<Page>


















                                   DYNEGY INC.

                           DEFERRED COMPENSATION PLAN


















                             As Amended and Restated
                            Effective January 1, 2002
<Page>



<Table>
<Caption>

                               TABLE OF CONTENTS
ARTICLE                                                             PAGE
-------                                                             ----
<S>   <C>                                                           <C>

      I.    DEFINITIONS AND CONSTRUCTION.............................I-1

      II.   PARTICIPATION...........................................II-1

      III.  ACCOUNT CREDITS AND ALLOCATIONS OF INCOME OR LOSS......III-1

      IV.   DEEMED INVESTMENT OF FUNDS..............................IV-1

      V.    DETERMINATION OF VESTED INTEREST AND FORFEITURES.........V-1

      VI.   IN-SERVICE DISTRIBUTIONS................................VI-1

      VII.  TERMINATION BENEFITS...................................VII-1

      VIII. ADMINISTRATION OF THE PLAN............................VIII-1

      IX.   ADMINISTRATION OF FUNDS.................................IX-1

      X.    NATURE OF THE PLAN.......................................X-1

      XI.   MISCELLANEOUS...........................................XI-1

</Table>




                                     (i)
<Page>



                                   DYNEGY INC.

                           DEFERRED COMPENSATION PLAN



                              W I T N E S S E T H :


      WHEREAS, Dynegy Inc. has heretofore adopted The Amended and Restated
Natural Gas Clearinghouse Deferred Compensation Plan to aid certain of its
employees in making more adequate provision for their retirement; and

      WHEREAS, Dynegy Inc. desires to restate said plan and to amend said
plan in several respects, including, among other things, changing the name of
said plan to the Dynegy Inc. Deferred Compensation Plan, hereinafter referred
to as the "Plan;"

      NOW THEREFORE, the Plan is hereby restated in its entirety as follows with
no interruption in time, effective as of January 1, 2002, except as otherwise
indicated herein:
























                                     (ii)
<Page>



                                       I.

                          DEFINITIONS AND CONSTRUCTION

      1.1   DEFINITIONS. Where the following words and phrases appear in the
Plan, they shall have the respective meanings set forth below, unless their
context clearly indicates to the contrary.

(1)   ACCOUNT(S): A Member's Employer Account and/or Deferral Account (including
      the Member's subaccounts within each Account) and the amounts credited
      thereto.

(2)   AFFILIATE: Any corporation, partnership, limited liability company or
      partnership, association, trust or other organization which, directly or
      indirectly, controls, is controlled by, or is under common control with,
      the Company. For purposes of the preceding sentence, "control" (including,
      with correlative meanings, the terms "controlled by" and "under common
      control with"), as used with respect to any entity or organization, shall
      mean the possession, directly or indirectly, of the power (i) to vote more
      than 50% of the securities having ordinary voting power for the election
      of directors of the controlled entity or organization or (ii) to direct or
      cause the direction of the management and policies of the controlled
      entity or organization, whether through the ownership of voting securities
      or by contract or otherwise.

(3)   ANNUAL BONUS: The annual incentive bonus, if any, paid in cash by the
      Employer to or for the benefit of a Member for services rendered or labor
      performed, including the portion thereof that a Member could have received
      in cash in lieu of (i) Compensation deferrals pursuant to Section 3.1 and
      (ii) elective contributions made on his behalf by the Employer pursuant to
      a qualified cash or deferred arrangement (as defined in section 401(k) of
      the Code) or pursuant to a plan maintained under section 125 of the Code.

(4)   BASE SALARY: The base rate of pay paid in cash by the Employer to or for
      the benefit of a Member for services rendered or labor performed while a
      Member, including base pay a Member could have received in cash in lieu of
      (i) Compensation deferrals pursuant to Section 3.1 and (ii) elective
      contributions made on his behalf by the Employer pursuant to a qualified
      cash or deferred arrangement (as defined in section 401(k) of the Code) or
      pursuant to a plan maintained under section 125 of the Code.

(5)   CHANGE IN CONTROL: The occurrence of any of the following events:

            (a)  any "person" or "group" (as defined in or contemplated by
      Section 13(d)(3) or 14(d)(2) of the Exchange Act) is or becomes the
      "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
      directly or indirectly, of more than 50% of the total voting stock of the
      Company;

            (b)  the Company is merged with or into or consolidated with another
      person and, immediately after giving effect to the merger or
      consolidation, (A) less than 50% of


                                      I-1
<Page>


      the total voting power of the outstanding voting stock of the surviving
      or resulting person is then "beneficially owned" (within the meaning of
      Rule 13d-3 under the Exchange Act) in the aggregate by (x) the
      stockholders of the Company immediately prior to such merger or
      consolidation, or (y) if a record date has been set to determine the
      stockholders of the Company entitled to vote with respect to such merger
      or consolidation, the stockholders of the Company as of such record date
      and (B) any "person" or "group" (as defined in or contemplated by Section
      13(d)(3) or 14(d)(2) of the Exchange Act) is or has become the direct or
      indirect "beneficial owner" (as defined in Rule 13d-3 under the Exchange
      Act) of more than 50% of the voting power of the voting stock of the
      surviving or resulting person;

            (c)  the Company, either individually or in conjunction with one or
      more of its subsidiaries, sells, assigns, conveys, transfers, leases or
      otherwise disposes of, or the subsidiaries sell, assign, convey, transfer,
      lease or otherwise dispose of, all or substantially all of the properties
      and assets of the Company and the subsidiaries, taken as a whole (either
      in one transaction or a series of related transactions), to any person
      (other than the Company or a wholly owned subsidiary);

            (d)  the liquidation or dissolution of the Company; or

            (e)  as a result of, or in connection with, a contested election of
      directors, the persons who were directors of the Company before such
      election shall cease to constitute a majority of the Board of Directors of
      the Company.

(6)   CODE: The Internal Revenue Code of 1986, as amended.

(7)   COMMITTEE: The Dynegy Inc. Benefit Plans Committee.

(8)   COMPANY: Dynegy Inc.

(9)   COMPENSATION: Base Salary and/or Annual Bonus.

(10)  COMPENSATION COMMITTEE: The Compensation Committee of the Board of
      Directors of the Company.

