<PAGE>

                                                                     Exhibit 4.1

                   STATEMENT OF RESOLUTION ESTABLISHING SERIES
                                       OF
                      SERIES C CONVERTIBLE PREFERRED STOCK
                                       OF
                                   DYNEGY INC.

     Pursuant to and in accordance with Section 6.10 of the Illinois Business
Corporation Act of 1983, as amended (the "IBCA"), the undersigned corporation
hereby makes the following statement:

                                   ARTICLE I.

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

                                  ARTICLE II.

     The Board of Directors of the Corporation (the "Board") on July 31, 2003,
duly adopted the following resolution establishing and designating a series of
preferred stock of the Corporation and fixing and determining the relative
rights and preferences thereof:

     RESOLVED, that pursuant to the authority vested in the Board by Article 4,
Paragraph 2B. of the Corporation's Amended and Restated Articles of
Incorporation (the "Articles of Incorporation"), a series of preferred stock of
the Corporation be, and it hereby is, created out of the authorized but unissued
shares of the capital stock of the Corporation, such series to be designated
"Series C Convertible Preferred Stock" (the "Series C Preferred Stock"), to
consist of 16,000,000 shares, no par value per share, of which the preferences
and relative and other rights, and the qualifications, limitations, and
restrictions thereof will be, in addition to those set forth in the Articles of
Incorporation, as follows:

     1. CERTAIN DEFINITIONS. (a) Unless otherwise stated herein or the context
otherwise requires, the terms defined in this Section 1 have the following
meanings:

     "Articles of Incorporation" is defined in the preamble to this Article II.

     "Board" is defined in the preamble to this Article II.

     "Cash Amount" is defined in Section 5(c)(iii)(C).

     "Cash Settlement Averaging Period" is defined in Section 5(c)(iii).

     "Cash Settlement Notice Period" is defined in Section 5(c)(iii).

     "Change of Control" means, any event or series of events by which:

<PAGE>

          (a) any "person" or "group" (as such terms are used in sections 13(d)
     and 14(d) of the Exchange Act, but excluding (i) any employee benefit plan
     of such person or its subsidiaries, and any person or entity acting in its
     capacity as trustee, agent or other fiduciary or administrator of any such
     plan and (ii) ChevronTexaco and/or any of its Affiliates) becomes the
     "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
     Act, except that a person or group shall be deemed to have "beneficial
     ownership" of all securities that such person or group has the right to
     acquire (such right, an "option right"), whether such right is exercisable
     immediately or only after the passage of time), directly or indirectly, of
     35% or more (excluding securities acquired by such "person" or "group"
     directly or indirectly in one or more related transactions from
     ChevronTexaco and/or any of its Affiliates) or 50% or more (including
     securities acquired by such "person" or "group" directly or indirectly in
     one or more related transactions from ChevronTexaco and/or any of its
     Affiliates) of the equity securities of the Corporation entitled to vote
     for members of the Board or equivalent governing body of the Corporation on
     a fully-diluted basis (and taking into account all such securities that
     such person or group has the right to acquire pursuant to any option
     right);

          (b) Continuing Directors cease for any reason to constitute a majority
     of the Board; or

          (c) all or substantially all of the consolidated assets of the
     Corporation and its Subsidiaries, taken as whole, are sold, leased or
     otherwise transferred to any Person (other than the Corporation or one or
     more of the Corporation's Subsidiaries).

     "Change of Control Offer" is defined in Section 6(b).

     "Change of Control Payment" is defined in Section 6(b).

     "Change of Control Payment Date" is defined in Section 6(b)(ii).

     "ChevronTexaco" means ChevronTexaco Corporation, a Delaware corporation.

     "Class A Common Stock" means all shares now or hereafter authorized of
Class A Common Stock, no par value per share, of the Corporation.

     "Class B Common Stock" means all shares now or hereafter authorized of
Class B Common Stock, no par value, of the Corporation.

     "Closing Price" means, with respect to any security on any day, the closing
sale price, regular way, on such day or, in case no such sale takes place on
such day, the average of the reported closing bid and asked prices, regular way,
in each case as quoted on the New York Stock Exchange or, if such security is
not quoted or listed or admitted to trading on such New York Stock Exchange, on
the principal national securities exchange or quotation system on which such
security is quoted or listed or admitted to trading or, if not quoted or listed
or admitted to trading on any national securities exchange or quotation system,
the average of the closing bid and asked prices of such security on the
over-the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similar generally accepted reporting
service, or if not so available, in such manner as furnished by any New York

                                       2

<PAGE>

Stock Exchange member firm selected from time to time by the Board for that
purpose, or a price determined in good faith by the Board.

     "Common Stock" means all shares now or hereafter authorized of any class of
common stock of the Corporation and any other stock of the Corporation,
howsoever designated, authorized after the Issue Date, which has the right
(subject to prior rights of any class or series of preferred stock) to
participate in the distribution of the assets and earnings of the Corporation
without limit as to per share amount.

     "Compound Dividends" is defined in Section 2(c)(ii).

     "Continuing Directors" means, as of any date of determination, any member
of the Board who: (x) was a member of the Board on the Issue Date, or (y) was
appointed, elected or nominated for election to the Board with the approval of a
majority of the Continuing Directors who were members of the Board at the time
of the relevant appointment, nomination or election.

     "Conversion Date" is defined in Section 5(c).

     "Conversion Obligation" is defined in Section 5(c)(iii).

     "Conversion Price" means the price per share of Common Stock used to
determine the number of shares of Common Stock deliverable upon conversion of a
share of the Series C Preferred Stock, subject to adjustment in accordance with
the provisions of Section 5.

     "Corporation" is defined in Article I.

     "Cross-Over Date" means the first to occur of (i) the eighteenth (18) month
anniversary of the Issue Date and (ii) the date which is 120 days after the date
on which the Corporation shall have completed one or more public or private
sales of Qualified Capital Stock, or rights, warrants or options therefor, or
securities convertible into Qualified Capital Stock, resulting in an aggregate
amount of gross proceeds of at least $250 million (measured with reference to
such sales which are consummated subsequent to the Issue Date).

     "Deferral Period Event" shall occur when an Extended Dividend Period shall
have reached ten (10) Dividend Periods without the Deferred Dividend which gave
rise to such Extended Dividend Period having been paid (determined taking into
account the provisions of Section 2(f)) in full not later than the last day of
such Extended Dividend Period.

     "Deferred Dividend" is defined in Section 2(f).

     "Disqualified Capital Stock" means any class or series of capital stock of
the Corporation that is required to be redeemed or is redeemable at the option
of the holder of such class or series at any time on or prior to the anniversary
of the Issue Date which falls in 2013.

     "Distributed Assets or Notes" is defined in Section 5(e)(iv).

                                       3

<PAGE>

     "Dividend Payment Date" means each of the semi-annual dates as follows: the
First Dividend Payment Date and each anniversary thereafter of the Issue Date
and the First Dividend Payment Date.

     "Dividend Period" means the semi-annual period between consecutive Dividend
Payment Dates.

     "Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any successor Federal statute, and the rules and regulations thereunder, all as
the same shall be in effect at the time. Reference to a particular section of,
or rule or regulation under, the Exchange Act shall include a reference to the
comparable section, rule or regulation, if any, and as the case may be, of or
under the successor Federal statute.

     "Extended Dividend Period" is defined in Section 2(f).

     "Extended Dividend Payment Date" is defined in Section 2(f).

