<SEC-DOCUMENT>0000891618-01-501828.txt : 20011026
<SEC-HEADER>0000891618-01-501828.hdr.sgml : 20011026
ACCESSION NUMBER:		0000891618-01-501828
CONFORMED SUBMISSION TYPE:	S-3
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20011022

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:		1933 Act
		SEC FILE NUMBER:	333-71966
		FILM NUMBER:		1763120

	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>f76163ors-3.txt
<DESCRIPTION>FORM S-3
<TEXT>
<PAGE>

    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 22, 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>
                        DELAWARE                                                77-0212977
           (States or other jurisdictions of                                 (I.R.S. Employer
             incorporation or organization)                              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
                   registrant's 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:

                                BRUCE C. BENNETT
                              COVINGTON & BURLING
                          1330 AVENUE OF THE AMERICAS
                            NEW YORK, NEW YORK 10019
                                 (212) 841-1000

    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:  From time
to time after the effective date of this Registration Statement.

    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 MAXIMUM    PROPOSED MAXIMUM
              TITLE OF EACH CLASS                AMOUNT TO BE    OFFERING PRICE    AGGREGATE OFFERING      AMOUNT OF
        OF SECURITIES TO BE REGISTERED            REGISTERED        PER UNIT             PRICE          REGISTRATION FEE
------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>            <C>                <C>                  <C>
Common Stock, par value $.001 per share, of
  Calpine Corporation(1).......................   2,110,527         $27.16(2)        $57,321,914(2)         $14,331
------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------
</Table>

(1) Includes certain preferred stock purchase rights (the "Rights") associated
    with shares of the Common Stock of Calpine Corporation. Until the occurrence
    of certain prescribed events, none of which have occurred, the Rights are
    not exercisable, are evidenced by the certificate representing the Common
    Stock and will be transferred along with and only with the Common Stock.

(2) Estimated solely for the purpose of determining the registration fee in
    accordance with Rule 457(c) under the Securities Act based upon the average
    of the high and low prices of Calpine's Common Stock as reported on The New
    York Stock Exchange on October 16, 2001.
                             ---------------------

    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT 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>

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 OCTOBER 22, 2001

PROSPECTUS

[CALPINE CORP. LOGO]
                                2,110,527 SHARES

                              CALPINE CORPORATION

                                  COMMON STOCK
                          (PAR VALUE $.001 PER SHARE)

     This prospectus relates to the resales of shares of common stock of Calpine
Corporation, a Delaware corporation, by the selling holders named in this
prospectus. The shares were issued to Michael P. Polsky and certain holders in
connection with our acquisition of SkyGen Energy Holdings LLC, a Delaware
limited liability company, in October 2000. We will not receive any cash
proceeds from this offering.

     Up to 2,110,527 shares of the common stock offered hereby may be resold by
the selling holders named in this prospectus. The selling holders will receive
all of the proceeds from the sale of the securities and will pay any
underwriting discounts and selling commissions applicable to any sale. 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 commission or discounts under the Securities Act.

     We are paying all expenses of registration incurred in connection with this
offering, other than underwriter commissions and similar selling fees and
transfer costs.

     Calpine's common stock is traded on The New York Stock Exchange under the
symbol "CPN." On October 16, 2001, the last reported sales price of the common
stock on that exchange was $27.58. Unless otherwise indicated, all dollar
references in this prospectus are to U.S. dollars.

     INVESTING IN CALPINE'S COMMON STOCK INVOLVES RISKS. SEE "RISK FACTORS" ON
PAGE 8.

     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>

                               TABLE OF CONTENTS

<Table>
<Caption>
                                                              PAGE
                                                              ----
<S>                                                           <C>
The Company.................................................    1
Risk Factors................................................    8
Where You Can Find More Information.........................    8
Forward-Looking Statements..................................    9
Use of Proceeds.............................................   10
Selling Holders.............................................   10
Plan of Distribution........................................   11
Description of Capital Stock................................   11
Certain United States Federal Income Tax Considerations.....   15
Legal Matters...............................................   18
Experts.....................................................   18
</Table>

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

     This document is called a prospectus and is part of a registration
statement that we filed with the Securities and Exchange Commission (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. 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 is
accurate as of any date other than the date on the front of the document.

     The prospectus incorporates business and financial information about us
that is not included in or delivered with this 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 hereafter in this prospectus
to "Calpine," "we," "us," and "our" or similar terms are to Calpine Corporation
and its consolidated subsidiaries, excluding Calpine Capital Trust III, Calpine
Capital Trust II and Calpine Capital Trust. On April 19, 2001, we acquired Encal
Energy Ltd. ("Encal") in a merger transaction that was accounted for as a
pooling-of-interests under U.S. GAAP. All financial information contained in
this prospectus has been restated for all periods presented as if Encal and
Calpine had always been combined. As used in this prospectus, "EBITDA" is
defined as net income less
<PAGE>

income from unconsolidated investments, plus cash received from unconsolidated
investments, plus provision for tax, plus interest expense, plus one-third of
operating lease expenses, plus depreciation and amortization, plus distributions
on our company-obligated mandatorily redeemable convertible preferred securities
of subsidiary trusts. This non-GAAP measure is presented not as a measure of
operating results, but rather as a measure of Calpine's ability to service debt.
EBITDA should not be construed as an alternative to either (i) income from
operations (determined in accordance with U.S. GAAP) or (ii) cash flows from
operating activities (determined in accordance with U.S. GAAP).

                                        i
<PAGE>

                                  THE COMPANY

     We are a leading independent power company engaged in the development,
acquisition, ownership and operation of power generation facilities and the sale
of electricity and steam in the United States, Canada and the United Kingdom. We
have experienced significant growth in all aspects of our business over the last
five years. Currently, we own interests in 61 power plants having a net capacity
of 11,085 megawatts. We also have 30 gas-fired projects under construction
having a net capacity of 16,673 megawatts and have announced plans to develop 26
gas-fired projects (power plants and expansions of current facilities) with a
net capacity of 14,915 megawatts. Upon completion of the projects under
construction, we will have interests in 87 power plants located in 22 U.S.
states, three Canadian provinces and the United Kingdom, having a net capacity
of 27,758 megawatts. Of this total generating capacity, 97% will be attributable
to gas-fired facilities and 3% will be attributable to geothermal facilities. As
a result of our expansion program, our revenues, EBITDA, earnings and assets
have grown significantly over the last five years, as shown in the table below.

<Table>
<Caption>
                                                                              COMPOUND
                                                                               ANNUAL
                                                        1996       2000      GROWTH RATE
                                                      --------   ---------   -----------
                                                         (IN MILLIONS)
<S>                                                   <C>        <C>         <C>
Total Revenue.......................................  $  291.5   $ 2,547.1        72%
EBITDA..............................................     144.2     1,017.2        63%
Net Income..........................................      14.8       372.6       124%
Total Assets........................................   1,245.0    10,323.2        70%
</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.

                                   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

                                        1
<PAGE>

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.

                              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 Reports on Form 10-Q for the
quarters ended March 31, 2001 and June 30, 2001, and our Current Reports on Form
8-K filed on April 10, 2001, April 19, 2001, April 30, 2001, June 26, 2001, July
9, 2001, July 13, 2001, July 17, 2001, July 27, 2001, September 5, 2001,
September 10, 2001, October 9, 2001 and October 12, 2001, each of which is
incorporated by reference in this prospectus.

     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 L562.5 million (U.S.$814.4 million at exchange
rates at the closing of the acquisition). 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 the Saltend facility's electricity
output is sold into the deregulated UK power market. The Saltend transaction is
our first acquisition of a power facility in Europe. The acquisition closed on
August 24, 2001.

     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 development company, for approximately $273.6
million and the assumption of $54.5 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 drilling locations within a
94,000 acreage position in close proximity to our South Texas Magic Valley and
Hidalgo Energy Centers. The acquisition closed on August 15, 2001.

     On October 16, 2001, Calpine completed a Canadian dollar offering of C$200
million in principal of Senior Notes Due 2007 issued by its wholly-owned
subsidiary Calpine Canada Energy Finance ULC and guaranteed by Calpine, and
completed Sterling and Euro offerings of L200 million in principal of Senior
Notes Due 2011 and E175 million in principal of Senior Notes Due 2008 issued by
its wholly-owned subsidiary Calpine Canada Energy Finance II ULC and guaranteed
by Calpine. On October 18, 2001, Calpine completed US dollar offerings of $530
million in principal of Senior Notes Due 2008 issued by Calpine

                                        2
<PAGE>

Canada Energy Finance ULC and guaranteed by Calpine Corporation and of $850
million in principal of Senior Notes Due 2011 issued by Calpine directly.
Proceeds from the offerings will be used to refinance existing bridge loan
financings incurred to fund recently completed transactions, finance the
development and construction of additional power generation facilities and for
working capital and general corporate purposes. On October 18, 2001, Calpine
also completed an offering of $654.5 million in principal of pass through lease
certificates relating to certain sale/leaseback transactions. Proceeds from this
offering will be used to refinance outstanding borrowings under Calpine's
construction loan facilities, certain project-specific debt and other
indebtedness and for working capital and general corporate purposes.

     California Power Market.  The deregulation of the California power market
has produced significant unanticipated results in the past year and a half. The
deregulation froze the rates that utilities can charge their retail and business
customers in California, until recent rate increases approved by the California
Public Utilities Commission ("CPUC"), 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
at times 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 during 2000,
       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 approximately $266 million in accounts receivable
with PG&E under its QF contracts, plus a $69 million note receivable not yet due
and payable. Calpine is currently selling power to PG&E pursuant to its
long-term QF contracts, and PG&E is paying on a current basis for these
purchases. 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 that averages 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. On September 20, 2001, PG&E filed its proposed plan of reorganization with
the bankruptcy court. This plan is consistent with the agreement between Calpine
and PG&E described above. Calpine cannot predict when the bankruptcy court will
confirm a plan of reorganization for PG&E.
                                        3
<PAGE>

     CPUC Proceedings Regarding QF Contract Pricing.  Our QF contracts with PG&E
provide that the 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.

