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<ACCESSION-NUMBER>0000916457-05-000027
<TYPE>8-K
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<ITEMS>1.01
<ITEMS>9.01
<FILING-DATE>20050317
<DATE-OF-FILING-DATE-CHANGE>20050316
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>CALPINE CORP
<CIK>0000916457
<ASSIGNED-SIC>4911
<IRS-NUMBER>770212977
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
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<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>001-12079
<FILM-NUMBER>05687242
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>50 WEST SAN FERNANDO ST
<CITY>SAN JOSE
<STATE>CA
<ZIP>95113
<PHONE>4089955115
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>50 W SAN FERNANDO
<STREET2>SUITE 500
<CITY>SAN JOSE
<STATE>CA
<ZIP>95113
</MAIL-ADDRESS>
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<TYPE>8-K
<SEQUENCE>1
<FILENAME>o30805.txt
<TEXT>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


                                    FORM 8-K

                                 CURRENT REPORT

                       Pursuant to Section 13 or 15(d) of
                       the Securities Exchange Act of 1934


      Date of Report (Date of earliest event reported): March 8, 2005


                               CALPINE CORPORATION
                            (A Delaware Corporation)

                        Commission file number: 001-12079

                  I.R.S. Employer Identification No. 77-0212977

                           50 West San Fernando Street
                           San Jose, California 95113
                            Telephone: (408) 995-5115

     Check the  appropriate  box below if the Form 8-K  filing  is  intended  to
simultaneously  satisfy the filing obligation of the registrant under any of the
following provisions:

     [ ]  Written communications pursuant to Rule 425 under the Securities Act
          (17 CFR 230.425)

     [ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act
          (17 CFR 240.14a-12)

     [ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
          Exchange Act (17 CFR 240.14d-2(b))

     [ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
          Exchange Act (17 CFR 240.13e-4(c))


<PAGE>


ITEM 1.01 ENTRY INTO A MATERIAL  DEFINITIVE  AGREEMENT



Chairman, President and Chief Executive Officer Employment Agreement


     On March  9,  2005,  the  Board  of  Directors  (the  "Board")  of  Calpine
Corporation  (the  "Issuer")   approved  an  employment   agreement  with  Peter
Cartwright  to serve as the Issuer's  Chairman,  President  and Chief  Executive
Officer. The agreement, attached as Exhibit 10.1 hereto, is made effective as of
January 1, 2005, and includes the following provisions:

1.   The term of the  agreement  is two years  (until  December 31, 2006) and is
     renewable for three successive  one-year terms upon the mutual agreement of
     the Board and Mr. Cartwright.

2.   Mr.  Cartwright  will  receive a minimum  base  salary  of  $1,000,000,  as
     adjusted  annually  by  the  Compensation   Committee  and  Nominating  and
     Governance  Committee of the Board, acting jointly (the "Joint Committee"),
     and shall be eligible to receive an annual  performance bonus as determined
     by the Joint Committee.  Mr.  Cartwright's target bonus is 180% of his base
     salary.

3.   Upon signing the  agreement,  Mr.  Cartwright  will be granted an option to
     purchase  1,250,000  shares of common stock  pursuant to the  Discretionary
     Option Grant Program of the Issuer's 1996 Stock Incentive Plan, as amended.
     Such option was granted on March 9, 2005 at an exercise  price of $3.80 per
     share (representing the closing price of Calpine common stock on January 3,
     2005). The option has a six-year term and will vest upon the earlier of (i)
     the Company's common stock closing price equaling at least $10.00 per share
     for four consecutive  trading days and (ii) December 31, 2009. A filing for
     such equity award was made with the Securities  and Exchange  Commission on
     Form 4 on March 10, 2005.

4.   Mr. Cartwright shall continue to serve as Chairman of the Board for as long
     as he continues to be nominated and elected.

5.   Mr.  Cartwright is entitled to certain  severance  benefits as set forth in
     the agreement in the event that (i) Mr. Cartwright  resigns for good cause,
     (ii) the Company  terminates his  employment  other than for cause or (iii)
     the agreement is not renewed for any of the three  one-year  renewal terms.
     The  severance  benefits  include an annual  amount equal to the sum of Mr.
     Cartwright's base salary and target bonus at the time of the termination of
     his  employment,  paid for the shorter of (i) two years and (ii) the period
     from his termination date to December 31, 2009.

6.   Disputes under the agreement will be resolved by arbitration.


Other Officer Compensation Arrangements

     On March 8, 2005, the  Compensation  Committee of the Board approved annual
base salary and equity awards of (i) options to purchase  common stock under the
Discretionary  Option  Program of the Issuer's  1996 Stock  Incentive  Plan,  as
amended,  and (ii)  performance-based  restricted stock under the Stock Issuance
Program of the  Issuer's  1996 Stock  Incentive  Plan,  as amended, for eligible
employees,  including Peter Cartwright,  Chairman, President and Chief Executive
Officer;  Ann B. Curtis,  Vice Chair,  Executive  Vice  President  and Corporate
Secretary;  Robert D. Kelly,  Executive Vice President,  Chief Financial Officer
and  President  - Calpine  Finance  Company;  E. James  Macias,  Executive  Vice
President; and Thomas R. Mason, Executive Vice President and President - Calpine
Power Company.  The Compensation  Committee of the Board determined not to issue
bonus awards for  performance in 2004 to the Issuer's  executive  officers under
the Issuer's Management Incentive Plan.

     The Compensation Committee of the Board made the following approvals:

<TABLE>
<CAPTION>
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
                                                                                     2005 Stock Option   2005 Restricted Stock
              Executive Officer           2005 Salary (1)       2004 Bonus (2)           Grant (3)             Grant (4)
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
<S>                                          <C>                      <C>                 <C>                   <C>
Peter Cartwright, Chairman, President        $1,000,000               $0                  350,500               406,627
and Chief Executive Officer
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
Ann B. Curtis, Vice Chair,                     $550,000               $0                  350,000               124,247
Executive Vice President
and Corporate Secretary
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
Robert D. Kelly,                               $530,000               $0                  500,000               301,205
Executive Vice President,
Chief Financial Officer and
President - Calpine Finance Company
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
E. James Macias,                               $500,000               $0                  225,000               112,952
Executive Vice President
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
Thomas R. Mason,                               $500,000               $0                  200,000               112,952
Executive Vice President and
President - Calpine Power Company
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
<FN>
     (1) No  increases  for 2005,  except that Mr.  Kelly will receive an annual
     base salary of $650,000, effective as of July 1, 2005.

     (2) Bonus awards payable in 2005 for performance during 2004.

     (3) Each  stock  option has an  exercise  price of $3.32  representing  the
     closing price of Calpine common stock on the New York Stock Exchange on the
     date of grant. The options have a seven-year term and will vest in a series
     of four successive equal annual installments  upon completion of each  year
     of continued service as a service provider of the Issuer over the four-year
     period measured from the grant date.

     (4) The  performance-based  restricted  stock has a purchase price of $3.32
     per share representing the closing price of Calpine common stock on the New
     York Stock Exchange on the date of grant and such purchase price is payable
     in past services.  Each  restricted  stock grant has an expiration  date of
     December 31, 2009. The performance-based restricted stock vests as follows:
     50% shall vest upon such time as the closing  selling price of the Issuer's
     common  stock  is  equal  to or  greater  than  $5.00  per  share  for four
     consecutive  trading days, and 50% shall vest upon such time as the closing
     selling  price of the  Issuer's  common  stock is equal to or greater  than
     $10.00 per share for four consecutive trading days.
</FN>
</TABLE>

     The stock  options  were  granted  subject  to the terms of a stock  option
agreement,  the form of which is attached as Exhibit 10.2 hereto. The restricted
stock awards were granted subject to the terms of a restricted  stock agreement,
the form of which is attached as Exhibit 10.3 hereto.

     As reported to the Securities and Exchange Commission on applicable Forms 4
on March 10,  2005,  Mr.  Cartwright  and the other  executive  officers  of the
Company were  granted the  performance-based  restricted  stock and stock option
awards described in the table above on March 8, 2005.

     On March 8, 2005,  the  Compensation  Committee  of the Board  approved  an
increase in annual base  salary from  $530,000 to $650,000  for Robert D. Kelly,
Executive  Vice  President,  Chief  Financial  Officer  and  President - Calpine
Finance Company, effective July 1, 2005.


ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS


(a) Financial Statements of Businesses Acquired.


    Not Applicable


(b) Pro Forma Financial Information.


    Not Applicable


(c) Exhibits.


 10.1 Employment Agreement,  effective  as of January 1, 2005,  between  Calpine
      Corporation and Peter Cartwright

 10.2 Form of Stock Option Agreement

 10.3 Form of Restricted Stock Agreement

 10.4 Base Salary, Bonus, Stock Option Grant and Restricted Stock Summary Sheet


<PAGE>



                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                  CALPINE CORPORATION

                                  By:  /s/ Charles B. Clark, Jr.
                                       ------------------------------------
                                       Charles B. Clark, Jr.
                                       Senior Vice President, Controller and
                                       Chief Accounting Officer


Date: March 16, 2005



<PAGE>


                                    EXHIBITS


10.1 Employment  Agreement,  effective  as of January 1, 2005,  between  Calpine
     Corporation and Peter Cartwright

10.2 Form of Stock Option Agreement

10.3 Form of Restricted Stock Agreement

10.4 Base Salary, Bonus, Stock Option Grant and Restricted Stock Summary Sheet
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>ex10-1.txt
<TEXT>
EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT



          This Employment  Agreement (the "Agreement") is entered into effective
as of January 1, 2005, between CALPINE CORPORATION,  a Delaware Corporation (the
"Company"),  and PETER  CARTWRIGHT  ("Mr.  Cartwright") to provide the terms and
conditions for Mr. Cartwright's employment.