     "Final Redemption Date" is defined in Section 4(f).

     "First Dividend Payment Date" means the date that is six months from the
Issue Date.

     "Forced Conversion Notice" is defined in Section 5(a)(ii).

     "IBCA" is defined in the introductory paragraph of this statement of
resolution.

     "Issue Date" means the date on which shares of Series C Preferred Stock are
first issued by the Corporation.

     "Junior Stock" means, for purposes of Section 2, the Common Stock and any
other class or series of capital stock of the Corporation issued after the Issue
Date not entitled to receive any dividends in any Dividend Period, unless all
dividends required to have been paid or declared and set apart for payment on
the Series C Preferred Stock have been paid or declared and set apart for
payment and, for purposes of Section 3, the Common Stock and any class or series
of capital stock of the Corporation issued after the Issue Date not entitled to
receive any assets upon the liquidation, dissolution, or winding up of the
affairs of the Corporation until the Series C Preferred Stock have received the
entire amount to which such stock is entitled upon such liquidation,
dissolution, or winding up.

     "Liquidation Date" is defined in Section 3.

     "Liquidation Value" means, as of any date, $50.00 per share of Series C
Preferred Stock (as adjusted for stock dividends, combinations or splits with
respect to such shares), plus any accrued but unpaid dividends (including
Compound Dividends, if any) thereon through such date.

     "Mandatory Conversion" is defined in Section 5(a)(ii).

     "Mandatory Redemption Date" is defined in Section 4(a).

                                       4

<PAGE>

     "NYSE Requirements" means the rules and regulations of the New York Stock
Exchange applicable to the Corporation as a listed company thereon.

     "Optional Conversion" is defined in Section 5(a)(i).

     "Original Issuance Price" means $50.00 per share of Series C Preferred
Stock (as adjusted for stock dividends, combinations or splits with respects to
such shares).

     "Parity Stock" means, for purposes of Section 2, any other class or series
of capital stock of the Corporation issued after the Issue Date entitled to
receive payment of dividends on a parity with the Series C Preferred Stock and,
for purposes of Section 3, any other class or series of capital stock of the
Corporation issued after the Issue Date entitled to receive assets upon the
liquidation, dissolution, or winding up of the affairs of the Corporation on a
parity with the Series C Preferred Stock.

     "Paying Agent" is defined in Section 6(b)(v).

     "Qualified Capital Stock" means all shares of capital stock of the
Corporation that is not Disqualified Capital Stock.

     "Record Date" means the 15th day next preceding a Dividend Payment Date, or
such other date as may be designated by the Board.

     "Redemption Agent" is defined in Section 4(e).

     "Redemption Date" is defined in Section 4(d).

     "Redemption Price" means $50.00 per share of Series C Preferred Stock, plus
any accrued but unpaid dividends (including Compound Dividends, if any) thereon
through the Redemption Date.

     "Senior Stock" means for purposes of Section 2, any class or series of
capital stock of the Corporation issued after the Issue Date ranking senior to
the Series C Preferred Stock in respect of the right to receive dividends, and,
for purposes of Section 3, any class or series of capital stock of the
Corporation issued after the Issue Date ranking senior to the Series C Preferred
Stock in respect of the right to receive assets upon the liquidation,
dissolution, or winding up of the affairs of the Corporation.

     "Series C Preferred Stock" is defined in the preamble to this Article II.

     "Subsidiary" of any Person means (x) any corporation, association or other
business entity (other than a partnership, joint venture, limited liability
company or similar entity) of which more than 50% of the total outstanding
voting power entitled (without regard to the occurrence of any contingency) to
vote in the election of directors, managers or trustees thereof (or persons
performing similar functions) or (y) any partnership, joint venture, limited
liability company or similar entity of which more than 50% of the capital
accounts, distribution rights, total equity and voting interests or general or
limited partnership interests, as applicable, is, in the case of clauses (x) and
(y), at the time owned or controlled, directly or indirectly, by (1) such

                                       5

<PAGE>

Person, (2) such Person and one or more Subsidiaries of such Person or (3) one
or more Subsidiaries of such Person.

     "Trading Day" shall mean (x) if the applicable security is quoted or listed
or admitted for trading on the New York Stock Exchange or another national
securities exchange or quotation system, a day on which the New York Stock
Exchange or such other national securities exchange or quotation system is open
for business or (y) if the applicable security is not so quoted, listed or
admitted for trading, any day other than a Saturday or Sunday or a day on which
banking institutions in the State of New York are authorized or obligated by law
or executive order to close.

     (b) The following terms have the respective meanings specified in the
indicated provision of Articles of Incorporation:

          .    Affiliate Art. 4; Para. 2(C).3(d)(ii); and

          .    Person Art. 4; Para. 2(C).3(d)(ii).

     2. DIVIDENDS.

          (a) Subject to the prior preferences and other rights of any Senior
     Stock, the holders of Series C Preferred Stock are entitled to receive, out
     of funds legally available for such purpose, cash dividends at the rate of
     $2.75 per annum per share of Series C Preferred Stock, and (subject to
     Sections 2(c) and 2(e)) no more. Such dividends are cumulative from the
     Issue Date and are payable semi-annually, in arrears, when and as declared
     by the Board on each Dividend Payment Date commencing on the first Dividend
     Payment Date after the Issue Date (subject to the rights of the Corporation
     pursuant to Section 2(f)). Each such dividend will be paid to the holders
     of record of the Series C Preferred Stock as their names appear on the
     share register of the Corporation on the Record Date immediately preceding
     such Dividend Payment Date. Dividends on account of arrears for any past
     Dividend Periods may be declared and paid at any time, without reference to
     any Dividend Payment Date, to holders of record on such date as may be
     fixed by the Board.

          (b) If full cash dividends, as provided for in Sections 2(a), 2(c)(ii)
     and 2(e), are not paid or made available to the holders of all outstanding
     shares of Series C Preferred Stock and any Parity Stock, and funds
     available are insufficient to permit such payment to all such holders of
     the preferential amounts to which they are then entitled, the entire amount
     available for payment of cash dividends remaining after the distributions
     to holders of any Senior Stock of the full amounts to which they may be
     entitled will be distributed among the holders of the Series C Preferred
     Stock and any Parity Stock ratably in proportion to the full amount to
     which they would otherwise be respectively entitled, and any remainder not
     paid to the holders of the Series C Preferred Stock will cumulate as
     provided in Section 2(c).

          (c) (i) If, on any Dividend Payment Date, the holders of the Series C
     Preferred Stock do not receive the full dividends provided for in Sections
     2(a), 2(c)(ii) and 2(e), then such dividends will cumulate, whether or not
     the Corporation has earnings

                                       6

<PAGE>

     and/or profits, whether or not there are funds legally available for
     payment of such dividends, and whether or not such dividends are declared.

          (ii) During any periods when there are Deferred Dividends outstanding,
     the holders of the Series C Preferred Stock shall be entitled to receive
     additional dividends (payable only as and when the accumulated dividends
     may become payable) at the rate of 5.5% per annum (or at the rate of 10.0%
     per annum for any Deferred Dividends outstanding after the Corporation's
     failure to obtain the shareholders' approval set forth in Section 5(l)) on
     the aggregate amount of Deferred Dividends outstanding during such period,
     accruing semi-annually as of each regular Dividend Payment Date ("Compound
     Dividends").

