<SUBMISSION>
<ACCESSION-NUMBER>0000950134-05-006796
<TYPE>PRE 14A
<PUBLIC-DOCUMENT-COUNT>4
<PERIOD>20050525
<FILING-DATE>20050404
<DATE-OF-FILING-DATE-CHANGE>20050404
<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>
<FILING-VALUES>
<FORM-TYPE>PRE 14A
<ACT>34
<FILE-NUMBER>001-12079
<FILM-NUMBER>05731151
</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>
</FILER>
<DOCUMENT>
<TYPE>PRE 14A
<SEQUENCE>1
<FILENAME>f04973prpre14a.htm
<DESCRIPTION>PRELIMINARY PROXY STATEMENT
<TEXT>
<HTML>
<HEAD>
<TITLE>pre14a</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="center" style="font-size: 10pt"><B>SCHEDULE 14A INFORMATION</B>



<P align="center" style="font-size: 10pt"><B>PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE<BR>
SECURITIES EXCHANGE ACT OF 1934</B>



<P align="left" style="font-size: 10pt">Filed by the Registrant <FONT face="Wingdings">&#254;</FONT>



<P align="left" style="font-size: 10pt">Filed by a Party other than the Registrant <FONT face="Wingdings">&#111;</FONT>



<P align="left" style="font-size: 10pt">Check the appropriate box:



<P>
<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap><FONT face="Wingdings">&#254;</FONT>&nbsp;</TD>
    <TD>Preliminary Proxy Statement</TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD>Definitive Proxy Statement</TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD>Confidential, for Use of the Commission Only (as permitted by Rule&nbsp;14a-6(e)(2))</TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD>Definitive Additional Materials</TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD>Soliciting Material Pursuant to sec. 240.14a-11(c) or sec. 240.14a-12</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><B>Calpine Corporation</B>



<P align="center" style="font-size: 10pt"><B>(Name of Registrant as Specified In Its Charter)</B>



<P align="center" style="font-size: 10pt"><B>(Name of Person(s) Filing Proxy Statement, if other than the Registrant)</B>



<P align="left" style="font-size: 10pt">Payment of Filing Fee (Check the appropriate box):



<P>
<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap><FONT face="Wingdings">&#254;</FONT>&nbsp;</TD>
    <TD>Fee not required.</TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD>Fee computed on table below per Exchange Act Rules&nbsp;14a-6(i)(1) and 0-11.</TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(1)&nbsp;&nbsp;</TD>
    <TD>Title of each class of securities to which transaction applies:</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(2)&nbsp;&nbsp;</TD>
    <TD>Aggregate number of securities to which transaction applies:</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(3)&nbsp;&nbsp;</TD>
    <TD>Per unit price or other underlying value of transaction computed pursuant to Exchange Act
Rule&nbsp;0-11 (set forth the amount on which the filing fee is calculated and state how it was
determined):</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(4)&nbsp;&nbsp;</TD>
    <TD>Proposed maximum aggregate value of transaction:</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(5)&nbsp;&nbsp;</TD>
    <TD>Total fee paid:</TD>
</TR>

</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD>Fee paid previously with preliminary materials.</TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="2" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="1%"></TD>
    <TD width="99%"></TD>
</TR>
<TR valign="top">
    <TD nowrap><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD>Check box if any part of the fee is offset as provided by Exchange Act Rule&nbsp;0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the Form or Schedule and the date of its
filing.</TD>
</TR>
</TABLE>


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(1)&nbsp;&nbsp;</TD>
    <TD>Amount Previously Paid:</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(2)&nbsp;&nbsp;</TD>
    <TD>Form, Schedule or Registration Statement No.:</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(3)&nbsp;&nbsp;</TD>
    <TD>Filing Party:</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">(4)&nbsp;&nbsp;</TD>
    <TD>Date Filed:</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="center" style="font-size: 10pt"><IMG src="f04973prcalbw.gif" alt="(CALPINE CORPORATION LOGO)">



<P align="center" style="font-size: 10pt"><B>CALPINE CORPORATION<BR>
50 West San Fernando Street<BR>
San Jose, California 95113</B>



<P>
<HR noshade width="26%" align="center" size="1" color="#000000">
<P>




<P align="center" style="font-size: 10pt"><B>NOTICE OF 2005 ANNUAL MEETING OF STOCKHOLDERS<BR>
To be held on Wednesday, May&nbsp;25, 2005</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOTICE IS HEREBY GIVEN that the 2005 Annual Meeting of Stockholders of Calpine Corporation, a
Delaware corporation (the &#147;Company&#148;), will be held at Calpine&#146;s Metcalf Energy Center, located at
One Blanchard Road, San Jose, California 95013, at 10:00&nbsp;a.m., Pacific Daylight Time, on Wednesday,
May&nbsp;25, 2005, for the purpose of considering and voting upon the following matters:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">1.&nbsp;&nbsp;</TD>
    <TD>To elect three Class&nbsp;III Directors to the Board of Directors, each for a term of three
years;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">2.&nbsp;&nbsp;</TD>
    <TD>To act upon a proposal to amend the Company&#146;s Amended and Restated Certificate of
Incorporation to declassify the election of the Board of Directors;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">3.&nbsp;&nbsp;</TD>
    <TD>To ratify the appointment of PricewaterhouseCoopers LLP as independent accountants for
the Company for the fiscal year ending December&nbsp;31, 2005; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="5%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">4.&nbsp;&nbsp;</TD>
    <TD>To transact such other business as may properly come before the meeting and any
adjournments or postponements thereof.</TD>
</TR>

</TABLE>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each of these matters is more fully described in the Proxy Statement accompanying this Notice.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only stockholders of record at the close of business on April&nbsp;1, 2005 are entitled to notice
of and to vote at the 2005 Annual Meeting of Stockholders and at any and all adjournments or
postponements thereof. A list of stockholders entitled to vote at the meeting will be available for
inspection at the office of the Secretary of the Company, which is located at the corporate
headquarters at Calpine Corporation, 50 West San Fernando Street, San Jose, California 95113, for
at least 10&nbsp;days prior to the meeting, and will also be available for inspection at the meeting.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The presence in person or representation by proxy of the holders of at least a majority of all
outstanding shares of Common Stock of the Company is required to constitute a quorum. Accordingly,
it is important that your shares be represented at the meeting. WHETHER OR NOT YOU PLAN TO ATTEND
THE MEETING, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENCLOSED
ENVELOPE. Should you receive more than one proxy because your shares are registered in different
names and addresses, each proxy should be signed and returned to assure that all your shares will
be voted. Your proxy may be revoked at any time prior to the time it is voted.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please read the proxy material carefully. Your vote is important and the Company appreciates
your cooperation in considering and acting on the matters presented.


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">By Order of the Board of Directors<BR>
<BR>
<BR>
PETER CARTWRIGHT<BR>
<I>Chairman of the Board, President<BR>
and Chief Executive Officer</I><BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<P align="left" style="font-size: 10pt">April &#091; &#093;, 2005<BR>
San Jose, California



<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- TOC -->
<A name="toc"><DIV align="CENTER" style="page-break-before:always"><U><B>TABLE OF CONTENTS</B></U></DIV></A>

<P><CENTER>
<TABLE border="0" width="90%" cellpadding="0" cellspacing="0">
<TR>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="3%"></TD>
	<TD width="76%"></TD>
</TR>
<TR><TD colspan="9"><A HREF="#000">INFORMATION CONCERNING SOLICITATION AND VOTING</A></TD></TR>
<TR><TD colspan="9"><A HREF="#001">CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#002">MATTERS TO BE CONSIDERED AT THE 2005 ANNUAL MEETING OF STOCKHOLDERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#003">PROPOSAL ONE: ELECTION OF DIRECTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#004">PROPOSAL TWO: AMENDMENT OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO DECLASSIFY THE STAGGERED BOARD OF DIRECTORS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#005">PROPOSAL THREE: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#006">OTHER MATTERS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#007">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#008">EXECUTIVE COMPENSATION AND OTHER INFORMATION</A></TD></TR>
<TR><TD colspan="9"><A HREF="#009">EXECUTIVE COMPENSATION REPORT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#010">AUDIT COMMITTEE REPORT</A></TD></TR>
<TR><TD colspan="9"><A HREF="#011">CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</A></TD></TR>
<TR><TD colspan="9"><A HREF="#012">COMPLIANCE WITH SECTION 16(a) OF<BR> THE SECURITIES EXCHANGE ACT OF 1934</A></TD></TR>
<TR><TD colspan="9"><A HREF="#013">STOCK PERFORMANCE GRAPH</A></TD></TR>
<TR><TD colspan="9"><A HREF="#014">ANNUAL REPORT</A></TD></TR>
</TABLE>
</CENTER>
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<P align="center" style="font-size: 10pt"><B>CALPINE CORPORATION<BR>
50 West San Fernando Street<BR>
San Jose, California 95113</B>



<P align="center" style="font-size: 10pt"><B>PROXY STATEMENT<BR>
FOR THE<BR>
2005 ANNUAL MEETING OF STOCKHOLDERS<BR>
OF<BR>
CALPINE CORPORATION<BR>
To be Held on Wednesday, May&nbsp;25, 2005</B>


<!-- link1 "INFORMATION CONCERNING SOLICITATION AND VOTING" -->
<DIV align="left"><A NAME="000"></A></DIV>

<P align="center" style="font-size: 10pt"><B>INFORMATION CONCERNING SOLICITATION AND VOTING</B>



<P align="left" style="font-size: 10pt"><B>General</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy Statement is being furnished to the stockholders of Calpine Corporation, a Delaware
corporation (&#147;Calpine&#148; or the &#147;Company&#148;), in connection with the solicitation of proxies by the
Board of Directors for use at the 2005 Annual Meeting of Stockholders of the Company, to be held at
10:00&nbsp;a.m., Pacific Daylight Time, on Wednesday, May&nbsp;25, 2005, at Calpine&#146;s Metcalf Energy Center,
located at One Blanchard Road, San Jose, California 95013, and at any and all adjournments or
postponements thereof. At the 2005 Annual Meeting of Stockholders, the stockholders of the Company
are being asked to consider and vote upon (i)&nbsp;the election of three Class&nbsp;III Directors, each for a
term of three years on the Board of Directors; (ii)&nbsp;a proposal to amend the Company&#146;s Amended and
Restated Certificate of Incorporation to declassify the election of the Board of Directors; and (iii)&nbsp;the ratification of the appointment of PricewaterhouseCoopers LLP as
independent accountants for the Company for the year ending December&nbsp;31, 2005.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Proxy Statement and the enclosed form of proxy are being mailed to stockholders of the
Company on or about April &#091; &#093;, 2005. The Company&#146;s 2004 Annual Report to Stockholders, which
includes audited financial statements, is being mailed to stockholders of the Company concurrently
with this Proxy Statement. Additional copies of the 2004 Annual Report to Stockholders are
available without charge upon request. The 2004 Annual Report to Stockholders is not to be regarded
as proxy soliciting material or as a communication by means of which any solicitation of proxies is
to be made. Requests for copies of the 2004 Annual Report to Stockholders should be directed to the
Senior Vice President &#151; Investor Relations of the Company at the corporate headquarters at the
following address: Calpine Corporation, 50 West San Fernando Street, San Jose, California 95113.


<P align="left" style="font-size: 10pt"><B>Record Date, Voting and Quorum</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The close of business on April&nbsp;1, 2005 is the record date (the &#147;Record Date&#148;) for stockholders
entitled to notice of and to vote at the 2005 Annual Meeting of Stockholders. At the close of
business on the Record Date, 538,017,458 shares of Common Stock were outstanding.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each stockholder will be entitled to one vote per share, in person or by proxy, for each share
of Common Stock held in such stockholder&#146;s name as of the Record Date on any matter submitted to a
vote of stockholders at the 2005 Annual Meeting of Stockholders. Directors will be elected by a
plurality of the votes cast for the election of directors.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An affirmative vote of the holders of two-thirds of the issued and outstanding shares of
Common Stock is required for the approval of the amendment of the Amended and Restated Certificate
of Incorporation. For purposes of this vote, neither abstentions nor proxies as to which a broker,
bank or other nominee does not have discretionary voting authority and has not received voting
instructions from the beneficial owner of the shares (&#147;broker non-votes&#148;) can be voted for the
proposal and, therefore, will have the effect of a vote against the proposal.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An affirmative vote of the holders of a majority of the shares of Common Stock present, in
person or by proxy, and entitled to vote at the meeting is required for approval of each of the
other items being submitted to the stockholders for a vote at the meeting. On each of these other
items, (i)&nbsp;abstentions will be treated as present and entitled to vote and, therefore, will have
the effect of a vote against the proposal and (ii)&nbsp;broker non-votes as to any particular proposal
will be treated as shares not present and therefore, not entitled to vote for purposes of the vote
on that proposal.


<P align="center" style="font-size: 10pt">1
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The presence, either in person or by proxy, of the holders of a majority of the shares of
Common Stock outstanding on the Record Date is necessary to constitute a quorum at the 2005 Annual
Meeting of Stockholders. All abstentions and broker non-votes will be included as shares that are
present and are entitled to vote for purposes of determining the presence of a quorum at the
meeting.


<P align="left" style="font-size: 10pt"><B>Admission Requirements</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All stockholders are invited to attend the 2005 Annual Meeting of Stockholders. For admission
to the 2005 Annual Meeting of Stockholders, stockholders of record must bring the section of their
proxy card entitled Admission Ticket to the check-in desk, where their ownership will be verified.
Those who have beneficial ownership of shares of Common Stock held by a bank, brokerage firm or
other nominee must bring account statements or letters from their banks or brokers showing
ownership of shares of Common Stock in order to be admitted to the 2005 Annual Meeting of
Stockholders.


<P align="left" style="font-size: 10pt"><B>Proxies and Solicitation Costs</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares of Common Stock represented by properly executed proxies received in time for voting at
the 2005 Annual Meeting of Stockholders will, unless such proxy subsequently is revoked, be voted
in accordance with the instructions indicated thereon. In the absence of specific instructions as
to how the shares represented thereby are to be voted, the persons named in the accompanying form
of proxy intend to vote all properly executed proxies received by them (i)&nbsp;FOR the election as
Class&nbsp;III Directors of the nominees of the Board of Directors, (ii)&nbsp;FOR the amendment of the
Amended and Restated Certificate of Incorporation to declassify the Board of Directors, and (iii)
FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the independent
accountants for the Company for the year ending December&nbsp;31, 2005. No business other than as set
forth in the accompanying Notice of Annual Meeting is expected to come before the 2005 Annual
Meeting of Stockholders, but should any other matter requiring a vote of stockholders be properly
brought before the 2005 Annual Meeting of Stockholders, it is the intention of the persons named in
the enclosed form of proxy to vote all proxies in accordance with their best judgment on such
matters.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This solicitation is being made by the Company. The entire cost of soliciting proxies will be
borne by the Company. Solicitation will be made by mail, and may be made personally or by telephone
or electronically by officers and other employees of the Company who will not receive additional
compensation for such solicitation. Arrangements will be made with brokerage houses and other
custodians, nominees and fiduciaries to send proxies and proxy material to the beneficial owners of
the Common Stock, and such persons will be reimbursed for their expenses.


<P align="left" style="font-size: 10pt"><B>Revocability of Proxies</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any person giving a proxy pursuant to this solicitation has the power to revoke it at any time
before it is voted. It may be revoked by filing with the Secretary of the Company at the corporate
headquarters at Calpine Corporation, 50 West San Fernando Street, San Jose, California 95113, a
written notice of revocation or a duly executed proxy bearing a later date, or it may be revoked by
attending the 2005 Annual Meeting of Stockholders and voting in person. Attendance at the 2005
Annual Meeting of Stockholders will not, by itself, revoke a proxy.