     On March 28, 2001, the CPUC issued an order (Decision 01-03-067) (the
"March 2001 Decision") proposing to change, on a prospective basis, the
composition of the short run avoided cost ("SRAC") energy price formula, which
is reset monthly, used by the California utilities in QF contracts. Prior to the
March 2001 Decision, CPUC regulations calculated SRAC based on 50% Topock and
50% Malin border gas indices. In the March 2001 Decision, the CPUC changed this
formulation to eliminate the prices at Topock from the SRAC formula. The March
2001 Decision is subject to challenges at the CPUC and the Federal Energy
Regulatory Commission ("FERC").

     On June 14, 2001, however, the CPUC issued an order (Decision 01-06-015)
(the "June 2001 Decision") that authorized the California utilities, including
PG&E, to amend QF contracts to elect a fixed energy price component that
averages 5.37 cents per kilowatt-hour for a five-year term under those contracts
in lieu of using the SRAC energy price formula. By this order, the CPUC
authorized the QF contract energy price amendments without further CPUC
concurrence. As part of the agreement we entered into with PG&E pursuant to
which PG&E agreed to assume its QF contracts with us in bankruptcy, PG&E agreed
with us to amend these contracts to adopt the fixed price component that
averages 5.37 cents pursuant to the June 2001 Decision. This election became
effective as of July 16, 2001. As a result of the June 2001 Decision and our
agreement with PG&E to amend the QF contracts to adopt the fixed price energy
component, the energy price component in our QF contracts is now fixed for five
years and we are no longer subject to any uncertainty that may have existed with
respect to this component of our QF contract pricing as a result of the March
2001 Decision. Further, the March 2001 Decision has no bearing on PG&E's
agreement with us to assume the QF contracts in bankruptcy or on the amount of
the receivable that was so assumed.

     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.
We 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.

     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 terms of the
second contract, a 20-year contract totaling

                                        4
<PAGE>

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.

     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 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, FERC denied a
complaint filed August 2, 2000 by San Diego Gas & Electric Company ("SDG&E")
that sought to extend the ISO's $250/MWh 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.

     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, 2001, 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
                                        5
<PAGE>

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 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 has been delayed pending the submission by the California ISO and the PX
of data for the purpose of developing the factual basis needed to implement the
refund methodology and order refunds. The FERC Administrative Law Judge
presiding over this hearing recently announced that this information must be
submitted not later than December 7, 2001, and the deadline for completion of
the hearing is March 8, 2002. 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.

                                        6
<PAGE>

                                 CAPITALIZATION

     The following table sets forth, as of June 30, 2001 (1) Calpine's actual
consolidated capitalization and (2) on an estimated basis for the purposes of
this registration statement, Calpine's consolidated capitalization as adjusted
to reflect the net effect of (a) the amendment on July 26, 2001 of Calpine's
Amended and Restated Certificate of Incorporation to increase from 500,000,000
to 1,000,000,000 the number of shares of common stock that Calpine has the
authority to issue, (b) Calpine's acquisition of Michael Petroleum Corporation,
including the assumption of debt in connection therewith as described above
under "The Company -- Recent Developments," and (c) the consummation of
concurrent offerings described above under "The Company -- Recent Developments"
and the use of proceeds therefrom. The adjustments do not reflect normal
day-to-day operations or the potential issuance of securities offered hereby.
This table should be read in conjunction with the consolidated financial
statements and related notes thereto and the unaudited consolidated condensed
financial statements and related notes thereto incorporated by reference in this
prospectus. All non-dollar amounts are translated into dollar amounts using
recent exchange rates.

<Table>
<Caption>
                                                                    JUNE 30, 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...................................................  $     1,258   $     1,258
Project financing, current portion..........................        1,396         1,305
Capital lease obligation, current portion...................        2,251         2,251
Zero-Coupon Convertible Debentures Due 2021.................    1,000,000     1,000,000
                                                              -----------   -----------
          Total short-term debt.............................  $ 1,004,905   $ 1,004,814
LONG-TERM DEBT:
Notes payable and borrowings under lines of credit, net of
  current portion...........................................  $    10,587   $    65,087
Project financing, net of current portion...................    1,776,435       245,232
Senior notes................................................    5,096,750     7,054,000
Capital lease obligation, net of current portion............      208,839       208,839
                                                              -----------   -----------
          Total long-term debt..............................  $ 7,092,611   $ 7,573,158
                                                              -----------   -----------
Company-obligated mandatorily redeemable convertible
  preferred securities of subsidiary trusts.................  $ 1,122,706   $ 1,122,706
Minority interests..........................................       40,733        82,579
                                                              -----------   -----------
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value:
  10,000,000 shares authorized; one share outstanding,
     actual and as adjusted.................................  $        --   $        --
                                                              -----------   -----------
Common stock, $.001 par value:
  500,000,000 shares authorized, actual, and 1,000,000,000
     shares authorized, as adjusted; 304,162,586 shares
     outstanding, actual and as adjusted....................  $       304   $       304
Additional paid-in capital..................................    1,993,849     1,993,849
Retained earnings...........................................      775,223       775,223
Accumulated other comprehensive income......................       78,411        78,411
                                                              -----------   -----------
          Total stockholders' equity........................  $ 2,847,787   $ 2,847,787
                                                              -----------   -----------
          Total capitalization..............................  $12,108,742   $12,631,044
                                                              ===========   ===========
</Table>

                                        7
<PAGE>

                                  RISK FACTORS

     Investing in our common stock involves risk. Please see the risk factors
described in our Annual Report on Form 10-K for the year ended December 31,
2000, our Quarterly Reports on Form 10-Q for the quarters ended March 31, 2001
and June 30, 2001 and our Current Report on Form 8-K, filed on September 10,
2001, each of which is incorporated by reference in this prospectus. Before
making an investment decision, you should carefully consider these risks as well
as other information contained or incorporated by reference in this prospectus.
The risks and uncertainties described are not the only ones facing us.
Additional risks and uncertainties not presently known to us or that we
currently deem immaterial may also impair our business operations.

                      WHERE YOU CAN FIND MORE INFORMATION

     We file annual, quarterly and special 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 website 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 made 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 otherwise terminated:

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

     - Calpine's Quarterly Reports on Form 10-Q for the quarters ended March 31,
       2001 and June 30, 2001;

     - Calpine's Current Reports on Form 8-K filed on February 9, 2001, April
       10, 2001, April 19, 2001, April 30, 2001, June 26, 2001, July 9, 2001,
       July 13, 2001, July 17, 2001, July 27, 2001, September 5, 2001, September
       10, 2001, September 28, 2001, October 9, 2001 and October 12, 2001;

     - 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; and

     - the description of Calpine's rights relating to its common stock
       contained in Calpine's Registration Statement on Form 8-A (File No.
       001-12079), filed with the SEC on June 17, 1997 pursuant to Section 12 of
       the Securities Exchange Act of 1934 and the amendments thereto filed on
       June 18, 1997, June 24, 1997 and September 28, 2001.

     If you request a copy of any or all of the documents incorporated by
reference, then we will send to you the copies you 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.

                                        8
<PAGE>

                           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 Section 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 the
following:

     - 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 risks associated with the assurance that Calpine will develop
       additional plants;

     - a competitor's development of a 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;

     - the direct and indirect effects of the terrorist incidents that occurred
       on September 11, 2001, and subsequent developments related to those
       attacks; and

                                        9
<PAGE>

     - 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 Form 10-K for the year ended
       December 31, 2000 and Quarterly Reports on Form 10-Q for the quarters
       ended March 31, 2001 and June 30, 2001 and our Current Report on Form
       8-K, filed on September 10, 2001, each of which is 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.

                                USE OF PROCEEDS

     We will not receive any cash proceeds upon the resale of our common stock
registered by this prospectus. The selling holders will receive all of the net
proceeds of the resales.

                                SELLING HOLDERS

     The selling holders may from time to time offer and sell pursuant to this
prospectus any or all of the shares of common stock listed below. The selling
holders may also elect not to sell any common stock held by them. The term
"selling holders" means the holders referred to below. Only those shares of
common stock 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 common stock
listed below by using this prospectus. Because the selling holders may offer all
or only some portion of the common stock offered for sale pursuant to this
prospectus, no estimate can be given as to the amount or percentage of these
shares of common stock that will be held by the selling holders upon termination
of this offering. In addition, the selling holders may have sold, transferred or
otherwise disposed of all or a portion of their shares since the date on which
they provided the information regarding their ownership of the common stock
included herein.

     The following table sets forth information with respect to the number of
shares of common stock beneficially owned by the selling holders 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>
                                    NUMBER OF SHARES OF                          NUMBER OF SHARES OF
                                        COMMON STOCK                                COMMON STOCK
                                     BENEFICIALLY OWNED      NUMBER OF SHARES    BENEFICIALLY OWNED
SELLING HOLDERS                   PRIOR TO THE OFFERING(1)   BEING OFFERED(1)   AFTER THE OFFERING(1)
---------------                   ------------------------   ----------------   ---------------------
<S>                               <C>                        <C>                <C>
Michael P. Polsky...............         1,792,896              1,772,480              20,416
Alan S. Polsky Trust............           105,888                105,888                   0
Gabriel J. Polsky Trust.........           105,888                105,888                   0
Other Holders...................           140,371                126,271              14,100
</Table>

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

(1) Beneficial ownership is determined in accordance with the rules of the SEC
    and generally includes voting or investment power with respect to
    securities. The selling holders have sole voting and sole investment power
    with respect to all shares beneficially owned, subject to community property
    laws, where applicable. For purposes of this table, we have assumed that the
    selling holders will offer and sell all of the shares of our common stock
    offered for sale pursuant to this prospectus, however, the selling holders
    may offer and/or sell less than all of such shares of common stock.