          (d) So long as any shares of Series C Preferred Stock are outstanding,
     the Corporation will not, unless all dividends to which the holders of
     Series C Preferred Stock are entitled for all previous Dividend Periods
     have been paid or declared and a sum of money sufficient for the payment
     thereof set apart, (i) declare or pay on any Junior Stock any dividend or
     distribution whatsoever, whether in cash, property, or otherwise (other
     than dividends payable in shares of the class or series upon which such
     dividends are declared or paid, or payable in shares of Common Stock with
     respect to Junior Stock other than Common Stock, together with cash in lieu
     of fractional shares), (ii) purchase or redeem any Junior Stock, or (iii)
     pay or make available any monies for a sinking fund for the purchase or
     redemption of any Junior Stock.

          (e) In the event that, on or prior to the first anniversary of the
     Issue Date, the Series C Preferred Stock shall not have become convertible
     (i.e., that the limitation on conversion described in Section 5(l) remains
     in effect), then, from and after the first anniversary of the Issue Date,
     the dividend rate per share of Series C Preferred Stock otherwise
     applicable pursuant to Section 2(a) shall be increased to the rate of $5.00
     per annum from $2.75 per annum, and shall remain at such increased level
     for so long as the Series C Preferred Stock shall not be convertible as
     aforesaid; provided, however, that at such time as the Series C Preferred
     Stock shall become convertible (i.e., that the limitation on conversion
     described in Section 5(l) is no longer in effect) the dividend rate shall
     revert back to the rate otherwise applicable pursuant to Section 2(a).

          (f) Notwithstanding that funds are legally available for the purpose
     of paying cash dividends to the holders of Series C Preferred Stock, the
     Corporation may elect to defer payment of cash dividends on the Series C
     Preferred Stock for up to ten (10) consecutive Dividend Periods provided,
     that no deferral pursuant to this sentence may (A) extend beyond the
     Mandatory Redemption Date or (B) end on a date other than a regular
     Dividend Payment Date. Irrespective of the reason that a regular dividend
     is not paid on a regular Dividend Payment Date, in the event that the full
     regular dividend is not paid on a Dividend Payment Date (a "Deferred
     Dividend"), then such Dividend Payment Date shall commence an extended
     Dividend Period (an "Extended Dividend Period") that will continue until
     the earlier of (I) the Deferred Dividend shall have been paid in cash or
     (II) the Deferred Dividend shall not have been declared and paid in full by
     the tenth (10th) regular Dividend Payment Date next following the Dividend
     Payment Date on which the Deferred Dividend was originally scheduled to be
     paid. For purposes of determining

                                       7

<PAGE>

     whether or not an Extended Dividend Period has ended, unless all dividends
     (including Compound Dividends) to which the holders of the Series C
     Preferred Stock are entitled for all previous Dividend Periods have been,
     or are simultaneously, paid or declared and a sum of money sufficient for
     payment thereof set apart, in the event that dividends are unpaid for more
     than one regular Dividend Period, any payment of cash dividends shall
     (irrespective of any action or statement of the Corporation or its Board to
     the contrary) be deemed to have been payment of unpaid regular dividends
     (including Compound Dividends) for previous Dividend Periods in reverse
     order of maturity. Prior to the end of an Extended Dividend Period, the
     Corporation may pay all or any portion of the accumulated dividends in the
     Series C Preferred Stock on any Extended Dividend Payment Date to holders
     of record on the regular Record Date for such Dividend Payment Date or from
     time to time extend such period; provided that such Extended Dividend
     Period, including such extension and all such further extensions thereof,
     shall not exceed ten (10) consecutive semi-annual Dividend Periods. Upon
     the termination of any Dividend Payment Period and upon the payment of all
     accumulated dividends, together with Compound Dividends, the Corporation
     may elect to begin a new Extended Dividend Period, subject to the foregoing
     requirements. No dividends shall be due and payable during an Extended
     Dividend Period, except on the last day thereof (an "Extended Dividend
     Payment Date"). On any Extended Dividend Payment Date, the Corporation
     shall pay all accumulated dividends (including any Compound Dividends)
     which shall be payable to the holders of the Series C Preferred Stock in
     whose names the Series C Preferred Stock are registered in the Series C
     Preferred Stock Register on the last Record Date prior to such Extended
     Dividend Payment Date.

          (g) The Corporation shall give the holders of the Series C Preferred
     Stock written notice of its election to commence an Extended Dividend
     Period at least five business days prior to the earlier of (i) the Record
     Date with respect to the next succeeding Dividend Payment Date or (ii) the
     date the Corporation is required to give notice of the record or payment
     date of such dividend payment to any national stock exchange or other
     self-regulatory organization on which the Series C Preferred Stock is
     listed or quoted or to holders of the Series C Preferred Stock. The
     Dividend Period in which any notice is given pursuant to this Section 2(g)
     shall be counted as one of the Dividend Periods permitted in determining
     the maximum Extended Dividend Period permitted under Section 2(f).

     3. DISTRIBUTIONS UPON LIQUIDATION, DISSOLUTION, OR WINDING UP. In the event
of any voluntary or involuntary liquidation, dissolution, or other winding up of
the affairs of the Corporation, subject to the prior preferences and other
rights of any Senior Stock, but before any distributions or payments are made to
the holders of Junior Stock, the holders of the Series C Preferred Stock will be
entitled to be paid the Liquidation Value of all outstanding shares of Series C
Preferred Stock, as of the date of such liquidation or dissolution or such other
winding up (the "Liquidation Date"), and no more, in cash or in property at its
fair value as determined by the Board, or both, at the election of the Board. If
such payment is made in full to the holders of the Series C Preferred Stock, and
if payment is made in full to the holders of any Senior Stock and Parity Stock
of all amounts to which such holders will be entitled, the remaining assets and
funds of the Corporation will be distributed among the holders of Junior Stock,
according to their respective shares and priorities. If, upon any such
liquidation,

                                       8

<PAGE>

dissolution, or other winding up of the affairs of the Corporation, the assets
of the Corporation distributable among the holders of all outstanding shares of
the Series C Preferred Stock and any Parity Stock are insufficient to permit the
payment in full to such holders of the preferential amounts to which they are
entitled, then the entire assets of the Corporation remaining after the
distributions to holders of any Senior Stock of the full amounts to which they
may be entitled will be distributed among the holders of the Series C Preferred
Stock and any Parity Stock ratably in proportion to the full amounts to which
they would otherwise be respectively entitled. Neither the consolidation or
merger of the Corporation into or with another entity or entities nor the sale
of all or substantially all of the assets of the Corporation to any person or
persons will be deemed a liquidation, dissolution, or winding up of the affairs
of the Corporation within the meaning of this Section 3, unless such
consolidation, merger, or sale of assets is in connection with the complete
liquidation, dissolution, or winding up of the affairs of the Corporation.

     4. REDEMPTION BY THE CORPORATION.

          (a) The Corporation shall redeem all, and not less than all, of the
     then outstanding shares of Series C Preferred Stock at the Redemption Price
     on the Mandatory Redemption Date that have not been converted pursuant to
     Section 5. The "Mandatory Redemption Date" is the earlier to occur of (i)
     the anniversary of the Issue Date occurring in 2033 and (ii) a Deferral
     Period Event.

          (b) Except for any mandatory redemption pursuant to Section 4(a), the
     Series C Preferred Stock may not be redeemed by the Corporation, in whole
     or in part, prior to the tenth (10th) anniversary of the Issue Date. On and
     after the tenth (10th) anniversary of the Issue Date, the Series C
     Preferred Stock may be redeemed by the Corporation at any time and from
     time to time, in whole or in part, at the option of the Corporation, at the
     Redemption Price.

