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                                                                  EXHIBIT 10.3.4

                      PETER CARTWRIGHT EMPLOYMENT AGREEMENT

      This Employment Agreement (this "Agreement") has been entered into
effective as of the first day of January, 2000, between CALPINE CORPORATION, a
Delaware corporation (the "Company"), and PETER CARTWRIGHT ("Executive") to
provide for the employment of Executive on the terms and conditions set forth
herein.

      WHEREAS, Executive has served as the President and Chief Executive Officer
of the Company since its inception in 1984 and has served as the Chairman of the
Board of Directors of the Company (the "Board") since September 1996; and

      WHEREAS, the Company wishes to assure itself of the continued employment
efforts of Executive for the period provided in this Agreement, and Executive is
willing to continue to serve in the employ of the Company on a full-time basis
for said period upon the terms and conditions hereinafter provided.

      NOW, THEREFORE, in consideration of the mutual agreements herein
contained, intending to be legally bound, the Company and Executive agree as
follows:

      1.    Employment. The Company hereby employs Executive, and Executive
hereby accepts such employment by the Company, upon the terms and conditions
herein provided.

      2.    Term of Employment. Executive's employment with the Company pursuant
to this Agreement shall commence on January 1, 2000 and shall continue through
December 31, 2004 (which period of time shall be referred to as the "Term of
this Agreement"), unless such employment is sooner terminated or subsequently
extended as hereinafter provided. Unless earlier terminated, this Agreement
shall automatically continue in effect for two (2) additional successive
calendar year periods after December 31, 2004 (each such successive calendar
year periods shall be referred to as the "Extended Term of this Agreement"),
unless either the Company or Executive elects to terminate this Agreement as of
the start of any subsequent calendar year by providing not less than sixty (60)
days prior written notice to the other party. The period during which this
Agreement continues in effect shall constitute the "Employment Period".

      3.    Positions and Responsibilities.

            (a)   Position. During the Employment Period, Executive shall serve
as the Company's President and Chief Executive Officer ("CEO") and shall be
responsible for the general management of the affairs of the Company, reporting
directly to the Board.

            (b)   Duties. During the Employment Period, and subject to the
control of the Board, Executive shall have general executive powers and active
management and supervision over





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the property, business and affairs of the Company and shall perform such other
executive and/or administrative duties consistent with the office of President
and CEO as from time to time may be assigned to Executive by the Board, but
subject to the conditions in this Agreement. Executive shall devote
substantially Executive's full business time and attention to, and exert
Executive's best efforts in, the performance of Executive's duties hereunder, so
as to promote the business of the Company. Executive's principal place of
business shall be at the Company's corporate offices in San Jose, California.

            (c)   Board Membership. The Company shall take all actions that are
necessary or appropriate to cause Executive to be nominated and elected to serve
as a member of the Board and as the Chairman of the Board during the Employment
Period.

      4.    Compensation. For all services rendered by Executive pursuant to
this Agreement, the Company shall pay Executive, and Executive agrees to accept,
the salary, bonuses and other benefits described below in this Section 4. Only
for purposes of this Section 4, the term "Board" shall be deemed to mean either
the Board of Directors of the Company or, where appropriate, the Compensation
Committee of the Board of Directors of the Company.

            (a)   Salary. The Company shall pay Executive an annual base salary
("Base Salary") as determined by the Board in accordance with this Section 4,
payable at periodic intervals in accordance with the Company's payroll practices
for salaried employees. Executive's Base Salary for the calendar year ending
December 31, 1999 is currently Seven Hundred Fifty Thousand Dollars
($750,000.00). In accordance with Subsection 4(c) hereof, the amount of the Base
Salary shall be reviewed by the Board on at least an annual basis during each
year of the Employment Period, and any increases will be effective as of the
first day of January of such year or on such other date determined appropriate
by the Board. Executive's Base Salary may be increased for any reason, including
to reflect inflation or such other adjustments as the Board may deem
appropriate; provided, however, that Executive's Base Salary, as currently in
effect as stated above or as so increased, may not be subsequently decreased,
except with the prior written consent of Executive.