     On July 15, 2001, Michael P. Polsky ("Polsky") resigned as a member of the
Board of Directors and as Senior Vice President of Calpine and as an officer and
employee of each affiliate of Calpine of which he was an officer or employee,
including as President and Chief Executive Officer of SkyGen Energy Holdings LLC
("SkyGen"). Polsky owns all of the capital stock of AI Technology, Inc., which
entered into a license

                                        10
<PAGE>

agreement with Calpine on June 15, 2001. Certain of the other selling holders
are or have been officers or employees of Calpine or SkyGen within the past
three years.

     To our knowledge, other than their stock ownership described in the above
table and their relationships with us described above, the selling holders have
had no position, office or material relationship with Calpine or any of its
predecessors or affiliates within the past three years.

                              PLAN OF DISTRIBUTION

     The selling holders may offer and sell the shares of our common stock
referred to above under "Selling Holders" from time to time directly to
purchasers. Alternatively, the selling holders may from time to time offer those
shares of common stock 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 common stock for
whom they act as agents. The selling holders and any underwriters,
broker-dealers or agents that participate in the distribution of the common
stock may be deemed to be "underwriters" within the meaning of the Securities
Act, and any profit on the sale of such common stock 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 selling holders' common stock 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 common stock may be effected in transactions, which may involve
crosses or block transactions:

     - on any national securities exchange or quotation service on which the
       common stock 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,

     - through the writing and exercise of options, or

     - through any other method permitted pursuant to applicable law, rule or
       regulation.

     In connection with sales of the common stock or otherwise, the selling
holders may enter into hedging transactions with broker-dealers or others who
may, in turn, engage in short sales of the common stock in the course of hedging
the positions they assume. The selling holders may also sell the common stock
short and deliver common stock to close out short positions, or loan or pledge
common stock to broker-dealers or others who, in turn, may sell such securities.

     At the time a particular offering of the common stock is made by the
selling holders, such selling holders must provide a copy of this prospectus,
which sets forth the name of the selling holders and the aggregate amount of
common stock being offered. To comply with the securities laws of certain
jurisdictions, if applicable, the common stock will be offered or sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain jurisdictions the common stock may not be offered or sold
unless it has been registered or qualified for sale in such jurisdictions or any
exemption from registration or qualification is available and is complied with.

     We have borne all fees and expenses incurred in connection with the
registration of the common stock. The selling holders will pay all expenses
incident to the offer and sale of the common stock, including any underwriting
discounts, selling commissions or fees, stock transfer taxes or similar costs.

                          DESCRIPTION OF CAPITAL STOCK

     Calpine's 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 Calpine's amended and restated certificate of incorporation and bylaws, which
have been
                                        11
<PAGE>

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 Calpine's common stock that became effective on October 7,
1999, the 2 for 1 split of Calpine's common stock that became effective on June
8, 2000 and the 2 for 1 split of Calpine's 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. 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 incorporated by reference as an exhibit to the Registration
Statement of which this prospectus constitutes a part. See "-- Anti-Takeover
Effects of Provisions of the Certificate of Incorporation, Bylaws, Rights Plan
and Delaware Law -- Rights Plan."

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...............................................  $  4.67   $  3.16
Second Quarter..............................................     7.38      4.39
Third Quarter...............................................    11.97      6.85
Fourth Quarter..............................................    16.38     10.63
2000
First Quarter...............................................  $ 30.75   $ 16.09
Second Quarter..............................................    35.22     18.13
Third Quarter...............................................    52.25     32.25
Fourth Quarter..............................................    52.97     32.25
2001
First Quarter...............................................  $ 58.04   $ 29.00
Second Quarter..............................................    57.35     36.20
Third Quarter...............................................    46.00     18.90
Fourth Quarter (through October 16, 2001)...................    28.68     21.35
</Table>

     As of October 16, 2001, there were approximately 986 holders of record of
our common stock. On October 16, 2001, the last sale price reported on The New
York Stock Exchange for our common stock was $27.58 per share.

                                        12
<PAGE>

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 October 16, 2001, there was one share of preferred stock outstanding
(see the discussion of Calpine's special voting preferred stock, below). The
board of directors has the authority, without further vote or action by our
stockholders, to issue from time to time up to a total of 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. The 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 our
stockholders. The 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 stockholders an opportunity to realize a premium over the
then prevailing market price of the common stock.

     Calpine's 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, which Calpine amended on September 19, 2001. As of October 16, 2001, no
shares of Calpine's 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, Rights Plan and Delaware Law" below.

     Upon consummation of the Encal business combination, 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 our stockholders equal to the number of
outstanding Calpine common equivalent shares issued by our wholly-owned
subsidiary, Calpine Canada Holdings Ltd., 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 our special voting preferred stock vote together as a single class on all
matters on which holders of our 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 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.

                                        13
<PAGE>

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

  CERTIFICATE OF INCORPORATION AND BYLAWS

     Our amended and restated 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 defined
therein) 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. Our
certificate of incorporation provides that a special meeting of stockholders may
be called only by the chairman of Calpine's board of directors, or by the
chairman or secretary upon the written request of a majority of the total number
of directors Calpine would have if there were no vacancies on its board of
directors. 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 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, which we amended on
September 19, 2001. 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 $140.00 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.

                                        14
<PAGE>

  DELAWARE ANTI-TAKEOVER STATUTE

     We are 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.

     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 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 or 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.

            CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

     The following is a summary of the material United States federal income tax
consequences of the ownership and disposition of Calpine's common stock. Unless
otherwise stated, this summary deals only with common stock held as capital
assets by U.S. holders. As used herein, "U.S. holders" are any beneficial owners
of 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. In addition,
certain trusts in existence on August 20, 1996 and treated as a U.S. holder
prior to such date may also be treated as U.S. holders. As used herein,
"non-U.S. holders" are beneficial owners of common stock, other than
partnerships, that are not U.S. holders for United States federal income tax
purposes. If a partnership (including for this purpose any entity treated as a
partnership for United States federal tax purposes) is a beneficial owner of
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. Partnerships and partners in such partnerships should consult their
tax advisors about the United States federal income tax consequences of owning
and disposing of the common stock. 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 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 persons that have a
functional currency other than the U.S. dollar or the tax consequences to
shareholders, partners or
                                        15
<PAGE>

beneficiaries of a holder of the common stock. Further, it does not include any
description of any alternative minimum tax consequences or the tax laws of any
state or local government or of any foreign government that may be applicable to
the common stock. 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, possibly on a retroactive basis.

     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 OWNERSHIP AND DISPOSITION OF CALPINE COMMON STOCK.

U.S. HOLDERS OF COMMON STOCK

Dividends

     The amount of any distribution we make in respect of the common stock will
be equal to the amount of cash and the fair market value, on the date of
distribution, of any property distributed. Generally, distributions will be
treated as a dividend, subject to tax as ordinary income, to the extent of our
current or accumulated earnings and profits, then as a tax-free return of
capital to the extent of a holder's tax basis in the common stock and thereafter
as gain from the sale or exchange of such stock as described below.

     In general, a dividend distribution to a corporate holder will qualify for
the 70% dividends-received deduction. The dividends-received deduction is
subject to certain holding period, taxable income and other limitations.

Sale or Exchange of Common Stock

     Upon the sale or exchange of common stock, a holder generally will
recognize capital gain or loss equal to the difference between (1) the amount of
cash and the fair market value of any property received upon the sale or
exchange and (2) such holder's adjusted tax basis in the common stock. In the
case of a holder other than a corporation, the preferential tax rates may apply
to such gain if such holder's holding period for such common stock exceeds one
year. A holder's basis in the common stock is generally equal to its initial
purchase price.

Information Reporting and Backup Withholding Tax

     In general, information reporting requirements will apply to payments of
dividends on common stock and payments of the proceeds of the sale of common
stock, and a backup withholding tax (currently 30.5%) may apply to such payments
if the holder fails to comply with certain identification requirements. Any
amounts withheld under the backup withholding rules from a payment to a holder
will be allowed as a credit against such holder's United States federal income
tax and may entitle the holder to a refund, provided that the required
information is furnished to the Internal Revenue Service.

NON-U.S. HOLDERS OF COMMON STOCK

     The rules governing United States federal income taxation of a non-U.S.
holder of common stock are complex and no attempt will be made herein 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 common
stock, including any reporting requirements.

Dividends

     Distributions by us with respect to the common stock that are treated as
dividends paid, as described above under "Dividends," to a non-U.S. holder
(excluding dividends that are effectively connected with the conduct of a United
States trade or business by such holder and are taxable as described below) will
be subject to United States federal withholding tax at a 30% rate (or a lower
rate provided under an applicable income tax treaty). Except to the extent that
an applicable income tax treaty otherwise provides, a non-U.S.

                                        16
<PAGE>

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 conduct of a United States
trade or business by the non-U.S. holder. If such non-U.S. holder is a foreign
corporation, it may also be subject to a United States branch profits tax on
such effectively connected income at a 30% rate (or such lower rate as may be
specified by an applicable income tax treaty). Even though such effectively
connected dividends are subject to income tax and may be subject to the branch
profits tax, they will not be subject to United States federal withholding tax
if the holder delivers a properly executed Internal Revenue Service Form W-8ECI
(or successor form) to the payor.

     A non-U.S. holder who wishes to claim the benefit of an applicable income
tax treaty is required to satisfy certain certification and other requirements.
If you are eligible for a reduced rate of United States withholding tax pursuant
to an income tax treaty, you may obtain a refund of any excess amounts withheld
by filing an appropriate claim for refund with the Internal Revenue Service.