<P align="left" style="font-size: 10pt"><B>Stockholder Proposals</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any stockholder who wishes to have a proposal included in the Company&#146;s proxy statement for
the 2006 Annual Meeting of Stockholders must ensure that the proposal is received by the Company no
later than December&nbsp;[&nbsp;&nbsp;&nbsp;], 2005 in order to be considered for inclusion in the proxy statement and
form of proxy relating to that meeting. The proposal must be mailed to the Secretary of the Company
at the corporate headquarters at Calpine Corporation, 50 West San Fernando Street, San Jose,
California 95113. Stockholder proposals may be included in the proxy statement only if they comply
with certain rules and regulations promulgated by the Securities and Exchange Commission.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under our bylaws, in order for a stockholder to properly bring an item of business before an
Annual Meeting of Stockholders that is not included in the proxy statement relating to that
meeting, notice of the matter must be received by the Company not less than 90&nbsp;days nor more than
120&nbsp;days prior to the date of the meeting, except if less than 105&nbsp;days&#146; advance notice or prior
public disclosure of the date of the meeting is given or made to stockholders, notice by the
stockholder must be received not later than the close of business on the 15th day following the
date on which such notice of the date of the annual meeting was mailed or such public disclosure
was made, whichever occurs earlier.


<P align="center" style="font-size: 10pt">2
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS" -->
<DIV align="left"><A NAME="001"></A></DIV>

<P align="center" style="font-size: 10pt"><B>CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company is committed to having sound corporate governance policies. Having such principles
is essential to running the Company&#146;s business efficiently and to maintaining the Company&#146;s
integrity in the marketplace. The Company&#146;s Corporate Governance Guidelines and Code of Conduct are
available on the Company&#146;s website at www.calpine.com, and are also available in print upon
written request addressed to the Senior Vice President &#151; Investor Relations of the Company at the
corporate headquarters at the following address: Calpine Corporation, 50 West San Fernando Street,
San Jose, California 95113.


<P align="left" style="font-size: 10pt"><B>Board Independence</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has determined that a majority of the members of the Company&#146;s Board of
Directors has no material relationship with the Company (either directly or as partners,
stockholders or officers of an organization that has a relationship with the Company) and is
&#147;independent&#148; within the meaning of the New York Stock Exchange (&#147;NYSE&#148;) director independence
standards. Peter Cartwright, Chairman of the Board, President and Chief Executive Officer of the
Company; Ann B. Curtis, Vice Chairman of the Board, Executive Vice President and Corporate
Secretary of the Company; and George Stathakis, who provides consulting services to the Company,
are not considered to be independent.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Furthermore, the Board has determined that each of the members of the Audit Committee, the
Compensation Committee and the Nominating and Governance Committee has no material relationship to
the Company (either directly or as a partner, stockholder or officer of an organization that has a
relationship with the Company) and is &#147;independent&#148; within the meaning of the NYSE&#146;s director
independence standards. In addition, the Board has determined that as of December&nbsp;10, 2004, in
accordance with the Executive Committee&#146;s charter, two of the three members of the Executive
Committee have no material relationship to the Company and are independent.


<P align="left" style="font-size: 10pt"><B>Board of Directors Meetings and Committees</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s Board of Directors held 12 meetings and acted by unanimous written consent twice
in 2004. The Board of Directors has an Audit Committee, a Compensation Committee, a Nominating and
Governance Committee, an Executive Committee and an Indenture Committee.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides membership information for 2004 for each of the Board Committees:

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Nominating and</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Audit</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Compensation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Governance</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Executive</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Indenture</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Peter Cartwright
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;X*
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;X*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Ann B. Curtis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">X</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Kenneth T. Derr
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">X
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">X
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;X**</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Gerald Greenwald
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">X
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">X</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Jeffrey E. Garten
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">X
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;X*</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Susan C. Schwab
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">X
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;X*</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">George J. Stathakis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">X</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Susan Wang
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">X
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD align="center" valign="top">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;X**&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John O. Wilson
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;&nbsp;X*
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">X</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<HR size="1" width="18%" align="left" noshade color="#000000">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">*</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Committee Chairperson</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">**</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">On December&nbsp;10, 2004, the Board of Directors appointed Mr.&nbsp;Derr and Ms.&nbsp;Wang to replace Mr.
Stathakis and Mr.&nbsp;Wilson on the Executive Committee.</TD>
</TR>

</TABLE>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each director attended at least 75% of all Board and Committee meetings (of those Committees
of which he/she is a Committee member).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Below is a description of each committee of the Board of Directors.


<P align="center" style="font-size: 10pt">3
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Audit Committee. </I>The Audit Committee meets with the Company&#146;s finance and accounting managers
and its independent public accountants to review the adequacy of internal controls and the results
and scope of the audit and other services provided by the independent auditors. The Audit Committee
is comprised of John O. Wilson (Chair), Jeffrey E. Garten, Kenneth T. Derr and Susan Wang. Ms.&nbsp;Wang
serves on the audit committee of three other publicly traded companies. The Board has made a
determination that Ms.&nbsp;Wang&#146;s simultaneous service on the audit committee of such other companies
does not impair Ms.&nbsp;Wang&#146;s ability to effectively serve on the Company&#146;s Audit Committee.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee held 10 meetings and did not act by unanimous written consent in 2004.
Further information concerning the Audit Committee is set forth below under the heading &#147;Audit
Committee Report.&#148; The charter of the Audit Committee is available on the Company&#146;s website at
www.calpine.com.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Compensation Committee. </I>The Compensation Committee administers salaries, incentives and other
forms of compensation for executive officers of the Company, as well as certain incentive
compensation and benefit plans of the Company. For a more detailed discussion of the Compensation
Committee&#146;s responsibilities, please refer to the Executive Compensation Report set forth below.
The Compensation Committee is comprised of Jeffrey E. Garten (Chair), Susan C. Schwab and Gerald
Greenwald. The Compensation Committee held six meetings and did not act by unanimous written
consent in 2004. The charter of the Compensation Committee is available on the Company&#146;s website at
www.calpine.com.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Nominating and Governance Committee. </I>The Nominating and Governance Committee is responsible
for reviewing and assessing the Company&#146;s corporate governance guidelines, evaluating Board
performance, setting eligibility requirements for candidates for election to the Board of Directors
and evaluating and making recommendations for new director candidates. The Nominating and
Governance Committee is responsible for reviewing with the Board the appropriate skills and
experience required of Board members in light of the current skills, experience and backgrounds
existing on the Board. The Board assessment includes a review of the diversity of candidates, in
addition to their skills and experience. In case of new director candidates, the Nominating and
Governance Committee also determines whether the nominee must be independent, which determination
is made based on applicable NYSE listing standards, applicable Securities and Exchange Commission
rules and regulations and under the advice of counsel, if necessary. Board members are expected to
make sure that other commitments do not interfere with the devotion of time needed to understand
the Company&#146;s business and to review materials for, attend and fully participate in each meeting.
The Nominating and Governance Committee regularly assesses the appropriate size of the Board, and
whether any vacancies on the Board are expected due to retirement or otherwise. In the event that
vacancies are anticipated, or otherwise arise, the Nominating and Governance Committee considers
various potential candidates. Candidates may come to the attention of the Nominating and Governance
Committee through current Board members, professional search firms, stockholders or other persons.
These candidates are evaluated at regular or special meetings of the Nominating and Governance
Committee, and may be considered at any point during the year.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Nominating and Governance Committee will consider properly submitted recommendations for
director candidates from stockholders of the Company. A stockholder interested in making such a
recommendation should submit a written recommendation identifying the candidate and explaining his
or her qualifications. The recommendation should be mailed to the Secretary of the Company at the
corporate headquarters at Calpine Corporation, 50 West San Fernando Street, San Jose, California
95113. The Nominating and Governance Committee is comprised of Susan C. Schwab (Chair), Kenneth T.
Derr and Gerald Greenwald. The Nominating and Governance Committee held four meetings and did not
act by unanimous written consent in 2004. The charter of the Nominating and Governance Committee is
available on the Company&#146;s website at <U>www.calpine.com</U>.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2004, the Compensation Committee and the Nominating and Governance Committee held two joint
meetings and did not act by joint unanimous written consent.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Executive Committee. </I>The Executive Committee is empowered to take actions on behalf of the
Board of Directors, particularly in the event such actions are necessary on short notice. During
the greater part of 2004, the Executive Committee was comprised of Mr.&nbsp;Cartwright (Chair), Mr.
Stathakis and Mr.&nbsp;Wilson. On December&nbsp;10, 2004, the Board of Directors appointed Mr.&nbsp;Derr and Ms.
Wang to replace Mr.&nbsp;Stathakis and Mr.&nbsp;Wilson on the Executive Committee. The Executive Committee
held three meetings and acted by unanimous written consent twice in 2004. The charter of the
Executive Committee is available on the Company&#146;s website at www.calpine.com.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Indenture Committee. </I>The Indenture Committee is empowered to take actions on behalf of the
Board with respect to certain indentures and debt facilities of the Company. The Indenture
Committee is comprised of Peter Cartwright (Chair) and Ann B. Curtis. The Indenture Committee did
not hold any meetings and acted by unanimous written consent three times in 2004.


<P align="center" style="font-size: 10pt">4
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Lead Director</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The independent directors of the Board have appointed Kenneth T. Derr, as Lead Director. The
Lead Director&#146;s duties include: (i)&nbsp;presiding at all executive sessions of the Board, (ii)
coordinating communications among the independent directors, (iii)&nbsp;presiding at Board meetings when
the Chairman of the Board and the Vice Chairman of the Board are not in attendance, and (iv)
performing such other duties as the Board deems appropriate.


<P align="left" style="font-size: 10pt"><B>Executive Sessions</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The non-management directors of the Company meet in executive session of the Board without
management at each regular board meeting and at each regular meeting of the Audit Committee,
Compensation Committee and Nominating and Governance Committee, and as otherwise scheduled from
time to time. The Lead Director presides at all executive sessions of the Board. The Chair of each
of the Audit Committee, Compensation Committee, and Nominating and Governance Committees presides
at the executive sessions of his or her respective committee. Interested parties who would like to
communicate with the non-management directors or any individual non-management director may do so
by sending a letter to the Lead Director in care of the General Counsel of the Company at the
corporate headquarters at Calpine Corporation, 50 West San Fernando Street, San Jose, California
95113.


<P align="left" style="font-size: 10pt"><B>Communications with the Board</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Individuals may communicate with the Board in writing by submitting a letter addressed to the
&#147;Board of Directors&#148; or to any of the directors by name in care of the General Counsel of the
Company at the corporate headquarters at Calpine Corporation, 50 West San Fernando Street, San
Jose, California 95113. The communication should indicate the name(s) of any specific director(s)
for whom it is intended, or the &#147;Board of Directors&#148; as a whole. All communications will be
compiled by the General Counsel of the Company and submitted as appropriate to the Board or
specified directors on a periodic basis.


<P align="left" style="font-size: 10pt"><B>Annual Meeting of Stockholders</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Directors are encouraged to attend the Company&#146;s annual meetings of stockholders. All
directors attended the 2004 Annual Meeting of Stockholders.


<P align="left" style="font-size: 10pt"><B>Director Compensation</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2004, non-employee members of the Board of Directors were each paid an annual retainer fee
of $42,000 and were reimbursed for all expenses incurred in attending meetings of the Board of
Directors or any committee thereof. The chairs of the Compensation Committee and the Nominating and
Governance Committee received an additional annual fee of $8,000. The chair of the Audit Committee
received an additional annual fee of $10,000. Additionally, each non-employee Board member received
$2,000 for attendance of each of the regular quarterly Board meetings. Members of the Audit
Committee received an additional $2,000 for attendance of each of the regular quarterly Audit
Committee Meetings. Members of the Nominating and Governance Committee and of the Compensation
Committee received $1,000 for attendance of each of the regular quarterly Compensation and
Nominating and Governance Committee meetings. Each non-employee member of the Executive Committee
received an additional $1,000 for serving on the Executive Committee. Fees are generally not paid
for special telephonic Board or Committee meetings except as otherwise specifically approved by the
Chairperson of the Board or Committee, as applicable, and notice of the same is provided to the
Board. Beginning in 2005, non-employee members of the Board of Directors will be paid an annual
retainer fee of $50,000 and will be reimbursed for all expenses incurred in attending meetings of
the Board of Directors or any committee thereof. Board members will not receive meeting attendance
fees nor fees for service on the Executive Committee. The chairs of the Compensation Committee and
the Nominating and Governance Committee will each receive an additional annual fee of $15,000. The
chair of the Audit Committee will receive an additional annual fee of $20,000 and members of the
Audit Committee (including the Chair) will each receive an additional annual fee of $10,000 for
serving on the Audit Committee. The Lead Director will receive an annual fee of $20,000 for
serving as Lead Director.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon election or appointment to the Board of Directors, each non-employee member of the Board
was automatically granted an option grant to purchase 20,000 shares of Common Stock under the
Automatic Option Grant Program in effect under the Company&#146;s 1996 Stock Incentive Plan. Such
initial option grant vests in a series of four successive annual installments upon the optionee&#146;s
completion of each year of service on the Board of Directors over the four-year period measured
from the grant date. Each option granted under the Automatic Option Grant Program has an exercise
price per share equal to the fair market value per share of Common Stock on the grant date and a
term of ten years, subject to earlier termination upon the optionee&#146;s cessation of Board service.


<P align="center" style="font-size: 10pt">5
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each option is immediately exercisable for all the option shares, but any shares purchased
upon exercise of the option will be subject to repurchase by the Company, at the option exercise
price paid per share, upon the optionee&#146;s cessation of Board service prior to vesting in those
shares. However, option shares issuable upon exercise of options granted will immediately vest on
an accelerated basis upon certain changes in control of the Company or upon the retirement, death
or disability of the optionee while a Board member. Beginning in 2005, upon election or
appointment to the Board of Directors, each non-employee member of the Board will be automatically
granted an option grant to purchase 50,000 shares of Common Stock (under various option grant
programs in effect under the Company&#146;s 1996 Stock Incentive Plan) on the terms and with such
vesting as described above.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, in 2004, each non-employee member of the Board received an annual option grant to
purchase 3,500 shares of Common Stock under the Automatic Option Grant Program. Such annual option
grant vests upon the optionee&#146;s completion of one year of Board service measured from the grant
date. Beginning in 2005, each non-employee member of the Board will receive as his or her annual
option grant an option to purchase 25,000 shares of Common Stock (under various option grant
programs in effect under the Company&#146;s 1996 Stock Incentive Plan). Such annual option grant will
vest upon the optionee&#146;s completion of one year of Board service measured from the grant date and
will have similar terms as described above.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In 2004, non-employee members of the Board were eligible to participate in the Director Fee
Option Grant Program in effect under the 1996 Stock Incentive Plan, pursuant to which they could
elect to apply all or a portion of their annual retainer fee towards the acquisition of special
options. For each director electing to participate, the number of shares of Common Stock subject to
these options was determined by dividing (i)&nbsp;the portion of the annual retainer fee the director
elects to apply toward the acquisition of options by (ii)&nbsp;66 2/3% of the fair market value per
share of Common Stock on the grant date. Each option had an exercise price per share equal to 33
1/3% of the fair market value per share of Common Stock on the grant date. The options granted
under the Director Fee Option Grant Program in 2004 became fully exercisable on December&nbsp;31, 2004.
The options have a term of ten years, subject to earlier termination two years following cessation
of Board service. George Stathakis, who is a former employee of the Company, does not participate
in the Automatic Option Grant Program or the Director Fee Option Grant Program. Instead, Mr.
Stathakis receives an annual stock option grant from the Company under the Discretionary Stock
Option Program in an amount equal to that received by the non-employee directors and under similar
terms. Mr.&nbsp;Stathakis&#146; compensation is discussed in greater detail under Certain Relationships and
Related Transactions. The Director Fee Option Grant Program will not be available in 2005 due to
the potential effect of the American Jobs Creation Act of 2004.