            (b)   Bonuses. In addition to Base Salary, Executive shall be
entitled to receive, for each fiscal year of the Company ending with or within
the Employment Period, an annual bonus ("Bonus"), whether pursuant to a formal
bonus or incentive plan or program of the Company or otherwise. Subject to this
Subsection 4(b) and Subsection 4(c) hereof, such Bonus shall be based on such
criteria as are in good faith deemed appropriate by the Board. Any Bonus earned
by Executive for service or performance rendered in any fiscal year within the
Employment Period shall be paid to Executive in accordance with the applicable
plan or program and the Company's policies governing such matters. Executive is
entitled to participate in and receive a Bonus in accordance with the terms and
conditions set forth in the Company's Annual Management Incentive Plan;
provided, however, that (i) the target bonus for Executive as set forth in the
current Annual Management Incentive Plan shall be one hundred forty-five percent
(145%), and (ii) ninety percent (90%) of Executive's bonus shall be based on the
Company's financial performance and ten percent (10%) of Executive's bonus will
be based on the Executive's individual performance which shall be evaluated on
the basis of qualitative, non-financial criteria which shall be determined and
articulated by the Board on an annual basis.




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            (c)   Annual Compensation Review. Notwithstanding anything herein to
the contrary, Executive's compensation, consisting of salary, bonus and stock
option grants, shall be reviewed not less than annually by the Board. In order
to assist the Board in accomplishing such review, the Company shall retain an
independent executive compensation consultant to prepare a survey of the
compensation of senior executives in positions similar to Executive.

            (d)   Health Care. During the Employment Period, Executive shall be
eligible to participate in any health insurance programs and medical plans under
current policies maintained by the Company for executives.

            (e)   Participation in Benefit and Equity Compensation Plans. During
the Employment Period, Executive shall be eligible to receive all benefits,
including those under equity participation and bonus programs, to which key
employees are or become eligible under such plans or programs as may be
established by the Board. In addition to any other plans or programs established
by the Company, Executive shall be entitled to participate in the Company's
Stock Option Program and any similar or replacement plan or program (the "Stock
Option Program").

            (f)   401(k) Plan Benefits. In addition to the other benefits to
which Executive shall be entitled to under this Agreement, Executive shall be
entitled to participate in the Company's 401(k) Plan and shall be entitled to
receive the full benefit of contributions to be made by the Company for the
benefit of Executive under the terms of the 401(k) Plan.

            (g)   Disability Benefits. In the event of the Disability of
Executive, the Company shall continue to pay Executive the salary payable to
Executive in accordance with Subsection 4(a) hereof during the period of
Executive's Disability; provided, however, that, in the event that Executive is
disabled for a continuous period exceeding six (6) calendar months, the Company
may elect at the expiration of this six (6) month period to terminate this
Agreement and pay Executive the greater of (i) Executive's available monthly
benefits from any existing Company-sponsored long-term disability plan; or (ii)
sixty-seven percent (67%) of the salary provided in Subsection 4(a) for the
duration of the Term of this Agreement or the Extended Term of this Agreement,
as applicable. In the event of Executive's Disability during the Employment
Period, the Company shall also pay to Executive the pro rata portion of the
Bonus that Executive would have earned in respect of the portion of the year
prior to Executive's Disability.

            (h)   Death Benefits. In the event of Executive's death (as defined
in the Company's group life insurance program) during Executive's Disability or
otherwise during the Employment Period, the Company shall cause payment to be
made to Executive's most recently designated beneficiary (which, absent specific
designation of a beneficiary for purposes of this provision, shall be
Executive's most recently designated beneficiary under the Company's group life
insurance program) a sum equal to three (3) times Executive's Base Salary. In
the event of Executive's death (as defined in the Company's group life insurance
program) during the Employment Period, the Company shall pay to Executive's
estate the pro rata portion of the Bonus that Executive would have earned with
respect of the portion of the year prior to Executive's death. The above payment
obligations of the Company shall be discharged to the extent benefits are





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actually paid pursuant to the Company's group life insurance program, with the
balance of said obligation to be discharged either by a cash payment from the
Company, or, if the Company so elects, by supplementary life insurance policies
to be obtained and maintained by the Company.

      5.    Vacation. During the Employment Period, Executive shall be entitled
to vacation of twenty-five (25) business days in each year, with full salary,
and Executive shall accrue paid vacation benefits during the Employment Period
in accordance with the Company policy in effect for executive officers.

      6.    Indemnification. The Company shall maintain indemnification of
Executive pursuant to the provisions of the Company's Articles of Incorporation
and Bylaws to the fullest extent of California law and all other applicable law,
and shall provide Executive with indemnification pursuant to the Company's
standard indemnification agreement and any director's and officer's liability
insurance policy maintained by the Company.

      7.    Severance Benefits.

            (a)   Voluntary Resignation. If Executive's employment terminates by
reason of Executive's voluntary resignation (and such termination is not an
Involuntary Termination or a termination for Cause), then Executive shall not be
entitled to receive severance or other benefits except for those (if any) to
which Executive may be entitled under this Agreement or any separate agreement
with the Company or as may then be established under the Company's then existing
severance and benefit plans and policies at the time of such termination.