  Sale or Exchange of Common Stock

     A non-U.S. holder generally will not be subject to United States federal
income tax or withholding tax on the sale or exchange of common stock unless (1)
the gain is effectively connected with a United States trade or business of the
non-U.S. holder, (2) in the case of a non-U.S. holder who is an individual, such
holder is present in the United States for a period or periods aggregating 183
days or more during the taxable year of the disposition, and either (A) such
holder has a "tax home" in the United States or (B) the disposition is
attributable to an office or other fixed place of business maintained by such
holder in the United States, (3) the 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 event that Calpine is characterized as a United
States real property holding corporation and the non-U.S. holder does not
qualify for certain exemptions (see discussion below under "Foreign Investment
in Real Property Tax Act").

     If an individual non-U.S. holder falls under clause (1) above, such
individual generally will be taxed on the net gain derived from a sale in the
same manner as a U.S. holder. If an individual non-U.S. holder falls under
clause (2) above, such individual generally will be subject to a flat 30% tax on
the gain derived from a sale, which may be offset by certain United States
capital losses (notwithstanding the fact that such individual is not considered
a resident of the United States). Individual non-U.S. holders who have spent (or
expect to spend) 183 days or more in the United States in the taxable year in
which they contemplate a sale of common stock are urged to consult their tax
advisors as to the tax consequences of such sale. If a non-U.S. holder that is a
foreign corporation falls under clause (1), it generally will be taxed on the
net gain derived from a sale in the same manner as a U.S. holder and, in
addition, may be subject to the branch profits tax on such effectively connected
income at a 30% rate (or such lower rate as may be specified by an applicable
income tax treaty).

  Information Reporting and Backup Withholding Tax

     United States information reporting requirements and backup withholding tax
will not apply to any payment of the proceeds of the sale of common stock
effected outside the United States by a foreign office of a "broker" as defined
in applicable Treasury regulations, unless such broker (1) is a United States
person as defined in the Internal Revenue Code, (2) is a foreign person that
derives 50% or more of its gross income for certain periods from the conduct of
a trade or business in the United States, (3) is a controlled foreign
corporation for United States federal income tax purposes or (4) is a foreign
partnership with certain U.S. connections. Payment of the proceeds of any such
sale effected outside the United States by a foreign office of any broker that
is described in the preceding sentence may be subject to backup withholding tax
and information reporting requirements, unless such broker has documentary
evidence in its records that the beneficial owner is a non-U.S. holder and
certain other conditions are met, or the beneficial owner otherwise establishes
an exemption. Dividends on common stock held by a non-U.S. holder will be
subject to information reporting requirements and may be subject to backup
withholding requirements described in this section unless certain certification
requirements are satisfied.

                                        17
<PAGE>

  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 it is likely that we are a "United States real property
holding corporation" and we can give no assurance that we will not continue to
be a United States real property holding corporation in the future. However, so
long as our common stock is regularly traded on an established securities
market, an exemption applies with respect to any non-U.S. holder whose
beneficial and/or constructive ownership of common stock is 5% or less 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.

     The United States federal income tax discussion set forth above is included
for general information only and may not be applicable depending upon a holder's
particular situation. Holders should consult their tax advisors with respect to
the tax consequences to them of the ownership and disposition of common stock,
including the tax consequences under state, local, foreign and other tax laws
and the possible effects of changes in United States federal or other tax laws.

                                 LEGAL MATTERS

     The validity of the shares of our common stock offered hereby will be
passed upon for us by Covington & Burling, New York, New York. Hilary Prescott
is a member of the Boards of Directors of three wholly-owned subsidiaries of
Calpine and is also a partner in the law firm of Covington & Burling.

                                    EXPERTS

     Calpine's audited financial statements incorporated by reference in this
prospectus 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
said reports. The report of Ernst and Young LLP, independent public accountants,
with respect to the audited financial statements of Encal Energy Ltd., which is
incorporated in this prospectus by reference to Calpine's Current Report on Form
8-K, filed on September 10, 2001, is included herein in reliance upon the
authority of said firm as experts in giving said report.

                                        18
<PAGE>

                                 [CALPINE LOGO]
<PAGE>

                                    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 issuance and distribution 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.......................  $ 13,710.00
Accounting fees and expenses................................    15,000.00
Legal fees and expenses.....................................    25,000.00
Printing fees...............................................    25,000.00
Transfer agent fees.........................................     5,000.00
Miscellaneous...............................................    16,290.00
                                                              -----------
       Total................................................  $100,000.00
                                                              ===========
</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 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.

     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 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

                                       II-1
<PAGE>

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.

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(a)
   3.3    Certificate of Amendment of Amended and Restated Certificate
          of Incorporation of Calpine Corporation(b)
   3.4    Certificate of Designation of Series A Participating
          Preferred Stock of Calpine Corporation(a)
   3.5    Amended Certificate of Designation of Series A Participating
          Preferred Stock of Calpine Corporation(a)
   3.6    Amended Certificate of Designation of Series A Participating
          Preferred Stock of Calpine Corporation(b)
   3.7    Certificate of Designation of Special Voting Preferred Stock
          of Calpine Corporation(c)
   3.8    Bylaws of Calpine Corporation(d)
   4.1    Amended and Restated Rights Agreement, dated as of September
          19, 2001, between Calpine Corporation and EquiServe Trust
          Company, N.A., as Rights Agent(e)
  *4.2    Stockholder Rights Agreement, dated as of October 12, 2000,
          among Calpine Corporation and the parties listed in the
          signature pages thereto
  +5.1    Opinion of Covington & Burling
 *23.1    Consent of Arthur Andersen LLP, independent public
          accountants
 *23.2    Consent of Ernst and Young LLP, independent public
          accountants
 +23.3    Consent of Covington & Burling (included in Opinion set
          forth as Item 5.1)
 *24.1    Power of Attorney of Officers and Directors of Calpine
          Corporation (set forth on the signature pages of this
          Registration Statement)
</Table>

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

 *  Filed herewith.

 +  To be filed by amendment.

(a) 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.

(b) Incorporated by reference to Calpine Corporation's Registration Statement on
    Form S-3 (Registration No. 333-66078) filed with the SEC on July 27, 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 Amendment No. 1 to
    Registration Statement on Form S-3 (Registration No. 333-67446) filed with
    the SEC on September 19, 2001.

(e) Incorporated by reference to Calpine's Registration Statement on Form 8-A/A
    filed with the SEC on September 28, 2001.

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

                                       II-2
<PAGE>

     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 Item 8.A. of Form 20-F 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 (a)(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 this chapter 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.

     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-3
<PAGE>

                                   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 9th day of October, 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 Act of 1933 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 WHEREOF, 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 Act of 1933, this
Registration Statement on Form S-3 has been signed by the following persons in
the capacities and on the dates indicated.

<Table>
<Caption>
                   SIGNATURE                                     TITLE                       DATE
                   ---------                                     -----                       ----
<S>                                                <C>                                 <C>
              /s/ PETER CARTWRIGHT                    Chairman, President, Chief       October 9, 2001
------------------------------------------------    Executive Officer and Director
                Peter Cartwright

               /s/ ANN B. CURTIS                    Executive Vice President, Chief    October 9, 2001
------------------------------------------------    Financial Officer and Director
                 Ann B. Curtis

           /s/ CHARLES B. CLARK, JR.                   Senior Vice President and       October 9, 2001
------------------------------------------------     Controller, Chief Accounting
             Charles B. Clark, Jr.                              Officer

              /s/ KENNETH T. DERR                              Director                October 9, 2001
------------------------------------------------
                Kenneth T. Derr
</Table>

                                       II-4
<PAGE>

<Table>
<Caption>
                   SIGNATURE                                     TITLE                       DATE
                   ---------                                     -----                       ----

<S>                                                <C>                                 <C>
             /s/ JEFFREY E. GARTEN                             Director                October 9, 2001
------------------------------------------------
               Jeffrey E. Garten

              /s/ GERALD GREENWALD                             Director                October 9, 2001
------------------------------------------------
                Gerald Greenwald

              /s/ SUSAN C. SCHWAB                              Director                October 9, 2001
------------------------------------------------
                Susan C. Schwab

            /s/ GEORGE J. STATHAKIS                            Director                October 9, 2001
------------------------------------------------
              George J. Stathakis

               /s/ JOHN O. WILSON                              Director                October 9, 2001
------------------------------------------------
                 John O. Wilson
</Table>

                                       II-5
<PAGE>

                               INDEX TO 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(a)
   3.3    Certificate of Amendment of Amended and Restated Certificate
          of Incorporation of Calpine Corporation(b)
   3.4    Certificate of Designation of Series A Participating
          Preferred Stock of Calpine Corporation(a)
   3.5    Amended Certificate of Designation of Series A Participating
          Preferred Stock of Calpine Corporation(a)
   3.6    Amended Certificate of Designation of Series A Participating
          Preferred Stock of Calpine Corporation(b)
   3.7    Certificate of Designation of Special Voting Preferred Stock
          of Calpine Corporation(c)
   3.8    Bylaws of Calpine Corporation(d)
   4.1    Amended and Restated Rights Agreement, dated as of September
          19, 2001, between Calpine Corporation and EquiServe Trust
          Company, N.A., as Rights Agent(e)
  *4.2    Stockholder Rights Agreement, dated as of October 12, 2000,
          among Calpine Corporation and the parties listed in the
          signature pages thereto
  +5.1    Opinion of Covington & Burling
 *23.1    Consent of Arthur Andersen LLP, independent public
          accountants
 *23.2    Consent of Ernst and Young LLP, independent public
          accountants
 +23.3    Consent of Covington & Burling (included in Opinion set
          forth as Item 5.1)
 *24.1    Power of Attorney of Officers and Directors of Calpine
          Corporation (set forth on the signature pages of this
          Registration Statement)
</Table>

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

 *  Filed herewith.

 +  To be filed by amendment.

(a) 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.