          Mr. Cartwright has served as the President and Chief Executive Officer
of the Company since its inception in 1984 and has served as the Chairman of the
Board of  Directors of the Company  (the  "Board")  since  September  1996.  Mr.
Cartwright's current employment agreement expires on December 31, 2004.

          The Company and Mr.  Cartwright  have agreed that Mr.  Cartwright will
remain  employed  by the Company  and will  continue  to serve as the  Company's
President and Chief Executive Officer,  under the terms and conditions set forth
below.

          Accordingly,  and in consideration of the mutual obligations set forth
in this  Agreement,  which Mr.  Cartwright and the Company agree are sufficient,
Mr. Cartwright and the Company agree as follows:

     1.   Term of Employment.  Mr. Cartwright's  Term of  Employment consists of
the initial term  and any  subsequent  term for which the  Agreement is renewed.
The  initial  term of  this  Agreement  begins  on January 1, 2005,  and ends on
December 31, 2006.  Mr.  Cartwright  and  the  Company  may  agree  to renew the
Agreement for one or more of three successive one-year terms, as follows:

          a. On or before  June 30,  2006,  Mr.  Cartwright  and the Board shall
     decide  whether to renew the Agreement  for the first  renewal term,  which
     would begin on January 1, 2007, and end on December 31, 2007.

          b. If the  Agreement  is  renewed  for the  first  renewal  term,  Mr.
     Cartwright  and the Board shall decide on or before June 30, 2007,  whether
     to renew the  Agreement  for a second  renewal  term,  which would begin on
     January 1, 2008, and end on December 31, 2008.

          c. If the  Agreement  is renewed  for the  second  renewal  term,  Mr.
     Cartwright  and the Board shall decide on or before June 30, 2008,  whether
     to renew the  Agreement  for a third  renewal  term,  which  would begin on
     January 1, 2009, and end on December 31, 2009.

          d. If the  Agreement  is  renewed  for the  third  renewal  term,  Mr.
     Cartwright's  Term of Employment shall end on December 31, 2009, unless the
     Board  and  Mr.  Cartwright  agree  to an  extension  of  Mr.  Cartwright's
     employment with the Company.

          If Mr.  Cartwright  and the Board  decide on or before  June 30 of the
year  preceding  any renewal  term not to renew the  Agreement  for such renewal
term,  Mr.  Cartwright's  Term of  Employment  shall end when the  current  term
expires.


                                     Page 1
<PAGE>

          If Mr. Cartwright's Agreement is not renewed for the first, second, or
third renewal term,  Mr.  Cartwright  shall continue to be available to serve as
Chairman of the Board if he continues to be nominated  and elected as such,  and
shall provide  consulting and advisory  services to the Company and to the Board
to the  extent  requested  by the  Company or the  Board,  in each case  through
December 31, 2009. Mr.  Cartwright shall be entitled to reasonable  compensation
for such services,  as shall be mutually  agreed between Mr.  Cartwright and the
Board. Mr.  Cartwright's  undertaking to provide continued services to the Board
or the  Company  under this  paragraph  shall  apply only to the extent that the
undertaking  does not make it  necessary  to delay the payment of any  severance
benefit to which he is entitled  under  paragraph 4, in order to comply with the
distribution  restrictions imposed by Section 409A of the Internal Revenue Code.
During any period in which Mr.  Cartwright  is  obligated  to provide  continued
services to the Company or the Board, Mr.  Cartwright shall not provide services
to any competitor of the Company.

          The Board may terminate Mr.  Cartwright's  employment for Cause at any
time  after  providing  Mr.  Cartwright  with 10 days'  advance  written  notice
explaining the circumstances that justify the termination.  "Cause" means any of
the following:  (1) material  breach of any material term of this Agreement that
is not  corrected  within  10 days  after  the  Board's  written  notice  to Mr.
Cartwright of the breach; (2) conviction of a felony;  (3) repeated  unexplained
or  unjustified  absence;  (4)  willful  breach of  fiduciary  duty  under  this
Agreement;  or (5)  gross  negligence  or  willful  misconduct,  where the gross
negligence  or willful  misconduct  has  resulted,  or is likely to  result,  in
substantial and material damage to the Company or any of its subsidiaries.

          Mr.  Cartwright  may terminate his  employment  for Good Reason at any
time.  "Good Reason" means the material  breach by the Company of one or more of
its material  obligations  under this Agreement that is not corrected  within 10
days after Mr. Cartwright's written notice to the Company of the breach.

     2.   Position  and Responsibilities.  During  the Term of  Employment,  Mr.
Cartwright  shall  have the  position  and  responsibilities  described  in this
paragraph  2. Mr.  Cartwright  shall  serve  as the  Company's  Chief  Executive
Officer,  with the general  executive  powers that accompany  that position.  He
shall report  directly to the Board and shall have the duties that are typically
performed by the chief  executive  officer of a public  company,  as well as any
other duties consistent with his position that are assigned to Mr. Cartwright by
the Board.  Although Mr.  Cartwright may be required to travel from time to time
for business  reasons,  his principal place of employment shall be the Company's
corporate offices in San Jose, California.

          a. Mr.  Cartwright  shall devote his full  business  time and his best
     efforts,  skill, and attention to the Company's business and affairs and to
     promoting the Company's best interests.

          b. Mr. Cartwright shall continue to serve as the Chairman of the Board
     for as long as he continues to be nominated and elected.


                                     Page 2
<PAGE>

          c. Mr.  Cartwright  shall also serve as the Company's  President until
     such time as he and the Board agree to name someone else as  President.  If
     someone else is named,  all of the  provisions of this contract will remain
     in place.

          d. While employed by the Company, Mr. Cartwright shall not directly or
     indirectly  manage,  operate,  participate  in,  be  employed  by,  perform
     consulting  services  for, or otherwise be connected  with,  any company or
     other  enterprise  that would  compete  with the  Company's  business.  Mr.
     Cartwright  may  invest  in an  entity  that  competes  with the  Company's
     business,  provided that Mr. Cartwright and his immediate family members do
     not own more than one percent of the voting  securities  of any such entity
     at any time.

          e. Mr.  Cartwright  shall not  disclose any  confidential  information
     relating to the Company or its business;  such information is the exclusive
     property of the Company.

     3.   Compensation.  For all  of his services during the Term of Employment,
Mr. Cartwright shall receive the following compensation:

          a.  Base  Salary.  Mr.  Cartwright's  minimum  Base  Salary  shall  be
     $1,000,000   per  calendar   year.  The  amount  of  any  increase  in  Mr.
     Cartwright's Base Salary shall be determined annually, jointly by a Special
     Joint Meeting of the Nominating and Governance and Compensation  Committees
     of the Board (the "Joint Committee"), in its sole discretion,  based on Mr.
     Cartwright's  performance  and taking into account  salaries  paid to other
     chief  executive  officers in  comparable  companies  and in the  Company's
     industry.

          b. Bonus.  In addition to his Base  Salary,  Mr.  Cartwright  shall be
     eligible to receive an annual performance bonus if, and to the extent that,
     any individual or corporate performance objectives established by the Joint
     Committee are achieved. Mr. Cartwright's Target Bonus shall be at least 180
     percent of his Base Salary.  The Joint  Committee shall  determine,  in its
     sole discretion,  the extent to which the performance  objectives have been
     achieved.

          c. Health Care. Mr. Cartwright shall be eligible to participate in any
     health insurance or health reimbursement plan maintained by the Company for
     its  executives,  and his  benefits  shall  be  based  on the  terms of the
     applicable plan.

          d. 401(k) Plan. Subject to its terms, Mr. Cartwright shall be eligible
     to participate in the Calpine Corporation Retirement Savings Plan.

          e. Vacation. Mr. Cartwright shall be eligible to take 25 paid vacation
     days per year.  These vacation days shall accrue according to the Company's
     vacation policy for executive officers.

          f. Equity Programs. Mr. Cartwright shall be eligible to participate in
     the  Company's  stock  incentive  programs and in any other equity  program
     established by the Company for its senior executives.


                                     Page 3
<PAGE>

          g. Option.  When Mr.  Cartwright signs this Agreement,  Mr. Cartwright
     shall  receive an option to  purchase  one  million  two  hundred and fifty
     thousand  (1,250,000) shares of common stock under the Discretionary Option
     Grant Program of the Company's 1996 Stock Incentive Plan. This option shall
     have a term of six years and an exercise  price equal to the greater of (i)
     $3.80 or (ii) the fair market  value of the  Company's  common stock on the
     date the option is granted, and shall vest upon the earlier of:

               1) the stock price  closing at or above  $10.00 per share (or the
               corresponding  price after adjustment to reflect any stock split,
               reverse stock split, stock dividend, recapitalization, or similar
               change  affecting  the  Company's  outstanding  common stock as a
               class without the Company's  receipt of  consideration)  for four
               consecutive trading days, or

               2) December 31, 2009.

