<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 6, 2000
REGISTRATION NO. 333-40652
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
POST-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CALPINE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 4911 77-0212977
(STATES OR OTHER JURISDICTIONS OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBERS) IDENTIFICATION NUMBERS)
</TABLE>
50 WEST SAN FERNANDO STREET
SAN JOSE, CALIFORNIA 95113
(408) 995-5115
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
PETER CARTWRIGHT
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
50 WEST SAN FERNANDO STREET
SAN JOSE, CALIFORNIA 95113
(408) 995-5115
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
BRUCE C. BENNETT
COVINGTON & BURLING
1330 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 841-1000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ] __________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED(1)(2)(3) UNIT(1)(2)(3) PRICE(1)(2)(3) REGISTRATION FEE
----------------------------------------------------------------------------------------------------------------------------------
Common Stock par value $.001 per share, of
Calpine Corporation......................
----------------------------------------------------------------------------------------------------------------------------------
Preferred Stock, par value $.001 per
share, of Calpine Corporation(4)........
----------------------------------------------------------------------------------------------------------------------------------
Debt Securities of Calpine
Corporation(4)..........................
----------------------------------------------------------------------------------------------------------------------------------
Common Stock, par value $.001 per share,
of Calpine Corporation(5)...............
----------------------------------------------------------------------------------------------------------------------------------
Total..................................... $2,180,000,000 100% $2,180,000,000 $575,520(6)
----------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes such indeterminate number of shares of common stock and preferred
stock and principal amount of debt securities of Calpine Corporation as may
be periodically issued at indeterminate prices or, if any debt securities
are issued with original issue discount, such greater principal amount as
shall be equal to the principal amount at maturity thereof.
(2) In United States dollars or the equivalent thereof in any other currency,
currency unit or units, or composite currency or currencies.
(3) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457. The aggregate public offering price of the common
stock, preferred stock and debt securities (or, in the case of debt
securities issued with original issue discount, the principal amount at
maturity thereof) of Calpine Corporation registered will not exceed
$2,180,000,000.
(4) To the extent convertible preferred stock and/or convertible debt securities
are issued hereunder, shares of common stock issuable upon conversion
thereof will be issued without the payment of additional consideration.
Pursuant to Rule 457(i) under the Securities Act, no registration fee is
attributable to the common stock which may be issued upon conversion of such
preferred stock or debt securities.
(5) Includes such indeterminate number of shares of common stock of Calpine
Corporation as may be periodically resold by unaffiliated third parties.
(6) Previously paid.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS
NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO
BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
SUBJECT TO COMPLETION, DATED DECEMBER 6, 2000
PROSPECTUS
[Calpine Logo]
CALPINE CORPORATION
Common Stock
Preferred Stock
Debt Securities
------------------
Calpine Corporation may periodically sell common stock, preferred stock and
debt securities to the public. We will provide specific terms of such securities
in supplements to this prospectus. You should read this prospectus and each
applicable supplement carefully before you invest.
Shares of common stock may also be offered and sold from time to time
pursuant to this prospectus by the holders of those securities who are not
affiliates of Calpine or by their transferees, pledgees, donees or successors
(all of which we refer to as selling holders).
INVESTING IN OUR SECURITIES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS" ON
PAGE 6.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
This prospectus may not be used to sell our securities unless it is
accompanied by a prospectus supplement.
Prospectus dated , 2000
<PAGE> 3
No person is authorized to give any information or to make any
representations other than those contained or incorporated by reference in this
prospectus or the accompanying prospectus supplement and, if given or made, such
information or representations must not be relied upon as having been
authorized. This prospectus and accompanying prospectus supplement do not
constitute an offer to sell or the solicitation of an offer to buy any
securities other than the securities described in this prospectus and the
accompanying prospectus supplement or an offer to sell or the solicitation of an
offer to buy such securities in any circumstance in which such offer or
solicitation is unlawful. Neither the delivery of this prospectus or the
accompanying prospectus supplement, nor any sale made under this prospectus or
accompanying prospectus supplement shall, under any circumstances, create any
implication that there has been no change in the affairs of Calpine or the
selling holders, as the case may be, since the date of the prospectus supplement
accompanying this prospectus or that the information contained or incorporated
by reference in this prospectus or accompanying prospectus supplement is correct
as of any time subsequent to the date of such information.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ABOUT THIS PROSPECTUS................. 1
THE COMPANY........................... 2
RISK FACTORS.......................... 6
WHERE YOU CAN FIND MORE INFORMATION... 6
FORWARD-LOOKING STATEMENTS............ 7
CONSOLIDATED RATIO OF EARNINGS TO
FIXED CHARGES....................... 8
USE OF PROCEEDS....................... 8
SELLING HOLDERS....................... 9
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PLAN OF DISTRIBUTION.................. 10
REGISTRATION RIGHTS................... 12
DESCRIPTION OF CAPITAL STOCK.......... 13
DESCRIPTION OF THE DEBT SECURITIES.... 17
CERTAIN UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES.................... 30
NOTICE TO CANADIAN RESIDENTS.......... 41
LEGAL MATTERS......................... 42
EXPERTS............................... 42
</TABLE>
i
<PAGE> 4
ABOUT THIS PROSPECTUS
This document is called a prospectus and is part of a registration
statement that we filed with the SEC using a "shelf" registration or continuous
offering process. Under this shelf process, we may from time to time sell any
combination of the common stock, the preferred stock and the debt securities
described in this prospectus in one or more offerings, and the selling holders
may from time to time sell common stock described in this prospectus in one or
more offerings, which will aggregate up to a total dollar amount of
$2,000,000,000 plus a $180,000,000 over-allotment option with regard to certain
securities.
This prospectus provides you with a general description of the common stock
that we or the selling holder may offer and of the preferred stock and the debt
securities that we may offer. Each time we sell such securities, we will provide
a prospectus supplement containing specific information about the terms of the
securities being offered. Each time a selling holder sells common stock pursuant
to this prospectus, the selling holder or its agent will be required to provide
you with this prospectus and a prospectus supplement containing specific
information about the selling holder and the terms of the common stock being
offered. Any such prospectus supplement may include a discussion of any risk
factors or other special considerations applicable to those securities. The
prospectus supplement may also add, update or change information in this
prospectus. If there is any inconsistency between the information in this
prospectus and any prospectus supplement, you should rely on the information in
that prospectus supplement. You should read both this prospectus and any
prospectus supplement together with the additional information described under
the heading "Where You Can Find More Information."
The registration statement containing this prospectus, including the
exhibits to the registration statement, provides additional information about us
and the securities offered under this prospectus. The registration statement,
including the exhibits, can be read at the SEC website or at the SEC offices
mentioned under the heading "Where You Can Find More Information."
You should rely only on the information incorporated by reference or
provided in this prospectus and the accompanying prospectus supplement. We have
not authorized anyone to provide you with different information. We are not
making or soliciting an offer of these securities in any jurisdiction in which
the offer or solicitation is not authorized or in which the person making the
offer or solicitation is not qualified to do so or to anyone to whom it is
unlawful to make the offer or solicitation. You should not assume that the
information in this prospectus or the accompanying prospectus supplement is
accurate as of any date other than the date on the front of the document.
The prospectus incorporates business and financial information about us
that is not included or delivered with the document. YOU MAY REQUEST AND OBTAIN
THIS INFORMATION FREE OF CHARGE BY WRITING OR TELEPHONING US AT THE FOLLOWING
ADDRESS: CALPINE CORPORATION, 50 WEST SAN FERNANDO STREET, SAN JOSE, CALIFORNIA
95113, ATTENTION: LISA M. BODENSTEINER, ASSISTANT SECRETARY, TELEPHONE: (408)
995-5115.
Unless we have indicated otherwise, references in this prospectus to
"Calpine," "we," "us" and "our" or similar terms are to Calpine Corporation and
its consolidated subsidiaries excluding Calpine Capital Trust III, Calpine
Capital Trust II and Calpine Capital Trust.
1
<PAGE> 5
THE COMPANY
Calpine is a leading independent power company engaged in the development,
acquisition, ownership and operation of power generation facilities and the sale
of electricity predominantly in the United States. We have experienced
significant growth in all aspects of our business over the last five years.
Currently, we own interests in 50 power plants having a net baseload capacity of
4,639 megawatts. We also have 23 gas-fired projects under construction having a
net baseload capacity of 11,065 megawatts and have announced plans to develop 23
gas-fired power plants with a net baseload capacity of 10,817 megawatts. Upon
completion of the projects under construction, as well as completion of the
pending acquisition of certain assets from Energy Management, Inc., we will have
interests in 73 power plants located in 22 states having a net baseload capacity
of 15,953 megawatts. Of this total generating capacity, 95% will be attributable
to gas-fired facilities and 5% will be attributable to geothermal facilities.
As a result of our expansion program, our revenues, EBITDA, earnings and
assets have grown significantly over the last five years, as shown in the table
below.
<TABLE>
<CAPTION>
COMPOUND ANNUAL
1995 1999 GROWTH RATE
-------- ---------- ---------------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C>
Total Revenue................................... $132.1 $ 847.7 59%
EBITDA.......................................... 74.2 351.5 48%
Net Income...................................... 7.4 95.1 89%
Total Assets.................................... 554.5 3,991.6 64%
</TABLE>
Since our inception in 1984, we have developed substantial expertise in all
aspects of the development, acquisition and operation of power generation
facilities. We believe that the vertical integration of our extensive
engineering, construction management, operations, fuel management and financing
capabilities provides us with a competitive advantage to successfully implement
our acquisition and development program and has contributed to our significant
growth over the past five years.
2
<PAGE> 6
CAPITALIZATION
The following table sets forth, as of September 30, 2000, the (1) actual
consolidated capitalization of Calpine; and (2) consolidated capitalization of
Calpine as adjusted for the acquisition of SkyGen Energy, LLC in October 2000.
This table should be read in conjunction with the consolidated financial
statements and related notes thereto incorporated by reference in this
prospectus.
<TABLE>
<CAPTION>
SEPTEMBER 30, 2000
---------------------------
ACTUAL AS ADJUSTED
----------- ------------
(UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE
AMOUNTS)
<S> <C> <C>
CASH:
Cash and cash equivalents................................. $1,082,896 $ 551,097
========== ==========
LONG-TERM DEBT:
Notes payable, net of current portion....................... 55,374 55,374
Project financing, net of current portion................... 361,188 764,146
Senior notes................................................ 2,551,750 2,551,750
Capital lease obligation, net of current portion............ 207,941 207,941
---------- ----------
Total long-term debt................................... 3,176,253 3,579,211
---------- ----------
Company-obligated mandatorily redeemable convertible
preferred securities of subsidiary trusts................. 1,122,828 1,122,828
Minority interests.......................................... 40,118 38,363
---------- ----------
STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value:
10,000,000 shares authorized; no shares outstanding,
actual and as adjusted.................................... -- --
---------- ----------
Common stock, $0.001 par value:
500,000,000 shares authorized; 279,426,248 shares
outstanding actual; 281,543,990 shares outstanding as
adjusted.................................................. 279 282
Additional paid-in capital.................................. 1,563,699 1,630,444
Retained earnings........................................... 428,872 428,872
Accumulated other comprehensive loss........................ (891) (891)
---------- ----------
Total stockholders' equity............................. 1,991,959 2,058,707
---------- ----------
Total capitalization................................... $6,331,158 $6,799,109
========== ==========
</TABLE>
3
<PAGE> 7
THE MARKET
The power industry represents the third largest industry in the United
States, with an estimated end-user market of over $225 billion of electricity
sales in 1999 produced by an aggregate base of power generation facilities with
a capacity of approximately 785,000 megawatts. In response to increasing
customer demand for access to low-cost electricity and enhanced services, new
regulatory initiatives have been and are continuing to be adopted at both the
state and federal level to increase competition in the domestic power generation
industry. The power generation industry historically has been largely
characterized by electric utility monopolies producing electricity from old,
inefficient, high-cost generating facilities selling to a captive customer base.
Industry trends and regulatory initiatives have transformed the existing market
into a more competitive market where end users purchase electricity from a
variety of suppliers, including non-utility generators, power marketers, public
utilities and others.
There is a significant need for additional power generating capacity
throughout the United States, both to satisfy increasing demand and to replace
old and inefficient generating facilities. Due to environmental and economic
considerations, we believe this new capacity will be provided predominantly by
gas-fired facilities. We believe that these market trends will create
substantial opportunities for efficient, low-cost power producers that can
produce and sell energy to customers at competitive rates.
In addition, as a result of a variety of factors, including deregulation of
the power generation market, utilities, independent power producers and
industrial companies are disposing of power generation facilities. To date,
numerous utilities have sold or announced their intentions to sell their power
generation facilities and have focused their resources on the transmission and
distribution business segments. Many independent producers operating a limited
number of power plants are also seeking to dispose of their plants in response
to competitive pressures, and industrial companies are selling their power
plants to redeploy capital in their core businesses.
STRATEGY
Our strategy is to continue our rapid growth by capitalizing on the
significant opportunities in the power market, primarily through our active
development and acquisition programs. In pursuing our growth strategy, we
utilize our management and technical knowledge to implement a fully integrated
approach to the acquisition, development and operation of power generation
facilities. This approach uses our expertise in design, engineering,
procurement, finance, construction management, fuel and resource production and
acquisition, operations and power marketing, which we believe provides us with a
competitive advantage. The key elements of our strategy are as follows:
- Development of new and expansion of existing power plants. We are
actively pursuing the development of new and expansion of our existing
highly efficient, low-cost, gas-fired power plants to replace old and
inefficient generating facilities and meet the demand for new generation.
- Acquisition of power plants. Our strategy is to acquire power generating
facilities that meet our stringent criteria, provide significant
potential for revenue, cash flow and earnings growth and provide the
opportunity to enhance the operating efficiencies of the plants.
- Enhancement of existing power plants. We continually seek to maximize the
power generation and revenue potential of our operating assets and
minimize our operating and maintenance expenses and fuel costs.
RECENT DEVELOPMENTS
Acquisitions. On October 12, 2000, we completed the acquisition of
Northbrook, Illinois-based SkyGen Energy LLC ("SkyGen") from Michael Polsky and
Wisvest Corporation ("Wisvest"), an affiliate of Wisconsin Energy Corp. The
purchase price was $392.5 million in cash (which included the repayment of
certain recourse and non-recourse obligations of SkyGen of $111.4 million) and
2,117,742 shares of our common stock (which were valued in the aggregate at
$57.5 million at the time the Company entered into
4
<PAGE> 8
the agreement). Additionally, we assumed other general and project-level debt,
and we are obligated to make contingent payments upon completion of certain
project development milestones.