(b) Incorporated by reference to Calpine Corporation's Registration Statement on
    Form S-3 (Registration No. 333-66078) filed with the SEC on July 27, 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 Amendment No. 1 to
    Registration Statement on Form S-3 (Registration No. 333-67446) filed with
    the SEC on September 19, 2001.

(e) Incorporated by reference to Calpine's Registration Statement on Form 8-A/A
    filed with the SEC on September 28, 2001.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>3
<FILENAME>f76163orex4-2.txt
<DESCRIPTION>EXHIBIT 4.2
<TEXT>
<PAGE>
                                                                     Exhibit 4.2

           STOCKHOLDER RIGHTS AGREEMENT, dated as of October 12, 2000,
           among Calpine Corporation, a Delaware corporation (the
           "Company"), and the parties listed on the signature pages
                                     hereto

                                  Introduction

     The Company has entered into a Stock and Note Purchase Agreement, dated as
of June 23, 2000, as amended (the "Stock and Note Purchase Agreement"), pursuant
to which, among other things, the Company is issuing, and Michael P. Polsky, the
ASP Trust (as defined in the Stock and Note Purchase Agreement) and the GJP
Trust (as defined in the Stock and Note Purchase Agreement) (collectively, the
"Stockholders") are acquiring, shares of the Company's common stock, par value
$0.001 per share (the "Common Stock").

     The execution and delivery of this Agreement by the Company and the
Stockholders is a condition precedent to the obligations of the Stockholders and
the Company under the Stock and Note Purchase Agreement.

     Capitalized terms used herein and not otherwise defined herein shall have
the meanings ascribed to such terms in Section 10(b).

     In   consideration of the foregoing, the covenants and obligations set
forth below and other good and valuable consideration, the parties agree as
follows:

     1.   Registration on Request.

     (a)  Request. Subject to the limitations set forth in Section 1(c) and
Section 20, Polsky may, from time to time, require the Company, upon written
notice to the Company, to use its best efforts to effect the registration under
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the "Securities Act"), of the Registrable Securities
held by the Holders in the amounts and at the times specified in Section 1(b).
The Company promptly shall give notice (the "Company Notice") of such requested
registration to all other Holders of Registrable Securities. The Company shall
use its best efforts to effect, in accordance with the terms hereof, the
registration under the Securities Act for public sale (in accordance with the
method of disposition specified in the requesting notice from Polsky) of the
Registrable Securities that the Company has been requested to register by (i)
Polsky and (ii) such other Holders who have given written notice to the Company
within 20 days after the giving of the Company Notice.

     (b)  Eligibility. Polsky shall not be entitled to require registration of
any Registrable Securities pursuant to Section 1(a) prior to July 31, 2001.
Polsky shall be entitled to require registration pursuant to Section 1(a) (A) at
any time on and after July 31, 2001, of up to 33.33% of the Registrable
Securities held by the requesting Holders and (B) at any time on and after the
last day of each month thereafter, commencing August 31, 2001, of up to an
additional 2.778% of the Registrable Securities held by the requesting Holders,
it being understood that all Registrable Securities held by the Holders shall be
eligible for registration pursuant to Section 1(a) on and after July 31, 2003.

     (c)  Limitations. The Company shall not be required to effect a
registration pursuant to Section 1(a):

<PAGE>


          (i)  within 90 days after the effective date of a registration
statement (a "Registration Statement") filed by the Company with the Securities
and Exchange Commission (the "Commission") for a public offering and sale of
equity securities of the Company (other than a registration of securities
pursuant to (A) any Registration Statement on Form S-8 or Form S-4, (B) any
Registration Statement covering only securities proposed to be issued in
exchange for securities or assets of another corporation or entity or (C) any
Registration Statement relating solely to a dividend reinvestment plan, employee
stock option, stock purchase, benefit or similar plans (each, a "Special
Registration Statement")); provided that the Company shall use its best efforts
to achieve effectiveness of a registration requested hereunder promptly
following such 90 day period if such request is made during such 90 day period;

          (ii) on more than one occasion in any nine consecutive month period
commencing August 1, 2001; and

          (iii) on more than four occasions in the aggregate.

     (d)  Effective Registration Statement. A registration requested pursuant to
this Section 1 shall not be deemed to have been effected, and shall not be
deemed a requested registration for purposes of this Section 1, (i) unless a
Registration Statement covering at least 90% of the Registrable Securities
specified in the notices from Polsky and any other requesting Holders has become
effective and remained effective in compliance with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities
covered by such Registration Statement for the requisite time period as set
forth in this Agreement; provided that a Registration Statement involving an
underwritten offering that does not cover at least 90% of the Registrable
Securities specified in the notices from Polsky and any other requesting Holders
solely by reason of a reduction in the number of Registrable Securities pursuant
to Section 1(f) shall be deemed to have been effected by the Company pursuant to
Section 1(a) unless Polsky and such other requesting Holders have elected to pay
all Registration Expenses in connection with such registration; provided further
that a registration which does not become effective after the Company has filed
a Registration Statement with respect thereto solely by reason of the refusal to
proceed of Polsky or any other requesting Holder shall be deemed to have been
effected by the Company at the request of Polsky and such other requesting
Holders unless Polsky and such other requesting Holders have elected to pay all
Registration Expenses in connection with such failed registration, (ii) if after
it has become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the Commission or other governmental
agency or court for any reason not attributable to any Holder, or (iii) if the
conditions to closing specified in the underwriting agreement, if any, entered
into in connection with such registration are not satisfied or waived, other
than by reason of a failure on the part of any Holder.

     (e)  Underwritten Offering. If any offering pursuant to a Registration
Statement pursuant to Section 1(a) hereof involves an underwritten offering,
Polsky shall have the right to select an investment banker and manager to
administer the offering, which investment banker and manager shall be reasonably
satisfactory to the Company.

     (f)  Priority in Requested Registration. The Company shall have the right
to include in any Registration Statement initiated by Polsky pursuant to Section
1(a) securities to be sold by the Company for its own account and securities of
the Company to be sold by any other

                                       2

<PAGE>

stockholder pursuant to incidental registration rights granted to such
stockholder in accordance with Section 17 (the "Other Holders"). If, in the
good-faith judgment of the managing underwriter of any underwritten offering,
the inclusion of all of the Registrable Securities requested for inclusion
pursuant to Section 1(a) would adversely affect the successful marketing of the
proposed offering or a reduction in the number of shares of Common Stock to be
sold is otherwise advisable, then the number of shares of Common Stock to be
included in the offering shall be reduced to the required level, first, by
excluding securities to be sold by the Company for its own account, second, by
reducing the participation of Other Holders in such offering pro rata among such
Other Holders in such offering based upon the total number of securities owned
by such Other Holders or excluding securities to be sold by such Other Holders,
and third, by reducing the participation of Holders such that the total number
of shares to be registered in such offering shall be based upon the following
formula:

     O x H/T

     O = the total number of shares that the managing underwriter in its good
faith judgment agrees can be sold in the offering.

     H = the total number of Registrable Securities requested to be included
in the offering by each such Holder after having given proper notice to
participate in the offering.

     T = the total number of Registrable Securities requested to be included
in the offering by all Holders who have given proper notice to participate in
the offering.

     (g)  Demands Only by Polsky. All of the Holders acknowledge and agree that
the right to initiate a registration pursuant to Section 1(a) or to select and
underwriter pursuant to Section 1(g) shall be exercised solely by Polsky.

     2.   Incidental Registration.

     (a)  Right to Include Registrable Securities. If at any time the Company
proposes to register under the Securities Act the resale of any shares of Common
Stock by any executive officer of the Company on a form and in a manner that
would permit registration of Registrable Securities for the sale to the public
under the Securities Act (other than in connection with Special Registration
Statements), the Company shall give written notice to all Holders of its
intention to do so. Upon the written request of a Holder given within 30 days
after the giving of any such notice by the Company, the Company shall use its
best efforts to cause to be included in such Registration Statement all of the
Registrable Securities requested by Holders. If the Registration Statement is to
cover, in whole or in part, any underwritten distribution, the Company shall use
its best efforts to cause the Registrable Securities requested for inclusion
pursuant to this Section 2(a) to be included in the underwriting on the same
terms and conditions as the securities otherwise being sold through the
underwriters.

     (b)  Priority in Incidental Registrations. If in the good-faith judgment of
the managing underwriter of any underwritten offering, the inclusion of all of
the Registrable Securities requested for inclusion pursuant to Section 2(a)
would adversely affect the successful marketing of the proposed offering or a
reduction in the number of shares of Common Stock to be

                                       3
<PAGE>

sold is otherwise advisable, then the number of shares of Common Stock to be
included in the offering shall be reduced to the required level, first, by
excluding securities to be sold by the Company for its own account, if any, and,
second, by reducing the participation of Holders and Other Holders in such
offering pro rata among such Holders and Other Holders based upon the following
formula:

     O x H/T

     O = the total number of shares that the managing underwriter in its good
faith judgment agrees can be sold in the offering.

     H = the total number of Registrable Securities requested to be included
in the offering by each such Holder who has given proper notice to participate
in the offering or the total number of securities requested to be included in
the offering by each such Other Holder, as the case may be.

     T = the total number of Registrable Securities requested to be included
in the offering by all Holders who have given proper notice to participate in
the offering and the total number of securities requested to be included in the
offering by all Other Holders.

