Document:

<PAGE>

                                                                     EXHIBIT 4.1

                   STATEMENT OF RESOLUTION ESTABLISHING SERIES
                                       OF
           SERIES B MANDATORILY CONVERTIBLE REDEEMABLE 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 November 7,
2001, 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, 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 B Mandatorily Convertible
Redeemable Preferred Stock" (the "SERIES B PREFERRED STOCK"), to consist of
150,000 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 Corporation's Amended and
Restated Articles of Incorporation, as follows:

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

         "AVERAGE CLOSING PRICE" means the average of the closing sale prices
for a share of the Class A Common Stock for a specified period on the principal
national securities exchange on which the Class A Common Stock is admitted to
trading or listed, or if not listed or admitted to trading on any such exchange,
the representative closing bid price of the Class A Common Stock as reported by
NASDAQ, or other similar organization if NASDAQ is no longer reporting such
information, or if not so available, the fair market price of the Class A Common
Stock as determined by the Board of Directors of the Corporation.

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

         "CHEVRONTEXACO" means ChevronTexaco Corporation, a Delaware
corporation.

         "CLASS A COMMON STOCK" means authorized shares of Class A Common Stock,
no par value per share, of the Corporation.
<PAGE>

         "CLASS B COMMON STOCK" means authorized shares of Class B Common Stock,
no par value per share, of the Corporation.

         "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.

         "CONVERSION DATE" is defined in Section 5(e).

         "CONVERSION PRICE" will mean the price per share of Class B Common
Stock used to determine the number of shares of Class B Common Stock deliverable
upon conversion of a share of the Series B Preferred Stock, subject to
adjustment in accordance with the provisions of Section 5.

         "CORPORATION" is defined in Article I.

         "DIVIDEND PAYMENT DATE" means March 31, June 30, September 30, and
December 31 of each year.

         "DIVIDEND PERIOD" means the quarterly period between consecutive
Dividend Payment Dates, with the initial Dividend Period commencing on the
Merger Date.

         "FINAL REDEMPTION DATE" is defined in Section 4(e).

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

         "ISSUE DATE" means the date on which shares of Series B 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 B 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 B Preferred Stock have
received the entire amount to which the Series B Preferred Stock is entitled
upon such liquidation, dissolution, or winding up.

         "LIQUIDATION DATE" is defined in Section 3.

         "LIQUIDATION VALUE" means $10,000.00 per share of Series B Preferred
Stock, plus any accrued but unpaid dividends thereon through the Liquidation
Date.

                                       2
<PAGE>

         "MERGER AGREEMENT" means the Agreement and Plan of Merger, dated
November 9, 2001, by and among the Corporation, Stanford, Inc., Sorin, Inc., and
certain other parties named therein.

         "MERGER DATE" means the date on which the Mergers are consummated
pursuant to the Merger Agreement.

         "MERGERS" means the mergers contemplated by the Merger Agreement.

         "NON-FUNDING REDEMPTION DATE" means the date that is the first
anniversary of the Merger Date.

         "NOTICE OF NON-FUNDING" means the notice from ChevronTexaco to the
Corporation pursuant to Section 2.5 of the Subscription Agreement.

         "NOTICE OF NON-FUNDING DATE" means the date on which the Notice of
Non-Funding is issued by ChevronTexaco, as contemplated by Section 2.5 of the
Subscription Agreement.

         "OPTIONAL REDEMPTION DATE" is defined in Section 4(b).

         "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 B 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 B Preferred Stock.

         "RECORD DATE" means March 15, June 15, September 15, and December 15 of
each year, or such other date as may be designated by the Board.

         "REDEMPTION AGENT" is defined in Section 4(d).

         "REDEMPTION DATE" means the Non-Funding Redemption Date, the Optional
Redemption Date or the Termination Redemption Date, as applicable.

         "REDEMPTION PRICE" means $10,000.00 per share of Series B Preferred
Stock, plus any accrued but unpaid dividends 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 B 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 B Preferred
Stock in respect of the right to receive assets upon the liquidation,
dissolution, or winding up of the affairs of the Corporation.

         "SERIES B PREFERRED STOCK" is defined in the preamble to this Article
II.

                                       3
<PAGE>

         "SPECIAL DIVIDEND" means a one time cash dividend in an amount equal to
7.0% of the Liquidation Value per annum per share of Series B Preferred Stock
for the period commencing and including the Issue Date and ending on and
including the Notice of Non-Funding Date calculated on the basis of a year of
365 days and charged for the actual number of days elapsed.

         "SUBSCRIPTION AGREEMENT" means the Class B Common Stock Subscription
Agreement dated November 9, 2001, by and between ChevronTexaco and Stanford,
Inc., relating to the acquisition of Class B Common Stock of Stanford, Inc.

         "TERMINATION" means the termination of the Merger Agreement for any
reason, without the Mergers having been consummated.

         "TERMINATION DATE" means the date of the Termination.

         "TERMINATION REDEMPTION DATE" means the second anniversary of the Issue
Date.

