectus and any prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act) included in the
Shelf Registration Statement, as amended or supplemented by any prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by the Shelf Registration Statement and by all
other amendments and supplements to such prospectus, including all material
incorporated by reference in such prospectus and all documents filed after the
date of such prospectus by the Company under the Exchange Act and incorporated
by reference therein.

         "Purchase Agreement" means the purchase agreement, dated as of April
30, 2001, between the Purchaser and the Company relating to the Securities.

         "Purchaser" means Goldman, Sachs & Co.

         "Registrable Securities" means all or any portion of the Securities
issued from time to time under the Indenture in registered form and the shares
of Common Stock issuable upon conversion of such Securities, including any
Securities initially issued in bearer form and constituting the unsold allotment
of a distributor (within the meaning of Regulation S under the Securities Act)
of such Securities and later exchanged for Securities in registered form;

                                       2
<PAGE>   3
provided, however, that a security ceases to be a Registrable Security when it
is no longer a Restricted Security.

         "Restricted Security" means any Security or share of Common Stock
issuable upon conversion thereof except any such Security or share of Common
Stock which (i) has been effectively registered under the Securities Act and
sold in a manner contemplated by the Shelf Registration Statement, (ii) has been
transferred in compliance with Rule 144 under the Securities Act (or any
successor provision thereto) or is transferable pursuant to paragraph (k) of
such Rule 144 (or any successor provision thereto), (iii) has been sold in
compliance with Regulation S under the Securities Act (or any successor thereto)
and does not constitute the unsold allotment of a distributor within the meaning
of Regulation S under the Securities Act, or (iv) has otherwise been transferred
and a new Security or share of Common Stock not subject to transfer restrictions
under the Securities Act has been delivered by or on behalf of the Company in
accordance with Section 2.6 of the Indenture.

         "Rules and Regulations" means the published rules and regulations of
the Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.

         "Shelf Registration" means a registration effected pursuant to Section
2 hereof.

         "Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the Holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company pursuant to the
provisions of Section 2 of this Agreement, including the Prospectus contained
therein, any amendments and supplements to such registration statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such registration statement.

         "Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated thereunder,
as the same shall be amended from time to time.

         The term "underwriter" means any underwriter of Registrable Securities
in connection with an offering thereof under a Shelf Registration Statement.

         (b)      Wherever there is a reference in this Agreement to a
percentage of the "principal amount" of Registrable Securities or to a
percentage of Registrable Securities, Common Stock shall be treated as
representing the principal amount of Securities which was surrendered for
conversion or exchange in order to receive such number of shares of Common
Stock.

         2.       Shelf Registration.

         (a)      The Company shall, no later than 90 calendar days following
the Closing Date, file with the Commission a Shelf Registration Statement
relating to the offer and sale of the Registrable Securities by the Holders from
time to time in accordance with the methods of distribution elected by such
Holders and set forth in such Shelf Registration Statement and, thereafter,
shall use its best efforts to cause such Shelf Registration Statement to be
declared effective under the Act no later than 180 calendar days following the
Closing Date; provided, however, that the Company may, upon written notice to
all Holders, postpone having the Shelf Registration Statement declared effective
for a reasonable period not to exceed 90 days if the

                                       3
<PAGE>   4
Company possesses material non-public information, the disclosure of which would
have a material adverse effect on the Company and its subsidiaries taken as a
whole; provided, further, however, that no Holder shall be entitled to be named
as a selling securityholder in the Shelf Registration Statement or have its
Registrable Securities included therein or to use the Prospectus forming a part
thereof for resales of Registrable Securities unless such Holder is an Electing
Holder; provided, further, that the Company shall not be obligated to file a
Shelf Registration Statement unless and until it has received an opinion, dated
as of the date of the filing of such Shelf Registration Statement and from
counsel reasonably acceptable to the Company, as required by Item 601(b)(8) of
Regulation S-K; it being understood that Thelen, Reid and Priest LLP and
Skadden, Arps, Slate, Meagher & Flom LLP, are reasonably acceptable to the
Company.

         (b)      The Company shall use its best efforts:

                  (i) To keep the Shelf Registration Statement continuously
         effective in order to permit the Prospectus forming part thereof to be
         lawfully delivered by Holders until the earliest of (1) the sale of all
         Registrable Securities registered under the Shelf Registration
         Statement; (2) the expiration of the period referred to in Rule 144(k)
         of the Act (or any successor provision thereto) with respect to all
         Registrable Securities held by Persons that are not Affiliates of the
         Company; and (3) two years from the date (the "Effective Date") such
         Shelf Registration Statement is declared effective (such period being
         referred to herein as the "Effectiveness Period"); and

                  (ii) During the Effectiveness Period, promptly upon the
         request of any Holder of Registrable Securities that is not then an
         Electing Holder, to take any action reasonably necessary to enable such
         Holder to use the Prospectus forming a part thereof for resales of
         Registrable Securities, including, without limitation, any action
         necessary to identify such Holder as a selling securityholder in the
         Shelf Registration Statement; provided, however, that nothing in this
         subparagraph shall relieve such Holder of the obligation to return a
         completed and signed Notice and Questionnaire to the Company in
         accordance with Section 3(a)(ii) hereof.

Subject to the provisions of paragraph 2(c) below, the Company shall be deemed
not to have used its best efforts to keep the Shelf Registration Statement
effective during the Effectiveness Period if the Company voluntarily takes any
action that would result in Holders of Registrable Securities covered thereby
not being able to offer and sell any of such Registrable Securities during such
period, unless such action is required by applicable law and the Company
thereafter promptly complies with the requirements of paragraph 3(j) below.

         (c)      The Company may suspend the use of the Prospectus for a period
not to exceed 30 days in any 90-day period or an aggregate of 90 days in any
12-month period if the Board of Directors of the Company shall have determined
in good faith that because of valid business reasons (not including avoidance of
the Company's obligations hereunder), including the acquisition or divestiture
of assets, pending corporate developments and similar events, it is in the best
interests of the Company to suspend such use, and prior to suspending such use
the Company provides the Holders with written notice of such suspension, which
notice need not specify the nature of the event giving rise to such suspension.

         3.       Registration Procedures. In connection with the Shelf
Registration Statement, the following provisions shall apply:

                                       4
<PAGE>   5
         (a)      (i)  Not less than 30 calendar days prior to the Effective
Time of the Shelf Registration Statement, the Company shall mail the Notice and
Questionnaire to the Holders of Registrable Securities. No Holder shall be
entitled to be named as a selling securityholder in the Shelf Registration
Statement or have its Registrable Securities included therein, and no Holder
shall be entitled to use the Prospectus forming a part thereof for resales of
Registrable Securities at any time, unless such Holder is an Electing Holder;
provided, however, Holders of Registrable Securities shall have at least 28
calendar days from the date on which the Notice and Questionnaire is first
mailed to such Holders to return a completed and signed Notice and Questionnaire
to the Company.

                  (ii) After the Effective Time of the Shelf Registration
         Statement and during the Effectiveness Period, the Company shall, upon
         the request of any Holder of Registrable Securities that is not then an
         Electing Holder, promptly send a Notice and Questionnaire to such
         Holder. The Company shall not be required to take any action to name
         such Holder as a selling securityholder in the Shelf Registration
         Statement or to enable such Holder to use the Prospectus forming a part
         thereof for resales of Registrable Securities until such Holder has
         returned a completed and signed Notice and Questionnaire to the
         Company.

                  (iii) The term "Electing Holder" shall mean any Holder of
         Registrable Securities that has returned a completed and signed Notice
         and Questionnaire to the Company in accordance with Section 3(a)(i) or
         3(a)(ii) hereof and has otherwise agreed to be bound by all the
         provisions of this Agreement applicable to such Holder.

         (b)      The Company shall furnish to the Purchaser, prior to the
Effective Time, a copy of the Shelf Registration Statement initially filed with
the Commission, and shall furnish to such Purchaser, prior to the filing thereof
with the Commission, copies of each amendment thereto and each amendment or
supplement, if any, to the Prospectus included therein, and shall use its best
efforts to reflect in each such document, at the Effective Time or when so filed
with the Commission, as the case may be, such comments as such Purchaser and its
counsel (which shall be Skadden, Arps, Slate, Meagher & Flom LLP) reasonably may
propose.

         (c)      The Company shall promptly take such action as may be
necessary so that (i) each of the Shelf Registration Statement and any amendment
thereto and the Prospectus forming part thereof and any amendment or supplement
thereto (and each report or other document incorporated therein by reference in
each case) complies in all material respects with the Securities Act and the
Exchange Act and the respective rules and regulations thereunder, (ii) each of
the Shelf Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) each of the Prospectus forming part
of the Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not at any time during the Effectiveness Period include an
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading.

         (d)       The Company shall promptly advise each Electing Holder, and
shall confirm such advice in writing if so requested by any such Holder:

                                       5
<PAGE>   6
                            (i)      when a Shelf Registration Statement and any
                  amendment thereto has been filed with the Commission and when
                  a Shelf Registration Statement or any post-effective amendment
                  thereto has become effective;

                            (ii)     of the issuance by the Commission of any
                  stop order suspending the effectiveness of the Shelf
                  Registration Statement or the initiation of any proceedings
                  for such purpose;

                            (iii)    of the receipt by the Company of any
                  notification with respect to the suspension of the
                  qualification of the securities included in the Shelf
                  Registration Statement for sale in any jurisdiction or the
                  initiation of any proceeding for such purpose; and

                            (iv) of the happening, during the Effectiveness
                  Period, of any event or the existence of any state of facts
                  that requires the making of any changes in the Shelf
                  Registration Statement or the Prospectus included therein so
                  that, as of such date, such Shelf Registration Statement and
                  Prospectus do not contain an untrue statement of a material
                  fact and do not omit to state a material fact required to be
                  stated therein or necessary to make the statements therein (in
                  the case of the Prospectus, in light of the circumstances
                  under which they were made) not misleading (which advice shall
                  be accompanied by an instruction to such Holders to suspend
                  the use of the Prospectus until the requisite changes have
                  been made).

         (e)      The Company shall use its best efforts to prevent the
issuance, and if issued to obtain the withdrawal, of any order suspending the
effectiveness of the Shelf Registration Statement at the earliest possible time.

