Edgar Filing: DYNEGY INC /IL/

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement

[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12

DYNEGY INC.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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[X] No fee required.

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[_] Check box if any part of the fee is offset as provided by Exchange
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[LOGO] Dynegy

April 23, 2001

To Our Shareholders:

On behalf of the Board of Directors of Dynegy, I am pleased to invite you
to attend our 2001 Annual Meeting of Shareholders. As indicated in the
attached notice, the meeting will be held at The Petroleum Club, 800 Bell
Avenue, Suite 4300, Houston, Texas, 77002 on Friday May 18, 2001, at 10:00
a.m., local time. At the meeting, in addition to acting on the matters
described in the attached proxy statement, there will be an opportunity to
discuss other matters of interest to you as a shareholder.

Please date, sign and mail the enclosed proxy card in the envelope
provided, even if you plan to attend the meeting in person. You also may vote
your shares through the internet or by telephone, as described in the enclosed
proxy statement. I look forward to seeing you in Houston.

Sincerely,

/s/ Chuck Watson
Chuck Watson
Chairman of the Board and Chief
Executive Officer

[Dynegy Logo]

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD FRIDAY, MAY 18, 2001

To our Shareholders:

NOTICE IS HEREBY GIVEN, that the 2001 Annual Meeting of Shareholders of
Dynegy Inc., an Illinois corporation, will be held on Friday, May 18, 2001 at
10:00 a.m., local time, at The Petroleum Club, 800 Bell Avenue, Suite 4300,
Houston, Texas 77002, for the following purposes:

1. To elect eleven Class A common stock directors and three Class B common
stock directors to serve until the 2002 Annual Meeting of Shareholders;

2. To consider and act upon a proposal to amend and restate Dynegy's
Articles of Incorporation to incorporate all previously approved
amendments to Dynegy's Articles of Incorporation, to clarify that the
description of Series A Convertible Preferred Stock (no shares of which
are outstanding) previously established by resolution of the Board is
deleted, to eliminate out-dated information and to make other minor
stylistic, conforming and clarifying alterations;

3. To consider and act upon a proposal to ratify the Board of Directors'
appointment of Arthur Andersen LLP as Dynegy's independent auditors for
the fiscal year ending December 31, 2001; and

4. To consider and act upon any other matters that may properly come
before such meeting or any adjournment(s) or postponement(s) thereof.

The close of business on March 30, 2001 has been fixed as the record date
for the determination of shareholders entitled to receive notice of and to
vote at the annual meeting or any adjournment(s) or postponement(s) thereof.

You are cordially invited to attend the annual meeting. WHETHER OR NOT YOU
PLAN TO ATTEND THE ANNUAL MEETING, WE ASK THAT YOU SIGN AND RETURN THE
ENCLOSED PROXY AS PROMPTLY AS POSSIBLE. A SELF-ADDRESSED, POSTAGE-PAID
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE. ALTERNATIVELY, YOU MAY VOTE YOUR
SHARES VIA TELEPHONE OR THE INTERNET AS DETAILED ON THE ENCLOSED PROXY.

By Order of the Board of Directors,

/s/ Kenneth E. Randolph
Kenneth E. Randolph
General Counsel and Secretary

April 23, 2001

DYNEGY INC.
1000 Louisiana, Suite 5800
Houston, Texas 77002
(713) 507-6400

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PROXY STATEMENT

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GENERAL INFORMATION

The enclosed proxy is solicited by and on behalf of the Board of Directors
of Dynegy for use at the annual meeting to be held on Friday, May 18, 2001 at
10:00 a.m., local time, at The Petroleum Club, 800 Bell Avenue, Suite 4300,
Houston, Texas 77002, or at any adjournment(s) or postponement(s) thereof.
This Proxy Statement, the Notice of Annual Meeting, the proxy card, and
Dynegy's Annual Report to Shareholders for the year ended December 31, 2000,
including financial statements, will be first sent or given to Dynegy's
shareholders on or about April 23, 2001. The Annual Report does not constitute
a part of the proxy soliciting material.

Quorum and Vote Required

The presence of the votes of a majority of the shares of Dynegy's Class A
common stock, no par value per share, and Class B common stock, no par value
per share, counted together, represented in person or by proxy at the annual
meeting and entitled to vote on a matter, will constitute a quorum for
consideration of that matter at the meeting for such quorum purposes.
Abstentions and broker non-votes are counted in determining the number of
shares present at the meeting. A "broker non-vote" occurs if a broker or other
nominee who holds shares in "street" name for customers who are beneficial
owners of those shares does not have discretionary authority and has not
received instructions with respect to a particular item from the customer.
Broker non-votes as to a particular matter do not count toward the
determination of the shares represented in person or by proxy on the
particular matter.

Election of Directors. In accordance with Dynegy's Articles of
Incorporation, the holders of Class A common stock are entitled to elect
eleven directors and the holders of Class B common stock are entitled to elect
three directors. The affirmative vote of a majority of the votes of shares of
Class A common stock represented in person or by proxy and entitled to vote is
required to elect a director. Under Illinois law and Dynegy's Articles of
Incorporation and Bylaws, abstentions would have the effect of votes against
the election of directors. Under Illinois law and Dynegy's Articles of
Incorporation, holders of Class A common stock (but not Class B common stock)
are entitled to cumulate their votes in the election of the Class A directors.

Amendment and Restatement of Articles of Incorporation. Under Dynegy's
Articles of Incorporation, the holders of Class A common stock and Class B
common stock are entitled to vote together as a single class on the proposal
to amend and restate the Articles of Incorporation. The holders of Class A
common stock and Class B common stock are entitled to one vote for each share.
The affirmative vote of the holders of not less than two-thirds of the Class A
common stock and the Class B common stock, entitled to vote, is required to
approve the proposal to amend and restate Dynegy's Articles of Incorporation.
Abstentions and broker non-votes would have the same legal effect as a vote
against this proposal.

Ratification of Independent Auditors. Under Dynegy's Articles of
Incorporation, the holders of Class A common stock and Class B common stock
are entitled to vote together as a single class on the ratification of

auditors. The holders of Class A common stock and Class B common stock are
entitled to one vote for each share. A majority of the votes of the shares of
Class A common stock and Class B common stock, represented in person or by
proxy, and entitled to vote is required to ratify the selection of auditors.
Under Illinois law, an abstention would have the same legal effect as a vote
against this proposal, but a broker non-vote would not be counted for purposes
of determining shares represented in person or by proxy on the matter.

No Appraisal Rights

Under Illinois law, no holder of Class A common stock or Class B common
stock has appraisal rights in connection with any proposal to be acted upon at
the annual meeting.

Record Date and Outstanding Shares

The Board of Directors has fixed the close of business on March 30, 2001,
as the record date for determining holders of outstanding shares of Class A
common stock and Class B common stock entitled to notice of and to vote at the
annual meeting or any adjournment(s) or postponement(s) thereof. As of the
record date, there were outstanding 239,036,975 shares of Class A common
stock, and 86,499,914 shares of Class B common stock, respectively. Class A
common stock and Class B common stock are the only classes of outstanding
securities of Dynegy entitled to notice of and to vote at the annual meeting.

Solicitation of Proxies

The cost of soliciting proxies will be borne by Dynegy. Proxies may be
solicited by mail, telecopy, telegraph or telex, or by directors, officers or
employees of Dynegy, in person or by telephone. Dynegy has retained Mellon
Investor Services LLC to assist in the solicitation of proxies for a fee of
$8,500. Dynegy will reimburse brokerage houses and other custodians, nominees
and fiduciaries for their reasonable out-of-pocket expenses for forwarding
solicitation material to the beneficial owners of common stock.

Questions concerning the proposals to be acted upon at the annual meeting
should be directed to Dynegy's Secretary at (713) 507-6400. Additional copies
of this Proxy Statement or the proxy card may be obtained from Dynegy's
Investor Relations Department at Dynegy's principal executive office. The
mailing address of Dynegy's principal executive office is 1000 Louisiana,
Suite 5800, Houston, Texas 77002.

Revocation of Proxies

The enclosed proxy, even though executed and returned, may be revoked at
any time prior to the voting of the proxy by (i) the execution and submission
of a revised proxy (including an Internet or telephone vote), (ii) written
notice to the Secretary of Dynegy, or (iii) voting in person at the annual
meeting. In the absence of such revocation, shares represented by proxies will
be voted at the annual meeting.

Voting by Telephone or Internet

Shareholders of record can simplify their voting and reduce Dynegy's cost
by voting their shares via telephone or the Internet. The telephone and
Internet voting procedures are designed to authenticate shareholders'
identities, allow shareholders to vote their shares and to confirm that their
instructions have been properly recorded. If a shareholder's shares are held
in the name of a bank or broker, the availability of telephone and Internet
voting will depend upon the voting processes of the bank or broker.
Accordingly, shareholders should follow the voting instructions on the form
they receive from their bank or broker. If you choose to cumulate your votes
other than equally for Directors you MAY NOT use Internet or telephone voting,
you MUST vote by returning this proxy card in the envelope provided.

Shareholders who elect to vote via the Internet may incur
telecommunications and Internet access charges and other costs for which they
are solely responsible. The Internet and telephone voting facilities for
shareholders of record will close at 4:00 p.m., eastern standard time, on
evening before the annual meeting.

Voting by Mail

Shareholders who elect to vote by mail are asked to date, sign and return
the enclosed proxy card using the postage paid envelope provided. The persons
named as proxies on the proxy card were designated by the Board of Directors.
Any proxy given pursuant to such solicitation and received prior to the annual
meeting will be voted as specified in such proxy. Unless otherwise instructed
or unless authority to vote is withheld, proxies will be voted FOR the
election of the nominees to the Board of Directors, equally or cumulatively as
the proxies may determine, FOR the proposal to amend and restate Dynegy's
Articles of Incorporation, FOR ratification of the appointment of Arthur
Andersen LLP, and in accordance with the judgment of the persons named in the
proxy on such other matters as may properly come before such meeting or any
adjournment(s) or postponement(s) thereof.

Form 10-K

Shareholders may obtain, without charge, a copy of Dynegy's 2000 Annual
Report on Form 10-K as filed with the Securities and Exchange Commission. For
copies, please contact Dynegy's Investor Relations Department at Dynegy's
principal executive office address: Dynegy Inc., 1000 Louisiana, Suite 5800,
Houston, Texas 77002. The Form 10-K is also available to the public at the
Commission's website at www.sec.gov.

DATED: April 23, 2001

PRINCIPAL SHAREHOLDERS

The following table sets forth certain information regarding beneficial
ownership of the capital stock of Dynegy as of March 30, 2001, by (i) each
person who is known by Dynegy to own beneficially 5% or more of Dynegy's Class
A common stock or Class B common stock, (ii) each director or nominee for
director of Dynegy, (iii) each executive officer of Dynegy named in the
Summary Compensation Table, and (iv) all directors, nominees for director and
executive officers of Dynegy as a group. Share amounts and percentages shown
for each individual or group in the table are adjusted to give effect to the
exercise of all options and warrants exercisable by such individual or group
within 60 days of March 30, 2001.

Number of Shares(1)
-------------------------
Percent of
Class A Class B Class A
Common Stock Common Stock Common Stock(2)
------------ ------------ ---------------

Chevron Corporation(3)........... -- 86,517,914 26.6(3)
Chevron USA Inc.
575 Market Street
San Francisco, CA 94104

Fidelity Management & Research
Company(4)...................... 16,703,190 -- 7.0
82 Devonshire
Boston, MA 02109

C.L. Watson(5)................... 12,329,803 -- 5.1

Stephen W. Bergstrom(6).......... 2,892,229 -- 1.2

Kenneth E. Randolph(7)........... 1,854,717 -- *

R. Blake Young(8)................ 26,217 -- *

Robert D. Doty, Jr.(9)........... 322,163 -- *

Charles E. Bayless(10).............. 448,300 -- *

Daniel L. Dienstbier(11)............ 25,172 -- *

Patricia M. Eckert(12).............. 100 -- *

Jerry L. Johnson................. -- -- *

C. Steven McMillan (11)............. 11,347 -- *

Robert M. Powers(11)................ 25,700 -- *

Sheli Z. Rosenberg(11).............. 13,608 -- *

Joe J. Stewart(11).................. 11,394 -- *

J. Otis Winters(11).............. 23,710 -- *

Darald W. Callahan............... -- -- *

R. H. Matzke..................... -- -- *

George L. Kirkland............... -- -- *

Michael D. Capellas.............. -- -- *

H. John Riley.................... -- -- *

Executive Officers, Directors,
and Nominees for Director as a
Group (19
persons)(5)(6)(7)(8)(9)(10)(11).. 18,004,460 -- 7.4

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* Less than 1%.
(1) Unless otherwise noted, each of the persons has sole voting and investment
power with respect to the shares reported.
(2) Based upon 239,036,975 shares of Class A common stock and 86,499,914
shares of Class B common stock outstanding at March 30, 2001.
(3) The shares are held of record by Chevron USA Inc. Chevron Corporation
beneficially owns 100% of the capital stock of Chevron USA. Consequently,
Chevron Corporation may be deemed to beneficially own all of the shares of
Class B common stock owned of record by Chevron USA. Includes 18,000
shares of Class B common stock issuable upon the exercise of options
attributable to the services of the three Chevron designees on Dynegy's
Board of Directors granted