         "TRANSFER" is defined in Section 12.

         2. DIVIDENDS. If the Mergers have occurred, the Notice of Non-Funding
has been issued and there has been no conversion of the Series B Preferred Stock
pursuant to Section 5(c), the Corporation will pay dividends out of funds
legally available for such purpose when and as declared by the Board as follows:

                  (a) The holders of all outstanding shares of Series B
Preferred Stock will, subject to prior preferences and other rights of any
Senior Stock, be entitled to receive the Special Dividend on the Redemption
Date. The Special Dividend will not be paid to any holder of Series B Preferred
Stock if the Mergers are not consummated.

                  (b) Subject to the prior preferences and other rights of any
Senior Stock, beginning on and including the Merger Date, the holders of all
outstanding shares of Series B Preferred Stock will be entitled to receive, out
of funds legally available for such purpose, cash dividends at the rate of
$700.00 per annum per share of Series B Preferred Stock, and no more. Such
dividends are cumulative from the Merger Date, and are payable quarterly, in
arrears, on each Dividend Payment Date commencing on the first Dividend Payment
Date after the Merger Date. Each such dividend will be paid to the holders of
record of the Series B Preferred Stock as their names appear on the share
register of the Corporation on the Record Date immediately preceding each
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.

                  (c) If, when due, full cash dividends are not paid or made
available to the holders of all outstanding shares of Series B 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 outstanding
shares of Series B Preferred Stock and any Parity Stock ratably in proportion to
the full amount to which they would

                                       4
<PAGE>

otherwise be respectively entitled, and any remainder not paid to the holders of
outstanding shares of Series B Preferred Stock will cumulate as provided in
Section 2(d).

                  (d) If, on any Dividend Payment Date, the holders of
outstanding shares of Series B Preferred Stock do not receive, when due, the
full dividends provided for in Section 2 (and with respect to the Special
Dividend, on and after the payment date therefor), then such dividends will
cumulate, whether or not the Corporation has earnings or profits, whether or not
there are funds legally available for payment of such dividends, and whether or
not such dividends are declared; provided, however, no additional dividends will
be paid on or with respect to any dividends that cumulate pursuant to this
Section 2(d).

                  (e) So long as any shares of Series B Preferred Stock are
outstanding, the Corporation will not, unless all dividends to which the holders
of outstanding shares of Series B Preferred Stock are entitled for all previous
Dividend Periods (and the Special Dividend, if applicable) 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.

         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 B Preferred Stock will be
entitled to be paid the Liquidation Value of all outstanding shares of Series B
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 B 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, 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 B 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 B 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.

         4. REDEMPTION BY THE CORPORATION. Subject to compliance with this
Section 4, the Series B Preferred Stock is redeemable as follows:

                                       5
<PAGE>

                  (a) If a Termination occurs, the Corporation will redeem all,
and not less than all, of the then outstanding shares of Series B Preferred
Stock at the Redemption Price on the Termination Redemption Date that have not
been converted pursuant to Section 5.

                  (b) If there has not been a Termination and a Notice of
Non-Funding has been issued, the Corporation may, until the Non-Funding
Redemption Date, at its option, redeem the Series B Preferred Stock, in whole or
in part (an "OPTIONAL REDEMPTION"), at any time after the Merger Date and from
time to time after the Merger Date (each an "OPTIONAL REDEMPTION DATE"), at the
Redemption Price; provided, however, the Corporation will redeem all, and not
less than all, of the then outstanding shares of Series B Preferred Stock at the
Redemption Price on the Non-Funding Redemption Date that have not been converted
pursuant to Section 5. With respect to each Optional Redemption, the Corporation
must redeem no fewer than 10,000 shares of Series B Preferred Stock, (or all of
the outstanding shares of Series B Preferred Stock if fewer than 10,000 shares
of Series B Preferred Stock are outstanding on the date set forth in the
redemption notice applicable thereto). If less than all of the then outstanding
shares of the Series B 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.

                  (c) A notice of the redemption will be delivered by or on
behalf of the Corporation to holders of record of the shares of Series B
Preferred Stock to be redeemed not less than five days or more than 20 days
prior to the Redemption Date that will (i) notify such holders of the Redemption
Date, (ii) notify the holders of the number of shares of Series B Preferred
Stock being called for redemption, (iii) state the place or places at which such
shares of Series B Preferred Stock will, upon presentation and surrender of the
certificate or certificates evidencing such shares, be redeemed and the
Redemption Price, and (iv) state the name and address of the Redemption Agent
selected in accordance with Section 2(d).

                  (d) 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 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 delivered in accordance
with Section 4(c), 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 B
Preferred Stock called for redemption. Neither failure to deliver any such
notice to one or more holders of Series B Preferred Stock nor any defect in any
notice will affect the sufficiency of the proceedings for redemption as to other
holders of Series B Preferred Stock.