<!-- link1 "MATTERS TO BE CONSIDERED AT THE 2005 ANNUAL MEETING OF STOCKHOLDERS" -->
<DIV align="left"><A NAME="002"></A></DIV>

<P align="center" style="font-size: 10pt"><B>MATTERS TO BE CONSIDERED AT THE 2005 ANNUAL MEETING OF STOCKHOLDERS</B>


<!-- link1 "PROPOSAL ONE: ELECTION OF DIRECTORS" -->
<DIV align="left"><A NAME="003"></A></DIV>

<P align="center" style="font-size: 10pt"><B>PROPOSAL ONE: ELECTION OF DIRECTORS</B>



<P align="left" style="font-size: 10pt"><B>General</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s Bylaws provide that the number of directors that shall constitute the Board of
Directors shall not be less than one, with the actual number to be fixed from time to time by
resolution of the Board of Directors. The authorized number of directors is currently set at nine.
The Company&#146;s Certificate of Incorporation provides that the Board of Directors shall be divided
into three classes, with each class having a three-year term. Three seats have been designated as
Class&nbsp;III Board seats, with the term of the directors occupying such seats expiring as of the 2005
Annual Meeting of Stockholders. Three seats have been designated as Class&nbsp;I Board seats and three
seats have been designated as Class&nbsp;II Board seats. The directors elected to Class&nbsp;I Board seats
will continue to hold office until the 2006 Annual Meeting of Stockholders and until such
directors&#146; successors have been elected and qualified or until the earlier of their death,
resignation or removal. The directors elected to Class&nbsp;II Board seats will continue to hold office
until the 2007 Annual Meeting of Stockholders and until such directors&#146; successors have been
elected and qualified or until the earlier of their death, resignation or removal.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the 2005 Annual Meeting of Stockholders, the Company intends to nominate Peter Cartwright,
Susan C. Schwab and Susan Wang for election as Class&nbsp;III Directors, each of whom has consented to
be named in this Proxy Statement and to serve if elected. Each of Mr.&nbsp;Cartwright, Ms.&nbsp;Schwab and
Ms.&nbsp;Wang currently serves as a Class&nbsp;III Director. Each would be elected to serve for a three-year
term ending at the 2008 Annual Meeting of Stockholders and until their respective successors are
elected and qualified or until the earlier of their death, resignation or removal. However, if
the Company&#146;s proposal to declassify the election of the Board of Directors described below in
Proposal Two is approved, each nominee for election as a director, including any directors whose
term has not yet expired and directors standing for re-election, will be elected for a one-year
term beginning at the 2006 Annual Meeting of Stockholders.


<P align="center" style="font-size: 10pt">6
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The proxy holders intend to vote all proxies received by them for each of the nominees for
election as a Class&nbsp;III Director unless instructions to the contrary are marked on the proxy. In
the event that a nominee is for any reason unable to serve as a director at the time of the 2005
Annual Meeting of Stockholders and the Board of Directors designates a replacement nominee, the
proxies will be voted for the replacement nominee. If the Board of Directors does not designate a
replacement nominee, the number of directors to be elected will be reduced. As of the date of this
Proxy Statement, the Board of Directors is not aware that any nominee is unable or will decline to
serve as a director.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth in the table below is a list of the Company&#146;s directors, together with certain
biographical information.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Principal Occupation</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Class</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Peter Cartwright
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">75</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chairman of the Board, President and Chief Executive
Officer of the Company
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">III</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Ann B. Curtis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">54</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President, Vice Chairman of the Board and
Corporate Secretary of the Company
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">II</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Kenneth T. Derr*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">68</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Retired, Former Chairman and Chief Executive Officer of
Chevron Corporation
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">II</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Jeffrey E. Garten*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">58</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Dean of the Yale School of Management
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">I</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Gerald Greenwald*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">69</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Managing Partner, Greenbriar Equity Group
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">II</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Susan C. Schwab*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">50</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">President and Chief Executive Officer, University System
of Maryland Foundation
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">III</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">George J. Stathakis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">74</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Chief Executive Officer, George J. Stathakis &#038; Associates
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">I</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Susan Wang*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">54</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Retired, Former Executive Vice President and Chief
Financial Officer of Solectron Corporation
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">III</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">John O. Wilson*
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">66</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Professor, University of California, Berkeley
</TD>
    <TD>&nbsp;</TD>
    <TD align="right" valign="top">I</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<HR size="1" width="18%" align="left" noshade color="#000000">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">*</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Independent director as independence is defined by the listing standards of the New York
Stock Exchange.</TD>
</TR>

</TABLE>



<P align="left" style="font-size: 10pt"><B>Class&nbsp;III Directors with Terms Expiring in 2005</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Peter Cartwright </I>founded the Company in 1984 and has since served as a director and as the
Company&#146;s President and Chief Executive Officer. Mr.&nbsp;Cartwright became Chairman of the Board of
Directors of the Company in September&nbsp;1996. From 1979 to 1984, Mr.&nbsp;Cartwright was Vice President
and General Manager of Gibbs &#038; Hill, Inc.&#146;s Western Regional Office. From 1960 to 1979, Mr.
Cartwright worked for General Electric Corporation&#146;s Nuclear Energy Division. His responsibilities
included plant construction, project management and new business development. He served on the
Board of Directors of nuclear fuel manufacturing companies in Germany, Italy and Japan. Mr.
Cartwright was responsible for General Electric&#146;s technology development and licensing programs in
Europe and Japan. Mr.&nbsp;Cartwright obtained a Master of Science degree in Civil Engineering from
Columbia University in 1953 and a Bachelor of Science degree in Geological Engineering from
Princeton University in 1952.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Susan C. Schwab </I>became a director of the Company in January&nbsp;1997. Dr.&nbsp;Schwab is President and
Chief Executive Officer of the University System of Maryland Foundation. She served as Dean of the
University of Maryland School of Public Policy from August&nbsp;1995 to August&nbsp;2003. Dr.&nbsp;Schwab served
as Director, Corporate Business Development for Motorola, Inc., an electronics manufacturer, from
July&nbsp;1993 to August&nbsp;1995. She also served as Assistant Secretary of Commerce for the U.S. and
Foreign Commercial Service from March&nbsp;1989 to May&nbsp;1993. Dr.&nbsp;Schwab serves as a director of Adams
Express Co. and Petroleum &#038; Resources Corp.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Susan Wang </I>became a director of the Company in June&nbsp;2003. From January&nbsp;2001 to February&nbsp;2002,
Ms.&nbsp;Wang served as Executive Vice President and Chief Financial Officer for Solectron Corporation,
an electronics manufacturing services company, and from August&nbsp;1989 to February&nbsp;2002, she served as
its Chief Financial Officer. Prior to that she was the Director of Finance from October&nbsp;1984 to
August&nbsp;1989. From May&nbsp;1977 to October&nbsp;1984 she was Manager, Financial Services for Xerox
Corporation, a document and equipment services provider. Ms.&nbsp;Wang obtained a Master of Business
Administration from University of Connecticut in 1981 and a Bachelor of Business Administration
degree in accounting from the University of Texas in 1972. Ms.&nbsp;Wang is a certified public
accountant in New York and served as chairman of the Financial Executive Research Foundation from
1998 to 1999. Ms.&nbsp;Wang serves as a director of Altera Corp., Avanex Corp. and Nektar Therapeutics.


<P align="center" style="font-size: 10pt">7
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Continuing Class&nbsp;I Directors with Terms Expiring in 2006</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Jeffrey E. Garten </I>became a director of the Company in January&nbsp;1997. Mr.&nbsp;Garten has served as
Dean of the Yale School of Management and as the William S. Beinecke Professor in the Practice of
International Trade and Finance since November&nbsp;1995. Mr.&nbsp;Garten served as Undersecretary of
Commerce of International Trade from November&nbsp;1993 to October&nbsp;1995. He was a managing director of
The Blackstone Group, an investment banking firm, from October&nbsp;1990 to October&nbsp;1992. Prior thereto,
Mr.&nbsp;Garten founded and managed The Eliot Group, a small investment bank, from November&nbsp;1987 to
October&nbsp;1990, and served as managing director of Lehman Brothers, an investment banking firm, from
January&nbsp;1979 to November&nbsp;1987. Mr.&nbsp;Garten serves as a director of CarMax, Inc. and Aetna Inc.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>George J. Stathakis </I>became a director of the Company in September&nbsp;1996 and has served as a
Senior Advisor to the Company since December&nbsp;1994. Mr.&nbsp;Stathakis is also the Chief Executive
Officer of George J. Stathakis &#038; Associates. He has been providing financial, business and
management advisory services to numerous corporations since 1985. He also served as Chairman of the
Board and Chief Executive Officer of Ramtron International Corporation, an advanced technology
semiconductor company, from 1990 to 1994. From 1986 to 1989, he served as Chairman of the Board and
Chief Executive Officer of International Capital Corporation, a subsidiary of American Express.
Prior to 1986, Mr.&nbsp;Stathakis served 32&nbsp;years with General Electric Corporation in various
management and executive positions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>John O. Wilson </I>became a director of the Company in January&nbsp;1997. Mr.&nbsp;Wilson has served as a
faculty member at the University of California at Berkeley since September&nbsp;1979. Mr.&nbsp;Wilson served
as a Senior Research Fellow at the Berkeley Roundtable on the International Economy and as
Executive Vice President and Chief Economist of SDR Capital Management from January&nbsp;1999 through
December&nbsp;2001. Mr.&nbsp;Wilson served as Executive Vice President and Chief Economist at Bank of America
from August&nbsp;1984 to January&nbsp;1999. He joined Bank of America in June&nbsp;1975 as Director of
Economics-Policy Research. Mr.&nbsp;Wilson served on the faculty at the University of Connecticut from
September&nbsp;1974 to June&nbsp;1975, and at Yale University from January&nbsp;1967 to September&nbsp;1970. Mr.&nbsp;Wilson
also served as Director of Regulatory Analysis of the U.S. Atomic Energy Commission from April&nbsp;1972
to October&nbsp;1972, as Director of Welfare Reform of the Department of Health, Education and Welfare
from April&nbsp;1971 to April&nbsp;1972, and as Assistant Director of the U.S. Office of Economic Opportunity
from August&nbsp;1969 to April&nbsp;1971. Mr.&nbsp;Wilson serves as a director of The Ryland Group, Inc.


<P align="left" style="font-size: 10pt"><B>Continuing Class&nbsp;II Directors with Terms Expiring in 2007</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Ann B. Curtis </I>has served as Executive Vice President of the Company since August&nbsp;1998, and
before that had been Senior Vice President of the Company since September&nbsp;1992. She has been
employed by the Company since its inception in 1984. Ms.&nbsp;Curtis became a director of the Company in
September&nbsp;1996 and became Vice Chairman of the Board of Directors in March&nbsp;2002. She is responsible
for overseeing the Company&#146;s administrative functions, including the functions of general counsel,
human resources, public relations and investor relations. Ms.&nbsp;Curtis also serves as Corporate
Secretary for the Company. From the Company&#146;s inception in 1984 through 1992, she served as the
Company&#146;s Vice President for Management and Financial Services. Additionally, from 1984 through
March&nbsp;2002, Ms.&nbsp;Curtis served in the role of Chief Financial Officer. Prior to joining the Company,
Ms.&nbsp;Curtis was Manager of Administration for Gibbs &#038; Hill, Inc., an architect/engineering firm that
specialized in power engineering projects.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Kenneth T. Derr </I>became a director of the Company in May&nbsp;2001. Mr.&nbsp;Derr retired as the Chairman
and Chief Executive Officer of Chevron Corporation, an international oil company, in 1999, a
position that he held since 1989, after a 39-year career with the company. Mr.&nbsp;Derr obtained a
Master of Business Administration degree from Cornell University in 1960 and a Bachelor of Science
degree in Mechanical Engineering from Cornell University in 1959. Mr.&nbsp;Derr serves as a director of
AT&#038;T Corp., Citigroup, Inc. and Halliburton Co.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Gerald Greenwald </I>became a director of the Company in July&nbsp;2001. Mr.&nbsp;Greenwald is a managing
partner of the Greenbriar Equity Group, a private equity investor in the transportation industry,
which he co-founded in 1999. Mr.&nbsp;Greenwald was the Chairman and Chief Executive Officer of UAL
Corporation and United Airlines (UAL), its principal subsidiary, from 1994 until his retirement in
1999. From 1979 to 1990, Mr.&nbsp;Greenwald held various executive positions with Chrysler Corporation,
an automotive manufacturer, serving as Vice Chairman of the Board from 1989 to May&nbsp;1990 and as
Chairman of Chrysler Motors from 1985 to 1988. In 1990, Mr.&nbsp;Greenwald was selected to serve as
Chief Executive Officer of United Employee Acquisition Corporation in connection with the proposed
1990 employee acquisition of UAL. From 1991 to 1992, he was a Managing Director of Dillon Read &#038;
Co., Inc., an investment banking firm, and, from 1992 to 1993, he was President and Deputy Chief
Executive Officer of Olympia &#038; York Developments Ltd., a Canadian real estate company. Mr.
Greenwald served as Chairman and Managing Director of Tatra Truck



<P align="center" style="font-size: 10pt">8
</DIV>


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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">Company, a truck manufacturer in the Czech Republic, from 1993 to 1994. Mr.&nbsp;Greenwald is a
trustee of the Aspen Institute and serves as a director of Aetna Inc. and Sentigen Holding Corp.


<P align="left" style="font-size: 10pt"><B>Recommendation of the Board of Directors</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors recommends that the stockholders vote &#147;FOR&#148; the election of the Class
III Director nominees listed above.

<!-- link1 "PROPOSAL TWO: AMENDMENT OF THE AMENDED AND RESTATED CERTIFICATE OF INCORPORATION TO DECLASSIFY THE STAGGERED BOARD OF DIRECTORS" -->
<DIV align="left"><A NAME="004"></A></DIV>

<P align="center" style="font-size: 10pt"><B>PROPOSAL TWO: AMENDMENT OF THE AMENDED AND RESTATED<BR>
CERTIFICATE OF INCORPORATION TO DECLASSIFY THE STAGGERED BOARD OF DIRECTORS</B>



<P align="left" style="font-size: 10pt"><B>Background</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Article&nbsp;SEVENTH subsection (b)&nbsp;of the Company&#146;s Amended and Restated Certificate of
Incorporation, the Board of Directors is divided into three classes of directors serving staggered
three-year terms, with each class being as nearly equal in number as possible. The Company has had
a staggered board of directors since it became a public company in 1996.