               Except as  provided  below in the case of  Disability  (paragraph
     3.h), death (paragraph 3.i), or severance  (paragraph 4.c), Mr.  Cartwright
     shall forfeit the option if he ceases to be employed as the Company's Chief
     Executive Officer before the option vests.

          h. Disability Benefits. If Mr. Cartwright becomes Disabled (as defined
     below)  while he is an active  employee of the Company,  the Company  shall
     continue to pay his Base Salary until his employment terminates as provided
     in the next sentence;  and the Company shall also pay Mr.  Cartwright a pro
     rata  portion of his annual  Target  Bonus for the portion of the  calendar
     year  before his  Disability.  If Mr.  Cartwright  remains  Disabled  for a
     continuous period exceeding six calendar months,  the Company may terminate
     his employment at any time after the end of the six-month  period, in which
     case Mr. Cartwright shall be eligible for any long-term disability benefits
     provided under the Company's  employee  benefit plans;  for full vesting of
     any  unvested  option  described  in  paragraph  3.g,  above;  and  for the
     severance benefits described in paragraph 4, below.

               For  purposes  of  this  Agreement,   Mr.   Cartwright  shall  be
     "Disabled"  if he is  unable  to  perform  all the  material  duties of his
     position, as determined by an independent physician approved by the Company
     and Mr.  Cartwright;  and "Disability" shall mean a period during which Mr.
     Cartwright remains Disabled.

          i.  Death  Benefits.  Subject to its terms,  Mr.  Cartwright  shall be
     eligible to participate in the Company's group life insurance  program.  If
     Mr.  Cartwright  dies while he is employed  by the  Company,  any  unvested
     option described in paragraph 3.g, above,  shall become fully vested at the
     time of his death,  and the option may be exercised by his  beneficiary  or
     personal  representative  at any time during its remaining term. Unless Mr.
     Cartwright   has  executed  a  valid  written   instrument   designating  a
     beneficiary  or  beneficiaries  to receive any benefit  payable  under this
     Agreement in the event of his death,  his beneficiary  under this Agreement
     shall be deemed to be the same as his beneficiary under the Company's group
     life insurance program.


                                     Page 4
<PAGE>

     4.   Severance. Mr.Cartwright shall receive the severance benefit described
in this paragraph 4 if the Company terminates Mr. Cartwright's employment at any
time during the Term of Employment  or if this  Agreement is not renewed for the
first, second, or third renewal term (and the termination or failure to renew is
not for Cause), or if Mr. Cartwright resigns for Good Reason.

          a. Amount and Payment  Schedule.  Mr.  Cartwright's  severance benefit
     shall be an annual  amount  equal to the sum of his annual  Base Salary and
     Target Bonus as of the date his employment terminates, paid for the shorter
     of (i) two years or (ii) the period from his  termination  date to December
     31, 2009. For purposes of this paragraph, Mr. Cartwright's employment shall
     be deemed to have  terminated at the end of his Term of Employment  even if
     he remains obligated to provide continued services as Chairman of the Board
     or continued  consulting and advisory  services as provided in paragraph 1.
     Subject to the timing rule  described  in  paragraph  4.b,  below,  and the
     special  rule in case of death  described  in  paragraph  4.d,  below,  the
     severance  benefit shall be paid ratably on the same payment  schedule that
     applied to Mr. Cartwright's salary at the time of his termination.

          b. Timing.  To the extent  necessary to comply with the restriction in
     Section  409A(a)(2)(B) of the Internal Revenue Code concerning  payments to
     specified employees, the first severance payment to Mr. Cartwright shall be
     made on the first  installment date (determined under paragraph 4.a, above)
     that is at least six months after Mr.  Cartwright's  termination  date. The
     first  payment  shall  include any  installments  that would have been paid
     previously  under  paragraph 4.a were it not for this special  timing rule,
     plus  interest on the delayed  installments  at an annual rate  (compounded
     monthly) equal to the federal  short-term  rate (as in effect under Section
     1274(d) of the Internal Revenue Code on his termination date).

          c. Other Severance Benefits.  If Mr. Cartwright is entitled to receive
     a severance benefit under paragraph 4.a as a result of his termination,  he
     shall also receive the following benefits:

               1.   All stock options,  restricted stock, warrants,  rights, and
                    other equity awards  granted by the Company  (including  the
                    option  described  in  paragraph  3.g) shall vest and remain
                    exercisable through their initial terms.

               2.   Until  December 31, 2009, the Company shall at its sole cost
                    and expense (but  disregarding  any individual tax liability
                    of Mr.  Cartwright)  provide Mr.  Cartwright (and his spouse
                    and eligible  dependents)  with life  insurance,  disability
                    insurance,  group health  benefits,  and accidental death or
                    dismemberment   benefits   substantially  similar  to  those
                    benefits  that Mr.  Cartwright  (and his spouse and eligible
                    dependents)   were   receiving    immediately   before   his
                    termination.  If Mr. Cartwright (or his spouse or dependent)
                    elects to receive  health care  continuation  coverage under
                    Section 4980B of the Internal  Revenue  Code,  that coverage
                    shall be in lieu  of,  and not in  addition  to,  the  group
                    health coverage described in this subparagraph.


                                     Page 5
<PAGE>

               3.   If  all  or  any  portion  of  the  amounts  payable  to Mr.
                    Cartwright  under this Agreement or otherwise are subject to
                    the golden  parachute  excise tax imposed by Section 4999 of
                    the Internal Revenue Code (or any similar tax under state or
                    local law),  the Company shall pay Mr.  Cartwright an amount
                    necessary  to place  Mr.  Cartwright  in the same  after-tax
                    position  that  Mr.  Cartwright  would  have  been in if the
                    excise  tax  had  not  been  imposed.   The  amount  of  the
                    additional  payment  shall be  determined  by the  Company's
                    independent accountants.

          d.  No  Severance  After  Death.  If Mr.  Cartwright  qualifies  for a
     severance benefit under paragraph 4.a but he dies before the last severance
     payment is made, any remaining severance payments under paragraph 4.a shall
     be  canceled  and his  beneficiary  (or  beneficiaries)  shall  receive any
     benefit payable under paragraph 3.i.

          e. No  Severance  Benefit  for  Termination  for  Cause  or  Voluntary
     Termination.  If the Company  terminates  Mr.  Cartwright's  employment for
     Cause,  or if Mr.  Cartwright  resigns (and his resignation is not for Good
     Reason),  Mr.  Cartwright  shall not be eligible  to receive any  severance
     benefit under this paragraph 4. Mr.  Cartwright's  eligibility  (if any) to
     receive a severance  or  retirement  benefit  under any other  severance or
     retirement plan or program maintained by the Company shall be determined by
     the terms of that plan or program as in effect on his termination date.

     5.   Employment  Taxes.  All payments  and other  compensation  under  this
Agreement  shall  be  subject  to  withholding  of  the  applicable  income  and
employment  taxes.  At  the  same  time,  however,   Mr.  Cartwright  is  solely
responsible for paying all required taxes on any payments or other  compensation
provided under this Agreement  (including imputed  compensation),  regardless of
whether taxes are withheld.

     6.   Nonduplication  of Benefits.  No  term  or  other  provision  of  this
Agreement may be interpreted to require the Company to duplicate  any payment or
other compensation that Mr. Cartwright is already entitled  to  receive  under a
compensation or benefit plan,  program,  or other arrangement  maintained by the
Company.

     7.   Indemnification.  To  the  extent  permitted  by  applicable  law, the
Companyshall provide indemnification for Mr. Cartwright under  its  Articles  of
Incorporation  and  Bylaws.  Mr.  Cartwright  shall be covered by the  Company's
standard indemnification agreement and by any director's and officer's liability
insurance policy maintained by the Company.

     8.   Successors.  Any  successor  to the Company or to all or substantially
all  of  the Company's  business  and/or  assets  (whether  a direct or indirect
successor, and whether by purchase, lease, merger,  consolidation,  liquidation,
or otherwise) shall assume the obligations under this Agreement.  In case of any
succession,  the term "Company" shall refer to the successor.  The terms of this
Agreement  and all of Mr.  Cartwright's  rights  hereunder  shall  inureto the
benefit  of,  and  be  enforceable  by,  Mr.  Cartwright's   personal  or  legal
representatives,  executors,  administrators,  successors,  heirs, distributees,
devisees, and legatees.


                                     Page 6
<PAGE>

     9.   No Third-Party Beneficiaries.  Except  as  provided  in  paragraph  8,
above,  nothing  in  this  Agreement  may confer upon any person or entity not a
party  to this Agreement any rights or remedies of any nature or kind whatsoever
under or by reason of this Agreement.

     10.  No Duty to Mitigate.  Mr. Cartwright shall not be required to seek new
employment or otherwise to mitigate the payments contemplated by this Agreement.
The payments  contemplated  by this  Agreement  shall not be reduced by earnings
that Mr. Cartwright may receive from any other source.

     11.  Notice.  Notices and other communications  between the parties to this
Agreement  shall be  delivered in writing and shall be deemed to have been given
when  personally  delivered or on the third  business day after  mailing by U.S.
registered or certified mail, return receipt requested and postage prepaid.

          a.  Notices  and  other  communications  to Mr.  Cartwright  shall  be
     addressed  to Mr.  Cartwright,  at the most  recent  home  address  that he
     provided in writing to the Company.

          b. Notices and other  communications to the Company shall be addressed
     to the Company's corporate headquarters,  to the attention of the Company's
     Secretary.

     12.  Waiver and Amendments. No provision of this Agreement may be modified,
waived, or discharged,  unless the modification,  waiver, or discharge is agreed
to in writing signed by Mr.  Cartwright and by an authorized  representative  of
the Company (other than Mr. Cartwright).  Unless specifically characterized as a
continuing  waiver, no waiver of a condition or provision at any one time may be
considered  a waiver  of the  same  provision  or  condition  (or any  different
provision or condition) at any other time.