         (f)      The Company shall furnish to each Electing Holder, without
charge, at least one copy of the Shelf Registration Statement and all
post-effective amendments thereto, including financial statements and schedules,
and, if such Holder so requests in writing, all reports, other documents and
exhibits that are filed with or incorporated by reference in the Shelf
Registration Statement.

         (g)      The Company shall, during the Effectiveness Period, deliver to
each Electing Holder, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in the Shelf Registration
Statement and any amendment or supplement thereto as such Electing Holder may
reasonably request; and the Company consents (except during the continuance of
any event described in Section 3(d)(v) above) to the use, in accordance with the
terms of this Agreement, of the Prospectus and any amendment or supplement
thereto by each of the Electing Holders in connection with the offering and sale
of the Registrable Securities covered by the Prospectus and any amendment or
supplement thereto during the Effectiveness Period.

         (h)      Prior to any offering of Registrable Securities pursuant to
the Shelf Registration Statement, the Company shall (i) register or qualify or
cooperate with the Electing Holders and their counsel (which shall be Skadden,
Arps, Slate, Meagher & Flom LLP) in connection with the registration or
qualification of such Registrable Securities for offer and sale under the
securities or "blue sky" laws of such jurisdictions within the United States as
any Electing Holder may reasonably request in writing, and (ii) keep such
registrations or qualifications in effect and comply with such laws so as to
permit the continuance of offers and sales in such jurisdictions for so long as
may be necessary to enable any Electing Holder or underwriter, if any, to

                                       6
<PAGE>   7
complete its distribution of Registrable Securities pursuant to the Shelf
Registration Statement, and (iii) take any and all other actions necessary or
advisable to enable the offer and sale in such jurisdictions of such Registrable
Securities; provided, however, that in no event shall the Company be obligated
to (A) qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it is not there so qualified or (B) take any action which
would subject it to the general service of process or taxation in any
jurisdiction where it is not as of the date hereof so subject.

         (i)      Unless any Registrable Securities shall be in book-entry only
form, the Company shall cooperate with the Electing Holders to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be sold pursuant to the Shelf Registration Statement, which
certificates, if so required by any securities exchange upon which any
Registrable Securities are listed, shall be penned, lithographed or engraved, or
produced by any combination of such methods, on steel engraved borders, and
which certificates shall be free of any restrictive legends and in such
permitted denominations and registered in such names as Electing Holders may
request in connection with the sale of Registrable Securities pursuant to the
Shelf Registration Statement.

         (j)      Upon the occurrence of any fact or event contemplated by
paragraph 3(d)(v) above, the Company shall promptly prepare a post-effective
amendment to any Shelf Registration Statement or an amendment or supplement to
the related Prospectus or file any other required document so that, as
thereafter delivered to purchasers of the Registrable Securities included
therein, the Prospectus will not include an untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. If
the Company notifies the Electing Holders of the occurrence of any event
contemplated by paragraph 3(d)(v) above, the Electing Holder shall suspend the
use of the Prospectus until the requisite changes to the Prospectus have been
made.

         (k)      Not later than the Effective Time of the Shelf Registration
Statement, the Company shall provide a CUSIP number for the Registrable
Securities that are debt securities under such Shelf Registration Statement.

         (l)      The Company shall use its best efforts to comply with all
applicable Rules and Regulations, and to make generally available to its
securityholders (or otherwise provide in accordance with Section 11(a) of the
Securities Act) as soon as practicable after the effective date (as defined in
Rule 158(c) under the Securities Act) of the Shelf Registration Statement, an
earning statement of the Company and its subsidiaries complying with Section
11(a) of the Securities Act and the rules and regulations of the Commission
thereunder (including, at the option of the Company, Rule 158), but in no event
later than 45 days after the end of a 12-month period (or 90 days, if, such
period is a fiscal year) beginning with the first month of the Company's first
fiscal quarter commencing after the effective date of the Registration
Statement, which statement shall cover such 12-month period.

         (m)      The Company shall cause the Indenture to be qualified under
the Trust Indenture Act in a timely manner and containing such changes, if any,
as shall be necessary for such qualification. In the event that any such
amendment or modification referred to in this Section 3(m) involves the
appointment of a new trustee under the Indenture, the Company shall appoint a
new trustee thereunder pursuant to the applicable provisions of the Indenture.

                                       7
<PAGE>   8
         (n) The Company may require each Electing Holder as a condition to the
registration of such Electing Holder's Securities under the Registration
Statement to furnish to the Company such information regarding the Electing
Holder and the distribution of such Securities as the Company may from time to
time reasonably require for inclusion in such Shelf Registration Statement. Each
Holder who offers and sells Registrable Securities by means of the Shelf
Registration Statement shall do so in accordance with the terms thereof and the
requirements of the Securities Act.

         (o)      In the event of an underwritten offering conducted pursuant to
Section 6 hereof, the Company shall, if requested, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to the Shelf
Registration Statement such information as the Managing Underwriters reasonably
agree should be included therein and to which the Company does not reasonably
object and shall make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after it is notified of the
matters to be included or incorporated in such Prospectus supplement or
post-effective amendment.

         (p)      The Company shall enter into such customary agreements
(including an underwriting agreement in customary form in the event of an
underwritten offering conducted pursuant to Section 6 hereof) and take all other
appropriate action in order to expedite and facilitate the registration and
disposition of the Registrable Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification provisions and procedures substantially identical to those set
forth in Section 5 hereof (or such other customary provisions and procedures
acceptable to the Managing Underwriters, if any) with respect to all parties to
be indemnified pursuant to Section 5 hereof.

         (q)      The Company shall:

                  (i)(A) make reasonably available for inspection by Electing
         Holders, any underwriter participating in any disposition pursuant to
         the Shelf Registration Statement, and any attorney, accountant or other
         agent retained by such Holders or any such underwriter all relevant
         financial and other records, pertinent corporate documents and
         properties of the Company and its subsidiaries, and (B) cause the
         Company's officers, directors and employees to supply all information
         reasonably requested by such Holders or any such underwriter, attorney,
         accountant or agent in connection with the Shelf Registration
         Statement, in each case, as is customary for similar due diligence
         examinations; provided, however, that all records, information and
         documents that are designated in writing by the Company, in good faith,
         as confidential shall be kept confidential by such Holders and any such
         underwriter, attorney, accountant or agent, unless such disclosure is
         made in connection with a court proceeding or required by law, or such
         records, information or documents become available to the public
         generally or through a third party without an accompanying obligation
         of confidentiality; and provided further that, the foregoing inspection
         and information gathering shall be coordinated on behalf of the
         Electing Holders and the other parties entitled thereto by one counsel
         designated by and on behalf of Electing Holders and other parties,
         which shall be Skadden, Arps, Slate, Meagher & Flom LLP;

                  (ii) in connection with any underwritten offering conducted
         pursuant to Section 6 hereof, make such representations and warranties
         to the Holders participating in such underwritten offering and to the
         Managing Underwriters, in form, substance and scope as are customarily
         made by the Company to underwriters in primary underwritten

                                       8
<PAGE>   9
         offerings of equity and convertible debt securities and covering
         matters including, but not limited to, those set forth in the Purchase
         Agreement;

                  (iii) in connection with any underwritten offering conducted
         pursuant to Section 6 hereof, obtain opinions of counsel to the Company
         (which counsel and opinions (in form, scope and substance) shall be
         reasonably satisfactory to the Managing Underwriters, if any) addressed
         to each Holder participating in such underwritten offering and the
         underwriters, covering such matters as are customarily covered in
         opinions requested in primary underwritten offerings of equity and
         convertible debt securities and such other matters as may be reasonably
         requested by such Holders and underwriters (it being agreed that the
         matters to be covered by such opinions shall include, without
         limitation, as of the date of the opinion and as of the Effective Time
         of the Shelf Registration Statement or most recent post-effective
         amendment thereto, as the case may be, the absence from the Shelf
         Registration Statement, including the documents incorporated by
         reference therein, of an untrue statement of a material fact or the
         omission of a material fact required to be stated therein or necessary
         to make the statements therein not misleading, and the absence from the
         Prospectus, including the documents incorporated by reference therein,
         of an untrue statement of a material fact or the omission of a material
         fact required to be stated therein or necessary to make the statements
         therein not misleading, in light of the circumstances under which they
         were made);

                  (iv) in connection with any underwritten offering conducted
         pursuant to Section 6 hereof, obtain "cold comfort" letters and updates
         thereof from the independent public accountants of the Company (and, if
         necessary, from the independent public accountants of any subsidiary of
         the Company or of any business acquired by the Company for which
         financial statements and financial data are, or are required to be,
         included in the Shelf Registration Statement), addressed to each Holder
         participating in such underwritten offering (if such Holder has
         provided such letter, representations or documentation, if any,
         required for such cold comfort letter to be so addressed as
         contemplated, and only if permitted, by Statement of Auditing Standards
         No. 72) and the underwriters, in customary form and covering matters of
         the type customarily covered in "cold comfort" letters in connection
         with primary underwritten offerings;

                  (v) in connection with any underwritten offering conducted
         pursuant to Section 6 hereof, deliver all customary documents and
         certificates as may be reasonably requested by any Holders
         participating in such underwritten offering and the Managing
         Underwriters, if any, including, without limitation, certificates to
         evidence compliance with Section 3(j) hereof and with any conditions
         contained in the underwriting agreement or other agreements entered
         into by the Company.

         (r)      The Company will use its best efforts to cause the Common
Stock issuable upon conversion of the Securities to be listed on the New York
Stock Exchange or other stock exchange or trading system on which the Common
Stock primarily trades on or prior to the Effective Time of the Shelf
Registration Statement hereunder.