<P align="left" style="font-size: 10pt"><B>Proposal</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has adopted the following resolution, declaring it advisable that
Article&nbsp;SEVENTH subsection (b)&nbsp;of the Company&#146;s Amended and Restated Certificate of Incorporation
be amended to eliminate classification of the Board of Directors (the &#147;Declassification
Amendment&#148;):


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Board of Directors believes that it is advisable and in the best interests of the
Company to declassify the Board;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW, THEREFORE, BE IT RESOLVED, that the Amended and Restated Certificate of Incorporation of
the Company be amended by:


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deleting therefrom the current Article&nbsp;SEVENTH subsection (b)&nbsp;in its entirety and substituting
therefore the following new Article&nbsp;SEVENTH subsection (b):


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;(b) Except as otherwise provided by law, each Director shall be elected at the annual
meeting of stockholders to serve a one-year term and until such Director&#146;s successor is elected and
qualified.&#148;


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the Declassification Amendment is approved, each nominee for election as a director,
including any directors whose term has not yet expired and directors standing for re-election, will
be elected for a one-year term beginning at the 2006 Annual Meeting of Stockholders.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In accordance with paragraph (d)&nbsp;of Article&nbsp;SEVENTH of the Restated Certificate of
Incorporation, adoption of the amendment to the Amended and Restated Certificate of Incorporation
requires the affirmative vote of the holders of two-thirds of the outstanding shares of Common
Stock.


<P align="left" style="font-size: 10pt"><B>Reasons for the Amendment</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors has considered the relative merits of annually elected and classified
boards. Classified boards promote stability by ensuring that a majority of directors will have had
prior experience with, and in-depth knowledge of, the Company&#146;s business and industry. A
classified board also helps protect the interests of stockholders by encouraging potential
acquirers to enter into arms-length negotiations with the Board of Directors. Notwithstanding
these important benefits, the Board of Directors recognizes that the election of directors is a
primary means for stockholders to influence corporate governance and ensure that management is
accountable to stockholders. The Board of Directors believes that providing the Company&#146;s
stockholders with the opportunity annually to register their views on the performance of individual
directors and the Board of Directors collectively will further the Company&#146;s goal of maintaining
best practices in corporate governance.


<P align="left" style="font-size: 10pt"><B>Recommendation of the Board of Directors</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors recommends that the stockholders vote &#147;FOR&#148; the amendment to the
Company&#146;s Amended and Restated Certificate of Incorporation to provide for the declassification of
the election of the Board of Directors.


<P align="center" style="font-size: 10pt">9
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "PROPOSAL THREE: RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS" -->
<DIV align="left"><A NAME="005"></A></DIV>

<P align="center" style="font-size: 10pt"><B>PROPOSAL THREE: RATIFICATION OF APPOINTMENT<BR>
OF INDEPENDENT PUBLIC ACCOUNTANTS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee of the Board of Directors appointed the firm of PricewaterhouseCoopers LLP
(&#147;PricewaterhouseCoopers&#148;) to serve as the independent public accountants to audit the financial
statements of the Company for the year ended December&nbsp;31, 2005, and has directed that management
submit the selection of the independent public accountants for ratification by the stockholders at
the 2005 Annual Meeting of Stockholders. The Audit Committee made this decision after evaluating
the qualifications, performance and independence of PricewaterhouseCoopers, including considering
whether PricewaterhouseCoopers&#146; quality controls are adequate and whether the performance of
permitted non-audit services by PricewaterhouseCoopers is compatible with maintaining its
independence.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Representatives of PricewaterhouseCoopers are expected to be present at the 2005 Annual
Meeting of Stockholders, will have the opportunity to make a statement if they desire to do so, and
are expected to be available to respond to appropriate questions.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PricewaterhouseCoopers was appointed as the Company&#146;s independent public accountants for the
year ended December&nbsp;31, 2003, by the Board of Directors and the Audit Committee of the Board of
Directors to replace the firm of Deloitte &#038; Touche LLP (&#147;Deloitte &#038; Touche&#148;), which had served as
the independent public accountants for the Company for the year ended December&nbsp;31, 2002. On April
10, 2003, Deloitte &#038; Touche and the Company each made the decision, to cease their client-auditor
relationship. On that date, Deloitte notified the chairman of the Audit Committee of the Board of
Directors that Deloitte &#038; Touche resigned as independent accountants of the Company. On that same
date, the Board of Directors and the Audit Committee met and determined to no longer utilize the
audit services of Deloitte &#038; Touche and approved the appointment of PricewaterhouseCoopers as the
Company&#146;s independent auditors for the year ended December&nbsp;31, 2003.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deloitte &#038; Touche has not included, in any report on the Company&#146;s financial statements, an
adverse opinion or a disclaimer of opinion, or a qualification or modification as to uncertainty,
audit scope, or accounting principles with respect to the Company&#146;s financial statements. During
the fiscal year of the Company ended December&nbsp;31, 2002, and the subsequent interim period through
April&nbsp;10, 2003, (i)&nbsp;other than described in the paragraph immediately following this paragraph,
there were no disagreements between the Company and Deloitte &#038; Touche on any matter of accounting
principles or practices, financial statement disclosure or auditing scope or procedure, which
disagreements, if not resolved to Deloitte&#146;s satisfaction, would have caused Deloitte &#038; Touche to
make reference to the subject matter of the disagreement in connection with its reports of the
Company&#146;s financial statements, and (ii)&nbsp;there were no reportable events (as defined in Item
304(a)(1)(v) of Regulation&nbsp;S-K).


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company had a disagreement with Deloitte &#038; Touche, which was satisfactorily resolved,
related to the interpretation of certain provisions of power sales agreements associated with two
power plants for which the Company had utilized sale-leaseback transactions. The Company had
previously accounted for these sale-leaseback transactions as qualifying for operating lease
accounting treatment. Deloitte &#038; Touche concluded that the provisions of the power sales agreements
precluded operating lease accounting treatment. The Company recorded adjustments related to these
matters in the 2000 and 2001 consolidated financial statements and adjusted the previously
announced unaudited financial statements for 2002. The Audit Committee of the Company&#146;s Board of
Directors discussed the subject matter of the disagreement with Deloitte &#038; Touche. The Company has
authorized Deloitte &#038; Touche to respond fully to the inquiries of PricewaterhouseCoopers concerning
the subject matter of the foregoing disagreement.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During the fiscal years ended December&nbsp;2001 and 2002, and the subsequent interim period
through April&nbsp;10, 2003, neither the Company nor anyone on the Company&#146;s behalf consulted
PricewaterhouseCoopers regarding the application of accounting principles to a specified
transaction, either completed or proposed, regarding the type of audit opinion that might be
rendered on the Company&#146;s financial statements or regarding &#147;disagreements&#148; or any &#147;reportable
events&#148; (each as defined in Item 304(a) of Regulation&nbsp;S-K).


<P align="left" style="font-size: 10pt"><B>Audit Fees</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The fees billed by PricewaterhouseCoopers for performing the Company&#146;s audit were
approximately $10.5&nbsp;million during the fiscal year ended December&nbsp;31, 2004 and approximately $2.6
million during the fiscal year ended December&nbsp;31, 2003. The fees billed by PricewaterhouseCoopers
relating to the review of the Company&#146;s financial statements included in the Company&#146;s Quarterly
Reports on Form 10-Q were approximately $0.9&nbsp;million during the fiscal year ended December&nbsp;31, 2004
and approximately $1.1&nbsp;million during the fiscal year ended December&nbsp;31, 2003. Its fees billed for
performing audits and reviews of certain of the Company&#146;s subsidiaries were approximately $2.7
million during the fiscal year ended December&nbsp;31, 2004 and approximately $1.6&nbsp;million during the
fiscal year ended December&nbsp;31, 2003.


<P align="center" style="font-size: 10pt">10
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Audit-Related Fees</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The fees billed by PricewaterhouseCoopers for audit-related services were approximately $0.7
million for the fiscal year ended December&nbsp;31, 2004 and approximately $4.1&nbsp;million for the fiscal
year ended December&nbsp;31, 2003. Such audit-related fees consisted primarily of re-audit and comfort
letter services relating to business acquisitions and divestitures and other attestation services.


<P align="left" style="font-size: 10pt"><B>Tax Fees</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;PricewaterhouseCoopers did not provide the Company with any tax compliance and tax consulting
services during the fiscal years ended December&nbsp;31, 2004 and December&nbsp;31, 2003.


<P align="left" style="font-size: 10pt"><B>All Other Fees</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The aggregate amount of fees billed by PricewaterhouseCoopers for all services rendered, other
than as described above under the headings Audit Fees, Audit-Related Fees and Tax Fees, was
approximately $0.8&nbsp;million during the fiscal year ended December&nbsp;31, 2004 and approximately $1.2
million during the fiscal year ended December&nbsp;31, 2003. Such fees primarily consisted of advisory
services related to compliance with the Sarbanes-Oxley Act of 2002.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee is responsible for pre-approving all auditing services and permitted
non-audit services to be performed by the independent auditors (including the fees and other terms
thereof). Under the Company policy relating to the approval of audit services and non-audit
services provided by its independent public accountant, pre-approval is not required for the
provision of non-audit services if (i)&nbsp;the aggregate amount of all such non-audit services
constitute no more than 5% of the total amount of revenues paid by the Company to the auditors
during the fiscal year in which the non-audit services are provided, (ii)&nbsp;such services were not
recognized by the Company at the time of engagement to be non-audit services and (iii)&nbsp;such
services are promptly brought to the attention of the Audit Committee and approved prior to the
completion of the audit. The Audit Committee pre-approved all auditing services and permitted
non-audit services to be performed by the independent auditors during the fiscal year ended
December&nbsp;31, 2004.


<P align="left" style="font-size: 10pt"><B>Recommendation of the Board of Directors</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors recommends that stockholders vote &#147;FOR&#148; the ratification of the
appointment of PricewaterhouseCoopers as the Company&#146;s independent public accountants for the year
ending December&nbsp;31, 2005.

<!-- link1 "OTHER MATTERS" -->
<DIV align="left"><A NAME="006"></A></DIV>

<P align="center" style="font-size: 10pt"><B>OTHER MATTERS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors does not know of any matters to be presented at the 2005 Annual Meeting
of Stockholders other than those set forth in the Notice of Annual Meeting accompanying this Proxy
Statement. However, if any other matters properly come before the meeting, the persons named in the
enclosed form of proxy intend to vote on such matters in accordance with their best judgment. This
discretionary authority is granted by the execution of the enclosed form of proxy.


<P align="center" style="font-size: 10pt">11
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" -->
<DIV align="left"><A NAME="007"></A></DIV>

<P align="center" style="font-size: 10pt"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information known to the Company regarding the
beneficial ownership of the Common Stock as of December&nbsp;31, 2004, or as such later date as
indicated below, by (i)&nbsp;each person known by the Company to be the beneficial owner of more than
five percent of the outstanding shares of Common Stock, (ii)&nbsp;each director of the Company, (iii)
each executive officer of the Company listed in the Summary Compensation Table below, and (iv)&nbsp;all
executive officers and directors of the Company as a group.

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="80%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Number of Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percentage of Shares</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name and Address of Beneficial Owner</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Beneficially Owned(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Beneficially Owned(1)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Massachusetts Financial Services Company(2)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">38,802,927</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">7.23</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:10px; text-indent:-0px">500 Boylston Street<BR>
Boston, MA 02116<BR></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Mellon Financial Corporation(3)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,637,544</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6.27</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:10px; text-indent:-0px">One Mellon Center<BR>
Pittsburgh, PA 15258<BR></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter Cartwright(4)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,536,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.11</TD>
    <TD nowrap>%</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ann B. Curtis(5)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,112,245</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Kenneth T. Derr(6)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,923</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jeffrey E. Garten(7)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">135,228</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Gerald Greenwald(8)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,903</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert D. Kelly(9)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,811,305</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">E. James Macias(10)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">261,636</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas R. Mason(11)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">582,677</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Susan C. Schwab(12)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">133,650</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">George J. Stathakis(13)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">301,540</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Susan Wang(14)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">John O. Wilson(15)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">231,032</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">All executive officers and directors as a group (17 persons)(16)</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,157,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.29</TD>
    <TD nowrap>%</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade color="#000000">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">*</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Less than one percent</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Beneficial ownership is determined in accordance with the rules of the Securities and
Exchange Commission and consists of either or both voting or investment power with respect
to securities. Shares of Common Stock issuable upon the exercise of options or warrants or
upon the conversion of convertible securities that are immediately exercisable or
convertible or that will become exercisable or convertible within the next 60&nbsp;days are
deemed beneficially owned by the beneficial owner of such options, warrants or convertible
securities and are deemed outstanding for the purpose of computing the percentage of shares
beneficially owned by the person holding such instruments, but are not deemed outstanding
for the purpose of computing the percentage of any other person. Except as otherwise
indicated by footnote, and subject to community property laws where applicable, the persons
named in the table have reported that they have sole voting and sole investment power with
respect to all shares of Common Stock shown as beneficially owned by them. The number of
shares of Common Stock outstanding as of December&nbsp;31, 2004 was 536,509,231.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">According to an amendment to Schedule&nbsp;13G filed with the Securities and Exchange
Commission on February&nbsp;9, 2005, Massachusetts Financial Services Company possesses sole
voting power over 37,009,537 shares of Common Stock and sole dispositive power over
38,802,927 shares of Common Stock.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">According to an amendment to Form&nbsp;13G filed with the Securities and Exchange Commission
on February&nbsp;15, 2005, Mellon Financial Corporation possesses sole voting power over
28,950,503 shares of Common Stock, shared voting power over 296,605 shares of Common Stock,
sole dispositive power over 33,158,769 shares of Common Stock and shared dispositive power
over 309,755 shares of Common Stock.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 9,399,237 shares of Common Stock issuable upon the exercise
of options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">12
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR><TD>&nbsp;</TD></TR>
<TR valign="top">
    <TD width="1%" nowrap align="left">(5)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 1,048,038 shares of Common Stock issuable upon the exercise
of options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(6)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 42,923 shares of Common Stock issuable upon the exercise of
options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(7)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 132,978 shares of Common Stock issuable upon the exercise of
options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(8)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 39,903 shares of Common Stock issuable upon the exercise of
options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(9)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 1,324,362 shares of Common Stock issuable upon the exercise of
options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(10)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 238,397 shares of Common Stock issuable upon the exercise of
options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(11)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 519,993 shares of Common Stock issuable upon the exercise of
options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(12)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 128,650 shares of Common Stock issuable upon the exercise of
options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(13)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 277,540 shares of Common Stock issuable upon the exercise of
options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(14)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 5,000 shares of Common Stock issuable upon the exercise of
options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>
<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(15)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 201,032 shares of Common Stock issuable upon the exercise
of options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(16)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Includes options to purchase 15,246,849 shares of Common Stock issuable upon the exercise
of options outstanding as of December&nbsp;31, 2004 or within 60&nbsp;days thereafter.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt">13
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "EXECUTIVE COMPENSATION AND OTHER INFORMATION" -->
<DIV align="left"><A NAME="008"></A></DIV>

<P align="center" style="font-size: 10pt"><B>EXECUTIVE COMPENSATION AND OTHER INFORMATION</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set forth in the table below is a list of the Company&#146;s executive officers serving as of
&#091;April &#95;&#95;&#95;, 2005&#093; who are not directors, together with certain biographical information.