          (c) If less than all of the outstanding shares of the Series C
     Preferred Stock are to be redeemed by the Corporation, such shares will be
     redeemed pro rata as determined by the Board in its sole discretion.

          (d) Notice of each proposed redemption of the Series C Preferred Stock
     will be sent by or on behalf of the Corporation, by first class mail,
     postage prepaid, to holders of record of the shares of Series C Preferred
     Stock to be redeemed at such holders' addresses as they appear on the
     records of the Corporation, not less than 30 days or more than 60 days
     prior to the date fixed for redemption by the Corporation (the "Redemption
     Date") (i) notifying such holders of the redemption of such shares of
     Series C Preferred Stock and the Redemption Date, (ii) stating the date on
     which such shares of Series C Preferred Stock cease to be convertible and
     the Conversion Price, (iii) stating the place or places at which such
     shares of Series C Preferred Stock called for redemption will, upon
     presentation and surrender of the certificate or certificates evidencing
     such shares, be redeemed and the Redemption Price, and (iv) stating the
     name and address of the Redemption Agent selected in accordance with
     Section 4(e).

          (e) The Corporation may (i) act as the redemption agent or (ii)
     appoint as its agent, for the purpose of acting as the Corporation's
     redemption agent, a bank or trust

                                       9

<PAGE>

     company in good standing, organized under the laws of the United States of
     America or any jurisdiction thereof and any replacement thereof or
     successors thereto. The Corporation or such appointed bank or trust company
     is hereinafter referred to as the "Redemption Agent." Following such
     appointment, if any, and prior to any redemption, the Corporation will
     deliver to the Redemption Agent irrevocable written instructions
     authorizing the Redemption Agent, on behalf and at the expense of the
     Corporation, to cause a notice of redemption to be duly mailed in
     accordance with Section 4(d), as soon as practicable after receipt of such
     irrevocable instructions. All funds necessary for the redemption will be
     deposited with the Redemption Agent, in trust, at least two business days
     prior to the Redemption Date, for the pro rata benefit of the holders of
     the shares of Series C Preferred Stock called for redemption. Neither
     failure to mail any such notice to one or more holders of Series C
     Preferred Stock nor any defect in any notice will affect the sufficiency of
     the proceedings for redemption as to other holders of Series C Preferred
     Stock.

          (f) If notice of redemption is given in accordance with Section 4(d)
     and the Corporation is not in default in the payment of the Redemption
     Price, then each holder of shares of Series C Preferred Stock called for
     redemption is entitled to all preferences and relative and other rights
     accorded by this resolution until and including the date prior to the
     Redemption Date. If the Corporation defaults in making payment on the
     Redemption Date, then each holder of the shares of Series C Preferred Stock
     called for redemption is entitled to all preferences and relative and other
     rights accorded by this resolution until and including the date prior to
     the date when the Corporation makes payment to the holders of the Series C
     Preferred Stock (the "Final Redemption Date"). From and after the
     Redemption Date, the shares of Series C Preferred Stock called for
     redemption will no longer be deemed to be outstanding and all rights of the
     holders of such shares of Series C Preferred Stock will cease and
     terminate, except the right of the holders of such shares of Series C
     Preferred Stock, upon surrender of the certificate or certificates
     therefor, to receive the Redemption Price. The deposit of monies in trust
     with the Redemption Agent by the Corporation will be irrevocable, except
     that the Corporation will be entitled to receive from the Redemption Agent
     the interest or other earnings, if any, earned on any monies so deposited
     in trust, and the holders of any shares of Series C Preferred Stock
     redeemed will have no claim to such interest or other earnings. Any balance
     of monies so deposited by the Corporation and unclaimed by the holders of
     the Series C Preferred Stock entitled thereto at the expiration of one year
     from the Redemption Date (or the Final Redemption Date, as applicable) will
     be repaid, together with any interest or other earnings thereon, to the
     Corporation, and after any such repayment, the holders of the shares of
     Series C Preferred Stock entitled to the funds so repaid to the Corporation
     will look only to the Corporation for payment of the Redemption Price,
     without interest.

     5. CONVERSION. The Series C Preferred Stock will be convertible into Common
Stock as follows:

          (a) (i) Conversion at Option of Holder. Subject to and upon compliance
     with the provisions of this Section 5 (including, but without limitation,
     Section 5(l)), the holder of any shares of Series C Preferred Stock will
     have the right at such holder's

                                       10

<PAGE>

     option, at any time or from time to time, to convert any of such shares of
     Series C Preferred Stock into fully paid and nonassessable shares of Class
     A Common Stock at the Conversion Price in effect on the Conversion Date (an
     "Optional Conversion"); provided, however, no right of conversion afforded
     by this Section 5(a)(i) may be exercised unless the Closing Price of the
     Class A Common Stock for each of the 20 Trading Days immediately prior to
     the proposed Conversion Date is at least 100% of the Conversion Price in
     effect on the proposed Conversion Date. Each share of Series C Preferred
     Stock to be converted pursuant to this Section 5(a)(i) will be converted
     into a number of shares of Class A Common Stock determined by dividing (A)
     the Original Issuance Price by (B) the Conversion Price in effect on the
     Conversion Date. With respect to any share of Series C Preferred Stock
     called for redemption, the right of conversion described in this Section
     5(a)(i) will terminate at the close of business on the day prior to the
     Redemption Date or, if the Corporation defaults in the payment of the
     Redemption Price, at the close of business on the day prior to the Final
     Redemption Date.

               (ii) Mandatory Conversion. Subject to the limitations set forth
     in Section 5(l) below, on or after the third anniversary of the Cross-Over
     Date, the Corporation may, by giving notice to the holders of Series C
     Preferred Stock (the "Forced Conversion Notice"), convert each share of
     Series C Preferred Stock (the "Mandatory Conversion") into the number of
     shares of Common Stock determined by dividing (A) the Original Issuance
     Price per share of Series C Preferred Stock by (B) the Conversion Price in
     effect on the Conversion Date; provided, however, that this right to compel
     Mandatory Conversion shall only be exercisable if: (I) the Closing Price of
     a share of Class A Common Stock exceeds 130% of the Conversion Price in
     effect on the Conversion Date (relating to the Mandatory Conversion) for at
     least 20 Trading Days within the 30 consecutive Trading Days immediately
     prior to the delivery by the Corporation of the Forced Conversion Notice
     (including the last Trading Day of such period); and, (II) simultaneously
     with the Mandatory Conversion, holders of such Series C Preferred Stock
     shall receive a dividend payment of cash, shares of Common Stock, or any
     combination thereof, as the Corporation determines in its sole discretion,
     in an amount equal to any accrued and unpaid dividends on the Series C
     Preferred Stock as of the applicable Conversion Date (other than previously
     declared dividends on the Series C Preferred Stock payable to a holder of
     record as of a prior date), whether or not declared, out of legally
     available assets of the Corporation. To the extent that the Corporation
     pays some or all of such dividend in shares of Common Stock, the number of
     shares of Common Stock issuable to a holder in respect of such accrued and
     unpaid dividends shall equal (x) the amount of accrued and unpaid dividends
     on the Series C Preferred Stock on the applicable Conversion Date that the
     Corporation shall have determined to pay in shares of Common Stock divided
     by (y) the average of the Closing Price of shares of Class A Common Stock
     for the 5 Trading Days next preceding the applicable Conversion Date.