         (s)      In the event that any broker-dealer registered under the
Exchange Act shall be an "affiliate" (as defined in Rule 2720(b)(1) of the NASD
Rules (or any successor provision thereto)) of the Company or has a "conflict of
interest" (as defined in Rule 2720(b)(7) of the NASD Rules (or any successor
provision thereto)) and such broker-dealer shall underwrite, participate as a
member of an underwriting syndicate or selling group or assist in the
distribution

                                       9
<PAGE>   10
(within the meaning of the NASD Rules) of any Registrable Securities covered by
the Shelf Registration Statement, whether as a Holder of such Registrable
Securities or as an underwriter, a placement or sales agent or a broker or
dealer in respect thereof, or otherwise, the Company shall assist such
broker-dealer in complying with the requirements of the NASD Rules, including,
without limitation, by (A) if such Rules, including Rule 2720, shall so require,
engaging a "qualified independent underwriter" (as defined in Rule 2720(b)(15)
of the NASD Rules (or any successor provision thereto)) to participate in the
preparation of the registration statement relating to such Registrable
Securities, to exercise usual standards of due diligence in respect thereto and
to recommend the public offering price of such Registrable Securities, (B)
indemnifying such qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 5 hereof, and (C) providing
such information to such broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the NASD Rules.

         (t)      The Company shall use its best efforts to take all other steps
necessary to effect the registration, offering and sale of the Registrable
Securities covered by the Shelf Registration Statement contemplated hereby.

         4.       Registration Expenses. Except as otherwise provided in Section
3, the Company shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2 and 3 hereof and shall reimburse
the Electing Holders for the reasonable fees and disbursements of a single
counsel, which shall be Skadden, Arps, Slate, Meagher & Flom LLP, to act as
counsel therefore in connection therewith. Each Electing Holder shall pay all
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of such Electing Holder's Registrable Securities
pursuant to the Shelf Registration Statement.

         5.       Indemnification and Contribution.

         (a)      Indemnification by the Company. Upon the registration of the
Registrable Securities pursuant to Section 2 hereof, the Company shall indemnify
and hold harmless each Electing Holder and each underwriter, selling agent or
other securities professional, if any, which facilitates the disposition of
Registrable Securities, and each of their respective officers and directors and
each person who controls such Electing Holder, underwriter, selling agent or
other securities professional within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act (each such person being sometimes referred
to as an "Indemnified Person") against any losses, claims, damages or
liabilities, joint or several, to which such Indemnified Person may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Shelf Registration Statement under which such Registrable
Securities are registered under the Securities Act, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or arise out of or are
based on an untrue statement or alleged untrue statement of a material fact
contained in the Prospectus contained therein or any Prospectus furnished by the
Company to any Indemnified Person, or any amendment or supplement thereto, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in light of the circumstances under which
they were made, and the Company hereby agrees to reimburse such Indemnified
Person for any legal or

                                       10
<PAGE>   11
other expenses reasonably incurred by them in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that the Company shall not be liable to any such Indemnified Person in
any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in such Shelf Registration Statement or
Prospectus, or amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Holder
specifically for inclusion therein.

         (b)      Indemnification by the Holders and any Agents and
Underwriters. Each Electing Holder agrees, as a consequence of the inclusion of
any of such Holder's Registrable Securities in such Shelf Registration
Statement, and each underwriter, selling agent or other securities professional,
if any, which facilitates the disposition of Registrable Securities shall agree,
as a consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors, officers who sign any Shelf Registration Statement and each person,
if any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which the Company or such other persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in such Shelf Registration Statement or Prospectus, or any amendment
or supplement, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Holder, underwriter, selling agent or other securities professional
specifically for inclusion therein, and (ii) reimburse the Company for any legal
or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.

         (c)      Notices of Claims, Etc. Promptly after receipt by an
indemnified party under subsection (a) or (b) above of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 5, notify
such indemnifying party in writing of the commencement thereof; but the omission
so to notify the indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section 5.
In case any such action shall be brought against any indemnified party and it
shall notify an indemnifying party of the commencement thereof, such
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and, after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, such indemnifying party shall not be liable to such indemnified
party under this Section 5 for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the prior written consent of
the indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is

                                       11
<PAGE>   12
an actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of such indemnified
party from all liability arising out of such action or claim and (ii) does not
include a statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party.

         (d)      Contribution. If the indemnification provided for in this
Section 5 is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to therein, then
each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation (even if the Electing Holders or any underwriters, selling
agents or other securities professionals or all of them were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in this Section 5(d).
The amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be deemed to include any legal or other fees or expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim which is the subject of this subsection (d). No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The obligations of the Electing
Holders and any underwriters, selling agents or other securities professionals
in this Section 5(d) to contribute shall be several in proportion to the
percentage of principal amount of Registrable Securities registered or
underwritten, as the case may be, by them and not joint. For purposes of this
paragraph (d), each person, if any, who controls such indemnified party within
the meaning of the Securities Act or the Exchange Act shall have the same rights
to contribution as such indemnified party and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act shall
have the same rights to contribution as the Company.

         (e)      Notwithstanding any other provision of this Section 5, in no
event will any (i) Electing Holder be required to undertake liability to any
person under this Section 5 for any amounts in excess of the dollar amount of
the proceeds to be received by such Holder from the sale of such Holder's
Registrable Securities (after deducting any fees, discounts and commissions
applicable thereto) pursuant to any Shelf Registration Statement under which
such Registrable Securities are to be registered under the Securities Act and
(ii) underwriter, selling agent or other securities professional be required to
undertake liability to any person hereunder for any amounts in excess of the
discount, commission or other compensation payable to such underwriter, selling
agent or other securities professional with respect to the Registrable
Securities underwritten by it and distributed to the public.

                                       12
<PAGE>   13
         (f)      The obligations of the Company under this Section 5 shall be
in addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 5 shall be in addition to any liability which such Indemnified Person
may otherwise have to the Company. The remedies provided in this Section 5 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.

         6.       Underwritten Offering. Any Holder of Registrable Securities
who desires to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided that (i) the Electing Holders of at least
33-1/3% in aggregate principal amount of the Registrable Securities then covered
by the Shelf Registration Statement shall request such an offering in a written
notice delivered to the Company and (ii) at least such aggregate principal
amount of such Registrable Securities shall be included in such offering; and
provided further that the Company shall not be obligated to cooperate with more
than one underwritten offering during the Effectiveness Period. Upon receipt of
such a request, the Company shall provide all Holders of Registrable Securities
written notice of the request, which notice shall inform such Holders that they
have the opportunity to participate in the offering. In any such underwritten
offering, the investment banker or bankers and manager or managers that will
administer the offering will be selected by, and the underwriting arrangements
with respect thereto (including the size of the offering) will be approved by,
the Company; provided, however, that such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the holders of a
majority of the Registrable Securities to be included in such offering. No
Holder may participate in any underwritten offering contemplated hereby unless
(a) such Holder agrees to sell such Holder's Registrable Securities to be
included in the underwritten offering in accordance with any approved
underwriting arrangements, (b) such Holder completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents required under the terms of such approved
underwriting arrangements, and (c) if such Holder is not then an Electing
Holder, such Holder returns a completed and signed Notice and Questionnaire to
the Company in accordance with Section 3(a)(2) hereof within a reasonable amount
of time before such underwritten offering. The Holders participating in any
underwritten offering shall be responsible for any underwriting discounts and
commissions and fees and, subject to Section 4 hereof, expenses of their own
counsel. The Company shall pay all expenses customarily borne by issuers,
including but not limited to filing fees, the fees and disbursements of its
counsel and independent public accountants and any printing expenses incurred in
connection with such underwritten offering. Notwithstanding the foregoing or the
provisions of Section 3(n) hereof, upon receipt of a request from the Managing
Underwriter or a representative of holders of a majority of the Registrable
Securities to be included in an underwritten offering to prepare and file an
amendment or supplement to the Shelf Registration Statement and Prospectus in
connection with an underwritten offering, the Company may delay the filing of
any such amendment or supplement for up to 90 days if the Board of Directors of
the Company shall have determined in good faith that the Company has a bona fide
business reason for such delay.

         7.       Liquidated Damages.

         (a)      Pursuant to Section 2(a) hereof, the Company may, upon written
notice to all the Holders, postpone having the Shelf Registration Statement
declared effective for a reasonable period not to exceed 90 days if the Company
possesses material non-public information, the disclosure of which would have a
material adverse effect on the Company and its subsidiaries taken as a whole.
Notwithstanding any such postponement, if (i) on or prior to the 90th day

                                       13
<PAGE>   14
following the Closing Date, a Shelf Registration Statement has not been filed
with the Commission or (ii) on or prior to the 180th day following the Closing
Date, such Shelf Registration Statement is not declared effective by the
Commission (each, a "Registration Default"), the Company shall be required to
pay liquidated damages ("Liquidated Damages"), from and including the day
following such Registration Default until, but excluding the day on which, such
Shelf Registration Statement is either so filed or so filed and subsequently
declared effective, as applicable, at a rate per annum equal to an additional
one-quarter of one percent (0.25%) of the principal amount of Registrable
Securities, to and including the 90th day following such Registration Default
and one-half of one percent (0.5%) thereof from and after the 91st day following
such Registration Default.

         (b)      In the event that the Shelf Registration Statement ceases to
be effective (or the Holders of Registrable Securities are otherwise prevented
or restricted by the Company from effecting sales pursuant thereto) (an
"Effective Failure") for more than 45 days, whether or not consecutive, in any
90-day period, or 90 days, whether or not consecutive, during any 12-month
period, then the Company shall pay Liquidated Damages at a rate per annum equal
to an additional one-half of one percent (0.5%) from the 46th day of the
applicable 90-day period or the 91st day of the applicable 12-month period, as
the case may be, that such Shelf Registration Statement ceases to be effective
(or the Holders of Registrable Securities are otherwise prevented or restricted
by the Company from effecting sales pursuant thereto) to but excluding the
earlier of (i) the date on which the Shelf Registration Statement again becomes
effective or the Holders of Registrable Securities are again able to make sales
under the Shelf Registration Statement or (2) the date on which the
Effectiveness Period expires. For the purpose of determining an Effective
Failure, days on which the Company has been obligated to pay Liquidated Damages
in accordance with the foregoing in respect of a prior Effective Failure within
the applicable 90-day or 12-month period, as the case may be, shall not be
included.

         (c)      In the event the Company fails to file a post-effective
amendment to the Shelf Registration Statement, or the post-effective amendment
is not declared effective, within the periods required by Section 3, the Company
shall pay Liquidated Damages at a rate per annum equal to an additional one-half
of one percent (0.5%) from and including the date of such Registration Default
until such time as such Registration Default is cured.