            (b)   Voluntary Resignation Following a Change of Control. If within
twelve (12) months after a Change of Control, Executive's employment terminates
by reason of Executive's voluntary resignation (and such termination is not an
Involuntary Termination or a termination for Cause), then the following
severance benefits shall be paid or otherwise provided to Executive:

                  (i)   the Company shall pay to Executive in the form of a lump
sum payment, in cash, a severance payment equal to the greater of (I) two (2)
times Executive's Current Compensation or (II) Executive's Current Compensation
multiplied by the number of years (or any portion thereof, calculated on a daily
basis) remaining under this Agreement had Executive's employment not been
terminated, which shall be paid to Executive within ten (10) days after the date
of termination;

                  (ii)  until the earlier of (I) the date this Agreement would
otherwise have terminated had Executive's employment not been terminated or (II)
the expiration of the three (3) year period measured from the date of
Executive's termination of employment, the Company shall at its sole cost and
expense provide Executive (and Executive's eligible dependents, if any) with
life, disability, accident and group health insurance benefits substantially
similar to those benefits that Executive (and Executive's dependents) were
receiving immediately prior to Executive's termination of employment; provided,
however, that the benefits otherwise receivable by Executive pursuant to this
subsection 7 (b) shall be reduced to the extent comparable benefits are

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concurrently received by Executive (or Executive's dependents) pursuant to a
similar plan or program of another employer, and any such other benefits
actually received by Executive (or Executive's dependents) must be reported to
the Company; and provided further, however, that the health care coverage
provided by the Company pursuant to this subsection 7 (b) shall be in lieu of
any other continued health care coverage to which Executive or Executive's
dependents would otherwise, at Executive's own expense, be entitled in
accordance with the requirements of Internal Revenue Code of 1986, as amended
("Code"), Section 4980B ("COBRA") by reason of Executive's termination of
employment; and

                  (iii) all stock options, warrants, rights and other Company
stock-related awards granted to Executive by the Company that would otherwise
have vested or become exercisable at any time in the future shall become fully
vested and nonforfeitable upon the date of Executive's termination of
employment, the Company's repurchase rights, if any, with respect to those
vested shares shall immediately lapse, and each such stock option, to the extent
vested, shall remain exercisable for the vested option shares until the
expiration or sooner termination of the option term in accordance with the
provisions of the agreement evidencing such option.

            (c)   Involuntary Termination Other Than For Cause. If Executive's
employment is terminated as a result of an Involuntary Termination other than
for Cause, then the following severance benefits shall be paid or otherwise
provided to Executive:

                  (i)   the Company shall pay to Executive in the form of a lump
sum payment, in cash, a severance payment equal to the greater of (I) three (3)
times Executive's Current Compensation or (II) Executive's Current Compensation
multiplied by the number of years (or any portion thereof, calculated on a daily
basis) remaining under this Agreement had Executive's employment not been
terminated, which shall be paid to Executive within ten (10) days after the date
of termination;

                  (ii)  until the earlier of (I) the date this Agreement would
otherwise have terminated had Executive's employment not been terminated or (II)
the expiration of the three (3) year period measured from the date of
Executive's termination of employment, the Company shall at its sole cost and
expense provide Executive (and Executive's eligible dependents, if any) with
life, disability, accident and group health insurance benefits substantially
similar to those benefits that Executive (and Executive's dependents) were
receiving immediately prior to Executive's termination of employment; provided,
however, that the benefits otherwise receivable by Executive pursuant to this
subsection 7 (c) shall be reduced to the extent comparable benefits are
concurrently received by Executive (or Executive's dependents) pursuant to a
similar plan or program of another employer, and any such other benefits
actually received by Executive (or Executive's dependents) must be reported to
the Company; and provided further, however, that the health care coverage
provided by the Company pursuant to this subsection 7 (c) shall be in lieu of
any other continued health care coverage to which Executive or Executive's
dependents would otherwise, at Executive's own expense, be entitled in
accordance with the requirements COBRA, by reason of Executive's termination of
employment;



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                  (iii) all stock options, warrants, rights and other Company
stock- related awards granted to Executive by the Company that would otherwise
have vested or become exercisable at any time in the future shall become fully
vested and nonforfeitable upon the date of Executive's termination of
employment, the Company's repurchase rights, if any, with respect to those
vested shares shall immediately lapse, and each such stock option, to the extent
vested, shall remain exercisable for the vested option shares until the
expiration or sooner termination of the option term in accordance with the
provisions of the agreement evidencing such option; and

                  (iv)  the Company shall pay or reimburse Executive for any and
all expenses incurred by Executive for outplacement services selected by
Executive until the earlier of (I) the first anniversary of the date of
termination of employment or (II) the date on which Executive commences
employment with another employer.