<P align="center" style="font-size: 10pt"><B>Other Executive Officers</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Age</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Position</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Robert D. Kelly
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">47</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President and Chief
Financial Officer, and President, Calpine Finance Company</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Thomas R. Mason
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">61</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President and President, Calpine Power Company</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">E. James Macias
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">50</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Lisa M. Bodensteiner
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">43</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President and General Counsel</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Bulent A. Berilgen
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">56</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Executive Vice President and President, Calpine Fuels Company</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Charles B. Clark, Jr
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">57</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President, Chief Accounting Officer and Corporate Controller</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Eric N. Pryor
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">39</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Senior Vice President, Deputy Chief
Financial Officer and Corporate Risk Officer</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Robert D. Kelly </I>has served as Executive Vice President and Chief Financial Officer since March
2002, and as President &#151; Calpine Finance Company since March&nbsp;2001. Previously, Mr.&nbsp;Kelly served as
the Company&#146;s Senior Vice President &#151; Finance from January&nbsp;1998 to March&nbsp;2002 and as Vice
President, Finance from April&nbsp;1994 to January&nbsp;1998. Mr.&nbsp;Kelly&#146;s responsibilities include all
project and corporate finance activities. From 1992 to 1994, Mr.&nbsp;Kelly served as Director &#151; Project
Finance for the Company, and from 1991 to 1992, he served as Project Finance Manager. Prior to
joining the Company, from 1990 to 1991, he was the Marketing Manager of Westinghouse Credit
Corporation. From 1989 to 1990, Mr.&nbsp;Kelly was Vice President of Lloyds Bank PLC. From 1982 to 1989,
Mr.&nbsp;Kelly was employed in various positions with The Bank of Nova Scotia. He obtained a Master of
Business Administration degree from Dalhousie University, Canada in 1980 and a Bachelor of Commerce
degree from Memorial University, Canada, in 1979.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Thomas R. Mason </I>has served as Executive Vice President since August&nbsp;1999 and President &#151;
Calpine Power Company since November&nbsp;2002. Previously, Mr.&nbsp;Mason served as a Senior Vice President
of the Company from March&nbsp;1999 until August&nbsp;1999. Mr.&nbsp;Mason is responsible for managing Calpine
Power Company&#146;s profits and losses. From March&nbsp;1995 to February&nbsp;1999, prior to joining the Company,
Mr.&nbsp;Mason was President and Chief Operating Officer of CalEnergy Operating Services Inc., a
wholly-owned subsidiary of MidAmerica Energy Holdings Company. He obtained a Master of Business
Administration degree from the University of Chicago in 1970 and a Bachelor of Science degree in
Electrical Engineering from Purdue University in 1966.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>E.&nbsp;James Macias </I>has served as Executive Vice President since November&nbsp;2002. As head of
Commercial Operations he directs the activities of Calpine&#146;s energy services and marketing and
sales organizations and integrates their activities with the power generation and natural gas
businesses. Mr.&nbsp;Macias served as Executive Vice President and Chief Operating Officer from March
2002 to November&nbsp;2002 and as Senior Vice President of Calpine&#146;s Power and Industrial Marketing from
April&nbsp;2001 to March&nbsp;2002. Prior to joining Calpine, Mr.&nbsp;Macias was a Senior Vice President with
Pacific Gas &#038; Electric, where he managed the utility&#146;s electricity and gas transmission systems,
gas supply program and power generation business from 1997 to 2000. He obtained a Bachelor of
Science degree in Mechanical Engineering from California Polytechnic State University, San Luis
Obispo in 1976, and graduated from the Harvard University Graduate School of Business, Program for
Management Development in 1998.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Lisa M. Bodensteiner </I>has served as Executive Vice President and General Counsel since December
2002. She is responsible for all corporate legal and insurance affairs. She also functions as
Assistant Secretary for the Company. Ms.&nbsp;Bodensteiner served as Senior Vice President and General
Counsel from March&nbsp;2001 to December&nbsp;2002, and from 1999 to 2001 she served as Vice President and
General Counsel. Ms.&nbsp;Bodensteiner joined the Company in 1996 as Associate Counsel. Prior to joining
the Company, Ms.&nbsp;Bodensteiner was an Associate with Thelen, Reid &#038; Priest from 1994 to 1996. She
obtained a Bachelor of Science degree in Business Administration and Accounting from the University
of Nevada in 1985 and a Juris Doctor degree from Santa Clara University School of Law in 1989.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Bulent A. Berilgen </I>has served as Executive Vice President since January&nbsp;2003 and as President
&#151; Calpine Power Fuels Company since January&nbsp;2003. Previously he served as Senior Vice President &#151;
Natural Gas from October&nbsp;1999 to January&nbsp;2003. Mr.&nbsp;Berilgen was President and Chief Executive
Officer of Sheridan Energy, a public oil and gas company, from June&nbsp;1997 until October&nbsp;1999


<P align="center" style="font-size: 10pt">14
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P align="left" style="font-size: 10pt">when it was acquired by the Company. From 1984 until 1997, Mr.&nbsp;Berilgen held several positions
with Forest Oil, including Vice President and Chief Technical Officer. Mr.&nbsp;Berilgen attended the
University of Oklahoma on a Mobil Oil scholarship, receiving a Bachelor of Science degree in
Petroleum Engineering in 1970 and a Masters of Science degree in Industrial Engineering/Management
Science in 1973.



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Charles B. Clark, Jr. </I>has served as the Company&#146;s Senior Vice President since September&nbsp;2001
and Corporate Controller since May&nbsp;1999. He was the Director of Business Services for the Company&#146;s
Geysers operations from February&nbsp;1999 to April&nbsp;1999. He also served as a Vice President of the
Company from May&nbsp;1999 until September&nbsp;2001. Prior to joining the Company, Mr.&nbsp;Clark served as the
Chief Financial Officer of Hobbs Group, LLC from March&nbsp;1998 to November&nbsp;1998. Mr.&nbsp;Clark also served
as Senior Vice President &#151; Finance and Administration of CNF Industries, Inc. from February&nbsp;1997 to
February&nbsp;1998. He served as Vice President and Chief Financial Officer of Century Contractors West,
Inc. from May&nbsp;1988 to January&nbsp;1997. Mr.&nbsp;Clark obtained a Master of Business Administration degree,
with a concentration in Finance, from Harvard Graduate School of Business Administration in 1976
and a Bachelor of Science degree in Mathematics from Duke University in 1969.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Eric N. Pryor </I>has served as Senior Vice President, Deputy Chief Financial Officer and
Corporate Risk Officer since March&nbsp;2002. He plays a key role in leading the Company&#146;s financial
operations and in assessing and managing business risk for the Company. From July&nbsp;1999 to April
2001 he served as Vice President &#151; Finance. From January&nbsp;1998 to June&nbsp;1999 he served as Director &#151;
Finance. From January&nbsp;1997 to December&nbsp;1997 he served as Senior Analyst. Prior to joining the
Company, Mr.&nbsp;Pryor served as Enterprise Tax Specialist with Arthur Andersen from 1990 to 1995. He
obtained a Bachelor of Arts degree in Economics from the University of California, Davis in 1988
and a Master of Business Administration degree also from the University of California, Davis in
1990. Mr.&nbsp;Pryor is a certified public accountant.




<P align="center" style="font-size: 10pt">15
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt"><B>Summary of Cash and Certain Other Compensation</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table provides certain information concerning the compensation for services
rendered to the Company in all capacities during each of the fiscal years ended December&nbsp;31, 2002,
2003 and 2004 by the Company&#146;s Chief Executive Officer and each of the four other most
highly-compensated executive officers of the Company in 2004 (based on combined salary and bonus)
who were serving as executive officers as of December&nbsp;31, 2004.


<P align="center" style="font-size: 10pt"><B>Summary Compensation Table</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="50%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>Long-Term Compensation</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>Annual Compensation</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Securities Underlying</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>All Other</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name and Principal Position</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Salary(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Bonus(2)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Options(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Compensation(3)</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter Cartwright</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">119,865</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Chairman of the Board,</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,250,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,018,939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">83,782</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">President and Chief</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">682,884</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">96,393</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Executive Officer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ann B. Curtis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">547,222</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,276</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Executive Vice President,</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">475,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">660,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">350,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">14,180</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Vice Chairman of the</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">475,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">127,337</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,627</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Board and Corporate Secretary</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert D. Kelly</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">548,162</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,045</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Executive Vice President,</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">470,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">368,939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,270</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Chief Financial Officer,</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">470,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,000,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">90,660</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,470</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">and President,
Calpine Finance Company</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">E. James Macias</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">490,741</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,006</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Executive Vice President</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">467,308</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">560,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">250,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,905</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">418,654</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">47,103</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9,840</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas R. Mason</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">499,074</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,044</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Executive Vice President</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">475,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">560,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">150,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">28,030</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">and President,</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">475,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">131,793</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">25,866</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:30px; text-indent:-15px">Calpine Power Company</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>




<P>
<HR size="1" width="18%" align="left" noshade color="#000000">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Salary figures include the amount of salary deferral reflected in the following stock option
grants under the Salary Investment Option Grant Program of the 1996 Stock Incentive Plan:</TD>
</TR>

</TABLE>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Option Grant</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Salary Deferral</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter Cartwright</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">15,090</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ann B. Curtis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,018</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert D. Kelly</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">18,939</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">E. James Macias</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,622</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,565</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,000</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas R. Mason</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4,456</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 10pt">These stock option grants are also included in the amounts listed as Securities Underlying
Options.




<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">An Employee Service Recognition bonus was paid to Ann B. Curtis in 2004 in recognition of her
20<SUP style="font-size: 85%; vertical-align: text-top">th</SUP> year of service with the Company. All Company employees are eligible to
participate in the Employee Service Recognition bonus program.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">For the named executive officers, this column includes the following payments by the Company:</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt">16
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Term</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Life</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Insurance</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Year</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>401(k)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Payment</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter Cartwright</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">111,665</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">75,782</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">88,393</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ann B. Curtis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,076</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">6,180</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,627</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert D. Kelly</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">11,845</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,003</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,958</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em">
    <TD><DIV style="margin-left:15px; text-indent:-15px">E. James Macias</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,806</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,905</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,840</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="padding-top: 0em; background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas R. Mason</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2004</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,200</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,844</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2003</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,030</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2002</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">17,866</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="left" style="font-size: 10pt"><B>Stock Options</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information concerning grants of stock options during
the fiscal year ended December&nbsp;31, 2004 to each of the executive officers named in the Summary
Compensation Table above. The table also sets forth hypothetical gains or &#147;option spreads&#148; for the
options at the end of their respective 10-year terms. These gains are based on the assumed rates of
annual compound stock price appreciation of 5% and 10% from the date the option was granted over
the full option term. No stock appreciation rights were granted during the fiscal year ended
December&nbsp;31, 2004.


<P align="center" style="font-size: 10pt"><B>Option Grants in Last Fiscal Year</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="14" style="border-bottom: 1px solid #000000"><B>Individual Grants(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Options</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Percentage of Total</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10"><B>Potential Realizable Value at Assumed</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Granted</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Options Granted to</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10"><B>Annual Rates of Stock Price Appreciation</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>(No. of</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Employees in</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Price per</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Expiration</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="10" style="border-bottom: 1px solid #000000"><B>For Option Term(3)</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Shares)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Fiscal Year(2)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Share</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>0%</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>5%</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>10%</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter Cartwright</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">15,090</TD>
    <TD nowrap>(4)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">0.27</TD>
    <TD nowrap>%</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">1.655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1/2/2014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">50,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">97,189</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">169,550</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter Cartwright</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">900,000</TD>
    <TD nowrap>(5)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">16.15</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.560</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/25/2014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3,146,989</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">7,975,087</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ann B. Curtis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3,018</TD>
    <TD nowrap>(4)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.54</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1/2/2014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">19,438</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">33,910</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ann B. Curtis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">252,000</TD>
    <TD nowrap>(6)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4.52</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.560</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/25/2014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">881,157</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,233,024</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert D. Kelly</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">288,000</TD>
    <TD nowrap>(6)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.17</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.560</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/25/2014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,007,036</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,552,028</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">E. James Macias</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">3,622</TD>
    <TD nowrap>(4)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0.65</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.655</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1/2/2014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">12,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">23,328</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">40,696</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">E. James Macias</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">180,000</TD>
    <TD nowrap>(6)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">3.23</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.560</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/25/2014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">629,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,595,017</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas R. Mason</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
    <TD align="right">144,000</TD>
    <TD nowrap>(6)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.58</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5.560</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2/25/2014</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">503,518</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,276,014</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<HR size="1" width="18%" align="left" noshade color="#000000">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Unless otherwise noted herein, the following applies to each option set forth in the table.
Each option has a term of 10&nbsp;years, subject to earlier termination upon the executive
officer&#146;s termination of service with the Company. Each option has an exercise price equal to
the fair market value of the Common Stock on the date of grant. Each option will become
exercisable for 25% of the option shares upon the officer&#146;s completion of each additional one
year of service measured from the grant date. Each option will immediately become exercisable
for all of the option shares (i)&nbsp;upon an acquisition of the Company by merger or asset sale
unless the options are assumed by the successor corporation, or (ii)&nbsp;upon retirement of the
executive officer at least 12&nbsp;months after the option grant date, if the executive officer is
at least 55&nbsp;years of age at retirement and if the sum of the executive officer&#146;s age and years
of service at retirement is at least 70.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(2)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">The Company granted options to purchase 5,573,902 shares of Common Stock during the fiscal
year ended December&nbsp;31, 2004.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(3)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">The 5% and 10% assumed annual rates of compound stock price appreciation from the exercise
date are mandated by the rules of the Securities and Exchange Commission and do not represent
the Company&#146;s estimate or a projection by the Company of future</TD>
</TR>

</TABLE>


<P align="center" style="font-size: 10pt">17
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR><TD>&nbsp;</TD></TR>
<TR valign="top">
    <TD width="1%" nowrap align="left">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">stock prices. The column headed 0% shows the &#147;in-the-money&#148; value at grant date of the options
granted with an exercise price below the market price at the date of grant.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(4)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">These options were granted under the Salary Investment Option Grant Program of the 1996
Stock Incentive Plan. The options vested in equal monthly installments over the 12 calendar
months of 2004. The number of shares of Common Stock subject to these options is determined by
dividing (i)&nbsp;the amount of compensation elected by the executive officer for deferral, which
amount may not exceed $50,000, by (ii)&nbsp;66 2/3% of the fair market value per share of Common
Stock on the grant date. The exercise price per share of each option is equal to 33 1/3% of
the fair market value per share of Common Stock on the grant date.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(5)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">These options were granted under the Discretionary Option Grant Program of the 1996 Stock
Incentive Plan. The options vest in equal annual installments over a two-year period following
the date of grant.</TD>
</TR>

<TR><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD width="1%" nowrap align="left">(6)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">These options were granted under the Discretionary Option Grant Program of the 1996 Stock
Incentive Plan. The options vest in equal annual installments over a four-year period
following the date of grant.</TD>
</TR>

</TABLE>



<P align="left" style="font-size: 10pt"><B>Stock Option Exercises and Holdings</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth certain information concerning the exercise of options during
the fiscal year ended December&nbsp;31, 2004, and the number of shares subject to exercisable and
unexercisable stock options held as of December&nbsp;31, 2004, by the executive officers named in the
Summary Compensation Table above. No stock appreciation rights were exercised by such executive
officers in the fiscal year ended December&nbsp;31, 2004 and no stock appreciation rights were
outstanding at the end of that year,