                  (e) If a notice of redemption is given in accordance with
Section 4(c) and the Corporation is not in default in the payment of the
Redemption Price, then each holder of shares of Series B 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

                                       6
<PAGE>

of the shares of Series B 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 B Preferred Stock (the "FINAL REDEMPTION Date"). From
and after the Redemption Date, the shares of Series B Preferred Stock called for
redemption will no longer be deemed to be outstanding and all rights of the
holders of such shares of Series B Preferred Stock will cease and terminate,
except the right of the holders of such shares of Series B 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 B
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 B 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 B
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. Subject to compliance with the provisions of this
Section 5, the Series B Preferred Stock will be convertible into Class B Common
Stock as follows:

                  (a) Optional Conversion Due to Mergers. If a Notice of
Non-Funding has been issued, each holder of shares of Series B Preferred Stock
shall have a one time right, at such holder's option, to convert immediately
prior to the Merger Date any or all of such holder's shares of Series B
Preferred Stock into fully paid and nonassessable shares of Class B Common Stock
at the Conversion Price in effect on the Conversion Date; provided, however, if
such holder elects to convert any shares of Series B Preferred Stock, such
holder must give to the Corporation written notice of such holder's irrevocable
election to so convert at least three business days prior to the Merger Date.

                  (b) Optional Conversion Due to Termination. Upon a
Termination, each holder of shares of Series B Preferred Stock shall have the
right at such holder's option, at any time and from time to time, to convert any
of such holder's shares of Series B Preferred Stock into fully paid and
nonassessable shares of Class B Common Stock at the Conversion Price in effect
on the Conversion Date; provided, however, (i) if such holder elects to convert
any shares of Series B Preferred Stock, such holder must give to the Corporation
written notice of such holder's irrevocable election to convert and (ii) with
respect to any shares of Series B Preferred Stock called for redemption pursuant
to Section 4(a), this right of conversion will terminate at the close of
business on the day prior to the Termination Redemption Date, or if the
Corporation defaults with respect to the payment of the Redemption Price, at the
close of business on the day prior to the Final Redemption Date.

                  (c) Mandatory Conversion. On the Merger Date and if no Notice
of Non-Funding has been issued, all of the shares of Series B Preferred Stock
will be automatically converted immediately prior to the consummation of the
Mergers into fully paid and

                                       7
<PAGE>

nonassessable shares of Class B Common Stock at the Conversion Price in effect
on the Conversion Date.

                  (d) Conversion Price. Each share of Series B Preferred Stock
will be converted into a number of shares of Class B Common Stock determined by
dividing (i) $10,000.00 by (ii) the Conversion Price in effect on the Conversion
Date. The Conversion Price at which shares of Class B Common Stock will
initially be issuable upon conversion of the shares of Series B Preferred Stock
will be the lesser of (i) $31.635 and (ii) the Average Closing Price for the
five consecutive trading days immediately preceding the trading day prior to the
Merger Date; provided, however, upon a Termination, the Conversion Price will be
$31.635. The Conversion Price will be subject to adjustment as set forth in
Section 5(g). No dividends will accrue or be paid on Series B Preferred Stock
subsequent to conversion.

                  (e) Mechanics of Conversion. The holder of shares of Series B
Preferred Stock to be converted must surrender to the Corporation or the
transfer agent of the Corporation the certificate or certificates for the shares
to be converted; provided, however, that the Corporation will not be obligated
to issue to any such holder the certificate or certificates evidencing the
shares of Class B Common Stock issuable upon such conversion, unless and until
the certificate or certificates evidencing the shares of Series B Preferred
Stock are delivered to the Corporation or the transfer agent of the Corporation.
Conversion will be deemed to have been effected on either (i) the date when the
delivery is made of notice of an election to convert under Section 5(a) and of
the certificate or certificates evidencing the Series B Preferred Stock shares
to be converted or (ii) immediately prior to the consummation of the Mergers
when the Series B Preferred Stock will be converted pursuant to Section 5(c)
(the "CONVERSION DATE"). Subject to the provisions of Section 5(g)(iii), as
promptly as practicable thereafter, the Corporation will issue and deliver to or
upon the written order of such holder a certificate or certificates for the
number of full shares of Class B Common Stock to which such holder is entitled
and a check or cash with respect to any fractional interest in a share of Class
B Common Stock as provided in Section 5(f). Subject to the provisions of Section
5(g)(iii), the person in whose name the certificate or certificates for shares
of Class B Common Stock are to be issued will be deemed to have become a holder
of record of such Class B 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 B Preferred Stock surrendered for conversion, the
Corporation will issue and deliver to 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 B Preferred Stock representing the
unconverted portion of the certificate so surrendered.

                  (f) Fractional Shares. No fractional shares of Class B Common
Stock or scrip will be issued upon conversion of shares of Series B Preferred
Stock. If more than one share of Series B Preferred Stock is surrendered for
conversion at any one time by the same holder, the number of full shares of
Class B Common Stock issuable upon conversion thereof will be computed on the
basis of the aggregate number of shares of Series B Preferred Stock so
surrendered. Instead of issuing any fractional shares of Class B Common Stock
which would otherwise be issuable upon conversion of any shares of Series B
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 B Common Stock. Such fair market value shall be
determined by the Board in its sole discretion.