            (d)   Termination for Cause. If Executive's employment is terminated
for Cause, then Executive shall not be entitled to receive any severance
payments or other severance benefits under this Section 7. Executive's benefits
will be continued under the Company's then existing benefit plans and policies
in accordance with such plans and policies in effect on the date of termination.

            (e)   Parachute Payments. If all or any portion of the amounts
payable to Executive under this Agreement or otherwise are subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code (the "Code") (or
similar state tax and/or assessment), Company shall pay to Executive an amount
necessary to place Executive in the same after tax position as Executive would
have been in had no such excise tax been imposed. The amount payable pursuant to
the preceding sentence shall be increased to the extent necessary to pay income
and excise taxes due on such amount. The determination of the amount of any such
additional amount shall be made by the independent accounting firm then employed
by the Company.


      8.    Noncompetition and Confidential Information. While employed by the
Company, Executive will not directly or indirectly manage, operate, participate
in, be employed by, perform consulting services for, or otherwise be connected
in any manner with, any firm, person, corporation, or enterprise which would be
competitive with the business of the Company. Executive will not at any time
disclose to others any confidential information relating to the Company or to
the business of the Company and confirms that such information constitutes the
exclusive property of the Company. The foregoing shall not preclude Executive's
investment in any such firm, corporation or enterprise provided that at any one
time Executive and members of Executive's immediate family do not own more than
one percent (1%) of any voting securities of any such entity.

      9.    Consulting. Executive and the Company may, but are not required to,
enter into an agreement pursuant to which Executive will provide consulting
services to the Company after the date of Executive's retirement or termination.
Any consulting fees paid to Executive will be in addition to any retirement or
severance payments.





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      10.   Failure to Comply. If, for any reason other than Executive's death,
Disability or Involuntary Termination, Executive shall cease to render services
as required by this Agreement without the written consent of the Company, or if
Executive shall breach the provisions of Section 8 hereof, then, except as
provided in Section 7 hereof, Executive will thereby relinquish all rights to
any benefits hereunder, including future salary payments and death benefits, and
the Company shall reserve whatever rights, if any, it may have against Executive
under this Agreement or otherwise.

      11.   Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise)
or to all or substantially all of the Company's business and/or assets shall
assume the obligations under this Agreement and shall perform the obligations
under this Agreement in the same manner and to the same extent as the Company
would be required to perform such obligations in the absence of a succession.
The terms of this Agreement and all of Executive's rights hereunder shall inure
to the benefit of, and be enforceable by, Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

      12.   Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. Mailed notices to Executive shall be
addressed to Executive at the home address from which Executive most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notice shall
be directed to the attention of its Secretary.

      13.   Miscellaneous Provisions.

            (a)   Definition of Terms. The capitalized terms in this Agreement
shall have the meanings set forth in this Agreement or in Appendix A hereto.

            (b)   No Duty to Mitigate. Executive shall not be required to
mitigate the amount of any payment contemplated by this Agreement (whether by
seeking new employment or in any other manner), nor shall any such payment be
reduced by earnings that Executive may receive from any other source.

            (c)   Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by Executive and by an authorized officer or
representative of the Company (other than Executive). No waiver by either party
of any breach of, or of compliance with, any condition or provision of this
Agreement by the other party shall be considered a waiver of any other condition
or provision or of the same condition or provision of another time.

            (d)   Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.





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            (e)   Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California.

            (f)   Severability. If any term or provision of this Agreement or
the application thereof to any circumstance shall, in any jurisdiction and to
any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity of
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions of this Agreement or the application of such terms and
provisions to circumstances other than those as to which it is held invalid or
unenforceable, and a suitable and equitable term or provision shall be
substituted therefor to carry out, insofar as may be valid and enforceable, the
intent and purpose of the invalid or unenforceable term or provision.

            (g)   Arbitration. Any dispute or controversy arising under or in
connection with this Agreement may be settled by arbitration in the County of
San Francisco, California, in accordance with the rules of the American
Arbitration Association then in effect. Such arbitration proceedings shall be
nonbinding and any claim with respect to this Agreement, whether or not
previously the subject of an arbitration proceeding, may be brought in any court
of competent jurisdiction.