         (d)      Any amounts to be paid as Liquidated Damages pursuant to
paragraphs (a), (b) or (c) of this Section 7 shall be paid semi-annually in
arrears, with the first semi-annual payment due on the first Interest Payment
Date (as defined in the Indenture), as applicable, following the date of such
Registration Default. Such Liquidated Damages will accrue (1) in respect of the
Securities at the rates set forth in paragraphs (a), (b) or (c) of this Section
7, as applicable, on the principal amount of the Securities and (2) in respect
of the Common Stock issued upon conversion of the Securities, at the rates set
forth in paragraphs (a), (b) or (c) of this Section 7, as applicable, applied to
the Conversion Price (as defined in the Indenture) at that time.

         (e)      Except as provided in Section 8(b) hereof, the Liquidated
Damages as set forth in this Section 7 shall be the exclusive monetary remedy
available to the Holders of Registrable Securities for such Registration Default
or Effective Failure. In no event shall the Company be required to pay
Liquidated Damages in excess of the applicable maximum amount of one-half of one
percent (0.5%) per annum set forth above, regardless of whether one or multiple
Registration Defaults exist.

         8.       Miscellaneous.

                                       14
<PAGE>   15
         (a)      Other Registration Rights. The Company may grant registration
rights that would permit any Person that is a third party the right to
piggy-back on any Shelf Registration Statement, provided that if the Managing
Underwriter of any underwritten offering conducted pursuant to Section 6 hereof
notifies the Company and the Electing Holders that the total amount of
securities which the Electing Holders and the holders of such piggy-back rights
intend to include in any Shelf Registration Statement is so large as to
materially threaten the success of such offering (including the price at which
such securities can be sold), then the amount, number or kind of securities to
be offered for the account of holders of such piggy-back rights will be reduced
to the extent necessary to reduce the total amount of securities to be included
in such offering to the amount, number and kind recommended by the Managing
Underwriter prior to any reduction in the amount of Registrable Securities to be
included in such Shelf Registration Statement.

         (b)      Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if the Company fails to perform any of
its obligations hereunder and that the Purchaser and the Holders from time to
time may be irreparably harmed by any such failure, and accordingly agree that
the Purchaser and such Holders, in addition to any other remedy to which they
may be entitled at law or in equity and without limiting the remedies available
to the Electing Holders under Section 7 hereof, shall be entitled to compel
specific performance of the obligations of the Company under this Registration
Rights Agreement in accordance with the terms and conditions of this
Registration Rights Agreement, in any court of the United States or any State
thereof having jurisdiction.

         (c)      Amendments and Waivers. This Agreement, including this Section
8(c), may be amended, and waivers or consents to departures from the provisions
hereof may be given, only by a written instrument duly executed by the Company
and the holders of a majority in aggregate principal amount of Registrable
Securities then outstanding. Each Holder of Registrable Securities outstanding
at the time of any such amendment, waiver or consent or thereafter shall be
bound by any amendment, waiver or consent effected pursuant to this Section
8(c), whether or not any notice, writing or marking indicating such amendment,
waiver or consent appears on the Registrable Securities or is delivered to such
Holder.

         (d)      Notices. All notices and other communications provided for or
permitted hereunder shall be given as provided in the Indenture.

         (e)      Parties in Interest. The parties to this Agreement intend that
all Holders of Registrable Securities shall be entitled to receive the benefits
of this Agreement and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with respect to the
Registrable Securities which are included in a Shelf Registration Statement. All
the terms and provisions of this Agreement shall be binding upon, shall inure to
the benefit of and shall be enforceable by the respective successors and assigns
of the parties hereto and any Holder from time to time of the Registrable
Securities to the aforesaid extent. In the event that any transferee of any
Holder of Registrable Securities shall acquire Registrable Securities, in any
manner, whether by gift, bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of any kind, be entitled
to receive the benefits of and, if an Electing Holder, be conclusively deemed to
have agreed to be bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.

         (f)      Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be

                                       15
<PAGE>   16
deemed to be an original and all of which taken together shall constitute one
and the same agreement.

         (g)      Headings. The headings in this agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

         (h)      GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

         (i)      Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties hereto shall be enforceable to the fullest extent permitted by law.

         (j)      Survival. The respective indemnities, agreements,
representations, warranties and other provisions set forth in this Agreement or
made pursuant hereto shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Electing Holder, any director, officer or partner of such Holder, any
agent or underwriter, any director, officer or partner of such agent or
underwriter, or any controlling person of any of the foregoing, and shall
survive the transfer and registration of the Registrable Securities of such
Holder.

                                       16
<PAGE>   17
         Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.

                                           Very truly yours,

                                           Calpine Corporation


                                           By: /s/ Ann B. Curtis
                                               --------------------------------
                                               Name:  Ann B. Curtis
                                               Title: Executive Vice President,
                                                      Chief Financial Officer
                                                      and Secretary

Accepted as of the date hereof:
Goldman, Sachs & Co.


By: /s/ Goldman Sachs & Co.
    -----------------------------------
    Name:  Goldman Sachs & Co.
    Title:


                                       17
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>5
<FILENAME>f74069ex12-1.txt
<DESCRIPTION>STATEMENT RE COMPUTATION OF RATIOS
<TEXT>

<PAGE>   1
                                                                    EXHIBIT 12.1


                          STATEMENT OF COMPUTATION OF
                       RATIO OF EARNINGS TO FIXED CHARGES


<TABLE>
<CAPTION>
                                                                                                        THREE MONTHS
                                                            YEAR ENDED DECEMBER 31,                    ENDED MARCH 31,
                                             --------------------------------------------------        ---------------
                                                1996       1997       1998      1999      2000            2001
                                                ----       ----       ----      ----      ----            ----
<S>                                          <C>       <C>        <C>       <C>         <C>            <C>
(in thousands)
COMPUTATION OF EARNINGS:
- ------------------------
Pretax income before adjustment for
  minority interests in consolidated
  subsidiaries and income or loss
  from equity investees .................     $21,219   $ 37,340   $ 48,133   $121,623   $ 521,683      $ 156,004
Fixed charges ...........................      48,672     72,718    100,015    153,268     331,023        144,239
Amortization of capitalized interest ....          --         --        136        331         447             16
Distributed income of equity investees ..       1,274     21,042     27,717     43,318      29,979          1,213
Interest capitalized ....................          --     (6,200)    (7,000)   (47,300)   (206,973)      (104,022)
Minority interest in pretax income
  of subsidiaries that have not
  incurred fixed charges ................          --         --        --         265        (895)            --
                                              -------   --------   --------   --------   ---------      ---------
Total earnings ..........................     $71,165   $124,900   $169,001   $271,505   $ 675,264      $ 197,450
                                              =======   ========   ========   ========   =========      =========

COMPUTATION OF FIXED CHARGES:
- ----------------------------
Interest expensed and capitalized .......     $45,294   $ 67,666   $ 93,726   $138,462   $ 263,673        119,727
Estimate of interest within
  rental expense ........................       3,378      5,052      6,289     12,241      23,140          9,337
Distributions on HIGH TIDES .............          --         --         --      2,565      44,210         15,175
                                              -------   --------   --------   --------   ---------      ---------
Total fixed charges .....................     $48,672   $ 72,718   $100,015   $153,268   $ 331,023      $ 144,239
                                              =======   ========   ========   ========   =========      =========
Ratio of earnings to fixed charges ......       1.46x      1.72x      1.69x      1.77x       2.04x          1.37x
</TABLE>

This information does not reflect any impact on Calpine's financial position or
results of operations that will result from our business combination under the
pooling of interest method of accounting consummated on April 19, 2001 with
Encal Energy Ltd.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>6
<FILENAME>f74069ex23-1.txt
<DESCRIPTION>CONSENT OF ARTHUR ANDERSEN LLP
<TEXT>

<PAGE>   1
                                                                    Exhibit 23.1



                   CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS


As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-3 of our report dated March
14, 2001 included in Calpine Corporation's Form 10-K for the year ended December
31, 2000 and to all references to our Firm included in this Registration
Statement on Form S-3.


/S/ ARTHUR ANDERSEN LLP



San Jose, California
July 25, 2001


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-25.1
<SEQUENCE>7
<FILENAME>f74069ex25-1.txt
<DESCRIPTION>STATEMENT OF ELIGIBILITY OF TRUSTEE
<TEXT>

<PAGE>   1
                                                                    Exhibit 25.1

                                                            Registration No.




                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM T-1

         STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
                  OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE

CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)  X
                 ------

                            WILMINGTON TRUST COMPANY
               (Exact name of trustee as specified in its charter)


        Delaware                                          51-0055023
(State of incorporation)                   (I.R.S. employer identification no.)

                               Rodney Square North
                            1100 North Market Street
                           Wilmington, Delaware 19890
                    (Address of principal executive offices)

                               Cynthia L. Corliss
                        Vice President and Trust Counsel
                            Wilmington Trust Company
                               Rodney Square North
                           Wilmington, Delaware 19890
                                 (302) 651-8516
            (Name, address and telephone number of agent for service)


                               CALPINE CORPORATION
               (Exact name of obligor as specified in its charter)

          Delaware                                        77-0212977
(State of incorporation)                   (I.R.S. employer identification no.)

    50 West San Fernando Street
       San Jose, California                               95113
(Address of principal executive offices)               (Zip Code)


  Zero Coupon Convertible Debentures Due April 30, 2021 of Calpine Corporation
                       (Title of the indenture securities)
<PAGE>   2
ITEM 1.     GENERAL INFORMATION.

                        Furnish the following information as to the trustee:

            (a)         Name and address of each examining or supervising
                        authority to which it is subject.

<TABLE>
<CAPTION>
<S>                     <C>                                  <C>
                        Federal Deposit Insurance Co.        State Bank Commissioner
                        Five Penn Center                     Dover, Delaware
                        Suite #2901
                        Philadelphia, PA
</TABLE>

            (b)         Whether it is authorized to exercise corporate trust
                        powers.

                        The trustee is authorized to exercise corporate trust
                        powers.

ITEM 2.     AFFILIATIONS WITH THE OBLIGOR.

                        If the obligor is an affiliate of the trustee, describe
                        each affiliation:

                        Based upon an examination of the books and records of
                        the trustee and upon information furnished by the
                        obligor, the obligor is not an affiliate of the trustee.

ITEM 3.     LIST OF EXHIBITS.