in favor of Chevron that are exercisable within 60 days of March 30, 2001.
Each share of Class B common stock may in certain circumstances be
converted into Class A common stock. Percent of Class A common stock
beneficially owned assumes conversion of Class B common stock for purposes
of computing Chevron's beneficial ownership only.
(4) According to its Form 13G/A for the year ended December 31, 2000. Advisor
subsidiaries of Fidelity Management & Research Company have sole voting
power for 3,948,602 shares and sole power to dispose or direct the
disposition of 16,703,190 shares.
(5) Includes 8,524,816 shares held of record by one or more partnerships, of
which Mr. Watson and his wife are the sole shareholders of the corporate
general partner and of which Mr. Watson (individually), his wife and
certain trusts (the "Trusts"), of which Mr. Watson or his wife are the
sole trustees, and a corporation, of which Mr. Watson and the Trusts are
the sole shareholders, are the sole limited partners (the "Family Limited
Partnership"). Mr. Watson may be deemed to beneficially own all of the
shares of Class A common stock held by the Family Limited Partnership.
Mr. Watson may be deemed to beneficially own all of the shares of Class A
common stock held by the Trusts. The number of shares also includes
3,824,987 shares of Class A common stock issuable upon the exercise of
employee stock options held by Mr. Watson that are exercisable within 60
days of March 30, 2001. The number of shares does not include
approximately 6,332 shares of Class A common stock held by the Trustee of
the Dynegy Inc. Profit Sharing/401(k) Savings Plan (the "401(k) Plan") as
of February 28, 2001, for the account of Mr. Watson. Participants in the
401(k) Plan have no voting or investment power with respect to such shares
until their distribution to such participants upon termination of their
employment. In addition, Mr. Watson may elect to take cash in lieu of
shares of Class A common stock held in his 4 01(k) Plan account upon
termination of his employment.
(6) Includes 601,174 shares of Class A common stock that are owned by trusts
established by Mr. Bergstrom. Mr. Bergstrom's father is the sole trustee
of such trusts. Mr. Bergstrom disclaims beneficial ownership of all of the
shares of Class A common stock held by such trusts. Also includes 824,691
shares of Class A common stock issuable upon the exercise of employee
stock options held by Mr. Bergstrom that are exercisable within 60 days of
March 30, 2001. The number of shares does not include approximately 6,033
shares of Class A common stock held by the Trustee of Dynegy's 401(k) Plan
as of February 28, 2001 for the account of Mr. Bergstrom. Participants in
the 401(k) Plan have no voting or investment power with respect to such
shares until their distribution to such participants upon termination of
their employment. In addition, Mr. Bergstrom may elect to take cash in
lieu of shares of Class A common stock held in his 401(k) Plan account
upon termination of his employment.
(7) Includes 257,745 shares of Class A common stock issuable upon the exercise
of employee stock options held by Mr. Randolph that are exercisable within
60 days of March 30, 2001. The number of shares does not include
approximately 5,988 shares of Class A common stock held by the Trustee of
Dynegy's 401(k) Plan as of February 28, 2001 for the account of Mr.
Randolph. Participants in the 401(k) Plan have no voting or investment
power with respect to such shares until their distribution to such
participants upon termination of their employment. In addition,
Mr. Randolph may elect to take cash in lieu of shares of Class A common
stock held in his 401(k) Plan account upon termination of his employment.
(8) Includes 22,077 shares of Class A common stock issuable upon the exercise
of employee stock options held by Mr. Young that are exercisable within 60
days of March 30, 2001. The number of shares does not include
approximately 1,947 of Class A common stock held by the Trustee of the
401(k) Plan as of February 28, 2001, for the account of Mr. Young.
Participants in the 401(k) Plan have no voting or investment power with
respect to such shares until their distribution to such participants upon
termination of their employment. In addition, Mr. Young may elect to take
cash in lieu of shares of Class A common stock held in his 401(k) Plan
account upon termination of his employment.
(9) Includes 293,448 shares of Class A common stock issuable upon the exercise
of employee stock options held by Mr. Doty that are exercisable within 60
days of March 30, 2001. The number of shares does not include
approximately 5,747 shares of Class A common stock held by the Trustee of
Dynegy's 401(k) Plan as of February 28, 2001 for the account of Mr. Doty.
Participants in the 401(k) Plan have no voting or investment power with
respect to such shares until their distribution to such participants upon
termination of their employment. In addition, Mr. Doty may elect to take
cash in lieu of shares of Class A common stock held in his 401(k) Plan
account upon termination of his employment.
(10) Includes 429,400 shares of Class A common stock issuable upon the
exercise of employee stock options held by Mr. Bayless that are
exercisable within 60 days of March 30, 2001. Also includes 6,000 shares
of Class A common stock issuable upon the exercise of director stock
options held by Mr. Bayless that are exercisable within 60 days of March
30, 2001.
(11) Includes 6000 shares of Class A common stock issuable upon the exercise
of director stock options held by each of Messrs. Dienstbier, McMillan,
Powers, Stewart and Winters, and by Ms. Rosenberg, that are exercisable
within 60 days of March 30, 2001. Does not include certain stock units
held by Messrs. McMillan, Powers or Stewart, or held by Ms. Rosenberg
through the Dynegy Deferred Compensation Plan for Certain Directors.
Participants in the Director Deferred Compensation Plan receive cash
equal to the number of stock units in their account times the last sales
price of the Class A common stock on the last business day of the month
preceding the termination of their service as a Director of Dynegy.
(12) Shares held of record by defined benefit plan.

PROPOSAL 1
ELECTION OF DIRECTORS

Eleven Class A common stock directors are to be elected at the annual
meeting by the shareholders of Class A common stock. The affirmative vote of a
majority of the votes of shares of Class A common stock represented in person
or by proxy and entitled to vote is required to elect a director. Under
Illinois law and Dynegy's Articles of Incorporation and Bylaws, abstentions
would have the effect of votes against the election of directors. Under
Illinois law and Dynegy's Articles of Incorporation, holders of Class A common
stock are entitled to cumulate their votes in the election of the Class A
directors.

All holders of Class A common stock will be entitled to eleven votes (the
number of Class A common stock directors to be elected) for each of their
shares for candidates nominated to serve as directors. Holders of Class A
common stock may cast their votes equally for all candidates or may cast all
of their votes for any one candidate whose name has been placed in nomination
prior to the voting, or distribute their votes among two or more candidates in
such proportion as they desire. If you are a holder of Class A common stock
and you choose to cumulate your votes other than equally for Directors, you
MAY NOT use Internet or telephone voting, you MUST vote by returning this
proxy card in the envelope provided.

Unless otherwise instructed or unless authority to vote is withheld, the
enclosed proxy will be voted FOR the election of the nominees listed below
equally or cumulatively as the proxies may determine. Although the Board of
Directors does not contemplate that any of the nominees will be unable to
serve, if such a situation arises prior to the annual meeting, the persons
appointed in the enclosed proxy will vote for the election of such other
person(s) as may be nominated by the Board of Directors.

Under Dynegy's Articles of Incorporation, Chevron, the sole holder of Class
B common stock, is entitled to nominate and vote as a single class for three
nominees to the Board of Directors.

Nine of the eleven nominees for Class A common stock director and each of
the three nominees for Class B common stock director is currently a director
of Dynegy. Messrs. McMillan and Powers will not be standing for re-election as
Class A common stock directors. The following table sets forth information
regarding the names, ages and principal occupations of the current directors
and nominees for director, other directorships held by them in certain
companies and, if applicable, the length of their continuous service as a
director of Dynegy.

Age as
Principal Occupation and of Director
Directors and Nominees Directorships 3/30/01 Since
---------------------- ------------------------ ------- --------

Class A Common Stock Directors
C.L. Watson........................... Chairman of the Board 51 1995
and Chief Executive
Officer of Dynegy;
Director of Baker Hughes
Incorporated
Stephen W. Bergstrom.................. President and Chief 43 1995
Operating Officer of
Dynegy
Charles E. Bayless.................... Retired Chairman and 58 2000
Chief Executive Officer
of Illinova Corporation
and Illinois Power,
Director of Trigen
Energy Corporation
Daniel L. Dienstbier.................. Private Investments, 60 1995
Member of the Audit
Committee of Northern
Border Partners, L.P.
Patricia M. Eckert.................... Consultant, Director of 53 2000
American Ecology Corp.
Jerry L. Johnson...................... Executive Vice President 53 2000
of Safeguard
Scientifics, Inc.,
Director of OAO
Technology Solutions and
PAC -- West Telecomm,
Inc.
C. Steven McMillan *.................. Chief Executive Officer 55 2000
of Sara Lee Corporation,
Director of Pharmacia
Corporation and Monsanto
Company
Robert M. Powers *.................... Retired President of 69 2000
A.E. Staley
Manufacturing Company
Sheli Z. Rosenberg.................... Vice Chairman of Equity 59 2000
Group Investments, LLC;
Director of Anixter
International, Inc.;
Capital Trust, CVS
Corporation, Equity
Office Properties Trust,
Equity Residential
Properties Trust,
Manufactured Home
Communities, Inc. and
Cendant Corporation
Joe J. Stewart........................ Retired President of BWX 63 2000
Technologies, Inc. and
Past President and Chief
Operating Officer of The
Babcock and Wilcox
Company; and Retired
Executive Vice President
of McDermott
International, Inc.
J. Otis Winters....................... Chairman, PWS Group, 68 1993
Inc.; Director of AMFM
Inc., Panja Corporation,
Triton Energy
Corporation and Walden
Residential Properties,
Inc.

Class A Common Stock Director Nominees
Michael D. Capellas................... Chairman and Chief 46 N/A
Executive Officer of
Compaq Computer
Corporation
H. John Riley, Jr..................... Chairman, President and 60 N/A
Chief Executive Officer
of Cooper Industries,
Inc., Director of The
Allstate Corporation and
Baker Hughes
Incorporated

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* Messrs. McMillan and Powers will not stand for re-election at the Annual
Meeting.

Class B Common Stock
Directors
Darald W. Callahan...... Executive Vice President of Chevron Corporation 58 1996
Richard H. Matzke....... Vice Chairman of the Board of Directors of Chevron Corporation 64 2000
George L. Kirkland...... President of Chevron U.S.A. Production Company 50 2000

In addition to the principal occupations and directorships of the directors
described above, the named nominees were engaged or are engaged (as
applicable) in the past five years in the principal occupations set forth
below.

Charles L. Watson has served as Chairman of the Board and Chief Executive
Officer of Dynegy since 1995. He founded Natural Gas Clearinghouse
("Clearinghouse"), a predecessor of Dynegy, in 1985 and served as President
and Chief Executive Officer of Clearinghouse from 1985 to 1995. He served as a
member of the Management Committee of Clearinghouse from 1985 to 1995 and was
elected Chairman of the Management Committee of Clearinghouse in 1989. Mr.
Watson also serves on the Board of Directors of Baker Hughes Incorporated.

Stephen W. Bergstrom has served as President and Chief Operating Officer of
Dynegy since August 1999. He has also served as a Director of Dynegy and as
President and Chief Operating Officer of Dynegy Marketing and Trade (f/k/a
Clearinghouse) since 1995. He served as Executive Vice President of
Clearinghouse and a member of the Clearinghouse Management Committee from 1989
through 1995.

Charles E. Bayless served as Chairman of Illinova and Illinois Power from
August 1998 until his retirement in December 1999. Mr. Bayless served as Chief
Executive Officer of Illinova and President of Illinois Power from July 1998
until September 1999. He was Chairman, President and Chief Executive Officer
of Tucson Electric Power from 1992 to 1998. Mr. Bayless served as a Director
of Illinova from 1998 until the closing of the merger with Dynegy in February
2000.

Daniel L. Dienstbier has over thirty years of experience in the oil and gas
industry. He served as President and Chief Operating Officer of American Oil &
Gas Corp. from October 1993 through July 1994, President and Chief Operating
Officer of Arkla, Inc. from July 1992 through October 1993, and President of
Jule, Inc., a private company involved in energy consulting and joint venture
investments in the pipeline, gathering and exploration and production
industries, from February 1991 through June 1992. Prior thereto, Mr.
Dienstbier served as President and Chief Executive Officer of Dyco Petroleum
Corp., and Executive Vice President of Diversified Energy from February 1989
through February 1991. In addition, he served as President of the Gas Pipeline
Group of Enron Corp. from July 1985 through July 1988. Mr. Dienstbier also
serves as a member of the Audit Committee of Northern Border Partners, L.P. In
the past, Mr. Dienstbier has served as a member on the Board of Directors of
several public companies, including American Oil & Gas Corp., Arkla, Inc.,
Enron Corp. and Midwest Resources.

Patricia M. Eckert serves as a consultant to Fortune 100 companies,
specializing in telecommunications and utilities issues. Ms. Eckert has
provided regulatory advisory and business development services to her clients
for over the past five years as an independent consultant. Ms. Eckert is a
former President of the California Public Utilities Commission and served as a
Commissioner from 1989 through 1994. Ms. Eckert also is a Director of American
Ecology Corp. and serves on the advisory board of Enertech Capital Partners.

Jerry L. Johnson has served as Executive Vice President of Safeguard
Scientifics, Inc. since March 1999. He is currently the head of Safeguard's e-
communications division. Mr. Johnson joined Safeguard in 1995 as Senior Vice
President, Operations. Prior to joining Safeguard, Mr. Johnson was a
telecommunications executive, having spent nearly 20 years with the Bell
System and US West.

C. Steven McMillan serves as Chief Executive Officer and Director of Sara
Lee Corporation, Chicago, Illinois, a global packaged food and consumer
products company. He was promoted to this position in 2000. Prior to that, Mr.
McMillan was President and Chief Operating Officer from 1997 to 2000 and was
Executive Vice President from 1993 to 1997. Mr. McMillan served as a Director
of Illinova from 1996 until the closing of the merger with Dynegy in February
2000. He also is a Director of Pharmacia Corporation and Monsanto Company.

Robert M. Powers served as President and Chief Executive Officer of A.E.
Staley Manufacturing Company in Decatur, Illinois, a processor of grain oil
seeds, from 1980 until his retirement in December 1988. Mr. Powers served as a
Director of Illinova from 1984 until the closing of the merger with Dynegy in
February 2000.

Sheli Z. Rosenberg has served as Vice Chairman since 2000 and has served as
Chief Executive Officer since 1999, President and Chief Executive Officer
since 1994 and General Counsel 1980 to 1994 of Equity Group Investments, LLC,
Chicago, Illinois, a privately held business conglomerate holding controlling
interests in seven publicly traded corporations involved in basic
manufacturing, radio stations, retail, insurance and real estate.
Ms. Rosenberg served as a Director of Illinova from 1997 until the closing of
the merger with Dynegy in February 2000. She also is a Director of Anixter
International, Inc., Capital Trust, CVS Corporation, Equity Office Properties
Trust, Equity Residential Properties Trust, Manufactured Home Communities,
Inc. and Cendant Corporation.

Joe J. Stewart served as President of BWX Technologies, Inc., Lynchburg,
Virginia, and Executive Vice President of McDermott International, Inc., New
Orleans, Louisiana, a diversified energy and environmental equipment and
services company, from 1995 until his retirement in 1998. He was President and
Chief Operating Officer of The Babcock & Wilcox Company and Executive Vice
President of McDermott International, Inc., from 1993 to 1995 and Executive
Vice President of the Power Generation Group of The Babcock and Wilcox Company
from 1987 to 1993. Mr. Stewart served as a Director of Illinova from 1998
until the closing of the merger with Dynegy in February 2000.

J. Otis Winters is a co-founder and Chairman of The PWS Group, Inc.
(formerly known as Pate, Winters & Stone, Inc.), a consulting firm, and has
served in such position since 1990. Mr. Winters was formerly Executive Vice
President and Director of the Williams Companies, and Executive Vice President
and Director of the First National Bank of Tulsa. Mr. Winters also serves as a
Director of AMFM Inc., an operator of radio stations, Panja Corporation, a
manufacturer of control devices, Triton Energy Corporation, an international
oil and gas exploration company, and Walden Residential Properties, Inc., an
apartment REIT.

Michael D. Capellas has served as Chairman and Chief Executive Officer of
Compaq Computer Corp. since September 2000. He was named President and Chief
Executive Officer of Compaq in July 1999 and was named Chief Operating Officer
in June 1999. Mr. Capellas joined Compaq in August 1998 as Senior Vice
President, Information Management, and Chief Information Officer. Prior to
joining Compaq, Mr. Capellas was Senior Vice President and General Manger of
the global energy business of Oracle Corporation from 1997 through 1998, and
Director of Supply Chain Management for SAP America from 1996 through 1997.
From 1981 through 1996, Mr. Capellas held several management positions at
Schlumberger Limited, including serving as head of worldwide information
services.