          (b) Conversion Price. The Conversion Price at which shares of Class A
     Common Stock will initially be issuable upon conversion of the shares of
     Series C Preferred Stock will be $5.78. The Conversion Price will be
     subject to adjustment as set forth in Section 5(e). No dividends will
     accrue or be paid on Series C Preferred Stock subsequent to conversion.

                                       11

<PAGE>

          (c) Mechanics of Conversion. (i) In the case of an Optional
     Conversion, the holder of any shares of Series C Preferred Stock shall
     exercise the conversion right by surrendering to the Corporation or the
     transfer agent of the Corporation the certificate or certificates for the
     shares to be converted, accompanied by written notice specifying the number
     of shares to be converted. Conversion will be deemed to have been effected
     on the date when delivery is made of notice of an election to convert and
     the certificate or certificates evidencing the Series C Preferred Stock
     shares to be converted and such date shall be the "Conversion Date."

          (ii) In the case of a Mandatory Conversion, the conversion shall be
     deemed to have been effective as of the date the Forced Conversion Notice
     is given by the Corporation and such date shall be the "Conversion Date,"
     and the holders of the Series C Preferred Stock shall promptly thereafter
     surrender their certificates evidencing their ownership of Series C
     Preferred Stock.

          (iii) Notwithstanding anything herein to the contrary, the Corporation
     may elect to satisfy all or any portion of its conversion obligation to a
     holder of shares of Series C Preferred Stock, whether arising pursuant to
     an Optional Conversion or a Mandatory Conversion (the "Conversion
     Obligation"), in cash or a combination of cash and Class A Common Stock.
     The Corporation will notify such holder of the dollar amount to be
     satisfied in cash (which must be expressed either as 100% of the Conversion
     Obligation or as a fixed dollar amount), in the case of an Optional
     Conversion, at any time on or before the date that is three business days
     following receipt of the written notice of conversion from the holder (such
     period, the "Cash Settlement Notice Period"), or, in the case of a
     Mandatory Conversion, in the Forced Conversion Notice. Settlement (in cash
     and/or shares) will occur on the business day following the final day of
     the five (5) Trading Day period beginning on, in the case of an Optional
     Conversion, the day after the final day of the Cash Settlement Notice
     Period, or, in the case of a Mandatory Conversion, the day after the date
     of the Forced Conversion Notice (the "Cash Settlement Averaging Period").
     Settlement amounts will be computed as follows:

                    (A) if the Corporation elects to satisfy the entire
          Conversion Obligation in shares of Class A Common Stock, the
          Corporation will deliver to such holder a number of full shares of
          Class A Common Stock to which such holder is entitled and a check or
          cash with respect to any fractional interest in a share of Class A
          Common Stock as provided in Section 5(d);

                    (B) if the Corporation elects to satisfy the entire
          Conversion Obligation in cash, the Corporation will deliver to such
          holder cash in an amount equal to the product of: (1) the number of
          full and fractional shares of Class A Common Stock to which such
          holder is entitled, and (2) the average Closing Price of the Class A
          Common Stock during the Cash Settlement Averaging Period; and

                    (C) if the Corporation elects to satisfy a fixed portion
          (other than 100%) of the Conversion Obligation in cash, the
          Corporation will deliver to such holder such cash amount ("Cash
          Amount") and a number of shares of Class A Common Stock equal to the
          greater of (1) one and (2) the excess, if any, of the

                                       12

<PAGE>

          number of shares calculated as set forth in clause (A) above (assuming
          for purposes of this calculation that the Corporation had elected to
          satisfy the entire Conversion Obligation in shares of Class A Common
          Stock) over the number of shares obtaining by dividing (x) the Cash
          Amount by (y) the average Closing Price of the Class A Common Stock
          during the Cash Settlement Average Period.

          (iv) Subject to the provisions of Section 5(e)(vi), the person in
     whose name the certificate or certificates for shares of Class A Common
     Stock are to be issued, if any, will be deemed to have become a holder of
     record of such Class A Common Stock on the applicable Conversion Date. Upon
     conversion of only a portion of the number of shares covered by a
     certificate representing shares of Series C Preferred Stock surrendered for
     conversion, the Corporation will issue and deliver to or upon the written
     order of the holder of the certificate so surrendered for conversion, at
     the expense of the Corporation, a new certificate covering the number of
     shares of Series C Preferred Stock representing the unconverted portion of
     the certificate so surrendered. Notwithstanding anything herein to the
     contrary, the Corporation will not be obligated to issue to any such holder
     the certificate or certificates evidencing the shares of Class A Common
     Stock issuable upon such conversion or deliver cash in lieu thereof, unless
     the certificate or certificates evidencing the shares of Series C Preferred
     Stock are either delivered to the Corporation or the transfer agent of the
     Corporation.

          (d) Fractional Shares. No fractional shares of Class A Common Stock or
     scrip will be issued upon conversion of shares of Series C Preferred Stock.
     If more than one share of Series C Preferred Stock is surrendered for
     conversion at any one time by the same holder, the number of full shares of
     Class A Common Stock issuable upon conversion thereof will be computed on
     the basis of the aggregate number of shares of Series C Preferred Stock so
     surrendered. Instead of any fractional shares of Class A Common Stock which
     would otherwise be issuable upon conversion of any shares of Series C
     Preferred Stock, the Corporation will pay a cash adjustment in respect of
     such fractional interest in an amount equal to that fractional interest
     based on the fair market value of the Class A Common Stock determined by
     the Corporation in its sole discretion.

          (e) Conversion Price Adjustments. The Conversion Price will be subject
     to adjustment from time to time as follows:

          (i) Stock Dividends, Subdivisions, Combinations, or Reclassifications.
     In case the Corporation shall (A) pay a dividend, or make a distribution,
     exclusively in shares of its capital stock on the Class A Common Stock; (B)
     subdivide or split its outstanding Class A Common Stock into a greater
     number of shares; (C) combine or reclassify its outstanding Class A Common
     Stock into a smaller number of shares; or (D) issue by reclassification of
     the shares of Class A Common Stock any shares of the Corporation's capital
     stock, the Conversion Price in effect immediately prior to the record date
     or effective date, as the case may be, for the adjustment pursuant to this
     Section 5(e)(i) as described below, shall be proportionately adjusted so
     that the holder of any Series C Preferred Stock thereafter surrendered for
     conversion shall be entitled to receive the number of shares of Class A
     Common Stock which such holder would have owned or have been entitled to
     receive after the happening of any of the

                                       13

<PAGE>

     events described above had such Series C Preferred Stock been converted
     immediately prior to such record date or effective date, as the case may
     be. An adjustment made pursuant to this Section 5(e)(i) shall become
     effective immediately after the applicable record date in the case of a
     dividend or distribution and shall become effective immediately after the
     applicable effective date in the case of subdivision, combination or
     reclassification of the Class A Common Stock. If any dividend or
     distribution of the type described in clause (A) above is not so paid or
     made, the Conversion Price shall again be adjusted to the Conversion Price
     that would then be in effect if such dividend or distribution had not been
     declared.