     13.  Agreement to Arbitrate. Any dispute arising out of or relating to this
Agreement,  or  otherwise  arising  out  of  or  relating  to  Mr.  Cartwright's
employment  with the  Company,  may be settled by  arbitration  in the County of
Santa Clara, California, using the rules of the American Arbitration Association
then in effect. Any arbitration proceedings shall be non-binding: any claim with
respect to this Agreement,  whether or not previously arbitrated, may be brought
in any court of competent jurisdiction.

     14.  Choice of Law. This Agreement (including its validity, interpretation,
construction,  and  performance)  shall be  governed by the laws of the State of
California,  without  regard to any rule or  principle  concerning  conflicts or
choice of law that might otherwise refer  construction or  interpretation to the
substantive law of another jurisdiction.

     15.  Section  Headings.  All  headings in this  Agreement  are inserted for
convenience only. Headings do not constitute a part of the Agreement and may not
affect the  meaning or  interpretation  of any term or other  provision  of this
Agreement.


                                     Page 7
<PAGE>

     16.  Severability  and  Reformation.  Each  substantive  provision  of this
Agreement is a separate agreement,  independently supported by good and adequate
consideration, and is severable from the other provisions of the Agreement. If a
court of competent  jurisdiction  determines  that any term or provision of this
Agreement  is  unenforceable,  then  the  other  terms  and  provisions  of this
Agreement shall remain in full force and effect, and the unenforceable  terms or
provisions  shall be equitably  modified to the extent  necessary to achieve the
underlying purpose in an enforceable way.

     17.  Whole Agreement. This Agreement reflects the entire  understanding and
agreement  between the Company and Mr.  Cartwright  regarding  Mr.  Cartwright's
employment.  This  Agreement  supersedes  all prior  negotiations,  discussions,
correspondence,   communications,   understandings,  and  agreements  (including
without  limitation  the  employment  agreement  between  the  Company  and  Mr.
Cartwright that was entered into effective as of January 1, 2000),  whether oral
or written,  relating  to Mr.  Cartwright's  employment  with the  Company.  The
respective rights and obligations of the parties to this Agreement shall survive
the termination of Mr.  Cartwright's  employment to the extent necessary to give
such rights and obligations their intended effect.

     18.  Counterparts. This Agreement may be executed in counterparts,  each of
which shall be deemed an original,  but all of which together shall constitute a
single instrument.

                                      * * *


          IN WITNESS  WHEREOF,  the parties to this Agreement have executed this
Agreement on March 9, 2005.

CALPINE CORPORATION:


By:  /s/ Jeffrey E. Garten                    /s/ Peter Cartwright
    ---------------------------------        -----------------------------------
       Jeffrey E. Garten                     Peter Cartwright, in his individual
       Chair of the Compensation              capacity
        Committee of the
        Board of Directors


By: /s/ Susan C. Schwab
    ---------------------------------
      Susan C. Schwab
      Chair of the Nominating and
       Governance Committee of the
       Board of Directors


                                     Page 8
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex10-2.txt
<TEXT>
EXHIBIT 10.2


--------------------------------------------------------------------------------
                                        Calpine Corporation
Notice of Grant of Stock Options           ID: 77-0212977
and Option Agreement                    50 West San Fernando Street
                                        Suite 550
                                        San Jose, California 95113
--------------------------------------------------------------------------------



Name                                    Option Number:
Address                                 Plan:             1996


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


Effective  __________,  you have been granted a  __________  Stock Option to buy
__________  shares of Calpine  Corporation  (the Company)  stock at $_______ per
share.

The total option price of the shares granted is $          .

Shares in each period will become fully vested on the date shown.


          Shares          Vest Type          Full Vest          Expiration











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

By your signature and the Company's  signature  below, you and the Company agree
that these options are granted under and governed by the terms and conditions of
the Company's Stock Option Plan, as amended,  and the Option  Agreement,  all of
which are attached and made a part of this document.

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




________________________________________          ______________________________
Calpine Corporation                               Date



________________________________________          ______________________________
Name                                              Date


<PAGE>


                               CALPINE CORPORATION
                         FORM OF STOCK OPTION AGREEMENT


                                    RECITALS

     A. The Board has adopted the Plan for the purpose of retaining the services
of  selected  Employees,  non-employee  members  of the Board or of the board of
directors of any Parent or  Subsidiary  and  consultants  and other  independent
advisors who provide services to the Corporation (or any Parent or Subsidiary).

     B. Optionee is to render valuable  services to the Corporation (or a Parent
or Subsidiary),  and this Agreement is executed  pursuant to, and is intended to
carry out the purposes of, the Plan in connection with the  Corporation's  grant
of an option to Optionee.

     C. All capitalized  terms in this Agreement shall have the meaning assigned
to them in the attached Appendix.

          NOW, THEREFORE, it is hereby agreed as follows:

          1. Grant of Option. The Corporation  hereby grants to Optionee,  as of
the Grant  Date,  an  option  to  purchase  up to the  number  of Option  Shares
specified in the Grant Notice.  The Option Shares shall be purchasable from time
to time during the option term specified in Paragraph 2 at the Exercise Price.

          2.  Option  Term.  This option  shall have a maximum  term of ten (10)
years measured from the Grant Date and shall accordingly  expire at the close of
business on the Expiration  Date,  unless sooner  terminated in accordance  with
Paragraph 5 or 6.

          3. Limited Transferability.  This option shall be neither transferable
nor  assignable  by  Optionee  other than by will or by the laws of descent  and
distribution following Optionee's death and may be exercised,  during Optionee's
lifetime,   only  by  Optionee.   However,   if  this  option  is  designated  a
Non-Statutory  Option in the Grant  Notice,  then this option may be assigned in
whole or in part during  Optionee's  lifetime  either as (a) as a gift to one or
more members of Optionee's Immediate Family, to a trust in which Optionee and/or
one or more  such  family  members  hold more than  fifty  percent  (50%) of the
beneficial  interest or an entity in which more than fifty  percent (50%) of the
voting  interests are owned by Optionee  and/or one or more such family members,
or (b) pursuant to a domestic  relations  order.  The assigned  portion shall be
exercisable only by the person or persons who acquire a proprietary  interest in
the option  pursuant to such  assignment.  The terms  applicable to the assigned
portion shall be the same as those in effect for this option  immediately  prior
to such  assignment  and  shall be set  forth in such  documents  issued  to the
assignee as the Plan Administrator may deem appropriate.

          4. Dates of Exercise.  This option shall  become  exercisable  for the
Option Shares in one or more  installments as specified in the Grant Notice.  As
the option becomes  exercisable for such installments,  those installments shall
accumulate  and  the  option  shall  remain   exercisable  for  the  accumulated
installments  until the Expiration Date or sooner termination of the option term
under Paragraph 5 or 6.



<PAGE>

          5.  Cessation  of Service.  The option term  specified  in Paragraph 2
shall  terminate  (and this option shall cease to be  outstanding)  prior to the
Expiration Date should any of the following provisions become applicable:

               (a) Should  Optionee  cease to remain in  Service  for any reason
(other than death, Permanent Disability,  Retirement,  or Misconduct) while this
option is  outstanding,  then  Optionee  shall have a period of three (3) months
(commencing with the date of such cessation of Service) during which to exercise
this option,  but in no event shall this option be exercisable at any time after
the Expiration Date.

               (b) If Optionee dies while this option is  outstanding,  then the
personal  representative  of Optionee's  estate or the person or persons to whom
the option is transferred  pursuant to Optionee's will or in accordance with the
laws of descent and  distribution  shall have the right to exercise this option.
Such right shall lapse, and this option shall cease to be outstanding,  upon the
earlier of (i) the expiration of the twelve (12)- month period measured from the
date of Optionee's death or (ii) the Expiration Date.

               (c)  Should   Optionee  cease  Service  by  reason  of  Permanent
Disability  while this option is outstanding,  then Optionee shall have a period
of twelve (12) months  (commencing  with the date of such  cessation of Service)
during  which  to  exercise  this  option.  In no event  shall  this  option  be
exercisable at any time after the Expiration Date.

               (d) Should  Optionee cease Service by reason of Retirement  while
this  option is  outstanding,  then  Optionee  shall have the life of the option
during  which  to  exercise  this  option.  In no event  shall  this  option  be
exercisable at any time after the Expiration Date.

               (e) If the Optionee has  completed at least twelve (12) months of
Service  after the Grant Date and then ceased  Service by reason of  Retirement,
this option shall become immediately vested and fully exercisable for all Option
Shares (including Option Shares not previously vested) during the limited period
of  post-Service   exercisability.   If  the  Optionee  ceased  Service  in  any
circumstances other than those described in the preceding sentence,  this option
may not be exercised in the aggregate  during the limited period of post-Service
exercisability  for more than the number of vested  Option  Shares for which the
option is exercisable at the time of Optionee's  cessation of Service.  Upon the
expiration of such limited  exercise  period or (if earlier) upon the Expiration
Date,  this option shall  terminate and cease to be  outstanding  for any vested
Option Shares for which the option has not been exercised.  However, this option
shall,  immediately  upon  Optionee's  cessation of Service for any reason other
than Retirement as described in the first sentence of this paragraph,  terminate
and cease to be outstanding  with respect to any Option Shares in which Optionee
is not  otherwise at that time vested or for which this option is not  otherwise
at that time exercisable.

               (f) Should Optionee's Service be terminated for Misconduct,  then
this option shall terminate immediately and cease to remain outstanding.