H. John Riley, Jr. serves as Chairman, President and Chief Executive
Officer of Cooper Industries, Inc. He was named President and Chief Operating
Officer in 1992, Chief Executive Officer in 1995 and Chairman in 1996. Mr.
Riley also serves as a Director of The Allstate Corporation and Baker Hughes
Incorporated.

Darald W. Callahan was named Executive Vice President of Chevron
Corporation in August 2000. He was named President of Chevron Chemical Co.
LLC, a subsidiary of Chevron, in February 1999. He served as Senior Vice
President of Chevron Chemical from October 1991 through January 1999. Mr.
Callahan has been employed by Chevron Corporation and its affiliates since
1964.

Richard H. Matzke was elected as one of two Vice Chairmen of the Board of
Directors of Chevron Corporation in January 2000. He was elected a member of
Chevron's Board of Directors in March 1997. From November 1989 through
December 1999, Mr. Matzke served as President of Chevron Overseas Petroleum
Inc., where he was responsible for directing Chevron's oil exploration and
production activities outside of North America. Mr. Matzke has been employed
by Chevron Corporation and its predecessors and affiliates since 1961. He is
chairman of the Board of Directors of the United States-Kazakhstan Business
Association; a member of the United States-Russia Business Council, and the
Business Council for International Understanding and Vice Chairman of the
United States-Azerbaijan Chamber of Commerce. He serves on the board of
trustees of The Africa America Institute, and the Advisory Board of the Center
of Strategic and International Studies (CSIS). He also is a member of the
Council on Foreign Relations, the American Institute of Professional
Geologists, the American Association of Petroleum Geologists, the World
Affairs Council of Northern California and the Commonwealth Club of
California.

George L. Kirkland was elected President of Chevron U.S.A. Production Co.
and a Vice President of Chevron Corporation in January 2000. From November
1996 through December 1999, Mr. Kirkland served as Chairman and Managing
Director of Chevron Nigeria Ltd., where he was responsible for all Chevron
operations in Nigeria. Mr. Kirkland has been employed by Chevron Corporation
and its predecessors and affiliates since 1974.

The Board of Directors recommends that shareholders vote "FOR" the election
of the nominees to the Board of Directors.

Directors' Meetings and Committees of the Board of Directors

The merger of Dynegy and Illinova Corporation (the "Dynegy/Illinova
Merger") was consummated on February 1, 2000. During January 2000, the former
Dynegy Board of Directors' Compensation Committee and Options Committee each
met one time with regard to merger related issues. After consummation of the
Dynegy/Illinova Merger, the new Dynegy Board of Directors held nine meetings.
Each director attended at least 75% of the aggregate of the total number of
meetings of the Board of Directors (held during the period for which he or she
has been a director) and the total number of meetings held by all committees
of the Board on which he or she served (during the periods that he or she
served). Following the Dynegy/Illinova Merger, the Board of Directors of
Dynegy had the following committees:

Executive Committee. The Executive Committee, which is currently comprised
of Messrs. Watson, Callahan, Dienstbier, Johnson, McMillan, Rosenberg and
Winters, met four times during 2000. The Executive Committee has been
delegated the authority to approve any actions that the Board of Directors
could approve, except to the extent restricted by law, Dynegy's Articles of
Incorporation or Dynegy's Bylaws. This committee also is responsible for
maintaining an effective working relationship between the Board of Directors
and management of Dynegy.

Nominations Committee. The Nominations Committee, which is currently
comprised of Messrs. McMillan, Dienstbier and Winters and Ms. Rosenberg, met
two times during 2000. The Nominations Committee is responsible for nominating
the Class A common stock directors.

Audit Committee. The Audit Committee, which is currently comprised of
Messrs. Winters, Johnson, McMillan, Powers and Stewart, met seven times during
2000. Each of the members of the Audit Committee is independent as
independence is defined by Section 303.01(B) of the New York Stock Exchange
rules. The Audit Committee is responsible for meeting with the independent
auditors, internal auditors and senior executives of Dynegy to review and
inquire into matters affecting the financial reporting of Dynegy and
recommending to the Board of Directors the auditors to be recommended for
appointment at the annual shareholders meeting.

Finance Committee. The Finance Committee, which is currently comprised of
Ms. Rosenberg and Messrs. Johnson, Kirkland, McMillan and Winters, met five
times during 2000. The Finance Committee is responsible for meeting with
management of Dynegy to review the financing plans and objectives of Dynegy,
Dynegy's annual Securities and Exchange Act filings and all prospectuses and
other offering memoranda of Dynegy.

Compensation Committee. The Compensation Committee, which is currently
comprised of Messrs. Dienstbier, Bayless and Callahan, and Ms. Eckert, met
seven times during 2000. The Compensation Committee reviews recommendations
for the appointment of persons to senior executive positions; reviews and
approves corporate compensation and benefits strategy; reviews and approves
terms of employment and compensation for senior executives; and is responsible
for the proper and orderly administration of Dynegy's retirement and savings
plan (other than matters relating to the funding and investment of the plan's
trust funds). This committee is also responsible for setting the compensation
of the Board of Directors.

Options Committee. The Options Committee, which is currently comprised of
Ms. Eckert and Messrs. Bayless and Dienstbier, met four times during 2000. The
Options Committee is responsible for recommending awards under Dynegy's stock
option and long-term incentive plan.

Risk and Environment Committee. The Risk and Environment Committee, which
is currently comprised of Messrs. Stewart, Bayless, Bergstrom and Matzke and
Ms. Eckert, met three times during 2000. The Risk and Environment Committee is
responsible for overseeing Dynegy's environmental and occupational health and
safety practices.

Compensation of Directors

Following the Dynegy/Illinova Merger, each non-employee director of Dynegy
was paid an annual retainer of $25,000 per year, $30,000 per year for
Committee Chairpersons, plus $1,500 per board or committee meeting attended.
In addition, each director is entitled to reimbursement for his or her
reasonable out-of-pocket expenses incurred in connection with travel to and
from, and attendance at, meetings of the Dynegy Board of Directors or
committees thereof. During 2000, each non-employee director also had the
option to receive shares of common stock, in lieu of cash, in payment of their
annual retainer and meeting fees pursuant to the terms of the Dynegy Inc. Non-
Employee Director Compensation Plan. Each director of Dynegy, other than
Messrs. Watson and Bergstrom, is a non-employee director for purposes of such
plan. During 2000, the annual retainer and meeting fees payable to Chevron
employee representatives on the Dynegy Board of Directors were paid directly
to Chevron. Each non-employee director also had the option to defer any cash
they received in payment of their annual retainer and meeting fees pursuant to
the terms of the Dynegy Deferred Compensation Plan for Certain Directors.

All non-employee directors of Dynegy are entitled to receive options to
purchase 6,000 shares of Class A common stock with an exercise price equal to
the market value of such stock on the day of their election at the annual
meeting or appointment to the Board of Directors. The annual award of 6,000
options (18,000 options in the aggregate) attributable to the services of the
three Chevron designees on the Board of Directors is granted in favor of
Chevron. Chevron receives options to purchase shares of Class B common stock.
Dynegy intends to make annual option grants a part of its non-employee
director compensation package.

In January 2001, Dynegy's Board of Directors approved certain changes to
Dynegy's director compensation package. The annual retainer was increased from
$25,000 to $30,000 with 50% payable in Dynegy common stock and the remaining
50% payable in either stock or cash at the election of the Directors.
Directors who are employees of Dynegy or employees of Chevron will no longer
be paid for their services. The Board also adopted a guideline pursuant to
which all Directors would be required to own Dynegy common stock with a
minimum value of two times their annual retainer within two years of their
appointment to the Board.

Certain Transactions and Other Matters

For a description of certain transactions with management and others,
certain business relationships, indebtedness of management and compliance with
Section 16(a) of the Securities Exchange Act of Securities Exchange Act of
1934, see "-Executive Compensation--Employment Agreements," "Certain
Relationships and Related Transactions," "Indebtedness of Management" and
"Section 16(a) Beneficial Ownership Reporting Compliance."

EXECUTIVE COMPENSATION

The following table sets forth certain information regarding the
compensation earned by the individual who serves as Dynegy's Chief Executive
Officer and the four most highly compensated executive officers of Dynegy at
the end of 2000 (the "Named Executive Officers") in combined salary and bonus
earned in 2000, as well as amounts earned by or awarded to such individuals
for services rendered in all capacities to Dynegy and its subsidiaries during
1999 and 1998.

SUMMARY COMPENSATION TABLE

Long Term
Compensation
Annual Compensation Awards
-------------------------------------------- ----------------
Shares
Fiscal Cash Other Annual Underlying All Other
Name and Position Year Salary Bonus(1) Compensation(2) Stock Options(3) Compensation(4)
----------------- ------ ---------- ---------- --------------- ---------------- ---------------

Charles L. Watson ..... 2000 $1,527,500 $4,632,814 -- 681,924 $26,000
Chairman of the Board 1999 $1,029,501 $4,300,000 -- 1,151,617 $24,000
and Chief
Executive Officer of
Dynegy Inc. 1998 $ 999,000 $ 604,000 -- 147,030 $20,000

Stephen W. Bergstrom... 2000 $ 865,580 $2,628,962 -- 450,000 $25,500
President and Chief
Operating 1999 $ 652,080 $1,770,000 -- 713,253 $24,000
Officer of Dynegy Inc. 1998 $ 600,000 $ 600,000 -- 204,462 $20,000

Kenneth E. Randolph.... 2000 $ 356,417 $ 525,000 -- 61,463 $27,427
General Counsel and 1999 $ 271,630 $ 520,000 -- 148,024 $31,000
Secretary of Dynegy
Inc. 1998 $ 263,758 $ 175,000 -- 73,824 $25,000

R. Blake Young......... 2000 $ 270,000 $ 490,000 -- 60,000 $28,646
Senior Vice President
and Chief 1999 $ 216,666 $ 220,000 -- 126,936 $26,000
Information Officer of
Dynegy Inc. 1998 $ 37,180 - -- 40,754 $ 4,647

Robert D. Doty, Jr..... 2000 $ 253,125 $ 493,000 -- 60,000 $28,573
Senior Vice President
and Chief 1999 $ 199,349 $ 163,950 -- 81,376 $26,000
Financial Officer of
Dynegy Inc. 1998 $ 172,628 $ 64,400 -- 117,651 $20,000

--------
(1) During 2000, each of the Named Executive Officers was party to an
employment agreement with Dynegy Marketing and Trade. Bonus awards for
2000, 1999 and 1998, which were paid in 2001, 2000 and 1999,
respectively, were determined under the terms of Dynegy's Incentive
Compensation Plan, subject to the minimum guaranteed bonus provisions of
such employment agreements. See "-Employment Agreements." The bonus shown
for 2000 for Mr. Watson includes a payment of $500,000 in February 2001
relating to the Dynegy/Illinova Merger, as described below. The bonus
shown for 1999 for Mr. Watson includes Mr. Watson's 1999 bonus award of
$2,300,000 and $2,000,000 of an additional $2,500,000 discretionary bonus
awarded in recognition of Mr. Watson's efforts in connection with the
Dynegy/Illinova Merger. The $2,000,000 was paid in February 2000 as an
additional bonus award for 1999 and the remaining $500,000 was paid in
February 2001. The 1999 bonus awards shown for Messrs. Randolph, Young
and Doty include signing bonuses of $100,000, $55,000 and $25,000,
respectively, relating to the execution of new employment agreements
effective upon consummation of the Dynegy/Illinova Merger. As Mr. Young
joined Dynegy in November 1998, he was not eligible to receive a bonus in
1998 under the terms of the Incentive Compensation Plan.
(2) Includes "Perquisites and Other Personal Benefits" if value is greater
than the lesser of $50,000 or 10% of reported salary and bonus. No Named
Executive Officer received perquisites that exceeded the threshold
amount.
(3) Includes awards of options that were granted 1/19/01 based on 2000
performance. See "-Employment Agreements."
(4) During 2000, 1999 and 1998, respectively, Messrs. Watson, Bergstrom,
Randolph, Young and Doty received Company contributions to their
respective savings plan accounts of $26,000, $25,500, $27,428, $28,646 and
$28,573, respectively; $24,000, $24,000, $26,000, $26,000 and $26,000,
respectively; and $20,000, $20,000, $20,000, $4,284 and $20,000,
respectively. In 1999 and 1998, life insurance premiums of $5,000 were
paid on behalf of Mr. Randolph.

Stock Option Grants

The following table sets forth certain information with respect to stock
option grants made to the Named Executive Officers during 2000 or related to
2000 performance under the Dynegy Inc. 2000 Long Term Incentive Plan. No stock
appreciation rights were granted during 2000. Effective with the
Dynegy/Illinova Merger, all stock option grants are made under the Dynegy Inc.
2000 Long Term Incentive Plan.

Potential Realizable
Value at Assumed Annual
Rate of Stock Price
Appreciation for
Option Term(2)
-----------------------
Individual Grants(1)
-----------------------------------------
Number of % Total
Securities Granted to
Underlying Employees Exercise
Options in Fiscal Price Expiration
Name Granted 2000 $/Share Date 5% 10%
---- ---------- ---------- -------- ---------- ----------- -----------

Charles L. Watson....... 681,924 9.8% $47.19 01/19/11 $20,237,875 $51,286.622
Stephen W. Bergstrom.... 450,000 6.5% $47.19 01/19/11 $13,354,892 $33,843,918
Kenneth E. Randolph..... 61,463 0.9% $47.19 01/19/11 $ 1,824,071 $ 4,622,553
R. Blake Young.......... 60,000 0.9% $47.19 01/19/11 $ 1,780,652 $ 4,512,522
Robert D. Doty, Jr...... 60,000 0.9% $47.19 01/19/11 $ 1,780,652 $ 4,512,522

--------
(1) Each of the Named Executive Officers is entitled to receive certain annual
market value stock option grants during the term of their respective
employment agreements. See "--Employment Agreements." Option awards based
on 2000 performance were granted January 19, 2001.
(2) The dollar amounts under these columns represent the potential realizable
value of each grant of options assuming that the market price of common
stock appreciates in value from the date of grant at the 5% and 10% annual
rates prescribed by the SEC and therefore are not intended to forecast
possible future appreciation, if any, of the price of common stock.

Option Exercises and Year-End Value Table

The following table sets forth for the Named Executive Officers,
information regarding options held by them at December 31, 2000.