<P align="center" style="font-size: 10pt"><B>Aggregated Option Exercises in Last Fiscal Year and<BR>
Fiscal Year-End Option Values</B>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Value of Unexercised</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>Options at December 31, 2004</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6"><B>In-the-Money Options</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Shares Acquired</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2"><B>Value</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>(No. of Shares)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="6" style="border-bottom: 1px solid #000000"><B>at December 31, 2004(1)</B></TD>
    <TD>&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Name</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>on Exercise</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Realized(1)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Exercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Unexercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Exercisable</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>Unexercisable</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Peter Cartwright</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2,675,944</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">9,671,590</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,449,237</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,407,934</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">7,006,875</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ann B. Curtis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">888,717</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">539,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">473,212</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Robert D. Kelly</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">201,768</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">571,374</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,156,877</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">573,039</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1,507,486</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">E. James Macias</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">126,069</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">380,656</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8,276</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Thomas R. Mason</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">437,672</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">281,398</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">0</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P>
<HR size="1" width="18%" align="left" noshade color="#000000">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left">(1)</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Based upon the closing selling price ($3.94 per share) of the Common Stock on December&nbsp;31,
2004, less the option exercise price payable per share.</TD>
</TR>

</TABLE>



<P align="left" style="font-size: 10pt"><B>Employment Agreements, Termination of Employment and Change In Control Arrangements</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On March&nbsp;9, 2005, the Company entered into a new employment agreement with Mr.&nbsp;Cartwright. The
term of the agreement is two years (until December&nbsp;31, 2006) and is renewable for three successive
one-year terms upon the mutual agreement of the Board and Mr.&nbsp;Cartwright. Mr.&nbsp;Cartwright&#146;s
employment agreement provides for the payment of a base salary, which is subject to periodic
adjustment by the Nominating and Governance Committee and Compensation Committee of the Board of
Directors, acting jointly; annual bonuses under the Company&#146;s bonus plans; and participation in all
benefit and equity plans. Pursuant to the agreement, on March&nbsp;9, 2005, Mr.&nbsp;Cartwright received an
option to purchase 1,250,000 shares of the Company&#146;s Common Stock under the Discretionary Stock
Option Grant Program of the Company&#146;s 1996 Stock Incentive Plan. The option has a six-year term
and an exercise price of $3.80 per share. The option will vest upon the earlier of (i)&nbsp;the
Company&#146;s common stock closing price equaling at least $10.00 per share for four consecutive
trading days and (ii)&nbsp;December&nbsp;31, 2009. Except in certain circumstances, the option will be
forfeited if Mr.&nbsp;Cartwright ceases to be employed as the Company&#146;s Chief Executive Officer before
the option vests. The employment agreement also provides for other employee benefits such as life
insurance and health care, in addition to certain disability and death benefits. Severance
benefits, including severance pay, the acceleration of outstanding options, life insurance and
health care, and outplacement services, are payable upon in the event of (i)&nbsp;resignation for good
cause, (ii)&nbsp;an involuntary termination other than for cause or (iii)&nbsp;the agreement is not renewed
for any of the three one-year renewal terms. Such severance pay will be equal to the sum of Mr.
Cartwright&#146;s base salary and target bonus at the time of the termination of his employment, paid
for the shorter of (i)&nbsp;two years and (ii)&nbsp;the period from his termination date to December&nbsp;31,
2009.



<P align="center" style="font-size: 10pt">18
</DIV>


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<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s employment agreements with Ms.&nbsp;Curtis, Mr.&nbsp;Kelly and Mr.&nbsp;Mason
terminated in 2004. The change in control agreement with Mr.&nbsp;Macias also terminated in 2004.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under the terms of the 1996 Stock Incentive Plan, should the Company be acquired by merger or
asset sale, then all outstanding options and shares of restricted stock held by the chief executive
officer and the other executive officers under the 1996 Stock Incentive Plan will automatically
accelerate and vest in full, except to the extent those options and shares of restricted stock are
to be assumed by the successor corporation. In addition, the Compensation Committee, as plan
administrator of the 1996 Stock Incentive Plan, has the authority to provide for the accelerated
vesting of the shares of Common Stock subject to outstanding options held by the Chief Executive
Officer or any other executive officer or any unvested shares of Common Stock acquired by such
individual, in connection with the termination of that individual&#146;s employment following (i)&nbsp;a
merger or asset sale in which these options are assumed or are assigned or (ii)&nbsp;certain hostile
changes in control of the Company.

<!-- link1 "EXECUTIVE COMPENSATION REPORT" -->
<DIV align="left"><A NAME="009"></A></DIV>

<P align="center" style="font-size: 10pt"><B>EXECUTIVE COMPENSATION REPORT</B>



<P align="left" style="font-size: 10pt"><B>Summary Overview</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The Compensation Committee of the Board of Directors (the &#147;Committee&#148;) believes that the total
compensation package for executives provides the incentives and rewards for achievement of those
financial goals and principal objectives that are critical to the Company.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The Company faced a challenging environment in 2004 as electricity prices continued to recover
slowly. The Company failed to meet the earnings per share goal established by the Committee at the
beginning of the year. Therefore, no bonuses were awarded under the annual Management Incentive
Plan. It is the view of the Committee that the management team has consistently demonstrated the
highest level of integrity and environmental stewardship in the management of the Company. In
reviewing the actions taken by management during 2004, the Committee believes that there were
significant accomplishments that will form the foundation for a stronger Company and which will be
reflected through growth in stockholder value over the next several years.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In recognition of these accomplishments and in light of the Company&#146;s pay-for-performance
philosophy, the Committee granted executives performance-based restricted stock that provides a
reward based on the future impact of executives&#146; actions taken in 2004 and beyond. These grants
will vest only when the Company&#146;s stock price reaches specified price targets. Therefore, the
executives will only benefit from the performance-based restricted stock grants if the stockholders
realize significant gains.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The performance-based restricted stock award is detailed as part of the description of the overall
executive compensation program that follows.


<P align="left" style="font-size: 10pt"><B>Compensation Governance</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The Committee and the Nominating and Governance Committee determine the compensation of Calpine&#146;s
Chief Executive Officer (&#147;CEO&#148;). The Committee is also responsible for approving compensation paid
to the Company&#146;s executive officers. The Committee is responsible to the Company&#146;s Board of
Directors and stockholders. Generally, the role of the Committee is to oversee the Company&#146;s
compensation and benefit plans and policies, annually review and approve all executive officers&#146;
compensation, and administer all equity plans, including reviewing and approving equity grants to
the CEO and the executive officers. The Committee is appointed by the Board and is composed
exclusively of three independent directors. The Committee operates pursuant to a written charter,
which is available on the Company&#146;s website. To assist in its review of the compensation of the CEO
and the executive officers, the Committee has retained an independent compensation consultant. In
addition, on an annual basis, the Committee performs a self-evaluation to assess the Committee&#146;s
performance.


<P align="center" style="font-size: 10pt">19
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="font-size: 10pt"><B>Compensation Philosophy and Objectives</B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The Committee&#146;s philosophy is to provide a total compensation package that attracts, motivates, and
retains talented executives with such package delivering higher rewards for excellent performance
and corollary results for underperformance. The Committee&#146;s fundamental philosophy is to link the
executive officers&#146; compensation with the achievement of annual and long-term performance goals.
This is achieved by providing a balanced mix of cash and equity-based compensation that the
Committee believes is appropriate to align the short- and long-term interests of the executives
with the stockholders.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Achievement of short-term objectives is rewarded through base salary and annual incentive bonuses.
Achievement of long-term objectives is rewarded using equity-based incentive grants. The annual
incentive awards are based on achievement of financial objectives that are important to the
Company. In 2004, the Company focused on earnings per share. The Company&#146;s compensation program
also takes into account individual executive performance. This allows the Committee to
differentiate among the executives and emphasize the personal accomplishments of each executive.
The Company operates in the extremely competitive and rapidly changing power industry. As such, all
of the compensation programs are developed and implemented with reference to the market in which
the Company operates.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">To ensure that the Company&#146;s compensation programs are properly benchmarked, the Committee compares
its compensation practices to companies in the utility industry, as well as with executive
positions in a range of other industries that have similar characteristics to the positions held by
executives at the Company.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The positions of the Company&#146;s CEO and its other executive officers are compared with those of
other companies, and the market compensation levels for comparable positions are examined to
determine base salary, target incentives, cash compensation, and total remuneration. In addition,
the Company analyzes other companies&#146; practices concerning long-term incentives, including stock
option grants.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">More specifically, the Committee considers the following in determining executive compensation
under the Company&#146;s compensation plans:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The Company&#146;s actual annual financial performance as compared to its annual budgeted performance goals,
measured by earnings per share in 2004;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>An executive&#146;s individual performance;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The Company&#146;s performance compared to other companies in its sector; and</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>The Company&#146;s ability to recruit and retain executive talent.</TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In designing the compensation program, the Committee has determined that up to approximately 75% of
the executives&#146; compensation, including the CEO&#146;s, is targeted to be performance-based incentive
compensation, delivered in both equity and cash that is directly related to the overall


<P align="center" style="font-size: 10pt">20
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">performance of the Company. Should the Company&#146;s performance goals not be achieved, this
performance-based incentive compensation is at risk.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">A more detailed description of each component of an executive&#146;s compensation is provided in the
following sections of this Compensation Committee Report. The Summary Compensation Table included
on page 17 of this proxy outlines in detail the annual compensation and long-term incentive
compensation of the CEO and each of the four other most highly compensated executive officers of
the Company.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B>Compensation Components and Process<BR></B>
The three major components of the CEO&#146;s and the executive officers&#146; compensation include: (i)&nbsp;base
salary; (ii)&nbsp;annual variable incentive awards under the annual Management Incentive Plan (the
&#147;MIP&#148;); and (iii)&nbsp;long-term, equity-based incentive awards under the 1996 Stock Incentive Plan (the
&#147;SIP&#148;). The Company also maintains a Nonqualified Deferred Compensation Plan that allows certain
employees, including the CEO and the executive officers, to defer receipt of their salaries and/or
their annual incentive bonuses. The Company does not provide the CEO and the executive officers any
type of supplemental retirement benefits or other perquisites such as company provided automobiles
or memberships in country clubs.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B><I>Base Salary<BR></I></B>
The Committee annually reviews and determines the base salaries for the CEO and the senior
executive officers reporting to the CEO. The Committee reviews the following qualitative factors
when determining base salaries: the executive&#146;s individual performance, level of responsibility,
tenure, prior experience, and a comparison to base salaries paid for comparable positions both
within and outside of the Company. Base salaries for the covered officers were increased by a
median of 3.75&nbsp;percent in 2004, with the executives receiving an average raise of 4.23&nbsp;percent. The
CEO&#146;s base salary was not increased in 2004.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B><I>Annual Incentive Awards<BR></I></B>
To reinforce the attainment of Company goals, the Committee believes that a substantial portion of
the annual compensation of each executive officer should be in the form of variable incentive pay.
Annual incentives are tied to the Company&#146;s performance as well as the performance of each
executive and his or her business unit. For 2004, the Committee established a set of corporate
goals and objectives. A target incentive, expressed as a percentage of base salary, is set for
each executive officer. The actual incentive payment for each executive officer is determined based
on his or her contribution to the achievement of the corporate goals and objectives.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Annual incentive award payments are made from a pool that is funded based on the Company&#146;s
performance against pre-established goals and objectives. The performance targets are established
by the Committee at the beginning of the year. The Committee retains discretion to make
adjustments when necessary to meet the Company&#146;s compensation objectives.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The Company did not pay incentive awards under the MIP to the CEO and its executive officers for
2004, as it failed to meet the pre-established financial goal set earlier in the year.

<P align="center" style="font-size: 10pt">21
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B><I>Long-Term, Equity-Based Incentive Awards<BR></I></B>
The 1996 Stock Incentive Plan (&#147;SIP&#148;) provides the Company with various types of equity-based
awards that it may grant to employees, non-employee directors, and certain independent contractors
of the Company. More specifically, the SIP enables the Company to grant stock options, stock
appreciation rights, restricted stock, and other equity awards, based on the Company&#146;s Common
Stock. The long-term incentives assist the Company in focusing executive efforts on attaining
performance goals over a number of years, a focus that is integral to the Company&#146;s continued
success. The SIP has a 10-year term; thus, the Company intends to submit a new equity plan to its
stockholders at the annual meeting in 2006.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The SIP is divided into five separate equity programs:


<P>
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>Discretionary Option Grant Program: Under
this program, eligible individuals may be granted
options to purchase shares of the Company&#146;s
Common Stock.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>Salary Investment Option Grant Program:
Under this program, eligible employees may elect
to have a portion of their base salary invested
each year in special non-statutory option grants.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>Stock Issuance Program: Under this program,
eligible individuals may be issued shares of the
Company&#146;s Common Stock either through the
immediate purchase of such shares or as a bonus
for services rendered to the Company.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>Automatic Option Grant Program; Under this
program, eligible non-employee members of the
Board of Directors receive non-statutory option
grants at periodic intervals to purchase shares
of the Company&#146;s Common Stock.</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">&#149;&nbsp;&nbsp;</TD>
    <TD>Director Fee Option Grant Program: Under
this program, non-employee members of the Board
of Directors may elect to have all or any portion
of their annual retainer fee otherwise payable in
cash applied to a special non-statutory option
grant.</TD>
</TR>

</TABLE>


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B><I>2004 and 2005 Equity Grants<BR></I></B>
With the help of an independent executive compensation consultant, the Committee determines the
value of the equity award to be granted to each executive officer. The incentive awards under the
SIP are made in the form of stock options or restricted stock.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B><I>Discretionary Option Grant Program<BR></I></B>
In 2004, executive officers received a total of 2,484,000 options to purchase the Company&#146;s Common
Stock at an exercise price of $5.56 per share. Of this amount, 900,000 options with 2-year vesting
and a 10-year term were granted to the CEO and the remaining 1,584,000 options with 4-year vesting
and a 10-year term were granted to the other executive officers. In 2005, executive
officers<SUP style="font-size: 85%; vertical-align: text-top">1</SUP> were awarded a total of 2,400,500 options with 4-year vesting and a 7-year
term to purchase the Company&#146;s Common Stock at an exercise price of $3.32 per share. Of this
amount, 350,500 options were granted to CEO and the remaining 2,050,000 options were granted to the
other executive officers. All options are granted with an exercise price equal to the



<P>
<HR size="1" width="18%" align="left" noshade color="#000000">

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top">
    <TD width="1%" nowrap align="left"><SUP style="font-size: 85%; vertical-align: text-top">1</SUP></TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="96%">Executive officer Ronald A. Walter received a
stock option grant of 144,000 shares in 2004. Mr.&nbsp;Walter retired on December
31, 2004 and is not included among the 2005 stock option grant recipients.</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt">22
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">fair market value of the Company&#146;s Common Stock on the date of grant, and option repricing is
expressly prohibited by the terms of the SIP.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B><I>Salary Investment Option Grant Program</I></B><BR>
Under the Salary Investment Option Grant Program, the CEO, executive officers, and other highly
compensated employees may elect to have between $10,000 and $50,000 of their base salaries invested
each year in special option grants. Under this program, 66-2/3&nbsp;percent of the fair market value of
the shares of Common Stock underlying the grant on the date of the grant is paid by the
participating executive through base salary reduction. Upon exercise of the options, the remaining
33-1/3&nbsp;percent of the fair market value of the shares is paid in cash by the executive. The number
of shares of Common Stock subject to the option is determined by dividing the dollar amount of the
approved salary reduction by a number equal to 66-2/3&nbsp;percent of the fair market value per share of
Common Stock on the grant date. The options vest monthly over a period of one year from the date
of grant and have a maximum term of ten years. In 2004, six executives participated in the
program. The Committee froze the Salary Investment Option Grant Program in 2005 until the impact of
IRS Code Section&nbsp;409A can be fully assessed.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B><I>Stock Issuance Program</I></B><BR>
As discussed, the Committee did not award annual incentive bonuses to the executive officers for
2004. The Committee recognized that there were significant achievements during the course of the
year that will enhance the value of the Company going forward. Specifically, actions related to
reductions in operating and overhead costs, as well as improvements in liquidity, will serve to
strengthen the Company over the long term. To provide executives with the ability to participate
in the fruits of these actions, the Committee decided to grant performance-based restricted stock
to the executives. Executives will vest in these awards only when the stock price reaches a
specified target and remains at that level over a specified period of time. By tying the vesting
of the performance-based restricted stock to target stock prices, the executives will only be
rewarded if stockholders benefit through increased share price. There is no ability to earn shares
under this grant of restricted stock without future performance.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The total number of performance-based restricted shares granted was 1,247,427 including the CEO;
840,800 to executive officers excluding the CEO award described below. The closing price was $3.32
per share of Common Stock on the date of the grant. The restricted stock has the following
performance-based vesting: 50% of the performance-based restricted stock shall vest when the
Company&#146;s stock price is equal to or greater than $5.00 per share for four consecutive trading
days. The remaining 50% of the restricted stock shall vest when the Company&#146;s stock price is equal
to or greater than $10.00 per share for four consecutive trading days. The restricted stock does
not include a time-based vesting feature. The grant shall terminate on December&nbsp;31, 2009.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B><I>Deferred Compensation Plan</I></B><BR>
In 2004 the Company maintained a Nonqualified Deferred Compensation Plan that allowed certain
employees, including the CEO and the executive officers, to defer a portion of their salaries
and/or annual incentive payments into various investment options. Participants were allowed to
defer up to 100&nbsp;percent of salary and 100&nbsp;percent of annual incentive awards until the date(s) they
specified. The Committee froze the Nonqualified Deferred Compensation Plan during 2005 until the
impact of IRS Code Section&nbsp;409A can be fully assessed.