                                       8
<PAGE>

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

                           (i) Stock Dividends, Subdivisions, Reclassifications,
or Combinations. If the Corporation (i) declares a dividend or makes a
distribution on its Class B Common Stock in shares of its Class B Common Stock,
(ii) subdivides or reclassifies the outstanding shares of Class B Common Stock
into a greater number of shares, or (iii) combines or reclassifies the
outstanding Class B Common Stock into a smaller number of shares, the Conversion
Price in effect at the time of the record date for such dividend or distribution
or the effective date of such subdivision, combination, or reclassification will
be proportionately adjusted so that the holder of any shares of Series B
Preferred Stock surrendered for conversion after such date will be entitled to
receive the number of shares of Class B Common Stock which such holder would
have owned or been entitled to receive had such Series B Preferred Stock been
converted immediately prior to such date. Successive adjustments in the
Conversion Price will be made whenever any of the events mentioned in this
Section 5(g)(i) reoccurs.

                           (ii) Rounding of Calculations; Minimum Adjustment.
All calculations under this Section 5(g) 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 if the sum of such amount and any other amount or
amounts so carried forward equals or exceeds $0.05.

                           (iii) Timing of Issuance of Additional Class B Common
Stock Upon Certain Adjustments. In any case in which the provisions of this
Section 5(g) require that an adjustment be made, such adjustment will become
effective immediately after the establishment of a record date for the event.
The Corporation may defer, until the occurrence of such event, (A) issuing to
the holder of any share of Series B Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Class B
Common Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the shares of Class B 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 B Common Stock
pursuant to Section 5(f); 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.

                  (h) Statement Regarding Adjustments. Whenever the Conversion
Price is adjusted as provided in Section 5(g), the Corporation will file, at the
office of any transfer agent for the Series B Preferred Stock and at the
principal office of the Corporation, a 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
delivered to each holder of shares of Series B Preferred Stock at such holder's
address appearing on the Corporation's records. At the holder's request, each
such statement will be signed by the Corporation's independent public
accountants, if applicable. Where appropriate, such copy may

                                       9
<PAGE>

be given in advance and may be included as part of a notice required to be
delivered under the provisions of Section 5(i).

                  (i) Notice to Holders. If the Corporation proposes to take any
action of the type described in Section 5(g)(i) or (ii), the Corporation will
give notice to each holder of shares of Series B Preferred Stock, in the manner
set forth in Section 5(h), which notice will specify the record date, if any,
with respect to any such action and the approximate date on which such action is
to take place. Such notice will also set forth such facts with respect thereto
as will be reasonably necessary to indicate the effect of such action (to the
extent such effect may be known at the date of such notice) on the Conversion
Price and the number, kind, or class of shares or other securities or property
which will be deliverable upon conversion of shares of Series B Preferred Stock.
In the case of any action which would require the fixing of a record date, such
notice will be given at least ten days prior to the date so fixed, and in case
of all other action, such notice will be given at least 15 days prior to the
taking of such proposed action. Failure to give such notice, or any defect
therein, will not affect the legality or validity of any such action.

                  (j) Costs. The Corporation will pay all documentary, stamp,
transfer, or other transactional taxes attributable to the issuance or delivery
of shares of Class B Common Stock upon conversion of any shares of Series B
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 B Preferred Stock in respect of which
such shares are being issued.

                  (k) Reservation of Shares. The Corporation will reserve at all
times, solely for the purpose of effecting the conversion of the shares of
Series B Preferred Stock, sufficient shares of Class B Common Stock to provide
for the conversion of all outstanding shares of Series B Preferred Stock so long
as any shares of Series B Preferred Stock remain outstanding. Such Class B
Common Stock will be free from statutory preemptive rights and will be issued
from the Corporation's treasury stock (if applicable) or its authorized but
unissued shares of Class B Common Stock, or both.

                  (l) Valid Issuance. All shares of Class B Common Stock which
may be issued upon conversion of the shares of Series B 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 Class B Common
Stock).

         6. VOTING RIGHTS. The holders of shares of Series B Preferred Stock
will not be entitled to vote upon matters that holders of the Class B Common
Stock have the right to vote. However, if the holders of shares of Series B
Preferred Stock have the right to vote pursuant to the IBCA, such holders will
be entitled to one vote for each such share so held.

         7. EXCLUSION OF OTHER RIGHTS. Except as may otherwise be required by
law, the shares of Series B Preferred Stock will not have any preferences or
relative, participating,

                                       10
<PAGE>

optional, or other special rights, other than those specifically set forth in
this Statement of Resolution. The shares of Series B Preferred Stock will have
no subscription rights.

         8. 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.

         9. SEVERABILITY OF PROVISIONS. If any right, preference, or limitation
of the Series B 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.

