**Exhibit 10.6****NON-QUALIFIED STOCK OPTION AWARD AGREEMENT****THIS NON-QUALIFIED STOCK OPTION AWARD AGREEMENT**(this “Agreement”) is made as of the **6th dayof March, 2008**, between DYNEGY INC., a Delaware corporation (“Dynegy”), and all of its Affiliates(collectively, the “Company”), and **Jason Hochberg**(“Employee”). A copy of the Dynegy Inc. 2000Long Term Incentive Plan (the “Plan”) is annexed to this Agreement and shall be deemed a part ofthis Agreement as if fully set forth herein. Unless the context otherwise requires, all terms thatare not defined herein but which are defined in the Plan shall have the same meaning given to themin the Plan when used herein.1. **The Grant**. The Compensation and Human Resources Committee of the Board ofDirectors (the “Committee”) granted to Employee on March 6, 2008 (“Effective Date”), as a matter ofseparate inducement and not in lieu of any salary or other compensation for Employee’s services,the right and option to purchase (the “Option”), in accordance with the terms and conditions setforth in the Plan and in this Agreement, an aggregate number of **96,419**shares (the “Shares”) ofClass A common stock of Dynegy, $0.01 par value per share (the “Common Stock”), at a price of **$7.48**per share (the “Exercise Price”). Employee acknowledges receipt of a copy of the Plan, and agreesthat the Option shall be subject to all of the terms and provisions of the Plan, including futureamendments thereto, if any, pursuant to the terms thereof, and to all of the terms and conditionsof this Agreement. The Option shall not be treated as an incentive stock option within the meaningof Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). The Exercise Priceis, in the judgment of the Committee, not less than one hundred percent (100%) of the Fair MarketValue of a share of the Common Stock on the Effective Date. If it is subsequently determined bythe Committee, in its sole discretion, that the terms and conditions of this Agreement and/or thePlan are not compliant with Code Section 409A, or any Treasury regulations or Internal RevenueService guidance promulgated thereunder, this Agreement and/or the Plan may be amended accordingly.2. **Exercise**. Subject to the provisions, limitations and other relevant provisions ofthe Plan and of this Agreement, and the earlier expiration of the Option as herein provided,Employee may exercise the Option to purchase some or all of the Shares as follows:(a) The Option shall become exercisable in three cumulative equal annual installmentsas follows:(i) on the first anniversary of the Effective Date, the right topurchase one-third of the aggregate number of Shares shall becomeexercisable without further action by the Committee;(ii) on the second anniversary of the Effective Date, the right topurchase an additional one-third of the aggregate number of Shares shallbecome exercisable without further action by the Committee; and
 