                        List below all exhibits filed as part of this Statement
                        of Eligibility and Qualification.

            A.          Copy of the Charter of Wilmington Trust Company, which
                        includes the certificate of authority of Wilmington
                        Trust Company to commence business and the authorization
                        of Wilmington Trust Company to exercise corporate trust
                        powers.

            B.          Copy of By-Laws of Wilmington Trust Company.

            C.          Consent of Wilmington Trust Company required by Section
                        321(b) of Trust Indenture Act.

            D.          Copy of most recent Report of Condition of Wilmington
                        Trust Company.

            Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 24th day
of July, 2001.

                                                      WILMINGTON TRUST COMPANY

[SEAL]

Attest:   /s/ Patricia A. Evans                       By:   /s/ James P. Lawler
         ------------------------                        ----------------------
         Assistant Secretary                             Name: James P. Lawler
                                                         Title:  Vice President


                                       2
<PAGE>   3
                                    EXHIBIT A

                                 AMENDED CHARTER

                            WILMINGTON TRUST COMPANY

                              WILMINGTON, DELAWARE

                           AS EXISTING ON MAY 9, 1987
<PAGE>   4
                                 AMENDED CHARTER

                                       OR

                              ACT OF INCORPORATION

                                       OF

                            WILMINGTON TRUST COMPANY

            WILMINGTON TRUST COMPANY, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "WILMINGTON TRUST COMPANY" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:

            FIRST: - The name of this corporation is WILMINGTON TRUST COMPANY.

            SECOND: - The location of its principal office in the State of
            Delaware is at Rodney Square North, in the City of Wilmington,
            County of New Castle; the name of its resident agent is WILMINGTON
            TRUST COMPANY whose address is Rodney Square North, in said City. In
            addition to such principal office, the said corporation maintains
            and operates branch offices in the City of Newark, New Castle
            County, Delaware, the Town of Newport, New Castle County, Delaware,
            at Claymont, New Castle County, Delaware, at Greenville, New Castle
            County Delaware, and at Milford Cross Roads, New Castle County,
            Delaware, and shall be empowered to open, maintain and operate
            branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
            2120 Market Street, and 3605 Market Street, all in the City of
            Wilmington, New Castle County, Delaware, and such other branch
            offices or places of business as may be authorized from time to time
            by the agency or agencies of the government of the State of Delaware
            empowered to confer such authority.

            THIRD: - (a) The nature of the business and the objects and purposes
            proposed to be transacted, promoted or carried on by this
            Corporation are to do any or all of the things herein mentioned as
            fully and to the same extent as natural persons might or could do
            and in any part of the world, viz.:

                        (1) To sue and be sued, complain and defend in any Court
                        of law or equity and to make and use a common seal, and
                        alter the seal at pleasure, to hold, purchase, convey,
                        mortgage or otherwise deal in real and personal estate
                        and property, and to appoint such officers and




<PAGE>   5
                        agents as the business of the Corporation shall require,
                        to make by-laws not inconsistent with the Constitution
                        or laws of the United States or of this State, to
                        discount bills, notes or other evidences of debt, to
                        receive deposits of money, or securities for money, to
                        buy gold and silver bullion and foreign coins, to buy
                        and sell bills of exchange, and generally to use,
                        exercise and enjoy all the powers, rights, privileges
                        and franchises incident to a corporation which are
                        proper or necessary for the transaction of the business
                        of the Corporation hereby created.

                        (2) To insure titles to real and personal property, or
                        any estate or interests therein, and to guarantee the
                        holder of such property, real or personal, against any
                        claim or claims, adverse to his interest therein, and to
                        prepare and give certificates of title for any lands or
                        premises in the State of Delaware, or elsewhere.

                        (3) To act as factor, agent, broker or attorney in the
                        receipt, collection, custody, investment and management
                        of funds, and the purchase, sale, management and
                        disposal of property of all descriptions, and to prepare
                        and execute all papers which may be necessary or proper
                        in such business.

                        (4) To prepare and draw agreements, contracts, deeds,
                        leases, conveyances, mortgages, bonds and legal papers
                        of every description, and to carry on the business of
                        conveyancing in all its branches.

                        (5) To receive upon deposit for safekeeping money,
                        jewelry, plate, deeds, bonds and any and all other
                        personal property of every sort and kind, from
                        executors, administrators, guardians, public officers,
                        courts, receivers, assignees, trustees, and from all
                        fiduciaries, and from all other persons and individuals,
                        and from all corporations whether state, municipal,
                        corporate or private, and to rent boxes, safes, vaults
                        and other receptacles for such property.

                        (6) To act as agent or otherwise for the purpose of
                        registering, issuing, certificating, countersigning,
                        transferring or underwriting the stock, bonds or other
                        obligations of any corporation, association, state or
                        municipality, and may receive and manage any sinking
                        fund therefor on such terms as may be agreed upon
                        between the two parties, and in like manner may act as
                        Treasurer of any corporation or municipality.

                        (7) To act as Trustee under any deed of trust, mortgage,
                        bond or other instrument issued by any state,
                        municipality, body politic, corporation, association or
                        person, either alone or in conjunction with any other
                        person or persons, corporation or corporations.

                        (8) To guarantee the validity, performance or effect of
                        any contract or agreement, and the fidelity of persons
                        holding places of responsibility or

                                       2



<PAGE>   6
                        trust; to become surety for any person, or persons, for
                        the faithful performance of any trust, office, duty,
                        contract or agreement, either by itself or in
                        conjunction with any other person, or persons,
                        corporation, or corporations, or in like manner become
                        surety upon any bond, recognizance, obligation,
                        judgment, suit, order, or decree to be entered in any
                        court of record within the State of Delaware or
                        elsewhere, or which may now or hereafter be required by
                        any law, judge, officer or court in the State of
                        Delaware or elsewhere.

                        (9) To act by any and every method of appointment as
                        trustee, trustee in bankruptcy, receiver, assignee,
                        assignee in bankruptcy, executor, administrator,
                        guardian, bailee, or in any other trust capacity in the
                        receiving, holding, managing, and disposing of any and
                        all estates and property, real, personal or mixed, and
                        to be appointed as such trustee, trustee in bankruptcy,
                        receiver, assignee, assignee in bankruptcy, executor,
                        administrator, guardian or bailee by any persons,
                        corporations, court, officer, or authority, in the State
                        of Delaware or elsewhere; and whenever this Corporation
                        is so appointed by any person, corporation, court,
                        officer or authority such trustee, trustee in
                        bankruptcy, receiver, assignee, assignee in bankruptcy,
                        executor, administrator, guardian, bailee, or in any
                        other trust capacity, it shall not be required to give
                        bond with surety, but its capital stock shall be taken
                        and held as security for the performance of the duties
                        devolving upon it by such appointment.

                        (10) And for its care, management and trouble, and the
                        exercise of any of its powers hereby given, or for the
                        performance of any of the duties which it may undertake
                        or be called upon to perform, or for the assumption of
                        any responsibility the said Corporation may be entitled
                        to receive a proper compensation.

                        (11) To purchase, receive, hold and own bonds,
                        mortgages, debentures, shares of capital stock, and
                        other securities, obligations, contracts and evidences
                        of indebtedness, of any private, public or municipal
                        corporation within and without the State of Delaware, or
                        of the Government of the United States, or of any state,
                        territory, colony, or possession thereof, or of any
                        foreign government or country; to receive, collect,
                        receipt for, and dispose of interest, dividends and
                        income upon and from any of the bonds, mortgages,
                        debentures, notes, shares of capital stock, securities,
                        obligations, contracts, evidences of indebtedness and
                        other property held and owned by it, and to exercise in
                        respect of all such bonds, mortgages, debentures, notes,
                        shares of capital stock, securities, obligations,
                        contracts, evidences of indebtedness and other property,
                        any and all the rights, powers and privileges of
                        individual owners thereof, including the right to vote
                        thereon; to invest and deal in and with any of the
                        moneys of the Corporation upon such securities and in
                        such manner as it may think fit and proper, and from
                        time to time to vary or realize such investments; to
                        issue bonds and

                                       3



<PAGE>   7




                        secure the same by pledges or deeds of trust or
                        mortgages of or upon the whole or any part of the
                        property held or owned by the Corporation, and to sell
                        and pledge such bonds, as and when the Board of
                        Directors shall determine, and in the promotion of its
                        said corporate business of investment and to the extent
                        authorized by law, to lease, purchase, hold, sell,
                        assign, transfer, pledge, mortgage and convey real and
                        personal property of any name and nature and any estate
                        or interest therein.

            (b) In furtherance of, and not in limitation, of the powers
            conferred by the laws of the State of Delaware, it is hereby
            expressly provided that the said Corporation shall also have the
            following powers:

                        (1) To do any or all of the things herein set forth, to
                        the same extent as natural persons might or could do,
                        and in any part of the world.

                        (2) To acquire the good will, rights, property and
                        franchises and to undertake the whole or any part of the
                        assets and liabilities of any person, firm, association
                        or corporation, and to pay for the same in cash, stock
                        of this Corporation, bonds or otherwise; to hold or in
                        any manner to dispose of the whole or any part of the
                        property so purchased; to conduct in any lawful manner
                        the whole or any part of any business so acquired, and
                        to exercise all the powers necessary or convenient in
                        and about the conduct and management of such business.

                        (3) To take, hold, own, deal in, mortgage or otherwise
                        lien, and to lease, sell, exchange, transfer, or in any
                        manner whatever dispose of property, real, personal or
                        mixed, wherever situated.

                        (4) To enter into, make, perform and carry out contracts
                        of every kind with any person, firm, association or
                        corporation, and, without limit as to amount, to draw,
                        make, accept, endorse, discount, execute and issue
                        promissory notes, drafts, bills of exchange, warrants,
                        bonds, debentures, and other negotiable or transferable
                        instruments.

                        (5) To have one or more offices, to carry on all or any
                        of its operations and businesses, without restriction to
                        the same extent as natural persons might or could do, to
                        purchase or otherwise acquire, to hold, own, to
                        mortgage, sell, convey or otherwise dispose of, real and
                        personal property, of every class and description, in
                        any State, District, Territory or Colony of the United
                        States, and in any foreign country or place.