         10. STATUS OF REACQUIRED SHARES. Shares of Series B Preferred Stock
which have been issued and reacquired in any manner will (upon 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. No additional
shares of Series B Preferred Stock will be issued by the Corporation.

         11. ISSUANCE OF ADDITIONAL SECURITIES. Subject to compliance with
requirements of the IBCA, 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; provided, however, that the
Corporation may not designate and/or issue any shares of Parity Stock or Senior
Stock without the consent of a majority of the shares of Series B Preferred
Stock.

         12. TRANSFER RESTRICTIONS. The holders of the Series B Preferred Stock
shall not be permitted, directly or indirectly, to transfer, sell, assign,
convey, pledge, hypothecate, encumber or otherwise dispose of (collectively,
"TRANSFER") any of the Series B Preferred Stock, except that shares of Series B
Preferred Stock may be Transferred to a Permitted Transferree (as such term is
defined in Article 4, Paragraph 2C.(3)(d)(ii) of the Corporation's Amended and
Restated Articles of Incorporation of the Corporation) or in connection with a
disposition of any of Chevron U.S.A. Inc.'s Shares of the Corporation effected
pursuant to and in accordance with the Shareholder Agreement, dated as of June
14, 1999, among the Corporation, Illinova Corporation, Dynegy Holdings Inc. and
Chevron U.S.A. Inc.

                     REMAINDER OF PAGE INTENTIONALLY BLANK.

                                       11
<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:  November 9, 2001                     DYNEGY INC.

                                                 By: /s/ STEPHEN W. BERGSTROM
                                                    ----------------------------
                                                 Name: Stephen W. Bergstrom
                                                      --------------------------
                                                 Title: President
                                                       -------------------------

                                                 Attested By: /s/ LISA Q. METTS
                                                             -------------------
                                                 Name: Lisa Q. Metts
                                                      --------------------------
                                                 Title: Secretary
                                                       -------------------------<PAGE>
                                                                    EXHIBIT 10.1

                              SHAREHOLDER AGREEMENT

         SHAREHOLDER AGREEMENT, dated as of November 9, 2001, by and among
Dynegy Inc., an Illinois corporation ("DYNEGY"), Enron Corp., an Oregon
corporation ("ENRON"), and Chevron U.S.A. Inc., a Pennsylvania corporation
("SHAREHOLDER").

         WHEREAS, concurrently herewith, Dynegy, Enron and certain other
entities are entering into an Agreement and Plan of Merger (as amended or
supplemented from time to time, the "MERGER AGREEMENT;" capitalized terms used
without definition herein having the meanings ascribed thereto in the Merger
Agreement);

         WHEREAS, as of November 6, 2001, Shareholder owns and/or has the power
to vote, as applicable, the number and type of Shares (as defined in Section 5)
set forth in Schedule I hereto;

         WHEREAS, the Board of Directors of Dynegy has, prior to the execution
of this Agreement, approved and adopted the Merger Agreement, and such approvals
and adoption have not been withdrawn;

         WHEREAS, approval of the Merger Agreement by Dynegy's shareholders is a
condition to the consummation of the Mergers; and

         WHEREAS, as a condition to its entering into the Merger Agreement,
Enron has required that Shareholder agree, and Shareholder has so agreed, to
enter into this Agreement.

         NOW THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein, the parties hereto agree as follows:

         Section 1. Agreement to Vote. (a) Unless the Dynegy Board of Directors
shall have withdrawn its recommendation in favor of the Mergers, Shareholder
hereby agrees to attend, in person or by proxy, the meeting of Dynegy
shareholders at which the matters contemplated by the Merger Agreement or this
Agreement are to be presented to a vote of shareholders of Dynegy, and to vote
(or cause to be voted) all Shares and any other voting securities of Dynegy that
Shareholder, directly or indirectly, owns or has the right to vote or direct the
voting of (including any such securities acquired hereafter but excluding any
Shares or other securities Shareholder has the right to acquire but has not
acquired) (collectively, the "COVERED SHARES") for approval and adoption of the
following: (i) the Merger Agreement and (ii) any related action reasonably
required in furtherance thereof. Unless the Dynegy Board of Directors shall have
withdrawn its recommendation in favor of the Mergers, Shareholder hereby further
agrees that until the Termination Date (as defined in Section 1(b)), it shall,
from time to time, in connection with any consent solicitation relating to the
Merger Agreement, timely execute and deliver (or cause to be timely executed and
delivered) a written consent with respect to any Covered Shares in favor of the
approval and adoption of the Merger Agreement and any action required in
furtherance thereof.