On October 16, 2000, we announced that we entered into an agreement with
TriGas Exploration Inc. ("TriGas"), the Calgary-based oil and gas company, under
which we will make a cash offer of Cdn.$3.20 per share for all of the issued and
outstanding common shares of TriGas. The aggregate value of the offer is
approximately Cdn.$156 million including the assumed net indebtedness of TriGas.
The acquisition provides us with natural gas reserves to fuel our proposed
Calgary Energy Center, a 26% interest in the East Crossfield Gas Plant,
extensive pipelines and gathering systems and a significant undeveloped land
base with development potential. The offering circular associated with the
transaction was mailed to TriGas shareholders on October 24, 2000 and the offer
expired on November 15, 2000, with 33,929,743 TriGas shares (96.5% of the total
outstanding TriGas shares) being tendered and paid for pursuant to the offer. We
intend to commence proceedings to acquire all of the remaining TriGas shares not
tendered pursuant to the compulsory acquisition provisions of the law of
Alberta, Canada.
On October 20, 2000, we announced that we entered into definitive
agreements to acquire strategic power assets from Dartmouth, Massachusetts-based
Energy Management, Inc. ("EMI") for approximately $145 million (a cash payment
of $100 million and the issuance of shares of our common stock with a value at
closing of $45 million) and the assumption of project financing. Under the terms
of the agreement, we will acquire the remaining interest in three recently
constructed combined-cycle power generating facilities located in Dighton,
Massachusetts; Tiverton, Rhode Island; and Rumford, Maine, as well as
Calpine-EMI Marketing LLC, a joint marketing venture between us and EMI. The
acquisitions are intended to close in early December 2000. The Tiverton and
Rumford facilities will be subject to certain leveraged lease transactions.
On October 26, 2000, we announced that our Board of Directors authorized a
2 for 1 stock split of our common stock for stockholders of record as of
November 6, 2000. The shares resulting from this split were distributed after
the market closed on November 14, 2000.
Third Quarter 2000 Earnings. On October 26, 2000, we announced earnings for
the three and nine months ended September 30, 2000.
Net income before extraordinary charge was $147.1 million for the quarter
ended September 30, 2000, representing a 243% increase compared to net income of
$42.9 million for the third quarter of 1999. Diluted earnings per share before
extraordinary charge rose 153% to $0.48 per share for the quarter, from $0.19
per share for the same period in 1999. Revenue for the quarter increased 168%,
from $253.0 million a year ago to $678.9 million. EBITDA increased 214% to
$325.9 million for the quarter compared to $103.8 million a year ago.
For the nine months ended September 30, 2000, net income before
extraordinary charge was $216.9 million, an increase of 231% compared to $65.5
million for the same period in 1999. Diluted earnings per share before
extraordinary charge rose 145% to $0.76 per share, compared to $0.31 per share
for the nine months of 1999. Revenue for the nine months was $1,278.0 million, a
113% increase from $600.2 million a year ago. EBITDA for the nine months rose
134% to $562.8 million, from $240.9 million in 1999. Total assets as of
September 30, 2000, were $7.2 billion, up 80% from $4.0 billion at December 31,
1999.
Financial results for both the three and nine months ended September 30,
2000 benefited primarily from strong energy prices in certain markets,
commencement of commercial operation of the Pasadena expansion and Hidalgo
projects, and strategic 1999 acquisitions, including geothermal steam fields and
energy facilities at The Geysers, California and six gas-fired energy centers.
Earnings also benefited from strong operations throughout our power portfolio.
5
<PAGE> 9
RISK FACTORS
Investing in our securities involves risk. Please see the risk factors
described in our Annual Report on Form 10-K for the year ended December 31,
1999, which is incorporated by reference in this prospectus. Before making an
investment decision, you should carefully consider these risks as well as other
information contained or incorporated by reference in this prospectus. The risks
and uncertainties described are not the only ones facing our company. Additional
risks and uncertainties not presently known to us or that we currently deem
immaterial may also impair our business operations.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). You may
obtain any document we file with the SEC at the SEC's public reference room in
Washington, D.C., Chicago, Illinois and New York, New York. You may obtain
information on the operation of the SEC's public reference facilities by calling
the SEC at 1-800-SEC-0330. You can request copies of these documents, upon
payment of a duplicating fee, by writing to the SEC at its principal office at
450 Fifth Street, N.W., Washington, D.C. 20549-1004. Our SEC filings are also
accessible through the Internet at the SEC's website at http://www.sec.gov.
The SEC permits us to "incorporate by reference" into this prospectus the
information in documents we file with it, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
prospectus, and later information that we file with the SEC will update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934, as amended, until we sell all
of the securities being registered or until this offering is otherwise
terminated:
- Calpine's Annual Report on Form 10-K for the year ended December 31,
1999;
- Calpine's Quarterly Reports on Form 10-Q for the quarters ended March 31,
2000, June 30, 2000 and September 30, 2000; and
- Calpine's Current Reports on Form 8-K dated January 26, 2000, February 3,
2000, March 6, 2000, March 30, 2000, May 18, 2000, June 26, 2000, July
24, 2000, July 25, 2000 and October 26, 2000.
If you request a copy of any or all of the documents incorporated by
reference, then we will send to you the copies you requested at no charge.
However, we will not send exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents. You should direct
requests for such copies to Calpine Corporation, 50 West San Fernando Street,
San Jose, California 95113, attention: Lisa M. Bodensteiner, Assistant
Secretary, telephone: (408) 995-5115.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act, covering the securities described in this prospectus. This
prospectus does not contain all of the information included in the registration
statement. Any statement made in this prospectus concerning the contents of any
contract, agreement or other document is only a summary of the actual contract,
agreement or other document. If we have filed any contract, agreement or other
document as an exhibit to the registration statement, you should read the
exhibit for a more complete understanding of the document or matter involved.
Each statement regarding a contract, agreement or other document is qualified in
its entirety by reference to the actual document.
6
<PAGE> 10
FORWARD-LOOKING STATEMENTS
Some of the statements contained in this prospectus or any prospectus
supplement and incorporated by reference into this prospectus or any prospectus
supplement are forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act and are
subject to the safe harbor created by the Private Securities Litigation Reform
Act of 1995. These statements include declarations regarding our or our
management's intents, beliefs or current expectations. In some cases, you can
identify forward-looking statements by terminology such as "may," "will,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," or "continue" or the negative of such terms or other
comparable terminology. Any forward-looking statements are not guarantees of
future performance and actual results could differ materially from those
indicated by the forward-looking statements. Forward-looking statements involve
known and unknown risks, uncertainties, and other factors that may cause our or
our industry's actual results, levels of activity, performance, or achievements
to be materially different from any future results, levels of activity,
performance, or achievements expressed or implied by such forward-looking
statements.
Among the important factors that could cause actual results to differ
materially from those indicated by such forward-looking statements are:
- the information is of a preliminary nature and may be subject to further
adjustment,
- the possible unavailability of financing,
- risks related to the development, acquisition, construction and operation
of power plants,
- the impact of electricity and gas price fluctuations,
- the impact of curtailment of power plant generation due to constrained
transmission capacity or other causes,
- the seasonal nature of our business,
- start-up risks,
- general operating risks,
- dependence on third parties,
- risks associated with international investments,
- risks associated with the power marketing business,
- changes in government regulation,
- availability of natural gas,
- the effects of competition,
- dependence on senior management,
- volatility in our stock price,
- fluctuations in quarterly results and seasonality, and
- other risks identified from time to time in our reports and registration
statements filed with the SEC, including the risk factors identified in
our Annual Report on Form 10K for the year ended December 31, 1999, which
is incorporated by reference in this prospectus.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance, or achievements. Moreover, neither we nor any other
person assumes responsibility for the accuracy and completeness of such
statements. We are under no duty to update any of the forward-looking statements
after the date of this prospectus to conform such statements to actual results.
7
<PAGE> 11
CONSOLIDATED RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------- -------------
1995 1996 1997 1998 1999 2000
----- ----- ----- ----- ----- -------------
<S> <C> <C> <C> <C> <C>
1.46x 1.46x 1.72x 1.69x 1.77x 2.12x
</TABLE>
For purposes of computing the consolidated ratio of earnings to fixed
charges, earnings consist of pretax income before adjustment for minority
interests in consolidated subsidiaries or income or loss from equity investees,
plus fixed charges, amortization of capitalized interest, and distributed income
of equity investees, reduced by interest capitalized, distributions on the
company-obligated mandatorily redeemable convertible preferred securities of
subsidiary trusts ("HIGH TIDES"(SM)) and the minority interest in pretax income
of subsidiaries that have not incurred fixed charges. Fixed charges consist of
interest expensed and capitalized (including amortized premiums, discounts and
capitalized expenses related to indebtedness), an estimate of the interest
within rental expense, and the distributions on the HIGH TIDES(SM).
USE OF PROCEEDS
Unless otherwise specified in a prospectus supplement accompanying this
prospectus, we will add the net proceeds from the sale by us of the securities
to which this prospectus and the accompanying prospectus supplement relate to
our general funds, which we will use for financing power projects under
development or construction, working capital, general corporate purposes and any
other purpose specified in a prospectus supplement. We may conduct concurrent or
additional financings at any time. The selling holders will receive all of the
net proceeds of any resales of common stock pursuant to this prospectus and the
accompanying prospectus supplement. We will not receive any of the net proceeds
from any such resale by the selling holders of any common stock.
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SELLING HOLDERS
Shares of common stock to be offered and sold from time to time by the
selling holders pursuant to this prospectus were originally issued by us to the
selling holders in transactions not involving any public offering under Section
4(2) of the Securities Act or otherwise exempt from the registration
requirements of the Securities Act. Such shares of common stock may include
restricted shares received by the selling holders upon the exercise of options
or warrants issued by us in transactions not involving any public offering under
Section 4(2) of the Securities Act or otherwise exempt from the registration
requirements of the Securities Act. We anticipate that any such transaction will
be entered into in connection with acquisition transactions consummated by us or
our affiliates, but any such transaction could arise in other contexts. The
relevant prospectus supplement will describe the transaction or transactions in
which the selling holders received the shares of common stock being sold
thereby.
The selling holders may from time to time offer and sell pursuant to this
prospectus and an accompanying prospectus supplement such shares of common
stock. Any selling holder may also elect not to sell any common stock held by
it. The term "selling holder" includes any holders identified in a prospectus
supplement and the beneficial owners of the common stock issued by us to such
holders, and their transferees, pledgees, donees or other successors (so long as
such transferee, pledgee, donee or other successor is identified in a prospectus
supplement hereto).
The prospectus supplement will also describe whether any of the selling
holders has, or has had within the past three years, any position, office or
other material relationship with Calpine or any of its predecessors or
affiliates.
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<PAGE> 13
PLAN OF DISTRIBUTION
Distribution by Calpine
We may sell our securities through agents, underwriters, dealers or
directly to purchasers.
- Unless we indicate otherwise in our prospectus supplement, our agents
will act on a best efforts basis for the period of their appointment.
- Our agents may be deemed to be underwriters under the Securities Act of
any of our securities that they offer or sell.
We may use an underwriter or underwriters in the offer or sale of our
securities.
- If we use an underwriter or underwriters, we will execute an underwriting
agreement with the underwriter or underwriters at the time that we reach
an agreement for the sale of our securities.
- We will include the names of the specific managing underwriter or
underwriters, as well as any other underwriters, and the terms of the
transactions, including the compensation the underwriters and dealers
will receive, in our prospectus supplement.
- The underwriters will use our prospectus supplement to sell our
securities.
We may use a dealer to sell our securities.
- If we use a dealer, we, as principal, will sell our securities to the
dealer.
- The dealer will then sell our securities to the public at varying prices
that the dealer will determine at the time it sells our securities.
- We will include the name of the dealer and the terms of our transactions
with the dealer in our prospectus supplement.
We may solicit directly offers to purchase our securities, and we may
directly sell our securities to institutional or other investors. We will
describe the terms of our direct sales in our prospectus supplement.
We may indemnify agents, underwriters, and dealers against certain
liabilities, including liabilities under the Securities Act. Our agents,
underwriters, and dealers, or their affiliates, may be customers of, engage in
transactions with or perform services for us, in the ordinary course of
business.
We may authorize our agents and underwriters to solicit offers by certain
institutions to purchase our securities at the public offering price under
delayed delivery contracts.
- If we used delayed delivery contracts, we will disclose that we are using
them in our prospectus supplement and will tell you when we will demand
payment and delivery of the securities under the delayed delivery
contracts.
- These delayed delivery contracts will be subject only to the conditions
that we set forth in our prospectus supplement.
- We will indicate in our prospectus supplement the commission that
underwriters and agents soliciting purchases of our securities under
delayed contracts will be entitled to receive.
Distribution by Selling Holders
Common stock may be offered and sold from time to time to purchasers
directly by the selling holders. Alternatively, the selling holders may from
time to time offer common stock to or through underwriters, broker-dealers or
agents, who may receive compensation in the form of underwriting discounts,
concessions or commissions from the selling holders or the purchasers of common
stock for whom they act as agents. The selling holders and any underwriters,
broker-dealers or agents that participate in the distribution of common stock
may be deemed to be "underwriters" within the meaning of the Securities Act, and
any profit on the sale of such common stock and any discounts, commissions,
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<PAGE> 14
concessions or other compensation received by any such underwriter,
broker-dealer or agent may be deemed to be underwriting discounts and
commissions under the Securities Act.
Common stock may be sold by the selling holders from time to time in one or
more transactions at fixed prices, at prevailing market prices at the time of
sale, at varying prices determined at the time of sale or at negotiated prices.
The sale of common stock by the selling holders may be effected in transactions,
which may involve crosses or block transactions:
- on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;
- in the over-the-counter market;
- in transactions otherwise than on such exchanges or in the
over-the-counter market; or
- through the writing and exercise of options.
At the time a particular offering of common stock is made by a selling
holder, such selling holder must provide this prospectus, and a prospectus
supplement, which will set forth the names of the selling holders, certain
additional information regarding the selling holders, the aggregate amount of
common stock being offered and the terms of the offering, including the name or
names of any underwriters, broker-dealers or agents, any discounts, commissions
and other terms constituting compensation from the selling holders and any
discounts, commissions or concessions allowed or reallowed to paid
broker-dealers, and may provide new information or update the information in
this prospectus.
To comply with the securities laws of certain jurisdictions, if applicable,
common stock will be offered or sold by the selling holders in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain jurisdictions common stock may not be offered or sold by
the selling holders unless it has been registered or qualified for sale in such
jurisdictions or any exemption from registration or qualification is available
and is complied with.