<P align="center" style="font-size: 10pt">23
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<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">This Plan is not funded by the Company, and participants have an unsecured contractual commitment
by the Company to pay the amounts due under its provisions. When such payments are due, the
deferred compensation will be distributed from the Company&#146;s general assets.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B>Compensation of the Chief Executive Officer</B><BR>
Mr.&nbsp;Cartwright&#146;s total compensation is presented in the summary compensation table and equity
compensation tables on pages 17 and 18 of this proxy. The following paragraphs provide background
and the Committee&#146;s rationale for compensation paid to Mr.&nbsp;Cartwright.


<P align="left" style="font-size: 10pt"><B><I>Base Salary</I></B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Under his original employment agreement, Mr.&nbsp;Cartwright&#146;s base salary for 2004 was $1,000,000. The
Board of Directors determined that this base salary was appropriate on the basis of Mr.
Cartwright&#146;s extensive industry experience, his level of responsibility, and on the salary levels
paid to chief executive officers among companies in the utility industry and other industries. In
setting the compensation payable to Mr.&nbsp;Cartwright, it has been the philosophy of the Committee to
tie a significant percentage of Mr.&nbsp;Cartwright&#146;s total compensation to the Company&#146;s performance
and long-term stock price appreciation.


<P align="left" style="font-size: 10pt"><B><I>Employment Agreement</I></B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The Company&#146;s Chairman, President, and CEO, Peter Cartwright, had an employment agreement with the
Company with a five-year term that ended on December&nbsp;31, 2004. On March&nbsp;9, 2005, the Company
entered into a new two-year agreement with Mr.&nbsp;Cartwright. Mr.&nbsp;Cartwright&#146;s new employment
agreement is discussed in greater detail under the section headed &#147;Employment Agreements,
Termination of Employment and Change in Control Arrangements&#148; on page 19 of this proxy.


<P align="left" style="font-size: 10pt"><B><I>Annual Incentive Award</I></B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">The Committee did not award Mr.&nbsp;Cartwright an annual incentive under the MIP for 2004.


<P align="left" style="font-size: 10pt"><B><I>2004-Stock Option Grant</I></B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In 2004, the Committee approved a stock option grant to Mr.&nbsp;Cartwright that was made in January
2004 under the Discretionary Option Grant Program of the SIP to purchase 900,000 shares of Common
Stock, as more fully described in the table captioned &#147;Option Grants in the Last Fiscal Year&#148; on
page 18 of this proxy statement. The stock options have an exercise price of $5.56 per share, the
market price of the Common Stock on the date of the grant, a ten-year term, and vest in equal
annual installments over a two-year period.


<P align="left" style="font-size: 10pt"><B><I>2004-Salary Investment Option Grant Program</I></B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In January of 2004 Mr.&nbsp;Cartwright participated in the Company&#146;s Salary Investment Option Grant
Program. Mr.&nbsp;Cartwright elected to have $50,000 of his base salary deferred under the terms of the
program described above and, as a result, holds an option to purchase 15,090 shares at an exercise
price of $1.655 per share.


<P align="center" style="font-size: 10pt">24
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<P align="left" style="font-size: 10pt"><B><I>2005-Stock Option Grants</I></B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">On March&nbsp;8, 2005, the Committee awarded Mr.&nbsp;Cartwright an option to purchase 350,500 shares of the
Company&#146;s Common Stock under the Discretionary Stock Option Grant Program of the Company&#146;s SIP.
The option has a seven-year term and an exercise price of $3.32 per share. The option vests over a
four-year period, with 25&nbsp;percent becoming exercisable on each anniversary of the grant date.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">Under Mr.&nbsp;Cartwright&#146;s new employment agreement, on March&nbsp;9, 2005, Mr.&nbsp;Cartwright received an
option to purchase 1,250,000 shares of the Company&#146;s Common Stock under the Discretionary Stock
Option Grant Program of the Company&#146;s SIP. The option has a six-year term and an exercise price of
$3.80 per share. The option will vest upon the earlier of (i)&nbsp;the Company&#146;s common stock closing
price equaling at least $10.00 per share for four consecutive trading days and (ii)&nbsp;December&nbsp;31,
2009.


<P align="left" style="font-size: 10pt"><B><I>2005-Restricted Stock Grant</I></B>



<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">On March&nbsp;8, 2005, Mr.&nbsp;Cartwright was awarded a grant of 406,627 shares of restricted stock under
the Stock Issuance Program of the SIP with performance-based vesting. The fair market value of
such grant is $3.32 per share of Common Stock and the restricted stock grant was issued in
consideration for past services. The restricted stock grant has the following performance-based
vesting: 50% of the restricted stock shall vest at such time as the Company&#146;s stock price is equal
to or greater than $5.00 per share for four consecutive trading days and the remaining 50% of the
restricted stock shall vest at such time as the Company&#146;s stock price is equal to or greater than
$10.00 per share for four consecutive trading days. The grant shall terminate on December&nbsp;31,
2009.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B>Compliance with Section 162(m) of the Internal Revenue Code</B><BR>
Under Section 162(m) of the Internal Revenue Code, the Company is not permitted to deduct for
federal income tax purposes any compensation in excess of $1,000,000 paid to its CEO or to any of
its four other most highly compensated executive officers, unless the compensation qualifies as
performance-based compensation within the meaning of Section&nbsp;162(m). In order to maintain
flexibility to adjust annual incentive payments to reflect business and individual performance, the
Company to date has not qualified the MIP to meet the requirements for exemption from the deduction
limit, but is considering obtaining stockholder approval of its Management Incentive Plan at the
2006 Annual Meeting of Stockholders.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">In 2004, none of the compensation paid to the executive officers named in the Summary Compensation
Table was nondeductible by reason of Section&nbsp;162(m). The restricted stock grants made to the
Company&#146;s executive officers in 2005 as described above, will be counted against the Section 162(m)
deduction limits for a given year, if and when, the shares of restricted stock vest.


<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt"><B>Stock Ownership Guidelines</B><BR>
In 2005 the Company is introducing Stock Ownership and Holding Period Guidelines for its executive
officers and members of the Board of Directors. The stock ownership guidelines will be designed to
further align the interests of executive officers and directors with those of our


<P align="center" style="font-size: 10pt">25
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<P align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt">stockholders. Under the guidelines, executive officers and directors are expected to acquire and
hold a certain amount of Common Stock. Stock ownership under this program is defined as direct
ownership of Company Common Stock, including sole ownership and other accounts over which the
individual has direct or indirect ownership or control. This includes shares held in a 401(k)
account, shares purchased by an executive officer pursuant to the Company&#146;s Employee Stock Purchase
Plan and vested shares of restricted stock. This definition does not include unexercised stock
options and unvested shares of restricted stock held by the executive. Executive officers and
directors are expected to meet their ownership guidelines within five years of becoming subject to
the guidelines.


<P align="left" style="font-size: 10pt">Submitted on behalf of the Compensation Committee of the Board of Directors.


<P align="left" style="font-size: 10pt; margin-left: 50%">Compensation Committee:


<P align="left" style="font-size: 10pt; margin-left: 50%">Jeffrey E. Garten (Chair)<BR>
Gerald Greenwald<BR>
Susan C. Schwab


<P align="center" style="font-size: 10pt">26
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<DIV style="font-family: 'Times New Roman',Times,serif">



<!-- link1 "AUDIT COMMITTEE REPORT" -->
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<P align="center" style="font-size: 10pt"><B>AUDIT COMMITTEE REPORT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following Report of the Audit Committee shall not be deemed incorporated by reference by
any general statement incorporating this Proxy Statement into any filing under the Securities Act
or under the Securities Exchange Act except to the extent the Company specifically incorporates
this information by reference and shall not otherwise be deemed filed under such acts.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee of the Board of Directors is primarily responsible for assisting the Board
of Directors in carrying out its duties as they relate to the Company&#146;s accounting policies and its
internal control and financial reporting practices, including monitoring the progress and results
of management&#146;s internal control assessment pursuant to Section&nbsp;404 of the Sarbanes-Oxley Act of
2002. The Audit Committee manages the Company&#146;s relationship with its independent auditors, who
report directly to the Audit Committee. The Audit Committee has the authority to obtain advice from
outside legal, accounting or other advisors as the Audit Committee deems necessary to carry out its
duties and receive appropriate funding, as determined by the Audit Committee, from the Company for
such advice and assistance.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee was established in 1996 following the Company&#146;s initial public offering.
The Audit Committee serves under a charter adopted by the Board of Directors that specifies the
responsibilities of the Audit Committee. The Audit Committee is comprised entirely of outside
directors, each of whom is independent as defined by the rules of the NYSE. All members of the
Audit Committee are financially literate within the meaning of the NYSE rules and all members of
the Audit Committee are &#147;audit committee financial experts&#148; as that term is defined by the rules of
the Securities and Exchange Commission adopted pursuant to the Sarbanes-Oxley Act of 2002.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As provided in the Audit Committee Charter, the Audit Committee of the Board of Directors
assists the Board of Directors in fulfilling its responsibility for oversight of the quality and
integrity of the accounting, auditing, and financial reporting practices of the Company. During the
fiscal year ended December&nbsp;31, 2004, the Audit Committee met 10 times. The Audit Committee
chairman, as representative of the Audit Committee, periodically discussed the interim financial
information contained in each quarterly earnings announcement with the Company&#146;s Chief Financial
Officer, its corporate controller and its independent auditors prior to public release.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In discharging its oversight responsibility as to the audit process, the Audit Committee
obtained from the Company&#146;s independent auditors a formal written statement describing all
relationships between the auditors and the Company that might bear on the auditors&#146; independence
consistent with Independence Standards Board Standard No.&nbsp;1, &#147;Independence Discussions with Audit
Committees,&#148; discussed with the auditors any relationship that may impact their objectivity and
independence and satisfied itself as to the auditors&#146; independence. The Audit Committee also
discussed with management, the internal auditors and the independent auditors the quality and
adequacy of the Company&#146;s internal controls, including deficiencies identified in the internal
control environment and the reporting of such deficiencies in the Company&#146;s financial statements
for the fiscal year ended December&nbsp;31, 2004. The Audit Committee reviewed with both the independent
and the internal auditors their audit plans, audit scope and identification of audit risks and the
internal audit function&#146;s organization, responsibilities, budget and staffing.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee has established a procedure for receiving and addressing anonymous
complaints regarding financial or accounting irregularities. The Audit Committee has set up a
toll-free ethics and compliance hotline managed by an independent third party. Such hotline is
available 24 hours a day, 7&nbsp;days a week to enable employees to communicate concerns to management
without fear of retaliation. The calls received by the hotline are reviewed by the appropriate
personnel in the Company, including the Office of the General Counsel. The Audit Committee has
delegated to the Office of the General Counsel of the Company the responsibility and authority to
conduct prompt and thorough investigations of any allegations or suspicions of violations of laws,
rules and regulations, the Code of Conduct or any other policy. The Office of the General Counsel
shall (i)&nbsp;evaluate the gravity and credibility of any alleged violation, (ii)&nbsp;initiate informal
inquiries or formal investigations as appropriate, (iii)&nbsp;report the results of such inquiry or
investigation to senior management or the Audit Committee, as appropriate, and (iv)&nbsp;recommend
appropriate action against violators, including but not limited to termination of employment.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee discussed and reviewed with the independent auditors all communications
required by generally accepted auditing standards, including those described in Statement of
Auditing Standards No.&nbsp;61, as amended, &#147;Communication with Audit Committees&#148; and, both with and
without management present, discussed and reviewed the results of the independent auditors&#146;
examination of the financial statements. The Audit Committee also discussed the results of the
internal audit examinations.


<P align="center" style="font-size: 10pt">27
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<DIV style="font-family: 'Times New Roman',Times,serif">

<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Audit Committee has reviewed and discussed the audited financial statements of the Company
as of and for the fiscal year ended December&nbsp;31, 2004, with management and the independent
auditors. Management has the responsibility for the preparation of the Company&#146;s financial
statements and the independent auditors have the responsibility for the examination of those
statements.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based on the above-mentioned review and discussions with management and the independent
auditors, the Audit Committee recommended to the Board of Directors that the Company&#146;s audited
financial statements be included in its Annual Report on Form 10-K for the fiscal year ended
December&nbsp;31, 2004, which has been filed with the Securities and Exchange Commission.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Submitted on behalf of the Audit Committee of the Board of Directors.


<P align="left" style="font-size: 10pt; margin-left: 50%">Audit Committee:


<P align="left" style="font-size: 10pt; margin-left: 50%">John O. Wilson (Chair)<BR>
Kenneth T. Derr<BR>
Jeffrey E. Garten<BR>
Susan Wang


<P align="center" style="font-size: 10pt">28
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<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS" -->
<DIV align="left"><A NAME="011"></A></DIV>

<P align="center" style="font-size: 10pt"><B>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;1999, the Company made an interest-free, five-year loan to Thomas R. Mason, Executive
Vice President of the Company, in a principal amount of $500,000, secured by a deed of trust on Mr.
Mason&#146;s residence. The loan was made to assist Mr.&nbsp;Mason on purchasing a new residence in
connection with his relocation to a new principal place of work upon his beginning his employment
with the Company. This loan has been repaid in full by Mr.&nbsp;Mason.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since January&nbsp;2000, the Company has entered into an annual Consulting Agreement with George J.
Stathakis, who is a member of the Board of Directors, to provide advice and guidance on various
management issues to the Chief Executive Officer and members of the Chief Executive Officer&#146;s
senior staff. Pursuant to the terms of the Consulting Agreement, in 2004 the Company paid Mr.
Stathakis a consulting fee of $5,000 per month and issued Mr.&nbsp;Stathakis a stock option grant in
January&nbsp;2004 under the Discretionary Option Grant Program for 10,000 shares of Common Stock at an
exercise price of $4.97 per share. Such options were fully vested at the end of 2004. Mr.
Stathakis, who is a former employee of the Company, also receives an annual stock option grant from
the Company under the Discretionary Option Grant Program in an amount equal to and on similar terms
as the grants issued to the other non-employee directors of the Company. Accordingly, in May&nbsp;2004,
Mr.&nbsp;Stathakis received a stock option grant to purchase 3,500 shares of Common Stock at an exercise
price of $3.67 per share and such options were fully vested at the end of 2004.