         (b) From and after the date hereof until the Termination Date, unless
the Dynegy Board of Directors shall have withdrawn its recommendation of the
Mergers, Shareholder hereby agrees

<PAGE>

to vote (or cause to be voted) any Covered Shares against any Dynegy Acquisition
Proposal and any related action reasonably required in furtherance thereof, at
any meeting of shareholders of Dynegy (including any adjournments or
postponements thereof) called to consider and vote on any Dynegy Acquisition
Proposal. Shareholder further agrees that, until the Termination Date, in
connection with any consent solicitation relating to a Dynegy Acquisition
Proposal, Shareholder will timely execute and deliver (or cause to be timely
executed and delivered) a written consent with respect to any Covered Shares
against any Dynegy Acquisition Proposal as contemplated by the immediately
preceding sentence. For purposes hereof, the term "TERMINATION DATE" shall mean
the first to occur of (a) the termination of the Merger Agreement and (b) the
date of consummation of the Mergers.

         (c) To the extent inconsistent with the foregoing provisions of this
Section 1 or the other provisions of this Agreement, Shareholder hereby (i)
revokes any and all previous proxies with respect to any Covered Shares, (ii)
waives any provisions of the Shareholder Agreement dated June 14, 1999 among
Dynegy (f/k/a Energy Convergence Holding Company), Illinova Corporation, Dynegy
Holdings Inc. (f/k/a Dynegy Inc.), a Delaware corporation and Shareholder (the
"SHAREHOLDER AGREEMENT") with respect to actions contemplated by the Merger
Agreement, and (iii) waives any provisions of the Stockholder Agreement dated
the date hereof among Dynegy, Stanford, Inc., a Delaware corporation, Enron and
Shareholder (the "STOCKHOLDER AGREEMENT") with respect to actions contemplated
by the Merger Agreement.

         (d) From the date hereof until the Termination Date, Shareholder shall
not (other than through, or resulting from (i) its current ownership in Dynegy,
(ii) the transactions contemplated by the Merger Agreement, (iii) the
transaction contemplated by the Series B Preferred Stock Subscription Agreement,
dated November 9, 2001, by and between ChevronTexaco Corporation and the Class B
Common Stock Subscription Agreement, dated November 9, 2001, between
ChevronTexaco Corporation and Stanford, Inc., or (iv) the proper exercise of the
preemptive rights of stockholder under Article VI of the Shareholders Agreement)
directly or indirectly, acquire, offer or propose to acquire, solicit an offer
to sell, become a "participant" in a "solicitation" of proxies, as those terms
are defined in Rule 14a-11 and 14a-1, respectively, under the Exchange Act, in
respect of any voting securities of Enron or Dynegy, as applicable, that may be
outstanding and entitled to vote relating to any of the foregoing, or otherwise
agree to acquire by purchase or otherwise (or permit any person or entity that
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, Shareholder to undertake any of
such actions) any voting securities of Enron or Dynegy, as applicable; provided
that nothing hereunder shall prevent Shareholder from making a Qualified Offer
for Dynegy voting securities (as defined in the Shareholder Agreement) in the
circumstances contemplated by Section 3.1(b) of the Shareholder Agreement.

         (e) Nothing herein contained shall (i) restrict, limit or prohibit any
individuals who may represent Shareholder on Dynegy's Board of Directors from
exercising (in his or her capacity as a director or officer) his or her
fiduciary duties to the shareholders of Dynegy under applicable law or (ii)
require any individual, in his or her capacity as an officer of Dynegy, to take
any action in contravention of, or omit to take any action pursuant to, or
otherwise take or refrain from taking any actions that are inconsistent with,
instructions or directions of the Board of Directors of

                                       2
<PAGE>

Dynegy undertaken in the exercise of its fiduciary duties, provided that nothing
in this Section 1(e) shall relieve or be deemed to relieve Shareholder from its
obligations under Sections 1 or 2.

         Section 2. Disposition of Shares. From and after the date hereof until
the Termination Date, Shareholder hereby agrees that it will not directly or
indirectly sell, pledge, encumber, grant any proxy or enter into any voting or
similar agreement with respect to, transfer or otherwise dispose of
(collectively, "TRANSFER"), or agree or contract to Transfer, any Covered Shares
(or any interest therein) with respect to which Shareholder, directly or
indirectly, controls the right to Transfer; provided, however, that Shareholder
may Transfer Covered Shares to an Affiliate (as defined below) of Shareholder
provided that such Affiliate agrees to be subject to the terms and conditions
set forth in this Agreement. For purposes of this Agreement, "AFFILIATE" shall
mean any corporation, partnership, limited liability company or other entity
(each a "PERSON") that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
another Person, and includes any Person acting in concert with another Person.

         Section 3. Other Covenants and Agreements. Each party shall execute and
deliver such additional instruments and other documents and shall take such
further actions as may be reasonably necessary or appropriate to effectuate,
carry out and comply with all of their obligations under this Agreement. Without
limiting the generality of the foregoing, no party shall enter into any
agreement or arrangement (or alter, amend or terminate any existing agreement or
arrangement) or take any other action (or fail to take any other action) if such
action (or failure) would materially impair the ability of any party to
effectuate, carry out or comply with all the terms of this Agreement. Enron
hereby agrees to cooperate with Shareholder in connection with any filings
required to be made by Shareholder in connection with the Mergers and the
transactions contemplated thereby.