The selling holders and any other person participating in such distribution
will be subject to applicable provisions of the Securities Exchange Act and the
rules and regulations thereunder, including Regulation M of the Exchange Act,
which may limit the timing of purchases and sales of any of the offered
securities by the selling holders and any other such person. Furthermore,
Regulation M may restrict the ability of any person engaged in the distribution
of the offered securities to engage in market-making activities with respect to
the particular offered securities being distributed. All of the foregoing may
affect the marketability of the offered securities and the ability of any person
or entity to engage with respect to the offered securities.
Pursuant to one or more registration rights agreements to be entered into
with respect to the underlying transactions with the selling holders, we will
bear all fees and expenses incurred in connection with the registration of the
selling holders' common stock, except that the selling holders will pay all
broker's commissions and underwriting discounts and commissions, if any, in
connection with any sales effected pursuant to this prospectus. The selling
holders will be indemnified by us against certain civil liabilities, including
certain liabilities under the Securities Act or the Securities Exchange Act or
otherwise, or alternatively will be entitled to contribution in connection with
those liabilities. See "Registration Rights" below.
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REGISTRATION RIGHTS
In connection with the original issuance of the common stock to selling
holders, we expect to enter into registration rights agreements with the selling
holders providing that we will:
- use our best efforts to keep the registration statement effective and
usable for two years or such other period as shall be required under Rule
144(k) of the Securities Act or any successor rule thereto or, if
earlier, such time as all of the applicable registrable securities have
been sold thereunder.
However, we are permitted to suspend the use of this shelf registration
statement during certain periods under certain circumstances.
We will provide to each selling holder with whom, or for whose benefit, we
have executed a registration rights agreement copies of this prospectus, will
notify each such selling holder if the registration statement of which this
prospectus is a part ceases to be effective, and we will take certain other
actions as are required to permit unrestricted resales of the registrable
securities. Each time a selling holder sells common stock pursuant to this
registration statement during the period we are required by the registration
rights agreement to keep the shelf registration statement effective, such
selling holder, under current SEC rules and regulations, shall be required to be
named as a selling holder in a prospectus supplement to this prospectus, and to
deliver this prospectus and a prospectus supplement to purchasers. Selling
holders also will be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and will be bound by the
provisions of the registration rights agreement that are applicable to such a
selling holder (including certain indemnification rights and obligations).
Any registration rights agreement will be governed by, and construed in
accordance with, the laws of the State of New York. The summary herein is
subject to modification in the accompanying prospectus supplement, which will
describe any additional or different provisions that are contained in the
relevant definitive registration rights agreement. Such definitive registration
rights agreement will be filed as an exhibit to any Registration Statement.
Copies will be available as described in "Where You Can Find More Information."
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<PAGE> 16
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 500,000,000 shares of common
stock, $.001 par value, and 10,000,000 shares of preferred stock, $.001 par
value. The following summary is qualified in its entirety by the provisions of
our certificate of incorporation and by-laws, which have been filed as exhibits
to the Registration Statement of which this prospectus constitutes a part. The
information provided below reflects the 2 for 1 split of our common stock that
became effective on October 7, 1999, the 2 for 1 split of our common stock that
became effective on June 8, 2000 and the 2 for 1 split of our common stock that
became effective on November 14, 2000.
COMMON STOCK
The holders of common stock are entitled to one vote per share on all
matters to be voted upon by the stockholders. Subject to preferences that may be
applicable to any outstanding preferred stock, the holders of common stock are
entitled to receive ratably such dividends, if any, as may be declared from time
to time by the board of directors out of funds legally available. See "Dividend
Policy." In the event of our liquidation, dissolution or winding up, the holders
of common stock are entitled to share ratably in all assets remaining after
payment of liabilities, subject to prior liquidation rights of preferred stock,
if any, then outstanding. The common stock has no preemptive or conversion
rights or other subscription rights. There are no redemption or sinking fund
provisions applicable to the common stock. All outstanding shares of common
stock to be outstanding upon the completion of any common stock offering will be
fully paid and non-assessable.
PRICE RANGE OF COMMON STOCK
Our common stock is traded on the New York Stock Exchange under the symbol
"CPN." Public trading of the common stock commenced on September 20, 1996. Prior
to that, there was no public market for the common stock. The following table
sets forth, for the periods indicated, the high and low sale price per share of
the common stock on the New York Stock Exchange.
<TABLE>
<CAPTION>
HIGH LOW
------- -------
<S> <C> <C>
1998
First Quarter............................................... $ 2.313 $ 1.594
Second Quarter.............................................. 2.657 2.157
Third Quarter............................................... 2.688 2.141
Fourth Quarter.............................................. 3.453 2.196
1999
First Quarter............................................... $ 4.672 $ 3.157
Second Quarter.............................................. 7.375 4.391
Third Quarter............................................... 11.969 6.852
Fourth Quarter.............................................. 16.375 10.633
2000
First Quarter............................................... $30.750 $16.094
Second Quarter.............................................. 35.219 18.125
Third Quarter............................................... 52.250 32.250
Fourth Quarter (through December 4, 2000)................... 52.969 32.250
</TABLE>
As of December 4, 2000, there were approximately 472 holders of record of
our common stock. On December 4, 2000, the last sale price reported on the New
York Stock Exchange for our common stock was $36.688 per share.
DIVIDEND POLICY
We do not anticipate paying any cash dividends on our common stock in the
foreseeable future because we intend to retain our earnings to finance the
expansion of our business and for general corporate
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<PAGE> 17
purposes. In addition, our ability to pay cash dividends is restricted under our
indentures and our other debt agreements. Future cash dividends, if any, will be
at the discretion of our board of directors and will depend upon, among other
things, our future operations and earnings, capital requirements, general
financial condition, contractual restrictions and such other factors as the
board of directors may deem relevant.
PREFERRED STOCK
The following description of preferred stock and the description of the
terms of a particular series of preferred stock that will be set forth in the
related prospectus supplement are not complete. These descriptions are qualified
in their entirety by reference to the certificate of designation relating to
that series. The rights, preferences, privileges and restrictions of the
preferred stock of each series will be fixed by the certificate of designation
relating to that series that will be filed as an amendment to this registration
statement at the time such series of preferred stock is offered. The prospectus
supplement also will contain a description of certain United States federal
income tax consequences relating to the purchase and ownership of the series of
preferred stock that is described in the prospectus supplement.
As of December 4, 2000, there were no shares of preferred stock
outstanding. The Board of Directors has the authority, without further vote or
action by the stockholders, to issue from time to time up to 10,000,000 shares
of preferred stock in one or more series, and to fix the rights, preferences,
privileges, qualifications, limitations and restrictions granted to or imposed
upon any wholly unissued shares of undesignated preferred stock, including
without limitation dividend rights, if any, voting rights, if any, and
liquidation and conversion rights, if any. The board of directors has the
authority to fix the number of shares constituting any series and the
designations of such series without any further vote or action by the
stockholders. The board of directors, without stockholder approval, can issue
preferred stock with voting and conversion rights which could adversely affect
the voting power of the holders of common stock. The issuance of preferred stock
may have the effect of delaying, deferring or preventing a change in control of
our company, or could delay or prevent a transaction that might otherwise give
our stockholders an opportunity to realize a premium over the then prevailing
market price of the common stock.
A prospectus supplement with respect to the issuance of a series of
preferred stock will specify:
- the maximum number of shares,
- the designation of the shares,
- the annual dividend rate, if any, whether the dividend rate is fixed or
variable, whether the series of preferred stock will be issued with
original issue discount and, if so, the computed dividend rate thereon,
the date dividends will accrue, the dividend payment dates, and whether
dividends will be cumulative,
- the price and the terms and conditions for redemption, if any, including
redemption at our option or at the option of the holders, including the
time period for redemption, and any accumulated dividends or premiums,
- the liquidation preference, if any, and any accumulated dividends upon
the liquidation, dissolution or winding up Calpine's affairs,
- any sinking fund or similar provision, and, if so, the terms and
provisions relating to the purpose and operation of the fund,
- the terms and conditions, if any, for conversion or exchange of shares of
any other class or classes of our capital stock or any series of any
other class or classes, or of any other series of the same class, or any
other securities or assets, including the price or the rate of conversion
or exchange and the method, if any, of adjustment,
- the voting rights, if any, and
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<PAGE> 18
- any or all other preferences and relative, participating, optional or
other special rights, privileges or qualifications, limitations or
restrictions.
Preferred stock will be fully paid and nonassessable upon issuance. The
preferred stock or any series of preferred stock may be represented, in whole or
in part, by one or more global certificates, which will have an aggregate
liquidation preference equal to that of the preferred stock represented by the
global certificate.
Each global certificate will:
- be registered in the name of a depositary or a nominee of the depositary
identified in the prospectus supplement,
- be deposited with such depositary or nominee or a custodian for the
depositary, and
- bear a legend regarding the restrictions on exchanges and registration of
transfer and any other matters as may be provided for under the
certificate of designation.
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF THE CERTIFICATE OF INCORPORATION, BYLAWS
AND DELAWARE LAW
CERTIFICATE OF INCORPORATION AND BYLAWS
Our certificate of incorporation provides that our board of directors is
classified into three classes of directors serving staggered, three-year terms.
The certificate of incorporation also provides that directors may be removed
only by the affirmative vote of the holders of two-thirds of the shares of our
capital stock entitled to vote, voting together as single class. Our bylaws
provide that any vacancy on the board of directors may be filled only by vote of
the majority of directors then in office or by a sole remaining director.
Further, the certificate of incorporation provides that any business combination
(as defined in the certificate of incorporation) requires the affirmative vote
of the holders of two-thirds of the shares of our capital stock entitled to
vote, voting together as a single class. The certificate of incorporation also
provides that all stockholder actions must be effected at a duly called meeting
and not by a consent in writing. These provisions of the certificate of
incorporation and bylaws could discourage potential acquisition proposals and
could delay or prevent a change in control of our company. These provisions are
intended to enhance the likelihood of continuity and stability in the
composition of the board of directors and in the policies formulated by the
board of directors and to discourage certain types of transactions that may
involve an actual or threatened change of control of our company. These
provisions are designed to reduce our vulnerability to an unsolicited
acquisition proposal. The provisions also are intended to discourage certain
tactics that may be used in proxy fights. However, such provisions could have
the effect of discouraging others from making tender offers for our shares and,
as a consequence, they also may inhibit fluctuations in the market price of our
shares that could result from actual or rumored takeover attempts. Such
provisions also may have the effect of preventing changes in our management.
DELAWARE ANTI-TAKEOVER STATUTE
We are subject to Section 203 of the Delaware General Corporation Law
("Section 203"), which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the date that such stockholder
became an interested stockholder, unless: (1) prior to such date, the board of
directors of the corporation approved either the business combination or the
transaction that resulted in the stockholder becoming an interested stockholder;
(2) upon consummation of the transaction that resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding those shares owned (x) by persons who are directors and also
officers and (y) by employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer; or (3) on or subsequent to
such date, the business combination is approved by the board of directors and
authorized at
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an annual or special meeting of stockholders, and not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting stock that is not
owned by the interested stockholder.
Section 203 defines the term business combination to include: (1) any
merger or consolidation involving the corporation or any of its direct of
indirect majority-owned subsidiaries and the interested stockholder; (2) any
sale, transfer, pledge or other disposition of 10% or more of the assets of the
corporation or any of its direct of indirect majority-owned subsidiaries
involving the interested stockholder; (3) subject to certain exceptions, any
transaction that results in the issuance or transfer by the corporation of any
stock of the corporation or any of its direct of indirect majority-owned
subsidiaries of any stock of the corporation or that subsidiary to the
interested stockholder; (4) any transaction involving the corporation or any of
its direct of indirect majority-owned subsidiaries that has the effect of
increasing the proportionate share of the stock of any class or series of the
corporation or that subsidiary beneficially owned by the interested stockholder;
or (5) the receipt by the interested stockholder of the benefit of any loans,
advances, guarantees, pledges or other financial benefits provided by or through
the corporation or any of its direct of indirect majority-owned subsidiaries. In
general, Section 203 defines an interested stockholder as any entity or person
beneficially owning 15% or more of the outstanding voting stock of the
corporation and any entity or person affiliated with or controlling or
controlled by such entity or person.
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DESCRIPTION OF THE DEBT SECURITIES
The following is a general description of the debt securities which may be
issued from time to time by us. The particular terms relating to each debt
security will be set forth in a prospectus supplement. Unless otherwise stated,
the senior debt securities and the subordinated debt securities are together
referred to as the "debt securities."
GENERAL
We will issue from time to time one or more series of debt securities under
separate indentures between us and Wilmington Trust Company, as trustee. The
indentures will not limit the amount of debt securities which we may issue.
The debt securities will be our direct, unsecured obligations. The senior
debt securities will rank equally with all of our other senior debt. The
subordination provisions of any subordinated debt securities will be described
in an applicable prospectus supplement.
Almost all of our operations are conducted through our subsidiaries and
other affiliates. As a result, we depend almost entirely upon their earnings and
cash flow to service our indebtedness, including our ability to pay the interest
on and principal of our debt securities. The non-recourse project financing
agreements of certain of our subsidiaries and other affiliates generally
restrict their ability to pay dividends, make distributions or otherwise
transfer funds to us prior to the payment of other obligations, including
operating expenses, debt service and reserves.
Our subsidiaries and other affiliates are separate and distinct legal
entities and will have no obligation to pay any amounts due on the debt
securities, and will not guarantee the payment of interest on or principal of
the debt securities. The right of our debt security holders to receive any
assets of any of our subsidiaries or other affiliates upon our liquidation or
reorganization will be subordinated to the claims of any subsidiaries' or other
affiliates' creditors (including trade creditors and holders of debt issued by
our subsidiaries or affiliates). As of September 30, 2000, our subsidiaries had
$374.3 million of project financing. We intend to utilize non-recourse project
financing when appropriate in the future, and this financing will be effectively
senior to the debt securities.
The following description is only a summary of the material provisions of
the proposed indenture for the debt securities. We urge you to read the form of
indenture because it, and not this description, defines your rights as a holder
of the debt securities. A copy of the form of indenture is included as an
exhibit to this registration statement and is available upon request made to us.
The summary below of the general terms of the debt securities will be
supplemented by the more specific terms in the prospectus supplement. Unless
otherwise stated herein or in an applicable prospectus supplement, the following
indenture description will apply to both senior and subordinated debt
securities.