Number of Shares
Underlying Unexercised Value of Unexercised
Shares Stock Options or Equity In-the-Money Stock Options
Acquired Options at 12/31/00 at 12/31/00(1)
on Exercise Value ------------------------- --------------------------
Name of Options Realized Exercisable Unexercisable Exercisable Unexercisable
---- ----------- ---------- ----------- ------------- ------------ -------------

Charles L. Watson....... -- -- 3,824,987 1,152,679 $197,454,815 $50,295,432
Stephen W. Bergstrom.... -- -- 824,691 791,563 $ 40,981,727 $37,551,744
Kenneth E. Randolph..... -- -- 257,745 161,476 $ 11,749,686 $ 7,318,705
R. Blake Young.......... 40,754 $1,831,948 22,077 104,859 $ 870,717 $ 4,895,703
Robert D. Doty, Jr...... 40,000 $2,120,760 293,448 61,509 $ 14,403,309 $ 2,755,836

--------
(1) Value based on the closing price of $56.06 on the New York Stock
Exchange--Composite Tape for Dynegy Class A common stock on December 29,
2000. Does not include options granted on January 19, 2001 relating to
2000 performance. Number of shares underlying options have been adjusted
to reflect the .69 Dynegy/Illinova merger conversion ratio and the Dynegy
2-for-1 stock split effected in August 2000.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities and Exchange Act of 1934, as amended,
requires Dynegy's executive officers and directors, and persons who own more
than 10% of a registered class of Dynegy's equity securities, to file reports
of ownership and changes in ownership with the Securities and Exchange
Commission and the New York Stock Exchange. Executive officers, directors and
greater than 10% shareholders are required by SEC regulations to furnish
Dynegy with copies of all Section 16(a) forms they file. Based solely upon
review of the copies of such forms furnished to Dynegy, or upon written
representations that no Form 5's were required, Dynegy believes that all
persons subject to these reporting requirements filed the required reports on
a timely basis.

Indebtedness of Management

No director, executive officer, nominee for election as a director or 5%
shareholder was indebted to Dynegy for an amount exceeding $60,000 during
2000.

Employment Agreements

C.L. Watson Employment Agreement. Mr. Watson's 2000 compensation was
determined under the terms of a three-year employment agreement between Dynegy
Marketing and Trade and Mr. Watson, pursuant to which Mr. Watson serves as
Chairman and Chief Executive Officer of Dynegy. Mr. Watson's employment
agreement entitles him to a base salary of $1,500,000, subject to increase at
the discretion of the Board of Directors, and the annual opportunity to earn
additional bonus amounts, dependent upon certain financial or performance
objectives, as a participant in the Incentive Compensation Plan. Mr. Watson's
current base salary is $1,560,000. The employment agreement also provides that
Mr. Watson is entitled to receive stock option grants each year during the
term of the agreement. On January 19, 2001, Mr. Watson was awarded a grant of
options to purchase 681,924 shares of common stock with an exercise price of
$47.19 per share. Under the terms of the employment agreement all options
granted to Mr. Watson prior to November 1, 1999 became fully vested as of
February 1, 2000. The employment agreement also contains non-compete
provisions in the event of Mr. Watson's termination of employment.

Stephen W. Bergstrom Employment Agreement. Mr. Bergstrom's 2000
compensation was determined under the terms of a four-year employment
agreement between Dynegy Marketing and Trade and Mr. Bergstrom, pursuant to
which Mr. Bergstrom serves as President and Chief Operating Officer of Dynegy.
Mr. Bergstrom's employment agreement entitles him to a base salary of
$850,000, subject to increase at the discretion of the Board of Directors, and
the annual opportunity to earn additional bonus amounts, dependent upon
certain financial or performance objectives, as a participant in the Incentive
Compensation Plan. Mr. Bergstrom's current base salary is $884,000. Under the
terms of the employment agreement, all options granted to Mr. Bergstrom prior
to November 1, 1999 became fully vested as of February 1, 2000. The employment
agreement also provides that Mr. Bergstrom is entitled to receive stock option
grants each year during the term of the agreement. On January 19, 2001, Mr.
Bergstrom was awarded a grant of options to purchase 450,000 shares of common
stock with an exercise price of $47.19 per share. The employment agreement
also contains non-compete provisions in the event of Mr. Bergstrom's
termination of employment.

Kenneth E. Randolph Employment Agreement. Mr. Randolph's 2000 compensation
was determined under the terms of a two-year employment agreement between
Dynegy Marketing and Trade and Mr. Randolph, pursuant to which Mr. Randolph
serves as General Counsel and Secretary of Dynegy. Mr. Randolph's employment
agreement entitles him to a base salary of $350,000, subject to increase at
the discretion of the Board of Directors, and the annual opportunity to earn
additional bonus amounts, dependent upon certain financial or performance
objectives, as a participant in the Incentive Compensation Plan. Mr.
Randolph's current base salary is $364,000. Mr. Randolph was paid a signing
bonus of $100,000 in connection with his execution of the employment
agreement. Under the terms of his employment agreement, all options granted to
Mr. Randolph prior to November 1, 1999 became fully vested as of February 1,
2000. The employment agreement also provides that Mr. Randolph is entitled to
receive stock option grants each year during the term of the agreement. On

January 19, 2001, Mr. Randolph was awarded a grant of options to purchase
61,463 shares of common stock with an exercise price of $47.19 per share. The
employment agreement contains non-compete provisions in the event of Mr.
Randolph's termination of employment.

R. Blake Young Employment Agreement. Mr. Young's 2000 compensation was
determined under the terms of a three-year employment agreement between Dynegy
Marketing and Trade and Mr. Young, pursuant to which Mr. Young serves as
Senior Vice President and Chief Information Officer of Dynegy. Mr. Young's
employment agreement entitles him to a base salary of $270,000, subject to
increase at the discretion of the Board of Directors, and the annual
opportunity to earn additional bonus amounts, dependent upon certain financial
or performance objectives, as a participant in the Incentive Compensation
Plan. Mr. Young's current base salary is $290,000. Mr. Young was paid a
signing bonus of $55,000 in connection with his execution of the employment
agreement. Under the terms of his employment agreement, all options granted to
Mr. Young prior to November 1, 1999 became fully vested as of February 1,
2000. The employment agreement also provides that Mr. Young is entitled to
receive stock option grants each year during the term of the agreement. On
January 19, 2001, Mr. Young was awarded a grant of options to purchase 60,000
shares of common stock with an exercise price of $47.19 per share. The
employment agreement contains non-compete provisions in the event of Mr.
Young's termination of employment.

Robert D. Doty, Jr. Mr. Doty's 2000 compensation was determined under the
terms of a two-year employment agreement between Dynegy Marketing and Trade
and Mr. Doty, pursuant to which Mr. Doty serves as Senior Vice President and
Chief Financial Officer of Dynegy. Mr. Doty's employment agreement entitles
him to a base salary of $225,000, subject to increase at the discretion of the
Board of Directors, and the annual opportunity to earn additional bonus
amounts, dependent upon certain financial or performance objectives, as a
participant in the Incentive Compensation Plan. Mr. Doty's current base salary
is $310,000. Mr. Doty was paid a signing bonus of $25,000 in connection with
his execution of the employment agreement. Under the terms of his employment
agreement, all options granted to Mr. Doty prior to November 1, 1999 became
fully vested as of February 1, 2000. The employment agreement also provides
that Mr. Doty is entitled to receive stock option grants each year during the
term of the agreement. On January 19, 2001, Mr. Doty was awarded a grant of
options to purchase 60,000 shares of common stock with an exercise price of
$47.19 per share. The employment agreement contains non-compete provisions in
the event of Mr. Doty's termination of employment.

Certain Relationships and Related Transactions

Compensation Committee/Options Committee Interlocks and Insider
Participation. The Compensation Committee and the Options Committee of the
Dynegy Board of Directors made decisions regarding compensation for executive
officers in 2000. The base compensation, bonus amounts and stock option grants
for 2000 for each of Messrs. Watson, Bergstrom, Randolph, Young and Doty were
established pursuant to the terms of their respective employment agreements.
For further information, see "--Employment Agreements."

Following the completion of the Dynegy/Illinova Merger on February 1, 2000
and from time to time during the remainder of 2000, the Dynegy Compensation
Committee has been comprised of the following directors: Messrs. Dienstbier,
Adorjan (until November 2000), Bayless, Callahan and Ms. Eckert. The Options
Committee has been comprised of Messrs. Adorjan (until November 2000),
Bayless, Dienstbier and Ms. Eckert. None of the members of either the
Compensation Committee nor the Options Committee has ever been an officer or
employee of Dynegy. Mr. Callahan serves as Executive Vice President of Chevron
Corporation. Dynegy has engaged in various transactions with Chevron and its
respective affiliates, as described below.

Business Relationships with Chevron; Chevron's Other Businesses. Various
business relationships between Chevron and Dynegy, together with Chevron's
operations as a major vertically integrated energy company, may present
conflicts of interest as Chevron and Dynegy each pursue business
opportunities.

Ancillary Agreements and Strategic Alliances Contemplated by the Chevron
Combination. In connection with the August 1996 business combination with
Chevron (the "Chevron Combination"), Dynegy and Chevron,

or affiliates thereof, entered into certain supply, sales and service
agreements pursuant to which, among other things, Dynegy has (i) the
obligation to purchase and the right to market substantially all natural gas
and natural gas liquids produced or controlled by Chevron in the United States
(except Alaska) and to supply natural gas and natural gas liquids feedstock to
Chevron refineries and Chevron Chemical plants in the United States, (ii) the
right to participate in existing and future opportunities to provide
electricity to United States facilities of Chevron and Chevron Chemical, as
well as to purchase or market excess electricity generated by such facilities,
and (iii) the right to process substantially all of Chevron's processable
natural gas in those geographic areas where it is economically feasible for
Dynegy to provide such service. During 2000, Dynegy purchased $3.1 billion of
natural gas, natural gas liquids and crude oil produced or controlled by
Chevron, and sold $1.4 billion of natural gas, natural gas liquids and crude
oil to Chevron refineries and Chevron Chemical plants in the United States.

In 1996, Dynegy and Chevron formed Venice Gas Processing Company, a Texas
limited partnership. Venice Gas was formed for the purpose of owning and
operating the Venice Complex, located in Plaquemines Parish, Louisiana. In
1997, Venice Gas reorganized as a limited liability company changing its name
to Venice Energy Services Company, L.L.C. In September 1997, Venice Energy
members agreed to expand ownership in Venice Energy to include an affiliate of
Shell Midstream Enterprises, a subsidiary of Shell Oil Company effective
September 1, 1997, in exchange for Shell's commitment of certain offshore
reserves to Venice

Energy. In 1998, ownership in Venice Energy was again expanded to include
Koch Energy Services Company, in exchange for their contribution of the
cryogenic processing unit. At December 31, 1999, Dynegy's interest in Venice
Energy approximated 22.9 percent. Dynegy operates the facility and has
commercial responsibility for product distribution and sales.

Other Chevron Business. Chevron Corporation, the parent company of Chevron,
is a major vertically integrated oil and gas company, and is the sixth largest
oil and gas company (by revenues) in the world. Chevron Corporation, through
its subsidiaries, affiliates and joint ventures, is involved in exploration
and production of oil and gas, gas gathering, gas and NGL transportation and
storage, refining and distribution (wholesale and retail).

Accordingly, Chevron Corporation's present operation and its pursuit of
additional gas services opportunities overlap with Dynegy's operations and
strategy. There are no contractual limits on Chevron Corporation's ability to
compete with Dynegy. Accordingly, conflicts of interest may arise between
Chevron Corporation, and its affiliates, and Dynegy as they each pursue
natural gas services business opportunities. These conflicts may be resolved
in favor of Chevron Corporation.

In connection with the merger, Dynegy and Chevron entered into a
shareholders agreement which allows the Chevron-designated Class B common
stock Directors to block certain corporate transactions. Chevron is Dynegy's
largest shareholder and currently owns approximately 27 percent of the voting
securities of Dynegy.

Brokerage Commissions. Caldwell Nyberg Interests, Inc. ("CNI") assisted
Cushman & Wakefield, Inc. ("Cushman & Wakefield") as a cooperating broker in
securing the Company's office headquarters lease in 1996. C. L. Watson,
Chairman of the Board and Chief Executive Officer of the Company, owns a 50%
passive investment interest in CNI. In 2000, CNI's successor, Caldwell Watson
Real Estate Group ("CWREG"), was paid a commission as a participating broker
in the amount of $104,680.

Audit Committee Report

Dynegy's Board of Directors has established an Audit Committee of
independent directors, which operates under a written charter adopted by the
Board of Directors. A copy of the charter is attached to this proxy statement
as Appendix B. Dynegy's management is responsible for establishing a system of
internal controls and for preparing the Company's consolidated financial
statements in accordance with generally accepted accounting principles.
Dynegy's independent accountants, Arthur Andersen LLP, are responsible for
auditing the Company's

consolidated financial statements in accordance with generally accepted
auditing standards and issuing their report based on such audit. Under the
Audit Committee's charter, the primary function of the Audit Committee is to
assist the Board of Directors in fulfilling its oversight responsibilities as
to these processes. The Audit Committee's functions also include the selection
and evaluation of the independent auditors, the review, in conjunction with
the independent auditors, of the plans and scope of the audit engagement and a
review with the independent auditors of their objectivity and independence.

In connection with the preparation of the audited financial statements
included in Dynegy's Annual Report on Form 10-K for the year ended December
31, 2000:

. The Audit Committee reviewed and discussed the audited financial
statements with management of the Company.

. The Audit Committee discussed with the independent auditors the matters
required to be discussed by Statement on Auditing Standards No. 61 and
Statement on Auditing Standards No. 90. In general, these auditing
standards require the auditors to communicate to the Audit Committee
certain matters that are incidental to the audit, such as any initiation
of or changes to significant accounting policies, management judgments,
accounting estimates and audit adjustments, disagreements with
management and the auditors' judgment about the quality of Dynegy's
accounting principles.

. The Audit Committee received from the independent auditors written
disclosures regarding their independence required by Independence
Standards Board Standard No. 1 and discussed with the auditors their
independence. In general, Independence Standards Board Standard No. 1
requires the auditors to disclose to the Audit Committee any
relationship between the auditors and its related entities and Dynegy
that in the auditor's professional judgment may reasonably be thought to
bear on independence.

Based on the review and discussions noted above, the Audit Committee
recommended to the Board of Directors that the audited consolidated financial
statements for the year ended December 31, 2000 be included in Dynegy's Annual
Report on Form 10-K filed with the Securities and Exchange Commission.

This report is submitted by the members of the Audit Committee of the Board
of Directors:

J. Otis Winters (Chairman)
C. Steven McMillan
Robert M. Powers
Joe J. Stewart
Jerry L. Johnson

Independent Auditors

The Audit Committee of the Board of Directors has approved the selection of
Arthur Andersen LLP as independent auditors to examine Dynegy's accounts for
the year ending December 31, 2001. Representatives of Arthur Andersen LLP are
expected to be present at the meeting to be available to respond to
appropriate questions.

Set forth below is a summary of certain fees paid to Arthur Andersen LLP
for services in 2000 and for the 2000 audit. In determining the independence
of Arthur Andersen LLP, the Audit Committee considered whether the provision
of non-audit services is compatible with maintaining Arthur Andersen LLP's
independence.

Audit Fees. The total fees, including reimbursement of expenses, Dynegy
paid Arthur Andersen LLP for professional services rendered for the audit of
the annual financial statements for the year ended December 31, 2000, and the
reviews of the financial statements included in our Forms 10-Q for the first
three quarters in 2000, were $3,198,500.

All Other Fees. The total fees, including reimbursement of expenses, Dynegy
paid Arthur Andersen LLP for professional services rendered in 2000 other than
for audit services were $4,119,500. During 2000, Arthur Andersen did not
furnish financial information systems design and implementation services to
Dynegy.