<!-- link1 "COMPLIANCE WITH SECTION 16(a) OF<BR> THE SECURITIES EXCHANGE ACT OF 1934" -->
<DIV align="left"><A NAME="012"></A></DIV>

<P align="center" style="font-size: 10pt"><B>COMPLIANCE WITH SECTION 16(a) OF<BR>
THE SECURITIES EXCHANGE ACT OF 1934</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;16(a) of the Securities Exchange Act requires the Company&#146;s directors and executive
officers, and persons who own more than 10% of a registered class of the Company&#146;s equity
securities, to file with the Securities and Exchange Commission initial reports of beneficial
ownership and reports of changes in beneficial ownership of Common Stock and other equity
securities of the Company and to provide the Company with a copy.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based solely upon review of the copies of such reports furnished to the Company and written
representations that no other reports were required, the Company is not aware of any instances of
noncompliance with the Section 16(a) filing requirements by any executive officer, director or
greater than 10% beneficial owners during the year ended December&nbsp;31, 2004, except as follows: a
late Form&nbsp;4 was filed by George J. Stathakis on January&nbsp;30, 2004 to report a stock option grant on
January&nbsp;5, 2004 for 10,000 shares of Common Stock, described above.

<!-- link1 "STOCK PERFORMANCE GRAPH" -->
<DIV align="left"><A NAME="013"></A></DIV>

<P align="center" style="font-size: 10pt"><B>STOCK PERFORMANCE GRAPH</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following performance graph shall not be deemed incorporated by reference by any general
statement incorporating this Proxy Statement into any filing under the Securities Act or under the
Securities Exchange Act except to the extent the Company specifically incorporates this information
by reference, and shall not otherwise be deemed filed under such acts.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On September&nbsp;20, 1996, the Company issued Common Stock in its initial public offering. The
Common Stock trades on the New York Stock Exchange under the symbol &#147;CPN.&#148; The following graph
compares for the period of December&nbsp;31, 1999 through December&nbsp;31, 2004, the total return on the
Common Stock with the cumulative weighted average total return assuming reinvestment of dividends
of (i)&nbsp;the Standard &#038; Poor&#146;s 500 Stock Index (&#147;S&#038;P 500&#148;) and (ii)&nbsp;an index of comparable peer
issuers (the &#147;Peer Group&#148;) consisting of AES Corp., Dynegy, Inc.,. and Reliant Resources Inc. In
accordance with the rules of the Commission the returns are indexed to a value of $100 at December
31, 1999 and the returns of each company in each Peer Group has been weighted according to its
market capitalization as of the beginning of the period.


<P align="center" style="font-size: 10pt"><B>COMPARISON OF CUMULATIVE TOTAL EARNINGS<BR>
1999-2004 MEASUREMENT PERIOD</B>



<P align="center" style="font-size: 10pt"><IMG src="f04973prf0497300.gif" alt="(PERFORMANCE GRAPH)">


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>1999</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2000</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2001</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2002</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2003</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="2" style="border-bottom: 1px solid #000000"><B>2004</B></TD>
    <TD>&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">CALPINE CORP</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">281.64</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">104.97</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">20.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">30.07</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">24.63</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">S&#038;P500</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">90.90</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">80.10</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">62.39</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">80.29</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">89.02</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">PEER GROUP</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">100.00</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">166.26</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">60.38</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">8.11</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">23.86</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">$</TD>
    <TD align="right">35.31</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt">29
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- link1 "ANNUAL REPORT" -->
<DIV align="left"><A NAME="014"></A></DIV>

<P align="center" style="font-size: 10pt"><B>ANNUAL REPORT</B>



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company&#146;s 2004 Annual Report to Stockholders is being mailed to stockholders concurrently
with this Proxy Statement and does not form a part of the proxy solicitation material.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under Securities and Exchange Commission rules brokers and banks that hold stock for the
account of their customers are permitted to deliver a single annual report and proxy statement (as
well as other shareholder communications from the issuer) to two or more stockholders who share the
same address. If you and other residents at your mailing address own Common Stock through a broker
or bank, you may have received only a single copy of this Proxy Statement and the 2004 Annual
Report to Stockholders. Upon written or oral request to the Senior Vice President &#151; Investor
Relations of the Company at the corporate headquarters at Calpine Corporation, 50 West San Fernando
Street, San Jose, California 95113, (408)&nbsp;995-5115, the Company will delivery promptly a separate
copy of the Proxy Statement and the 2004 Annual Report to Stockholders to any stockholder at a
shared address to which a single copy of this Proxy Statement and the 2004 Annual Report to
Stockholders was delivered.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By written or oral request to the same address or phone number stated above, a stockholder may
notify the Company that the stockholder wishes to receive a separate Annual Report or Proxy
Statement in the future. Your notice should include the name of your brokerage firm or bank and
your account number. If you hold your shares of Common Stock through a broker or bank and are
receiving multiple copies of the Proxy Statement and Annual Report at your address and would like
to receive only one copy for your household, please contact your broker or bank.


<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;It is important that your shares be represented at the meeting, regardless of the number of
shares which you hold. YOU ARE, THEREFORE, URGED TO EXECUTE PROMPTLY AND RETURN THE ACCOMPANYING
PROXY IN THE ENVELOPE WHICH HAS BEEN ENCLOSED FOR YOUR CONVENIENCE. Stockholders who are present at
the meeting may revoke their proxies and vote in person or, if they prefer, may refrain from voting
in person and allow their proxies to be voted.


<P align="left" style="font-size: 10pt; margin-left: 50%">By Order of the Board of Directors


<P align="left" style="font-size: 10pt; margin-left: 50%">Peter Cartwright<BR>
<I>Chairman of the Board, President and<BR>
Chief Executive Officer</I>


<P align="left" style="font-size: 10pt">April [&nbsp;&nbsp;&nbsp;], 2005<BR>
San Jose, California



<P align="center" style="font-size: 10pt">30
</DIV>


<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<P><DIV style="position: relative; float: left; margin-right: 1%; width: 38%">

<P align="left" style="font-size: 10pt"><IMG src="f04973prcalpinelogo.gif" alt="(CALPINE LOGO)"><BR>
<B>CALPINE CORPORATION<BR>
50 WEST SAN FERNANDO STREET<BR>
SAN JOSE, CA 95113</B>

</DIV>

<DIV style="position: relative; float: right; margin-left: 1%; width: 58%">


<P align="left" style="font-size: 9pt"><B>VOTE BY INTERNET &#151; www.proxyvote.com<BR></B>
Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59&nbsp;P.M. Eastern Time the day before the
cut-off date or meeting date. Have your proxy card in hand when you access the
web site and follow the instructions to obtain your records and to create an electronic voting
instruction form.


<P align="left" style="font-size: 9pt"><B>VOTE BY PHONE &#151; 1-800-690-6903<BR></B>
Use any touch-tone telephone to transmit your voting instructions up until
11:59&nbsp;P.M. Eastern Time the day before the cut-off date or meeting date. Have
your proxy card in hand when you call and then follow the
instructions.


<P align="left" style="font-size: 9pt"><B>VOTE BY MAIL<BR></B>
Mark, sign, and date your proxy card and return it in the postage-paid envelope
we have provided or return it to Calpine Corporation, c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717.


</DIV>
<BR clear="all"><BR>

<P align="left" style="font-size: 9pt">TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:


<DIV align="right" style="font-size: 8pt"><B>CALPN1</B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>KEEP THIS PORTION FOR YOUR RECORDS</B>
<HR size="1" noshade width="100%" align="right">
</DIV>

<DIV align="right" style="font-size: 8pt"><B>DETACH AND RETURN THIS PORTION ONLY</B>
</DIV>

<P align="left" style="font-size: 9pt"><B>BY THE ORDER OF THE BOARD
OF DIRECTORS OF CALPINE CORPORATION (the &#147;Company&#148;)</B>



<P align="left" style="font-size: 9pt"><B>Vote On Directors</B>


<DIV style="position: relative; float: left; margin-right: 1%; width: 58%">

<DIV align="center">
<TABLE style="font-size: 9pt" cellspacing="0" border="0" cellpadding="0" width="100%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>

<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">1.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">To elect three Class&nbsp;II Directors
to the Board of Directors, each
for a term of three years:<BR>
01) Peter Cartwright
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>For<br>
All</B><br>
<FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Withhold<br>
All</B><br>
<FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>For All<br>
Except<BR></B>
<FONT face="Wingdings">&#111;</FONT></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">02) Susan C. Schwab</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">03) Susan Wang</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>


</DIV>

<DIV style="position: relative; float: right; margin-left: 1%; width: 38%">
<P align="left" style="font-size: 9pt">&nbsp;<BR>
To withhold authority to vote, mark &#147;For All Except&#148; and write the number of
one or more nominees on the line below.


<P align="left" style="font-size: 10pt"><HR size="1" noshade width="100%" align="center">


</DIV>
<BR clear="all"><BR>

<P align="left" style="font-size: 9pt"><B>Vote On Proposals</B>

<DIV align="center">
<TABLE style="font-size: 9pt" cellspacing="0" border="0" cellpadding="0" width="100%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>

<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top"><B>For</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top"><B>Against</B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top"><B>Abstain</B></TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">2.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">To act upon a Company proposal regarding the
amendment of the Company&#146;s Amended
and Restated Certificate of Incorporation to declassify the election of the Board;
</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">3.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">To ratify the appointment of
PricewaterhouseCoopers LLP as independent accountants for the Company
for the fiscal year ending December&nbsp;31, 2005; and
</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">To transact such other business as may properly come before the meeting and any adjournments or postponements thereof.
</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="CENTER" valign="top"><FONT face="Wingdings">&#111;</FONT>
</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>



<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 9pt"><B>THIS PROXY CARD IS VALID ONLY
WHEN SIGNED AND DATED. THIS PROXY WILL BE VOTED
AS DIRECTED. WHERE NO CHOICE IS SPECIFIED, THIS PROXY WILL CONFER
DISCRETIONARY AUTHORITY AND WILL BE VOTED IN FAVOR OF PROPOSALS ONE, TWO,
THREE AND FOUR.</B>


<P><DIV style="position: relative; float: left; margin-right: 1%; width: 48%">
<P align="left" style="font-size: 9pt">For comments, please check this box and write them on the back where indicated&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Wingdings">&#111;</FONT>

<DIV style="position: relative; float: left; margin-right: 1%; width: 100%">
<DIV align="center">

<TABLE style="font-size: 9pt" cellspacing="0" border="0" cellpadding="0" width="100%">

<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="55%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>

<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Please indicate whether you would
like to keep your vote confidential under the current
policy
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>Yes</B><br>
<FONT face="Wingdings">&#111;</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>No</B><br>
<FONT face="Wingdings">&#111;</FONT>
</TD>
</TR>

<TR>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="left" style="font-size: 9pt">Please sign exactly as your name(s) appear on proxy.
If held in joint tenancy,
all persons must sign. Trustees, Administrators, etc., should include title and
authority.


<DIV align="center">
<TABLE style="font-size: 9pt" cellspacing="0" border="0" cellpadding="0" width="100%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="75%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>

<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top" style="border-top: 1px solid black; border-left: 1px solid black; border-bottom: 1px solid black; font-size: 20pt">&nbsp;</TD>
    <TD style="font-size: 20pt; border-top: 1px solid black; border-bottom: 1px solid black">&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 20pt; border-top: 1px solid black; border-right: 1px solid black; border-bottom: 1px solid black">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top" style="font-size: 10pt">Signature &#091;PLEASE SIGN WITHIN BOX&#093;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 10pt">Date</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>
</DIV>

</DIV>
<BR clear="all">

<DIV style="float: left; margin-left: 0%; width: 48%">

<P>&nbsp;<BR>
&nbsp;<BR>
&nbsp;<BR>
&nbsp;<BR>
&nbsp;

<DIV align="center">
<TABLE style="font-size: 9pt" cellspacing="0" border="0" cellpadding="0" width="100%">

<!-- Begin Table Head --><TR valign="bottom">
    <TD width="75%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="20%">&nbsp;</TD>
</TR>

<!-- End Table Head -->

<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top" style="font-size: 20pt; border-top: 1px solid black; border-left: 1px solid black; border-bottom: 1px solid black">&nbsp;</TD>
    <TD style="font-size: 20pt; border-top: 1px solid black; border-bottom: 1px solid black">&nbsp;</TD>
    <TD align="left" valign="top" style="font-size: 20pt; border-top: 1px solid black; border-right: 1px solid black; border-bottom: 1px solid black">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top" style="font-size: 10pt"><DIV style="margin-left:0px; text-indent:-0px">Signature (Joint Owners)
</DIV></TD>
    <TD style="font-size: 10pt">&nbsp;</TD>
    <TD style="font-size: 10pt" align="left" valign="top">Date</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>


</DIV>
<BR clear="all"><BR>

<P align="center" style="font-size: 10pt">&nbsp;
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#toc">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<P align="center" style="font-size: 10pt"><B>(MAP)</B>

</DIV>
<P align="left" style="font-size: 10pt"><B>From San Francisco Bay Area/San Jose<BR></B>

<P align="center" style="font-size: 10pt"><B>ADMISSION TICKET<BR>
2005 Annual Meeting of Shareholders<BR>
Wednesday, May&nbsp;25, 2005 at 10:00&nbsp;a.m.<BR>
Metcalf Energy Center, One Blanchard Road, San Jose, California 95013</B>


<P align="left" style="font-size: 10pt">You must present this admission ticket in order to gain
admittance to the
meeting. This ticket admits only the stockholder(s) listed on the reverse side
and is not transferable. If your shares are held in the name of the broker,
trustee, bank or other nominee, you must bring a proxy or letter from the
broker, trustee, bank or nominee confirming your beneficial ownership of the
shares.



<BR clear="all"><BR>

<P align="center" style="font-size: 10pt"><HR size="1" noshade width="100%" align="CENTER">



<P align="left" style="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned appoints Peter Cartwright and Ann B. Curtis, and each of them,
proxies with full power of substitution, to vote all the shares of common stock
of Calpine Corporation that the undersigned may be entitled to vote at the 2005
Annual Meeting of Stockholders of Calpine Corporation, a Delaware corporation
(the &#147;Company&#148;), to be held at Calpine&#146;s Metcalf Energy Center, located at One Blanchard Road, San Jose, California 95013, at
10:00&nbsp;a.m., Pacific
Daylight Time, on
Wednesday, May&nbsp;25, 2005, for the purpose of considering and voting upon the matters stated
on the reverse side.

<P align="left" style="font-size: 10pt">Comments:


<P align="left" style="font-size: 10pt"><HR size="1" noshade width="100%" align="CENTER">


<P align="left" style="font-size: 10pt"><HR size="1" noshade width="100%" align="CENTER">


<P align="left" style="font-size: 10pt"><HR size="1" noshade width="100%" align="CENTER">


<DIV align="center" style="font-size: 10pt">(If you noted any comments above, please check the corresponding box on the reverse side.)</DIV>




<P align="center" style="font-size: 10pt">&nbsp;


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