X0202 4 2006-03-31 0 0001241199 CAPITALSOURCE INC CSE 0001257511 FREMDER ANDREW B C/O FARALLON CAPITAL MANAGEMENT, L.L.C. ONE MARITIME PLAZA, SUITE 1325 SAN FRANCISCO CA 94111 1 0 1 1 Member of Group Owning 10% Phantom Stock 2006-03-31 4 A 0 121 24.88 A Common Stock 121 2148 D Each share of phantom stock represents the right to receive one share of common stock. These shares of phantom stock are payable upon termination of the reporting person's service as a director, a date selected by the reporting person or as provided in the Issuer's Deferred Compensation Plan, a form of which was filed with the Securities and Exchange Commission on February 2, 2004 as Exhibit 10.21 to the Issuer's Registration Statement on Form S-1/A (Reg. No. 333-112002). The number of derivative securities reported in Column 9 includes 196 phantom stock units received by Fremder on or about January 25, 2006 pursuant to the Issuer's Deferred Compensation Plan as a result of the special dividend declared by the Issuer and paid to all of its holders of record of shares of common stock on November 23, 2005. The receipt of such additional phantom stock units was exempt from Section 16 of the Securities Exchange Act of 1934, as amended. The number of derivative securities reported in Column 9 includes 39 phantom stock units received by Fremder on or about March 31, 2006 pursuant to the Issuer's Deferred Compensation Plan. The Issuer declared a quarterly cash dividend to all of its holders of record of shares of common stock on March 3, 2006. The 39 phantom stock units represent the re-investment of the cash dividend payable to Fremder with respect to his existing phantom stock units pursuant to the Issuer's Deferred Compensation Plan. The receipt of such additional phantom stock units was exempt from Section 16 of the Securities Exchange Act of 1934, as amended. Fremder, together with certain entities and individuals affiliated with Farallon Capital Management, L.L.C. and Farallon Partners, L.L.C. and identified in the Form 4 filed by Fremder and such entities and individuals on March 14, 2006 with respect to the Issuer's common stock, may be deemed members of a group holding equity securities of the Issuer. None of the information in this Form 4 may be deemed to be an admission that any of Fremder and such entities and individuals are members of such group. /s/ Mark C. Wehrly, as attorney-in-fact and/or authorized signer for Andrew B. Fremder 2006-04-04