(11)  DEFERRAL ACCOUNT: An individual account for each Member to which is
      credited his Compensation deferrals pursuant to Section 3.1 and which is
      credited (or debited) for such account's allocation of net income (or net
      loss) as provided in Section 3.3.

(12)  DEFERRAL PLAN YEAR SUBACCOUNT(S): A separate subaccount within a Member's
      Deferral Account to which is credited his Compensation deferrals pursuant
      to Section 3.1 for the relative Plan Year, including the net income or net
      loss attributable to such Compensation deferrals for such Plan Year.

(13)  EFFECTIVE DATE: January 1, 2002, as to this restatement of the Plan,
      except as otherwise provided herein.


                                      I-2
<Page>


(14)  ELIGIBLE EMPLOYEE: Each individual who has been selected by the
      Committee for participation in the Plan.

(15)  ELIGIBILITY PERIOD: The 30-day period following an Eligible Employee's
      notification by the Committee of eligibility to participate in the Plan.

(16)  EMPLOYER: The Company and any other adopting entity that adopts the
      Plan pursuant to the provisions of Section 2.3.  As of the Effective
      Date, each of the following is an Employer:  the Company; Calcasieu
      Power, LLC; Dynegy Global Liquids (Cayman) Ltd.; Dynegy Global
      Communications, Inc.; Illinova Energy Partners, Inc.; Illinova
      Generating Company; Dynegy Midstream Services, Limited Partnership;
      Dynegy Marketing and Trade; Dynegy Northeast Generation, Inc.; Dynegy
      Power Marketing, Inc.; Dynegy Power Corp.; Illinois Power Company; and
      Dynegy Midwest Generation, Inc.

(17)  EMPLOYER ACCOUNT: An individual account for each Member to which is
      credited the Employer Deferrals made on his behalf pursuant to Section 3.2
      and which is credited (or debited) for such account's allocation of net
      income (or net loss) as provided in Section 3.3.

(18)  EMPLOYER DEFERRALS: Deferrals made by the Employer on a Member's
      behalf pursuant to Section 3.2.

(19)  EMPLOYER PLAN YEAR SUBACCOUNT(S): A separate subaccount within a Member's
      Employer Account to which is credited the Employer Deferrals made on his
      behalf pursuant to Section 3.2 for the relative Plan Year, including the
      net income or net loss attributable to such Employer Deferrals for such
      Plan Year.

(20)  EXCHANGE ACT: The Securities Exchange Act of 1934, as amended.

(21)  FUNDS: The investment funds designated from time to time for the deemed
      investment of Accounts pursuant to Article IV.

(22)  MEMBER: Each Eligible Employee who has become a Member pursuant to
      Article II.

(23)  PLAN: The Dynegy Inc. Deferred Compensation Plan, as amended from time
      to time.

(24)  PLAN YEAR: The twelve-consecutive month period commencing January 1 of
      each year.

(25)  SAVINGS PLAN: The Dynegy Inc. 401(k) Savings Plan, as amended from time
      to time.

(26)  SCHEDULED DISTRIBUTION: A distribution of a Member's Compensation deferral
      under the Plan for a Plan Year (as adjusted for net income (or net loss)
      allocated thereto), that is paid to such Member at the time and in the
      form elected by such Member under Section 3.1(d)(ii).

(27)  TERMINATION OF SERVICE: The termination of a Member's employment with
      the Employer and all Affiliates for any reason whatsoever.


                                      I-3
<Page>


(28)  TRUST: The trust established under the Trust Agreement.

(29)  TRUST AGREEMENT: The agreement entered into between the Company and
      the Trustee pursuant to Article X.

(30)  TRUST FUND: The funds and properties held pursuant to the provisions
      of the Trust Agreement, together with all income, profits and
      increments thereto.

(31)  TRUSTEE: The trustee or trustees qualified and acting under the Trust
      Agreement at any time.

(32)  UNFORESEEABLE FINANCIAL EMERGENCY: An unexpected need of a Member for cash
      that (i) arises from a sudden and unexpected illness or accident of the
      Member or of a dependent of a Member, loss of the Member's property due to
      casualty, or similar extraordinary and unforeseeable circumstances arising
      as a result of events beyond the control of such Member and (ii) would
      result in severe financial hardship to such Member if his Compensation
      deferral election was not canceled pursuant to Section 3.1(c) and/or if a
      benefit payment pursuant to Section 6.2 or 7.6(b)(ii) was not permitted.
      Cash needs arising from foreseeable events, such as the purchase of a
      house or education expenses for children, shall not be considered to be
      the result of an Unforeseeable Financial Emergency. Further, cash needs
      that may be relieved (a) through reimbursement or compensation by
      insurance or otherwise, (b) by liquidation of the Member's assets, to the
      extent the liquidation of such assets would not itself cause severe
      financial hardship, or (c) by cessation of deferrals under the Plan shall
      not be considered to be Unforeseeable Financial Emergencies.

(33)  VESTED INTEREST: The portion of a Member's Accounts which, pursuant to
      the Plan, is nonforfeitable.

(34)  VESTING SERVICE: With regard to a Member who is a participant in the
      Savings Plan (as determined in accordance with the provisions of the
      Savings Plan), the term "Vesting Service" shall mean such Member's Vesting
      Service as defined and determined under the Savings Plan. With regard to a
      Member who is not a participant in the Savings Plan, the term "Vesting
      Service" shall mean such Member's Vesting Service calculated as if he were
      a participant in the Savings Plan; provided, however, that in making such
      calculation, such Member shall be treated as receiving service credit for
      employment with a Controlled Entity (as such term is defined in the
      Savings Plan).

      1.2   NUMBER AND GENDER. Wherever appropriate herein, words used in the
singular shall be considered to include the plural and words used in the plural
shall be considered to include the singular. The masculine gender, where
appearing in the Plan, shall be deemed to include the feminine gender.

      1.3   HEADINGS. The headings of Articles and Sections herein are included
solely for convenience, and if there is any conflict between such headings and
the text of the Plan, the text shall control.


                                      I-4
<Page>



                                       II.

                                 PARTICIPATION

      2.1   PARTICIPATION.

            (a)  The Committee, in its sole discretion, shall select and notify
those management or highly compensated employees of the Employer who shall
become Eligible Employees. An Eligible Employee may become a Member, effective
as of the first day of the next Plan Year following such Eligible Employee's
notification of eligibility, by executing and filing with the Committee the
Compensation deferral election prescribed by the Committee prior to the start of
such Plan Year.