Compensation Committee Report on Executive Compensation

The Compensation Committee/Options Committee. The Compensation Committee of
the Board of Directors is responsible for developing Dynegy's executive
compensation philosophy. It is the duty of the Compensation Committee to
administer the philosophy and its relationship with the compensation paid to
the Chief Executive Officer and each of the other executive officers. The 2000
Compensation Committee was chaired by Daniel L. Dienstbier, an independent
director, and was comprised of four members, including the Chairman. During
2000 following the Dynegy/Illinova Merger, the Compensation Committee met
seven times.

Prior to the completion of the merger with Illinova on February 1, 2000,
the Options Committee of the Board of Directors was responsible for approving
awards under

. the Dynegy Employee Equity Option Plan;

. the Dynegy Amended and Restated 1991 Stock Option Plan;

. the Dynegy U.K. Stock Option Plan; and

. the Dynegy 1999 Long-Term Incentive Plan.

Upon completion of the merger with Illinova, all prior option plans were
terminated and the Options Committee thereafter approved awards under the
Dynegy 2000 Long Term Incentive Plan. During 2000 following the
Dynegy/Illinova Merger, the Options Committee met four times. During 2000
following the Dynegy/Illinova Merger, the Options Committee was comprised of
J. Joe Adorjan, Chairman until November 2000, Daniel L. Dienstbier, Chairman
after November 2000, Charles E. Bayless, and, beginning in November 2000 when
she replaced Mr. Adorjan as a member, Patricia M. Eckert.

The executive compensation philosophy at Dynegy is to reward the
executive's performance in a way that creates long-term shareholder value.
Dynegy's executive compensation program was designed to help Dynegy attract,
motivate and retain the executive resources that it needs in order to maximize
its return to shareholders. Dynegy's goal is to provide its executives with a
total compensation package that--at expected levels of performance--is above
average compared with those provided to executives who hold comparable
positions or have similar qualifications in other similarly situated
organizations. Salary increases, annual incentive awards and long-term
incentive grants are reviewed annually to ensure consistency with Dynegy's
total compensation philosophy. Dynegy also seeks to encourage employee
participation in stock ownership, thereby aligning employees' interests with
those of shareholders and providing an incentive to increase shareholder
value. To achieve this goal, Dynegy makes extensive use of stock option awards
to executives, managers and key employees. Employee stock ownership is also
accomplished through Dynegy stock contributions to the 401(k) Plan.

The Compensation Committee primarily compares Dynegy's executive
compensation program to other national energy merchants of comparable size.
The Compensation Committee also consults from time to time with outside
consultants experienced in executive compensation, and Dynegy has access to
and utilizes an extensive nationwide database that tracks pay trends for a
broad industry index in which Dynegy competes for executives and senior
management.

During 2000, Dynegy's executive compensation program consisted of three
main components: (1) base salary; (2) potential for an annual incentive award
based on overall company performance as well as individual performance; and
(3) the opportunity to earn stock-based incentives, which are intended to
encourage the

achievement of superior results over time and to align executive officer and
shareholder interests. The second and third elements constitute the "at risk"
portion of the compensation program.

Base Salary. All decisions regarding base salary are made based upon
individual performance as measured against pre-established individual
objectives and competitive practices as measured by periodic compensation
surveys. Base salaries are targeted at competitive levels when compared to an
industry group that includes peer group companies, including those reflected
in the performance graph, and general industry companies similar in size to
Dynegy.

Annual Incentive Awards. During 2000, Dynegy's mechanism for awarding
annual bonuses to its executive officers was the Dynegy Inc. Incentive
Compensation Plan for 2000. The Incentive Compensation Plan is used to provide
incentive payments to all non-union salaried employees of Dynegy. The basis
for the payment of annual bonuses under the Incentive Compensation Plan is a
combination of attaining certain corporate and/or business unit performance
goals recommended and approved by the Board of Directors (i.e., earnings per
share, net income, cash-flow, return on capital employed) and personal
performance.

In 2000, Dynegy's financial results exceeded certain performance
thresholds. An incentive fund was created which was consistent with Dynegy's
pay for performance philosophy.

Long Term Incentive Compensation. Prior to the completion of the
Dynegy/Illinova Merger on February 1, 2000, Dynegy administered four stock
option plans, the Employee Equity Option Plan, the Amended and Restated 1991
Stock Option Plan, the U.K. Stock Option Plan and the 1999 Long Term Incentive
Plan, for certain key employees, including executive officers. Following the
completion of the Dynegy/Illinova Merger, these four option plans were
replaced by the 2000 Long Term Incentive Plan. As such, Dynegy's long term
incentive compensation is based upon the grants of market value stock option
awards pursuant to the 2000 Long Term Incentive Plan. Such awards are
consistent with the stock option awards made by similarly situated companies
in Dynegy's industry who are aggressive in the use of stock option awards as a
means of long term compensation. During 2000, the Options Committee was
responsible for approving stock option awards. Stock option grants were
awarded to all executive officers of Dynegy during 2000.

Compensation of Chief Executive Officer; Employment Agreement. Effective
upon the closing of the merger with Illinova on February 1, 2000, Dynegy
Marketing and Trade entered into a new three-year employment agreement with
Mr. Watson, pursuant to which Mr. Watson serves as Chairman and Chief
Executive Officer of Dynegy. Mr. Watson's new employment agreement entitles
him to a base salary of $1,500,000, subject to increase at the discretion of
the Board of Directors, and the annual opportunity to earn additional bonus
amounts, dependent upon certain financial or performance objectives, as a
participant in the Incentive Compensation Plan. Under the terms of the new
employment agreement all options granted to Mr. Watson prior to November 1,
1999 became fully vested as of February 1, 2000. The employment agreement also
contains non-compete provisions in the event of Mr. Watson's termination of
employment.

In determining Mr. Watson's base salary adjustment and annual incentive
award for 2000, the Compensation Committee considered Mr. Watson's efforts in
executing Dynegy's long-term business strategy and the financial performance
of Dynegy.

After consideration of these criteria and 2000 corporate performance, the
Compensation Committee approved an annual incentive award of $4,132,814 for
Mr. Watson. Mr. Watson also received a payment of $500,000 in February 2001
that was approved by the Board in November 1999 in recognition of Mr. Watson's
efforts in connection with the Dynegy/Illinova Merger. In addition, Mr.
Watson's base salary was increased to $1,560,000. Under the terms of his
employment agreement, Mr. Watson is also eligible to receive, each year during
the term of his agreement, stock option grants under the Dynegy 2000 Long Term
Incentive Plan with a target range at the 75th percentile of 375% of his base
salary. In January 2001, Mr. Watson received a grant of 681,924 options with
an exercise price of $47.19 per share.

Compliance with Internal Revenue Code Section 162(m). Section 162(m) of the
Internal Revenue Code, enacted in 1993, generally disallows a tax deduction to
public companies for certain compensation over $1,000,000 paid to Dynegy's
Chief Executive Officer and four other most highly compensated executive
officers, as reported in this Proxy Statement. Excluded from the limitation is
compensation that is "performance based." For compensation to be performance
based, it must meet certain criteria, including being based on predetermined
objective standards approved by shareholders. Dynegy does not believe that
Section 162(m) applies to its corporate structure. However, in general, Dynegy
believes that compensation relating to options granted under its market value
stock option plan should be excluded from the $1,000,000 limitation.
Compensation relating to Dynegy's Incentive Compensation Plan does not
currently qualify for exclusion from limitation, given the discretion that is
provided to the Compensation Committee under such plans in determining the
actual amount of such awards. The Committee believes that maintaining the
discretion to evaluate the performance of Dynegy's management is an important
part of its responsibilities and inures to the benefit of Dynegy's
shareholders. The Compensation Committee, however, will continue to take into
account the potential application of Section 162(m) with respect to incentive
compensation awards and other compensation decisions made by it in the future.

All amounts paid or accrued during fiscal year 2000 under the above-
described plans and programs are included in the preceding tables. The
individuals who served as members of the Compensation Committee during 2000
are listed below. No member of the Dynegy Compensation Committee or Options
Committee was an officer or employee of Dynegy or any of its subsidiaries
during 2000.

Compensation Committee

Daniel L. Dienstbier, Chairman
Joe Adorjan (until November 2000)
Charles E. Bayless
Darald W. Callahan
Patricia M. Eckert (beginning in November 2000)

Options Committee

Daniel L. Dienstbier, Chairman
Joe Adorjan (member and Chairman until November 2000)
Charles E. Bayless
Patricia M. Eckert

Shareholder Return Performance Presentation

The performance graph shown on the following page was prepared by Standard
& Poor's Compustat, a division of McGraw-Hill, Inc., using data from the
Standard & Poor's Compustat Database for use in this Proxy Statement. As
required by applicable rules of the SEC, the graph was prepared based upon the
following assumptions:

1. One hundred dollars ($100) was invested in Dynegy common stock, the S&P
500 and the Peer Group (as defined below) on December 31, 1995.

2. The returns of each component company in the Peer Group are weighed
based on the market capitalization of such company at the beginning of
the measurement period.

3. Dividends are reinvested on the ex-dividend dates.

Dynegy's Peer Group for fiscal year-ended December 31, 2000 (the "New Peer
Group") is comprised of a weighted index of eight energy services companies:
The AES Corp., Calpine Corporation, Duke Energy Corp., El Paso Corporation,
Enron Corp., Reliant Energy Incorporated, The Williams Companies, Inc. and
Mirant Corp.; seven utilities: Ameren, Allete Company, Dominion Resources
Inc., Nstar Company, Southern Company, Inc.,

Vectren and WPS Resources Corp.; and two midstream gas and natural gas liquids
companies: Mitchell Energy & Development Corporation and Western Gas Resources
Inc. The results were weighted 70% energy services group, 15% utilities group
and 15% midstream group to acknowledge Dynegy's continued evolution from a
producer and a marketer of natural gas and natural gas liquids to an energy
services company with an expanding presence in the BTU convergence market.
Dynegy's previous peer group was comprised of a weighted index of seven energy
services companies: AES Corporation, Calpine Corporation, Duke Energy Corp.,
Enron Corp., Pacific Gas & Electric Company, Reliant Energy Incorporated and
Southern Co.; seven utilities: Allegheny Energy Inc., American Electric Power
Corporation, Cinergy Corporation. Commonwealth Edison Corp., Dayton Power &
Light Company, FirstEnergy Corp. and NiSource Inc.; and two midstream gas and
natural gas liquids companies: Mitchell Energy & Development Corporation and
Western Gas Resources Inc. The results were weighted 65% energy services
group, 20% utilities group and 15% midstream group to acknowledge Dynegy's
evolution from a producer and a marketer of natural gas and natural gas
liquids to an energy services company with an expanding presence in the BTU
convergence market. The companies included in the New Peer Group differ
somewhat from Dynegy's previous peer group because such companies are more
representative of various peers that are compared to Dynegy in terms of
performance on an equity basis and because of certain industry consolidations.

[CHART APPEARS HERE]

TOTAL SHAREHOLDER RETURNS

(Dividends Reinvested)

ANNUAL RETURN PERCENTAGE
Years Ending
-----------------------------------------
Company Name/Index Dec. 96 Dec. 97 Dec. 98 Dec. 99 Dec. 2000
------------------ ------- ------- ------- ------- ---------

Dynegy Inc............................ 162.80 -24.52 -37.27 122.86 220.20
S&P 500 Index......................... 22.96 33.36 28.58 21.04 -9.10
New Peer Group........................ 14.78 28.85 7.06 23.57 89.08
Old Peer Group........................ 5.68 27.67 4.59 12.86 85.89

INDEXED RETURNS
Years Ending
Dec. '95 -----------------------------------------
Company Name/Index Base Period Dec. 96 Dec. 97 Dec. 98 Dec. 99 Dec. 2000
------------------ ----------- ------- ------- ------- ------- ---------

Dynegy Inc................ 100 262.80 198.36 124.45 277.35 888.07
S&P 500 Index............. 100 122.96 163.98 210.85 255.21 231.98
New Peer Group............ 100 114.78 147.89 158.33 195.65 369.94
Old Peer Group............ 100 105.68 134.93 141.11 159.25 296.04

PROPOSAL 2

AMENDMENT AND RESTATEMENT OF ARTICLES OF INCORPORATION

Since the formation of Dynegy, the Company's Articles of Incorporation have
been amended a number of times to change the corporate name, to increase the
number of authorized shares and to set forth provisions relating to the Class
A common stock and the Class B common stock. In addition, the Board of
Directors established the Series A Convertible Preferred Stock by resolution
as permitted by the Articles of Incorporation and applicable law. The Board of
Directors has determined that it is in the best interests of Dynegy and its
shareholders to amend and restate Dynegy's Articles of Incorporation to
consolidate the various amendments to the Articles of Incorporation, to
eliminate the designation of relative rights and preferences of Series A
convertible preferred stock previously established by resolution of the Board
of Directors, to eliminate any outdated information and to make other minor
stylistic, definitional, conforming and clarifying drafting alterations in a
single document. Specifically, the proposed amendment will capitalize defined
terms, delete duplicate definitions, renumber sections in a consistent manner
for the restated document, update the name and address of the registered agent
and correct typographical and grammatical errors. This proposed amendment and
restatement of the Articles of Incorporation is not intended to change any of
your existing rights as a shareholder.

The affirmative vote of the holders of not less than two-thirds of the
Class A common stock and the Class B common stock entitled to vote, voting
together as a single class, is required to approve the proposed amendment and
restatement of the Articles of Incorporation. Abstentions and broker non-votes
would have the same legal effect as a vote against the proposal. Although the
Articles of Incorporation provide that the Series A convertible preferred
stock votes together with the Class A common stock and Class B common stock as
a single class on such a proposal, no shares of the Series A convertible
preferred stock are currently outstanding and eligible to so vote.

The Board of Directors believes the proposed amendment and restatement of
the Articles of Incorporation, in the form attached to this Proxy Statement as
Appendix A, is in the best interests of Dynegy and recommends that
shareholders vote "FOR" the Amended and Restated Articles of Incorporation.

PROPOSAL 3

RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS

The Board of Directors has appointed the firm of Arthur Andersen LLP as
independent auditors of Dynegy for the fiscal year ending December 31, 2001
and recommends ratification by the shareholders of such appointment. Such
ratification requires the affirmative vote of a majority of the shares of
Class A common stock and Class B common stock, voting together as a single
class, present or represented by proxy and entitled to vote at the annual
meeting. Under Illinois law, an abstention would have the same legal effect as
a vote against this proposal, but a broker non-vote would not be counted for
purposes of determining shares represented in person or by proxy on the
matter. The persons named in the accompanying proxy intend to vote for
ratification of such appointment unless instructed otherwise on the proxy.

In the event the appointment is not ratified, the Board of Directors will
consider the appointment of other independent auditors. The Board of Directors
may terminate the appointment of Arthur Andersen LLP as Dynegy's independent
auditors without the approval of the shareholders of Dynegy whenever the Board
of Directors deems such termination necessary or appropriate. A representative
of Arthur Andersen LLP is expected to attend the annual meeting and will be
available to respond to appropriate questions.

The Board of Directors recommends that shareholders vote "FOR" ratification
of the appointment of Arthur Andersen LLP as independent auditors.