     3.   Registration Procedures. If and whenever the Company is required by
the provisions of Sections 1 or 2 to effect the registration of Registrable
Securities under the Securities Act, the Company shall, at its expense, as
expeditiously as possible:

     (a)  prepare and, in any event within 60 days (or 90 days in the case of an
underwritten registration) after the end of the period within which a request
for registration may be given to the Company by an eligible Holder, file with
the Commission a Registration Statement with respect to such Registrable
Securities and use its best efforts to cause such Registration Statement to
become effective; provided that the Company may discontinue any registration of
its securities which is being effected pursuant to Section 2 at any time prior
to the effective date of the Registration Statement;

     (b)  prepare and file with the Commission such amendments and supplements
to such Registration Statement and the prospectus used in connection therewith
as may be necessary to keep such Registration Statement effective for a period
not in excess of 120 days (except with respect to any Registration Statement
filed pursuant to Rule 415 under the Securities Act if the Company is eligible
to file a Registration Statement on Form S-3, in which case the Company shall
use its best efforts to keep such Registration Statement effective and updated
until such time as all of the Registrable Securities covered by such
Registration Statement have been disposed of in accordance with the intended
methods of disposition by the seller or sellers set forth in such Registration
Statement) and to comply with the provisions of the Securities Act with respect
to the disposition of all Registrable Securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the seller or sellers thereof set forth in such Registration
Statement; provided that before filing a Registration Statement or prospectus,
or any amendments or supplements thereto, the Company will furnish to one
counsel selected by the Holders of a majority of the Registrable Securities
covered by such Registration Statement, which counsel shall be reasonably
acceptable to the Company, to represent all Holders of Registrable

                                       4
<PAGE>

Securities covered by such Registration Statement, copies of all documents
proposed to be filed, which documents will be subject to the review of such
counsel;

     (c)  furnish to each seller of such Registrable Securities such number of
copies of such Registration Statement and of each amendment and supplement
thereto (in each case including all exhibits), such number of copies of the
prospectus included in such Registration Statement (including each preliminary
prospectus and summary prospectus), and any other prospectus filed under Rule
424 under the Securities Act in conformity with the requirements of the
Securities Act, and such other documents as such seller may reasonably request;

     (d)  use its best efforts to register or qualify such Registrable
Securities covered by such Registration Statement under such other securities or
blue sky laws of such jurisdictions as each seller shall reasonably request, and
do any and all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller, except that
the Company shall not for any such purpose be required (i) to qualify generally
to do business as a foreign corporation in any jurisdiction where, but for the
requirements of this clause (d), it would not be obligated to be so qualified or
(ii) to consent to general service or process in any such jurisdiction;

     (e)  notify each seller of any such Registrable Securities covered by such
Registration Statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the Company's becoming
aware that the prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing, and at
the request of any such seller, prepare and furnish to such seller a reasonable
number of copies of an amended or supplemental prospectus as may be necessary so
that, as thereafter delivered to the sellers of such Registrable Securities,
such prospectus shall not include 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 in the light of the circumstances then
existing;

     (f)  otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as
soon as reasonably practicable (but not more than 18 months) after the effective
date of the Registration Statement, an earnings statement which shall satisfy
the provisions of Section 11(a) of the Securities Act and the rules and
regulations promulgated thereunder;

     (g)  use its best efforts to list such Registrable Securities on any
securities exchange or interdealer quotation system on which capital stock of
the same class is then listed, if such Registrable Securities are not already so
listed and if such listing is then permitted under the rules of such exchange or
system, and to provide a transfer agent and registrar for such Registrable
Securities covered by such Registration Statement not later than the effective
date of such Registration Statement;

     (h)  in connection with any underwritten offering, enter into such
customary agreements (including an underwriting agreement in customary form) and
take such other actions

                                       5
<PAGE>


as the sellers of a majority of such Registrable Securities or the underwriters,
if any, reasonably request in order to expedite or facilitate the disposition of
such Registrable Securities;

     (i)  in connection with any underwritten offering, obtain a "cold comfort"
letter or letters from the Company's independent public accountants in customary
form and covering matters of the type customarily covered by "cold comfort"
letters as the sellers of a majority of such Registrable Securities shall
reasonably request;

     (j)  in connection with any underwritten offering, obtain an opinion of
counsel for the Company in customary form and covering matters of the type
customarily covered in opinions of the Company's counsel as the sellers of a
majority of such Registrable Securities shall reasonably request; and

     (k)  in connection with any underwritten offering, make available for
inspection by any seller of such Registrable Securities covered by such
Registration Statement, by any underwriter participating in any disposition to
be effected pursuant to such Registration Statement and by any attorney,
accountant or other agent retained by any such underwriter, all pertinent
financial and other records, pertinent corporate documents and properties of the
Company, and cause all of the Company's officers, directors and employees to
supply all information reasonably requested by any such seller, underwriter,
attorney, accountant or agent in connection with such Registration Statement.

     4.   Expenses. With respect to each registration effected pursuant to
Sections 1 or 2, all Registration Expenses in connection with such registration
and the public offering in connection therewith shall be borne by the Company;
provided that Holders participating in any such registration shall bear their
pro rata share of the underwriting discounts and selling commissions (on the
basis of the number of Registrable Securities of each such person included and
sold in such registration).

     5.   Indemnification and Contribution.

     (a)  Indemnification by the Company. In the event of a registration of any
shares of Registrable Securities pursuant to Section 1 or 2, the Company, to the
extent permitted by law, will indemnify and hold harmless each Holder of such
shares of Registrable Securities included in a Registration Statement pursuant
to the provisions of this Agreement and any underwriter (as defined in the
Securities Act) of such Registrable Securities and each other person, if any,
who controls such Holder or such underwriter within the meaning of the
Securities Act, and their respective directors, officers, partners, members,
agents and affiliates (the "Holders' Affiliates"), and each of their successors
from and against, and will reimburse such Holder and each such underwriter,
controlling person and Holders' Affiliate with respect to, any and all claims,
actions, demands, losses, damages, liabilities, costs and expenses to which such
Holder, underwriter, controlling person or Holders' Affiliate may become subject
under the Securities Act or otherwise, including, without limitation, the
reasonable fees and expenses of legal counsel, insofar as such claims, actions,
demands, losses, damages, liabilities, costs or expenses (or actions or
proceedings, whether commenced or threatened in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact contained in such Registration Statement, any prospectus contained therein
or any amendment or supplement thereto, or arise out of or are

                                       6
<PAGE>

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 any violation by the Company of any rule or
regulation under the Securities Act or any state securities laws applicable to
the Company and relating to action or inaction required of the Company in
connection with such registration; provided that the Company will not be liable
in any case to the extent, but only to the extent, that any such claim, action,
demand, loss, damage, liability, cost or expense arises out of or is based upon
an untrue statement or omission so made in reliance upon and in strict
conformity with information furnished in writing by such Holder or such
underwriter specifically for use in the preparation thereof. This indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of such Holder, underwriter, controlling person or Holders' Affiliate
and shall survive the transfer of such securities by such Holder.

     (b)  Indemnification by the Holders. Each Holder of shares of Registrable
Securities that are included in a Registration Statement pursuant to the
provisions of this Agreement, severally and not jointly, to the extent permitted
by law, will indemnify and hold harmless the Company, each person, if any, who
controls the Company within the meaning of the Securities Act, each officer of
the Company who signs such Registration Statement, each director of the Company,
each underwriter and any person who controls the underwriter and each of their
successors from and against, and will reimburse the Company and such officer,
director, underwriter or controlling person with respect to, any and all claims,
actions, demands, losses, damages, liabilities, costs or expenses to which the
Company or such officer, director, underwriter or controlling person may become
subject under the Securities Act or otherwise, insofar as such claims, actions,
demands, losses, damages, liabilities, costs or expenses arise out of or are
based upon any untrue statement or alleged untrue statement of any material fact
contained in such Registration Statement, any prospectus contained therein 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;
provided that such Holder will be liable in any such case to the extent, but
only to the extent, that any such claim, action, demand, loss, damage,
liability, cost or expense arises out of or is based upon an untrue statement or
omission made in reliance upon and in strict conformity with written information
furnished by such Holder specifically for use in the preparation thereof. The
liability of each Holder under this Section 5(b) shall be limited to the
proportion of any such claim, action, demand, loss, damage, liability, cost or
expense which is equal to the proportion that the public offering price of the
shares of Registrable Securities sold by such Holder under such Registration
Statement bears to the total offering price of all securities sold thereunder,
but not, in any event, to exceed the proceeds received by such Holder from the
sale of shares of Registrable Securities covered by the Registration Statement.
It is agreed that this indemnity shall not apply to amounts paid in settlement
of any such claim, action, demand, loss, damage, liability, cost or expense if
such settlement is effected without the consent of the Holders (which consent
shall not be unreasonably withheld). This indemnity shall remain in full force
and effect regardless of any investigation made by or on behalf of such Holder,
underwriter or any such director, officer, partner, member, agent or controlling
person and shall survive the transfer of such securities by such Holder.

     (c)  Notices of Claims, etc. Promptly after receipt by a party to be
indemnified pursuant to the provisions of Section 5(a) or (b) (an "indemnified
party") of notice of the commencement of any action involving the subject matter
of the foregoing indemnity provisions, such indemnified party will, if a claim
thereof is to be made against the indemnifying party

                                       7
<PAGE>

pursuant to the provisions of this Section 5(a) or (b), notify the indemnifying
party of the commencement thereof, but the omission to so notify the
indemnifying party will not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 5 and shall not relieve
the indemnifying party from liability under this Section 5 unless such
indemnifying party is prejudiced by such omission. In case such action is
brought against any indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party shall have the right to
participate in, and, to the extent that it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party, and after the notice
from the indemnifying party to such indemnified party of its election to assume
the defense thereof, the indemnifying party will not be liable to such
indemnified party pursuant to the provisions of Section 5(a) and (b) for any
legal expense subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation; provided that,
if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be reasonable defenses available to it that are different from or
additional to those available to the indemnifying party or if the interests of
the indemnified party reasonably may be deemed to conflict with the interests of
the indemnifying party, the indemnified party shall have the right to select a
separate counsel and to assume such legal defenses and otherwise to participate
in the defense of such action, with the expenses and fees of such separate
counsel and other expenses related to such participation to be reimbursed by the
indemnifying parry as incurred; provided that the indemnifying party shall be
required to pay the fees of only one separate counsel for all indemnified
parties in such action. No indemnifying party shall be liable to an indemnified
party for any settlement of any action or claim without the consent of the
indemnifying party and no indemnifying party may unreasonably withhold its
consent to any such settlement. No indemnifying party will, except with the
consent of the indemnified party, consent to entry of any judgment or enter into
any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation.