            (b)  Notwithstanding Paragraph (a), after the start of a Plan Year,
the Committee may, in its discretion, select and notify those Eligible Employees
who may become Members with respect to such Plan Year by executing and filing
with the Committee, prior to the close of such Eligible Employee's Eligibility
Period and in accordance with the procedures established by the Committee, the
Compensation deferral election prescribed by the Committee. An Eligible Employee
who has filed such election in accordance with this Paragraph shall become a
Member as of the first day of the payroll period that is administratively
practicable following such election.

            (c)  Subject to the provisions of Section 2.2, a Member shall remain
eligible to defer Compensation hereunder and receive an allocation of Employer
Deferrals for each Plan Year following his commencement of participation in the
Plan.

      2.2   CESSATION OF ACTIVE PARTICIPATION. Notwithstanding any provision
herein to the contrary, an individual who has become a Member of the Plan shall
cease to be entitled to defer Compensation hereunder or receive an allocation
of Employer Deferrals effective as of any date designated by the Committee. Any
such Committee action shall be communicated to the affected individual prior to
the effective date of such action. Such an individual may again become entitled
to defer Compensation hereunder and receive an allocation of Employer Deferrals
beginning as of any date selected by the Committee in its sole discretion.

      2.3   ADOPTING ENTITIES. It is contemplated that other entities may adopt
this Plan and thereby become an Employer. Any such entity, whether or not
presently existing, may become a party hereto by appropriate action of its
officers without the need for approval of its board of directors or of the
Committee or the Compensation Committee; provided, however, that such entity
must be an Affiliate. The provisions of the Plan shall apply separately and
equally to each Employer and its employees in the same manner as is expressly
provided for the Company and its employees, except that (a) the power to
appoint or otherwise affect the Committee and the Trustee and the power to
amend or terminate the Plan or amend the Trust Agreement shall be exercised by
the Compensation Committee alone and (b) the determination of whether a Change
in Control has occurred shall be made based solely on the Company. Transfer of
employment among Employers and Affiliates shall not be considered a Termination
of Service hereunder.


                                     II-1
<Page>


Any Employer may, by appropriate action of its officers without the need for
approval of its board of directors (or noncorporate counterpart) or the
Committee or the Compensation Committee, terminate its participation in the
Plan. Moreover, the Compensation Committee may, in its discretion, terminate an
Employer's Plan participation at any time.
























                                     II-2
<Page>



                                      III.

              ACCOUNT CREDITS AND ALLOCATIONS OF INCOME OR LOSS

      3.1   MEMBER DEFERRALS.

            (a)  In accordance with the procedures established from time to time
by the Committee, a Member (or an Eligible Employee, if such Eligible Employee
has not yet become a Member pursuant to Section 2.1) may annually elect to defer
an integral percentage of from 1% to 85% of his Base Salary for a Plan Year and
from 1% to 85% of his Annual Bonus for a Plan Year. Compensation not so deferred
by such election shall be received by such Member in cash. A Member's election
to defer an amount of his Compensation pursuant to this Section shall be made by
executing a Compensation deferral election in accordance with Paragraph (b)
below pursuant to which the Member authorizes the Employer to reduce his
Compensation for a Plan Year in the elected amount and the Employer, in
consideration thereof, agrees to credit an equal amount to a separate Deferral
Plan Year Subaccount (established for such Plan Year) within the Member's
Deferral Account maintained under the Plan. Compensation deferrals (including
net income or net loss allocated with respect thereto) made by a Member for a
Plan Year shall be credited to his Deferral Plan Year Subaccount established
with respect to such Plan Year as of a date determined in accordance with the
procedures established from time to time by the Committee; provided, however,
that such deferrals shall be credited to the Deferral Plan Year Subaccount no
later than 30 days after the date upon which the Compensation deferred would
have been received by such Member in cash if he had not elected to defer such
amount pursuant to this Section 3.1.

            (b)  A Member's (or an Eligible Employee's, if such Eligible
Employee has not yet become a Member pursuant to Section 2.1) annual election
to defer an integral percentage of his Compensation earned with respect to a
Plan Year under Paragraph (a) of this Section must be made prior to the start
of such Plan Year and in accordance with the procedures established by the
Committee, and shall become effective as of the first day of such Plan Year.
Notwithstanding the foregoing, a deferral election made by an Eligible Employee
who becomes a Member pursuant to Section 2.1(b) shall become effective as of
the first day of the payroll period that is administratively practicable
following such election and shall be effective only with respect to
Compensation earned on or subsequent to the first day of such payroll period.
Subject to Paragraph (c) and Section 6.4, a deferral election under this
Section with respect to a Plan Year shall be irrevocable. A Member's deferral
election with respect to an Annual Bonus for a Plan Year shall apply to such
Annual Bonus even if it is paid after the close of such Plan Year.

            (c)  In the event that the Committee, upon written petition of a
Member, determines in its sole discretion that such Member has suffered an
Unforeseeable Financial Emergency or that such Member will, absent termination
of such Member's Compensation deferral election then in effect with respect to a
Plan Year, suffer an Unforeseeable Financial Emergency, then such Member's
Compensation deferral then in effect with respect to a Plan Year, if any, shall
be terminated as soon as administratively practicable after such determination.
A Member whose Compensation deferral election has been so terminated may again
elect to


                                     III-1
<Page>


defer a portion of his Compensation, effective as of the first day of any Plan
Year that is at least twelve months after the effective date of such
termination, by executing and delivering to the Employer, in accordance with
the procedures established by the Committee, a new Compensation deferral
election prior to the start of such Plan Year.

            (d)  In accordance with the procedures established by the Committee,
for each Plan Year that begins on or after the Effective Date, a Member may
elect for such Plan Year that:

                 (i)   100% of the Member's Compensation deferred under the Plan
      for such Plan Year (and the net income (or net loss) allocated with
      respect thereto) shall be deferred until paid pursuant to Article VII
      following such Member's Termination of Service; or

                 (ii)  100% of the Member's Compensation deferred under the Plan
      for such Plan Year (and the net income (or net loss) allocated with
      respect thereto) shall be paid as a Scheduled Distribution on the last day
      of a Plan Year specified by such Member in such election (which specified
      Plan Year must end no earlier than two years after the last day of the
      Plan Year to which the Compensation deferral relates) in one of the three
      forms of payment described in Section 7.3 (as elected by such Member
      pursuant to Paragraph (e) below).