            (h)   Employment Taxes. All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.

            (i)   Assignment by Company. The Company may assign its rights under
this Agreement to an affiliate, and an affiliate may assign its rights under
this Agreement to another affiliate of the Company; provided, however, that if
there is any such assignment, the Company will guarantee all payments and the
performance of all obligations under this Agreement. In the case of any such
assignment, the term "Company" when used in a section of this Agreement shall
mean the corporation or other entity that actually employs Executive.

            (j)   Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together will
constitute one and the same instrument.

      14.   Previous Agreement. This Agreement replaces and supersedes the
Amended and Restated Employment Contract with Executive which covered the period
from January 1, 1995 through December 31, 1999.



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      IN WITNESS WHEREOF, the parties hereto have executed this Agreement this
day and year first above written.


CALPINE CORPORATION:                        EXECUTIVE:



By:
   ---------------------------------        ---------------------------------
   Susan C. Schwab, Chairman of the         Peter Cartwright, in his individual
   Compensation Committee of the            capacity
   Board of Directors




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                                   APPENDIX A

                                   DEFINITIONS


      Cause. "Cause" shall mean (i) material breach of any material terms of
this Agreement, (ii) conviction of a felony, (iii) repeated unexplained or
unjustified absence, (iv) willful breach of fiduciary duty under this Agreement
or (v) gross negligence or willful misconduct where such gross negligence or
willful misconduct has resulted or is likely to result in substantial and
material damage to the Company or its subsidiaries.

      Change of Control. "Change of Control" shall mean the occurrence of any of
the following events:

            (i) any "person" (as such term is used in Sections 13(d) and 14(d)
      of the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
      other than the Company's current stockholders or a trustee or other
      fiduciary holding securities under an employee benefit plan of the Company
      or any corporation owned, directly or indirectly, by the Company's
      stockholders in substantially the same proportions as their ownership of
      the Company's stock, becomes the "beneficial owner" (as defined in Rule
      13d-3 under the Exchange Act), directly or indirectly, of securities of
      the Company representing fifty percent (50%) or more of the total combined
      voting power of the Company's then outstanding securities; or

            (ii) the majority of the members of the Board ceases to be comprised
      of individuals who are Continuing Members; for such purpose, a "Continuing
      Member" shall mean an individual who is a member of the Board on the date
      of this Agreement and any successor of a Continuing Member who is elected
      to the Board or nominated for such election by action of a majority of
      Continuing Members then serving on the Board; or

            (iii) the stockholders of the Company approve a merger or
      consolidation of the Company with any other corporation, other than a
      merger or consolidation which would result in the voting securities of the
      Company outstanding immediately prior thereto continuing to represent
      (either by remaining outstanding or by being converted into voting
      securities of the surviving entity) at least fifty percent (50%) of the
      total voting power represented by the voting securities of the Company or
      such surviving entity outstanding immediately after such merger or
      consolidation, or the stockholders of the Company approve a plan of
      complete liquidation or dissolution of the Company or an agreement for the
      sale or disposition by the Company of all or substantially all of the
      Company's assets.




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      Current Compensation. "Current Compensation" shall mean (i) an amount
equal to the greater of (A) Executive's highest annual base salary for the year
preceding the year in which a termination of employment occurs or (B)
Executive's annual base salary at any time during the year in which a
termination of employment occurs, plus (ii) an amount equal to the greater of
the bonus payments Executive received in the preceding calendar year or the
target bonus payment for the year in which a termination of employment occurs.

      Disability. "Disability" shall mean the inability of Executive to perform
all the material duties of Executive's position as determined by an independent
physician selected with the approval of the Company and Executive.

      Involuntary Termination. "Involuntary Termination" shall mean termination
by the Company of Executive's employment for any reason other than for Cause,
and shall include Executive's voluntary resignation following (i) the material
breach by the Company of one or more of its obligations under this Agreement
which are not otherwise corrected within ten (10) days following Executive's
written notice to the Company of such breach, or (ii) the occurrence of any of
the following events without Executive's express prior written consent: (A) a
change in Executive's position with the Company which materially reduces
Executive's level of responsibilities, (B) a reduction in Executive's level of
compensation (including base salary, benefits and any non-discretionary and
objective-standard incentive payment or bonus award), (C) a relocation of
Executive's place of employment by more than twenty (20) miles from Executive's
current place of employment, (D) the assignment of additional material job
responsibilities or a reduction in job responsibilities inconsistent with
Executive's position with the Company and Executive's prior responsibilities, or
(E) in the event Executive is no longer the Company's President and CEO
reporting to the Board.




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