         Section 4. Representations and Warranties of Enron. Enron represents
and warrants to Shareholder as follows: (a) each of this Agreement and the
Merger Agreement has been approved by the Board of Directors of Enron,
representing all necessary corporate action on the part of Enron, except for the
approval of Enron's shareholders contemplated by the Merger Agreement, (b) each
of this Agreement and the Merger Agreement has been duly executed and delivered
by a duly authorized officer of Enron, and (c) each of this Agreement and the
Merger Agreement constitutes a valid and binding agreement of Enron, enforceable
against Enron, except as such enforceability may be subject to the effects of
bankruptcy, insolvency, reorganization, moratorium, or other laws relating to or
affecting the rights of creditors, and general principles of equity.

         Section 5. Representations and Warranties of Shareholder. Shareholder
represents and warrants to Enron as follows: (a) Shareholder has the corporate
power and authority to execute and deliver this Agreement, (b) this Agreement
has been duly executed and delivered by Shareholder, (c) this Agreement
constitutes the valid and binding agreement of Shareholder, except as such
enforceability may be subject to the effects of bankruptcy, insolvency,
reorganization, moratorium, or other laws relating to or affecting the rights of
creditors, and general principles of equity, (d) Shareholder has the full power
and authority to vote, or execute a

                                       3
<PAGE>

consent with respect to, all Covered Shares as contemplated hereby, (e) the
securities of Dynegy listed next to the name of Shareholder on Schedule I hereto
are the only securities of Dynegy owned by Shareholder and over which
Shareholder has the power to vote (or direct the voting) (collectively, the
"SHARES"), (f) except as provided in the Shareholder Agreement and the
Stockholder Agreement, Shareholder is the lawful owner of the Shares listed on
Schedule I as owned by it, free and clear of all liens, charges, encumbrances
and commitments of every kind, other than this Agreement, and has the power to
vote (including by an irrevocable power to vote or execution of a consent) such
Shares without any actions on the part of any other party, and (g) the execution
and delivery by Shareholder of this Agreement does not violate or breach any
law, contract, instrument, agreement or arrangement to which Shareholder is a
party or by which Shareholder is bound, except to the extent such violation or
breach does not prevent or delay performance of such Shareholder's obligations
hereunder.

         Section 6. Effectiveness. It is a condition precedent to the
effectiveness of this Agreement that the Merger Agreement shall have been duly
executed and delivered by the parties thereto. Any amendment or change to the
Merger Agreement that (i) changes the Merger Ratio, (ii) adds any cash or other
consideration to be paid to holders of Enron Common Stock, (iii) changes the
termination date of the Merger Agreement, (iv) allows the Closing Date to occur
on or prior to a date that is at least 6 months after the date Shareholder
purchases the Series B Convertible Preferred Stock of Dynegy to be issued under
the Dynegy Subscription Agreement, or (v) materially adversely affects the
Shareholder or its interests in Dynegy or Stanford, will nullify the
effectiveness of this Agreement and this Agreement shall terminate immediately.

         Section 7. Miscellaneous.

         (a) Notices, Etc. All notices, requests, demands or other
communications required by or otherwise with respect to this Agreement shall be
in writing and shall be deemed to have been duly given to any party when
delivered personally (by courier service or otherwise), when delivered by
telecopy and confirmed by return telecopy, or three days after being mailed by
courier service that guarantees overnight delivery, in each case to the
applicable addresses set forth below:

         If to Enron:

                  Enron Corp.
                  1300 Smith Street
                  Houston, Texas 77002
                  Attention: General Counsel
                  Telecopy: (713) 853-6161

         with copy to:

                  Vinson & Elkins, L.L.P.
                  1001 Fannin, Suite 2300
                  Houston, Texas 77002-6760
                  Attention:    William E. Joor III, Esq.
                                Scott N. Wulfe, Esq.
                  Telecopy: (713) 758-2346

                                       4
<PAGE>

         If to the Shareholder:

                  Chevron U.S.A. Inc.
                  1301 McKinney St.
                  Houston, TX 77010
                  Attention: President of Chevron U.S.A. Inc.
                  Telecopy: (713) 754-5554
                  Fax: (713) 754-5777

         with copies to:

                  Harvey D. Hinman, Esq.
                  Vice President and General Counsel
                  ChevronTexaco Corporation
                  575 Market Street
                  San Francisco, CA 94105
                  Tel: (415) 894-3232
                  Fax: (415) 894-6017

         and:

                  Terry Michael Kee, Esq. and
                  Rodney R. Peck, Esq.
                  Pillsbury Winthrop LLP
                  50 Fremont Street
                  Post Office Box 7880
                  San Francisco, CA 94120-7880
                  Tel: (415) 983-1000
                  Fax: (415) 983-1200

         and:

                  Dynegy Inc.
                  1000 Louisiana Street
                  Suite 6700
                  Houston, TX 77002
                  Attention:  Kenneth Randolph
                  Tel: (713) 507-6400
                  Fax: (713) 507-6806

                                       5
<PAGE>

         and:

                  Baker Botts L.L.P.
                  One Shell Plaza
                  910 Louisiana
                  Houston, Texas 77002-4995
                  Attention:    R. Joel Swanson, Esq.
                                J. David Kirkland, Jr., Esq.
                  Telecopy: (713) 229-1522

         and:

                  Akin, Gump, Strauss, Hauer & Feld, L.L.P.
                  711 Louisiana Street, 19th Floor
                  Houston, TX 77002
                  Attention: Robert Allen
                  Telecopy: (713) 236-0822

or to such other address as such party shall have designated by notice so given
to each other party.