SHAREHOLDER PROPOSALS

Any shareholder who wishes to submit a proposal for inclusion in the proxy
material and for presentation at Dynegy's 2002 Annual Meeting of Shareholders
must forward such proposal to the Secretary of Dynegy at the address indicated
on the first page of this Proxy Statement so that the Secretary receives it no
later than December 24, 2001.

OTHER MATTERS

The Board of Directors does not know of any other matters that are to be
presented for action at the annual meeting. However, if any other matters
properly come before the annual meeting or any adjournment(s) or
postponement(s) thereof, it is intended that the enclosed proxy will be voted
in accordance with the judgment of the persons named in the proxy.

By Order of the Board of Directors,

/s/ Kenneth E. Randolph
Kenneth E. Randolph
General Counsel and Secretary

April 23, 2001

APPENDIX A

AMENDED AND RESTATED

ARTICLES OF INCORPORATION

DYNEGY INC.

ARTICLE 1

The name of the corporation is Dynegy Inc. (the "Corporation").

The Corporation was incorporated on June 11, 1999 under the name Energy
Convergence Holding Company. The Corporation's name was amended from Energy
Convergence Holding Company to Dynegy Inc. on January 4, 2000.

ARTICLE 2

Registered Agent CT Corporation System
Registered Office: c/o CT Corporation System
208 S. LaSalle St. Chicago, IL 60604 Cook County

ARTICLE 3

Purpose or purposes for which the corporation is organized:

To transact any or all lawful businesses for which a corporation may be
incorporated under the Business Corporation Act of 1983, as amended from time
to time.

ARTICLE 4

Paragraph 1: Authorized Shares

Class Par Value Per Share Number of Authorized Shares
----- ------------------- ---------------------------

Class A Common............... No Par Value 900,000,000
Class B Common............... No Par Value 360,000,000
Preferred.................... No Par Value 70,000,000

Paragraph 2: The preferences, qualifications, limitations, restrictions and
special or relative rights in respect of the shares of each class are:

A. General

All holders of Class A Common Stock (as defined) shall be entitled to
cumulative voting rights, as that term is used in Section 7.40 of the Illinois
Business Corporation Act of 1983, as amended from time to time (the "IBCA"),
in any election of directors. Holders of Class B Common Stock (as defined)
shall not be entitled to cumulative voting rights.

A-1

B. Provisions Relating to Preferred Stock

(1) The total number of shares of preferred stock that the Corporation
shall have authority to issue is 70,000,000, no par value per share
(the "Preferred Stock").

(2) Authority is hereby expressly vested in the Board of Directors (the
"Board") to divide, and to provide for the issue from time to time of,
the Preferred Stock in series and to fix and determine as to each such
series:

(a) the designation of, and the number of shares to be issuable in,
such series;

(b) the dividend rate for the shares for such series;

(d) the amount payable upon each of such shares in the event of
involuntary dissolution of the Corporation;

(e) the amount payable upon each of such shares in the event of
voluntary dissolution of the Corporation;

(f) sinking fund provisions, if any, for the redemption or purchase of
such shares (the term "sinking fund," as used herein, including
any analogous fund, however designated);

(g) if such shares are to be issued with the privilege of conversion
into shares of the Common Stock or other securities, the terms and
conditions on which such shares may be so converted; and

(h) the voting rights or the grant of special voting rights, provided
that the voting rights of such Preferred Stock are no greater in
proportion than to the economic interest of such Shares.

In all other respects the shares of Preferred Stock of all series shall be
identical. Holders of Preferred Stock shall have no preemptive rights.

Additional series of Preferred Stock may be issued pursuant to designation
by resolution of the Board of Directors and such series may have preferences
which are junior to, parri passu with or superior to an outstanding series of
Preferred Stock set forth in these articles of incorporation or created by
designation without any vote of such outstanding series of Preferred Stock
unless the designation or terms of the outstanding series of Preferred Stock
expressly provides otherwise.

So long as any shares of any series of the Preferred Stock established by
resolution of the Board of Directors shall be outstanding, such resolution
shall not be amended so as to affect any of the preferences or other rights of
the holders of the shares of such series without the affirmative vote or the
written consent of the holders of at least a majority of the shares of such
series outstanding at the time or as of a record date fixed by the Board of
Directors, but such resolution may be so amended with such vote or consent.

[The Series A Convertible Preferred Stock, no par value per share,
consisting of 6,697,776 shares, previously established and designated by
resolution of the Board of Directors of the Corporation on January 31, 2000,
of which no shares remain currently outstanding, is deleted as of the date of
filing of these Amended and Restated Articles of Incorporation.]

C. Provisions Relating to Common Stock

(1) The total number of shares of common stock that the Corporation shall
have authority to issue is 1,260,000,000 of which (i) 900,000,000
shares shall be shares of Class A Common Stock, no par value per share
(the "Class A Common Stock"), and (ii) 360,000,000 shares shall be
shares of Class B Common Stock, no par value per share (the "Class B
Common Stock," and together with the Class A Common Stock, the "Common
Stock").

A-2

(2) Holders of the Common Stock shall have no preemptive rights. Except as
contemplated by Article 4, Paragraph 2C., each outstanding share of
Common Stock shall entitle the holder thereof to one vote (and not
more than one vote) on each matter submitted to a vote at a meeting of
holders of Common Stock.

(3) The following is a statement of the relative powers, preferences and
participating, optional or other special rights, and the
qualifications, limitations and restrictions of the Class A Common
Stock and Class B Common Stock:

(a) Class A Common Stock and Class B Common Stock

Except as otherwise set forth in this Article 4, Paragraph 2C., the
relative powers, preferences and participating, optional or other
special rights, and the qualifications, limitations or restrictions of
the Class A Common Stock and Class B Common Stock shall be identical in
all respects.

(b) Dividends

Subject to the rights of the holders of Preferred Stock, and subject
to any other provisions of these Articles, holders of Common Stock
shall be entitled to receive such dividends and other distributions in
cash, stock of any corporation (other than Common Stock) or property of
the Corporation as may be declared thereon by the Board of Directors
from time to time out of assets or funds of the Corporation legally
available therefor and shall share equally on a per share basis in all
such dividends and other distributions. In the case of dividends or
other distributions payable in Common Stock, including distributions
pursuant to stock splits or divisions of Common Stock, only shares of
Class A Common Stock shall be paid or distributed with respect to Class
A Common Stock and only shares of Class B Common Stock shall be paid or
distributed with respect to Class B Common Stock. The number of shares
of Class A Common Stock and Class B Common Stock so distributed on each
share shall be equal in number. Neither the shares of Class A Common
nor the shares of Class B Common Stock may be reclassified, subdivided
or combined unless such reclassification, subdivision or combination
occurs simultaneously and in the same proportion for each class.

(i) Except as may be otherwise required by law or by the provisions
of this Article 4, Paragraph 2C.(3)(c), the holders of the Class B
Common Stock shall vote together with the holders of the Class A Common
Stock as a single class on every matter coming before any meeting of
the shareholders or otherwise to be acted upon by the shareholders,
subject to any voting rights which may be granted to holders of any
other class or series of Preferred Stock. So long as any Class B Common
Stock is outstanding, the Corporation shall not (x) without the
affirmative vote of 66 2/3% of the shares of Class A and Class B Common
Stock outstanding, voting as a single class, effect any mergers,
consolidations, reorganizations, or sales of assets requiring
shareholder approval under the IBCA or disposition of all or
substantially all of the Corporation's assets, or (y) without the
affirmative vote of 66 2/3% of the shares of Class B Common Stock
outstanding, voting as a separate class, and the affirmative vote of a
majority of the shares of Class A and Class B Common Stock, voting as a
single class, (1) amend any provision of this Article 4,
Paragraph 2C.(3)(c)(i) relating to the Common Stock or (2) (unless such
amendment shall be approved by a majority of the Class B directors
present at the meeting where such amendment is considered and a
majority of the Directors then in office) amend Section 7 of
Article III or Article X of the Corporation's By-laws.

(ii) The Board of Directors of the Corporation shall consist of at
least twelve members and no more than fifteen members as established
from time to time by resolution of the Board of Directors, except that
such numbers are subject to automatic adjustment as necessary, under
those circumstances and during those time periods that holders of any
other class or series of the Corporation's outstanding Preferred Stock
have rights to elect members of the Board of Directors (the "Preferred
Stock Directors"), as set forth in these Articles of Incorporation or
in the resolution of the Board of Directors

A-3

establishing and designating such series and fixing and determining the
relative rights and preferences thereof. So long as any shares of
Class B Common Stock are outstanding, the holders of the Class B Common
Stock, as such holders, shall be entitled to vote as a separate class
for the election of three directors of the Corporation (the "Class B
Directors") and the holders of the Class A Common Stock shall be
entitled to vote as a separate class for the remaining directors of the
Corporation (the "Class A Directors"), excluding Preferred Stock
Directors, if any. At such time as no Class B Common Stock is
outstanding, the term of all Class B Directors shall immediately end.

(iii) For purposes of electing Class B Directors, the Board of
Directors will nominate such individuals as may be specified by a
majority vote of the then existing Class B Directors or, if there are
no Class B Directors, by holders of a majority of the Class B Common
Stock. The remaining directors will be nominated in accordance with the
Corporation's Bylaws.

(iv) At any meeting having as a purpose the election of directors by
holders of the Common Stock, the presence, in person or by proxy, of
the holders of a majority of the shares of the relevant class or
classes of Common Stock then outstanding shall be required and be
sufficient to constitute a quorum of such class or classes for the
election of any director by such holders. Each director shall be
elected by the vote or written consent required under the IBCA of the
holders of such class or classes. At any such meeting or adjournment
thereof, (i) the absence of a quorum of such holders of an applicable
class of Common Stock shall not prevent the election of the directors
to be elected by the holders of shares other than such class of Common
Stock, and (ii) in the absence of such quorum (either of holders of
such class of Common Stock or of shares other than such class of Common
Stock, or both), a majority of the holders, present in person or by
proxy, of the class or classes of stock which lack a quorum shall have
power to adjourn the meeting for the election of directors which they
are entitled to elect, from time to time, without notice other than
announcement at the meeting, until a quorum shall be present.

(v) Any vacancy in the office of a class of director may be filled
by the remaining directors of such class, unless such vacancy occurred
because of the removal (with or without cause) of a director, in which
event such vacancy shall be filled by the affirmative vote of the
holders of a majority of the outstanding shares of the applicable class
of Common Stock. Any or all of the directors may be removed, with or
without cause, by vote or by written consent in each case in accordance
with Section 8.35 of the IBCA by the holders of the applicable class of
Common Stock and not otherwise. Any director elected to fill a vacancy
shall serve the same remaining term as that of his or her predecessor,
subject, however, to prior death, resignation, retirement,
disqualification, or removal from office.

(vi) Without the affirmative vote of the holders of at least 66 2/3%
of the outstanding shares of the Class B Common Stock or the written
consent of such holders of the Class B Common Stock, the Corporation
may not effect any change in the rights, privileges or preferences of
the Class B Common Stock. This provision shall not be applicable to any
amendment to the Articles of Incorporation or adoption of resolutions
of the Board of Directors which establishes or designates one or more
classes or series of Preferred Stock in accordance with Article 4,
Paragraph 2B.(2).

(vii) With respect to actions by the holders of Class B Common Stock
upon those matters on which such holders are entitled to vote as a
separate class, such actions may be taken without a shareholders
meeting by the written consent of holders of the Class B Common Stock
who would be entitled to vote at a meeting those shares having voting
power to cast not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all
shares of Class B Common Stock entitled to vote were present and voted.
Notice shall be given in accordance with the applicable provisions of
the IBCA of the taking of corporate action without a meeting by less
than unanimous written consent to those holders of Class B Common Stock
on the record date whose shares were not represented on the written
consent.

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(d) Transfer

(i) If any person holding shares of Class B Common Stock of record
(a "Class B Holder") purports to transfer such shares of Class B Common
Stock, whether by sale, assignment, gift, bequest or otherwise, except
to a Permitted Transferee, such transfer shall be deemed to constitute
a request by the Class B Holder for conversion of such shares and shall
result in such shares being converted into Class A Common Stock as
provided by Article 4, Paragraph 2C.(3)(e).

(ii) In the case of a Class B Holder acquiring record and beneficial
ownership of the shares of Class B Common Stock in question upon
initial issuance by the Corporation (an "Original Holder"), a
"Permitted Transferee" shall mean any Affiliate (as defined below) of
such Original Holder.

In the case of a Class B Holder which is a Permitted Transferee of an
Original Holder, a "Permitted Transferee" shall mean:

(y) any Original Holder, or

(z) any Permitted Transferee of any Original Holder.

For this paragraph and Article 4, Paragraph 2C.(3)(e), "Affiliate" means
any corporation, partnership, limited liability company or other entity
(each, a "Person") that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, another Person, and includes any Person acting in concert with
another Person.

(iii) With respect to a Class B Holder which holds shares by virtue
of its status as an Affiliate, the subsequent loss of Affiliate status
shall, unless within 15 days thereafter all shares of Class B Common
Stock held by such Class B Holder are transferred to an Original Holder
or a Permitted Transferee of an Original Holder, result in the
automatic conversion of all of its shares of Class B Common Stock into
shares of Class A Common Stock, and stock certificates formerly
representing such shares of Class B Common Stock shall thereupon and
thereafter be deemed to represent shares of Class A Common Stock as
provided by Article 4, Paragraph 2C.(3)(e).

(iv) Any transfer of shares of Class B Common Stock not permitted
hereunder shall result in the conversion of the transferee's shares of
Class B Common Stock into shares of Class A Common Stock as provided by
Article 4, Paragraph 2C.(3)(e), effective as of the date on which
certificates representing such shares are presented for transfer on the
books of the Corporation or on such earlier date that the Corporation
receives notice of such attempted transfer. The Corporation may, in
connection with preparing a list of stockholders entitled to vote at
any meeting of stockholders, or as a condition to the transfer or the
registration of shares of Class B Common Stock on the Corporation's
books, require the furnishing of such affidavits or other proof as it
deems necessary to establish that the person is the beneficial owner of
shares of Class B Common Stock or is a Permitted Transferee.

(v) Shares of Class B Common Stock shall be registered in the names
of the beneficial owners thereof and not in "street" or "nominee" name.
For this purpose, a "beneficial owner" of any shares of Class B Common
Stock shall mean a person who, or any entity which, possesses the
powers, either singly or jointly, to direct the voting or disposition
of such shares. Certificates for shares of Class B Common Stock shall
bear a legend referencing the restrictions on transfer imposed by this
Article 4, Paragraph 2C.(3)(d).

(e) Conversion

(i) Each share of Class B Common Stock shall be converted at such
time, in such manner and upon such terms and conditions as provided
herein into one fully paid and non-assessable share of Class A Common
Stock.