Any election made pursuant to clause (ii) of this Paragraph shall be
irrevocable. With respect to any Plan Year for which an election to receive a
Scheduled Distribution is not made, a Member shall be deemed to have made an
election under clause (i) of this Paragraph for such Plan Year. The provisions
of Section 6.1 shall apply with respect to each election by a Member to receive
a Scheduled Distribution.

            (e)  With respect to each Plan Year for which a Member elects to
defer Compensation under this Plan and/or the Employer credits such Member's
Employer Account with an Employer Deferral in accordance with Section 3.2, such
Member shall make a time of payment election pursuant to Section 7.2 and a form
of benefit payment election pursuant to Section 7.3; provided, however, that if
a Member has elected to have his Compensation deferrals for a Plan Year paid as
a Scheduled Distribution, a separate time of payment election and form of
benefit payment election shall be made with respect to any Employer Deferrals
made on behalf of such Member for such Plan Year. Elections under this Paragraph
shall be made in accordance with the procedures set forth in Section 7.4.
Notwithstanding the foregoing, Section 6.1 shall govern a Member's time of
payment and form of benefit payment elections with respect to a Scheduled
Distribution.

      3.2   EMPLOYER DEFERRALS. As of any date selected by the Employer, the
Employer may credit a Member's Employer Plan Year Subaccount relating to a Plan
Year with such amount, if any, as the Employer shall determine in its sole
discretion. Such credits may be made on behalf of some Members but not others,
and such credits may vary in amount among individual Members.


                                     III-2
<Page>


      3.3   VALUATION OF ACCOUNTS. All amounts credited to a Member's Accounts
shall be deemed invested as soon as administratively feasible following the
date upon which such credit occurs, and the balance of each Account shall
reflect the result of daily pricing of the assets in which such Account is
deemed invested from time to time until the time of distribution.





























                                     III-3
<Page>



                                       IV.

                           DEEMED INVESTMENT OF FUNDS

      Each Member shall designate, in accordance with the procedures established
from time to time by the Committee, the manner in which the amounts allocated to
his Accounts shall be deemed to be invested from among the Funds made available
from time to time for such purpose by the Committee. Such Member may designate
one of such Funds for the deemed investment of all the amounts allocated to his
Accounts or he may split the deemed investment of the amounts allocated to his
Accounts between such Funds in such increments as the Committee may prescribe.
If a Member fails to make a proper designation, then his Accounts shall be
deemed to be invested in the Fund or Funds designated by the Committee from time
to time in a uniform and nondiscriminatory manner.

      A Member may change his deemed investment designation for future deferrals
to be allocated to his Accounts. Any such change shall be made in accordance
with the procedures established by the Committee, and the frequency of such
changes may be limited by the Committee.

      A Member may elect to convert his deemed investment designation with
respect to the amounts already allocated to his Accounts. Any such conversion
shall be made in accordance with the procedures established by the Committee,
and the frequency of such conversions may be limited by the Committee.













                                     IV-1
<Page>



                                       V.

               DETERMINATION OF VESTED INTEREST AND FORFEITURES

      5.1   DEFERRAL ACCOUNT. A Member shall have a 100% Vested Interest in his
Deferral Account at all times.

      5.2   EMPLOYER ACCOUNT.

            (a)  Subject to Paragraphs (b) and (c) below, a Member shall have:
(i) a 25% Vested Interest in his Employer Account upon completion of one year of
Vesting Service; (ii) a 50% Vested Interest in his Employer Account upon
completion of two years of Vesting Service; (iii) a 75% Vested Interest in his
Employer Account upon completion of three years of Vesting Service; and (iv) a
100% Vested Interest in his Employer Account upon completion of four or more
years of Vesting Service.

            (b)  Notwithstanding Paragraph (a) and subject to Paragraph (c), for
purposes of determining a Member's Vested Interest in any amount credited to his
Employer Plan Year Subaccount for a Plan Year (and the net income (or net loss)
allocated thereto), the Committee may modify or alter in any manner the schedule
set forth in Paragraph (a) upon prior notice to such Member.

            (c)  A Member who is employed by the Employer immediately prior to a
Change in Control shall have a 100% Vested Interest in his Employer Account upon
the occurrence of such Change in Control.

      5.3   FORFEITURES. A Member who has a Vested Interest in his Employer
Account that is less than 100% as of the date of his Termination of Service
shall forfeit to the Employer the nonvested portion of such Account as of the
date of such termination.












                                      V-1
<Page>



                                       VI.

                            IN-SERVICE DISTRIBUTIONS

      6.1   DISTRIBUTION OF CERTAIN COMPENSATION DEFERRALS. With respect to
each election by a Member to receive a Scheduled Distribution, as soon as
administratively practicable after the last day of the Plan Year specified by
such Member in such election, such Member shall begin receiving a distribution
in the payment form elected by such Member pursuant to Section 3.1(e) and in an
amount equal to the value of such Member's Deferral Plan Year Subaccount for
the Plan Year for which such election to receive a Scheduled Distribution was
made (as adjusted for net income or net loss); provided, however, that if an
installment payment form was elected, monthly installment amounts shall be
recalculated annually in accordance with the method set forth in Section
7.3(b). If a Member's Deferral Plan Year Subaccount from which a Scheduled
Distribution is to be paid is deemed to be invested in more than one Fund, such
benefit shall be distributed pro rata from each Fund in which such subaccount
is deemed to be invested. If a Member elects a form of payment for his
Scheduled Distribution other than a single lump sum payment and such Member
dies before payment of his Scheduled Distribution under this Section is
complete, then the remaining balance of such benefit shall be paid to the
Member's designated beneficiary (determined under Section 7.5) in the payment
form elected by the Member.