         (b) Amendments, Waivers, Etc. This Agreement may not be amended,
changed, supplemented, waived or otherwise modified or terminated except by an
instrument in writing signed by Enron, Dynegy and Shareholder.

         (c) Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the parties and their
respective successors and assigns, including without limitation any corporate
successor by merger or otherwise, or any party succeeding to the ownership of
(or power to vote) any Covered Shares.

         (d) Entire Agreement. This Agreement (together with the Merger
Agreement) embodies the entire agreement and understanding between the parties
relating to the subject matter hereof and supersedes all prior agreements and
understandings relating to such subject matter. There are no representations,
warranties or covenants by the parties hereto relating to such subject matter
other than those expressly set forth in this Agreement and the Merger Agreement.

         (e) Severability. If any term of this Agreement or the application
thereof to any party or circumstance shall be held invalid or unenforceable to
any extent, the remainder of this Agreement and the application of such term to
the other party or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by applicable law, provided that in
such event the parties shall negotiate in good faith in an attempt to agree to
another provision (in lieu of the term or application held to be invalid or
unenforceable) that will be valid and enforceable and will carry out the
parties' intentions hereunder.

         (f) Specific Performance. The parties acknowledge that money damages
are not an adequate remedy for violations of this Agreement and that any party
may, in its sole discretion,

                                       6
<PAGE>

apply to a court of competent jurisdiction for specific performance or
injunctive or such other relief as such court may deem just and proper in order
to enforce this Agreement or prevent any violation hereof and, to the extent
permitted by applicable law, each party waives any objection to the imposition
of such relief.

         (g) Remedies Cumulative. All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or in equity
shall be cumulative and not alternative, and the exercise or beginning of the
exercise of any thereof by any party shall not preclude the simultaneous or
later exercise of any other such right, power or remedy by such party.

         (h) No Waiver. The failure of any party hereto to exercise any right,
power or remedy provided under this Agreement or otherwise available in respect
hereof at law or in equity, or to insist upon compliance by any other party
hereto with its obligations hereunder, and any custom or practice of the parties
at variance with the terms hereof, shall not constitute a waiver by such party
of its right to exercise any such or other right, power or remedy or to demand
such compliance.

         (i) Third Party Beneficiaries. This Agreement is not intended to be for
the benefit of and shall not be enforceable by any person or entity who or which
is not a party hereto.

         (j) Waiver of Jury Trial. Each party hereto hereby waives any right to
a trial by jury in connection with any action, suit, or proceeding, which arises
in connection with this Agreement.

         (k) Governing Law. This Agreement and all disputes hereunder shall be
governed by and construed and enforced in accordance with the laws of the State
of Illinois to the fullest extent possible.

         (l) Name, Captions, Gender. The name assigned this Agreement and the
section captions used herein are for convenience of reference only and shall not
affect the interpretation or construction hereof. Whenever the context may
require, any pronoun used herein shall include the corresponding masculine,
feminine or neuter forms.

         (m) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one instrument. Each counterpart may consist of a
number of copies each signed by less than all, but together signed by all, the
parties hereto.

         (n) Expenses. Enron, Dynegy, and Shareholder each shall bear its own
expenses incurred in connection with this Agreement and the transactions
contemplated hereby.

                REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.

                                       7
<PAGE>

         IN WITNESS WHEREOF, the parties have duly executed this Shareholder
Agreement as of the date first above written.

                                               DYNEGY INC.

                                               By:    /s/ HUGH A. TARPLEY
                                                   -----------------------------
                                               Name:  Hugh A. Tarpley
                                               Title: Executive Vice President

                                               ENRON CORP.

                                               By:    /s/ RAYMOND M. BOWEN, JR.
                                                   -----------------------------
                                               Name:  Raymond M. Bowen, Jr.
                                               Title: Executive Vice President -
                                                      Finance and Treasurer

                                               CHEVRON U.S.A. INC.

                                               By:    /s/ RICHARD P. COHAGAN
                                                   -----------------------------
                                               Name:  Richard P. Cohagan
                                               Title: Attorney-in-Fact

                                       8
<PAGE>

                                   SCHEDULE I

                                     SHARES

DYNEGY CLASS B COMMON STOCK         86,599,914

                                       9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00031-of-00352.parquet"}]]