(ii) Each share of Class B Common Stock shall automatically convert
into a share of Class A Common Stock upon the earlier to occur of
(x) the holders of all Class B Common Stock ceasing to own in the
aggregate 15% of the issued and outstanding Common Stock, and (y) as
provided in

A-5

Article 4, Paragraph 2C.(3)(d). Upon automatic conversion of shares of
Class B Common Stock, the Corporation shall reflect such conversion,
and the issuance of Class A Common Stock in connection therewith on its
books and records for all purposes even if certificates reflecting such
converted shares of Class B Common Stock are not surrendered to the
Corporation or its transfer agent. All shares of Class B Common Stock,
upon conversion thereof into Class A Common Stock, shall retain their
designation as Class B Common Stock and shall have the status of
authorized and unissued shares of Class B Common Stock; provided that
if all shares of Class B Common Stock outstanding are converted into
shares of Class A Common Stock, then all authorized but unissued shares
or treasury shares of Class B Common Stock shall automatically convert
into authorized but unissued or treasury shares of Class A Common
Stock, as the case may be, and no further shares of Class B Common
Stock shall exist. Except as specifically contemplated under this
Article 4, Paragraph 2C.(3)(e), shares of Class B Common Stock may not
be converted into Class A Common Stock.

(iii) Each share of Class A Common Stock owned (within the meaning
of Article 4, Paragraph 2C.(3)(d)) by Chevron U.S.A. Inc., a
Pennsylvania corporation ("Chevron") or its Affiliates shall
simultaneous with acquiring such ownership automatically be converted
into one fully paid and non-assessable share of Class B Common Stock;
provided, however, that for purposes of any shares of Class B Common
Stock so issued, only Chevron will be deemed to be the Original Holder
thereof for purposes of the provisions of Article 4,
Paragraph 2C.(3)(d), and provided, further, that this provision shall
not apply with respect to shares of Class A Common Stock issued upon
conversion of all Class B Common Stock in accordance with the first
sentence of Article 4, Paragraph 2C.(3)(e)(ii)(x), or any shares of
Class A Common Stock owned by Chevron or its Affiliates, after such
conversion shall have occurred. Upon automatic conversion of shares of
Class A Common Stock, the Corporation shall reflect such conversion and
the issuance of Class B Common Stock in connection therewith on its
books and records for all purposes even if certificates reflecting such
converted shares of Class A Common Stock are not surrendered to the
Corporation for transfer. All shares of Class B Common Stock shall be
subject to the restrictions and provisions contained in the
Corporation's Articles of Incorporation. All shares of Class A Common
Stock, upon conversion thereof into Class B Common Stock, shall retain
their designation as Class A Common Stock and shall have the status of
authorized and unissued shares of Class A Common Stock.

(iv) Nothing herein shall prevent the Original Holder (or any
Permitted Transferee) of the Class B Common Stock and the Corporation
from executing an agreement allowing the Original Holder (or any
Permitted Transferee), at its option, to convert the Class B Common
Stock into Class A Common Stock, nor the conversion of any Class B
Common Stock pursuant to such agreement.

(v) The Corporation will, as soon as practicable after such deposit
of a certificate or certificates for Common Stock to be converted in
accordance with this Article 4, Paragraph 2C.(3)(e), issue and deliver
at the office of the Corporation or of its transfer agent to the person
for whose account such Common Stock was so surrendered, a certificate
or certificates for the number of full shares of Common Stock into
which the shares represented by the surrendered certificate are
converted. If surrendered certificates for Common Stock are converted
only in part, the Corporation will issue and deliver to the holder,
without charge therefor, a new certificate or certificates representing
the aggregate of the unconverted shares of such class of Common Stock.
The failure of the holder to deliver to the Corporation certificates
representing shares of a class of Common Stock converted in accordance
with this Article 4, Paragraph 2C.(3)(e), shall in no way affect the
automatic conversion of such shares.

(vi) The issuance of certificates for shares of a class of Common
Stock upon conversion of shares of the other class of Common Stock
shall be made without charge for any issue, stamp or other similar tax
in respect of such issuance; provided, however, if any such certificate
is to be issued in a name other than that of the holder of the share or
shares of the class of Common Stock converted, the person or persons
requesting the issuance thereof shall pay to the Corporation the amount
of any tax which may be payable in respect of any transfer involved in
such issuance or shall establish to the satisfaction of the Corporation
that such tax has been paid.

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(vii) The Corporation shall at all times reserve and keep available,
solely for the purpose of issuance upon conversion of the outstanding
shares of Class B Common Stock, such number of shares of Class A Common
Stock as shall be issuable upon the conversion of all such outstanding
shares, provided that nothing contained herein shall be construed to
preclude the Corporation from satisfying the obligations in respect of
the conversion of the outstanding shares of Class B Common Stock by
delivery of shares of Class A Common Stock which are held in the
treasury of the Corporation. The Corporation shall take all such
corporate and other actions as from time to time may be necessary to
insure that all shares of Class A Common Stock issuable upon conversion
of shares of Class B Common Stock upon issue will be duly and validly
authorized and issued, fully paid and nonassessable and free of any
preemptive or similar rights. In order that the Corporation may issue
shares of Class A Common Stock upon conversion of the Class B Common
Stock, the Corporation will endeavor to comply with all applicable
Federal and state securities laws and will endeavor to list such shares
to be issued upon conversion on such securities exchange on which the
Class A Common Stock is then listed.

(viii) The Corporation shall at all times reserve and keep
available, solely for the purpose of issuance upon conversion of the
outstanding shares of Class A Common Stock a number of shares of
Class B Common Stock equal to 40% of the number of outstanding shares
of Class A Common Stock, provided that nothing contained herein shall
be construed to preclude the Corporation from satisfying the
obligations in respect of the conversion of the outstanding shares of
Class A Common Stock by delivery of shares of Class B Common Stock
which are held in the treasury of the Corporation. The Corporation
shall take all such corporate and other actions as from time to time
may be necessary to insure that all shares of Class B Common Stock
issuable upon conversion of shares of Class A Common Stock upon issue
will be duly and validly authorized and issued, fully paid and
nonassessable and free of any preemptive or similar rights. In order
that the Corporation may issue shares of Class B Common Stock upon
conversion of the Class A Common Stock, the Corporation will endeavor
to comply with all applicable Federal and state securities laws.

(f) Except as may otherwise be required by law and for the equitable
rights and remedies which may otherwise be available to holders of
Common Stock, the shares of Common Stock shall not have any
designations, preferences, limitations or relative rights, other than
those specifically set forth in these Articles of Incorporation.

(g) The headings of the various subdivisions of this Section are for
convenience of reference only and shall not affect the interpretation
of any of the provisions of this Section.

ARTICLE 5

[This Article 5 intentionally left blank.]

ARTICLE 6
(as of June 11, 1999)

(a) It is estimated that the value of all property to be
owned by the Corporation for the following year wherever
located will be: $3,436,819,466
(b) It is estimated that the value the property to be located
within the State of Illinois during the following year
will be: $ 0
(c) It is estimated that the gross amount of business that
will be transacted by the Corporation during the
following year will be: $ 0
(d) It is estimated that the gross amount of business that
will be transacted from places of business in the State
of Illinois during the following year will be: $ 0

A-7

ARTICLE 7

Paragraph 1:

A. Right to Indemnification.

A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its shareholders, (ii) for acts or
omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, (iii) under Section 8.65 of the IBCA, or (iv) for
any transaction from which the director derived an improper personal benefit.
If the IBCA is amended to authorize corporate action further eliminating or
limiting the personal liability of Directors, then the liability of a director
or the Corporation shall be eliminated or limited to the full extent permitted
under the IBCA, as so amended. Any repeal or modification of this Article 7,
Paragraph 1 by the shareholders of the Corporation shall not adversely affect
any right or protection of a director of the Corporation existing at the time
of such repeal or modification.

The Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that he is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to be the best interests of the
Corporation, and, with respect to any criminal action or proceeding, has no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon
a plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to be the best interests of the
Corporation, or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

B. Suit by Corporation or Shareholder

The Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by or in the right of the Corporation to procure a judgment
in its favor by reason of the fact that he is or was a director or officer of
the Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation, partnership, joint venture, trust
or other enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of
such action, suit or proceeding, if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to the best interests of the
Corporation, and except that no indemnification shall be made with respect to
any claim, issue or matter as to which such person has been finally adjudged
to have been liable to the Corporation, unless, and only to the extent that
the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability, but in view of all
the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses as the court shall deem proper.

C. Director Discretion

Any indemnification under Article 7, Paragraphs 1A. and B. (unless ordered
by a court) shall be made only as authorized in the specific case, upon a
determination that indemnification of the director or officer is proper in the
circumstances because he has met the applicable standard of conduct set forth
in Article 7, Paragraphs 1A. and B. Such determination shall be made (1) by
the board of directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding, or (2) if such a
quorum is not obtainable (or,

A-8

even if obtainable, a quorum of disinterested directors so directs) by
independent legal counsel in a written opinion, or (3) by the shareholders. In
any event, to the extent that a director or officer of the Corporation has
been successful, on the merits or otherwise, in the defense of any action,
suit or proceeding referred to in Article 7, Paragraphs 1A. and B. or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including reasonable attorneys' fees) actually and reasonably
incurred by him in connection therewith.

D. Advancement of Expenses

(1) Reasonable expenses incurred in defending a civil or criminal
action, suit or proceeding shall be paid by the Corporation in advance of the
final deposition of such action, suit or proceeding, upon receipt of (i) a
statement signed by such director or officer to the effect that such director
or officer acted in good faith and in a manner which he believed to be in, or
not opposed to the best interests of the Corporation and (ii) an undertaking
by or on behalf of the director or officer to repay such amount, if it shall
ultimately be determined that he is not entitled to be indemnified by the
Corporation as authorized in this Article.

(2) The board of directors may, by separate resolution adopted under and
referring to this Article of the by-laws, provide for securing the payment of
authorized advances by the creation of escrow accounts, the establishment of
letters of credit or such other means as the board deems appropriate and with
such restrictions, limitations and qualifications with respect thereto as the
board deems appropriate in the circumstances.

E. Non-Exclusivity of Rights and Contractual Nature

(1) The indemnification and advancement of expenses provided by or
granted under other subsections of this Article shall not be deemed exclusive
of any other rights to which those seeking indemnification or advancement of
expenses may be entitled under any by-law, agreement, vote of shareholders or
disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office and
shall continue as to a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors and administrators of such
a person.

(2) The provisions of this Article 7, Paragraph 1 shall be deemed to be
a contract between the Corporation and each director and officer who serves in
such capacity at anytime while this Article 7, Paragraph 1 is in effect and
any indemnification provided under Article 7, Paragraph 1 to a person shall
continue after such person ceases to be an officer, director, agent or
employee of the Corporation as to all facts, circumstances and events
occurring while such person was such officer, director, agent or employee, and
shall not be decreased or diminished in scope without such person's consent,
regardless of their repeal or modification of this Article or any repeal or
modification of the Illinois Business Corporation Act or any other applicable
law. If the scope of indemnity provided by this Article 7, Paragraph 1 or any
replacement article, or pursuant to the Illinois Business Corporation Act or
any modification or replacement thereof is increased, then such person shall
be entitled to such increased indemnification as is in existence at the time
indemnity is provided to such person, it being the intent, subject to
Article 7, Paragraph 1K., to indemnify persons under this Article 7,
Paragraph 1 to the fullest extent permitted by law.

F. Insurance

The Corporation may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee or agent of the Corporation, or is
or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as such, whether or not
the Corporation would have the power to indemnify him against such liability
under the provisions of this Article.

G. Report to Shareholders

The Corporation shall report in writing to shareholders any indemnity or
advanced expenses paid to a director, officer, employee or agent with or
before the notice of the next shareholders' meeting.

A-9

H. Right of Claimant to Bring Suit

Subject to Article 7, Paragraph 1K., if a claim under this Article is not
promptly paid by the Corporation after a written claim has been received by
the Corporation or if expenses pursuant to Section 4 of this Article have not
been promptly advanced after a written request for such advancement
accompanied by the statement and undertaking required by Article 7,
Paragraph 1D. of this Article has been received by the Corporation, the
director or officer may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim or the advancement of
expenses. If successful, in whole or in part, in such suit, such director or
officer shall also be entitled to be paid the reasonable expense thereof,
including attorneys' fees. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the required
undertaking has been tendered to the Corporation) that the director or officer
has not met the standards of conduct which make it permissible under the
Illinois Business Corporation Act for the Corporation to indemnify the
director or officer for the amount claimed, but the burden of proving such
defense shall be on the Corporation. Neither the failure of the Corporation
(including its board of directors, independent legal counsel, or its
shareholders) to have made a determination, if required, prior to the
commencement of such action that indemnification of the director or officer is
proper in the circumstances because he or she has met the applicable standard
of conduct required under the Illinois Business Corporation Act, nor an actual
determination by the Corporation (including its board of directors,
independent legal counsel, or its shareholders) that the director or officer
had not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the director or officer had not met the
applicable standard of conduct.

I. Definition of "Corporation"

For purposes of this Article 7, references to the "Corporation" shall
include, in addition to the surviving corporation, any merging corporation
(including any corporation having merged with a merging corporation) absorbed
in a merger which, if its separate existence had continued, would have had the
power and authority to indemnify its directors, officers and employees or
agents, so that any person who was a director or officer of such merging
corporation, or was serving at the request of such merging corporation as a
director or officer of another corporation, partnership, joint venture, trust
or other enterprise, shall stand in the same position under the provisions of
this Article with respect to the surviving corporation as such person would
have with respect to such merging corporation if its separate existence had
continued.

J. Employee Benefit Plans

For purposes of this Article 7, references to "other enterprises" shall
include employee benefit plans; references to "fines" shall include any excise
taxes assessed on a person with respect to an employee benefit plan;
references to "serving at the request of the Corporation" shall include any
service as a director, officer, employee or agent of the Corporation which
imposes duties on, or involves services by such director, officer, employee,
or agent with respect to an employee benefit plan, its participants, or
beneficiaries; and references to "officers" shall include elected and
appointed officers. A person who acted in good faith and in a manner he
reasonably believed to be in the best interest of the participants and
beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interest of the Corporation" as referred to in
this Article.

K. Reimbursement

Anything herein to the contrary notwithstanding, if the Corporation
purchases insurance in accordance with Article 7, Paragraph 1F., the
Corporation shall not be required to, but may (if the board of directors so
determines in accordance with this Article 7, Paragraph 1) reimburse any party
instituting any action, suit or proceeding if a result of the institution
thereof is the denial of or limitation of payment of losses under such
insurance when such losses would have been paid thereunder if a non-insured
third party had instituted such action, suit or proceeding.

A-10

L. Severability

If any portion of this Article shall be invalidated or held to be
unenforceable on any ground by any court of competent jurisdiction, the
decision of which shall not have been reversed on appeal, such invalidity or
unenforceability shall not affect the other provisions hereof, and this
Article shall be construed in all respects as if such invalid or unenforceable
provisions had been omitted therefrom.