          (ii) Rights or Warrant Offerings. In case the Corporation shall issue
     rights or warrants to all holders of the Class A Common Stock entitling
     them (for a period expiring within 60 days after the date of issuance of
     such rights or warrants) to subscribe for or purchase Class A Common Stock
     at a price per share less than the Closing Price of Class A Common Stock on
     the record date fixed for determination of shareholders entitled to receive
     such rights or warrants, the Conversion Price in effect immediately after
     such record date shall be adjusted so that the same shall equal the
     Conversion Price determined by multiplying the Conversion Price in effect
     immediately after such record date by a fraction of which (i) the numerator
     shall be the number of shares of Class A Common Stock outstanding on such
     record date plus the number of shares which the aggregate offering price of
     the total number of shares so offered would purchase at the Closing Price
     of Class A Common Stock on the earlier of such record date or the Trading
     Day immediately preceding the ex date for such issuance of rights or
     warrants, and (ii) the denominator shall be the number of shares of Class A
     Common Stock outstanding on such record date plus the number of additional
     shares of Class A Common Stock offered for subscription or purchase. Such
     adjustment shall be made successively whenever any such rights or warrants
     are issued, and shall become effective immediately after the opening of
     business on the day following the record date for the determination of
     shareholders entitled to receive such rights or warrants. To the extent
     that shares of Class A Common Stock are not delivered after the expiration
     of such rights or warrants, the Conversion Price shall be readjusted to the
     Conversion Price which would then be in effect had the adjustments made
     upon the issuance of such rights or warrants been made on the basis of
     delivery of only the number of shares of Class A Common Stock actually
     delivered. If such rights or warrants are not so issued, the Conversion
     Price shall again be adjusted to be the Conversion Price which would then
     be in effect if such record date for the determination of shareholders
     entitled to receive such rights or warrants had not been fixed. In
     determining whether any rights or warrants entitle the holders to subscribe
     for or purchase shares of Class A Common Stock at less than such Closing
     Price, and in determining the aggregate offering price of such shares of
     Class A Common Stock, there shall be taken into account any consideration
     received by the Corporation for such rights or warrants, the value of such
     consideration, if other than cash, to be determined by the Board.

          (iii) Extraordinary Cash Dividends. In case the Corporation shall, by
     dividend or otherwise, distribute to all holders of its Class A Common
     Stock cash (excluding (x) any quarterly cash dividend on the Class A Common
     Stock for any fiscal quarter to the extent that the aggregate cash dividend
     per share of Class A Common

                                       14

<PAGE>

     Stock in such fiscal quarter does not exceed the greater of (A) the amount
     per share of Class A Common Stock of the next preceding quarterly cash
     dividend on the Class A Common Stock to the extent that such preceding
     quarterly dividend did not require any adjustment of the Conversion Price
     pursuant to this Section 5(e)(iii) (as adjusted to reflect subdivisions or
     combinations of the Class A Common Stock), and (B) 10% of the arithmetic
     average of the Closing Price per share on ten (10) Trading Days prior to
     the date of declaration of such dividend or distribution, and (y) any
     dividend or distribution in connection with the liquidation, dissolution or
     winding up of the Corporation, whether voluntary or involuntary), then, in
     such case, the Conversion Price in effect immediately prior to the close of
     business on the record date fixed for the determination of holders of Class
     A Common Stock entitled to receive such dividend or distribution shall be
     adjusted so that the same shall equal the Conversion Price determined by
     multiplying the Conversion Price in effect immediately before such record
     date by a fraction,

                         (a) the numerator of which shall be the Closing Price
               per share on such record date; and

                         (b) the denominator of which shall be the Closing Price
               per share on such record date plus the amount of cash so
               distributed (and not excluded as provided in this section)
               applicable to one share of the Class A Common Stock,

     such adjustment to be effective immediately prior to the opening of
     business on the day following such record date, provided that if the
     portion of the cash so distributed applicable to one share of Class A
     Common Stock is equal to or greater than the Closing Price on such record
     date, in lieu of the foregoing adjustment, adequate provision shall be made
     so that each holder of Series C Preferred Stock shall have the right to
     receive upon conversion the amount of cash such holder would have received
     had such holder converted each share of Series C Preferred Stock on such
     record date. If such dividend or distribution is not so paid or made, the
     Conversion Price shall again be adjusted to be the Conversion Price that
     would then be in effect if such dividend or distribution had not been
     declared. If any adjustment is required by this Section 5(e)(iii) as a
     result of a distribution that is a quarterly dividend, such adjustment
     shall be based upon the amount by which such distribution exceeds the
     amount of the quarterly cash dividend permitted to be excluded pursuant
     hereto. If an adjustment is required to be made as set forth in this
     Section 5(e)(iii) above as a result of a distribution that is not a
     quarterly dividend, such adjustment shall be based upon the full amount of
     the distribution.

          (iv) Other Distributions. In case the Corporation shall, by dividend
     or otherwise, distribute to all holders of Class A Common Stock any
     non-cash assets, debt securities, shares of capital stock of any class or
     series, or other securities (excluding any dividend, distribution or
     issuance covered by those referred to in Section 5(e)(i), 5(e)(ii) or
     5(e)(iii) hereof or in connection with a voluntary or involuntary
     liquidation, dissolution or winding up of the Corporation) (any of the
     foregoing hereinafter in this Section 5(e)(iv) called the "Distributed
     Assets or Notes"), then (unless the Corporation elects to reserve any such
     Distributed Assets or Notes for distribution to the holders of shares of
     Series C Preferred Stock upon the conversion of the shares of Series C
     Preferred Stock so

                                       15

<PAGE>

     that any such holder upon conversion will receive the amount and kind of
     such Distributed Assets or Notes which such holder would have received if
     such holder had converted its shares of Series C Preferred Stock
     immediately prior to the record date fixed for the determination of holders
     of Class A Common Stock entitled to receive such dividend or distribution)
     the Conversion Price shall be adjusted so that the same shall equal the
     Conversion Price determined by multiplying the Conversion Price in effect
     immediately prior to the close of business on the record date fixed for the
     determination of holders of Class A Common Stock entitled to receive such
     dividend or distribution by a fraction of which (A) the numerator shall be
     the Closing Price per share of the Class A Common Stock on the earlier of
     such record date or the Trading Day immediately preceding the ex date for
     such dividend or distribution, and (B) the denominator shall be (1) the
     Closing Price per share of the Class A Common Stock on the earlier of such
     record date or the Trading Day immediately preceding the ex date for such
     dividend or distribution plus (2) the fair market value on the earlier of
     such record date or the Trading Day immediately preceding the ex date for
     such dividend or distribution (as determined in good faith by the Board) of
     the Distributed Assets or Notes so distributed applicable to one share of
     Class A Common Stock. Such adjustment shall become effective immediately
     after such record date. In the event that such distribution is not so paid
     or made, the Conversion Price shall again be adjusted to the Conversion
     Price which would then be in effect if such distribution had not been
     declared.

          (v) Rounding of Calculations; Minimum Adjustment. All calculations
     under this Section 5(e) will be made to the nearest cent or to the nearest
     one hundredth (1/100th) of a share, as the case may be. Any provision of
     this Section 5 to the contrary notwithstanding, no adjustment in the
     Conversion Price will be made if the amount of such adjustment would be
     less than $0.05, but any such amount will be carried forward and an
     adjustment with respect thereto will be made at the time of and together
     with any subsequent adjustment which, together with such amount and any
     other amount or amounts so carried forward, will aggregate $0.05 or more.