      6.2   EMERGENCY BENEFIT. In the event that the Committee, upon written
petition of a Member, determines in its sole discretion that such Member has
suffered an Unforeseeable Financial Emergency, such Member shall be entitled to
a benefit in an amount not to exceed the lesser of (a) the amount determined by
the Committee as necessary to meet such Member's needs created by the
Unforeseeable Financial Emergency or (b) the then value of such Member's
Deferral Account. Such benefit shall be paid in a single lump sum payment as
soon as administratively practicable after the Committee has made its
determinations with respect to the availability and amount of such benefit.
Such benefit shall be considered to have been distributed, first, from the
Deferral Plan Year Subaccount with respect to which the earliest distribution
would be made pursuant to Sections 6.1 or 7.2, then, from the Deferral Plan
Year Subaccount with respect to which the next earliest distribution would be
made pursuant to Sections 6.1 or 7.2, and continuing in such manner until the
amount of such distribution has been satisfied. If a Member's Deferral Plan
Year Subaccount from which a withdrawal is to be made is deemed to be invested
in more than one Fund, such benefit shall be distributed pro rata from each
Fund in which such subaccount is deemed to be invested.

      6.3   ELECTIVE WITHDRAWAL. A Member may elect at any time, by following
the election procedure prescribed by the Committee, to withdraw as a benefit
all or a portion of his Deferral Account as of the last business day of any
calendar month or any other interim date determined by the Committee on a
nondiscriminatory basis, subject to a withdrawal penalty of 10% of the amount
of any such withdrawal. Upon any such withdrawal, the withdrawal penalty
referred to in the preceding sentence shall be forfeited to the Employer. A
Member may select the Deferral Plan Year Subaccount (or Subaccounts) from which
such withdrawal (including the withdrawal penalty) shall be paid. If a Member's
Deferral Plan Year Subaccount from which a withdrawal is to be made is deemed
to be invested in more than one Fund, such withdrawal shall


                                     VI-1
<Page>


be distributed pro rata from each Fund in which such subaccount is deemed to be
invested. Notwithstanding the preceding provisions of this Section 6.3, a
Member shall not be entitled to a withdrawal under this Section 6.3 if the
Committee determines, in its sole discretion, that the primary purpose of such
withdrawal is to cause the cessation of Compensation deferrals under the Plan.
The Committee shall consider such factors as it deems appropriate in order to
make a determination pursuant to the preceding sentence, including, without
limitation, the amount of the requested withdrawal, the balance in the Member's
Accounts, the Member's Compensation deferral election then in effect, and the
timing of such withdrawal request.

      6.4   SUSPENSION OF ACTIVE PARTICIPATION UPON DISTRIBUTION OF EMERGENCY
BENEFIT OR ELECTIVE WITHDRAWAL. Upon a distribution of an emergency benefit or
elective withdrawal to a Member pursuant to Sections 6.2 or 6.3, respectively,
such Member's participation in the Plan shall terminate and no further
Compensation deferrals shall be made under the Plan on behalf of such Member
until the first day of the Plan Year that begins more than 12 months after the
date of the distribution.

      6.5   RESTRICTION ON IN-SERVICE DISTRIBUTIONS. Except for Section 6.1,
this Article VI shall not be applicable to a Member following his Termination
of Service, and the amounts credited to such Member's Accounts (other than
amounts such Member has elected to be paid as a Scheduled Distribution) shall
be payable to such Member in accordance with the provisions of Article VII.




















                                     VI-2
<Page>



                                      VII.

                              TERMINATION BENEFITS

      7.1   AMOUNT OF BENEFIT.

            (a)  Except for Sections 7.6, 7.7, and 7.8, and as otherwise
provided under any provision of this Plan, this Article VII shall not apply
with respect to a Member's Compensation deferred under the Plan for a Plan Year
(as adjusted for net income or net loss) elected to be paid as a Scheduled
Distribution.

            (b)  Subject to Section 7.2, upon a Member's Termination of Service,
the Member, or, in the event of the Member's death, the Member's designated
beneficiary (as determined under Section 7.5), shall become entitled to receive
a benefit equal in value to the Member's Vested Interest in the aggregate
balance of his Accounts and subaccounts. The value of a Member's Vested Interest
in each of his Acounts and subaccounts shall be determined as of the elected
date payments are to commence from such Account or subaccount pursuant to
Section 7.2 (provided, however, that if an installment payment form was elected
pursuant to Section 7.3, the amount of monthly installment payments shall be
recalculated annually in accordance with the method set forth in Section
7.3(b)).

      7.2   TIME OF PAYMENT. Payment of a Member's benefit under Section 7.1(b)
shall commence as soon as administratively practicable after the date of the
Member's Termination of Service or death. Notwithstanding the foregoing, with
respect to each Plan Year for which a Member elects to defer Compensation under
this Plan and/or the Employer credits such Member's Employer Account with an
Employer Deferral, such Member may elect, in accordance with Section 7.4, to
delay commencement of the portion of his Section 7.1(b) benefit attributable to
Compensation deferrals or Employer Deferrals for such Plan Year until the
passage of a specified number of years following his Termination of Service.

      7.3   ALTERNATIVE FORMS OF BENEFIT PAYMENTS. With respect to each Plan
Year for which a Member elects to defer Compensation under this Plan and/or the
Employer credits such Member's Employer Account with an Employer Deferral, such
Member shall, in accordance with Section 7.4, elect one of the following forms
of payment for the portion of his Section 7.1(b) benefit attributable to
Compensation deferrals and Employer Deferrals for such Plan Year:

            (a)  A single lump sum payment;

            (b)  Monthly installment payments for a period of 5, 10, 15, or 20
      years, as elected by such Member, payable to the Member, or, in the event
      of such Member's death prior to the end of such period, to his designated
      beneficiary (determined under Section 7.5). The amount of each monthly
      installment shall be computed by dividing a Member's annual installment
      amount during each year of the elected installment period into twelve
      equal monthly installments. Such Member's annual installment amount shall
      be


                                     VII-1
<Page>


      calculated by dividing his Vested Interest in the unpaid balance in his
      Deferral and Employer Plan Year Subaccounts relating to the Plan Year for
      which the election is made (determined initially as of the date payment of
      such Member's benefit is scheduled to commence pursuant to Section 7.2
      and, in subsequent years during the elected installment period, on the
      annual anniversary of such date) by the remaining number of years in the
      elected installment period; or

            (c)  A single lump sum payment of a specified percentage, as elected
      by such Member, of his benefit under Section 7.1(b). The balance of such
      Member's benefit under Section 7.1(b) shall be paid in monthly installment
      payments for a period of 5, 10, 15, or 20 years, as elected by such
      Member, calculated in accordance with the method set forth in Paragraph
      (b) above; provided, however, that in calculating such Member's monthly
      installment amounts, his Vested Interest in the unpaid balance in his
      Deferral and Employer Plan Year Subaccounts for which the election is made
      shall be adjusted for any lump sum amount already paid or to be paid to
      such Member.