          6. Special Acceleration of Option.

               (a)  This  option,  to the  extent  outstanding  at the time of a
Corporate  Transaction but not otherwise fully exercisable,  shall automatically
accelerate so that this option shall, immediately prior to the effective date of


                                       2.
<PAGE>

the Corporate  Transaction,  become  exercisable for all of the Option Shares at
the time  subject to this  option and may be  exercised  for any or all of those
Option Shares as fully-vested  shares of Common Stock.  No such  acceleration of
this option,  however,  shall occur if and to the extent: (i) this option is, in
connection with the Corporate Transaction, either to be assumed by the successor
corporation  (or parent  thereof) or to be replaced with a comparable  option to
purchase  shares of the capital  stock of the successor  corporation  (or parent
thereof) or (ii) this option is to be replaced with a cash incentive  program of
the successor  corporation  which  preserves the spread existing on the unvested
Option Shares at the time of the Corporate  Transaction  (the excess of the Fair
Market Value of those Option  Shares over the aggregate  Exercise  Price payable
for such shares) and provides for subsequent pay-out in accordance with the same
option   exercise/vesting   schedule  set  forth  in  the  Grant   Notice.   The
determination of option comparability under clause (i) shall be made by the Plan
Administrator, and such determination shall be final, binding and conclusive.

               (b) Immediately following the Corporate Transaction,  this option
shall terminate and cease to be outstanding, except to the extent assumed by the
successor  corporation  (or parent  thereof) in  connection  with the  Corporate
Transaction.

               (c) If this  option is assumed  in  connection  with a  Corporate
Transaction, then this option shall be appropriately adjusted, immediately after
such Corporate Transaction, to apply to the number and class of securities which
would  have  been  issuable  to  Optionee  in  consummation  of  such  Corporate
Transaction  had the option been exercised  immediately  prior to such Corporate
Transaction,  and  appropriate  adjustments  shall also be made to the  Exercise
Price, provided the aggregate Exercise Price shall remain the same.

               (d) This  Agreement  shall not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business  structure  or to merge,  consolidate,  dissolve,  liquidate or sell or
transfer all or any part of its business or assets.

          7.  Adjustment  in Option  Shares.  Should  any  change be made to the
Common Stock by reason of any stock  split,  stock  dividend,  recapitalization,
combination  of  shares,  exchange  of  shares  or other  change  affecting  the
outstanding  Common  Stock  as a class  without  the  Corporation's  receipt  of
consideration,  appropriate  adjustments  shall be made to (i) the total  number
and/or class of securities subject to this option and (ii) the Exercise Price in
order to reflect such change and thereby  preclude a dilution or  enlargement of
benefits hereunder.

          8.  Stockholder  Rights.  The holder of this option shall not have any
stockholder  rights with  respect to the Option  Shares  until such person shall
have exercised the option, paid the Exercise Price and become a holder of record
of the purchased shares.

          9. Manner of Exercising Option.

               (a) In order to exercise  this option with  respect to all or any
part of the  Option  Shares for which  this  option is at the time  exercisable,
Optionee  (or any other person or persons  exercising  the option) must take the
following actions:


                                       3.
<PAGE>

                    (i)  Execute  and  deliver  to the  Corporation  a Notice of
Exercise for the Option Shares for which the option is exercised.

                    (ii) Pay the  aggregate  Exercise  Price  for the  purchased
shares in one or more of the following forms:

                         (A) cash or check made payable to the Corporation;

                         (B) [deleted]

                         (C)  shares of Common  Stock held by  Optionee  (or any
          other  person or persons  exercising  the  option)  for the  requisite
          period necessary to avoid a charge to the  Corporation's  earnings for
          financial  reporting  purposes  and valued at Fair Market Value on the
          Exercise Date; or

                         (D) to the extent the  option is  exercised  for vested
          Option  Shares,  through  a  special  sale  and  remittance  procedure
          pursuant to which Optionee (or any other person or persons  exercising
          the   option)   shall   concurrently   provide   irrevocable   written
          instructions (I) to a Corporation-designated  brokerage firm to effect
          the  immediate  sale  of  the  purchased   shares  and  remit  to  the
          Corporation,  out of the sale  proceeds  available  on the  settlement
          date,  sufficient funds to cover the aggregate  Exercise Price payable
          for the purchased shares plus all applicable Federal,  state and local
          income and employment taxes required to be withheld by the Corporation
          by reason of such exercise and (II) to the  Corporation to deliver the
          certificates  for the purchased shares directly to such brokerage firm
          in order to complete the sale transaction.

                    Except to the extent the sale and  remittance  procedure  is
          utilized  in  connection  with the  option  exercise,  payment  of the
          Exercise Price must accompany the Notice of Exercise  delivered to the
          Corporation in connection with the option exercise.

                    (iii) Furnish to the Corporation  appropriate  documentation
that the person or persons  exercising  the option (if other than Optionee) have
the right to exercise this option.

                    (iv) Make appropriate  arrangements with the Corporation (or
Parent or Subsidiary  employing or retaining  Optionee) for the  satisfaction of
all Federal, state and local income and employment tax withholding  requirements
applicable to the option exercise.

               (b) As soon as practical after the Exercise Date, the Corporation
shall  issue to or on  behalf  of  Optionee  (or any  other  person  or  persons
exercising this option) a certificate for the purchased Option Shares,  with the
appropriate legends affixed thereto.

               (c) In no event may this option be exercised  for any  fractional
shares.


                                       4.
<PAGE>

          10. Compliance with Laws and Regulations.

               (a) The  exercise of this  option and the  issuance of the Option
Shares upon such exercise shall be subject to compliance by the  Corporation and
Optionee with all applicable  requirements of law relating  thereto and with all
applicable  regulations of any stock exchange (or the Nasdaq National Market, if
applicable)  on which the Common  Stock may be listed for trading at the time of
such exercise and issuance.

               (b) The inability of the  Corporation to obtain approval from any
regulatory  body having  authority  deemed by the Corporation to be necessary to
the lawful  issuance and sale of any Common Stock  pursuant to this option shall
relieve the  Corporation  of any liability with respect to the  non-issuance  or
sale of the Common Stock as to which such approval shall not have been obtained.
The  Corporation,  however,  shall  use its  best  efforts  to  obtain  all such
approvals.

          11. Successors and Assigns. Except to the extent otherwise provided in
Paragraphs 3 and 6, the provisions of this Agreement  shall inure to the benefit
of, and be binding upon,  the  Corporation  and its  successors  and assigns and
Optionee,  Optionee's assigns and the legal representatives,  heirs and legatees
of Optionee's estate.

          12.  Notices.  Any notice  required  to be given or  delivered  to the
Corporation  under the terms of this Agreement shall be in writing and addressed
to the Corporation at its principal corporate offices. Any notice required to be
given or delivered to Optionee  shall be in writing and addressed to Optionee at
the address indicated below Optionee's  signature line on the Grant Notice.  All
notices shall be deemed effective upon personal  delivery or upon deposit in the
U.S. mail, postage prepaid and properly addressed to the party to be notified.

          13. [Deleted].

          14.  Construction.  This Agreement and the option evidenced hereby are
made and  granted  pursuant to the Plan and are in all  respects  limited by and
subject to the terms of the Plan. All decisions of the Plan  Administrator  with
respect to any question or issue arising under the Plan or this Agreement  shall
be conclusive and binding on all persons having an interest in this option.

          15. Governing Law. The interpretation,  performance and enforcement of
this Agreement shall be governed by the laws of the State of California  without
resort to that State's conflict-of-laws rules.

          16.  Excess  Shares.  If the Option Shares  covered by this  Agreement
exceed,  as of the Grant  Date,  the number of shares of Common  Stock which may
without stockholder approval be issued under the Plan, then this option shall be
void with  respect to those excess  shares,  unless  stockholder  approval of an
amendment sufficiently  increasing the number of shares of Common Stock issuable
under the Plan is obtained in accordance with the provisions of the Plan.


                                       5.
<PAGE>

          17.  Additional Terms Applicable to an Incentive  Option. In the event
this option is designated an Incentive Option in the Grant Notice, the following
terms and conditions shall also apply to the grant:

               (a)  This  option  shall  cease  to  qualify  for  favorable  tax
treatment as an Incentive Option if (and to the extent) this option is exercised
for one or more  Option  Shares:  (i) more than three (3) months  after the date
Optionee  ceases to be an Employee  for any reason other than death or Permanent
Disability or (ii) more than twelve (12) months after the date  Optionee  ceases
to be an Employee by reason of Permanent Disability.

               (b) No installment  under this option shall qualify for favorable
tax treatment as an Incentive  Option if (and to the extent) the aggregate  Fair
Market Value  (determined  at the Grant Date) of the Common Stock for which such
installment  first  becomes  exercisable  hereunder  would,  when  added  to the
aggregate value  (determined as of the respective date or dates of grant) of the
Common Stock or other  securities  for which this option or any other  Incentive
Options  granted to Optionee  prior to the Grant Date (whether under the Plan or
any other  option plan of the  Corporation  or any Parent or  Subsidiary)  first
become  exercisable  during the same calendar year,  exceed One Hundred Thousand
Dollars  ($100,000) in the aggregate.  Should such One Hundred  Thousand  Dollar
($100,000)  limitation  be  exceeded in any  calendar  year,  this option  shall
nevertheless become exercisable for the excess shares in such calendar year as a
Non-Statutory Option.

               (c) Should the  exercisability of this option be accelerated upon
a Corporate  Transaction,  then this option  shall  qualify  for  favorable  tax
treatment as an Incentive  Option only to the extent the  aggregate  Fair Market
Value  (determined  at the Grant Date) of the Common Stock for which this option
first  becomes   exercisable  in  the  calendar  year  in  which  the  Corporate
Transaction occurs does not, when added to the aggregate value (determined as of
the respective  date or dates of grant) of the Common Stock or other  securities
for which this option or one or more other Incentive Options granted to Optionee
prior to the Grant Date (whether  under the Plan or any other option plan of the
Corporation or any Parent or  Subsidiary)  first become  exercisable  during the
same  calendar  year,  exceed One Hundred  Thousand  Dollars  ($100,000)  in the
aggregate.   Should  the  applicable  One  Hundred  Thousand  Dollar  ($100,000)
limitation be exceeded in the calendar year of such Corporate  Transaction,  the
option may nevertheless be exercised for the excess shares in such calendar year
as a Non-Statutory Option.