          (vi) Timing of Issuance of Additional Class A Common Stock Upon
     Certain Adjustments. In any case in which the provisions of this Section
     5(e) requires that an adjustment be made in connection with any event, the
     Corporation may defer, until the occurrence of such event, (A) issuing to
     the holder of any share of Series C Preferred Stock converted after the
     relevant record date and before the occurrence of such event the additional
     shares of Class A Common Stock issuable upon such conversion by reason of
     the adjustment required by such event over and above the shares of Class A
     Common Stock issuable upon such conversion before giving effect to such
     adjustment and (B) paying to such holder any amount of cash in lieu of a
     fractional share of Class A Common Stock pursuant to Section 5(d);
     provided, however, that the Corporation upon request will deliver to such
     holder a due bill or other appropriate instrument evidencing such holder's
     right to receive such additional shares and such cash, upon the occurrence
     of the event requiring such adjustment.

          (f) Statement Regarding Adjustments. Whenever the Conversion Price is
     adjusted as provided in Section 5(e), the Corporation will file, at the
     office of any transfer agent for the Series C Preferred Stock and at the
     principal office of the Corporation, a

                                       16

<PAGE>

     statement showing in detail the facts requiring such adjustment and the
     Conversion Price in effect after such adjustment, and the Corporation will
     also cause a copy of such statement to be sent by mail, first class postage
     prepaid, to each holder of shares of Series C Preferred Stock at such
     holders address appearing on the Corporation's records. Each such statement
     will be signed by the Corporation's independent public accountants, if
     applicable. Where appropriate, such copy may be given in advance and may be
     included as part of a notice required to be mailed under the provisions of
     Section 6(c).

          (g) Conditional Conversion. If it is proposed that a registration of
     Class A Common Stock is intended to be filed, except on Form S-4 or S-8 (or
     any successor forms), which includes the secondary registration on behalf
     of holders of Class A Common Stock generally, the Corporation will notify
     the holders of Series C Preferred Stock of such proposed registration and
     such holders may conditionally exercise their right to convert any or all
     of such shares of Series C Preferred Stock so held in accordance with this
     Section 5 and participate in such proposed registration in accordance with
     the registration rights granted to such holder by the Corporation, if any.
     If such registration is not declared effective or is withdrawn, any
     conditional exercise pursuant to this Section 5(g) will be null and void ab
     initio. Only the number of shares of Class A Common Stock conditionally
     converted pursuant to this Section 5(g) that are actually sold under an
     effective registration statement will be deemed converted pursuant to
     Section 5(a) and the conditional conversion of such shares will be null and
     void ab initio upon the termination of the offering under such registration
     statement.

          (h) Costs. The Corporation will pay all documentary, stamp, transfer,
     or other transactional taxes attributable to the issuance or delivery of
     shares of Class A Common Stock upon conversion of any shares of Series C
     Preferred Stock; provided, however, that the Corporation will not be
     required to pay any taxes which may be payable in respect of any transfer
     involved in the issuance or delivery of any certificate for such shares in
     a name other than that of the holder of the shares of Series C Preferred
     Stock in respect of which such shares are being issued.

          (i) Reservation of Shares. The Corporation will reserve at all times
     so long as any shares of Series C Preferred Stock remain outstanding, free
     from preemptive rights, out of its treasury stock (if applicable) or its
     authorized but unissued shares of Common Stock, or both, solely for the
     purpose of effecting the conversion of the shares of Series C Preferred
     Stock, sufficient shares of Common Stock to provide for the conversion of
     all outstanding shares of Series C Preferred Stock.

          (j) Valid Issuance. All shares of Common Stock which may be issued
     upon conversion of the shares of Series C Preferred Stock will, upon
     issuance by the Corporation, be duly and validly issued, fully paid and
     nonassessable and free from all taxes, liens, and charges with respect to
     the issuance thereof, and the Corporation will take no action which will
     cause a contrary result (including, without limitation, any action which
     would cause the Conversion Price to be less than the par value, if any, of
     the Common Stock).

                                       17

<PAGE>

          (k) Automatic Conversion into Class B Common Stock in Certain
     Circumstances. All shares of Class A Common Stock which may be issued upon
     conversion of the Series C Preferred Stock are subject to automatic
     conversion into Shares of Class B Common Stock in the circumstances and
     with the effects specified in Article 4, Paragraphs 2C.(3)(d) and (e) of
     the Articles of Incorporation.

          (l) Shareholder Approval. Notwithstanding anything to the contrary
     contained herein, conversion of the Series C Preferred Stock may not occur
     unless and until either (i) the shareholders shall have, in accordance with
     the IBCA and NYSE Requirements, approved the issuance of shares of Common
     Stock into which the Series C Preferred Stock is convertible or (ii) (A)
     the Board (on advice of counsel) shall have determined that shareholder
     approval is not required by either the IBCA or NYSE Requirements in
     connection with such conversion, (B) representatives of the New York Stock
     Exchange shall have affirmatively agreed with the such determination, and
     (C) notice of such determination (accompanied by written advice of counsel
     addressed to the holders of Series C Preferred Stock as well as evidence of
     the agreement of the New York Stock Exchange) shall have been given to all
     holders of the Series C Preferred Stock.

     6. CORPORATE EVENTS.

          (a) Merger. In case of (i) any reclassification or change of
     outstanding shares of Common Stock (other than a change in par value or
     from par value to no par value or from no par value to par value, or as a
     result of a subdivision or combination), (ii) any consolidation or merger
     of the Corporation with one or more other corporations (other than any
     consolidation or merger in which the Corporation is the continuing
     corporation and which does not result in any reclassification, conversion,
     exchange or cancellation of outstanding shares of Common Stock issuable
     upon conversion of the Series C Preferred Stock), (iii) any sale or
     conveyance to another corporation or other entity of all or substantially
     all of the property of the Corporation, or (iv) any other transaction which
     would constitute a Change of Control of the Corporation, then the
     Corporation, or such successor corporation or other entity, as the case may
     be, shall make appropriate provision so that the holder of each share of
     the Series C Preferred Stock then outstanding shall have the right
     thereafter, to convert such share of the Series C Preferred Stock into the
     kind and amount of securities, cash and other property receivable upon such
     consolidation, merger, sale, reclassification, change or conveyance by a
     holder of the number of shares of Common Stock into which such share of the
     Series C Preferred Stock might have been converted immediately prior to
     such consolidation, merger, sale, reclassification, change or conveyance,
     subject to such adjustment which shall be as nearly equivalent as may be
     practicable to the adjustments provided in Section 5(e). The above
     provisions of this Section 6(a) shall similarly apply to successive
     consolidations, mergers, conveyances or transfers.

          (b) Offer to Repurchase. In addition to the foregoing, upon the
     occurrence of a Change of Control, the Corporation shall make an offer (a
     "Change of Control Offer") to each holder of shares of the Series C
     Preferred Stock to repurchase all or any part of each such holder's shares
     of the Series C Preferred Stock at an offer price in cash (the

                                       18

<PAGE>

     "Change of Control Payment") equal to 100% of the Liquidation Value - per
     share as of the Change of Control Payment Date. The Corporation shall
     comply with the requirements of Rule 14e-1 under the Exchange Act and any
     other securities laws and regulations thereunder to the extent such laws
     and regulations are applicable in connection with the repurchase of shares
     of the Series C Preferred Stock as a result of a Change of Control, and the
     Corporation shall not be in violation of this resolution by reason of any
     act, including any failure to act, required by such rule or other
     applicable law or regulation.