In the event such Member fails to timely elect in accordance with Section 7.4
the form in which his benefit payment attributable to a particular Plan Year is
to be paid, such benefit payment shall be paid in the form of a single lump sum
payment. If a Member dies prior to the date the payment of the portion of his
Section 7.1(b) benefit derived from deferrals for a particular Plan Year begins,
and if the Member failed to timely elect the form of such payment, then such
payment shall be made to the Member's designated beneficiary (as determined
under Section 7.5) in the form of a single lump sum payment. If a Member dies
prior to the date the payment of the portion of his Section 7.1(b) benefit
derived from deferrals for a particular Plan Year begins or is completed, and if
the Member did timely elect the form of such payments, then such payments shall
be made to the Member's designated beneficiary in the form elected by the
Member. In the event of the death of a Member and the subsequent death of his
designated beneficiary prior to the commencement or completion of payment of
such Member's Section 7.1(b) benefit, then the remaining balance of such
Member's benefit under Section 7.1(b) shall be paid to the estate of his
designated beneficiary in the form of a single lump sum payment.

      7.4   ELECTION AS TO TIME OF PAYMENT AND FORM OF BENEFIT. A Member's
elections as to time of payment and form of benefit payment under Sections 7.2
and 7.3, respectively, with respect to each Plan Year for which such Member
elects to defer Compensation under this Plan and/or the Employer credits such
Member's Employer Account with an Employer Deferral, shall be made in writing
on the form prescribed by the Committee, in accordance with the procedures
established by the Committee, and shall be made prior to the first day of such
Member's participation in the Plan for the Plan Year to which such elections
relate. Notwithstanding the foregoing, subject to the consent of the Committee
in its sole discretion, a Member may, on the form prescribed by the Committee,
modify his original elections as to time of payment and form of benefit payment
with respect to deferrals for any Plan Year; provided, however, that such
modification shall not be effective if such Member incurs a Termination of
Service on or before the date that is thirteen months after such Member
delivers the form implementing such change to the Committee.


                                     VII-2
<Page>


      7.5   DESIGNATION OF BENEFICIARIES.

            (a)  Each Member shall have the right to designate the beneficiary
or beneficiaries to receive payment of his benefit in the event of his death.
Each such designation shall be made by executing the beneficiary designation
form prescribed by the Committee and filing same with the Committee. Any such
designation may be changed at any time by execution of a new designation in
accordance with this Section.

            (b)  If no such designation is on file with the Committee at the
time of the death of the Member or such designation is not effective for any
reason as determined by the Committee, then the designated beneficiary or
beneficiaries to receive such benefit shall be as follows:

                 (i)   If a Member leaves a surviving spouse, his benefit
      shall be paid to such surviving spouse;

                 (ii)  If a Member leaves no surviving spouse, his benefit shall
      be paid to such Member's executor or administrator, or to his heirs at law
      if there is no administration of such Member's estate.

      7.6   ACCELERATED PAY-OUT OF CERTAIN BENEFITS.

            (a)  If a Member's Vested Interest in the aggregate balance of his
Accounts is less than $25,000, then the Committee may, in its sole discretion,
elect to cause the entire remaining Vested Interest in the balance of such
Member's Accounts to be paid in a single lump sum payment.

            (b)  If a Member incurs a Termination of Service and such Member has
elected to have any portion of his Section 7.1(b) benefits and Scheduled
Distributions paid in a form and at a time other than a single lump sum payment
made as soon as administratively practicable after Termination of Service, then:

                 (i)   With respect to such benefit payments, such Member or, in
      the event of such Member's death, his designated beneficiary, may elect at
      any time, by following the election procedure prescribed by the Committee,
      to receive the Vested Interest in the remaining balance in his Accounts
      (reduced by the 10% penalty described in the following sentence) in a
      single lump sum payment as soon as administratively feasible after the
      date such Member or his designated beneficiary delivers to the Committee
      the form prescribed by the Committee requesting such distribution. Upon
      such a request, the Vested Interest in the aggregate balance in such
      Member's Accounts as of the date of the requested distribution shall be
      reduced by 10% and such amount shall be forfeited to the Employer; and

                 (ii)  In the event that the Committee, upon written petition of
      such Member or, in the event of such Member's death, his designated
      beneficiary, determines in its sole discretion that such Member, or his
      designated beneficiary, has suffered an


                                     VII-3
<Page>


      Unforeseeable Financial Emergency, such Member or his designated
      beneficiary shall be entitled to an emergency benefit in an amount and
      under conditions similar to those described in Section 6.2.

      7.7   PAYMENT OF BENEFITS. To the extent the Trust Fund has sufficient
assets, the Trustee shall pay benefits to Members or their beneficiaries,
except to the extent the Employer pays the benefits directly and provides
adequate evidence of such payment to the Trustee. To the extent the Trustee
does not or cannot pay benefits out of the Trust Fund, the benefits shall be
paid by the Employer. Any benefit payments made to a Member or for his benefit
pursuant to any provision of the Plan shall be debited to such Member's
Accounts. All benefit payments pursuant to any provision of the Plan shall be
made in cash to the fullest extent practicable.

      7.8   UNCLAIMED BENEFITS. In the case of a benefit payable on behalf of a
Member, if the Committee is unable to locate the Member or beneficiary to whom
such benefit is payable, upon the Committee's determination thereof, such
benefit shall be forfeited to the Employer. Notwithstanding the foregoing, if
subsequent to any such forfeiture the Member or beneficiary to whom such
benefit is payable makes a valid claim for such benefit, such forfeited benefit
(without any adjustment for earnings or loss after the time of such forfeiture)
shall be restored to the Plan by the Employer and paid in accordance with the
Plan.


















                                     VII-4
<Page>



                                      VIII.