     (d)  Contribution. In order to provide for just and equitable contribution
to joint liability under the Securities Act in any case in which either (i) any
Holder exercising rights under this Agreement, any underwriter or controlling
person of any such Holder or underwriter, or any Holders' Affiliate, makes a
claim for indemnification pursuant to this Section 5 but it is judicially
determined (by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 5 provides for indemnification in
such case, or (ii) contribution under the Securities Act may be required on the
part of any such Holder, underwriter, controlling person or Holders' Affiliate
in circumstances for which indemnification is provided under this Section 5,
then, and in each such case, the Company and such Holder will contribute to the
aggregate losses, claims, damages or liabilities to which they may be subject
(after contribution from others) in such proportion as is appropriate to reflect
the relative fault of the Company on the one hand and of the Holder of
Registrable Securities on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault of the
Company on the one hand and of the Holder of Registrable Securities on the other
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

                                       8
<PAGE>

by the Company on the one hand or by the Holder of Registrable Securities on the
other, and each party's relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission; provided that, in
any such case, (A) no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation and (B) no such Holder will be required to contribute any
amount in excess of the proceeds received by such Holder from the sales of
Registrable Securities covered by the Registration Statement.

     (e)  Other Indemnification. Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with any underwritten public
offering of Registrable Securities are in conflict with the foregoing
provisions, the provisions in the underwriting agreement shall control.

     6.   Reporting Requirements.

     (a)  Exchange Act Reporting. The Company shall timely file such
information, documents and reports as the Commission may require or prescribe
under Section 13 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").

     (b)  Furnishing Information to Holders. The Company shall forthwith upon
request furnish any Holder of Registrable Securities (a) a copy of the most
recent annual or quarterly report of the Company, and (b) such other reports and
documents filed by the Company with the Commission as such Holder may reasonably
request in availing itself of an exemption for the sale of Registrable
Securities without registration under the Securities Act.

     (c)  Rule 144. The Company acknowledges and agrees that the purposes of the
requirements contained in this Section 6 are to enable any such Holder to comply
with the current public information requirement contained in paragraph (c) of
Rule 144 under the Securities Act should such Holder ever wish to dispose of any
Registrable Securities in reliance upon Rule 144 (or any other similar or
successor exemptive provision hereafter in effect). In addition, the Company
shall take such other measures and file such other information, documents and
reports as shall hereafter be required by the Commission as a condition to the
availability of Rule 144 under the Securities Act (or any similar or successor
exemptive provision hereafter in effect). The Company agrees to use reasonable
efforts to facilitate and expedite transfers of Registrable Securities by
Holders pursuant to Rule 144 under the Securities Act (or any similar or
successor exemptive provision hereafter in effect), which efforts shall include
timely notice to its transfer agent to expedite such transfers of Registrable
Securities.

     7.   Stockholder Information. The Company may require each Holder of
Registrable Securities as to which any registration is to be effected pursuant
to this Agreement to furnish the Company in a timely manner such information
with respect to such Holder and the distribution of such Registrable Securities
as the Company may from time to time reasonably request and as shall be required
by law or by the rules and regulations of the Commission in order to facilitate
the disposition of the Registrable Securities owned by them that are included in
such registration.

                                       9
<PAGE>


     8.   Specific Enforcement. All of the parties acknowledge that the parties
will be irreparably damaged in the event that this Agreement is not specifically
enforced. Upon a breach or threatened breach of the terms, covenants or
conditions of this Agreement by any of the parties hereto, the other parties
shall, in addition to all other remedies, be entitled to a temporary or
permanent injunction, without showing any actual damage, or a decree for
specific performance, in accordance with the provisions of this Agreement.

     9.   Restrictions on Transfer.

     (a)  No Holder shall, directly or indirectly, sell (including short sales),
transfer, exchange, assign, pledge, hypothecate, give or otherwise dispose of
any Registrable Securities, or any right or interest therein, or enter into any
contract in respect of any of the foregoing, unless and until such Registrable
Securities are either (i) eligible for registration for resale under the
Securities Act pursuant to Section 1 (regardless of whether such Registrable
Securities are actually registered) or (ii) are registered for resale under the
Securities Act pursuant to Section 2; provided that

          (A) a Stockholder or Plan Participant without registration may
          transfer Registrable Securities by gift to any member of such
          Stockholder's or Plan Participant's immediate family or to a trust
          solely for the benefit of one or more members of such Stockholder's or
          Plan Participant's immediate family;

          (B) Registrable Securities without registration may be transferred to
          a Holder's executor, administrator, trustee, or personal
          representative at death or involuntarily by operation of law; and

          (C) within 30 days after the date hereof, Michael P. Polsky may sell
          up to an aggregate of 67,000 Registrable Securities to the Plan
          Participants, provided that as a condition precedent to each such
          sale, the Company shall have received an opinion of Sachnoff & Weaver,
          Ltd., in form and substance reasonably satisfactory to the Company,
          that such sale is exempt from registration under the Securities Act
          and all applicable state securities laws;

and in each case any such transfer otherwise shall be exempt from registration
under the Securities Act and any applicable state securities laws.

     (b)  Each stock certificate representing Registrable Securities shall be
imprinted with the following legend:


          "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
          UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. SUCH
          SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE PLEDGED,
          OFFERED, SOLD OR TRANSFERRED EXCEPT IN COMPLIANCE WITH THE

                                       10
<PAGE>


          REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933 AND APPLICABLE
          STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION
          REQUIREMENTS IS AVAILABLE AND UPON DELIVERY TO THE COMPANY, IF
          REQUESTED, OF AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE
          COMPANY, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY,
          THAT REGISTRATION IS NOT REQUIRED. THE SHARES REPRESENTED BY THIS
          CERTIFICATE ARE HELD SUBJECT TO THE TERMS OF A STOCKHOLDER RIGHTS
          AGREEMENT, DATED AS OF OCTOBER 12, 2000. A COPY OF THE STOCKHOLDER
          RIGHTS AGREEMENT IS AVAILABLE FOR INSPECTION DURING NORMAL BUSINESS
          HOURS AT THE PRINCIPAL OFFICES OF THE COMPANY. NEITHER THIS
          CERTIFICATE NOR THE SHARES REPRESENTED HEREBY MAY BE SOLD, ASSIGNED,
          TRANSFERRED, MORTGAGED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED
          OR ENCUMBERED, DIRECTLY OR INDIRECTLY, EXCEPT IN ACCORDANCE WITH THE
          PROVISIONS OF SUCH STOCKHOLDER RIGHTS AGREEMENT. THE STOCKHOLDER
          RIGHTS AGREEMENT SHOULD BE READ CAREFULLY PRIOR TO PURCHASING THE
          SHARES REPRESENTED HEREBY."

The Company may instruct its transfer agent to impose appropriate stop transfer
procedures to enforce the restrictions imposed by Section 9(a).

     (c)  The legend specified in Section 9(b) shall be removed and the Company
shall promptly issue, or shall promptly cause to be issued, a certificate
without such legend to the Holder of any Registrable Securities if the resale of
such Registrable Securities is registered under the Securities Act pursuant to
Section 1 or 2.

     10.  Descriptive Headings; Definitions; Certain Interpretations.

     (a)  Descriptive headings are for convenience only and shall not control or
affect the meaning or construction of any provision of this Agreement.

     (b)  As used in this Agreement, the following terms shall have the
following respective meanings:

     "Affiliate" means (a) any person directly or indirectly controlling,
controlled by or under common control with another person; (b) any person owning
or controlling 10% or more of the outstanding voting securities of such other
person; (c) any partner, officer, director, employee or stockholder of such
person or any parent, spouse, child, brother, sister or other relative with a

                                       11
<PAGE>

relationship (by blood, marriage or adoption) or not more remote than first
cousin of any of the foregoing; or (d) any liquidating trust, trustee or other
similar person or entity for any person.

     "Holder" means (a) the Stockholders and (b) any other person to which the
rights of registration under this Agreement have been transferred or assigned in
accordance with the terms of this Agreement.

     "Plan Participant" means each of the individuals identified on Schedule 1
hereto.

     "Polsky" means Michael A. Polsky or, in the event of his death or
incapacity, a single person designated in writing to the Company by his estate
or administrator.

     "Registrable Securities" means (a) 1,058,871 shares of Common Stock issued
to the Stockholders pursuant to the Stock and Note Purchase Agreement and (b)
any shares of Common Stock issued in respect of such shares by way of a stock
dividend or stock split or in connection with a combination of shares,
recapitalization, merger or consolidation or reorganization; provided that any
such shares shall cease to be Registrable Securities when such securities have
been sold in a public distribution or a public securities transaction.

     "Registration Expenses" means any and all expenses incident to performance
of or compliance with this Agreement, including (i) all registration and filing
fees of the Commission, a stock exchange or the National Association of
Securities Dealers, Inc., (ii) all fees and expenses of complying with
securities or blue sky laws, (iii) all printing, messenger and delivery
expenses, (iv) all fees and expenses incurred in connection with the listing of
the Registrable Securities on any securities exchange pursuant to Section 3(g),
(v) the fees and disbursements of counsel for the Company and of its independent
public accountants, including the expenses of any special audits or "cold
comfort" letters required by or incident to such performance and compliance,
(vi) the reasonable fees and disbursements of one counsel selected by the
Holders of a majority of the Registrable Securities being registered to
represent all Holders of the Registrable Securities being registered in
connection with each such registration, and (vii) the reasonable fees and
expenses of any special experts retained by the Company in connection with the
requested registration.

