Exhibit 10.2


            
            Dynegy Excise Tax Reimbursement Policy


            
            Effective January 1, 2008, Dynegy Inc. and its participating
            subsidiaries and affiliated entities (collectively, the “Company”) have
            adopted this Policy to provide excise tax gross-up benefits for any of its employees at
            the level of Managing Director or above (a “Covered Individual”) who incur
            excise taxes under Section 4999 of the Internal Revenue Code of 1986, as amended (the
            “Code”).


            In
            the event it is determined that any payment or distribution by the Company to a Covered
            Individual or for a Covered Individual’s benefit (a “Payment”) would
            be subject to the excise tax imposed by Code Section 4999, or the Covered Employee
            incurs any interest or penalties with respect to such excise tax (such excise tax,
            together with any such interest and penalties shall hereinafter collectively be
            referred to as the “Excise Tax”), the Company shall pay to such Covered
            Individual, in accordance with the terms and conditions of this Policy, an additional
            payment (a “Gross-up Payment”) in an amount such that after payment by such
            Covered Individual of all taxes (together with any interest or penalties imposed with
            respect to such taxes), including any Excise Tax imposed on any Gross-up Payment, such
            Covered Individual will retain an amount of the Gross-up Payment equal to the Excise
            Tax imposed upon the Payments. The Company shall make an initial determination as to
            whether a Gross-up Payment is required and the amount of any such Gross-up Payment.
            Such Gross-up Payment shall be paid as soon as administratively feasible after the
            Company determines the amount of such payment, but in no event shall such payment be
            made after the last day of the calendar year following the calendar year in which such
            Covered Individual pays the Excise Tax; provided, however, the Company shall not be
            obligated to pay a Gross-up Payment to a Covered Individual until such Covered
            Individual signs and returns a letter to the Company, that will be provided to such
            Covered Individual by the Company, which will state that such Covered Individual agrees
            to be bound by the terms and conditions of this Policy.


            
            Each Covered Individual shall notify the Company immediately in writing
            of any claim by the Internal Revenue Service, which if successful, would require the
            Company to make a Gross-up Payment (or a Gross-up Payment in excess of that, if any,
            initially determined by the Company) within five (5) days of the receipt of such claim.
            The Company shall notify such Covered Individual in writing at least (5) days prior to
            the due date of any response required with respect to such claim if it plans to contest
            the claim. If the Company decides to contest such claim, then such Covered Individual
            shall cooperate fully with the Company in such action; provided, however, the Company
            shall bear and pay directly or indirectly all costs and expenses (including additional
            interest and penalties) incurred in connection with such action and shall indemnify and
            hold such Covered Individual harmless, on an after-tax basis, for any Excise Tax
            imposed as a result of the Company’s action. Reimbursement for any such costs and
            expenses shall be made as soon as administratively feasible, but in no event after the
            last day of the calendar year following the calendar year in which such cost or expense
            is incurred. If, as a result of the Company’s action with respect to a claim, a
            Covered Individual receives a refund of any amount paid by the Company with respect to
            such claim, then such Covered Individual shall promptly pay such refund to the Company.
            If the Company fails to timely notify such Covered Individual whether it will contest
            such claim or the Company determines not to contest such claim then the Company shall
            immediately pay to such Covered Individual (but in no event after the last day of the
            calendar year following the calendar year in which such Covered Individual pays the
            additional amount) a Gross-up Payment, in accordance with the terms and conditions of
            this


             


            

            

            

            



             


            
            Policy, for any portion of such claim which it has not previously paid
            to such Covered Individual.


            
            Dynegy Inc. reserves the right to amend, modify, supplement or
            terminate, in whole or in part, any or all of the provisions of this Policy at any time
            prospectively or retroactively, for any reason, without notice or further obligation to
            any Covered Individual or any other person entitled to receive benefits under this
            Policy.


             


            
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