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(iii) on the third anniversary of the Effective Date, the right topurchase the remaining one-third of the aggregate number of Shares shallbecome exercisable without further action by the Committee.(b) Notwithstanding any other provision of this Agreement, the unexercised portion ofthe Option, if any, will automatically and without notice terminate and become null and voidupon the expiration of ten (10) years from the Effective Date of the Option.(c) Any exercise by Employee of the Option, or portion thereof, shall be conducted bydelivery of an irrevocable notice of exercise to the Company or its designee as provided inthe Plan. In no event shall Employee be entitled to exercise the Option for less than awhole Share.(d) Notwithstanding any other provision of this Agreement, upon the occurrence of aChange in Control, the Option shall become fully vested and immediately exercisable in fullon the date of the Change in Control. For purposes hereof, “Change in Control” shall meanthe occurrence of any of the following events: (i) a merger of Dynegy with another entity, aconsolidation involving Dynegy, or the sale of all or substantially all of the assets orequity interests of Dynegy to another entity if, in any such case, (A) the holders of equitysecurities of Dynegy immediately prior to such event do not beneficially own immediatelyafter such event equity securities of the resulting entity entitled to fifty-one percent(51%) or more of the votes then eligible to be cast in the election of directors (orcomparable governing body) of the resulting entity in substantially the same proportionsthat they owned the equity securities of Dynegy immediately prior to such event or (B) thepersons who were members of the Board immediately prior to such event do not constitute atleast a majority of the board of directors of the resulting entity immediately after suchevent; (ii) the dissolution or liquidation of Dynegy, but excluding a reorganizationpursuant to chapter 11 of Title 11, U.S. Code, as amended; (iii) a circumstance where anyperson or entity, including a “group” as contemplated by Section 13(d)(3) of the ExchangeAct, acquires or gains ownership or control (including, without limitation, power to vote)of fifty percent (50%) or more of the combined voting power of the outstanding securitiesof, (A) if Dynegy has not engaged in a merger or consolidation, Dynegy, or (B) if Dynegy hasengaged in a merger or consolidation, the resulting entity; (iv) circumstances where, as aresult of or in connection with, a contested election of directors, the persons who weremembers of the Board immediately before such election shall cease to constitute a majorityof the Board; or (v) the Board (or the Committee) adopts a resolution declaring that aChange in Control has occurred. For purposes of the “Change in Control” definition, (1)“resulting entity” in the context of an event that is a merger, consolidation or sale of allor substantially all of the subject assets or equity interests shall mean the survivingentity (or acquiring entity in the case of an asset or equity interest sale), unless thesurviving entity (or acquiring entity in the case of an asset sale) is a subsidiary ofanother entity and the holders of common stock of Dynegy receive capital stock of such otherentity in such transaction or event, in which event the resulting entity shall be such otherentity, and (2) subsequent to the consummation of a merger or consolidation that does notconstitute a Change in Control, the term “Dynegy” shall refer to the resulting entity andthe term “Board” shall refer to the board of directors (or comparable governing body) of theresulting entity.
 
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3. **Termination of Employment**. The Option may be exercised only while Employee remainsan employee of the Company and will terminate and cease to be exercisable upon Employee’stermination of employment with the Company, except that:(a) if Employee shall die while in the employ of the Company, the Option awardedhereunder shall immediately vest with respect to all of the remaining Shares and becomefully exercisable without further action by the Committee, and Employee’s legalrepresentative, or the person, if any, who acquired the Option by bequest or inheritance orby reason of the death of Employee, may exercise the Option, to the extent not previouslyexercised, in respect of any or all such Shares at any time up to and including the datethree (3) years after the date of death, after which date the Option will automatically andwithout notice terminate and become null and void; and(b) if Employee is determined to be disabled (as defined in the Company’s long termdisability program or plan in which Employee is a participant or, if Employee does notparticipate in any such plan, as defined in the Dynegy Inc. Long Term Disability Plan, asamended, or the successor plan thereto), the Option awarded hereunder shall immediately vestwith respect to all of the remaining Shares and become fully exercisable without furtheraction by the Committee, and Employee may exercise the Option, to the extent not previouslyexercised, in respect of any or all such Shares at any time up to and including the datethree (3) years after the date of such, after which date the Option will automatically andwithout notice terminate and become null and void; and(c) if Employee’s employment with the Company terminates by reason of retirement byEmployee following (i) the date on which such Employee has reached sixty (60) years of ageand (ii) at least ten (10) years of service as an employee of the Company or itssubsidiaries, the Option awarded hereunder shall continue to become exercisable inaccordance with Section 2(a) of this Agreement, and Employee may exercise the Option, to theextent not previously exercised, at any time up to and including the date five (5) yearsafter the date of termination of Employee’s employment by reason of such retirement, or theend of the option term, whichever is less, after which date the Option will automaticallyand without notice terminate and become null and void; and(d) if Employee’s employment with the Company terminates by reason of dismissal by theCompany for Cause, then the Option, to the extent not previously exercised, willimmediately, automatically and without notice or further action by the Committee, terminateand become null and void; and(e) if Employee’s employment with the Company terminates by reason of resignation bythe Employee (except as otherwise provided in Sections 3(f), (g) or (h) below) and at a timewhen Employee was entitled to exercise the Option, Employee may exercise the Option, to theextent not previously exercised, with respect to any or all such number of Shares as to which the Option was exercisable as of the date of Employee’stermination of employment, at any time up to and including the date ninety (90) days afterthe date of termination by reason of such resignation, after which date the Option willautomatically and without notice terminate and become null and void; and
 