     (c)  Except as otherwise expressly provided in this Agreement, the
following rules of interpretation apply to this Agreement: (i) the singular
includes the plural and the plural includes the singular; (ii) "or" or "any" are
not exclusive and "include" and "including" are not limiting; (iii) a reference
to any agreement or other contract includes permitted supplements and
amendments; (iv) a reference to a law includes any amendment or modification to
such law and any rules or regulations issued thereunder; (v) a reference to a
person includes its permitted successors and assigns; and (vi) a reference in
this Agreement to an Section or Schedule is to the Section or Schedule of this
Agreement.

     11.  Notices. All notices, requests and other communications to any party
hereunder shall be in writing and sufficient if delivered personally or sent by
telecopy (with confirmation of receipt) or by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:

                                       12
<PAGE>



     If to the Company:     Calpine Corporation
                            50 West San Fernando Street
                            San Jose, California 95113
                            Attention:  Ann B. Curtis
                            Fax No.:  408-995-0505

     With a copy to:        Covington & Burling
                            1330 Avenue of the Americas
                            New York, New York 10019
                            Attention: William R. Collins
                            Fax No.: (212) 841-1010

If to any Holder, to its address as provided on its signature page attached
hereto, or to such other address or telecopy number as the party to whom notice
is to be given may have furnished to the other party in writing in accordance
herewith. Each such notice, request or communication shall be effective when
received or, if given by mail, when delivered at the address specified in this
Section or on the fifth business day following the date on which such
communication is posted, whichever occurs first.

     12.  Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.

     13.  Benefits of Agreement. All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. This Agreement is for the
sole benefit of the parties hereto and not for the benefit of any third party.

     14.  Enforceability. It is the desire and intent of the parties hereto that
the provisions of this Agreement shall be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated to be invalid or unenforceable, such provision
shall be deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such deletion to apply only with respect to the
operation of such provision in the particular jurisdiction in which such
adjudication is made.

     15.  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY
CHOICE OR CONFLICT OF LAWS PROVISIONS).

     16.  WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY HAS

                                       13
<PAGE>


REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTY HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION 16.

     17.  Other Registration Rights. Within the limitations prescribed by this
Section 17, but not otherwise, the Company may grant to other investors in the
Company rights of incidental registration (such as those rights provided in
Section 2) with respect to registrations requested by Holders pursuant to
Section 1, but only in respect of that portion of any such registration as
remains after inclusion of all shares of Registrable Securities requested by
Holders.

     18.  Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. The Stockholders' rights hereunder may not be assigned to any
person or entity except a transferee of Registrable Securities pursuant to an
unregistered transfer by a Holder in accordance with the proviso set forth in
Section 9(a); provided that any such transferee agrees in writing to be bound by
all of the terms and conditions of this Agreement.

     19.  Blackout Periods. Notwithstanding any other provision in this
Agreement to the contrary, the Company's obligation to file a Registration
Statement, or cause such Registration Statement to become and remain effective,
shall be suspended for not more than one period not to exceed an aggregate of 90
days in any 12-month period if the Company shall furnish to Holders a
certificate signed by the president of the Company stating that in the
reasonable judgment of the Board of Directors of the Company it would be
seriously detrimental to the Company and its stockholders for such registration
to be effected at such time due to undisclosed pending Company events. Any such
suspension shall terminate upon disclosure of such events by the Company or the
termination of such events.

     20.  Aircraft Carrier Release. The parties agree that if Release No.
33-7606A, or a similar release, is adopted by the Commission, the parties shall
make amendments to this Agreement necessary to preserve the intent of this
Agreement. All references to forms of the Commission in this Agreement include
successor forms thereto.

     21.  Entire Agreement. This Agreement contains the entire agreement and
understanding between the parties hereto with respect to matters covered hereby
and supersedes all prior agreements with respect to its subject matter and
understandings, written or oral, among the parties with respect to the subject
matter hereof.

     22.  Amendment and Waiver. This Agreement and the rights granted to the
Stockholders may be modified, amended or waived only by a writing signed by each
party hereto.

     23.  Admission of Additional Holders. Any person who on or subsequent to
the date of this Agreement acquires Registrable Securities pursuant to Section
9(a), shall, upon execution of a counterpart signature page of this Agreement
become a party to this Agreement without further action by the other parties
hereto. The addition of any such person as a party to this Agreement party shall
not be considered an amendment of this Agreement.

                                       14

<PAGE>

     IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.

                           CALPINE CORPORATION


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

                                       15
<PAGE>
HOLDER SIGNATURE PAGE


                              Michael P. Polsky
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Michael P. Polsky
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              233 South Wacker Drive
                              ----------------------------------------------
                              Suite 9425
                              ----------------------------------------------
                              Chicago, IL 60606
                              ----------------------------------------------

<PAGE>

HOLDER SIGNATURE PAGE


                              David Boyce
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ David Boyce
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              8 Bel Aire Court
                              ----------------------------------------------
                              Buffalo Grove, IL 60089
                              ----------------------------------------------
<PAGE>
HOLDER SIGNATURE PAGE


                              Steve Dowdy
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Steve Dowdy
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              210 Wyngate Drive
                              ----------------------------------------------
                              Barrington, IL 60010
                              ----------------------------------------------

<PAGE>

HOLDER SIGNATURE PAGE


                              Alex George
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Alex George
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              810 Alleghany Road
                              ----------------------------------------------
                              Grayslake, IL 60030
                              ----------------------------------------------
<PAGE>

HOLDER SIGNATURE PAGE


                              Andy Kellen
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Andy Kellen
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              6905 Wellauer Drive
                              ----------------------------------------------
                              Wauwatosa, WI 53213
                              ----------------------------------------------
<PAGE>

HOLDER SIGNATURE PAGE


                              Jerrold Levy
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Jerrold Levy
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              2106 Brandywyn Lane
                              ----------------------------------------------
                              Buffalo Grove, IL 60089
                              ----------------------------------------------
<PAGE>
HOLDER SIGNATURE PAGE


                              Tom Long
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Tom Long
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              41 East Stone Avenue
                              ----------------------------------------------
                              Lake Forest, IL 60045
                              ----------------------------------------------

<PAGE>
HOLDER SIGNATURE PAGE


                              Terry Mitchell
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Terry Mitchell
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              17 Bristol Court
                              ----------------------------------------------
                              Mundelein, IL 60060
                              ----------------------------------------------
<PAGE>
HOLDER SIGNATURE PAGE


                              Kent Morton
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Kent Morton
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              1000 West Washington Boulevard
                              ----------------------------------------------
                              #134
                              ----------------------------------------------
                              Chicago, IL 60607
                              ----------------------------------------------

<PAGE>
HOLDER SIGNATURE PAGE


                              Bryan Schueler
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Bryan Schueler
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              2040 Walters Avenue
                              ----------------------------------------------
                              Northbrook, IL 60062
                              ----------------------------------------------
<PAGE>
HOLDER SIGNATURE PAGE


                              James Shield
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ James Shield
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              20428 Weatherstone
                              ----------------------------------------------
                              Kildeer, IL 60047
                              ----------------------------------------------
<PAGE>
HOLDER SIGNATURE PAGE


                              Shailesh Vyas
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Shailesh Vyas
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              8323 Misty Trail Drive
                              ----------------------------------------------
                              Houston, TX 77095
                              ----------------------------------------------
<PAGE>
HOLDER SIGNATURE PAGE


                              Bianca Virgili
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Bianca Virgili
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              207 West Ridge
                              ----------------------------------------------
                              Prospect Heights, IL 60070
                              ----------------------------------------------
<PAGE>
HOLDER SIGNATURE PAGE


                              Mark Leaman and Marlo Leman, JTWROS
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Mark Leaman and Marlo Leaman, JTWROS
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              2036 Walters Avenue
                              ----------------------------------------------
                              Northbrook, IL 60062
                              ----------------------------------------------
<PAGE>
HOLDER SIGNATURE PAGE


                              Enio Ricci and Mary Ricci, JTWROS
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ Enio Ricci and Mary Ricci, JTWROS
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              One Littlebrooke Court
                              ----------------------------------------------
                              Olney, MD 20832
                              ----------------------------------------------
<PAGE>
HOLDER SIGNATURE PAGE


                              James Murphy and Kathryn Murphy
                              ----------------------------------------------
                              Print Name of Holder


                              /s/ James Murphy and Kathryn Murphy
                              ----------------------------------------------


                              ----------------------------------------------
                              Print Name of Signatory (if Holder is
                              not a natural person)


                              ----------------------------------------------
                              Title of Signatory (if Holder is not a
                              a natural person)


                              Address:
                              125 Tall Trees Drive
                              ----------------------------------------------
                              Barrington, IL 60010
                              ----------------------------------------------


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>4
<FILENAME>f76163orex23-1.txt
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<PAGE>
                                                                    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 (No. 333-_____) of our
report dated April 19, 2001 and to all references to our Firm included in this
Registration Statement on Form S-3. Our report dated March 14, 2001 included in
Calpine Corporation's Form 10-K for the year ended December 31, 2000 is no
longer appropriate since restated financial statements have been presented
giving effect to a business combination accounted for by a pooling-of-interests.

/s/ Arthur Andersen LLP

San Jose, California
October 19, 2001

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>5
<FILENAME>f76163orex23-2.txt
<DESCRIPTION>EXHIBIT 23.2
<TEXT>
<PAGE>
                                                                    EXHIBIT 23.2


                  CONSENT OF INDEPENDENT CHARTERED ACCOUNTANTS

We consent to the reference to our firm under the caption "Experts" in the
registration statement (Form S-3 No. 333-____) and related Prospectus of Calpine
Corporation and to the incorporation by reference therein of our report dated
February 16, 2001 with respect to the consolidated financial statements of Encal
Energy Ltd. included in the Current Report on Form 8-K of Calpine Corporation
dated September 10, 2001, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Calgary, Alberta
October 22, 2001

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