Paragraph 2:

Without the consent of the holders of eighty-five percent (85%) of the
outstanding Common Stock, voting as a single class, the Corporation may (and
may permit any subsidiary of the Corporation over which it has control to)
sell the following products:

(1) crude oil;

(2) other products usually and normally refined as petroleum products
from crude oils; and

(3) natural gas liquids or liquefied petroleum gases;

irrespective of where such sales or products are made, only when the seller
has no actual knowledge that the sale is not for consumption or resale in one
or more of the following areas:

(a) the United States or any of its territories or possessions;

(b) any country wholly located in the Western Hemisphere and/or
Europe or surrounded by the Mediterranean Sea;

(d) any country whose territory is contained within the territories
constituting as of the date hereof the countries known as Algeria, Angola,
Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Congo, Cote
D'Ivoire, Equatorial Guinea, Gabon, Gambia, Ghana, Greenland, Guinea,
Guinea Bissau, Iceland, Liberia, Libya, Mali, Mauritania, Mongolia,
Morocco, Niger, Nigeria, Rio Muni, Senegal, Sierra Leone, Togo, Tunisia,
Turkey, Western Sahara and/or Zaire;

(e) Antarctica; and

(f) international waters;

unless (x) otherwise permitted by the terms of that certain Scope of Business
Agreement, dated May 22, 1996, between the Corporation and Chevron, as the
same may from time to time be amended in accordance with the terms thereof, or
(y) such Scope of Business Agreement is terminated pursuant to its terms, upon
which termination the provisions of this Article 7, Paragraph 2 shall be of no
further force and effect. A copy of such Scope of Business Agreement, as the
same may be amended, shall be available for inspection by any shareholder of
the Corporation at the principal offices of the Corporation. Except as
indicated above or as may otherwise be provided in these Articles of
Incorporation or by Illinois law, shareholders shall have no right to approve
specific business activities of the Corporation, and the above provisions
shall not otherwise affect corporate powers and purposes as stated in
Article 3.

[End of Amended and Restated Articles of Incorporation of Dynegy Inc.]

A-11

APPENDIX B

DYNEGY INC.

AUDIT COMMITTEE CHARTER

May 2000

I. PURPOSE

Pursuant to Article IV of the Bylaws of Dynegy Inc. (the "Corporation"), a
committee of the directors to be known as the "Audit Committee"
(hereinafter referred to as the "Committee") is hereby established. The
primary function of the Committee is to assist the Board of Directors in
fulfilling its oversight responsibilities related to corporate accounting,
financial reporting practices, quality and integrity of financial reports
as well as legal compliance and business ethics. Key components of
fulfilling this charge include:

. Facilitating and maintaining an open avenue of communication among the
Board of Directors, Audit Committee, Senior Management, the independent
accountants, the internal audit staff and the ethics and business
conduct staff.

. Serving as an independent and objective party to monitor the
Corporation's financial reporting process and internal control system.

. Reviewing and appraising the work of the independent accountants.

. Providing direction to and oversight of the Internal Audit function and
the Ethics and Business Conduct function.

II. ORGANIZATION/COMPOSITION

The Committee will be comprised of three or more directors to be determined
by the Board, each of whom shall be independent directors as defined by the
New York Stock Exchange, or other exchange(s) on which the Corporation is
listed. The members will be free from any financial, family and other
material personal relationships that, in the opinion of the Board or Audit
Committee members, would interfere with the exercise of their independence
from management and the Corporation. All members of the committee will have
a working familiarity with basic finance and accounting practices and at
least one member must have accounting or related financial management
expertise.

III. MEETINGS

The Committee will meet at least four times annually. Additional meetings
may occur as circumstances dictate. The meetings will focus primarily on
audit/financial issues and ethics and business conduct issues. The
Committee will request legal updates from the General Counsel and/or
outside legal resources as they determine the need exists. The Committee
chairman should meet with the Ethics and Business Conduct Vice President
and/or Internal Audit Vice President prior to the scheduled committee
meetings to finalize the meeting agenda and overview issues to be
discussed. The Committee members will have sole discretion in determining
the meeting attendees and agenda.

IV. RESPONSIBILITIES AND DUTIES

The Committee believes its policies and procedures should remain flexible
in order to best react to changing conditions and provide reasonable
assurance to the Board that the accounting and reporting practices of the
Corporation are in accordance with all applicable requirements and an
effective legal compliance and business ethics program exists.

B-1

The Committee will fulfill their duties and responsibilities as follows:

A. General

. Adopt a formal written charter that is approved by the full Board of
Directors that specifies scope of responsibility, process, membership,
etc. The charter will be reviewed and updated as necessary, but at least
annually.

. Maintain minutes or other records of meetings and activities.

. Report on Committee activities and actions to the Board, including Board
recommendations the Committee may deem appropriate.

. As part of executing the responsibility to foster open communication,
the Committee will meet in separate executive sessions without members
of senior management present with each of the following groups:
Independent Accountants and Vice President--Internal Audit, to discuss
matters that the Committee or any of these groups believe should be
discussed privately.

. Conduct or authorize investigations into any matters within the
Committee's scope of responsibilities. The Committee shall be empowered
to retain independent counsel, independent accountants, or others to
assist it in the conduct of any investigation, subject to the approval
of the Board of Directors.

B. External/Independent Accountants

. Recommend to the Board the selection of the independent accountants,
considering independence and effectiveness. Annually, the Committee will
ensure a formal statement delineating the scope of services and all
relationships between such accountants and the Corporation is received
from the independent accountants. The Committee will discuss with the
independent accountants all significant relationships such accountants
have with the Corporation to ensure the accountants' independence.

. Approve any replacement of the independent accountants.

. Consult with independent accountants out of management's presence about
internal controls and the fairness of, and quality of disclosures in,
the Corporation's financial statements.

. Meet with the independent accountants and financial management of the
corporation to review the scope of the proposed external audit for the
current year. The external audit engagement shall include a requirement
that the independent accountants inform the Committee of any significant
changes in the independent accountants' original audit plan and that the
independent accountants conduct a SAS 71 Interim Financial Review prior
to the company's filing of each quarterly report to shareholders (Form
10-Q).

. Review the coordination of internal and external audit procedures to
promote an effective use of resources and ensure adequate and non-
redundant audit work is performed.

. Instruct the independent accountants that the Board of Directors is the
accountant's client and that the independent accountant is ultimately
accountable to the Board of Directors.

C. Internal Audit

. Review and approve the annual internal audit plan in relation to the
identified risks the Corporation faces, as well as any periodic changes
to such plan.

. Review at least annually the qualifications of internal audit staff as
well as the number and use of internal audit staff.

. Inquire of the Vice President--Internal Audit regarding the adequacy and
effectiveness of accounting and financial controls and request
recommendations for improvements. Review the quality and objectivity of
the internal audit function of the Corporation, including its
independence, authority and reporting relationship to management and the
Board of Directors.

. Review a summary of findings and completed internal audits, adequacy and
appropriateness of management's responses thereto, and a progress report
on executing the approved internal audit plan.

. Inquire of the Vice President--Internal Audit regarding any difficulties
encountered in the course of their audits, including any restrictions on
the scope of their work or access to required information.

B-2

D. Financial Statements/Internal Controls

. Review annual financial statements with management and the independent
accountants to determine that both groups are satisfied with the
disclosure and content in the financial statements, including the nature
and extent of any significant changes in accounting principles.

. Consider independent accountants' judgements regarding the quality and
appropriateness of the Corporation's financial statements.

. Make inquiries of management and independent accountants concerning the
adequacy of the company's system of internal controls including
computerized information system controls and security.

. Related findings and recommendations of the independent accountants and
Internal Audit together with management's responses.

. Advise financial management and the independent accountants that they
are expected to provide a timely analysis of significant financial
reporting issues and practices that affect the Corporation.

. Advise financial management and the independent accountants to discuss
with the Committee the quality, not just the acceptability, of
accounting principles and financial disclosure practices used or
proposed to be adopted by the Corporation, prior to the filing of a Form
10-Q or Form 10-K and, if practicable, prior to the release of quarter
or annual earnings.

E. Ethics and Business Conduct

. Provide oversight to the business ethics and compliance program.

. Require management to report on procedures that provide assurance that
the Corporation's mission, values, and code of conduct are properly
communicated to all employees on an annual basis.

. Review the programs and policies of the Corporation designed by
management to assure compliance with applicable laws and regulations and
monitor the results of the compliance efforts.

. Review and approve potential conflicts of interest between or among
affiliate shareholders, management and the company.

F. Establish Trading Limits & Policy

. Review, at least annually, trading limits and risk management policy and
procedures and recommend changes, if necessary, to the Board.

G. Legal

. Meet with corporation's general counsel to review any legal matters that
may have a significant impact on the Corporation's overall financial
statements.

H. While the Audit Committee has the responsibility and power set forth in
this charter, it is not the duty of the Audit Committee to plan or
conduct audits or to determine that the company's financial statements
are complete and accurate and are in accordance with generally accepted
accounting principles. This is the responsibility of management and/or
the independent auditors.

B-3

PROXY - CLASS A COMMON STOCK

DYNEGY INC.
1000 LOUISIANA, SUITE 5800 HOUSTON, TX 77002

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DYNEGY INC.

The undersigned hereby appoints C.L. Watson, Kenneth E. Randolph and Robert D.
Doty, Jr., and each of them, as proxies, each with the power to appoint his
substitute, and hereby authorizes each of them to represent and to vote, as
designated on the reverse side, all the shares of Class A Common Stock of Dynegy
Inc. held of record by the undersigned on March 30, 2001 at the Annual Meeting
of Shareholders to be held at The Petroleum Club, 800 Bell Avenue, Suite 4300,
Houston, TX 77002 at 10:00 A.M. on Friday May 18, 2001, or any adjournment
thereof.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3. THE INDIVIDUALS NAMED ABOVE ARE AUTHORIZED TO
VOTE IN THEIR DISCRETION ON ANY OTHER MATTERS THAT MAY PROPERLY COME BEFORE THE
MEETING.

(CONTINUED ON REVERSE SIDE)

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* FOLD AND DETACH HERE *

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3. Please mark [X]
your votes as
indicated in
this example

1. Election of Directors
Insert your vote for nominees named below in the designated space provided. Directors may be elected by cumulative voting. If you
choose cumulative voting for Directors you MAY NOT use internet or telephone voting, you MUST vote by returning this proxy card in
the envelope provided. Vote the number of shares owned or controlled by you multiplied by eleven. This number of shares may be cast
for any one nominee or may be distributed between nominees as you wish. Shareholders may withhold authority to vote for any nominee
by entering zero in the space following the nominee's name.

FOR all nominees WITHHOLD Nominees - Class A common stock Votes
listed to the right, cumulative AUTHORITY 1. C.L. Watson _____________________
votes to be divided equally for all eleven nominees 2. Stephen W. Bergstrom _____________________
between the nominees listed to the right 3. Michael D. Capellas _____________________
[ ] [ ] 4. Charles E. Bayless _____________________
5. Daniel L. Dienstbier _____________________
6. Patricia M. Eckert _____________________
7. Jerry L. Johnson _____________________
Note: The total number of votes you cast in the election 8. H. John Riley, Jr. _____________________
of the directors should not exceed the number of shares 9. Sheli Z. Rosenberg _____________________
shown above times eleven. 10. Joe J. Stewart _____________________
11. J. Otis Winters _____________________

2. Proposal to amend and restate FOR AGAINST ABSTAIN
Dynegy's Articles of Incorporation. [ ] [ ] [ ]

3. Proposal to ratify the appointment of Arthur [ ] [ ] [ ]
Andersen LLP as independent auditors for the
Company for the fiscal year ending
December 31, 2001.

4. In their discretion, the proxies are authorized to vote upon such other business as may properly
come before the meeting or any adjournment thereof.

Yes
I PLAN TO ATTEND THE MEETING [ ]
Yes
IN THE FUTURE, WOULD YOU CONSENT TO ACCESSING YOUR ANNUAL REPORT AND PROXY [ ]
STATEMENT ELECTRONICALLY VIA THE INTERNET?

SIGNATURE __________________________________ SIGNATURE______________________________________ DATE_______________________
NOTE: PLEASE SIGN AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN. WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE
OR GUARDIAN, PLEASE GIVE FULL TITLE AS SUCH.

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* FOLD AND DETACH HERE *

VOTE BY INTERNET OR TELEPHONE OR MAIL
24 HOURS A DAY, 7 DAYS A WEEK

YOUR TELEPHONE OR INTERNET VOTE AUTHORIZES THE NAMED PROXIES TO VOTE YOUR SHARES
IN THE SAME MANNER AS IF YOU MARKED, SIGNED AND RETURNED YOUR PROXY CARD.

INTERNET TELEPHONE MAIL
HTTP://WWW.PROXYVOTING.COM/DYN 1-800-840-1208
Use the Internet to vote your proxy. Use any touch-tone telephone to vote Mark, sign and date
Have your proxy card in hand when you your proxy. Have your proxy card in hand your proxy card
access the web site. You will be OR when you call. You will be prompted to OR and
prompted to enter your control number, enter your control number, located in the return it in
located in the box below, to create box below, and then follow the directions the enclosed postage-paid
and submit an electronic ballot. given. envelope.

IF YOU VOTE YOUR PROXY BY INTERNET OR BY TELEPHONE, YOU DO
NOT NEED TO MAIL BACK YOUR PROXY CARD.

IF YOU CHOOSE CUMULATIVE VOTING FOR DIRECTORS YOU MAY NOT USE INTERNET OR TELEPHONE VOTING, YOU MUST VOTE BY RETURNING THIS PROXY
CARD IN THE ENVELOPE PROVIDED.

PROXY - CLASS B COMMON STOCK

DYNEGY INC.
1000 LOUISIANA, SUITE 5800 HOUSTON, TX 77002

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF DYNEGY INC.

The undersigned hereby appoints C.L. Watson, Kenneth E. Randolph and Robert D.
Doty, Jr., and each of them, as proxies, each with the power to appoint his
substitute, and hereby authorizes each of them to represent and to vote, as
designated on the reverse side, all the shares of Class B Common Stock of Dynegy
Inc. held of record by the undersigned on March 30, 2001 at the Annual Meeting
of Shareholders to be held at The Petroleum Club, 800 Bell Avenue, Suite 4300,
Houston, TX 77002 at 10:00 A.M. on Friday May 18, 2001, or any adjournment
thereof.

(CONTINUED ON REVERSE SIDE)

--------------------------------------------------------------------------------
* FOLD AND DETACH HERE *

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3. Please mark [X]
your votes as
indicated in
this example

1. Election of Directors

WITHHOLD Nominees - Class B common stock
AUTHORITY (Instructions to withhold authority for any individual
FOR all nominees for all nominees nominee, strike a line through the nominees name below)
listed to the right. listed to the right 1. Darald W. Callahan
[ ] [ ] 2. R.H. Matzke
3. George L. Kirkland

2. Proposal to amend and restate FOR AGAINST ABSTAIN
Dynegy's Articles of Incorporation. [ ] [ ] [ ]

3. Proposal to ratify the appointment of Arthur [ ] [ ] [ ]
Andersen LLP as independent auditors for the
Company for the fiscal year ending
December 31, 2001.

4. In their discretion, the proxies are authorized to vote upon such other business as may properly
come before the meeting or any adjournment thereof.

Yes
I PLAN TO ATTEND THE MEETING [ ]

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* FOLD AND DETACH HERE *