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(f) if Employee’s employment with the Company terminates by reason of InvoluntaryTermination, as such term is defined below, the Option awarded hereunder shall immediatelyvest with respect to all remaining Shares and become fully exercisable without furtheraction of the Committee, and Employee may exercise the Option, to the extent not previouslyexercised, at any time up to and including the date three (3) years after the date of suchtermination of employment, after which date the Option will automatically and without noticeterminate and become null and void; and(g) if Employee’s employment with the Company terminates as a result of a mutuallysatisfactory resignation, as determined by the Committee in its sole discretion, the Optionawarded hereunder shall continue to become exercisable in accordance with Section 2(a) ofthis Agreement, and Employee may exercise the Option, to the extent not previouslyexercised, at any time up to and including the date ten (10) years after the date oftermination of Employee’s employment by reason of such resignation, or the end of the optionterm, whichever is less, after which date the Option will automatically and without noticeterminate and become null and void; and(h) if Employee’s employment with the Company is terminated as a result of a Change inControl Termination, as such term is defined below, occurring (i) in connection with, but inno event earlier than sixty (60) days prior to, a Change in Control or (ii) on or within oneyear after the effective date upon which a Change in Control occurs, the Option shall becomefully vested and immediately exercisable in full on the effective date of the Change ofControl, and such Option shall remain exercisable from such date for the lesser of: (A) five(5) years from the date of such Change in Control; (B) the remaining period of time forexercise of the Option hereunder (irrespective of any mandatory exercise period specifiedherein that would otherwise be triggered by the termination of employment of such Employee);or (C) such period of time (which period of time may end as early as the consummation of a“Corporate Change,” as such term is defined in the Plan) as the Committee may determine inconnection with or in contemplation of a Corporate Change in the exercise of its discretionunder the Plan, with respect to which the Committee has the discretion to, among otherthings, require the surrender of stock options (which surrender may be in exchange for acash payment, if applicable) and to cancel such stock options upon the consummation of aCorporate Change as further described in the Plan.(i) For purposes of this Agreement:“Base Salary” shall mean the regular base salary of Employee but excluding allbonuses, expense reimbursements, benefits paid under any plan maintained by theCompany and all equity awards of any type.
 
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“Cause” shall mean, and hence arise where, as determined by the Committee inits sole discretion, Employee (A) has been convicted of a misdemeanor involvingmoral turpitude or a felony; (B) has failed to substantially perform the duties ofsuch Employee to the Company (other than such failure resulting from Employee’sincapacity due to physical or mental condition) which results in a materiallyadverse effect upon the Company, financial or otherwise; (C) has refused withoutproper legal reason to perform Employee’s duties and responsibilities to theCompany; or (D) has breached any material corporate policy maintained andestablished by the Company that is applicable to Employee, provided such breachresults in a materially adverse effect upon the Company, financial or otherwise.“Change in Control Termination” shall mean Employee’s employment is terminatedby the Company (or a successor thereto) without Cause, or by Employee following: (i)a significant diminution in Employee’s responsibilities, authority or duties; (ii) amaterial reduction in Employee’s Base Salary; or (iii) relocation of Employee’sposition outside the Houston, Texas metropolitan area, all as determined by theCommittee in its sole discretion.“Involuntary Termination” shall have the same meaning as specified in theDynegy Inc. Executive Severance Pay Plan (as amended and restated effective January1, 2008).4. **Registration**. The Company intends to register the Shares for issuance under theSecurities Act of 1933, as amended (the “Act”), and to keep such registration effective throughoutthe period the Option is exercisable. In the absence of such effective registration or anavailable exemption from registration under the Act, issuance of the Shares will be delayed untilregistration of such shares is effective or an exemption from registration under the Act isavailable. The Company intends to use its best efforts to ensure that no such delay will occur.In the event exemption from registration under the Act is available upon an exercise of the Option,Employee (or the person permitted to exercise the Option in the event of Employee’s death orincapacity), if requested by the Company to do so, will execute and deliver to the Company, inwriting, such agreements and other documents containing such provisions as the Company may requireto assure compliance with applicable securities laws.Employee agrees that the Shares will not be sold or otherwise disposed of in any manner whichwould constitute a violation of any applicable federal or state securities laws. Employee alsoagrees that (a) the certificates representing the Shares may bear such legend or legends as theCommittee in its sole discretion deems appropriate in order to assure compliance with applicablesecurities laws and (b) the Company may refuse to register transfer of the Shares on the stocktransfer records of the Company, and may give related instructions to its transfer agent, if any,to stop registration of such transfer, if such proposed transfer would in the opinion of counselsatisfactory to the Company constitute a violation of any applicable securities law.5. **Employment Relationship**. For purposes of this Agreement, Employee shall beconsidered to be in the employment of the Company as long as Employee remains an employeeof (a) the Company, (b) an Affiliate (as such term is defined in the Plan) or (c) acorporation (or a parent or subsidiary of such corporation) assuming or substituting a new optionfor the Option. Any question as to whether and when there has been a termination of suchemployment, and the cause of such termination, shall be determined by the Committee in its solediscretion, and its determination shall be final and binding on all parties.
 