                        (6) It is the intention that the objects, purposes and
                        powers specified and clauses contained in this paragraph
                        shall (except where otherwise expressed in said
                        paragraph) be nowise limited or restricted by reference
                        to or inference from the terms of any other clause of
                        this or any other paragraph in this charter, but that
                        the objects, purposes and powers specified in each of
                        the clauses of this paragraph shall be regarded as
                        independent objects, purposes and powers.

                                       4

<PAGE>   8
            FOURTH: - (a) The total number of shares of all classes of stock
            which the Corporation shall have authority to issue is forty-one
            million (41,000,000) shares, consisting of:

                        (1) One million (1,000,000) shares of Preferred stock,
                        par value $10.00 per share (hereinafter referred to as
                        "Preferred Stock"); and

                        (2) Forty million (40,000,000) shares of Common Stock,
                        par value $1.00 per share (hereinafter referred to as
                        "Common Stock").

            (b) Shares of Preferred Stock may be issued from time to time in one
            or more series as may from time to time be determined by the Board
            of Directors each of said series to be distinctly designated. All
            shares of any one series of Preferred Stock shall be alike in every
            particular, except that there may be different dates from which
            dividends, if any, thereon shall be cumulative, if made cumulative.
            The voting powers and the preferences and relative, participating,
            optional and other special rights of each such series, and the
            qualifications, limitations or restrictions thereof, if any, may
            differ from those of any and all other series at any time
            outstanding; and, subject to the provisions of subparagraph 1 of
            Paragraph (c) of this Article FOURTH, the Board of Directors of the
            Corporation is hereby expressly granted authority to fix by
            resolution or resolutions adopted prior to the issuance of any
            shares of a particular series of Preferred Stock, the voting powers
            and the designations, preferences and relative, optional and other
            special rights, and the qualifications, limitations and restrictions
            of such series, including, but without limiting the generality of
            the foregoing, the following:

                        (1) The distinctive designation of, and the number of
                        shares of Preferred Stock which shall constitute such
                        series, which number may be increased (except where
                        otherwise provided by the Board of Directors) or
                        decreased (but not below the number of shares thereof
                        then outstanding) from time to time by like action of
                        the Board of Directors;

                        (2) The rate and times at which, and the terms and
                        conditions on which, dividends, if any, on Preferred
                        Stock of such series shall be paid, the extent of the
                        preference or relation, if any, of such dividends to the
                        dividends payable on any other class or classes, or
                        series of the same or other class of stock and whether
                        such dividends shall be cumulative or non-cumulative;

                        (3) The right, if any, of the holders of Preferred Stock
                        of such series to convert the same into or exchange the
                        same for, shares of any other class or classes or of any
                        series of the same or any other class or classes of
                        stock of the Corporation and the terms and conditions of
                        such conversion or exchange;

                                       5


<PAGE>   9
                        (4) Whether or not Preferred Stock of such series shall
                        be subject to redemption, and the redemption price or
                        prices and the time or times at which, and the terms and
                        conditions on which, Preferred Stock of such series may
                        be redeemed.

                        (5) The rights, if any, of the holders of Preferred
                        Stock of such series upon the voluntary or involuntary
                        liquidation, merger, consolidation, distribution or sale
                        of assets, dissolution or winding-up, of the
                        Corporation.

                        (6) The terms of the sinking fund or redemption or
                        purchase account, if any, to be provided for the
                        Preferred Stock of such series; and

                        (7) The voting powers, if any, of the holders of such
                        series of Preferred Stock which may, without limiting
                        the generality of the foregoing include the right,
                        voting as a series or by itself or together with other
                        series of Preferred Stock or all series of Preferred
                        Stock as a class, to elect one or more directors of the
                        Corporation if there shall have been a default in the
                        payment of dividends on any one or more series of
                        Preferred Stock or under such circumstances and on such
                        conditions as the Board of Directors may determine.

            (c) (1) After the requirements with respect to preferential
            dividends on the Preferred Stock (fixed in accordance with the
            provisions of section (b) of this Article FOURTH), if any, shall
            have been met and after the Corporation shall have complied with all
            the requirements, if any, with respect to the setting aside of sums
            as sinking funds or redemption or purchase accounts (fixed in
            accordance with the provisions of section (b) of this Article
            FOURTH), and subject further to any conditions which may be fixed in
            accordance with the provisions of section (b) of this Article
            FOURTH, then and not otherwise the holders of Common Stock shall be
            entitled to receive such dividends as may be declared from time to
            time by the Board of Directors.

                        (2) After distribution in full of the preferential
                        amount, if any, (fixed in accordance with the provisions
                        of section (b) of this Article FOURTH), to be
                        distributed to the holders of Preferred Stock in the
                        event of voluntary or involuntary liquidation,
                        distribution or sale of assets, dissolution or winding-
                        up, of the Corporation, the holders of the Common Stock
                        shall be entitled to receive all of the remaining assets
                        of the Corporation, tangible and intangible, of whatever
                        kind available for distribution to stockholders ratably
                        in proportion to the number of shares of Common Stock
                        held by them respectively.

                        (3) Except as may otherwise be required by law or by the
                        provisions of such resolution or resolutions as may be
                        adopted by the Board of Directors pursuant to section
                        (b) of this Article FOURTH, each holder of Common Stock
                        shall have one vote in respect of each share of Common

                                       6


<PAGE>   10
                        Stock held on all matters voted upon by the
                        stockholders.

            (d) No holder of any of the shares of any class or series of stock
            or of options, warrants or other rights to purchase shares of any
            class or series of stock or of other securities of the Corporation
            shall have any preemptive right to purchase or subscribe for any
            unissued stock of any class or series or any additional shares of
            any class or series to be issued by reason of any increase of the
            authorized capital stock of the Corporation of any class or series,
            or bonds, certificates of indebtedness, debentures or other
            securities convertible into or exchangeable for stock of the
            Corporation of any class or series, or carrying any right to
            purchase stock of any class or series, but any such unissued stock,
            additional authorized issue of shares of any class or series of
            stock or securities convertible into or exchangeable for stock, or
            carrying any right to purchase stock, may be issued and disposed of
            pursuant to resolution of the Board of Directors to such persons,
            firms, corporations or associations, whether such holders or others,
            and upon such terms as may be deemed advisable by the Board of
            Directors in the exercise of its sole discretion.

            (e) The relative powers, preferences and rights of each series of
            Preferred Stock in relation to the relative powers, preferences and
            rights of each other series of Preferred Stock shall, in each case,
            be as fixed from time to time by the Board of Directors in the
            resolution or resolutions adopted pursuant to authority granted in
            section (b) of this Article FOURTH and the consent, by class or
            series vote or otherwise, of the holders of such of the series of
            Preferred Stock as are from time to time outstanding shall not be
            required for the issuance by the Board of Directors of any other
            series of Preferred Stock whether or not the powers, preferences and
            rights of such other series shall be fixed by the Board of Directors
            as senior to, or on a parity with, the powers, preferences and
            rights of such outstanding series, or any of them; provided,
            however, that the Board of Directors may provide in the resolution
            or resolutions as to any series of Preferred Stock adopted pursuant
            to section (b) of this Article FOURTH that the consent of the
            holders of a majority (or such greater proportion as shall be
            therein fixed) of the outstanding shares of such series voting
            thereon shall be required for the issuance of any or all other
            series of Preferred Stock.

            (f) Subject to the provisions of section (e), shares of any series
            of Preferred Stock may be issued from time to time as the Board of
            Directors of the Corporation shall determine and on such terms and
            for such consideration as shall be fixed by the Board of Directors.

            (g) Shares of Common Stock may be issued from time to time as the
            Board of Directors of the Corporation shall determine and on such
            terms and for such consideration as shall be fixed by the Board of
            Directors.

            (h) The authorized amount of shares of Common Stock and of Preferred
            Stock may, without a class or series vote, be increased or decreased
            from

                                       7


<PAGE>   11
            time to time by the affirmative vote of the holders of a majority of
            the stock of the Corporation entitled to vote thereon.

            FIFTH: - (a) The business and affairs of the Corporation shall be
            conducted and managed by a Board of Directors. The number of
            directors constituting the entire Board shall be not less than five
            nor more than twenty-five as fixed from time to time by vote of a
            majority of the whole Board, provided, however, that the number of
            directors shall not be reduced so as to shorten the term of any
            director at the time in office, and provided further, that the
            number of directors constituting the whole Board shall be
            twenty-four until otherwise fixed by a majority of the whole Board.

            (b) The Board of Directors shall be divided into three classes, as
            nearly equal in number as the then total number of directors
            constituting the whole Board permits, with the term of office of one
            class expiring each year. At the annual meeting of stockholders in
            1982, directors of the first class shall be elected to hold office
            for a term expiring at the next succeeding annual meeting, directors
            of the second class shall be elected to hold office for a term
            expiring at the second succeeding annual meeting and directors of
            the third class shall be elected to hold office for a term expiring
            at the third succeeding annual meeting. Any vacancies in the Board
            of Directors for any reason, and any newly created directorships
            resulting from any increase in the directors, may be filled by the
            Board of Directors, acting by a majority of the directors then in
            office, although less than a quorum, and any directors so chosen
            shall hold office until the next annual election of directors. At
            such election, the stockholders shall elect a successor to such
            director to hold office until the next election of the class for
            which such director shall have been chosen and until his successor
            shall be elected and qualified. No decrease in the number of
            directors shall shorten the term of any incumbent director.

            (c) Notwithstanding any other provisions of this Charter or Act of
            Incorporation or the By-Laws of the Corporation (and notwithstanding
            the fact that some lesser percentage may be specified by law, this
            Charter or Act of Incorporation or the By-Laws of the Corporation),
            any director or the entire Board of Directors of the Corporation may
            be removed at any time without cause, but only by the affirmative
            vote of the holders of two-thirds or more of the outstanding shares
            of capital stock of the Corporation entitled to vote generally in
            the election of directors (considered for this purpose as one class)
            cast at a meeting of the stockholders called for that purpose.