                           ADMINISTRATION OF THE PLAN

      8.1   THE COMMITTEE. The general administration of the Plan shall be
vested in the Committee.

      8.2   SELF-INTEREST OF MEMBERS. No member of the Committee shall have any
right to vote or decide upon any matter relating solely to himself under the
Plan or to vote in any case in which his individual right to claim any benefit
under the Plan is particularly involved. In any case in which a Committee
member is so disqualified to act and the remaining members cannot agree, the
Company shall appoint a temporary substitute member to exercise all the powers
of the disqualified member concerning the matter in which he is disqualified.

      8.3   COMMITTEE POWERS AND DUTIES. The Committee shall supervise the
administration and enforcement of the Plan according to the terms and
provisions hereof and shall have all powers necessary to accomplish these
purposes, including, but not by way of limitation, the right, power, and
authority:

            (a)  To make rules, regulations, and bylaws for the administration
      of the Plan that are not inconsistent with the terms and provisions
      hereof, and to enforce the terms of the Plan and the rules and regulations
      promulgated thereunder by the Committee;

            (b)  To construe in its discretion all terms, provisions,
      conditions, and limitations of the Plan;

            (c)  To correct any defect or to supply any omission or to reconcile
      any inconsistency that may appear in the Plan in such manner and to such
      extent as it shall deem in its discretion expedient to effectuate the
      purposes of the Plan;

            (d)  To employ and compensate such accountants, attorneys,
      investment advisors, and other agents, employees, and independent
      contractors as the Committee may deem necessary or advisable for the
      proper and efficient administration of the Plan;

            (e)  To determine in its discretion all questions relating to
      eligibility;

            (f)  To determine whether and when a Member has incurred a
      Termination of Service, and the reason for such termination;

            (g)  To make a determination in its discretion as to the right of
      any person to a benefit under the Plan and to prescribe procedures to be
      followed by distributees in obtaining benefits hereunder;

            (h)  To receive and review reports from the Trustee as to the
      financial condition of the Trust Fund, including its receipts and
      disbursements; and


                                     VIII-1
<Page>


            (i)  To establish or designate Funds as investment options as
      provided in Article IV.

      8.4   CLAIMS REVIEW. In any case in which a claim for Plan benefits of a
Member or beneficiary is denied or modified, the Committee shall furnish
written notice to the claimant within 90 days after receipt of such claim for
Plan benefits (or within 180 days if additional information requested by the
Committee necessitates an extension of the 90-day period), which notice shall:

            (a)  State the specific reason or reasons for the denial or
      modification;

            (b)  Provide specific reference to pertinent Plan provisions on
      which the denial or modification is based;

            (c)  Provide a description of any additional material or information
      necessary for the Member, his beneficiary, or representative to perfect
      the claim and an explanation of why such material or information is
      necessary; and

            (d)  Explain the Plan's claim review procedure as contained herein.

In the event a claim for Plan benefits is denied or modified, if the Member, his
beneficiary, or a representative of such Member or beneficiary desires to have
such denial or modification reviewed, he must, within 60 days following receipt
of the notice of such denial or modification, submit a written request for
review by the Committee of its initial decision. In connection with such
request, the Member, his beneficiary, or the representative of such Member or
beneficiary may review any pertinent documents upon which such denial or
modification was based and may submit issues and comments in writing. Within 60
days following such request for review the Committee shall, after providing a
full and fair review, render its final decision in writing to the Member, his
beneficiary or the representative of such Member or beneficiary stating specific
reasons for such decision and making specific references to pertinent Plan
provisions upon which the decision is based. If special circumstances require an
extension of such 60-day period, the Committee's decision shall be rendered as
soon as possible, but not later than 120 days after receipt of the request for
review. If an extension of time for review is required, written notice of the
extension shall be furnished to the Member, beneficiary, or the representative
of such Member or beneficiary prior to the commencement of the extension period.

      8.5   EMPLOYER TO SUPPLY INFORMATION. The Employer shall supply full and
timely information to the Committee, including, but not limited to, information
relating to each Member's Compensation, age, retirement, death, or other cause
of Termination of Service and such other pertinent facts as the Committee may
require. The Employer shall advise the Trustee of such of the foregoing facts
as are deemed necessary for the Trustee to carry out the Trustee's duties under
the Plan and the Trust Agreement. When making a determination in connection
with the Plan, the Committee shall be entitled to rely upon the aforesaid
information furnished by the Employer.


                                     VIII-2
<Page>


      8.6   INDEMNITY. To the extent permitted by applicable law, the Company
shall indemnify and save harmless each member of the Committee and the
Compensation Committee against any and all expenses, liabilities and claims
(including legal fees incurred to defend against such liabilities and claims)
arising out of their discharge in good faith of responsibilities under or
incident to the Plan. Expenses and liabilities arising out of willful
misconduct shall not be covered under this indemnity. This indemnity shall not
preclude such further indemnities as may be available under insurance purchased
by the Company or provided by the Company under any bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, as such indemnities are
permitted under applicable law.

      8.7   CHANGE IN CONTROL. Notwithstanding any provision in the Plan to the
contrary, upon the occurrence of a Change in Control, the Committee's powers
and duties under the Plan shall cease to the extent, if any, such powers and
duties are vested in the Trustee under the terms of the Trust Agreement.






















                                     VIII-3
<Page>



                                       IX.

                             ADMINISTRATION OF FUNDS

      9.1   PAYMENT OF EXPENSES. All expenses incident to the administration of
the Plan and Trust, including but not limited to, legal, accounting, Trustee
fees, and expenses of the Committee, may be paid by the Employer and, if not
paid by the Employer, shall be paid by the Trustee from the Trust Fund.

      9.2   TRUST FUND PROPERTY. All income, profits, recoveries,
contributions, forfeitures and any and all moneys, securities and properties of
any kind at any time received or held by the Trustee shall be held for
investment purposes as a commingled Trust Fund pursuant to the terms of the
Trust Agreement. The Committee shall maintain one or more Accounts in the name
of each Member, but the maintenance of an Account designated as the Account of
a Member shall not mean that such Member shall have a greater or lesser
interest than that due him by operation of the Plan and shall not be considered
as segregating any funds or property from any other funds or property contained
in the commingled fund. No Member shall have any title to any specific asset in
the Trust Fund.