               (d) Should Optionee hold, in addition to this option, one or more
other options to purchase  Common Stock which become  exercisable  for the first
time in the same calendar year as this option, then the foregoing limitations on
the  exercisability of such options as Incentive Options shall be applied on the
basis of the order in which such options are granted.

          18. Leave of Absence.  The following  provisions  shall apply upon the
Optionee's commencement of an authorized leave of absence:

               (a) The exercise  schedule in effect under the Grant Notice shall
be frozen as of the first day of the authorized leave, and this option shall not
become  exercisable for any additional  installments of the Option Shares during
the period Optionee remains on such leave.


                                       6.
<PAGE>

               (b) Should  Optionee  resume active  Employee status within sixty
(60) days after the start date of the  authorized  leave,  Optionee  shall,  for
purposes of the exercise schedule set forth in the Grant Notice, receive Service
credit for the entire  period of such leave.  If Optionee does not resume active
Employee status within such sixty (60)-day period,  then no Service credit shall
be given for the period of such leave.

               (c) If the option is  designated  as an  Incentive  Option in the
Grant Notice, then the following additional provision shall apply:

                         If the leave of absence  continues  for more than three
(3) months,  then this option  shall  automatically  convert to a  Non-Statutory
Option  under  the  Federal  tax laws at the end of the three  (3)-month  period
measured from the ninety-first  (91st) day of such leave,  unless the Optionee's
reemployment rights are guaranteed by statute or by written agreement. Following
any such  conversion  of the option,  all  subsequent  exercises of such option,
whether  effected before or after  Optionee's  return to active Employee status,
shall  result  in an  immediate  taxable  event,  and the  Corporation  shall be
required  to collect  from  Optionee  the  Federal,  state and local  income and
employment withholding taxes applicable to such exercise.

               (d) In no event  shall this  option  become  exercisable  for any
additional  Option Shares or otherwise  remain  outstanding if Optionee does not
resume Employee status prior to the Expiration Date of the option term.







                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]


                                       7.
<PAGE>



                                    EXHIBIT I
                               NOTICE OF EXERCISE

          I hereby notify Calpine  Corporation (the  "Corporation") that I elect
to  purchase   ____________  shares  of  the  Corporation's  Common  Stock  (the
"Purchased Shares") at the option exercise price of $____________ per share (the
"Exercise  Price") pursuant to that certain option (the "Option")  granted to me
under the Corporation's 1996 Stock Incentive Plan on __________________, ______.

          Concurrently  with  the  delivery  of  this  Exercise  Notice  to  the
Corporation,  I shall hereby pay to the  Corporation  the Exercise Price for the
Purchased  Shares in accordance  with the  provisions  of my agreement  with the
Corporation  (or other  documents)  evidencing  the  Option  and  shall  deliver
whatever  additional  documents may be required by such agreement as a condition
for exercise.  Alternatively,  I may utilize the special  broker-dealer sale and
remittance procedure specified in my agreement to effect payment of the Exercise
Price.




________________________, _____
Date

                                       _________________________________________
                                       Optionee
                                       Address: ________________________________

                                       _________________________________________

Print name in exact manner
it is to appear on the
stock certificate:                     _________________________________________

Address to which certificate
is to be sent, if different
from address above:                    _________________________________________

Social Security Number:

Employee Number:                       _________________________________________




<PAGE>


                                    APPENDIX

          The following definitions shall be in effect under the Agreement:

     A. Agreement shall mean this Stock Option Agreement.

     B. Board shall mean the Corporation's Board of Directors.

     C. Code shall mean the Internal Revenue Code of 1986, as amended.

     D. Common Stock shall mean the Corporation's common stock.

     E.   Corporate   Transaction   shall   mean   either   of   the   following
stockholder-approved transactions to which the Corporation is a party:

          (i) a merger or consolidation in which securities possessing more than
     fifty percent (50%) of the total combined voting power of the Corporation's
     outstanding  securities are  transferred  to a person or persons  different
     from  the  persons  holding  those  securities  immediately  prior  to such
     transaction, or

          (ii) the sale,  transfer or other  disposition of all or substantially
     all of the Corporation's  assets in complete  liquidation or dissolution of
     the Corporation.

     F. Corporation shall mean Calpine Corporation, a Delaware corporation.

     G.  Employee  shall  mean  an  individual  who  is in  the  employ  of  the
Corporation (or any Parent or Subsidiary),  subject to the control and direction
of the employer  entity as to both the work to be  performed  and the manner and
method of performance.

     H.  Exercise  Date shall mean the date on which the option  shall have been
exercised in accordance with Paragraph 9 of the Agreement.

     I. Exercise  Price shall mean the exercise  price per share as specified in
the Grant Notice.

     J.  Expiration  Date  shall  mean the date on which the  option  expires as
specified in the Grant Notice.

     K. Fair Market Value per share of Common  Stock on any relevant  date shall
be determined in accordance with the following provisions:

          (i) If the Common  Stock is at the time traded on the Nasdaq  National
     Market,  then the Fair Market Value shall be the closing  selling price per
     share of Common Stock on the date in question,  as the price is reported by
     the  National  Association  of  Securities  Dealers on the Nasdaq  National
     Market or any successor  system.  If there is no closing  selling price for
     the Common Stock on the date in question,  then the Fair Market Value shall
     be the  closing  selling  price on the last  preceding  date for which such
     quotation exists.


                                      A-1.
<PAGE>

          (ii)If the Common  Stock is at the time listed on any Stock  Exchange,
     then the Fair Market Value shall be the closing  selling price per share of
     Common Stock on the date in question on the Stock  Exchange  determined  by
     the Plan  Administrator  to be the primary market for the Common Stock,  as
     such price is officially  quoted in the composite tape of  transactions  on
     such exchange. If there is no closing selling price for the Common Stock on
     the date in  question,  then the Fair  Market  Value  shall be the  closing
     selling price on the last preceding date for which such quotation exists.

     L. Grant Date  shall mean the date of grant of the option as  specified  in
the Grant Notice.

     M. Grant Notice shall mean the Notice of Grant of Stock Option accompanying
the  Agreement,  pursuant to which Optionee has been informed of the basic terms
of the option evidenced hereby.

     N. Immediate  Family of Optionee shall mean  Optionee's  child,  stepchild,
grandchild,  parent,  stepparent,  grandparent,  spouse, former spouse, sibling,
niece,  nephew,  mother-in-law,   father-in-law,   son-in-law,  daughter-in-law,
brother-in-law, or sister in law, including adoptive relationships.

     O. Incentive  Option shall mean an option which satisfies the  requirements
of Code Section 422.

     P. Misconduct  shall mean the commission of any act of fraud,  embezzlement
or dishonesty  by Optionee,  any  unauthorized  use or disclosure by Optionee of
confidential  information or trade secrets of the  Corporation (or any Parent or
Subsidiary), or any other intentional misconduct by Optionee adversely affecting
the business or affairs of the  Corporation  (or any Parent or  Subsidiary) in a
material manner. The foregoing definition shall not be deemed to be inclusive of
all the acts or omissions  which the  Corporation  (or any Parent or Subsidiary)
may consider as grounds for the  dismissal or discharge of Optionee or any other
individual in the Service of the Corporation (or any Parent or Subsidiary).

     Q.  Non-Statutory  Option  shall mean an option not intended to satisfy the
requirements of Code Section 422.

     R.  Notice  of  Exercise  shall  mean the  notice of  exercise  in the form
attached hereto as Exhibit I.

     S. Option Shares shall mean the number of shares of Common Stock subject to
the option as specified in the Grant Notice.

     T.  Optionee  shall  mean the  person  to whom the  option  is  granted  as
specified in the Grant Notice.


                                      A-2.
<PAGE>

     U. Parent shall mean any  corporation  (other than the  Corporation)  in an
unbroken  chain of  corporations  ending  with the  Corporation,  provided  each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination,  stock possessing fifty percent (50%) or more of the total
combined  voting power of all classes of stock in one of the other  corporations
in such chain.

     V. Permanent  Disability  shall mean the inability of Optionee to engage in
any  substantial  gainful  activity  by  reason  of any  medically  determinable
physical or mental impairment which is expected to result in death or has lasted
or can be  expected  to last for a  continuous  period of twelve  (12) months or
more.

     W. Plan shall mean the Corporation's  1996 Stock Incentive Plan, as amended
fro time to time.

     X. Plan  Administrator  shall mean either the Board or a  committee  of the
Board acting in its administrative capacity under the Plan.

     Y. Retirement  shall mean voluntary  termination of Service by the Optionee
after meeting  either of the following  criteria:  (i)  attainment of age 60 and
completion of 10 years of Service,  or (ii)  attainment of age 55 and completion
of a number of years of Service that, when added to current age, equals at least
70.

     Z.  Service  shall mean the  Optionee's  performance  of  services  for the
Corporation  (or any Parent or  Subsidiary)  in the capacity of an  Employee,  a
non-employee  member of the board of directors or a  consultant  or  independent
advisor.

     AA. Stock  Exchange  shall mean the American Stock Exchange or the New York
Stock Exchange.

     AB.  Subsidiary shall mean any corporation  (other than the Corporation) in
an unbroken chain of corporations beginning with the Corporation,  provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the  determination,  stock possessing fifty percent (50%) or more of the
total  combined  voting  power  of all  classes  of  stock  in one of the  other
corporations in such chain.


                                      A-3.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ex10-3.txt
<TEXT>
EXHIBIT 10.3


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

                                             Calpine Corporation
Notice of Grant of Restricted Stock and           ID: 77-0212977
Restricted Stock Agreement                   50 West San Fernando Street
                                             Suite 550
                                             San Jose, California 95113
--------------------------------------------------------------------------------



---------------------------------------- ----------------------------------
Name of Grant Recipient
---------------------------------------- ----------------------------------
Address
---------------------------------------- ----------------------------------
Date of Grant
---------------------------------------- ----------------------------------
Plan from which Award Is Made            1996 Stock Incentive Plan -
                                         Stock Issuance Program
---------------------------------------- ----------------------------------
Number of Shares Granted
---------------------------------------- ----------------------------------
Grant Expiration Date
---------------------------------------- ----------------------------------

Vesting Schedule:

-------------------------- ------------------------------------------------
     Percent Vested        Vesting Event
-------------------------- ------------------------------------------------

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


By your signature and the Company's  signature  below, you and the Company agree
that these  shares of  restricted  stock are granted  under and  governed by the
terms  and  conditions  of the Plan  specified  above and the  Restricted  Stock
Agreement attached to this document.



---------------------------------            ------------------------------
Calpine Corporation                          Date



---------------------------------            ------------------------------
Recipient                                    Date



<PAGE>


                               CALPINE CORPORATION
                            1996 STOCK INCENTIVE PLAN

                       FORM OF RESTRICTED STOCK AGREEMENT

                                    RECITALS

          A. The Board has  adopted the Plan for the  purpose of  retaining  the
services  of  selected  Employees,  non-employee  members of the Board or of the
board of  directors  of any  Parent or  Subsidiary,  and  consultants  and other
independent  advisors who provide  services to the Corporation (or any Parent or
Subsidiary).

          B. The Participant has rendered and is to render valuable  services to
the  Corporation  (or a Parent or  Subsidiary),  and this  Agreement is executed
pursuant  to,  and is  intended  to  carry  out the  purposes  of,  the  Plan in
connection with the Corporation's grant of restricted stock to the Participant.

          C. All  capitalized  terms in this  Agreement  shall have the  meaning
assigned to them in the attached Appendix.

          NOW, THEREFORE, it is hereby agreed as follows:

          1. Grant of Restricted Stock

          The  Corporation  hereby  grants to the  Participant,  as of the Grant
Date,  the  number  of shares of Common  Stock  specified  in the Grant  Notice,
subject to the  restrictions  stated in the Grant Notice.  The Purchase Price of
the restricted stock shall be the Fair Market Value per share of Common Stock on
the date of grant and is payable in past services, unless otherwise specified in
the Grant Notice.

          2. Stockholder Rights

          The Participant shall have full stockholder rights with respect to any
shares of Common Stock issued to the Participant  under this Agreement,  whether
or not the Participant's  interest in those shares is vested.  Accordingly,  the
Participant  shall have the right to vote such shares and to receive any regular
cash  dividends  paid on such  shares.  Any  dividend  payable  with  respect to
unvested  Common  Stock  shall be paid to the  Participant  no later  than 2 1/2
months  after  the end of the  calendar  year in which the  record  date for the
dividend occurs.

          3. Additional Property

          Any new,  substituted,  or  additional  securities  or other  property
(including  money  paid  other  than  as  a  regular  cash  dividend)  that  the
Participant receives with respect to the Participant's unvested shares of Common
Stock  by  reason  of  any  stock  dividend,   stock  split,   recapitalization,
combination  of shares,  exchange  of shares,  or similar  event shall be issued
subject  to the  same  vesting  requirements  and  other  restrictions  that are
applicable  to the  Participant's  unvested  shares of Common  Stock  under this
Agreement.



<PAGE>

          4. Vesting and Forfeiture

          (a) The shares of Common Stock granted under this Agreement shall vest
in one or more  installments  when the conditions  specified in the Grant Notice
are satisfied, unless the shares are previously forfeited as provided below.

          (b) If the Participant's  Service terminates for any reason other than
death,  Permanent Disability,  or Retirement,  the Participant shall forfeit any
shares that have not vested when the Participant's Service terminates, except as
provided in the Grant Notice.

          (c)  If  the  Participant's  Service  terminates  as a  result  of the
Participant's  death,  the shares of Common Stock granted  under this  Agreement
that have not vested when the Participant  dies shall remain  outstanding  until
the earlier of (i) the expiration of the twelve (12)- month period measured from
the date of the Participant's death or (ii) the date on which the grant expires.

          (d)  If  the  Participant's  Service  terminates  as a  result  of the
Participant's  Permanent  Disability,  the shares of Common Stock  granted under
this Agreement  that have not vested when the  Participant  becomes  Permanently
Disabled shall remain outstanding until the earlier of (i) the expiration of the
twelve  (12)-  month  period  measured  from the date  the  Participant  becomes
Permanently Disabled or (ii) the date on which the grant expires.

          (e)  If  the  Participant's  Service  terminates  as a  result  of the
Participant's  Retirement,  the  shares  of  Common  Stock  granted  under  this
Agreement  that  have not  vested  when the  Participant  Retires  shall  remain
outstanding until the date the grant expires.

          (f) The Participant shall  immediately  surrender any forfeited shares
to the  Corporation  for  cancellation,  and shall have no  further  stockholder
rights with respect to those shares.  To the extent the Participant paid cash or
cash  equivalent for the shares when they were awarded,  the  Corporation  shall
return to the Participant the consideration paid for the surrendered shares (or,
if less,  the  fair  market  value  of the  shares  on the  date  when  they are
surrendered).

          5. No Transfer or Assignment

          While the shares of Common Stock granted under this  Agreement  remain
unvested,  the  shares  shall be  neither  transferable  nor  assignable  by the
Participant.  Calpine  shall not be required to transfer on its books any of the
shares of Common Stock that the Participant has attempted to sell or transfer in
violation of any of the provisions set forth in this  Agreement,  or to treat as
the  owner of such  shares  of  Common  Stock  any  person or entity to whom the
Participant has attempted to sell or transfer the shares.


                                      -2-
<PAGE>

          6. Escrow or Restrictive Legends

          Unvested shares may, in the Plan Administrator's  discretion,  be held
in escrow by the  Corporation  until the  Participant's  interest in such shares
vests,  or  may be  issued  directly  to  the  Participant  with  the  following
restrictive legend:

     "These shares of Common Stock have been issued or transferred  subject
     to a Restricted  Stock  Agreement  between  Calpine and the registered
     owner of such  shares,  and are subject to  substantial  restrictions,
     including (but not limited to) a prohibition against transfer,  either
     voluntary or  involuntary,  and a provision  requiring the transfer of
     these  shares  to  Calpine  without  any  payment  in the event of the
     registered  owner's  termination of service,  all as more particularly
     set forth in the aforementioned  Restricted Stock Agreement, a copy of
     which is on file with Calpine and its transfer agent."

          When the shares of Common Stock granted under this Agreement vest, the
Participant  may  tender to  Calpine  the  certificates  containing  the  legend
described above and receive new certificates not containing this legend.

          7. Withholding

          As a condition to the delivery of a  certificate  for shares of Common
Stock  subject to this  Agreement  that bear no legend (or,  if the  Participant
makes the election permitted by Section 83(b) of the Internal Revenue Code, as a
condition to the initial  delivery of a  certificate  for shares of Common Stock
bearing such legend),  Calpine may, by notice to the  Participant,  require that
Calpine be paid the amount of any federal, state, or local taxes required by law
to be withheld.

          8. Corporate Transaction

          All of the shares of Common Stock granted under this  Agreement  shall
immediately  vest in full in the event of any Corporate  Transaction,  except to
the extent the Corporation's  rights and obligations under this Agreement are to
be assigned to the successor  corporation (or parent thereof) in connection with
such Corporate  Transaction.  The  Corporation  may assign its rights under this
Agreement to a successor corporation (or the parent thereof) without the consent
of the Participant.

          9. Notices

          Any notice required to be given or delivered to the Corporation  under
the terms of this Agreement shall be in writing and addressed to the Corporation
at its principal corporate offices. Any notice required to be given or delivered
to the  Participant  shall be in writing and addressed to the Participant at the
address  indicated in the Grant Notice.  All notices  shall be deemed  effective
upon personal  delivery or upon deposit in the U.S.  mail,  postage  prepaid and
properly addressed to the party to be notified.


                                      -3-
<PAGE>

          10. Construction

          This Agreement and the  restricted  stock award  evidenced  hereby are
made and  granted  pursuant to the Plan and are in all  respects  limited by and
subject to the terms of the Plan. All decisions of the Plan  Administrator  with
respect to any question or issue arising under the Plan or this Agreement  shall
be conclusive and binding on all persons having an interest in this award.

          11. Governing Law

          The  interpretation,  performance  and  enforcement  of this Agreement
shall be governed by the laws of the State of California  without resort to that
State's conflict-of-laws rules.

          12. Excess Shares

          If the shares covered by this Agreement  exceed, as of the Grant Date,
the number of shares of Common Stock which may without  stockholder  approval be
issued  under the Plan,  then this  award  shall be void with  respect  to those
excess  shares,  unless  stockholder  approval  of  an  amendment   sufficiently
increasing  the  number of shares of  Common  Stock  issuable  under the Plan is
obtained in accordance with the provisions of the Plan.