            (d) Nominations for the election of directors may be made by the
            Board of Directors or by any stockholder entitled to vote for the
            election of directors. Such nominations shall be made by notice in
            writing, delivered or mailed by first class United States mail,
            postage prepaid, to the Secretary of the Corporation not less than
            14 days nor more than 50 days prior to any meeting of the
            stockholders called for the election of directors; provided,
            however, that if less than 21 days' notice of the meeting is given
            to stockholders, such written

                                       8
<PAGE>   12
            notice shall be delivered or mailed, as prescribed, to the Secretary
            of the Corporation not later than the close of the seventh day
            following the day on which notice of the meeting was mailed to
            stockholders. Notice of nominations which are proposed by the Board
            of Directors shall be given by the Chairman on behalf of the Board.

            (e) Each notice under subsection (d) shall set forth (i) the name,
            age, business address and, if known, residence address of each
            nominee proposed in such notice, (ii) the principal occupation or
            employment of such nominee and (iii) the number of shares of stock
            of the Corporation which are beneficially owned by each such
            nominee.

            (f) The Chairman of the meeting may, if the facts warrant, determine
            and declare to the meeting that a nomination was not made in
            accordance with the foregoing procedure, and if he should so
            determine, he shall so declare to the meeting and the defective
            nomination shall be disregarded.

            (g) No action required to be taken or which may be taken at any
            annual or special meeting of stockholders of the Corporation may be
            taken without a meeting, and the power of stockholders to consent in
            writing, without a meeting, to the taking of any action is
            specifically denied.

            SIXTH: - The Directors shall choose such officers, agents and
            servants as may be provided in the By-Laws as they may from time to
            time find necessary or proper.

            SEVENTH: - The Corporation hereby created is hereby given the same
            powers, rights and privileges as may be conferred upon corporations
            organized under the Act entitled "An Act Providing a General
            Corporation Law", approved March 10, 1899, as from time to time
            amended.

            EIGHTH: - This Act shall be deemed and taken to be a private Act.

            NINTH: - This Corporation is to have perpetual existence.

            TENTH: - The Board of Directors, by resolution passed by a majority
            of the whole Board, may designate any of their number to constitute
            an Executive Committee, which Committee, to the extent provided in
            said resolution, or in the By-Laws of the Company, shall have and
            may exercise all of the powers of the Board of Directors in the
            management of the business and affairs of the Corporation, and shall
            have power to authorize the seal of the Corporation to be affixed to
            all papers which may require it.

            ELEVENTH: - The private property of the stockholders shall not be
            liable for the payment of corporate debts to any extent whatever.

            TWELFTH: - The Corporation may transact business in any part of the
            world.

                                       9
<PAGE>   13
            THIRTEENTH: - The Board of Directors of the Corporation is expressly
            authorized to make, alter or repeal the By-Laws of the Corporation
            by a vote of the majority of the entire Board. The stockholders may
            make, alter or repeal any By-Law whether or not adopted by them,
            provided however, that any such additional By-Laws, alterations or
            repeal may be adopted only by the affirmative vote of the holders of
            two-thirds or more of the outstanding shares of capital stock of the
            Corporation entitled to vote generally in the election of directors
            (considered for this purpose as one class).

            FOURTEENTH: - Meetings of the Directors may be held outside of the
            State of Delaware at such places as may be from time to time
            designated by the Board, and the Directors may keep the books of the
            Company outside of the State of Delaware at such places as may be
            from time to time designated by them.

            FIFTEENTH: - (a) (1) In addition to any affirmative vote required by
            law, and except as otherwise expressly provided in sections (b) and
            (c) of this Article FIFTEENTH:

                        (A) any merger or consolidation of the Corporation or
                        any Subsidiary (as hereinafter defined) with or into (i)
                        any Interested Stockholder (as hereinafter defined) or
                        (ii) any other corporation (whether or not itself an
                        Interested Stockholder), which, after such merger or
                        consolidation, would be an Affiliate (as hereinafter
                        defined) of an Interested Stockholder, or

                        (B) any sale, lease, exchange, mortgage, pledge,
                        transfer or other disposition (in one transaction or a
                        series of related transactions) to or with any
                        Interested Stockholder or any Affiliate of any
                        Interested Stockholder of any assets of the Corporation
                        or any Subsidiary having an aggregate fair market value
                        of $1,000,000 or more, or

                        (C) the issuance or transfer by the Corporation or any
                        Subsidiary (in one transaction or a series of related
                        transactions) of any securities of the Corporation or
                        any Subsidiary to any Interested Stockholder or any
                        Affiliate of any Interested Stockholder in exchange for
                        cash, securities or other property (or a combination
                        thereof) having an aggregate fair market value of
                        $1,000,000 or more, or

                        (D) the adoption of any plan or proposal for the
                        liquidation or dissolution of the Corporation, or

                        (E) any reclassification of securities (including any
                        reverse stock split), or recapitalization of the
                        Corporation, or any merger or consolidation of the
                        Corporation with any of its Subsidiaries or any similar
                        transaction (whether or not with or into or otherwise
                        involving an Interested Stockholder) which has the
                        effect, directly or indirectly, of increasing the
                        proportionate share of the outstanding shares of any
                        class of equity or convertible securities of the
                        Corporation or any Subsidiary which is

                                       10
<PAGE>   14
                        directly or indirectly owned by any Interested
                        Stockholder, or any Affiliate of any Interested
                        Stockholder,

shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article FIFTEENTH as one class ("Voting Shares"). Such affirmative vote shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.

                        (2) The term "business combination" as used in this
                        Article FIFTEENTH shall mean any transaction which is
                        referred to in any one or more of clauses (A) through
                        (E) of paragraph 1 of the section (a).

            (b) The provisions of section (a) of this Article FIFTEENTH shall
            not be applicable to any particular business combination and such
            business combination shall require only such affirmative vote as is
            required by law and any other provisions of the Charter or Act of
            Incorporation or By-Laws if such business combination has been
            approved by a majority of the whole Board.

            (c) For the purposes of this Article FIFTEENTH:

            (1) A "person" shall mean any individual, firm, corporation or other
            entity.

            (2) "Interested Stockholder" shall mean, in respect of any business
            combination, any person (other than the Corporation or any
            Subsidiary) who or which as of the record date for the determination
            of stockholders entitled to notice of and to vote on such business
            combination, or immediately prior to the consummation of any such
            transaction:

                        (A) is the beneficial owner, directly or indirectly, of
                        more than 10% of the Voting Shares, or

                        (B) is an Affiliate of the Corporation and at any time
                        within two years prior thereto was the beneficial owner,
                        directly or indirectly, of not less than 10% of the then
                        outstanding voting Shares, or

                        (C) is an assignee of or has otherwise succeeded in any
                        share of capital stock of the Corporation which were at
                        any time within two years prior thereto beneficially
                        owned by any Interested Stockholder, and such assignment
                        or succession shall have occurred in the course of a
                        transaction or series of transactions not involving a
                        public offering within the meaning of the Securities Act
                        of 1933.

            (3)  A person shall be the "beneficial owner" of any Voting Shares:

                                       11
<PAGE>   15
                        (A) which such person or any of its Affiliates and
                        Associates (as hereafter defined) beneficially own,
                        directly or indirectly, or

                        (B) which such person or any of its Affiliates or
                        Associates has (i) the right to acquire (whether such
                        right is exercisable immediately or only after the
                        passage of time), pursuant to any agreement, arrangement
                        or understanding or upon the exercise of conversion
                        rights, exchange rights, warrants or options, or
                        otherwise, or (ii) the right to vote pursuant to any
                        agreement, arrangement or understanding, or

                        (C) which are beneficially owned, directly or
                        indirectly, by any other person with which such first
                        mentioned person or any of its Affiliates or Associates
                        has any agreement, arrangement or understanding for the
                        purpose of acquiring, holding, voting or disposing of
                        any shares of capital stock of the Corporation.

            (4) The outstanding Voting Shares shall include shares deemed owned
            through application of paragraph (3) above but shall not include any
            other Voting Shares which may be issuable pursuant to any agreement,
            or upon exercise of conversion rights, warrants or options or
            otherwise.

            (5) "Affiliate" and "Associate" shall have the respective meanings
            given those terms in Rule 12b-2 of the General Rules and Regulations
            under the Securities Exchange Act of 1934, as in effect on December
            31, 1981.

            (6) "Subsidiary" shall mean any corporation of which a majority of
            any class of equity security (as defined in Rule 3a11-1 of the
            General Rules and Regulations under the Securities Exchange Act of
            1934, as in effect on December 31, 1981) is owned, directly or
            indirectly, by the Corporation; provided, however, that for the
            purposes of the definition of Investment Stockholder set forth in
            paragraph (2) of this section (c), the term "Subsidiary" shall mean
            only a corporation of which a majority of each class of equity
            security is owned, directly or indirectly, by the Corporation.

                        (d) majority of the directors shall have the power and
                        duty to determine for the purposes of this Article
                        FIFTEENTH on the basis of information known to them, (1)
                        the number of Voting Shares beneficially owned by any
                        person (2) whether a person is an Affiliate or Associate
                        of another, (3) whether a person has an agreement,
                        arrangement or understanding with another as to the
                        matters referred to in paragraph (3) of section (c), or
                        (4) whether the assets subject to any business
                        combination or the consideration received for the
                        issuance or transfer of securities by the Corporation,
                        or any Subsidiary has an aggregate fair market value of
                        $1,000,000 or more.

                        (e) Nothing contained in this Article FIFTEENTH shall be
                        construed to relieve any Interested Stockholder from any
                        fiduciary obligation imposed

                                       12
<PAGE>   16
                        by law.

            SIXTEENTH: Notwithstanding any other provision of this Charter or
            Act of Incorporation or the By-Laws of the Corporation (and in
            addition to any other vote that may be required by law, this Charter
            or Act of Incorporation by the By-Laws), the affirmative vote of the
            holders of at least two-thirds of the outstanding shares of the
            capital stock of the Corporation entitled to vote generally in the
            election of directors (considered for this purpose as one class)
            shall be required to amend, alter or repeal any provision of
            Articles FIFTH, THIRTEENTH, FIFTEENTH or SIXTEENTH of this Charter
            or Act of Incorporation.

            SEVENTEENTH: (a) a Director of this Corporation shall not be liable
            to the Corporation or its stockholders for monetary damages for
            breach of fiduciary duty as a Director, except to the extent such
            exemption from liability or limitation thereof is not permitted
            under the Delaware General Corporation Laws as the same exists or
            may hereafter be amended.