     Within 25 days following any Change of Control, the Corporation shall mail
     a notice to each holder of shares of the Series C Preferred Stock stating:

          (i) that the Change of Control Offer is being made pursuant to this
     Section 6 and that all shares of the Series C Preferred Stock tendered will
     be accepted for payment;

          (ii) the purchase price and the purchase date, which shall be at least
     30 but no more than 60 days from the date on which the Corporation mails
     notice of the Change of Control (the "Change of Control Payment Date");

          (iii) that any shares of the Series C Preferred Stock not tendered
     will continue to accrue dividends as provided in this resolution;

          (iv) that, unless the Corporation defaults in the payment of the
     Change of Control Payment, all shares of the Series C Preferred Stock
     accepted for payment pursuant to the Change of Control Offer shall cease to
     accrue dividends after the Change of Control Payment Date;

          (v) that holders of shares of the Series C Preferred Stock electing to
     have any shares of the Series C Preferred Stock purchased pursuant to a
     Change of Control Offer shall be required to surrender the shares of the
     Series C Preferred Stock to the Corporation or its designated agent (the
     "Paying Agent") for such purpose, at the address specified in the notice
     prior to the close of business on the third Business Day preceding the
     Change of Control Payment Date; and

          (vi) that holders of shares of the Series C Preferred Stock will be
     entitled to withdraw their election if the Corporation or the Paying Agent
     receives, not later than the close of business on the second Business Day
     preceding the Change of Control Payment Date, a telegram, telex, facsimile
     transmission or letter setting forth the name of the holder of shares of
     the Series C Preferred Stock, the number of shares of the Series C
     Preferred Stock delivered for purchase, and a statement that such holder is
     withdrawing his election to have such shares purchased.

     On the Change of Control Payment Date, the Corporation shall, to the extent
     lawful, (x) accept for payment all shares of the Series C Preferred Stock
     tendered pursuant to the Change of Control Offer, and (y) deposit with the
     Paying Agent an amount equal to the Change of Control Payment in respect of
     all shares of the Series C Preferred Stock so accepted for payment. The
     Corporation shall promptly mail to each holder of shares of

                                       19

<PAGE>

     the Series C Preferred Stock so tendered the Change of Control Payment for
     such shares. The Corporation shall publicly announce the results of the
     Change of Control Offer on or as soon as practicable after the Change of
     Control Payment Date.

          (c) Notice of Record Date. In case at any time or from time to time
     (i) the Corporation shall pay any stock dividend or make any other non-cash
     distribution to the holders of its Common Stock, or offer for subscription
     pro rata to the holders of its Common Stock any additional shares of stock
     of any class or any other right, or (ii) there shall be any capital
     reorganization or reclassification of the Common Stock of the Corporation
     or consolidation or merger of the Corporation with or into another
     corporation, or any sale or conveyance to another corporation of the
     property of the Corporation as an entirety or substantially as an entirety,
     or (iii) there shall be a voluntary or involuntary dissolution, liquidation
     or winding up of the Corporation, then, in any one or more of said cases
     the Corporation shall give at least 20 days' prior written notice (the time
     of mailing of such notice shall be deemed to be the time of giving thereof)
     to the registered holders of the Series C Preferred Stock at the addresses
     of each as shown on the books of the Corporation maintained by the transfer
     agent thereof of the date on which (A) a record shall be taken for such
     stock dividend, distribution or subscription rights or (B) such
     reorganization, reclassification, consolidation, merger, sale or
     conveyance, dissolution, liquidation or winding up shall take place, as the
     case may be; provided that, in the case of any transaction to which Section
     6(a) applies the Corporation shall give at least 30 days' prior written
     notice as aforesaid. Such notice shall also specify the date as of which
     the holders of the Common Stock of record shall participate in said
     dividend, distribution or subscription rights or shall be entitled to
     exchange their Common Stock for securities or other property deliverable
     upon such reorganization, reclassification, consolidation, merger, sale or
     conveyance or participate in such dissolution, liquidation or winding up,
     as the case may be. Such notice will also set forth such facts as will be
     reasonably necessary to indicate the effect of such corporate action (to
     the extent such effect may be known at the date of such notice) on the
     Conversion Price, if any, under Section 5(a), and the number, kind, or
     class of shares or other securities or property which will be deliverable
     upon conversion of shares of Series C Preferred Stock. Failure to give such
     notice shall not affect the legality or validity of any action so taken.

     7. VOTING RIGHTS. If the holders of shares of Series C Preferred Stock have
the right to vote separately as a class pursuant to the IBCA or Section 12
hereof, such holders will be entitled to one vote for each such share so held.
In all other cases, the holders of shares of Series C Preferred Stock will not
be entitled to vote.

     8. EXCLUSION OF OTHER RIGHTS. Except as may otherwise be required by law,
the shares of Series C Preferred Stock will not have any preferences or
relative, participating, optional, or other special rights, other than those
specifically set forth in this Statement of Resolution. The shares of Series C
Preferred Stock will have no preemptive or subscription rights.

                                       20

<PAGE>

     9. HEADINGS OF SUBDIVISIONS. The headings of the various subdivisions
hereof are for convenience of reference only and will not affect the
interpretation of any of the provisions hereof.

     10. SEVERABILITY OF PROVISIONS. If any right, preference, or limitation of
the Series C Preferred Stock set forth in this resolution (as such resolution
may be amended from time to time) is invalid, unlawful, or incapable of being
enforced by reason of any rule of law or public policy, all other rights,
preferences, and limitations set forth in this resolution (as so amended) which
can be given effect without the invalid, unlawful or unenforceable right,
preference, or limitation will, nevertheless, remain in full force and effect,
and no right, preference, or limitation herein set forth will be deemed
dependent upon any other such right, preference, or limitation unless so
expressed herein.

     11. STATUS OF REACQUIRED SHARES. Shares of Series C Preferred Stock which
have been issued and reacquired in any manner will (upon cancellation by the
Corporation and compliance with any applicable provisions of the laws of the
State of Illinois) have the status of authorized and unissued shares of
Preferred Stock issuable in series undesignated as to series and may be
redesignated and reissued.

     12. ISSUANCE OF ADDITIONAL SECURITIES. Nothing contained herein will be
deemed to any way prohibit, restrict, or inhibit the ability of the Corporation
to designate and/or issue additional securities of any kind, including, without
limitation, shares of Parity Stock or Junior Stock; provided that, the
Corporation may not designate and/or issue any shares of Senior Stock without
the consent of a majority of the shares of Series C Preferred Stock, other than
shares of Senior Stock designated and/or issued by the Corporation (i) in
connection with a bona fide transaction where the consideration paid for such
shares of Senior Stock consists primarily of cash or (ii) in connection with a
Board-approved acquisition (whether by stock sale, merger, recapitalization,
asset sale or otherwise) of any business or entity by the Corporation where such
Senior Stock comprises all or a portion of the purchase price thereof.

                                       21

<PAGE>

     The Corporation has caused this statement to be signed by its duly
authorized officers, each of whom affirms, under penalties of perjury, that the
facts stated herein are true.

Date: August 6, 2003                      DYNEGY INC.


                                          By: /s/ Bruce A. Williamson
                                              ----------------------------------
                                              Name: Bruce A. Williamson
                                              Title: President and CEO


                                          By: /s/ Carol Graebner
                                              ----------------------------------
                                              Name: Carol Graebner
                                              Title: EVP and General Counsel

                                       22