          13. Amendment

          Calpine may revoke this Agreement at any time with respect to unvested
shares of Common Stock if Calpine  determines  that the Agreement is contrary to
law;  and, in that event,  Calpine may give notice to the  Participant  that the
unvested  shares of Common Stock subject to the Agreement are to be delivered to
Calpine as though the  Participant's  Service with Calpine had terminated on the
date of the  notice.  Calpine  may also  modify  this  Agreement  to the  extent
necessary to bring the  Agreement  and the issuance or transfer of the shares of
Common  Stock into  compliance  with any  applicable  law or  regulation  now or
hereafter promulgated by any governmental agency, including, but not limited to,
the provisions in Section 409A of the Internal  Revenue Code governing  deferred
compensation.  By entering  into this  Agreement  and  accepting the issuance or
transfer of shares of Common Stock under this Agreement,  the Participant agrees
that,  upon  request in writing by  Calpine,  the  Participant  will  tender any
certificates  for shares of Common Stock subject to this Agreement for amendment
of the legend or for change in the  number of shares of Common  Stock  issued or
transferred  as  Calpine  deems  necessary  in  light of the  amendment  to this
Agreement.  Except as  otherwise  provided  in the first two  sentences  of this
Section 13 or in the Plan, the Plan Administrator shall obtain the Participant's
consent before it amends this Agreement in a manner that  significantly  reduces
the Participant's rights or benefits under this Agreement.

          14. Waiver

          The  waiver  by  Calpine  or the  Plan  Administrator  of any  vesting
condition or other  provision  of this  Agreement at any time or for any purpose
shall not operate as, or be  construed  to be, a waiver of the same or any other
provision of this Agreement at any subsequent time or for any other purpose.


                                      -4-
<PAGE>


                                    APPENDIX

          The following definitions shall be in effect under the Agreement:

     A. Agreement shall mean this Restricted Stock Agreement.

     B. Board shall mean the Corporation's Board of Directors.

     C. Common Stock shall mean the Corporation's common stock.

     D.   Corporate   Transaction   shall   mean   either   of   the   following
stockholder-approved transactions to which the Corporation is a party:

          (i) a merger or consolidation in which securities possessing more than
     fifty percent (50%) of the total combined voting power of the Corporation's
     outstanding  securities are  transferred  to a person or persons  different
     from  the  persons  holding  those  securities  immediately  prior  to such
     transaction, or

          (ii) the sale,  transfer or other  disposition of all or substantially
     all of the Corporation's  assets in complete  liquidation or dissolution of
     the Corporation.

     E. Corporation shall mean Calpine Corporation, a Delaware corporation.

     F.  Employee  shall  mean  an  individual  who  is in  the  employ  of  the
Corporation (or any Parent or Subsidiary),  subject to the control and direction
of the employer  entity as to both the work to be  performed  and the manner and
method of performance.

     G.  Grant  Date  shall  mean the date of grant of the  restricted  stock as
specified in the Grant Notice.

     H.  Grant  Notice  shall  mean the  Notice  of Grant  of  Restricted  Stock
accompanying the Agreement,  pursuant to which the Participant has been informed
of the basic terms of the restricted  stock award  evidenced  hereby.  The Grant
Notice shall be part of the Agreement,  and shall be subject to all of the terms
and conditions stated in the Agreement and in the Plan.

     I. Participant  shall mean the person to whom the restricted stock award is
granted as specified in the Grant Notice.

     J. Parent shall mean any  corporation  (other than the  Corporation)  in an
unbroken  chain of  corporations  ending  with the  Corporation,  provided  each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination,  stock possessing fifty percent (50%) or more of the total
combined  voting power of all classes of stock in one of the other  corporations
in such chain.


                                      -5-
<PAGE>

     K.  Permanent  Disability  shall mean the inability of the  Participant  to
engage  in  any  substantial   gainful  activity  by  reason  of  any  medically
determinable  physical or mental impairment which is expected to result in death
or has lasted or can be expected to last for a continuous  period of twelve (12)
months or more.

     L. Plan shall mean the Corporation's 1996 Stock Incentive Plan.

     M. Plan  Administrator  shall mean either the Board or a  committee  of the
Board acting in its administrative capacity under the Plan.

     N.  Retirement   shall  mean  voluntary   termination  of  Service  by  the
Participant  after meeting either of the following  criteria:  (i) attainment of
age 60 and completion of 10 years of Service,  or (ii)  attainment of age 55 and
completion  of a number of years of Service  that,  when  added to current  age,
equals at least 70.

     O. Service  shall mean the  Participant's  performance  of services for the
Corporation  (or any Parent or  Subsidiary)  in the capacity of an  Employee,  a
non-employee  member of the board of directors,  or a consultant or  independent
advisor.

     P. Subsidiary shall mean any corporation (other than the Corporation) in an
unbroken chain of  corporations  beginning with the  Corporation,  provided each
corporation (other than the last corporation) in the unbroken chain owns, at the
time of the  determination,  stock possessing fifty percent (50%) or more of the
total  combined  voting  power  of all  classes  of  stock  in one of the  other
corporations in such chain.


                                      -6-
<PAGE>


                             SECTION 83(b) ELECTION

1. Nature of Election. The undersigned hereby elects,  pursuant to Section 83(b)
of the Internal  Revenue Code of 1986 and Treasury  Regulation  ss.  1.83-2,  to
include the value of the restricted  property described below in gross income in
the year of transfer.

2. Identity of Taxpayer.

   Name:
   Address:


   Taxpayer Identification Number:

3.   Description   of   Property.   This   election  is  made  with  respect  to
_______________ shares of the common stock of Calpine Corporation.

4. Date of Award.  The property  covered by this election was transferred to the
taxpayer on March 8, 2005.

5. Taxable Year of Election. This election relates to calendar year 2005.

6. Nature of  Restrictions.  The property covered by this election is subject to
the following restrictions:

   If the  taxpayer's  service with Calpine  Corporation  terminates  before the
   vesting  conditions  specified in the award  agreement  have been  satisfied,
   Calpine  Corporation  has the right to  repurchase  the shares at a price per
   share  equal to the lower of (1) the  purchase  price  per share  paid by the
   taxpayer, or (2) the fair market value of the shares on the repurchase date.

7. Fair Market Value of  Property.  The fair market value of the property on the
date when it was  transferred  to the  taxpayer  was $3.32 per share.  This fair
market  value is  determined  without  regard  to any  restrictions  other  than
restrictions that, by their terms, will never lapse.

8. Amount Paid for Property. The taxpayer paid $______________ per share for the
property covered by this election.

9.  Statement to Employer.  The taxpayer  received the property  covered by this
election in  connection  with  services  that the taxpayer has performed or will
perform for  Calpine  Corporation.  The  taxpayer  has  furnished a copy of this
statement to Calpine Corporation.

Date:___________________________            Signature:__________________________

File the original of this  statement  with the Internal  Revenue  Service office
where you file your tax  return  not later  than 30 days after the date on which
you received a restricted  stock award,  and provide a copy of the  statement to
Calpine.  Attach a copy of this  statement  to your tax  return  for the year in
which you received the restricted stock award.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>5
<FILENAME>ex10-4.txt
<TEXT>
EXHIBIT 10.4


Base Salary, Bonus, Stock Option Grant and Restricted Stock Summary Sheet


<TABLE>
<CAPTION>
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
                                                                                     2005 Stock Option   2005 Restricted Stock
              Executive Officer           2005 Salary (1)       2004 Bonus (2)           Grant (3)             Grant (4)
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
<S>                                          <C>                      <C>                 <C>                   <C>
Peter Cartwright, Chairman, President        $1,000,000               $0                  350,500               406,627
and Chief Executive Officer
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
Ann B. Curtis, Vice Chair,                     $550,000               $0                  350,000               124,247
Executive Vice President
and Corporate Secretary
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
Robert D. Kelly,                               $530,000               $0                  500,000               301,205
Executive Vice President,
Chief Financial Officer and
President - Calpine Finance Company
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
E. James Macias,                               $500,000               $0                  225,000               112,952
Executive Vice President
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
Thomas R. Mason,                               $500,000               $0                  200,000               112,952
Executive Vice President and
President - Calpine Power Company
--------------------------------------- ------------------- ----------------------- ------------------- ------------------------
<FN>
     (1) No  increases  for 2005,  except that Mr.  Kelly will receive an annual
     base salary of $650,000, effective as of July 1, 2005.

     (2) Bonus awards payable in 2005 for performance during 2004.

     (3) Each  stock  option has an  exercise  price of $3.32  representing  the
     closing price of Calpine common stock on the New York Stock Exchange on the
     date of grant. The options have a seven-year term and will vest in a series
     of four successive equal annual installments  upon completion of each  year
     of continued service as a service provider of the Issuer over the four-year
     period measured from the grant date.

     (4) The  performance-based  restricted  stock has a purchase price of $3.32
     per share representing the closing price of Calpine common stock on the New
     York Stock Exchange on the date of grant and such purchase price is payable
     in past services.  Each  restricted  stock grant has an expiration  date of
     December 31, 2009. The performance-based restricted stock vests as follows:
     50% shall vest upon such time as the closing  selling price of the Issuer's
     common  stock  is  equal  to or  greater  than  $5.00  per  share  for four
     consecutive  trading days, and 50% shall vest upon such time as the closing
     selling  price of the  Issuer's  common  stock is equal to or greater  than
     $10.00 per share for four consecutive trading days.
</FN>
</TABLE>
</TEXT>
</DOCUMENT>
</SUBMISSION>