      9.3   CONTRIBUTIONS TO THE TRUST FUND. As soon as administratively
practicable after each date upon which an amount is credited to a Member's
Account pursuant to Sections 3.1 and/or 3.2, the Employer shall contribute an
equivalent amount to the Trust Fund.

      9.4   INVESTMENT OF THE TRUST FUND. The Committee shall have the right,
power, authority, and duty to instruct the Trustee as to the management,
investment, and reinvestment of the Trust Fund.















                                     IX-1
<Page>



                                       X.

                               NATURE OF THE PLAN

      The Employer intends and desires by the adoption of the Plan to recognize
the value to the Employer of the past and present services of employees covered
by the Plan and to encourage and assure their continued service with the
Employer by making more adequate provision for their future retirement security.
The establishment of the Plan is made necessary by certain benefit limitations
which are imposed on the Savings Plan and other qualified retirement plans by
the Employee Retirement Income Security Act of 1974 and by the Code. The Plan is
intended to constitute an unfunded, unsecured plan of deferred compensation for
a select group of management or highly compensated employees of the Employer.
Plan benefits herein provided are a contractual obligation of the Employer which
shall be paid out of the Trust Fund or out of the Employer's general assets.
Subject to the terms hereof and of the Trust Agreement, the Employer shall
transfer money or other property to the Trustee to provide Plan benefits
hereunder, and the Trustee shall pay Plan benefits to Members and their
beneficiaries out of the Trust Fund.

      The Employer has established the Trust and entered into the Trust
Agreement. The Employer shall remain the owner of all assets in the Trust Fund
and the assets shall be subject to the claims of the Employer's creditors if the
Employer ever becomes insolvent. For purposes hereof, the Employer shall be
considered "insolvent" if (a) the Employer is unable to pay its debts as such
debts become due, (b) the Employer is subject to a pending proceeding as a
debtor under the United Sates Bankruptcy Code (or any successor federal statute)
or other proceedings intended to liquidate or rehabilitate the Employer's
estate, or (c) the Employer is subject to regulation by federal or state
regulators and such regulators have determined that the Employer is insolvent or
should be placed in insolvency or similar proceedings. The chief executive
officer of the Employer and its board of directors shall have the duty to inform
the Trustee in writing if the Employer becomes insolvent. Such notice given
under the preceding sentence by any party shall satisfy all of the parties' duty
to give notice. When so informed, the Trustee shall suspend payments to the
Members and hold the assets for the benefit of the Employer's general creditors.
If the Trustee receives a written allegation that the Employer is insolvent, the
Trustee shall suspend payments to the Members and hold the Trust Fund for the
benefit of the Employer's general creditors, and shall determine in the manner
specified in the Trust Agreement whether the Employer is insolvent. If the
Trustee determines that the Employer is not insolvent, the Trustee shall resume
payments to the Members. No Member or beneficiary shall have any preferred claim
to, or any beneficial ownership interest in, any assets of the Trust Fund, and,
upon commencement of participation in the Plan, each Member shall have agreed to
waive his priority credit position, if any, under applicable state law with
respect to the assets of the Trust Fund.





                                      X-1
<Page>



                                       XI.

                                  MISCELLANEOUS

      11.1  NOT CONTRACT OF EMPLOYMENT. The adoption and maintenance of the
Plan shall not be deemed to be a contract between the Employer and any person
or to be consideration for the employment of any person. Nothing herein
contained shall be deemed to (a) give any person the right to be retained in
the employ of the Employer, (b) restrict the right of the Employer to discharge
any person at any time, (c) give the Employer the right to require any person
to remain in the employ of the Employer, or (d) restrict any person's right to
terminate his employment at any time.

      11.2  ALIENATION OF INTEREST FORBIDDEN. The interest of a Member or his
beneficiary or beneficiaries hereunder may not be sold, transferred, assigned,
or encumbered in any manner, either voluntarily or involuntarily, and any
attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be null and void; neither shall the benefits hereunder be
liable for or subject to the debts, contracts, liabilities, engagements or
torts of any person to whom such benefits or funds are payable, nor shall they
be an asset in bankruptcy or subject to garnishment, attachment or other legal
or equitable proceedings.

      11.3  WITHHOLDING. All Compensation deferrals and Employer Deferrals and
payments provided for hereunder shall be subject to applicable withholding and
other deductions as shall be required of the Employer under any applicable
local, state or federal law.

      11.4  AMENDMENT AND TERMINATION. The Compensation Committee may from time
to time, in its discretion, amend, in whole or in part, any or all of the
provisions of the Plan; provided, however, that no amendment may be made that
would impair the rights of a Member with respect to amounts already allocated
to his Accounts. The Compensation Committee may terminate the Plan at any time.
In the event that the Plan is terminated, the Vested Interest in the balance in
a Member's Accounts shall be paid to such Member or his designated beneficiary
in the manner specified by the Committee, which may include the payment of a
single lump sum payment in full satisfaction of all of such Member's or
beneficiary's benefits hereunder. Notwithstanding the foregoing, upon the
occurrence of a Change in Control, the Plan may not be amended or terminated in
any manner that changes a Member's elections as to time of payment and form of
payment of benefits.

      11.5  SEVERABILITY. If any provision of this Plan shall be held illegal
or invalid for any reason, said illegality or invalidity shall not affect the
remaining provisions hereof; instead, each provision shall be fully severable
and the Plan shall be construed and enforced as if said illegal or invalid
provision had never been included herein.

      11.6  GUARANTY. Notwithstanding any provisions of the Plan to the
contrary, in the event any Affiliate that adopts the Plan pursuant to Section
2.3 hereof fails to make payment of the benefits due under the Plan on behalf
of its Members, whether directly or through the Trust, the Company shall be
liable for and shall make payment of such benefits due as a guarantor of


                                     XI-1
<Page>


such entity's obligations hereunder. The guaranty obligations provided herein
shall be satisfied directly and not through the Trust.

      11.7  GOVERNING LAWS. ALL PROVISIONS OF THE PLAN SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF TEXAS EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.


























                                     XI-2
<Page>


      EXECUTED this 28th day of November, 2001.


                              DYNEGY INC.




                              By:   /s/ Jane D. Jones
                                    --------------------------------------------
                                    Name:  Jane D. Jones
                                           -------------------------------------
                                    Title: Vice President - Rewards & Technology
                                           -------------------------------------
























                                     (iii)