TERMS APPLICABLE TO DEBT SECURITIES
The prospectus supplement for a particular series of debt securities will
specify the following terms of the series of debt securities:
- the designation, the aggregate principal amount and the authorized
denominations, if other than $1,000 and integral multiples of $1,000;
- the percentage of their principal amount at which the debt securities
will be issued;
- the date or date on which the debt securities will mature;
- the currency, currencies or currency units in which payments on the debt
securities will be payable;
- the rate or rates at which the debt securities will bear interest, if
any, or the method of determination of such rate or rates;
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<PAGE> 21
- the date or dates from which the interest, if any, shall accrue, the
dates on which the interest, if any, will be payable and the method of
determining holders to whom any of the interest shall be payable;
- the prices, if any, at which, and the dates at or after which, we may or
must repay, repurchase or redeem the debt securities;
- any sinking fund obligation with respect to the debt securities;
- any special United States federal income tax consequences;
- the exchanges, if any, on which the debt securities may be listed; and
- any other material terms of the debt securities consistent with the
provisions of the indenture.
Unless otherwise specified in the prospectus supplement, we will compute
interest payments on the basis of a 360-day year consisting of twelve 30-day
months.
Some of the debt securities may be issued as discounted debt securities to
be sold at a substantial discount below their stated principal amount. The
prospectus supplement relating to any discounted series of debt securities will
describe any Federal income tax consequences and other special consequences
applicable to discounted debt securities.
The indenture governing the senior debt does not contain any provisions
that:
- limit our ability to incur indebtedness; or
- provide protection in the event we choose to engage in a highly leveraged
transaction, reorganization, restructuring, merger or similar
transaction.
REOPENING OF ISSUE
We may, from time to time, reopen an issue of debt securities and issue
additional debt securities with the same terms (including issue date, maturity
and interest rate) as debt securities issued on an earlier date. After such
additional debt securities are issued, they will be fungible with the debt
securities issued on the earlier date.
RANKING
The senior debt securities will be unsecured and will rank equal in right
of payment with all of our existing and future unsecured and unsubordinated
indebtedness, including, without limitation, our obligations under the Amended
and Restated Credit Agreement, dated as of May 23, 2000, as amended, among
Calpine, Bank of Nova Scotia, as Lead Arranger and Administrative Agent, and
Bayerische Landesbank, as Co-Arranger and Syndication Agent, and the various
commercial lending institutions named therein as lenders (as it may be further
amended, refinanced, replaced, renewed or extended from time to time) and our
other outstanding senior debt securities, including our 7 5/8% Senior Notes due
2006, our 7 3/4% Senior Notes due 2009, our 7 7/8% Senior Notes due 2008, our
8 3/4% Senior Notes due 2007, our 9 1/4% Senior Notes due 2004, our 10 1/2%
Senior Notes due 2006, our 8 1/4% Senior Notes due 2005 and our 8 5/8% Senior
Notes due 2010. At September 30, 2000, we had approximately $2.6 billion of
indebtedness outstanding that would rank equally with the senior debt
securities.
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COVENANTS
The indenture shall provide that, except as otherwise set forth under "--
Defeasance," below, for so long as any debt securities remain outstanding or any
amount remains unpaid on any of the debt securities, we will comply with the
terms of the covenants contained in the indenture including the following:
PAYMENT OF SECURITIES.
We will duly and punctually pay the principal of and interest on the debt
securities in accordance with the terms of the debt securities and the
indenture.
MAINTENANCE OF OFFICE OR AGENCY.
We will maintain in the Borough of Manhattan, the City of New York, an
office or agency where the debt securities may be paid and notices and demands
to or upon us in respect of the debt securities and the indenture may be served
and an office or agency where debt securities may be surrendered for
registration of transfer or exchange. We will give prompt written notice to the
trustee of the location, and any change in the location, of any such office or
agency. If at any time we shall fail to maintain any required office or agency
or shall fail to furnish the trustee with the address of any required office or
agency, all presentations, surrenders, notices and demands may be served at the
office of the trustee.
FURTHER ASSURANCES.
We and the trustee will execute and deliver all documents, instruments and
agreements, and do all other acts and things as may be reasonably required, to
enable the trustee to exercise and enforce its rights under the indenture and
under the documents, instruments and agreements required under the indenture and
to carry out the intent of the indenture.
LIMITATION ON SALE/LEASEBACK TRANSACTIONS.
Under the terms of the indenture, we shall not, and we shall not permit any
Restricted Subsidiary to, enter into any Sale/Leaseback Transaction unless:
(a) we or the Restricted Subsidiary would be entitled to create a Lien
on the property or asset subject to the Sale/Leaseback Transaction securing
Indebtedness in an amount equal to the Attributable Debt with respect to
that transaction without equally and ratably securing the debt securities
pursuant to the covenant entitled "Limitation on Liens"; or
(b) the net proceeds of the sale are at least equal to the fair value
(as determined by our board of directors) of the property or asset subject
to the Sale/Leaseback Transaction and we or the Restricted Subsidiary apply
or cause to be applied, within 180 days of the effective date of the Sale/
Leaseback Transaction, an amount in cash equal to the net proceeds of the
sale to the retirement of our or any Restricted Subsidiary's Indebtedness.
In addition to the transactions permitted pursuant to the above clauses (a) and
(b), we or any Restricted Subsidiary may enter into a Sale/Leaseback Transaction
as long as the sum of:
- the Attributable Debt with respect to that Sale/Leaseback Transaction and
all other Sale/ Leaseback Transactions entered into pursuant to this
provision; plus
- the amount of outstanding Indebtedness secured by Liens incurred pursuant
to the final provision to the covenant described under "-- Limitation on
Liens" below;
does not exceed 15% of Consolidated Net Tangible Assets as determined based on
our consolidated balance sheet as of the end of the most recent fiscal quarter
for which financial statements are available. In addition, a Restricted
Subsidiary may enter into a Sale/Leaseback Transaction with respect to property
or assets owned by that Restricted Subsidiary, so long as the proceeds of that
Sale/Leaseback Transaction are used to acquire, develop, construct, or repay
(within 365 days of the commencement of full
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commercial operation of any such property or assets) Indebtedness incurred to
acquire, develop or construct property or assets of any Restricted Subsidiary.
As used in the indenture, the following terms are defined as follows:
"Attributable Debt" means, as at the time of determination, the present
value (discounted at the rate of interest set forth or implicit in terms of the
lease (or, if not practicable to determine that rate, the weighted average rate
of interest borne by the debt securities outstanding hereunder (calculated, in
the event of the issuance of any original issue discount debt securities, based
on the computed interest rate with respect thereto)), compounded annually) of
the total obligations of the lessee for rental payments during the remaining
term of the lease included in such Sale/Leaseback Transaction (including any
period for which such lease has been extended).
"Capitalized Lease Obligations" of a person means the rental obligations
under any lease of any property (whether real, personal or mixed) of which the
discounted present value of the rental obligations of that person as lessee, in
conformity with generally accepted accounting principals, is required to be
capitalized on the balance sheet of that person; the stated maturity of any such
lease shall be the date of the last payment of rent or any other amount due
under such lease prior to the first date upon which such lease may be terminated
by the lessee without payment of a penalty.
"Consolidated Current Liabilities," as of the date of determination, means
the aggregate amount of consolidated liabilities of us and our consolidated
Restricted Subsidiaries which may properly be classified as current liabilities
(including taxes accrued as estimated), after eliminating (i) all inter-company
items between us and our subsidiaries and (ii) all current maturities of
long-term Indebtedness, all as determined in accordance with generally accepted
accounting principles.
"Consolidated Net Tangible Assets" means, as of any date of determination,
the total amount of our consolidated assets (less accumulated depreciation or
amortization, allowances for doubtful receivables, other applicable reserves and
other properly deductible items) under generally accepted accounting principles
which would appear on our consolidated balance sheet, determined in accordance
with generally accepted accounting principles, and after giving effect to
purchase accounting and after deducting therefrom, to the extent otherwise
included, the amounts of:
(a) Consolidated Current Liabilities;
(b) minority interests in our consolidated subsidiaries held by
persons other than us or a Restricted Subsidiary;
(c) excess of cost over fair value of assets of businesses acquired,
as determined in good faith by our board of directors;
(d) any revaluation or other write-up in value of assets subsequent to
December 31, 1993 as a result of a change in the method of valuation in
accordance with generally accepted accounting principles;
(e) unamortized debt discount and expenses and other unamortized
deferred charges, goodwill, patents, trademarks, service marks, trade
names, copyrights, licenses, organization or developmental expenses and
other intangible items;
(f) treasury stock; and
(g) any cash set apart and held in a sinking or other analogous fund
established for the purpose of redemption or other retirement of capital
stock to the extent such obligation is not reflected in Consolidated
Current Liabilities.
"Indebtedness" of any person means, without duplication:
(a) the principal of and premium (if any premium is then due and
owing) in respect of indebtedness of that person for money borrowed;
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(b) all Capitalized Lease Obligations of that person;
(c) all obligations of that person for the reimbursement of any
obligor on any letter of credit, banker's acceptance or similar credit
transaction, other than obligations with respect to letters of credit
securing obligations (other than obligations described in clauses (a) and
(b) above) entered into in the ordinary course of business of that person
to the extent such letters of credit are not drawn upon or, if and to the
extent drawn upon, that drawing is reimbursed no later than the tenth
business day following receipt by that person of a demand for reimbursement
following payment on the letter of credit;
(d) all obligations of the type referred to in clauses (a) through (c)
above of other persons and all dividends of other persons for the payment
of which, in either case, that person is responsible or liable, directly or
indirectly, as obligor, guarantor or otherwise; and
(e) all obligations of the type referred to in clauses (a) through (d)
above of other persons secured by any Lien on any property or asset of that
person (whether or not such obligation is assumed by that person), the
amount of the obligation on any date of determination being deemed to be
the lesser of the value of the property or assets or the amount of the
obligation so secured.
The amount of Indebtedness of any person at any date shall be, with respect
to unconditional obligations, the outstanding balance at such date of all such
obligations as described above and, with respect to any contingent obligations
at such date, the maximum liability determined by that person's board of
directors, in good faith, as in light of the facts and circumstances existing at
the time, reasonably likely to be incurred upon the occurrence of the
contingency giving rise to such obligation.
"Lien" means any mortgage, lien, pledge, charge, or other security interest
or encumbrance of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof).
"Preferred Stock," as applied to the capital stock of any corporation,
means capital stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of capital stock of any other class of such
corporation.
"Restricted Subsidiary" means any subsidiary of ours that is not designated
an Unrestricted Subsidiary by our board of directors.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or later acquired whereby we or one of our subsidiaries transfers that
property to another person and then leases it back from that person, other than
leases for a term of not more than 36 months or leases between us and a wholly
owned subsidiary of ours or between our wholly owned subsidiaries.
"Senior Indebtedness" means all indebtedness incurred, assumed or
guaranteed by the Company, whether or not represented by bonds, debentures notes
or other securities, for money borrowed, and any deferrals, renewals or
extensions or refunding of any such indebtedness, unless in the instrument
creating or evidencing any such indebtedness or pursuant to which the same is
outstanding it is specifically stated, at or prior to the time Calpine becomes
liable in respect thereof, that any such indebtedness or such deferral, renewal,
extension or refunding thereof is not Senior Indebtedness.
"Subordinated Security" means any security issued under this Indenture
which is designated as a Subordinated Debt Security.
"Unrestricted Subsidiary" means (i) any subsidiary that at the time of
determination shall be designated an Unrestricted Subsidiary by our board of
directors in the manner provided below and (ii) any subsidiary of an
Unrestricted Subsidiary. Our board of directors may designate any subsidiary
(including any newly acquired or newly formed subsidiary) to be an Unrestricted
Subsidiary unless such subsidiary owns any capital stock of, or owns or holds
any Lien on any property of, ours or any other subsidiary of ours that is not a
subsidiary of the subsidiary to be so designated, so long as the subsidiary to
be designated an Unrestricted Subsidiary and all other subsidiaries previously
so designated at the time of any
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determination hereunder shall, in the aggregate, have total assets not greater
than 5% of Consolidated Net Tangible Assets as determined based on our
consolidated balance sheet as of the end of the most recent financial quarter
for which financial statements are available. Our board of directors may
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
however, that immediately after giving effect to that designation no Default or
Event of Default under the indenture shall have occurred and be continuing. Any
such designation by our board of directors shall be evidenced to the trustee by
promptly filing with the trustee a copy of the board resolution giving effect to
the designation and a certificate signed by two of our officers certifying that
the designation complied with these provisions. However, the failure to file the
resolution and/or certificate with the trustee shall not impair or affect the
validity of the designation.
LIMITATION ON LIENS.
Under the terms of the indenture, we shall not, and we shall not permit any
Restricted Subsidiary to, incur any Lien upon any of our or its properties
(including capital stock) without effectively providing that the outstanding
debt securities shall be secured equally and ratably with (or prior to) that
Indebtedness, so long as that Indebtedness shall be so secured. The above
restriction on Liens will not, however, apply to:
(a) (1) Liens incurred by us or any Restricted Subsidiary securing
Indebtedness incurred by us or such Restricted Subsidiary, as the case may
be, to finance the exploration, drilling, development, construction or
purchase of or by, or repairs, improvements or additions to, property or
assets of us or such Restricted Subsidiary, as the case may be, which Liens
may include Liens on the capital stock of such Restricted Subsidiary or (2)
Liens incurred by any Restricted Subsidiary that does not own, directly or
indirectly, at the time of such original incurrence of such Lien under this
clause (2) any operating properties or assets securing Indebtedness
incurred to finance the exploration, drilling, development, construction or
purchase of or by or repairs, improvements or additions to, property or
assets of any Restricted Subsidiary that does not, directly or indirectly,
own any operating properties or assets at the time of such original
incurrence of such Lien, which Liens may include Liens on the capital stock
of one or more Restricted Subsidiaries that do not, directly or indirectly,
own any operating properties or assets at the time of such original
incurrence of such Lien, provided, however, that the Indebtedness secured
by any such Lien may not be issued more than 365 days after the later of
the exploration, drilling, development, completion of construction,
purchase, repair, improvement, addition or commencement of full commercial
operation of the property or assets being so financed;
(b) Liens existing on the date of issuance of such series of debt
securities, other than Liens relating to Indebtedness or other obligations
being repaid or Liens that are otherwise extinguished with the proceeds of
any offering of debt securities pursuant to the indenture;
(c) Liens on property, assets or shares of stock of a person at the
time that person becomes a subsidiary of ours; provided, however, that any
such Lien may not extend to any other property or assets owned by us or any
Restricted Subsidiary;
(d) Liens on property or assets at the time we or one of our
subsidiaries acquire the property or asset, including any acquisition by
means of a merger or consolidation with or into us or one of our
subsidiaries; provided, however, that such Liens are not incurred in
connection with, or in contemplation of, that merger or consolidation and
provided, further, that the Lien may not extend to any other property or
asset owned by us or any Restricted Subsidiary;
(e) Liens securing Indebtedness or other obligations of one of our
subsidiaries that is owing to us or a Restricted Subsidiary, or Liens
securing our Indebtedness or other obligations that is owing to one of our
subsidiaries;
(f) Liens incurred on assets that are the subject of a Capitalized
Lease Obligation to which we or any of our subsidiaries is a party, which
shall include Liens on the stock or other ownership interest in one or more
Restricted Subsidiaries leasing such assets;
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(g) Liens to secure any refinancing, refunding, extension, renewal or
replacement (or successive refinancings, refundings, extensions, renewals
or replacements) as a whole, or in part, of any Indebtedness secured by any
Lien referred to in clauses (a), (b), (c), (d) and (f) above, provided,
however, that (1) such new Lien shall be limited to all or part of the same
property or assets that secured the original Lien (plus repairs,
improvements or additions to that property or assets and Liens on the stock
or other ownership interest in one or more Restricted Subsidiaries
beneficially owning that property or assets) and (2) the amount of
Indebtedness secured by such Lien is not increased, other than by an amount
necessary to pay fees and expenses, including premiums, related to the
refinancing, refunding, extension, renewal or replacement of the
Indebtedness; and
(h) Liens by which the debt securities are secured equally and ratably
with other Indebtedness pursuant to this covenant.
However, we or a Restricted Subsidiary may incur other Liens to secure
Indebtedness as long as the sum of:
- the lesser of (1) the amount of outstanding Indebtedness secured by Liens
incurred pursuant to this provision and (2) the fair market value of the
property securing that item of Indebtedness; plus
- the Attributable Debt with respect to all Sale/Leaseback Transactions
entered into pursuant to clause (a) described under the covenant
"Limitation on Sale/Leaseback Transactions";
does not exceed 15% of Consolidated Net Tangible Assets as determined based on
our consolidated balance sheet as of the end of the most recent fiscal quarter
for which financial statements are available.
MERGER, CONSOLIDATION, SALE OR LEASE.
Nothing in the indenture shall prevent us from consolidating with or
merging into another corporation or conveying, transferring or leasing our
properties and assets substantially as an entirety to any person, provided that
(a) the successor entity assumes our obligations on each series of debt
securities outstanding and (b) immediately after giving effect to the
transaction, no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have occurred and be
continuing.
SEC REPORTS.
We are subject to the informational reporting requirements of Sections 13
and 15(d) under the Securities Exchange Act and, in accordance with those
requirements, file certain reports and other information with the SEC. See
"Where You Can Find More Information." In addition, if Sections 13 and 15(d)
cease to apply to us, we will covenant in the indenture to file those reports
and information with the trustee, and to mail such reports and information to
holders of the debt securities at their registered addresses, for so long as any
debt securities remain outstanding.
COMPLIANCE CERTIFICATES.
The indenture will require that we file annually with the trustee a
certificate describing any "Default," which is defined in the indenture as any
event which is, or after notice or passage of time or both would be, an Event of
Default, by us in the performance of any conditions or covenants under the
indenture and the status of any such Default. We also must give the trustee
written notice within 30 days of the occurrence of certain Defaults under the
indenture that could mature into Events of Default, as described under the
caption "-- Events of Default" below.
EVENTS OF DEFAULT
"Events of Default" are defined in the indenture with respect to any series
of debt securities as any of the following:
(a) default for 30 days in payment of any interest installment due and
payable on any debt securities of such series;
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(b) default in payment of principal or premium, if any, when due on
the debt securities of such series;
(c) default in the making of any sinking fund payment or analogous
obligation on the debt securities of such series;
(d) material default in our performance of any other covenants or
agreements in respect of the debt securities of such series contained in
the indenture or the debt securities for 60 days after written notice to us
by the trustee or to us and the trustee by the holders of at least 25% in
aggregate principal amount of the debt securities of such series then
outstanding;
(e) there shall have occurred a default in the payment of the
principal or premium, if any, of any bond, debenture, note or other
evidence of our indebtedness, in each case for money borrowed, or in the
payment of principal or premium, if any, under any mortgage, indenture,
agreement or instrument under which there may be issued or by which there
may be secured or evidenced any indebtedness of ours for money borrowed
(including any other series of debt securities issued under the indenture),
which default for payment of principal or premium, if any, is in an
aggregate principal amount exceeding $50,000,000 (or its equivalent in any
other currency or currencies) when such indebtedness becomes due and
payable (whether at maturity, upon redemption or acceleration or
otherwise), if such default shall continue unremedied or unwaived for more
than 30 business days after the expiration of any grace period or extension
of the time for payment applicable thereto; and
(f) certain events of bankruptcy, insolvency and reorganization.
An Event of Default under one series of debt securities does not
necessarily constitute an Event of Default under any other series of debt
securities.
The indenture provides that if an Event of Default occurs and is continuing
with respect to any series of debt securities, either the trustee or the
registered holders of at least 25% in aggregate principal amount of that series
of debt securities, may declare the principal amount of those debt securities
and any accrued and unpaid interest on those debt securities to be due and
payable immediately. At any time after a declaration of acceleration, but before
a judgment or decree for payment of money has been obtained, if all Events of
Default with respect to those debt securities have been cured (other than the
nonpayment of principal of such debt securities which has become due solely by
reason of the declaration of acceleration) then the declaration of acceleration
shall be automatically annulled and rescinded.
The indenture will require that we file annually with the trustee a
certificate describing any Default by us in the performance of any conditions or
covenants that has occurred under the indenture and its status. See
"Covenants -- Compliance Reports." We must give the trustee written notice
within 30 days of any Default under the indenture that could mature into an
Event of Default described in clause (d), (e) or (f).
The trustee will be entitled under the indenture, subject to the duty of
the trustee during a Default to act with the required standard of care, to be
indemnified before proceeding to exercise any right or power under the indenture
at the direction of the registered holders of the debt securities or which
requires the trustee to expend or risk its own funds or otherwise incur any
financial liability. The indenture will also provide that the registered holders
of a majority in principal amount of the outstanding debt securities of any
series issued under the indenture may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee or exercising
any trust or power conferred on the trustee with respect to that series of debt
securities. The trustee, however, may refuse to follow any such direction that
conflicts with law or the indenture, is unduly prejudicial to the rights of
other registered holders of that series of debt securities, or would involve the
trustee in personal liability.
The indenture will provide that while the trustee generally must mail
notice of a Default or Event of Default to the registered holders of the debt
securities of any series issued under the indenture within 90 days of
occurrence, the trustee may withhold notice of any Default or Event of Default
(except in
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payment on the debt securities) if the trustee in good faith determines that the
withholding of such notice is in the interest of the registered holders of that
series of debt securities.
MODIFICATION OF THE INDENTURE
We and the trustee may amend or supplement the indenture if the holders of
a majority in principal amount of the outstanding debt securities of each series
of debt securities affected by the amendment or supplement consent to it, except
that no amendment or supplement may, without the consent of each affected
registered holder of that series:
- reduce the amount of principal we have to repay or change the date of
maturity,
- reduce the rate or change the time of payment of interest,
- change the currency of payment,
- modify any redemption or repurchase right to the detriment of the holder,
- reduce the percentage of the aggregate principal amount of debt
securities needed to consent to an amendment or supplement or
- change the provisions of the indenture relating to waiver of past
defaults, rights of registered holders of the debt securities to receive
payments or the provisions relating to amendments of the indenture that
require the consent of registered holders of each affected series.
ACTIONS BY HOLDERS
A holder of any series of debt securities may not pursue any remedy with
respect to the indenture or the debt securities of such series (except a
registered holder of a series of debt securities may bring an action for payment
of overdue principal, premium, if any, or interest on that series), unless:
- the registered holder has given notice to the trustee of such series of a
continuing Event of Default,
- registered holders of at least 25% in principal amount of that series of
debt securities have made a written request to the trustee of such series
to pursue such remedy,
- such registered holder or holders have offered the trustee of such series
security or indemnity reasonably satisfactory to the trustee against any
loss, liability or expense,
- the trustee of such series has not complied with such request within 60
days of such request and offer, and
- the registered holders of a majority in principal amount of that series
of debt securities have not given the trustee of such series an
inconsistent direction during that 60-day period.
DEFEASANCE, DISCHARGE AND TERMINATION
DEFEASANCE AND DISCHARGE.
The indenture will provide that we will be discharged from any and all
obligations in respect of a series of debt securities, and the provisions of the
indenture will no longer be in effect with respect to that series of debt
securities (except for, among other matters, certain obligations to register the
transfer or exchange of those debt securities, to replace stolen, lost or
mutilated debt securities, to maintain paying agencies and to hold monies for
payment in trust, and the rights of holders of that series to receive payments
of principal, premium, if any, and interest), on the 123rd day after the date of
the deposit with the trustee, in trust, of money or U.S. Government Obligations
that, through the payment of interest, principal and premium, if any, in respect
thereof in accordance with their terms, will provide money, or a combination
thereof, in an amount sufficient to pay the principal, premium, if any, and
interest on that series of debt securities, when due in accordance with the
terms of the indenture and those debt securities. Such a trust may only be
established if, among other things,
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a. we have delivered to the trustee either
- an opinion of counsel (who may not be an employee of ours) to the
effect that registered holders of that series will not recognize
income, gain or loss for federal income tax purposes as a result of
such deposit, defeasance and discharge and will be subject to federal
income tax on the same amount and in the same manner and at the same
times as would have been the case if such deposit, defeasance and
discharge had not occurred, which opinion of counsel must refer to and
be based upon a ruling of the Internal Revenue Service or a change in
applicable federal income tax law occurring after the date of the
indenture or
- a ruling of the Internal Revenue Service to such effect, and
b. no Default under the indenture with respect to that series shall
have occurred and be continuing on the date of such deposit or during the
period ending on the 123rd day after such date of deposit and such deposit
shall not result in or constitute a Default or result in a breach or
violation of, or constitute a default under, any other agreement or
instrument to which we are a party or by which we are bound.
"U.S. Government Obligations" are defined under the indenture as securities
that are (x) direct obligations of the United States for the payment of which
its full faith and credit is pledged or (y) obligations of a person controlled
or supervised by and acting as an agency or instrumentality of the United States
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States and which, in either case, are not callable or
redeemable before their maturity.
DEFEASANCE OF COVENANTS AND CERTAIN EVENTS OF DEFAULT.
The indenture will further provide that, with respect to a series of debt
securities issued under the indenture, the provisions of the indenture described
under "-- Covenants -- Limitations on Liens" will no longer be in effect,
clauses (d) (with respect to such covenant) and (d) under "-- Events of Default"
shall be deemed not to be Events of Default under the indenture, and the
provisions described herein under "-- Ranking" shall not apply, upon the deposit
with the trustee, in trust, of money or U.S. Government Obligations that through
the payment of interest and principal in respect thereof in accordance with
their terms will provide money in an amount sufficient to pay the principal,
premium, if any, and interest on that series of debt securities when due in
accordance with the terms of the indenture. Such a trust may only be established
if, among other things, the provisions described in clause (b) of the
immediately preceding paragraph have been satisfied and we have delivered to the
trustee an opinion of counsel (who may not be an employee of ours) to the effect
that the registered holders of that series will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit and defeasance,
and will be subject to federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such deposit and
defeasance had not occurred.
In the event we exercise our option not to comply with the covenants and
certain other provisions of the indenture with respect to a series of debt
securities as described in the immediately preceding paragraph, and that series
of debt securities are declared due and payable because of the occurrence of an
Event of Default that remains applicable, while the amount of money or U.S.
Government Obligations on deposit with the trustee will be sufficient to pay
principal of and interest on that series on the respective dates on which such
amounts are due, they may not be sufficient to pay amounts due on that series at
the time of the acceleration resulting from such Event of Default. However, we
shall remain liable for such payments.
TERMINATION OF COMPANY'S OBLIGATIONS IN CERTAIN CIRCUMSTANCES.
The indenture will further provide that we will be discharged from any and
all obligations in respect of a series of debt securities and the provisions of
the indenture will no longer be in effect with respect to that series of debt
securities (except to the extent provided under "-- Defeasance and Discharge")
if that series of debt securities mature within one year and we deposit with the
trustee, in trust, money or U.S.
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Government Obligations that, through the payment of interest and principal in
respect thereof in accordance with their terms, will provide money in an amount
sufficient to pay the principal of, premium, if any, and accrued interest on
that series of debt securities when due in accordance with the terms of the
indenture and the debt securities. Such a trust may only be established if,
among other things,
- no Default under the indenture with respect to that series shall have
occurred and be continuing on the date of such deposit,
- such deposit will not result in or constitute a Default or result in a
breach or violation of, or constitute a Default under, any other
agreement or instrument to which we are a party or by which we are bound
and
- we have delivered to the trustee an opinion of counsel stating that such
conditions have been complied with.
Pursuant to this provision, we are not required to deliver an opinion of
counsel to the effect that registered holders of that series will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of such
deposit and termination, and there is no assurance that registered holders of
that series would not recognize income, gain or loss for U.S. federal income tax
purposes as a result thereof or that they would be subject to U.S. federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such deposit and termination had not occurred.
UNCLAIMED MONEY
Subject to any applicable abandoned property law, the indenture will
provide that the trustee will pay to us upon request any money held by the
trustee for the payment of principal, premium, if any, or interest that remains
unclaimed for two years. After payment to us, registered holders of debt
securities entitled to such money must look to us for payment as general
creditors.
CONCERNING THE TRUSTEE AND PAYING AGENT
Wilmington Trust Company will initially act as Trustee and paying agent for
the debt securities. We may have in the future other relationships with
Wilmington Trust Company.
We will describe in the prospectus supplement any material business and
other relationships (including additional trusteeships), other than the
trusteeship under the indenture, between us and any of our affiliates, on the
one hand, and each trustee and paying agent under the indenture, on the other
hand.
GOVERNING LAW
The laws of the State of New York will govern the indenture and each series
of debt securities.
BOOK-ENTRY SYSTEM
Unless otherwise specified in the prospectus supplement, each series of
debt securities will be represented by one or more global notes registered in
the name of a nominee of The Depository Trust Company ("DTC"), as depositary.
Upon the issuance of the global notes, DTC or its custodian will credit, on its
internal system, the respective principal amount of the individual beneficial
interests represented by the global notes to the accounts of persons who have
accounts with DTC. Each account initially will be designated by or on behalf of
the underwriters, dealer or agents. Ownership of beneficial interests in a
global note will be limited to persons who have accounts with DTC
("participants") or persons who hold interests through participants. Ownership
of beneficial interests in the global notes will be shown on, and transfers of
their ownership may be effected only through, records maintained by DTC or its
nominee (with respect to interests of participants) and the records of
participants (with respect to interests of persons other than participants). DTC
currently limits the maximum denomination of any single global note to
$400,000,000.
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So long as DTC or its nominee is the registered owner or holder of the
global notes, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the debt securities represented by such global notes for
all purposes under the indenture and the debt securities. No beneficial owner of
an interest in the global notes will be able to transfer that interest except in
accordance with DTC's applicable procedures, in addition to those provided for
under the indenture.
Payments of the principal of, and interest on, the global notes will be
made to DTC or its nominee, as the case may be, as the registered owner of the
global notes. Neither we, the trustee or any paying agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the global notes
or for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
We expect that DTC or its nominee, upon receipt of any payment of principal
or interest in respect of the global notes will credit participants' accounts
with payments in amounts proportionate to their respective beneficial interests
in the principal amount of the global notes as shown on the records of DTC or
its nominee. We also expect that payments by participants to owners of
beneficial interests in the global notes held through such participants will be
governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers registered in the names of
nominees for such customers. Such payments will be the responsibility of such
participants.
Transfers between participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in same-day funds. If a holder
requires physical delivery of a certificated note for any reason, including to
sell debt securities to persons in states which require delivery of certificated
notes or to pledge their debt securities, such holder must transfer its interest
in the global notes in accordance with the normal procedures of DTC and the
procedures set forth in the indenture.
DTC has advised us that it will take any action permitted to be taken by a
holder of a series of debt securities (including the presentation of debt
securities for exchange as described below) only at the direction of one or more
participants to whose account the DTC interests in the global notes relating to
such series is credited and only in respect of such portion of the aggregate
principal amount of debt securities as to which such participant or participants
has or have given such direction. However, if there is an Event of Default under
a series of debt securities, DTC will exchange the global notes relating to such
series for certificated notes which it will distribute to its participants.
DTC has advised us as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial
Code and a "Clearing Agency" registered pursuant to the provisions of Section
17A of the Securities Exchange Act of 1934. DTC was created to hold securities
for its participants and facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry changes in
accounts of its participants, thereby eliminating the need for physical movement
of certificates. Participants include securities brokers and dealers, banks,
trust companies and clearing corporations and certain other organizations.
Indirect access to the DTC system is available to "indirect participants" such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interest in the global notes among participants of DTC, it is under
no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither we nor the trustee will have
any responsibility for the performance by DTC or its respective participants or
indirect participants of their respective obligations under the rules and
procedures governing their operations.
CERTIFICATED NOTES
If DTC is at any time unwilling or unable to continue as a depositary for
the global notes and a successor depositary is not appointed by us within 90
days, or if we otherwise choose to issue definitive
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debt securities, we will issue certificated notes in exchange for the global
notes. In either instance, an owner of a beneficial interest in a global note
will be entitled to have debt securities equal in principal amount to such
beneficial interest registered in its name and will be entitled to physical
delivery of debt securities in definitive form. Debt securities in definitive
form will be issued in denominations of $1,000 and integral multiples of $1,000
and will be issued in registered form only, without coupons. We will maintain in
the Borough of Manhattan, The City of New York, one or more offices or agencies
where debt securities may be presented for payment and may be transferred or
exchanged. You will not be charged a fee for any transfer or exchange of your
debt securities, but we may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
SAME-DAY SETTLEMENT IN RESPECT OF GLOBAL NOTES
Global notes held by DTC will trade in DTC's Same-Day Funds Settlement
System until maturity and secondary market trading activity in the debt
securities will settle in immediately available funds. No assurance can be given
as to the effect, if any, of settlement in immediately available funds on the
trading activity in the debt securities.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of the securities.
Unless otherwise stated, this summary deals only with the securities held as
capital assets by United States persons which, as defined in the Internal
Revenue Code of 1986, as amended, include any beneficial owners, that are, for
United States federal income tax purposes, (1) citizens or residents of the
United States, (2) corporations or partnerships created or organized in or under
the laws of the United States, any state thereof or the District of Columbia
(other than partnerships that are not treated as a United States person under
any applicable Treasury regulations), (3) estates, the income of which is
subject to United States federal income taxation regardless of its source, or
(4) trusts if (A) a court within the United States is able to exercise primary
supervision over the administration of the trust and (B) one or more United
States persons have the authority to control all substantial decisions of the
trust. It does not deal with special classes of holders such as banks, thrifts,
real estate investment trusts, regulated investment companies, insurance
companies, dealers in securities or currencies, or tax-exempt investors and does
not discuss securities held as part of a hedge, straddle, "synthetic security"
or other integrated transaction. This summary also does not address the tax
consequences to persons that have a functional currency other than the U.S.
dollar or the tax consequences to shareholders, partners or beneficiaries of a
holder of the securities. Further, it does not include any description of any
alternative minimum tax consequences or the tax laws of any state or local
government or of any foreign government that may be applicable to the
securities. This summary is based on the Internal Revenue Code, the Treasury
regulations promulgated thereunder and administrative and judicial
interpretations thereof, all as of the date hereof, and all of which are subject
to change, possibly on a retroactive basis.
You should consult with your own tax advisor regarding the federal, state,
local and foreign income, franchise, personal property, and any other tax
consequences of the purchase, ownership and disposition of the securities.
TAXATION OF COMMON STOCK
The subsection describes the material United States federal income tax
consequences of owning, selling and disposing of the common stock that Calpine
may offer.
U.S. HOLDERS OF COMMON STOCK
Dividends
The amount of any distribution we make in respect of our common stock will
be equal to the amount of cash and the fair market value, on the date of
distribution, of any property distributed. Generally, distributions will be
treated as a dividend, subject to tax as ordinary income, to the extent of our
current or accumulated earnings and profits, then as a tax-free return of
capital to the extent of a holder's tax basis in the common stock and thereafter
as gain from the sale or exchange of such stock as described below.
In general, a dividend distribution to a corporate holder will qualify for
the 70% dividends-received deduction if the holder owns less than 20% of the
voting power and value of our stock (other than any non-voting, non-convertible,
non-participating preferred stock). The dividends received deduction is subject
to certain holding period, taxable income, and other limitations.
Sale or Exchange of Common Stock
Upon the sale or exchange of common stock, a holder generally will
recognize capital gain or loss equal to the difference between (1) the amount of
cash and the fair market value of any property received upon the sale or
exchange and (2) such holder's adjusted tax basis in the common stock. In the
case of a holder other than a corporation, the maximum marginal United States
federal income tax rate applicable to such gain is 20% if such holder's holding
period for such common stock exceeds one year. A holder's basis in the common
stock is generally equal to its initial purchase price.
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Information Reporting and Backup Withholding Tax
In general, information reporting requirements will apply to payments of
dividends on common stock and payments of the proceeds of the sale of common
stock, and a 31% backup withholding tax may apply to such payments if the holder
(1) fails to furnish or certify his correct taxpayer identification number to
the payor in the manner required, (2) is notified by the Internal Revenue
Service that he has failed to report payments of interest and dividends
properly, or (3) under certain circumstances, fails to certify that he has not
been notified by the Internal Revenue Service that he is subject to backup
withholding for failure to report interest and dividend payments. Any amounts
withheld under the backup withholding rules from a payment to a holder will be
allowed as a credit against such holder's United States federal income tax and
may entitle the holder to a refund, provided that the required information is
furnished to the Internal Revenue Service.
NON-U.S. HOLDERS OF COMMON STOCK
The rules governing United States federal income taxation of a beneficial
owner of common stock that, for United States federal income tax purposes, is a
holder who is not a United States person as that term is defined in the Internal
Revenue Code are complex and no attempt will be made herein to provide more than
a summary of such rules. Non-U.S. holders should consult with their own tax
advisors to determine the effect of federal, state, local and foreign income tax
laws, as well as treaties, with regard to an investment in the common stock,
including any reporting requirements.
Dividends
Distributions by Calpine with respect to the common stock that are treated
as dividends paid (or deemed paid), as described above under "Dividends," to a
non-U.S. holder (excluding dividends that are effectively connected with the
conduct of a United States trade or business by such holder and are taxable as
described below) will be subject to United States federal withholding tax at a
30% rate (or a lower rate provided under any applicable income tax treaty).
Except to the extent that an applicable tax treaty otherwise provides, a
non-U.S. holder will be taxed in the same manner as a holder who is a United
States person on dividends paid (or deemed paid) that are effectively connected
with the conduct of a United States trade or business by the non-U.S. holder. If
such non-U.S. holder is a foreign corporation, it may also be subject to a
United States branch profits tax on such effectively connected income at a 30%
rate (or such lower rate as may be specified by an applicable tax treaty). Even
though such effectively connected dividends are subject to income tax and may be
subject to the branch profits tax, they will not be subject to U.S. withholding
tax if the holder delivers a properly executed Internal Revenue Service Form
4224 (or successor form) to the payor.
Under current Treasury regulations, dividends paid to an address in a
foreign country are presumed to be paid to a resident of that country (unless
the payor has knowledge to the contrary) for purposes of the 30% withholding
discussed above and for purposes of determining the applicability of a tax
treaty rate. Under Final Treasury regulations effective with respect to payments
made after December 31, 2000, however, non-U.S. holders of common stock who wish
to claim the benefit of an applicable treaty rate would be required to satisfy
certain certification requirements.
Sale or Exchange of Common Stock
Subject to the discussion below regarding "Foreign Investment in Real
Property Tax Act," a non-U.S. holder generally will not be subject to United
States federal income tax or withholding tax on the sale or exchange of common
stock unless (1) the gain is effectively connected with a United States trade or
business of the non-U.S. holder, (2) in the case of a non-U.S. holder who is an
individual, such holder is present in the United States for a period or periods
aggregating 183 days or more during the taxable year of the disposition, and
either such holder has a "tax home" in the United States or the disposition is
attributable to an office or other fixed place of business maintained by such
holder in the United States, (3) the non-U.S. holder is subject to tax pursuant
to the provisions of the Internal Revenue Code
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applicable to certain United States expatriates or (4) in the event that Calpine
is characterized as a United States real property holding corporation (see
discussion below under "Foreign Investment in Real Property Tax Act"), the
non-U.S. holders beneficial and/or constructive ownership of common stock
exceeds 5% of the total fair market value of the common stock.
Prospective investors should consult their own tax advisors as to the
effect, if any, of the Final Treasury regulations on their purchase, ownership
and disposition of the common stock.
Information Reporting and Backup Withholding Tax
United States information reporting requirements and backup withholding tax
will not apply to any payment of the proceeds of the sale of common stock
effected outside the United States by a foreign office of a "broker" as defined
in applicable Treasury regulations, unless such broker (1) is a United States
person as defined in the Internal Revenue Code, (2) is a foreign person that
derives 50% or more of its gross income for certain periods from the conduct of
a trade or business in the United States or (3) is a controlled foreign
corporation for United States federal income tax purposes. Payment of the
proceeds of any such sale effected outside the United States by a foreign office
of any broker that is described in (1), (2) or (3) of the preceding sentence
will not be subject to backup withholding tax, but will be subject to
information reporting requirements, unless such broker has documentary evidence
in its records that the beneficial owner is a non-U.S. holder and certain other
conditions are met, or the beneficial owner otherwise establishes an exemption.
If paid to an address outside the United States, dividends on common stock held
by a non-U.S. holder generally will not be subject to the information reporting
and backup withholding requirements described in this section. However, under
Final Treasury regulations, dividend payments made after December 31, 2000 will
be subject to information reporting and backup withholding unless certain
certification requirements are satisfied.
Prospective investors should consult their own tax advisors as to the
effect, if any, of the Final Treasury regulations on their purchase, ownership
and disposition of common stock.
Foreign Investment in Real Property Tax Act
Under the Foreign Investment in Real Property Tax Act, any person who
acquires a "United States real property interest" (as described below) from a
foreign person must deduct and withhold a tax equal to 10% of the amount
realized by the foreign transferor. In addition, a foreign person who disposes
of a United States real property interest generally is required to recognize
gain or loss that is subject to United States federal income tax. A "United
States real property interest" generally includes any interest (other than an
interest solely as a creditor) in a United States corporation unless it is
established under specific procedures that the corporation is not (and was not
for the prior five-year period) a "United States real property holding
corporation." We can give no assurance as to whether we are, at any time within
the past five years have been, or will in the future become, a United States
real property holding corporation. If it is determined that we are, have been in
the past five years or in the future become, a United States real property
holding corporation, so long as our stock is regularly traded on an established
securities market, an exemption should apply to the common stock except with
respect to a non-U.S. holder whose beneficial and/or constructive ownership of
common stock exceeds 5% of the total fair market value of the common stock.
Any investor that may approach or exceed the 5% ownership threshold
discussed above, either alone or in conjunction with related persons, should
consult its own tax advisor concerning the United States tax consequences that
may result. A non-U.S. holder who sells or otherwise disposes of common stock
may be required to inform its transferee whether such common stock constitutes a
United States real property interest.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
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DISPOSITION OF COMMON STOCK, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES
FEDERAL OR OTHER TAX LAWS.
TAXATION OF PREFERRED STOCK
This subsection describes the material United States federal income tax
consequences of owning, selling and disposing of the preferred stock that
Calpine may offer.
U.S. HOLDERS OF PREFERRED STOCK
Dividends
The amount of any distribution we make in respect of our preferred stock
will be equal to the amount of cash and the fair market value, on the date of
distribution, of any property (including common stock) distributed. Generally,
distributions will be treated as a dividend, subject to tax as ordinary income,
to the extent of our current or accumulated earnings and profits, then as a
tax-free return of capital to the extent of a holder's tax basis in the
preferred stock and thereafter as gain from the sale or exchange of such stock
as described below.
Dividends to Corporate Holders
In general, a dividend distribution to a corporate holder will qualify for
the 70% dividends received deduction if the holder owns less than 20% of the
voting power and value of our preferred stock (other than any non-voting,
non-convertible, non-participating preferred stock). In addition, the benefit of
a dividends received deduction may be reduced by the corporate alternative
minimum tax.
In determining entitlement to the dividends received deduction, corporate
holders of preferred stock should also consider the provisions of Sections
246(c), 246A and 1059 of the Internal Revenue Code and Treasury regulations
promulgated thereunder, and Internal Revenue Service rulings and administrative
pronouncements relating to such provisions. Under current law, Section 246(c) of
the Internal Revenue Code disallows the dividends received deduction in its
entirety if the holder does not satisfy the applicable holding period
requirement for the dividend-paying stock for a period immediately before or
immediately after such holder becomes entitled to receive each dividend on the
stock. Section 246(c)(4) of the Internal Revenue Code provides that a holder may
not count toward this minimum holding period any period in which the holder (1)
has, among other things, an option to sell preferred stock which it owns, (2) is
under a contractual obligation to sell preferred stock which it owns, (3) has
made (and not closed) a short sale of substantially identical stock or
securities, or (4) has diminished its risk of loss by holding one or more
positions with respect to substantially similar or related property. Under
certain circumstances, Section 1059 of the Internal Revenue Code (A) reduces the
tax basis of stock by a portion of any "extraordinary dividends" that are
eligible for the dividends received deduction and (B) to the extent that the
basis reduction would otherwise reduce the tax basis of the preferred stock
below zero, requires immediate recognition of gain, which is treated as gain
from the sale or exchange of the stock. In the case of preferred stock, an
"extraordinary dividend" would include any amount treated as a dividend with
respect to a redemption that is not pro rata to all stockholders (or meets
certain other requirements), without regard to either the relative amount of the
dividend or the holder's holding period for the preferred stock. Section 246A of
the Internal Revenue Code contains the "debt-financed" portfolio stock rules,
under which the dividends received deduction could be reduced to the extent that
a holder incurs indebtedness directly attributable to its investment in the
preferred stock.
Receipt of Common Stock Upon Conversion of the Preferred Stock
If the preferred stock is convertible into common stock of Calpine, gain or
loss will not be recognized by a holder upon the conversion of such preferred
stock into common stock if no cash is received. A holder who receives cash in
lieu of a fractional share of common stock will in general be treated as having
received such fractional share and having exchanged it for cash in a redemption,
which would be treated in the manner described under "Sale, Exchange or
Redemption of Preferred stock" below. As discussed
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therein, a holder who cannot qualify for sale or exchange treatment under the
rules applicable to redemptions will generally be taxable on the cash received
in lieu of a fractional share as a distribution described in "Dividends" above.
Generally, a holder's tax basis in the common stock received upon
conversion will generally be equal to the holder's tax basis in the preferred
stock less the tax basis allocated to any fractional share for which cash is
received, and a holder's holding period in the common stock received upon
conversion generally will include the period during which the preferred stock
was held by such holder.
Adjustments of Conversion Price in Respect of Preferred Stock
If the preferred stock is convertible into common stock of Calpine,
adjustments to the conversion price ratio of common stock to take into account a
stock dividend or stock split generally will not be taxable. However, an
adjustment to the conversion price ratio to reflect the issuance of certain
rights, warrants, evidences of indebtedness, securities or other assets to
holders of common stock (an "Adjustment") may result in constructive
distributions to the holders of the preferred stock. The amount of any such
constructive distribution would be the fair market value on the date of the
Adjustment of the number of shares of common stock which, if actually
distributed to holders of preferred stock, would produce the same increase in
the proportionate interests of such holders in the assets or earnings and
profits of Calpine as that produced by the Adjustment. The distribution would be
treated in the manner described above under "Dividends."
Excessive Redemption Price of Preferred Stock
Under Section 305 of the Internal Revenue Code and Treasury regulations, if
preferred stock with a mandatory redemption date or preferred stock subject to
certain redemption rights on the part of either Calpine or the holder of such
stock has a redemption price that exceeds its issue price (i.e., its fair market
value at its date of original issuance) by more than a de minimis amount, such
excess may be treated as a constructive distribution that will be treated in the
same manner as distribution described above under "Dividends." A holder of such
preferred stock would be required to treat such excess as a constructive
distribution received by the holder over the life of such stock under a constant
interest (economic yield) method that takes into account the compounding of
yield.
Accrual Dividends on the Preferred Stock
The tax treatment of accrued dividends that are payable upon a redemption
of the preferred stock will be addressed in the applicable prospectus
supplement.
Sale, Exchange or Redemption of Preferred Stock
Upon the sale or exchange of preferred stock, a holder generally will
recognize capital gain or loss equal to the difference between (1) the amount of
cash and the fair market value of any property received upon the sale or
exchange and (2) such holder's adjusted tax basis in the stock. In the case of a
holder other than a corporation, the maximum marginal United States federal
income tax rate applicable to such gain is 20% if such holder's holding period
for such stock exceeds one year. A holder's basis in the stock is generally
equal to its initial purchase price.
Gain or loss recognized by a holder on a redemption of the preferred stock
should be treated as a sale or exchange and therefore qualify for the treatment
described above if, taking into account stock that is actually or constructively
owned under the constructive ownership rules of Section 318 of the Internal
Revenue Code by such holder, either (1) the holder's interest in the stock of
Calpine is completely terminated as a result of such redemption, (2) such
holder's percentage ownership of Calpine's voting stock immediately after the
redemption is less than 80% of such holder's percentage ownership immediately
before the redemption or (3) the redemption is "not essentially equivalent to a
dividend." Under Section 318 of the Internal Revenue Code, a person generally
will be treated as the owner of stock of Calpine owned by certain related
parties or certain entities in which the person owns an interest and
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stock that a holder could acquire through exercise of an option. For this
purpose, an option would include the conversion right under the preferred stock.
Whether a redemption is not essentially equivalent to a dividend depends on each
holder's facts and circumstances, but in any event requires a "meaningful
reduction" in such holder's equity interest in Calpine. A holder of the
preferred stock who sells some or all of the stock of Calpine owned by it may be
able to take such sales into account to satisfy one of the foregoing conditions.
Conversely, a holder who purchases additional shares of stock of Calpine may be
required to take such shares into account in determining whether any of the
foregoing conditions are satisfied.
If none of the above conditions is satisfied to qualify for sale or
exchange treatment, the entire amount of the cash (or property) received on a
redemption will be treated as a distribution (without offset by the holder's tax
basis in the redeemed shares), which will be treated in the same manner as
distributions described above under "Dividends." In such case, the holder's
basis in the redeemed preferred stock would be transferred to the holder's
remaining shares of Calpine stock (if any). If the holder does not retain any
shares of Calpine's stock but dividend treatment arises because of the
constructive ownership rules, such basis will be entirely lost to the holder.
Other Preferred Stock
Special tax rules may apply to certain types of preferred stock including,
but not limited to, preferred stock issued at a discount. The applicable
prospectus supplement will discuss any such special United States federal income
tax rules with respect to such preferred stock.
Information Reporting and Backup Withholding Tax
In general, information reporting requirements will apply to payments of
dividends on the preferred stock and payments of the proceeds of the sale of the
preferred stock, and a 31% backup withholding tax may apply to such payments if
the holder (1) fails to furnish or certify his correct taxpayer identification
number to the payor in the manner required, (2) is notified by the Internal
Revenue Service that he has failed to report payments of interest and dividends
properly, or (3) under certain circumstances, fails to certify that he has not
been notified by the Internal Revenue Service that he is subject to backup
withholding for failure to report interest and dividend payments. Any amounts
withheld under the backup withholding rules from a payment to a holder will be
allowed as a credit against such holder's United States federal income tax and
may entitle the holder to a refund, provided that the required information is
furnished to the Internal Revenue Service.
NON-U.S. HOLDERS OF PREFERRED STOCK
The rules governing United States federal income taxation of a beneficial
owner of preferred stock that, for United States federal income tax purposes, is
a holder who is not a United States person as that term is defined in the
Internal Revenue Code are complex and no attempt will be made herein to provide
more than a summary of such rules. Non-U.S. holders should consult with their
own tax advisors to determine the effect of federal, state, local and foreign
income tax laws, as well as treaties, with regard to an investment in the
preferred stock, including any reporting requirements.
Dividends
Distributions by Calpine with respect to the preferred stock that are
treated as dividends paid (or deemed paid), as described above under
"Dividends," to a non-U.S. holder (excluding dividends that are effectively
connected with the conduct of a United States trade or business by such holder
and are taxable as described below) will be subject to United States federal
withholding tax at a 30% rate (or a lower rate provided under any applicable
income tax treaty). Except to the extent that an applicable tax treaty otherwise
provides, a non-U.S. holder will be taxed in the same manner as a holder who is
a United States person on dividends paid (or deemed paid) that are effectively
connected with the conduct of a United States trade or business by the non-U.S.
holder. If such non-U.S. holder is a foreign corporation, it may
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also be subject to a United States branch profits tax on such effectively
connected income at a 30% rate (or such lower rate as may be specified by an
applicable tax treaty). Even though such effectively connected dividends are
subject to income tax, and may be subject to the branch profits tax, they will
not be subject to U.S. withholding tax if the holder delivers a properly
executed Internal Revenue Service Form 4224 (or successor form) to the payor.
Under current Treasury regulations, dividends paid to an address in a
foreign country are presumed to be paid to a resident of that country (unless
the payor has knowledge to the contrary) for purposes of the 30% withholding
discussed above and for purposes of determining the applicability of a tax
treaty rate. Under Final Treasury regulations effective with respect to payments
made after December 31, 2000, however, non-U.S. holders of preferred stock who
wish to claim the benefit of an applicable treaty rate would be required to
satisfy certain certification requirements.
Receipt of Common Stock Upon Conversion of the Preferred Stock
In general, no United States federal income tax or withholding tax will be
imposed upon the conversion of preferred stock into common stock by a non-U.S.
holder (except with respect to the non-U.S. holder's receipt of cash in lieu of
fractional shares where one of the conditions described below under "Sale or
Exchange of Preferred stock" is satisfied).
Sale or Exchange of Preferred Stock
Subject to the discussion below regarding "Foreign Investment in Real
Property Tax Act," a non-U.S. holder generally will not be subject to United
States federal income tax or withholding tax on the sale or exchange of
preferred stock unless (1) the gain is effectively connected with a United
States trade or business of the non-U.S. holder, (2) in the case of a non-U.S.
holder who is an individual, such holder is present in the United States for a
period or periods aggregating 183 days or more during the taxable year of the
disposition, and either such holder has a "tax home" in the United States or the
disposition is attributable to an office or other fixed place of business
maintained by such holder in the United States, (3) the non-U.S. holder is
subject to tax pursuant to the provisions of the Internal Revenue Code
applicable to certain United States expatriates or (4) in the event that Calpine
is characterized as a United States real property holding corporation (see
discussion below under "Foreign Investment in Real Property Tax Act"), the
non-U.S. holders beneficial and/or constructive ownership of preferred stock
exceeds 5% of the total fair market value of the preferred stock.
If an individual non-U.S. holder falls under clause (1) above, such
individual generally will be taxed on the net gain derived from a sale under
regular graduated United States federal income tax rates. If an individual
non-U.S. holder falls under clause (2) above, such individual generally will be
subject to a flat 30% tax on the gain derived from a sale, which may be offset
by certain United States capital losses (notwithstanding the fact that such
individual is not considered a resident of the United States). Thus, individual
non-U.S. holders who have spent (or expect to spend) 183 days or more in the
United States in the taxable year in which they contemplate a sale of preferred
stock are urged to consult their tax advisors as to the tax consequences of such
sale.
If a non-U.S. holder that is a foreign corporation falls under clause (1)
of the first sentence above, it generally be taxed on its net gain under regular
graduated United States federal income tax rates and, in addition, will be
subject to the branch profits tax equal to 30% of its "effectively connected
earnings and profits," as defined in the Internal Revenue Code, for the taxable
year, as adjusted for certain items, unless it qualifies for a lower rate under
an applicable income tax treaty.
Information Reporting and Backup Withholding Tax
United States information reporting requirements and backup withholding tax
will not apply to any payment of the proceeds of the sale of preferred stock
effected outside the United States by a foreign office of a "broker" as defined
in applicable Treasury regulations, unless such broker (1) is a United States
person as defined in the Internal Revenue Code, (2) is a foreign person that
derives 50% or more of
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its gross income for certain periods from the conduct of a trade or business in
the United States or (3) is a controlled foreign corporation for United States
federal income tax purposes. Payment of the proceeds of any such sale effected
outside the United States by a foreign office of any broker that is described in
(1), (2) or (3) of the preceding sentence will not be subject to backup
withholding tax, but will be subject to information reporting requirements,
unless such broker has documentary evidence in its records that the beneficial
owner is a non-U.S. holder and certain other conditions are met, or the
beneficial owner otherwise establishes an exemption. If paid to an address
outside the United States, dividends on preferred stock held by a non-U.S.
holder generally will not be subject to the information reporting and backup
withholding requirements described in this section. However, under Final
Treasury regulations, dividend payments made after December 31, 2000 will be
subject to information reporting and backup withholding unless certain
certification requirements are satisfied.
Prospective investors should consult their own tax advisors as to the
effect, if any, of the Final Treasury regulations on their purchase, ownership
and disposition of preferred stock.
Foreign Investment in Real Property Tax Act
Under the Foreign Investment in Real Property Tax Act, any person who
acquires a "United States real property interest" (as described below) from a
foreign person must deduct and withhold a tax equal to 10% of the amount
realized by the foreign transferor. In addition, a foreign person who disposes
of a United States real property interest generally is required to recognize
gain or loss that is subject to United States federal income tax. A "United
States real property interest" generally includes any interest (other than an
interest solely as a creditor) in a United States corporation unless it is
established under specific procedures that the corporation is not (and was not
for the prior five-year period) a "United States real property holding
corporation." We can give no assurance as to whether we are, at any time within
the past 5 years have been, or will in the future become, a United States real
property holding corporation. If it is determined that we are, have been in the
past five years or in the future become, a United States real property holding
corporation, so long as our stock is regularly traded on an established
securities market, an exemption should apply to the preferred stock except with
respect to a non-U.S. holder whose beneficial and/or constructive ownership of
preferred stock exceeds 5% of the total fair market value of the preferred
stock.
Any investor that may approach or exceed the 5% ownership threshold
discussed above, either alone or in conjunction with related persons, should
consult its own tax advisor concerning the United States tax consequences that
may result. A non-U.S. holder who sells or otherwise disposes of preferred stock
may be required to inform its transferee whether such preferred stock
constitutes a United States real property interest.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED STOCK, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR
OTHER TAX LAWS.
TAXATION OF DEBT SECURITIES
This subsection describes the material United States federal income tax
consequences of owning, selling and disposing of the debt securities we are
offering. It deals only with debt securities that are due to mature 30 years or
less from the date on which they are issued. The United States federal income
tax consequences of owning debt securities that are due to mature more than 30
years from the date of issue will be discussed in an applicable prospectus
supplement. In addition, this subsection assumes that the debt securities will
not be offered at a discount.
37
<PAGE> 41
U.S. HOLDERS OF DEBT SECURITIES
Interest Income
Payments of interest on a debt security generally will be taxable to a U.S.
holder as ordinary interest income at the time such payments are accrued or are
received (in accordance with the holder's regular method of tax accounting).
Debt Securities Purchased at a Market Discount
A holder who purchases a debt security will be considered to have purchased
the underlying debenture at a "market discount" if the holder's adjusted basis
in the debt security is less than its issue price, unless such market discount
is a de minimis amount (generally up to 1/4 of 1 percent of the adjusted issue
price of the debt security as of the purchase date multiplied by its weighted
average maturity as of such date). In general, any partial payment of principal
on, or gain recognized on the maturity or disposition of, the debt security will
be treated as ordinary income to the extent that such gain does not exceed the
accrued market discount on the underlying debenture. Alternatively, a holder of
a debt security may elect to include market discount in income currently over
the life of the debt security. Such an election applies to all debt instruments
with market discount acquired by the electing holder on or after the first day
of the first taxable year to which the election applies and may not be revoked
without the consent of the Internal Revenue Service.
Market discount accrues on a straight-line basis unless the holder elects
to accrue such discount on a constant yield to maturity basis. Such an election
is applicable only to the debt security with respect to which it is made and is
irrevocable. A holder of a debt security that does not elect to include market
discount in income currently generally will be required to defer deductions for
interest on borrowings allocable to such debt security in an amount not
exceeding the accrued market discount on such debt security until the maturity
or disposition of such debt security.
Debt Securities Purchased at a Premium
Under the Internal Revenue Code, a holder that purchases a debt security
will be considered to have purchased the debt security at a premium if the
holder's adjusted basis in the debt security immediately after the purchase is
greater than the issue price of such debt security. Such a holder may elect to
treat such premium as "amortizable bond premium," in which case the amount of
qualified stated interest required to be included in the holder's income each
year with respect to the interest on the debt security will be reduced by the
amount of the amortizable bond premium allocable (based on the debt security's
yield to maturity) to such year. Any election to amortize bond premium is
applicable to all bonds (other than bonds the interest on which is excludible
from gross income) held by the holder at the beginning of the first taxable year
to which the election applies or thereafter acquired by the holder, and may not
be revoked without the consent of the Internal Revenue Service.
Sale or Exchange of Debt Securities
A holder will generally recognize taxable gain or loss equal to the
difference between the amount realized on the sale, exchange or other
disposition of the debt security and the holder's adjusted tax basis in such
debt security (subject to the discussion above regarding market discount, which
may be treated as ordinary income). A holder's adjusted tax basis in the debt
security generally will be the initial purchase price paid therefor. In the case
of a holder other than a corporation, the maximum marginal United States federal
income tax rate applicable to gain recognized on the sale of a debt security is
20% if such holder's holder period for such debt security exceeds one year.
To the extent the selling price is less than the holder's adjusted tax
basis, the holder will recognize a capital loss. Subject to certain limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
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<PAGE> 42
Other Debt Securities
Special tax rules may apply to certain types of debt securities including,
but not limited to, debt securities issued at a discount, debt securities
subject to contingencies, variable rate debt securities and debt securities
convertible into equity of Calpine. The applicable prospectus supplement will
discuss any such special United States federal income tax rules with respect to
such debt securities.
Information Reporting and Backup Withholding Tax
In general, information reporting requirements will apply to payments of
principal, premium, if any, and interest on the debt securities and payments of
the proceeds of the sale of the debt securities, and a 31% backup withholding
tax may apply to such payments if the holder (1) fails to furnish or certify his
correct taxpayer identification number to the payor in the manner required, (2)
is notified by the Internal Revenue Service that he has failed to report
payments of interest and dividends properly, or (3) under certain circumstances,
fails to certify that he has not been notified by the Internal Revenue Service
that he is subject to backup withholding for failure to report interest and
dividend payments. Any amounts withheld under the backup withholding rules from
a payment to a holder will be allowed as a credit against such holder's United
States federal income tax and may entitle the holder to a refund, provided that
the required information is furnished to the Internal Revenue Service.
NON-U.S. HOLDERS OF DEBT SECURITIES
The rules governing United States federal income taxation of a beneficial
owner of debt securities that, for United States federal income tax purposes, is
a holder who is not a United States person as that term is defined in the
Internal Revenue Code are complex and no attempt will be made herein to provide
more than a summary of such rules. Non-U.S. holders should consult with their
own tax advisors to determine the effect of federal, state, local and foreign
income tax laws, as well as treaties, with regard to an investment in the debt
securities, including any reporting requirements.
This discussion assumes that the debt security or coupon is not subject to
the rules of Section 871(h)(4)(A) of The Internal Revenue Code, relating to
interest payments that are determined by reference to income, profits, changes
in value of property or other attributes of Calpine or a related party.
Interest Income
Generally, interest income of a non-U.S. holder that is not effectively
connected with a United States trade or business will be subject to a
withholding tax at a 30% rate (or, if applicable, a lower tax rate specified by
a treaty). However, interest income earned on a debt security by a non-U.S.
holder will qualify for the "portfolio interest" exemption and therefore will
not be subject to United States federal income tax or withholding tax, provided
that such interest income is not effectively connected with a United States
trade or business of the non-U.S. holder and provided that (1) the non-U.S.
holder does not actually or constructively own 10% of more of the total combined
voting power of all classes of our stock entitled to vote; (2) the non-U.S.
holder is not a controlled foreign corporation that is related to us through
stock ownership; (3) the non-U.S. holder is not a bank which acquired the debt
security in consideration for an extension of credit made pursuant to a loan
agreement entered into in the ordinary course of business; and (4) either (A)
the non-U.S. holder certifies to us or our agent, under penalties of perjury,
that it is not a United States person and provides its name and address or (B) a
securities clearing organization, bank or other financial institution that holds
customer securities in the ordinary course of its trade or business and holds
the debt securities in such capacity, certifies to us or our agent, under
penalties of perjury, that such a statement has been received from the
beneficial owner by it or by a financial institution between it and the
beneficial owner and furnishes to us or our agent with a copy thereof.
39
<PAGE> 43
Final Treasury regulations would modify the certification requirements on
payments of interest made after December 31, 2000. Prospective investors should
consult their own tax advisors as to the effect, if any, of the Final Treasury
regulations on their purchase, ownership and disposition of debt securities.
Except to the extent that an applicable treaty otherwise provides, a
non-U.S. holder generally will be taxed with respect to interest in the same
manner as a holder that is a United States person if the interest is effectively
connected with a United States trade or business of the non-U.S. holder.
Effectively connected interest income received or accrued by a corporate
non-U.S. holder may also, under certain circumstances, be subject to an
additional "branch profits" tax at a 30% rate (or, if applicable, at a lower tax
rate specified by a treaty). Even though such effectively connected income is
subject to income tax, and may be subject to the branch profits tax, it is not
subject to withholding tax if the non-U.S. holder delivers a properly executed
Internal Revenue Service Form 4224 (or successor form) to the payor.
Sale or Exchange of Debt Securities
A non-U.S. holder generally will not be subject to United States federal
income tax or withholding tax on any gain realized on the sale, exchange or
other disposition of a debt security unless (1) the gain is effectively
connected with a United States trade or business of the non-U.S. holder, (2) in
the case of a non-U.S. holder who is an individual, such holder is present in
the United States for a period or periods aggregating 183 days or more during
the taxable year of the disposition, and either such holder has a "tax home" in
the United States or the disposition is attributable to an office or other fixed
place of business maintained by such holder in the United States, or (3) the
non-U.S. holder is subject to tax pursuant to the provisions of the Internal
Revenue Code applicable to certain United States expatriates.
Information Reporting and Backup Withholding Tax
United States information reporting requirements and backup withholding tax
will not apply to payments on the debt securities to a non-U.S. holder if the
statement described in "Interest Income" is duly provided by such holder,
provided that the payor does not have actual knowledge that the holder is a
United States person. Information reporting requirements and backup withholding
tax will not apply to any payment of the proceeds of the sale of debt securities
effected outside the United States by a foreign office of a "broker" as defined
in applicable Treasury regulations, unless such broker (1) is a United States
person as defined in the Internal Revenue Code, (2) is a foreign person that
derives 50% or more of its gross income for certain periods from the conduct of
a trade or business in the United States or (3) is a controlled foreign
corporation for United States federal income tax purposes. Payment of the
proceeds of any such sale effected outside the United States by a foreign office
of any broker that is described in (1), (2) or (3) of the preceding sentence
will not be subject to backup withholding tax, but will be subject to
information reporting requirements, unless such broker has documentary evidence
in its records that the beneficial owner is a non-U.S. holder and certain other
conditions are met, or the beneficial owner otherwise establishes an exemption.
Payment of the proceeds of any such sale to or through the United States office
of a broker is subject to information reporting and backup withholding
requirements unless the beneficial owner of the debt securities provides the
statement described in "Interest Income" or otherwise establishes an exemption.
Prospective investors should consult their own tax advisors as to the effect, if
any, of the Final Treasury regulations on their purchase, ownership and
disposition of the debt securities.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
DEBT SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR
OTHER TAX LAWS.
40
<PAGE> 44
NOTICE TO CANADIAN RESIDENTS
RESALE RESTRICTIONS
The distribution of the securities in Canada will be made only on a private
placement basis exempt from the requirement that we prepare and file a
prospectus with the securities regulatory authorities in each province where
trades of the securities are made. Any resale of securities in Canada must be
made under applicable securities laws which will vary depending on the relevant
jurisdiction, and which may require resales to be made under available statutory
exemptions or under a discretionary exemption granted by the applicable Canadian
securities regulatory authority. Purchasers are advised to seek legal advice
prior to any resale of securities.
REPRESENTATION OF PURCHASERS
By purchasing the securities in Canada and accepting a purchase
confirmation a purchaser is representing to us and the dealer from whom the
purchase confirmation is received that
(i) the purchaser is entitled under applicable provincial securities
laws to purchase the securities without the benefit of a prospectus
qualified under those securities laws,
(ii) where required by law, that the purchaser is purchasing as
principal and not as agent, and
(iii) the purchaser has reviewed the text under "Resale Restrictions."
RIGHTS OF ACTION (ONTARIO PURCHASERS)
The securities being offered are those of a foreign issuer and Ontario
purchasers will not receive the contractual right of action prescribed by
Ontario securities law. As a result, Ontario purchasers must rely on other
remedies that may be available, including common law rights of action for
damages or rescission or rights of action under the civil liability provisions
of the U.S. federal securities laws.
ENFORCEMENT OF LEGAL RIGHTS
All of the issuer's directors and officers as well as the experts named
herein may be located outside of Canada and, as a result, it may not be possible
for Canadian purchasers to effect service of process within Canada upon the
issuer or such persons. All or a substantial portion of the assets of the issuer
and such persons may be located outside of Canada and, as a result, it may not
be possible to satisfy a judgment against the issuer or such persons in Canada
or to enforce a judgment obtained in Canadian courts against such issuer or
persons outside of Canada.
NOTICE TO BRITISH COLUMBIA RESIDENTS
A purchaser of the securities to whom the Securities Act (British Columbia)
applies is advised that the purchaser is required to file with the British
Columbia Securities Commission a report within ten days of the sale of any
securities acquired by such purchaser pursuant to this offering. The report must
be in the form attached to British Columbia Securities Commission Blanket Order
BOR #95/17, a copy of which may be obtained from us. Only one report must be
filed for the securities acquired on the same date and under the same prospectus
exemption.
TAXATION AND ELIGIBILITY FOR INVESTMENT
Canadian purchasers of securities should consult their own legal and tax
advisors with respect to the tax consequences of an investment in the securities
in their particular circumstances and with respect to the eligibility of the
securities for investment by the purchaser under relevant Canadian legislation.
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<PAGE> 45
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for us by
Covington & Burling, New York, New York. Any underwriters that utilize outside
counsel will be represented by Skadden, Arps, Slate, Meagher & Flom LLP, New
York, New York.
EXPERTS
The financial statements incorporated by reference in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports with respect
thereto and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
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<PAGE> 46
CALPINE LOGO
<PAGE> 47
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+1.1 Form of Underwriting Agreement
+3.1 Amended and Restated Certificate of Incorporation of Calpine
+3.2 By-laws of the Company
+4.1 Form of Indenture between the Company and Wilmington Trust
Company, including form of Note
+5.1 Opinion of Covington & Burling
+8.1 Opinion of Covington & Burling as to certain tax matters
**10.1 Form of Registration Rights Agreement
+12.1 Statement Regarding Computation of Ratios
*23.1 Consent of Arthur Andersen LLP, independent public
accountants
+23.2 Consent of Covington & Burling (included in Exhibits 5.1 and
8.1)
+24.1 Power of Attorney of Officers and Directors of the Company
(set forth on the signature pages of the first filing of
this Registration Statement)
+25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of Wilmington Trust Company, as
Trustee under the Indenture
</TABLE>
-------------------------
* Filed herewith.
** To be filed by amendment.
+ Previously filed.
II-1
<PAGE> 48
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of San Jose, State of California, on this 6th day of
December, 2000.
CALPINE CORPORATION
By /s/ ANN B. CURTIS
------------------------------------
Ann B. Curtis
Executive Vice President and
Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
amendment to the Registration Statement has been signed below by the following
persons on behalf of the Registrant and in the capacities and on the dates
indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman, President, Chief Executive December 6, 2000
------------------------------------ and Director (Principal Executive
Peter Cartwright Officer)
/s/ ANN B. CURTIS Executive Vice President and December 6, 2000
------------------------------------ Director (Principal Financial
Ann B. Curtis Officer)
* Vice President and Corporate December 6, 2000
------------------------------------ Controller (Principal Accounting
Charles B. Clark, Jr. Officer)
Director December 6, 2000
------------------------------------
Jeffrey E. Garten
Director December 6, 2000
------------------------------------
Michael Polsky
Director December 6, 2000
------------------------------------
Susan C. Schwab
* Director December 6, 2000
------------------------------------
George J. Stathakis
* Director December 6, 2000
------------------------------------
John O. Wilson
* Director December 6, 2000
------------------------------------
V. Orville Wright
*By: /s/ ANN B. CURTIS
------------------------------------
Ann B. Curtis
Attorney-in-Fact
</TABLE>
II-2
<PAGE> 49
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
+1.1 Form of Underwriting Agreement
+3.1 Amended and Restated Certificate of Incorporation of Calpine
+3.2 By-laws of the Company
+4.1 Form of Indenture between the Company and Wilmington Trust
Company, including form of Note
+5.1 Opinion of Covington & Burling
+8.1 Opinion of Covington & Burling as to certain tax matters
**10.1 Form of Registration Rights Agreement
+12.1 Statement Regarding Computation of Ratios
*23.1 Consent of Arthur Andersen LLP, independent public
accountants
+23.2 Consents of Covington & Burling (included in Exhibits 5.1
and 8.1)
+24.1 Power of Attorney of Officers and Directors of the Company
(set forth on the signature pages of the first filing of
this Registration Statement)
+25.1 Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended, of Wilmington Trust Company, as
Trustee under the Indenture.
</TABLE>
-------------------------
* Filed herewith.
** To be filed by amendment.
+ Previously filed.
II-3