                        (b) Any repeal or modification of the foregoing
                        paragraph shall not adversely affect any right or
                        protection of a Director of the Corporation existing
                        hereunder with respect to any act or omission occurring
                        prior to the time of such repeal or modification."

                                       13
<PAGE>   17
                                    EXHIBIT B

                                     BY-LAWS

                            WILMINGTON TRUST COMPANY

                              WILMINGTON, DELAWARE

                        AS EXISTING ON FEBRUARY 20, 2000
<PAGE>   18
                       BY-LAWS OF WILMINGTON TRUST COMPANY

                                    ARTICLE I

                             STOCKHOLDERS' MEETINGS

            Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.

            Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.

            Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.

            Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.

                                   ARTICLE II

                                    DIRECTORS

            Section 1. The authorized number of directors that shall constitute
the Board of Directors shall be fixed from time to time by or pursuant to a
resolution passed by a majority of the Board within the parameters set by the
Charter of the Bank. No more than two directors may also be employees of the
Company or any affiliate thereof.

            Section 2. Except as provided in these Bylaws or as otherwise
required by law, there shall be no qualifications for election or service as
directors of the Company. In addition to any other provisions of these Bylaws,
to be qualified for nomination for Election or appointment to the Board of
Directors each person must have not attained the age of sixty-nine years at the
time of such election or appointment, provided however, the Nominating and
Corporate Governance Committee may waive such qualification as to a particular
candidate otherwise qualified to serve as a director upon a good faith
determination by such committee that such a waiver is in the best interests of
the Company and its stockholders. The Chairman of the Board of Directors shall
not be qualified to continue to serve as a director upon the termination of his
or her services in that office for any reason.
<PAGE>   19
            Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.

            Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.

            Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Board of
Directors or the President.

            Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.

            Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.

            Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.

            Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.

            Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.

            Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.

            Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.

                                       2

<PAGE>   20
                                   ARTICLE III
                                   COMMITTEES

            Section 1.  Executive Committee

                        (A) The Executive Committee shall be composed of not
more than nine members who shall be selected by the Board of Directors from its
own members and who shall hold office during the pleasure of the Board.

                        (B) The Executive Committee shall have all the powers of
the Board of Directors when it is not in session to transact all business for
and in behalf of the Company that may be brought before it.

                        (C) The Executive Committee shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of the
Executive Committee or at the call of the Chairman of the Board of Directors.
The majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be held
at any time when a quorum is present.

                        (D) Minutes of each meeting of the Executive Committee
shall be kept and submitted to the Board of Directors at its next meeting.

                        (E) The Executive Committee shall advise and superintend
all investments that may be made of the funds of the Company, and shall direct
the disposal of the same, in accordance with such rules and regulations as the
Board of Directors from time to time make.

                        (F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Company by its directors and officers as contemplated by these By-Laws any
two available members of the Executive Committee as constituted immediately
prior to such disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the provisions of Article III of these By-Laws; and if less than three
members of the Trust Committee is constituted immediately prior to such disaster
shall be available for the transaction of its business, such Executive Committee
shall also be empowered to exercise all of the powers reserved to the Trust
Committee under Article III Section 2 hereof. In the event of the
unavailability, at such time, of a minimum of two members of such Executive
Committee, any three available directors shall constitute the Executive
Committee for the full conduct and management of the affairs and business of the
Company in accordance with the foregoing provisions of this Section. This By-Law
shall be subject to implementation by Resolutions of the Board of Directors
presently existing or hereafter passed from time to time for that purpose, and
any provisions of these By-Laws (other than this Section) and any resolutions
which are contrary to the provisions of this Section or to the provisions of any
such implementary Resolutions shall be suspended during such a disaster period
until it shall be determined by any


                                       3
<PAGE>   21
interim Executive Committee acting under this section that it shall be to the
advantage of the Company to resume the conduct and management of its affairs and
business under all of the other provisions of these By-Laws.

            Section 2.  Audit Committee

                        (A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.

                        (B) The Audit Committee shall have general supervision
over the Audit Division in all matters however subject to the approval of the
Board of Directors; it shall consider all matters brought to its attention by
the officer in charge of the Audit Division, review all reports of examination
of the Company made by any governmental agency or such independent auditor
employed for that purpose, and make such recommendations to the Board of
Directors with respect thereto or with respect to any other matters pertaining
to auditing the Company as it shall deem desirable.

                        (C) The Audit Committee shall meet whenever and wherever
the majority of its members shall deem it to be proper for the transaction of
its business, and a majority of its Committee shall constitute a quorum.

            Section 3.  Compensation Committee

                        (A) The Compensation Committee shall be composed of not
more than five (5) members who shall be selected by the Board of Directors from
its own members who are not officers of the Company and who shall hold office
during the pleasure of the Board.

                        (B) The Compensation Committee shall in general advise
upon all matters of policy concerning the Company brought to its attention by
the management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.

                        (C) Meetings of the Compensation Committee may be called
at any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.

                                       4


<PAGE>   22
            Section 4.  Associate Directors

                        (A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to serve during the
pleasure of the Board.

                        (B) An associate director shall be entitled to attend
all directors meetings and participate in the discussion of all matters brought
to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.

            Section 5.  Absence or Disqualification of Any Member of a Committee

                        (A) In the absence or disqualification of any member of
any Committee created under Article III of the By-Laws of this Company, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member.

                                   ARTICLE IV
                                    OFFICERS

            Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.

            Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.

            Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors. In the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.

            Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.

                                       5


<PAGE>   23
            Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.

            Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.

            Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.

            Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.

            There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.

            Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.

            There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.

            Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in

                                       6

<PAGE>   24
charge of the department or division to whom they are assigned.

            Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.

                                    ARTICLE V
                          STOCK AND STOCK CERTIFICATES

            Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.

            Section 2. Certificates of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.

            Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.

                                       7

<PAGE>   25
                                   ARTICLE VI
                                      SEAL

            Section 1. The corporate seal of the Company shall be in the
following form:

                        Between two concentric circles the words "Wilmington
                        Trust Company" within the inner circle the words
                        "Wilmington, Delaware."

                                   ARTICLE VII
                                   FISCAL YEAR

            Section 1. The fiscal year of the Company shall be the calendar
year.

                                  ARTICLE VIII
                     EXECUTION OF INSTRUMENTS OF THE COMPANY

            Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.

                                   ARTICLE IX
               COMPENSATION OF DIRECTORS AND MEMBERS OF COMMITTEES

            Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.

                                       8

<PAGE>   26
                                    ARTICLE X
                                 INDEMNIFICATION

            Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.

                        (B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
that the payment of expenses incurred by a Director or officer in his capacity
as a Director or officer in advance of the final disposition of the proceeding
shall be made only upon receipt of an undertaking by the Director or officer to
repay all amounts advanced if it should be ultimately determined that the
Director or officer is not entitled to be indemnified under this Article or
otherwise.

                        (C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses under applicable law.

                        (D) The rights conferred on any person by this Article X
shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.

                        (E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.

                                   ARTICLE XI
                            AMENDMENTS TO THE BY-LAWS


                                       9

<PAGE>   27
            Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.

                                       10

<PAGE>   28
                                    EXHIBIT C



                             SECTION 321(b) CONSENT

            Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.



                                  WILMINGTON TRUST COMPANY


Dated: July 24, 2001              By:   /s/ James P. Lawler
                                     -----------------------------------
                                  Name: James P. Lawler
                                  Title: Vice President
<PAGE>   29
                                    EXHIBIT D

                                     NOTICE

            This form is intended to assist state nonmember banks
            and savings banks with state publication requirements.
            It has not been approved by any state banking
            authorities. Refer to your appropriate state banking
            authorities for your state publication requirements.


REPORT OF CONDITION

Consolidating domestic subsidiaries of the

           WILMINGTON TRUST COMPANY                        of     WILMINGTON
                 Name of Bank                                        City

in the State of DELAWARE, at the close of business on March 31, 2001.



ASSETS

<TABLE>
<CAPTION>
                                                                                                         Thousands of dollars
<S>                                                                                                         <C>
Cash and balances due from depository institutions:
         Noninterest-bearing balances and currency and coins...........................................         195,465
         Interest-bearing balances.....................................................................               0
Held-to-maturity securities............................................................................          17,881
Available-for-sale securities..........................................................................       1,294,541
Federal funds sold and securities purchased under agreements to resell.................................         505,993
Loans and lease financing receivables:
         Loans and leases, net of unearned income. . . . . .  4,687,583
         LESS:  Allowance for loan and lease losses. . . . .     70,510
         LESS:  Allocated transfer risk reserve. . . . . . .          0
         Loans and leases, net of unearned income, allowance, and reserve..............................       4,617,073
Assets held in trading accounts........................................................................               0
Premises and fixed assets (including capitalized leases)...............................................         127,356
Other real estate owned................................................................................             523
Investments in unconsolidated subsidiaries and associated companies....................................           1,748
Customers' liability to this bank on acceptances outstanding...........................................               0
Intangible assets:
         a.  Goodwill..................................................................................             249
         b.  Other intangible assets...................................................................           4,883
Other assets...........................................................................................         161,175
Total assets...........................................................................................       6,926,887
</TABLE>



                                                          CONTINUED ON NEXT PAGE
<PAGE>   30
LIABILITIES

<TABLE>
<S>                                                                                                      <C>
Deposits:
In domestic offices...................................................................................        5,420,816
         Noninterest-bearing . . . . . . . .    1,004,202
         Interest-bearing. . . . . . . . . .    4,416,614
Federal funds purchased and Securities sold under agreements to repurchase............................          247,037
Trading liabilities (from Schedule RC-D)..............................................................                0
Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases:........          631,250
Bank's liability on acceptances executed and outstanding..............................................                0
Subordinated notes and debentures.....................................................................                0
Other liabilities (from Schedule RC-G)................................................................          117,530
Total liabilities.....................................................................................        6,416,633


EQUITY CAPITAL

Perpetual preferred stock and related surplus.........................................................                0
Common Stock..........................................................................................              500
Surplus (exclude all surplus related to preferred stock)..............................................           62,118
a.  Retained earnings.................................................................................          440,962
b.  Accumulated other comprehensive income............................................................            6,674
Total equity capital..................................................................................          510,254
Total liabilities, limited-life preferred stock, and equity capital...................................        6,926,887
</TABLE>

                                       2

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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