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6. **Withholding Taxes**. By Employee’s acceptance hereof, Employee hereby (a) agrees toreimburse the Company or any Affiliate by which Employee is employed for any federal, state orlocal taxes required by any government to be withheld or otherwise deducted by such corporation inrespect of Employee’s exercise of the Option, (b) authorize the Company or any Affiliate by whichEmployee is employed to withhold from any cash compensation paid to Employee or in Employee’sbehalf, an amount sufficient to discharge any federal, state and local taxes imposed on theCompany, or the Affiliate by which Employee is employed, and which otherwise has not beenreimbursed by Employee, in respect of Employee’s exercise of the Option and (c) agrees that thecorporation by which Employee is employed, may, in its discretion, hold the stock certificates towhich Employee is entitled upon exercise of the Option, as security for the payment of theaforementioned withholding tax liability, until cash sufficient to pay that liability has beenaccumulated, and may, in its discretion, effect such withholding by retaining Shares issuable uponthe exercise of the Option having a Fair Market Value on the date of exercise which is equal to theamount to be withheld.7. **Miscellaneous**.(a) This grant is subject to all the terms, conditions, limitations and restrictionscontained in the Plan. In the event of any conflict or inconsistency between the termshereof and the terms of the Plan, the terms of the Plan shall be controlling. In the eventof any conflict or inconsistency between the terms hereof and the terms of the Dynegy Inc.Executive Severance Pay Plan, including any amendments or supplements thereto, or the DynegyInc. Severance Pay Plan, including any amendments or supplements thereto, the terms hereofshall be controlling.(b) This grant is not a contract of employment and the terms of Employee’s employmentshall not be affected hereby or by any agreement referred to herein except to the extentspecifically so provided herein or therein. Nothing herein shall be construed to impose anyobligation on the Company or on any Affiliate to continue Employee’s employment, and itshall not impose any obligation on Employee’s part to remain in the employ of the Company orof any Affiliate.(c) All references in this Agreement to any “corporation” shall include a corporation,a general partnership, a joint venture, a limited partnership, a business trust or any otherlawful business entity.
 
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(d) Any notices or other communications provided for in this Agreement shall besufficient if in writing. In the case of Employee, such notices or communications shall beeffectively delivered when hand delivered to Employee at his or her principal place ofemployment or when sent by registered or certified mail to Employee at the last address Employee has filed with the Company. In the case of the Company, such notices orcommunications shall be effectively delivered when sent by registered or certified mail tothe Company at its principal executive offices.**[Remainder of page intentionally left blank]**
 
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**IN WITNESS WHEREOF**, the Company has caused this Agreement to be duly executed by an officerthereunto duly authorized, and Employee has agreed to and accepted the terms of this Agreement*,all as of the date first above written.         **DYNEGY INC.**           By: