As filed with the Securities and Exchange Commission on March 9, 2000.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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DYNEGY INC.
(Exact name of Registrant as specified in its charter)
Illinois 74-2928353
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
1000 Louisiana Street, Suite 5800 77002
Houston, Texas (Zip Code)
(Address of Principal Executive Offices)
Kenneth E. Randolph
1000 Louisiana Street, Suite 5800
Houston, Texas 77002
(713) 507-6400
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
----------------
Copy to:
Julien R. Smythe
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1900 Pennzoil Place - South Tower
711 Louisiana
Houston, Texas 77002
(713) 220-5800
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Approximate date of commencement of proposed sale to the public:
From time to time or at one time after the effective date of this registration
statement as determined by the selling stockholder.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. |X|
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |_|
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. |_|
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. |_|
----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===========================================================================================================
Title Of Shares Amount To Be Proposed Maximum Proposed Maximum Amount of
To Be Registered Registered Offering Price Aggregate Registration
Per Share(1) Offering Price(1) Fee
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock 5,000,000 $48.75 $243,750,000 $64,350
===========================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) under the Securities Act of 1933, based on the
average high and low sales prices of the Class A common stock of Dynegy
Inc. on March 2, 2000, as reported by the New York Stock Exchange.
<PAGE>
Explanatory Note
On February 1, 2000, Dynegy Holdings Inc., a Delaware corporation formerly
known as Dynegy Inc. ("Old Dynegy"), and Illinova Corporation, an Illinois
corporation ("Illinova"), merged with subsidiaries of Dynegy Inc., an Illinois
corporation and the registrant hereunder, formerly known as Energy Convergence
Holding Company ("Dynegy"). As a result of the merger, Old Dynegy and Illinova
are subsidiaries of Dynegy. The merger is more fully described in the Joint
Proxy Statement Prospectus contained within Dynegy's Form S-4 Registration
Statement (File Number 333-84965) filed with the Securities and Exchange
Commission on September 7, 1999. The business of Dynegy consists of the
businesses previously conducted by Old Dynegy, Illinova and their respective
subsidiaries. In connection with the merger, Dynegy assumed all the obligations
of Illinova under Illinova Investment Plus. Immediately subsequent to the
merger, Dynegy amended and restated Illinova Investment Plus and renamed it
Dynegy Investment Plus. This registration statement registers the issuance of
shares by Dynegy under Dynegy Investment Plus.
<PAGE>
[DYNEGY INC. LOGO]
5,000,000 SHARES OF CLASS A COMMON STOCK
------------------------------------------------
March 9, 2000
Dynegy Investment Plus offers you a variety of convenient, low-cost services to
make it easier for you to invest in Class A common stock of Dynegy Inc. The plan
has various features designed for long-term investors who wish to invest and
build their share ownership over time. The plan offers a convenient and
economical means to own shares. Unlike an individual stock brokerage account,
the timing of purchases and sales is subject to the provisions of the plan.
Please read carefully the terms and conditions of the plan.
In addition, the plan will provide Dynegy with a means of raising additional
capital for general corporate purposes through the sale of Class A common stock.
Whether significant additional capital is raised may be affected, in part, by
Dynegy's decision to waive the limitations applicable to optional cash purchases
and, in part, by Dynegy's decision to sell newly issued shares of Class A common
stock to fulfill the requirements of the plan.
You can participate in the plan if you are a registered holder of Dynegy Class A
common stock or a holder of certain equity securities of Illinois Power Company.
If you do not own Class A common stock, you can become a participant by making
your initial purchase directly through the plan. The plan offers you the
opportunity to reinvest dividends and provides an alternative to traditional
methods of buying, holding and selling Class A common stock.
This prospectus contains a more detailed description of the features of the plan
as offered by Dynegy. If you were not a participant in Illinova Investment Plus
and would like to participate in Dynegy Investment Plus, complete the enclosed
enrollment form and mail it to the plan administrator in the reply envelope
provided for your convenience. If you were a participant in Illinova Investment
Plus, you are automatically a participant in Dynegy Investment Plus without
submitting a new enrollment form. If you do not wish to continue participation
in Dynegy Investment Plus, you should submit a Sale/Withdrawal Request Form to
the plan administrator
You should read this prospectus carefully so you know how the plan works and
then retain it for future reference.
------------------------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
<PAGE>
TABLE OF CONTENTS
Purpose....................................................................... 1
Key Features of Plan.......................................................... 2
Terms and Conditions of the Plan.............................................. 3
Where You Can Find More Information About Dynegy..............................14
The Company...................................................................16
Use of Proceeds...............................................................16
Plan of Distribution..........................................................16
Legal Matters.................................................................16
Experts.......................................................................16
<PAGE>
DYNEGY INVESTMENT PLUS
Purpose
The purpose of Dynegy Investment Plus is to provide you with a convenient
way to purchase shares of Dynegy Class A common stock and to reinvest all or a
portion of the cash dividends paid on eligible securities in additional shares
of Class A common stock. The plan replaces and assumes, by amendment and
restatement, Illinova Investment Plus. All accounts and all elections, notices,
instructions and authorizations under Illinova Investment Plus automatically
will continue under the plan, and participants in Illinova Investment Plus will
continue as participants in the plan. No action by current participants in
Illinova Investment Plus is required to continue participation in the plan. In
connection with the assumption of Illinova Investment Plus, Dynegy has made some
changes to the plan, including, but not limited to, the following:
o The maximum amount allowed for initial and optional investments has
been changed from $60,000 per year to $10,000 per month;
o Under certain circumstances, you may now make initial and optional
purchases in excess of the monthly maximum;
o The minimum amount allowed for an optional cash investment has been
changed from $25 to $100, except that active employees of New Dynegy
or one of its subsidiaries may still make optional cash investments
in even multiples of $1 but not less than $5 per pay period; and
o The plan administrator is now Chase Manhattan Bank.
You should carefully read this prospectus to find out more about Dynegy
Investment Plus. If you wish to continue your participation in Dynegy Investment
Plus you do not need to do anything at this time. If you are a participant in
Illinova Investment Plus and, after reviewing this prospectus, you do not wish
to continue participation in the plan, you should submit a Sale/Withdrawal
Request Form to the plan administrator, Chase Manhattan Bank, c/o ChaseMellon
Shareholder Services, L.L.C., P. O. Box 3338, South Hackensack, New Jersey
07606-1938.
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<PAGE>
Key Features of the Plan
Anyone can participate in the plan
Interested investors who are not employees of Dynegy or its subsidiaries
or record holders of eligible securities may become participants by making an
initial investment of at least $250 to purchase Class A common stock through the
plan. Employees of Dynegy or its subsidiaries who are not record holders of
eligible securities may become participants by making an initial investment of
at least $100.
How to join the plan
Record holders of eligible securities may become participants by electing
to have dividend payments on all or a portion of their eligible securities
reinvested in Class A common stock, or by depositing certificates representing
Class A common stock into the plan for safekeeping.
Not all of your dividends have to be reinvested
You may direct that all or a portion of your dividend payments on eligible
securities be reinvested in additional shares of Class A common stock. Dividend
payments not reinvested will be paid to you in the usual manner.
Optional cash purchases
In addition to having your dividend payments on eligible securities
reinvested in Class A common stock, you may invest additional funds in Class A
common stock through optional cash investments of at least $100 for any single
investment. Dynegy reserves the right to refuse any optional cash investment
which causes an investor's total investment (initial cash investments plus
optional cash investments plus dividends reinvested) to exceed $10,000 in any
calendar month. In certain instances, however, Dynegy may permit you to make
greater optional cash purchases. Optional cash investments may be made
occasionally or at regular intervals.
Your funds will be fully invested
Funds paid to the plan are fully invested in Class A common stock through
the purchase of whole shares and fractions of shares.
Share safekeeping
The plan offers a "safekeeping" service whereby you may deposit, free of
any service charges, certificates representing Class A common stock into the
plan and have your ownership of such Class A common stock maintained on the
administrator's records as part of your account. You can select this service
without participating in any other feature of the plan.
You may sell, withdraw, or transfer your shares at any time
You may sell or withdraw shares of Class A common stock credited to your
account, including those shares of Class A common stock deposited into the plan
for safekeeping, through the plan. A statement will be mailed to you for each
month in which a transaction takes place. Additionally you may transfer or make
gifts to others of Class A common stock by contacting the administrator.
Plan Administrator
Chase Manhattan Bank is the administrator. ChaseMellon Shareholder
Services, L.L.C., a registered transfer agent, will provide certain
administrative support to the administrator. You may contact the administrator
by calling 1 (888) 921-5563 or by writing to the administrator at the following
address:
Chase Manhattan Bank
c/o ChaseMellon Shareholder Services, L.L.C.
P. O. Box 3338
South Hackensack, New Jersey 07606-1938.
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<PAGE>
Terms and Conditions of the Plan
Can I participate in the plan?
Any person or entity, whether or not a record holder of Class A common
stock, is eligible to participate in the plan, provided that
o such person or entity fulfills the prerequisites for participation
described below under "How do I get started?"; and
o in the case of citizens or residents of a country other than the
United States, its territories or possessions, such persons can
provide the administrator with satisfactory evidence that
participation would not violate local laws applicable to Dynegy, the
plan or the participant.
To the extent required by applicable law in certain jurisdictions, some
persons may be required to be a current record holder of Class A common stock to
participate.
How do I get started?
You may join the plan at any time after being furnished with a copy of
this prospectus by completing and signing an enrollment form distributed with
this prospectus in the manner set forth below. Requests for copies of enrollment
forms, as well as copies of other plan forms and this prospectus, should be made
in writing or by telephone to the administrator. If you are a record holder of
eligible securities, you should be sure to sign your name on the enrollment form
exactly as it appears on your certificates.
To become a participant in the plan, you must complete and sign an
enrollment form and return it to the administrator and
o make an initial cash investment;
o elect to have cash dividends paid on eligible securities of which
you are the record holder invested in Class A common stock; or
o deposit certificates representing shares of Class A common stock
into the plan for safekeeping.
If you are a holder of Class A common stock and are currently
participating in Illinova Investment Plus, you will automatically become a
participant in the plan without sending in a new enrollment form. However, if
you wish to change your participation in any way (e.g., from partial to full
reinvestment), you must submit a new enrollment form.
If you are a current participant in Illinova Investment Plus and want to
end your participation, you may do so at any time by submitting a
Sale/Withdrawal Request Form to the administrator.
Enrollment forms will be processed as promptly as practicable. You will
become a participant after the administrator receives and approves a properly
completed enrollment form.
What securities are eligible?
The following equity securities of Dynegy and Illinois Power Company,
Dynegy's indirect wholly owned subsidiary, are eligible to participate in the
plan:
o Dynegy Class A common stock (including shares of Class A common
stock purchased through the plan);
o Illinois Power Serial Preferred Stock, $50 par value:
4.08% Series Preferred Stock;
4.26% Series Preferred Stock;
4.70% Series Preferred Stock;
4.42% Series Preferred Stock;
4.20% Series Preferred Stock; and
7.75% Series Preferred Stock.
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<PAGE>
In addition, Dynegy may from time to time designate, in its sole
discretion, other equity or debt securities of Dynegy and its subsidiaries as
eligible securities by notifying the administrator in writing of such
designation.
How do I make an initial cash investment and additional optional cash purchases?
If you are not an employee of Dynegy or its subsidiaries or a record
holder of eligible securities, you must include an initial cash investment of at
least $250 with your completed enrollment form. Employees of Dynegy or its
subsidiaries who are not record holders of eligible securities must include an
initial cash investment of at least $100 with their completed enrollment form.
Such investments may be made
o by personal check or money order payable to Dynegy Investment Plus;
o by direct debit; or
o for active employees of Dynegy or its subsidiaries, by automatic
payroll deduction (in which case submission of an enrollment form is
not required).
Do not send cash. You may make additional optional cash investments by
delivering to the administrator a completed enrollment form. Optional cash
investments must be at least $100 for any single investment, except that active
employees of Dynegy or its subsidiaries may make optional cash investments
through payroll deductions in even multiples of $1 but not less than $5 per
period. You can make such an investment
o by personal check or money order payable to Dynegy Investment Plus;
o by direct debit; or
o for active employees of Dynegy or its subsidiaries, by automatic
payroll deduction (in which case submission of an enrollment form is
not required).
Do not send cash. Dynegy reserves the right to refuse any optional cash
investment which causes an investor's total investment (initial cash investments
plus optional cash investments plus dividends reinvested) to exceed $10,000 in
any calendar month. In certain instances, however, Dynegy may permit you to make
greater initial investments, as further described in this prospectus. There is
no obligation to make any optional cash investment and the amount and timing of
such investments may vary from time to time.
Employees participating in the plan may arrange for initial and optional
cash investments under the plan to be made through payroll deductions. A payroll
deduction for optional cash investments may be in even multiples of $1, but not
less than $5 per pay period. To initiate payroll deduction, an employee must
complete, sign and return to the administrator a payroll deduction authorization
form.
After the administrator has received the payroll deduction authorization
form and the authority for the payroll deduction has been noted on Dynegy's
payroll records, Dynegy will withhold each month the amount authorized. The
withholding will be made each month from the paycheck for the pay period ending
in that month. The amount withheld will be forwarded to the administrator, and
the administrator will invest the funds in Class A common stock beginning on the
first investment date following the administrator's receipt of the funds. The
amount of payroll deduction can be revised, changed or terminated at any time by
written notice to the administrator. Commencement, revision or termination of
payroll deductions will become effective as soon as practicable after the
administrator receives an employee's request.
When are initial and optional cash investments invested?
An investment date will occur twice every month, as further described in
this prospectus. Initial and optional cash investments will be invested in Class
A common stock beginning on the first investment date following the
administrators receipt of the funds; but the administrator must receive such
investments no later than one business day prior to an investment date to be
invested beginning on that investment date. Otherwise, the administrator may
hold the investment and invest the funds beginning on the next investment date.
No interest will be paid on funds held by the administrator pending investment.
At your written request, if the administrator receives such request no
later than one business day prior to the applicable investment date, initial and
optional cash investments not already invested in Class A common stock will be
returned to you. However, the administrator will not refund a check or money
order until the administrator
4
<PAGE>
has actually collected the funds from such instruments. Accordingly, such
refunds may be significantly delayed. If the administrator does not receive the
written request to stop investment at least one business day prior to an
investment date, initial and optional cash investments the administrator then
holds will be invested in Class A common stock on such investment date.
All initial and optional cash investments are subject to collection by the
administrator of full face value in U.S. funds. The method of delivery of any
initial and optional cash investment is at your election and risk, and will be
deemed received when the administrator actually receives them.
Cash dividends paid on shares of Class A common stock credited to your
account that were purchased through the plan with initial and optional cash
investments will be reinvested in shares of Class A common stock in accordance
with your reinvestment election designated on a completed enrollment form.
How do I make optional cash purchases over the maximum monthly amount?
Optional cash purchases in excess of $10,000 per month may be made only
pursuant to a request for waiver accepted by Dynegy. If you wish to make an
optional cash purchase in excess of $10,000 for any month, you must obtain
Dynegy's prior written approval and a copy of such written approval must
accompany any such optional cash purchase. You must contact the administrator to
determine if Dynegy is accepting requests for waiver of the maximum monthly
investment, and to obtain a form for requesting a waiver. You then must submit a
request for waiver to the administrator on the form provided by the
administrator. Dynegy has sole discretion to grant any approval for optional
cash purchases in excess of the allowable maximum amount. The administrator will
notify you if Dynegy has accepted your request for waiver. In deciding whether
to approve a request for waiver, Dynegy will consider relevant factors including
o whether the plan is then acquiring shares newly issued directly from
Dynegy or acquiring shares in the open market or in privately
negotiated transactions from third parties;
o Dynegy's need for additional funds;
o the attractiveness of obtaining such additional funds through the
sale of Class A common stock as compared to other sources of funds;
o the purchase price likely to apply to any sale of Class A common
stock;
o the shareholder submitting the request;
o the extent and nature of such shareholder's prior participation in
the plan;
o the number of shares of Class A common stock held of record by such
shareholder; and
o the aggregate number of optional cash purchases in excess of $10,000
for which requests for waiver have been submitted by all
shareholders.
If requests for waiver are submitted for any month for an aggregate amount
in excess of the amount Dynegy is then willing to accept, Dynegy may honor such
requests in order of receipt, pro rata or by any other method that Dynegy
determines to be appropriate. With regard to optional cash purchases made
pursuant to a request for waiver, the plan does not provide for a predetermined
maximum limit on the amount that a shareholder may invest or on the number of
shares that may be purchased.
What additional provisions apply to optional cash purchases made pursuant to a
request for waiver?
Optional cash purchases made pursuant to a request for waiver will be
applied to the purchase of shares of Class A common stock as soon as practicable
on or after the following investment date. Optional cash purchases made pursuant
to a request for waiver will be acquired at a price equal to the average of the
daily high and low sales prices computed up to seven decimal places, if
necessary, of the Class A common stock as reported on the New York Stock
Exchange for the five trading days immediately preceding the applicable
investment date. The period encompassing the five trading days immediately
preceding the next following investment date constitutes the relevant "pricing
period". The administrator will apply all optional cash purchases made pursuant
to a request for a waiver for which good funds are received on or before the
first business day before the pricing period to the purchase of shares of Class
A common stock as soon as practicable on or after the next following investment
date.
5
<PAGE>
Dynegy may establish for a pricing period a minimum threshold price
applicable to optional cash purchases made pursuant to a request for waiver. At
least three business days prior to the first day of the applicable pricing
period, Dynegy will determine whether to establish a threshold price, and if the
threshold price is established, its amount, and will so notify the
administrator. Dynegy will make the determination in its sole discretion after a
review of current market conditions, the level of participation in the plan, and
current and projected capital needs.
If a threshold price is established for any pricing period, it will be
stated as a dollar amount that the average of the high and low sale prices of
the Class A common stock on the New York Stock Exchange composite tape listing
for each trading day of the relevant pricing period must equal or exceed. If the
threshold price is not satisfied for a trading day in the pricing period, then
that trading day will be excluded from the pricing period and all trading prices
for that day will be excluded from the determination of the purchase price. A
day will also be excluded if no trades of Class A common stock are made on the
New York Stock Exchange for that day. For example, if the threshold price is not
satisfied for one of the five trading days in a pricing period, then the
purchase price will be based upon the remaining four trading days in which the
threshold price was satisfied.
In addition, a portion of each optional cash purchase will be returned for
each trading day of a pricing period in which the threshold price is not
satisfied or for each day in which no trades of Class A common stock are
reported on the New York Stock Exchange. The returned amount will equal
one-fifth of the total amount of such optional cash purchase (not just the
amount exceeding $10,000) for each trading day that the threshold price is not
satisfied. For example, if the threshold price is not satisfied or no such sales
are reported for one of the five trading days in a pricing period, 1/5 (or 20%)
of such optional cash purchase will be returned without interest.
The establishment of the threshold price and the possible return of a
portion of the investment apply only to optional cash purchases made pursuant to
a request for waiver. Setting a threshold price for a pricing period shall not
affect the setting of a threshold price for any subsequent pricing period. For
any particular month, Dynegy may waive its right to set a threshold price.
Neither Dynegy nor the administrator shall be required to provide any written
notice as to the threshold price for any pricing period. You may ascertain
whether a threshold price has been set or waived for any given pricing period by
calling the administrator at (212) 273-8200.
Each investment date, at the same time the threshold price is determined,
Dynegy may establish discounts from the market price applicable to optional cash
purchases made pursuant to a request for waiver. Such waiver discount may be
between 0% and 3% of the purchase price and may vary each investment date. The
waiver discount will be established at Dynegy's sole discretion after a review
of current market conditions, the level of participation in the plan, discounts
requested by investors, the attractiveness of obtaining such additional funds
through the sale of Class A common stock as compared to other sources of funds
and current and projected capital needs. You may determine whether Dynegy will
accept your waiver discount request by calling the administrator at (212)
273-8200. Setting a waiver discount for a particular investment date shall not
affect the setting of a waiver discount for any subsequent investment date. The
waiver discount will apply only to optional cash purchases of more than $10,000.
The waiver discount will apply to the entire optional cash purchase and not just
the portion of the optional cash purchase that exceeds $10,000. Dynegy reserves
the right to establish in the future a discount from the market price for
optional cash purchases of $10,000 or less.
How do I reinvest my cash dividends?
You may elect to reinvest all or a portion of the cash dividends paid on
all or a portion of the eligible securities registered in your name and in the
plan, i.e. Class A common stock that you purchased through the plan which has
been credited to your account and Class A common stock deposited into the plan
for safekeeping, by designating such election on your enrollment form. If you do
not make an election, cash dividends paid on shares of Class A common stock
credited to your account that were purchased through the plan or deposited into
the plan for safekeeping will be paid in cash. If you elect partial reinvestment
of cash dividend payments on any of your eligible securities, you must designate
the specific security for which such partial reinvestment is desired and the
whole dollar amount or whole number of shares for which reinvestment is desired.
Once you elect reinvestment, cash dividend payments made on the designated
eligible securities will be reinvested in shares of Class A common stock. The
amount so reinvested will be reduced by any amount which is required to be
withheld under any applicable tax or other statutes. If you have specified
partial reinvestment, that portion of cash dividend payments not designated for
reinvestment will be sent to you by check in the usual manner.
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<PAGE>
How do I change plan options?
You may change plan options by delivering written instructions or a new
enrollment form to the administrator. Such changes include:
o changing your reinvestment level (i.e., full, partial or none) of
cash dividend payments on eligible securities; and
o changing the designation of eligible securities on which cash
dividend payments are subject to reinvestment.
To be effective with respect to a particular cash dividend payment, the
administrator must receive any such instructions on or before the record date
relating to such cash dividend payment. If the administrator does not receive
such instructions on or before the record date, the instructions will not become
effective until after such dividend is paid. The shares of Class A common stock
purchased with such funds will be credited to your account.
How often do reinvestments occur?
An investment date under the plan, i.e. when reinvestments will occur,
will be:
o in any month in which a cash dividend on eligible securities is
paid, such dividend payment date and the 15th day of the month or,
if either day is not a business day, the business day immediately
following that day; and
o in any month in which no dividend payment occurs, the 1st and 15th
day of the month or, if either day is not a business day, the
business day immediately following that day.
Where do the shares purchased come from?
Shares of Class A common stock purchased for you under the plan will be
either newly issued shares or shares held in the treasury of Dynegy or, at
Dynegy's option, shares of Class A common stock purchased in the open market or
in privately negotiated transactions by an independent agent. Dynegy will not
change the source of shares more than once in any three-month period. Such a
change must be accompanied by a determination by the Dynegy board of directors
or the Chief Financial Officer of Dynegy that there is a valid reason for the
change.
If Dynegy elects to use newly issued or treasury shares, the administrator
will forward to Dynegy all dividends paid on your shares and any initial and
optional cash investments received from you since the last investment date.
Purchases of shares of Class A common stock from Dynegy, whether newly issued or
treasury shares, will be made on the relevant investment date at the average of
the high and low sales prices of the Class A common stock reported on New York
Stock Exchange composite tape as published in The Wall Street Journal on the
investment date on which such shares are purchased. If no trading occurs in the
Class A common stock on the investment date, the purchase price will be the
average of the high and low sales prices on the next preceding trading day. Such
shares will be issued or sold to, and registered in the name of, the
administrator or its nominee as your custodian. Dynegy will only sell or issue
whole shares to the administrator.
If Dynegy elects to use shares purchased on the open market, the
administrator will forward to an independent agent all dividends paid on your
shares and any initial and optional cash investments received from you since the
last investment date. The independent agent may be chosen be either Dynegy or
the administrator. Purchases in the open market or in privately negotiated
transactions may begin on the relevant investment date and should be completed
no more than 15 days after that investment date, unless completion at a later
date is necessary or advisable under applicable law, including any federal
securities law. Funds not invested in Class A common stock within 30 days of
receipt will be promptly returned to you. The price of any shares of Class A
common stock purchased or sold in the open market or in privately negotiated
transactions for you will be the weighted average price per share of the
aggregate number of shares purchased or sold, as the case may be, with respect
to the relevant investment date. Such shares will be issued or sold to, and
registered in the name of, the administrator or its nominee as your custodian.
The number of shares (including any fraction of a share rounded to four
decimal places) of Class A common stock credited to your account for a
particular investment date will be determined by dividing the total amount of
cash dividends, optional cash investments and/or initial cash investments to be
invested for you on such
7
<PAGE>
investment date by the relevant purchase price per share.
With regard to open market purchases and sales of shares of Class A common
stock by an independent agent, none of Dynegy, the administrator, its agents or
any participant will have any authority or power to direct the time or price at
which shares may be purchased or sold, the markets on which the shares are to be
purchased or sold (including on any securities exchange, in the over-the-counter
market or in negotiated transactions), or the selection of the broker or dealer
(other than any independent agent) through or from whom purchases and sales may
be made.
What is the safekeeping service?
At the time of enrollment, or at any later time, you may take advantage of
the plan's safekeeping services. Class A common stock that you hold in
certificate form may be deposited into the plan, to be held by the administrator
or its nominee, by delivering a completed enrollment form and the Class A common
stock certificates to the administrator. Such certificates should not be
endorsed. The shares of Class A common stock so deposited will be transferred
into the name of the administrator or its nominee, as custodian, and credited to
your account. Thereafter, such shares of Class A common stock will be treated in
the same manner as shares of Class A common stock purchased under the plan and
credited to your account. Cash dividends paid on shares of Class A common stock
credited to your account that were deposited into the plan for safekeeping will
be reinvested in shares of Class A common stock in accordance with your
reinvestment election designated on the enrollment form.
How can I sell my shares subject to the plan?
You may request, at any time, that all or a portion of the shares of Class
A common stock credited to your account be sold by delivering to the
administrator a completed Sale/Withdrawal Request Form. Only whole shares of
Class A common stock credited to your account may be sold under the plan. The
administrator will forward the sale instructions to an independent agent within
five business days of receipt (except as described in the following paragraph).
An independent agent will sell such shares as soon as practicable after
processing the request and will transmit to you the proceeds of the sale (less
any brokerage commissions and any applicable transfer taxes and service
charges). Proceeds of shares of Class A common stock sold through the plan will
be paid to you by check.
If instructions for the sale of shares of Class A common stock on which
cash dividends are not being reinvested are received by the administrator on or
after the record date relating to a dividend payment date (see definition below)
but before the dividend payment date, the sale will be processed and a separate
check for the dividends will be mailed to you following the dividend payment
date. If instructions for the sale of shares of Class A common stock on which
cash dividends are being reinvested are received by the administrator on or
after the record date relating to a dividend payment date but before the
dividend payment date, the dividends paid on the dividend payment date will be
invested in Class A common stock through the plan, and
o if your sale instructions cover less than all of the shares of Class
A common stock credited to your account, the sale of such shares
will be processed and the shares purchased with the reinvested
dividends will be credited to your account; or
o if your sale instructions cover all of the shares of Class A common
stock credited to your account, the sale instructions will not be
processed until after the dividends have been invested in Class A
common stock through the plan at which time all of the shares
credited to your account, including the shares purchased with the
reinvested dividends, will be sold and the proceeds transmitted to
you.
How do I withdraw shares from the plan?
You may withdraw some or all of the Class A common stock credited to your
account from the plan at any time by delivering to the administrator
o a completed Sale/Withdrawal Request Form, if you will be the record
holder of such Class A common stock after withdrawal; or
o a completed Sale/Withdrawal Request Form and a stock assignment
(stock power), if you will not be the record holder of the Class A
common stock after withdrawal.
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Upon the administrator's receipt of the proper documentation, certificates
representing the designated Class A common stock will be sent to you, your
broker or any other person that you have designated.
If a completed Sale/Withdrawal Request Form with regard to shares of Class
A common stock credited to your account on which cash dividends are not being
reinvested is received on or after the record date relating to a dividend
payment date but before the dividend payment date, the withdrawal will be
processed and a separate check for the dividends will be mailed to you following
the dividend payment date. If a completed Sale/Withdrawal Request Form with
regard to shares of Class A common stock credited to your account on which cash
dividends are being reinvested is received by the administrator on or after the
record date relating to a dividend payment date but before the dividend payment
date, the dividends paid on the dividend payment date will be invested in Class
A common stock through the plan, and
o if your withdrawal instructions cover less than all of the shares of
Class A common stock credited to your account, the withdrawal of
such shares will be processed and the shares purchased with the
reinvested dividends will be credited to your account; or
o if your withdrawal instructions cover all of the shares of Class A
common stock credited to your account, the withdrawal instructions
will not be processed until after the dividends have been invested
in Class A common stock through the plan, at which time certificates
representing all of the shares credited to your account, including
the shares purchased with the reinvested dividends, will be sent to
you or other designated recipient.
Certificates representing whole shares of Class A common stock withdrawn
from the plan will be sent to you or designated recipient by first class mail as
soon as practicable following the administrator's receipt of the required
documentation, subject to the provisions of the preceding paragraph. Withdrawal
of shares of Class A common stock does not affect reinvestment of cash dividends
on the shares withdrawn unless
o you are no longer the record holder of such shares;
o you change such reinvestment by delivering a completed enrollment
form to the administrator; or
o you have terminated your participation in the plan.
How can I transfer or give gifts of shares?
You may transfer or give gifts of Class A common stock to anyone you
choose by contacting the administrator and requesting a transfer. You may give
or transfer Class A common stock to anyone you choose by:
o making an initial $250 cash investment to establish an account in
the recipient's name;
o submitting an optional cash investment on behalf of another
participant in an amount not less than $100 nor more than $10,000;
or
o transferring Class A common stock from your account to the
recipient.
You must transfer a whole number of shares unless you elect to transfer
the entire account. You may transfer shares to new or existing participants. To
transfer the ownership of all or part of the whole shares of Class A common
stock held in your plan account, you must mail the administrator a transfer
request along with a properly signed stock power. A stock power form can be
obtained from the administrator, most banks or most stockbrokers. You must have
your signature guaranteed by a financial institution participating in the
medallion guarantee program. The medallion guarantee program ensures that the
individual signing the certificate is in fact the registered owner as it appears
on the stock certificate or stock power. The administrator will automatically
place such new accounts in full dividend reinvestment status. The recipients of
gifts or transfers, at their discretion, may then elect to change participation
but, to do so, they must submit a new enrollment form to the administrator. The
administrator will send recipients of gifts or transfers a notice of such
transfer.
If you request to either transfer all of your shares or make a partial
sale and transfer the balance of your shares and such request is received during
the three business days prior to a dividend payment date, the processing of your
request may be held until after your account is credited with reinvested
dividends. This hold period could be as long as four weeks.
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What happens if I withdraw a some of my shares in the plan?
If you are reinvesting cash dividends paid on only a portion of the shares
of Class A common stock credited to your account through the plan and you elect
to sell, withdraw or transfer a portion of such shares, cash dividends on the
remainder of the shares credited to your account, up to the number of shares
designated for reinvestment prior to such sale, withdrawal or transfer, will
continue to be reinvested through the plan, except where you give specific
instructions to the contrary in connection with such sale, withdrawal or
transfer. For example, if you had elected to have cash dividends reinvested
through the plan on 50 shares of a total of 100 shares of Class A common stock
credited to your account elected to sell, withdraw or transfer 25 shares, cash
dividends on 50 shares of the remaining 75 shares credited to your account would
be reinvested through the plan. If instead you elected to sell or withdraw 75
shares, cash dividends on the remaining 25 shares credited to your account would
be reinvested through the plan.
Will I receive reports regarding my account?
You will receive a statement of account for each month in which an
investment, reinvestment, deposit, withdrawal, sale or any other transaction
takes place. You should retain these statements of account to establish the cost
basis, for tax purposes, of shares of Class A common stock acquired under the
plan.
You will receive copies of all communications sent to holders of Class A
common stock. This may include quarterly reports to shareholders, annual reports
to shareholders, proxy material, and Internal Revenue Service information, if
appropriate, for reporting dividend income. All notices, statements of account
and other communications from the administrator to you will be addressed to the
latest address of record. Therefore, it is important that you promptly notify
the administrator of any change of address.
How do I obtain a certificate for my shares?
You may obtain, free of charge at any time, a certificate for all or a
part of the whole shares of Class A common stock credited to your account upon
written request to the administrator. Such certificate(s) will be mailed by
first class mail, within two business days of the administrator's receipt of the
written request, to your address of record. Such shares shall continue to have
their dividends reinvested unless you also submit a enrollment form electing to
not have dividends on such shares reinvested. Any remaining whole or fractions
of shares of Class A common stock will continue to be credited to your account.
Shares of Class A common stock credited to your account may not be pledged
or assigned. A participant who wishes to pledge or assign shares of Class A
common stock must request that they be withdrawn from the plan.
Certificates for fractions of shares of Class A common stock will not be
issued under any circumstances.
How do I terminate my participation in the plan?
You may at any time terminate your participation in the plan by delivering
a completed Sale/Withdrawal Request Form to the administrator. Upon the
administrator's receipt of such written notification, you will receive
o a certificate for all of the whole shares of Class A common stock
credited to your account;
o a check for any dividends and cash investments credited to your
account; and
o a check for the cash value of any fraction of a share of Class A
common stock credited to your account.
Such fraction of a share will be valued at the average of the high and low
sales prices of the Class A common stock reported on the New York Stock Exchange
composite tape as published in The Wall Street Journal for the trading day
preceding the date of receipt of a completed Sale/Withdrawal Request Form.
Will participation cost me anything?
Dynegy will pay all administrative costs and expenses associated with the
plan. In addition, Dynegy will pay any brokerage commissions and any applicable
transfer taxes and service charges related to shares purchased under the plan.
Participants requesting that the shares of Class A common stock credited to
their accounts be sold in the open market will be required to pay any brokerage
commissions and any applicable transfer taxes and services charges with respect
to any shares of Class A common stock sold. Such costs will be included as
adjustments to sales prices.
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What are the tax consequences?
The following is a summary of the material Federal Income Tax consequences
of participation in the plan. The effect of such tax consequences on you will
depend upon you individual circumstances which, together with the state and
local tax consequences of participation, should be discussed with your tax
advisor.
You will be required to include in income for federal income tax purposes
the amount of cash dividends paid on eligible securities and shares of Class A
common stock credited to your account which are reinvested in Class A common
stock under the plan even though no such amount is actually received by you in
cash, but instead is applied to the purchase of shares of Class A common stock
for your account. If shares are purchased in the open market you will also be
required to include in income for federal income tax purposes an allocable share
of any brokerage commissions incurred to purchase such shares.
Your tax basis for shares of Class A common stock purchased under the plan
will be equal to the price at which the shares are credited by the administrator
to your account. If shares are purchased in the open market, the allocable
shares of any brokerage commissions incurred are added to your tax basis. Shares
of Class A common stock purchased under the plan will have a holding period
beginning on the day after the shares are allocated to your account.
You will not realize any taxable income when you receive certificates for
whole shares credited to your account under the plan. Gain or loss will be
recognized by you when you sell such whole shares and will be recognized by you
when a fractional share credited to your account is sold pursuant to the terms
of the plan.
What if Dynegy has a stock split, a stock dividend or a rights offering?
Any shares or other securities representing stock splits or noncash
distributions on shares of Class A common stock credited to your account will be
credited to your account. Stock splits, combinations, recapitalization and
similar events affecting shares of Class A common stock credited to your account
will be credited to your account on a pro rata basis.
In the event of a rights offering, you will receive rights based upon the
total number of whole shares of Class A common stock credited to your account.
Will I be able to vote my shares purchased through the plan?
You will have the exclusive right to exercise all voting rights respecting
shares of Class A common stock credited to your account. The administrator will
forward all shareholder materials relating to shares of Class A common stock
credited to your account to you. You may vote any whole shares of Class A common
stock credited to your account in person or by proxy. Your proxy card will
include whole shares of Class A common stock credited to your account and shares
of Class A common stock registered in your name. Shares of Class A common stock
credited to your account will not be voted unless you or your proxy votes them.
You are not permitted to vote fractions of shares.
Your vote, under a proxy or consent provision that is applicable to all
holders of Class A common stock, and your option to exercise under a tender or
exchange offer may be solicited by Dynegy's management or others. The
administrator will notify you of occasions when you may exercise your voting
rights or your rights with respect to a tender offer or exchange offer within a
reasonable period of time prior to when those rights are to be exercised.
Limitation of liability
The plan provides that neither Dynegy, the administrator (including Dynegy
if it is acting as such) in administering the plan nor any independent agent
will be liable for any act done in good faith or for the good faith omission to
act in connection with the plan, including, without limitation, any claim of
liability arising out of failure to terminate your account upon your death prior
to receipt of notice in writing of such death, or with respect to the prices at
which shares of Class A common stock are purchased or sold for your account and
the times when such purchases and sales are made, or with respect to any loss or
fluctuation in the market value after the purchase or sale of such shares. The
foregoing does not represent a waiver of any rights you may have under
applicable securities laws.
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Interpretation and regulation of the plan
Dynegy may adopt any rules or regulations with respect to the plan which
are necessary or desirable for the administration of the plan. Dynegy also has
the power and authority to interpret the terms and provisions of the plan and
reconcile any inconsistency or supply any omitted detail so long as it is
consistent with the general terms and provisions of the plan.
Dynegy may change or terminate the plan at its option
Dynegy may suspend, modify or terminate the plan at any time, in whole, in
part or in respect of participants in one or more jurisdictions, without the
approval of participants. Notice of such suspension, modification or termination
will be sent to all affected participants, who will in all events have the right
to withdraw from participation. Upon any whole or partial termination of the
plan by Dynegy, each affected participant will receive
o a certificate for all of the whole shares of Class A common stock
credited to their account;
o a check for any dividends and cash investments credited to their
account; and
o a check for the cash value of any fraction of a share of Class A
common stock credited to their account.
Such fraction of a share shall be valued at the average of the high and low
sales prices of the Class A common stock reported on the New York Stock Exchange
composite tape as published in The Wall Street Journal for the trading day
preceding the date of termination. You will be notified by the administrator
promptly if the plan is suspended, modified or terminated.
When may Dynegy end my participation in the plan?
If you do not have at least one whole share of Class A common stock
credited to your account, or do not own any eligible securities for which cash
dividends are designated for reinvestment pursuant to the plan, your
participation in the plan may be terminated by Dynegy upon written notice to
you. Additionally, Dynegy may terminate your participation in the plan after
written notice mailed in advance to you at the address appearing on the
administrator's records. If your participation has been terminated you will
receive
o a certificate for all of the whole shares of Class A common stock
credited to your account;
o a check for any dividends and cash investments credited to your
account; and
o a check for the cash value of any fraction of a share of Class A
common stock credited to your account.
Such fraction of a share shall be valued at the average of the high and low
sales prices of the Class A common stock reported on the New York Stock Exchange
composite tape as published in The Wall Street Journal for the trading day
preceding the date of termination. Dynegy may at any time in its sole discretion
suspend, modify, amend or terminate the plan, in whole, in part or in respect of
participants in one or more jurisdictions. Such amendment may not decrease the
account of any participant or result in a distribution to Dynegy of any amount
credited to the account of any participant.
What if I have questions about the plan?
Any questions you have about buying or selling shares or any other
services offered by the plan should be directed to the administrator at its
toll-free number:
1-888-921-5563
A customer service representative will assist you. Once enrolled, you may
also use the administrator's automated voice response system, which will furnish
information regarding your account -- for example, the number of shares held in
the plan, amount of last dividend check or the closing stock price. You may also
write to the administrator at the following address:
Chase Manhattan Bank
c/o ChaseMellon Shareholder Services, L.L.C.
P. O. Box 3338
South Hackensack, New Jersey 07606-1938.
Be sure to include your name, address, account key and daytime phone
number on all correspondence.
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The administrator has been appointed by Dynegy and such appointment may be
revoked and the administrator may resign at any time with reasonable notice to
Dynegy. If no administrator is appointed, Dynegy will be deemed the plan
administrator. The administrator has the authority to take any actions necessary
to fulfill it's duties under the plan and will keep records of your account.
Dynegy will arrange for the administrator's compensation.
Your acceptance of the terms and conditions of the plan
By completing the enrollment form or, if you were a participant in
Illinova Investment Plus, by your continuing participation in the plan, you and
your heirs, executors, administrators, legal representatives and assigns
approves and agrees to be bound by the provisions of the plan and any subsequent
amendments to the plan, as well as the actions of Dynegy and the administrator
in connection with the plan.
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Where You Can Find More Information About Dynegy
General
Dynegy files annual, quarterly and current reports, proxy statements and
other information with the Securities and Exchange Commission. You may read and
copy any documents we have filed at the Commission's Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed
rates. The Commission maintains a Web site at www.sec.gov that contains reports,
proxy and other information regarding Dynegy. In addition, copies of such
reports and other information concerning Dynegy may also be inspected and copied
at the library of the New York Stock Exchange, 20 Broad Street, New York, New
York 10005.
Information we file with the Commission
The Commission allows us to incorporate by reference the information we
have previously filed with them. Incorporation by reference means that we can
disclose important information to you by referring you to those documents. The
information incorporated by reference is considered to be part of this
prospectus, and later information that we file with the Commission will
automatically update and supersede this information. We incorporate by reference
the documents listed below and future filings made with the Commission by Dynegy
(File Number 1-11156) under Sections 13(a), 13(c), 14 or 15(d) of the Exchange
Act until we sell all the Class A common stock covered by this prospectus.
o The description of the Class A common stock in Dynegy's Registration
Statement on Form 8-A (Securities Act of 1933 Commission File Number
333-84965) filed on February 2, 2000.
The following documents previously filed with the SEC by Dynegy
(Commission File Number 1-11156) are incorporated by reference into this
document:
o Dynegy's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999;
o Dynegy's Current Report on Form 8-K filed with the SEC on January 6,
2000, February 2, 2000 and February 29, 2000.
This prospectus is part of a registration statement that we filed with the
Commission.
You may request a copy of these filings, at no cost, by writing or calling
us at:
Dynegy Inc.
1000 Louisiana Street, Suite 5800
Houston, Texas 77002
(713) 507-6400.
Our website address is www.dynegy.com. The information on our web site is
not incorporated by reference into this prospectus. You should rely only on the
information incorporated by references or provided in this prospectus or any
prospectus supplement. We have not authorized anyone else to provide you with
different information. We are only offering these securities in states where the
offer is permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of those documents.
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UNCERTAINTY OF FORWARD LOOKING STATEMENTS
This prospectus, any accompanying prospectus supplement and the additional
information described under the heading "Where You Can Find More Information
About Dynegy" may contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are subject
to risks and uncertainties and are based on the beliefs and assumptions of our
management, based on information currently available to our management. When we
use words such as "believes," "expects," "anticipates," "intends," "plans,"
"estimates," "should" or similar expressions, we are making forward-looking
statements. Forward-looking statements include the information concerning
possible or assumed future results of operations set forth under "Business"
and/or "Management's Discussion and Analysis of Financial Conditions and Results
of Operations" in our annual report on Form 10-K and quarterly reports on Form
10-Q incorporated by reference into this prospectus.
Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions. Our future results and shareholder value
may differ materially from those expressed in these forward-looking statements.
Many of the factors that will determine these results and value are beyond our
ability to control or predict. These statements are necessarily based upon
various assumptions involving judgments with respect to the future including,
among others:
o competitive practices in the industries in which Dynegy competes;
o fluctuations in commodity prices for natural gas, electricity,
natural gas liquids, crude oil or coal;
o fluctuations in energy commodity prices which have not been properly
hedged or which are inconsistent with Dynegy's open position in its
energy marketing activities;
o operational and systems risks;
o general economic and capital market conditions, including
fluctuations in interest rates; and
o the impact of current and future laws and governmental regulations
(particularly environmental regulations) affecting the energy
industry in general and Dynegy's operations in particular.
You are cautioned not to put undue reliance on any forward-looking
statements. For those statements, we claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995.
You should also consider any other factors contained in this prospectus or
in any accompanying supplement, including the information incorporated by
reference into this prospectus or into any accompanying supplement.
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The Company
Dynegy is a leading provider of energy products and services in North
America and the United Kingdom. On February 1, 2000, Dynegy Inc., a Delaware
corporation (since renamed Dynegy Holdings Inc.) ("Old Dynegy") and Illinova
Corporation, an Illinois corporation ("Illinova"), merged in a transaction in
which Old Dynegy and Illinova became wholly owned subsidiaries of Dynegy. The
merger is more fully described in the Joint Proxy Statement Prospectus contained
within Dynegy's Form S-4 Registration Statement (File Number 333-84965) filed
with the Commission on September 7, 1999.
Products marketed by Old Dynegy's wholesale marketing operations include
natural gas, electricity, coal, natural gas liquids, crude oil, liquid petroleum
gas and related services. Old Dynegy's wholesale marketing operations are
supported by ownership or control of an extensive asset base and transportation
network that includes unregulated power generation, gas and liquids storage
capacity, gas, power and liquids transportation capacity and gas gathering,
processing and fractionation facilities.
Illinova is the holding company for: Illinois Power Company, an electric
and natural gas utility that serves approximately 650,000 customers over a
15,000 square-mile area of Illinois; Illinova Generating, Inc., which invests
in, develops and operates independent power projects worldwide; and Illinova
Energy Partners, Inc., which markets energy and energy-related services in the
United States and Canada.
Our principal office is located at 1000 Louisiana, Suite 5800, Houston,
Texas 77002, and the telephone number is (713) 507-6400.
Use of Proceeds
Dynegy intends to use the proceeds of the sale of any newly issued or
treasury shares of Class A common stock under the plan for general corporate
purposes. Since the price of the shares of Class A common stock offered under
the plan is based on future market prices, Dynegy is unable to make an advance
determination of the price at which shares of Class A common stock will be sold
to plan participants or the proceeds of such sale.
Description of Securities to be Registered
The authorized capital stock of Dynegy consists of 300,000,000 shares of
Class A common stock, 120,000,000 shares of Class B common stock and 70,000,000
shares of preferred stock. The description of the Class A common stock in
Dynegy's Form S-4 Registration Statement (File Number 333-84965) filed with the
Commission on September 7, 1999 is incorporated by reference into this
prospectus. At February 4, 2000, there were approximately 98 million shares of
Class A common stock issued and outstanding.
Legal Matters
Troutman Sanders LLP will issue an opinion regarding certain legal matters
in connection with the Class A common stock offered pursuant to this prospectus.
Experts
The audited consolidated financial statements and schedule of Dynegy
incorporated by reference herein, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their report with respect
thereto, and are incorporated by reference herein in reliance upon the authority
of said firm as experts in accounting and auditing in giving said report.
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Dynegy Inc.
1000 Louisiana Street, Suite 5800
Houston, Texas 77002
(713) 507-6400.
17
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Part II. INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth all expenses in connection with the
distribution of the shares of Class A common stock being registered. All amounts
shown below are estimates, except the registration fee:
Registration fee of Securities and
Exchange Commission................................$ 64,350.00
New York Stock Exchange listing fees..................4,375.00
Accountants' fees and expenses.......................50,000.00
Legal fees and expenses.............................100,000.00
Miscellaneous........................................80,000.00
TOTAL..............................................$298,725.00
Item 15. Indemnification of Directors and Officers
Illinois law permits corporations to adopt a provision in their charters
eliminating the liability of a director to the corporation or its shareholders
for monetary damages for breach of the director's fiduciary duty of care.
Illinois corporations are not permitted to eliminate monetary liability
where such liability is based on:
(1) any breach of the director's duty of loyalty to the
corporation or its shareholders;
(2) acts or omissions not in good faith or that involve
intentional misconduct or a knowing violation of law;
(3) liability of directors for unlawful payment of dividends or
unlawful stock purchases or redemptions; or
(4) any transaction from which the director derived an improper
personal benefit.
The Dynegy articles of incorporation also provide for broad mandatory
indemnification, generally extending to any person who is or was a director or
officer who acted in good faith and in a manner he reasonably believed to be not
opposed to the best interests of the corporation. Such articles also eliminate
the liability of directors to the fullest extent permissible under Illinois law,
as such law exists currently or as it may be amended in the future. The Dynegy
bylaws provide that Dynegy may indemnify an employee or agent of the corporation
in a proceeding, including those by or in the right of the corporation, because
he or she is or was acting in the scope of his or her duties, in good faith, and
in a manner he or she reasonably believed to be in the best interests of the
corporation.
The merger agreement provides that Dynegy will indemnify the present and
former directors and officers of Old Dynegy, Illinova and their respective
subsidiaries and fiduciaries under their benefit plans against all losses,
damages, costs or expenses (including attorneys' fees), liabilities or amounts
paid in settlement arising out of actual or alleged actions or omissions
existing at or before the effective date of the merger. The indemnification will
be to the fullest extent permitted under Illinois law or Dynegy's articles of
incorporation and bylaws in effect on the date of such indemnification and Old
Dynegy's and Illinova's indemnification obligations in effect as of the date of
the merger agreement. Dynegy will also be obligated to advance expenses as
incurred to the fullest extent permitted by law. The determination of compliance
with the indemnification requirements will be made by independent counsel
mutually acceptable to Dynegy and the indemnified person.
For six years after the effective date of the merger, Dynegy will maintain
Illinova's and Old Dynegy's existing directors' and officers' liability
insurance policies covering the existing directors and officers to the extent
related to liabilities prior to the merger. The coverage will be at least as
favorable as the existing coverage, but Dynegy will not be required to spend
over 150% of the higher of the annual premium paid by Old Dynegy or Illinova for
its existing coverage.
Item 16. Exhibits
The Exhibits filed herewith are set forth on the Index to Exhibits filed
as a part of this Registration Statement.
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Item 17. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form F-3 and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on March 9, 2000.
DYNEGY INC.
By: /s/ C. L. Watson
-------------------------------
C. L. Watson
Chairman of the Board and Chief
Executive Officer
The undersigned directors and officers of Dynegy hereby constitute and
appoint C. L. Watson and Kenneth E. Randolph with full power to act without the
other and with full power of substitution, our true and lawful attorneys-in-fact
with full power to execute in our name and behalf in the capacities indicated
below any and all amendments (including post-effective amendments and amendments
thereto) to this Registration Statement on Form S-3 and to file the same, with
all exhibits thereto and other documents in connection therewith with the
Commission and hereby ratify and confirm all that such attorneys-in-fact, or
either of them, or their substitutes shall lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-3 has been signed below by the following
persons in the capacities indicated on March 9, 2000.
Signature Title
- --------- -----
/s/ C. L. Watson Chairman of the Board, Director
- --------------------------------------- and Chief Executive Officer
C. L. Watson (Principal Executive Officer)
/s/ John U. Clarke Executive Vice President and
- --------------------------------------- Chief Financial Officer
John U. Clarke (Principal Financial Officer)
/s/ Bradley P. Farnsworth Senior Vice President and Controller
- --------------------------------------- (Principal Accounting Officer)
Bradley P. Farnsworth
/s/ Charles E. Bayless Director
- ---------------------------------------
Charles E. Bayless
/s/ Stephen W. Bergstrom Director
- ---------------------------------------
Stephen W. Bergstrom
II-3
<PAGE>
Signature Title
- --------- -----
/s/ J. Otis Winters Director
- ---------------------------------------
J. Otis Winters
/s/ Daniel L. Dienstbier Director
- ---------------------------------------
Daniel L. Dienstbier
/s/ Patricia A. Woertz Director
- ---------------------------------------
Patricia A. Woertz
/s/ Darald W. Callahan Director
- ---------------------------------------
Darald W. Callahan
/s/ Richard H. Matzke Director
- ---------------------------------------
Richard H. Matzke
/s/ J. Joe Adorjan Director
- ---------------------------------------
J. Joe Adorjan
/s/ C. Steven McMillan Director
- ---------------------------------------
C. Steven McMillan
/s/ Robert M. Powers Director
- ---------------------------------------
Robert M. Powers
/s/ Sheli Z. Rosenberg Director
- ---------------------------------------
Sheli Z. Rosenberg
/s/ Joe J. Stewart Director
- ---------------------------------------
Joe J. Stewart
/s/ John D. Zeglis Director
- ---------------------------------------
John D. Zeglis
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number Description of Exhibits
------ -----------------------
4.1* Dynegy Investment Plus
5.1* Opinion of Troutman Sanders LLP as to the legality of the
shares being registered
23.1* Consent of Troutman Sanders LLP (included in the opinion filed
as Exhibit 5.1 to this Registration Statement)
23.2* Consent of Arthur Andersen LLP
24.1 Powers of Attorney (included in the signature page of this
Registration Statement)
99.1* Cover letter to accompany the prospectus to be sent to
participants in Illinova Investment Plus
99.2* Cover letter to accompany the prospectus to be sent to holders
of eligible securities not participating in Illinova
Investment Plus
99.3* Enrollment form for Dynegy Investment Plus.
99.4* Schedule of anticipated investment dates for Dynegy
Investment Plus.
- ----------
*filed herewith
DYNEGY INVESTMENT PLUS
(As Amended and Restated Effective February 2, 2000)
<PAGE>
TABLE OF CONTENTS
ARTICLE I. Definitions.........................................................1
1.1 Account.................................................................1
1.2 Account Shares..........................................................1
1.3 Administrator...........................................................2
1.4 Common Stock............................................................2
1.5 Company.................................................................2
1.6 Company Purchase Price..................................................2
1.7 Dividend................................................................2
1.8 Dividend Payment Date...................................................2
1.9 Effective Date..........................................................2
1.10 Eligible Securities.....................................................2
1.11 Enrollment Form.........................................................3
1.12 Illinois Power..........................................................3
1.13 Independent Agent.......................................................3
1.14 Investment Date.........................................................3
1.15 Market Purchase Price...................................................4
1.16 NYSE....................................................................4
1.17 Participant.............................................................4
1.18 Person..................................................................4
1.19 Plan....................................................................4
1.20 Pricing Period..........................................................4
1.21 Prior Plan..............................................................4
1.22 Reinvestment Eligible Securities........................................4
1.23 Sale/Withdrawal Request Form............................................5
1.24 Statement of Account....................................................5
1.25 Threshold Price.........................................................5
1.26 Trading Day.............................................................5
1.27 Waiver Discount.........................................................5
ARTICLE II. Participation......................................................5
2.1 Participation...........................................................5
2.2 Initial Cash Investment.................................................6
2.3 Dividend Reinvestment...................................................7
2.4 Optional Cash Investments...............................................8
2.5 Optional Cash Investments in Excess of the Maximum Amount...............9
ARTICLE III. Dividend Reinvestment and Stock Purchase.........................12
3.1 Dividend Reinvestment..................................................12
3.2 Investment of Initial Cash Payments and Optional Cash Payments.........14
ARTICLE IV. Safekeeping Services for Deposited Common Stock...................16
4.1 Deposited Common Stock.................................................16
4.2 Withdrawal of Deposited Common Stock...................................16
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ARTICLE V. Sale of Account Shares; Gift or Transfer of Account Shares.........16
5.1 Sale of Account Shares.................................................16
5.2 Gift or Transfer of Account Shares.....................................18
5.3 Reinvestment of Dividends on Remaining Account Shares..................19
ARTICLE VI. Eligible Securities...............................................19
6.1 Eligible Securities....................................................19
6.2 Additional Eligible Securities.........................................20
ARTICLE VII. Treatment of Accounts............................................20
7.1 Changing Plan Options..................................................20
7.2 Right of Withdrawal....................................................21
7.3 Right of Termination of Participation..................................22
7.4 Termination of Participation by Company................................22
7.5 Stock Splits, Stock Dividends and Rights Offerings.....................23
7.6 Shareholder Materials; Voting Rights...................................23
7.7 Statement of Account...................................................24
ARTICLE VIII. Certificates and Fractions of Shares............................24
8.1 Certificates...........................................................24
8.2 Fractional Shares......................................................25
ARTICLE IX. Amendment and Termination of this Plan............................25
9.1 Suspension, Modification and Termination...............................25
ARTICLE X. Administration of this Plan........................................26
10.1 Rules and Regulations..................................................26
10.2 Selection of an Administrator..........................................26
10.3 Authority and Duties of Administrator..................................26
10.4 Compensation...........................................................26
10.5 Costs..................................................................27
10.6 Liability of the Company, the Administrator and Any Independent Agent..27
10.7 Records and Reports....................................................27
10.8 Selection of Independent Agent.........................................27
10.9 Source of Shares of Common Stock..................................... 28
..
ARTICLE XI. Miscellaneous Provisions..........................................28
11.1 Controlling Law........................................................28
11.2 Acceptance of Terms and Conditions of Plans by Participants............28
ii
<PAGE>
DYNEGY INVESTMENT PLUS
Dynegy Inc., an Illinois corporation (the "Company"), hereby adopts and
establishes as its own Dynegy Investment Plus (the "Plan"), effective as of
February 2, 2000. This Plan constitutes an assumption and an amendment and
restatement of Illinova Investment Plus.
The purpose of this Plan is to provide investors and holders of certain
equity securities of the Company and Illinois Power Company, the Company's
indirect wholly owned subsidiary ("Illinois Power"), with a convenient and
economical opportunity to commence or increase their investment in Class A
common stock of the Company through (i) cash purchases of Class A common stock
of the Company; and/or (ii) regular reinvestment of cash dividends made with
respect to such equity securities, including Class A common stock.
ARTICLE I.
Definitions
The terms defined in this Article I shall have the following respective
meanings:
1.1 "Account" means the account maintained by the Administrator for a
Participant evidencing (i) the shares (including any fraction of a share) of
Common Stock either purchased through this Plan on behalf of the Participant or
deposited by such Participant into this Plan pursuant to Section 4.1; and (ii)
cash held in this Plan pending investment in Common Stock for such Participant.
1.2 "Account Shares" means all shares (including any fraction of a share)
of Common Stock credited to the Account of a Participant.
1
<PAGE>
1.3 "Administrator" means the individual (who may be an employee of the
Company), bank, trust company or other entity (including the Company) appointed
from time to time by the Company to act as Administrator hereunder.
1.4 "Common Stock" means the Company's Class A common stock, without par
value.
1.5 "Company" means Dynegy Inc., an Illinois corporation.
1.6 "Company Purchase Price", when used with respect to newly issued
shares of Common Stock or shares of Common Stock held in the Company's treasury,
means the average of the high and low sales prices of Common Stock on a given
trading day as reported on NYSE composite tape as published in The Wall Street
Journal. If no trading is so reported for a trading day, the Company Purchase
Price for such shares shall be determined on the basis of the average of the
high and low sales prices of Common Stock on the next preceding trading day. Any
fraction of a cent of a Company Purchase Price shall be rounded up.
1.7 "Dividend" means cash dividends paid on Reinvestment Eligible
Securities.
1.8 "Dividend Payment Date" means a date on which a cash dividend on
shares of Common Stock is paid.
1.9 "Effective Date" means the date as of which this Plan is effective, or
February 2, 2000.
2
<PAGE>
1.10 "Eligible Securities" means the equity securities of the Company and
Illinois Power, whether issued prior to, on or after, the Effective Date as
described in Sections 6.1 and 6.2.
1.11 "Enrollment Form" means the documentation that the Administrator
shall require to be completed and received prior to (i) an investor's enrollment
in this Plan pursuant to Section 2.2; (ii) a Participant's election to have
Dividends reinvested in this Plan pursuant to Section 2.3; (iii) a Participant's
optional cash investment pursuant to Section 2.4; (iv) a Participant's deposit
of shares of Common Stock into this Plan pursuant to Section 4.1; or (v) a
Participant's change to his or her elections under this Plan pursuant to Section
7.1.
1.12 "Illinois Power" means the Illinois Power Company, an Illinois
corporation.
1.13 "Independent Agent" means an agent independent of the Company who
satisfies applicable legal requirements (including the requirements of
Regulation M promulgated under the Securities Act of 1933, the Securities
Exchange Act of 1934 and the Investment Company Act of 1940) and who has been
selected by the Company pursuant to Section 10.8 to serve as an independent
agent for purposes of making open market purchases and sales of Common Stock
under this Plan.
1.14 "Investment Date" means (i) in any month in which a Dividend Payment
Date occurs, such Dividend Payment Date and the 15th day of the month or, if
either day is not a business day, the business day immediately following that
day; and (ii) in any month in which no Dividend Payment Date occurs, the first
and 15th day of the month or, if either day is not a business day, the business
day immediately following that day.
3
<PAGE>
1.15 "Market Purchase Price," when used with respect to shares of Common
Stock purchased in the open market, means the weighted average purchase price
per share (disregarding any brokerage commissions and any applicable taxes and
service charges) of the aggregate number of shares purchased in the open market
for an Investment Date.
1.16 "NYSE" means the New York Stock Exchange, Inc.
1.17 "Participant" means any Person who has satisfied the requirements of
Section 2.1.
1.18 "Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
estate or unincorporated organization.
1.19 "Plan" means this Dynegy Investment Plus, as effective on the
Effective Date.
1.20 "Pricing Period" is defined in Section 2.5(b).
1.21 "Prior Plan" means Illinova Investment Plus as amended and restated
effective July 1, 1996.
1.22 "Reinvestment Eligible Securities" means (i) a Participant's Account
Shares with respect to which the Participant has elected to have dividends
reinvested in Common Stock; and (ii) any other Eligible Securities of which a
Participant is the record holder and with respect to which such Participant has
elected to have all or a portion of the dividends reinvested in Common Stock.
4
<PAGE>
1.23 "Sale/Withdrawal Request Form" means the documentation that the
Administrator shall require to be completed and received prior to a
Participant's (i) sale of Account Shares pursuant to Article V; (ii) withdrawal
of whole Account Shares pursuant to Section 7.2 (unless such Participant will be
the record holder of such Account Shares after withdrawal); and (iii)
termination of participation in this Plan pursuant to Section 7.3.
1.24 "Statement of Account" means a written statement prepared by the
Administrator and sent to each Participant pursuant to Section 7.7 which
reflects (i) all transactions completed under this Plan on behalf of such
Participant during a month; (ii) the number of shares of Common Stock credited
to such Participant's Account at the date of such statement; and (iii) any
additional information that the Administrator determines to be pertinent.
1.25 "Threshold Price" is defined in Section 2.5(c).
1.26 "Trading Day" means a day on which trades are reported by the NYSE.
1.27 "Waiver Discount" is defined in Section 2.5(g).
A pronoun or adjective in the masculine gender includes the feminine
gender, and the singular includes the plural, unless the context clearly
indicates otherwise.
ARTICLE II.
Participation
2.1 Participation.
(a) Any Person, whether or not a record holder of Common Stock, may elect
to participate in this Plan. Notwithstanding the foregoing, however, (i) if
required by the laws of
5
<PAGE>
the jurisdiction in which the Person resides, such Person shall be a current
record holder of Common Stock to participate; (ii) if such Person is a citizen
or resident of, or is organized or incorporated under, or has its principal
place of business in, a country other than the United States, its territories or
possessions, they must provide evidence satisfactory to the Administrator that
their participation in this Plan wou1d not violate local laws applicable to the
Company, this Plan or such Person; and (iii) participation in this Plan is
subject to approval by the Administrator, which approval shall not be
unreasonably withheld.
(b) An election by a Person to participate in this Plan shall be made by
completing and returning an Enrollment Form to the Administrator, which shall
evidence the following: (i) an initial cash investment pursuant to Section 2.2;
(ii) the election to have Dividends on all or a specified number of shares of
Eligible Securities of which such Person is the record holder invested in Common
Stock pursuant to Section 2.3; and/or (iii) the deposit into this Plan of
certificates representing Common Stock of which such Person is the record holder
pursuant to Section 4.1.
(c) Notwithstanding the foregoing, each Person who is a participant in a
Prior Plan on the Effective Date shall continue to be a Participant without
submitting a new Enrollment Form; provided, however, that any such Participant
who wishes to change their current participation in any way must submit a new
Enrollment Form to the Administrator.
2.2 Initial Cash Investment.
(a) A Person not already a Participant who has met the eligibility
requirements of Section 2.1(a), and who is not a current holder of record of an
Eligible Security may become a
6
<PAGE>
Participant by making an initial cash investment of at least $250 to be invested
in Common Stock pursuant to Section 3.2.
(b) A Person not already a Participant who has met the eligibility
requirements of Section 2.1(a), and who is not a current holder of record of an
Eligible Security, but who is an active employee of the Company or its
subsidiaries, may become a Participant by making an initial cash investment of
at least $100 to be invested in Common Stock pursuant to Section 3.2.
(c) Payment must be by personal check or money order made payable to
Dynegy Investment Plus, or by direct debit, and must be accompanied by a
completed Enrollment Form. A Person who is an active employee of the Company may
make an initial cash investment through payroll deductions, authorized on a
payroll deduction authorization form. After the Administrator has received the
payroll deduction authorization form and the authority for the payroll deduction
has been noted on the Company's payroll records, the Company will withhold each
month the amount authorized. The withholding will be made each month from the
paycheck for the pay period ending in that month. The amount withheld will be
forwarded to the Administrator, and the Administrator will invest the funds in
Common Stock beginning on the first Investment Date following the
Administrator's receipt of the funds. The amount of payroll deduction can be
revised, changed or terminated at any time by written notice to the
Administrator. Commencement, revision or termination of payroll deductions will
become effective as soon as practicable after the Administrator receives an
employee's request.
2.3 Dividend Reinvestment. A Person not already a Participant who has met
the eligibility requirements of Section 2.1(a) may become a Participant by
electing to have all or a portion of any Dividends invested in shares (including
any fraction of a share) of Common Stock
7
<PAGE>
to be credited to his Account in lieu of receiving such Dividends directly by
completing an Enrollment Form. A current Participant may also elect reinvestment
of Dividends in accordance with the preceding sentence. If a Participant elects
to reinvest only a portion of the Dividends, that portion of such Dividends not
reinvested in Common Stock shall be sent to the Participant by check in the
manner otherwise associated with payment of such Dividends. The amount
reinvested will be reduced by any amount which is required to be withheld under
any applicable tax or other statutes.
2.4 Optional Cash Investments.
(a) A Participant may elect to make optional cash investments at any time
or from time to time to this Plan for investment in Common Stock pursuant to
Section 3.2. Optional cash investments must be at least $100 for any single
investment. Payment must be by personal check or money order made payable to
Dynegy Investment Plus, or by direct debit, and must be accompanied by a
completed Enrollment Form. A Participant who is an active employee of the
Company may make optional cash investments through payroll deductions,
authorized on a payroll deduction authorization form submitted to the Company
and in even multiples of $1, but not less than $5 per pay period.
(b) The Company in its sole discretion reserves the right to refuse or
limit any optional cash investments in excess of $10,000 per month. In certain
instances, however, the Company may permit greater optional cash purchases. For
the purposes of determining whether such maximum annual amount has been reached,
an initial cash investment made pursuant to Section 2.2 and dividend
reinvestments made pursuant to Section 2.3 shall be counted as an optional cash
investment.
8
<PAGE>
2.5 Optional Cash Investments in Excess of the Maximum Amount.
(a) Optional cash purchases in excess of $10,000 per month may be made
only pursuant to a request for waiver accepted by the Company. If a Participant
wishes to make an optional cash purchase in excess of $10,000 for any month,
they must obtain the prior written approval of the Company and a copy of such
written approval must accompany any such optional cash purchase. A Participant
must contact the Administrator to determine whether the Company is accepting
such requests for waiver of the maximum monthly investment, and to obtain a form
for requesting a waiver. Each Participant then must submit to the Administrator
a request for waiver on the form provided by the Administrator. THE COMPANY HAS
SOLE DISCRETION TO GRANT ANY APPROVAL OF A WAIVER FOR OPTIONAL CASH PURCHASES IN
EXCESS OF THE ALLOWABLE MAXIMUM AMOUNT. The Administrator will notify each
Participant requesting a waiver if the Company has accepted its request. In
deciding whether to approve a request for waiver, the Company will consider
relevant factors including, (i) whether this Plan is then acquiring newly issued
shares directly from the Company or acquiring shares in the open market or in
privately negotiated transactions from third parties; (ii) the Company's need
for additional funds; (iii) the attractiveness of obtaining such additional
funds through the sale of Common Stock as compared to other sources of funds;
(iv) the purchase price likely to apply to any sale of Common Stock; (v) the
Participant submitting the request; (vi) the extent and nature of such
Participant's prior participation in this Plan; (vii) the number of shares of
Common Stock held of record by such Participant and (viii) the aggregate number
of optional cash purchases in excess of $10,000 for which requests for waiver
have been submitted by all Participants. If requests for waiver are submitted
for any month for an aggregate amount in excess of the amount the Company is
then willing to accept,
9
<PAGE>
the Company may honor such requests in order of receipt, pro rata or by any
other method that the Company determines in its sole discretion to be
appropriate. There is no predetermined maximum limit on the amount that a
Participant may invest or on the number of shares that may be purchased with
regard to optional cash purchases made pursuant to a request for waiver.
(b) Optional cash purchases made pursuant to a request for waiver will be
applied to the purchase of shares of Common Stock as soon as practicable on or
after an Investment Date. Optional cash purchases made pursuant to a request for
waiver will be acquired at a price equal to the average of the daily high and
low sales prices computed up to seven decimal places, if necessary, of the
Common Stock as reported on the NYSE for the five Trading Days immediately
preceding the applicable Investment Date. The period encompassing the first five
Trading Days immediately preceding the next following Investment Date
constitutes the relevant "Pricing Period." The Administrator will apply all
optional cash purchases for which good funds are received on or before the first
business day before the Pricing Period to the purchase of shares of Common Stock
as soon as practicable on or after the next following Investment Date.
(c) The Company may establish for a Pricing Period a minimum price (the
"Threshold Price") applicable to optional cash purchases made pursuant to a
request for waiver. At least three business days prior to the first day of the
applicable Pricing Period, the Company will determine whether to establish a
Threshold Price, and if the Threshold Price is established, its amount, and will
so notify the Administrator. This determination will be made by the Company in
its sole discretion after, among other things, a review of current market
conditions, the level of participation in this Plan, and current and projected
capital needs. A Participant must contact the Administrator to determine whether
the Company has established a Threshold Price and the amount of the Threshold
Price.
10
<PAGE>
(d) If a Threshold Price is established for any Pricing Period, it will be
stated as a dollar amount that the average of the high and low sale prices of
the Common Stock on the NYSE for each Trading Day of the relevant Pricing Period
must equal or exceed. If the Threshold Price is not satisfied for a Trading Day
in the Pricing Period, then that Trading Day will be excluded from the Pricing
Period and all trading prices for that day will be excluded from the
determination of the purchase price. A day will also be excluded if no trades of
Common Stock are made on the NYSE for that day. For example, if the Threshold
Price is not satisfied for one of the five Trading Days in a Pricing Period,
then the purchase price will be based upon the remaining four Trading Days in
which the Threshold Price was satisfied.
(e) In addition, a portion of each optional cash purchase will be returned
for each Trading Day of a Pricing Period in which the Threshold Price is not
satisfied or for each day in which no trades of Common Stock are reported on the
NYSE. The returned amount will equal one-fifth of the total amount of such
optional cash purchase (not just the amount exceeding $10,000) for each Trading
Day that the Threshold Price is not satisfied. For example, if the Threshold
Price is not satisfied or no such sales are reported for one of the five Trading
Days in a Pricing Period, 1/5 (or 20%) of such optional cash purchase will be
returned without interest.
(f) The establishment of the Threshold Price and the possible return of a
portion of the investment apply only to optional cash purchases made pursuant to
a request for waiver. Setting a Threshold Price for a Pricing Period shall not
affect the setting of a Threshold Price for any subsequent Pricing Period. For
any Investment Date, the Company may waive its right to set a Threshold Price.
Neither the Company nor the Administrator shall be required to provide any
written notice as to the Threshold Price for any Pricing Period.
11
<PAGE>
(g) Each Investment Date, at the same time the Threshold Price is
determined, the Company may establish discounts from the market price applicable
to optional cash purchases made pursuant to a request for waiver. Such discount
(the "Waiver Discount") may be between 0% and 3% of the purchase price and may
vary each Investment Date. The Waiver Discount will be established at the
Company's sole discretion after, among other things, a review of current market
conditions, the level of participation in this Plan, discounts requested by
investors, the attractiveness of obtaining such additional funds through the
sale of Common Stock as compared to other sources of funds and current and
projected capital needs. Setting a Waiver Discount for a particular Investment
Date shall not affect the setting of a Waiver Discount for any subsequent
Investment Date. The Waiver Discount will apply only to optional cash purchases
of more than $10,000. The Waiver Discount will apply to the entire optional cash
purchase and not just the portion of the optional cash purchase that exceeds
$10,000. The Company reserves the right to establish in the future a discount
from the market price for optional cash purchases of $10,000 or less.
ARTICLE III.
Dividend Reinvestment and Stock Purchase
3.1 Dividend Reinvestment.
(a) A Participant's Dividends shall be paid to the Administrator or its
nominee on behalf of such Participant. Such Dividends shall be reinvested, at
the Company's election, in (i) either newly issued shares of Common Stock or
shares of Common Stock held in the Company's treasury purchased from the
Company; or (ii) shares of Common Stock purchased in the open market.
12
<PAGE>
(b) On an Investment Date with respect to which the Company elects to
invest Dividends in newly issued shares or shares of Common Stock held in the
Company's treasury, the Administrator shall remit to the Company the amount of
Dividends paid to the Administrator on such Investment Date and since the
preceding Investment Date. Upon receipt of such Dividends, the Company shall
issue to the Administrator for crediting to the Account of a Participant, a
number of shares (including any fraction of a share) of Common Stock equal to
the amount of such Dividends received from the Administrator, divided by the
Company Purchase Price on such Investment Date. Such shares shall be issued or
sold to, and registered in the name of, the Administrator or its nominee as
custodian for such Participants.
(c) On an Investment Date with respect to which the Company elects to
invest Dividends in shares of Common Stock purchased in the open market, the
Administrator shall cause an Independent Agent to apply the amount of any
Dividends paid to the Administrator on behalf of a Participant on such
Investment Date and since the preceding Investment Date to the purchase of
shares of Common Stock in the open market. Such purchases in the open market
pursuant to this Section 3.1(c) may begin on the applicable Investment Date and
shall be completed no later than 15 days from such date, unless completion at a
later date is necessary or advisable under applicable law, including any federal
securities laws. The number of shares (including any fraction of a share rounded
to four decimal places) of Common Stock credited to a Participant's Account
shall be equal to the amount of such Dividends received by the Administrator
divided by the Market Purchase Price on such Investment Date. Such shares shall
be registered in the name of the Administrator or its nominee as custodian for
the Participants.
(d) Open market purchases pursuant to Section 3.1(c) may be made on any
securities exchange on which the Common Stock is traded or by negotiated
transactions, and may be upon
13
<PAGE>
such terms and subject to such conditions with respect to price and delivery to
which the Independent Agent may agree. With regard to such open market purchases
of Common Stock, none of the Company, the Administrator or any Participant shall
have any authority or power to direct the time or price at which shares of
Common Stock may be purchased, the markets in which such shares are to be
purchased (including on any securities exchange or in negotiated transactions)
or the selection of the broker or dealer (other than the Independent Agent)
through or from whom purchases may be made, except that the timing of such
purchases must be made in accordance with the terms and conditions of this Plan.
(e) Notwithstanding the foregoing, any Dividends to be reinvested in
shares of Common Stock purchased in the open market pursuant to Section 3.1(c)
not reinvested in shares of Common Stock within 30 days of receipt by the
Administrator shall be promptly returned to the Participant at his address of
record by first class mail.
3.2 Investment of Initial Cash Payments and Optional Cash Payments.
(a) Subject to Section 2.5, any initial cash investments and optional cash
investments received by the Administrator from or with respect to a Participant
at least one business day prior to an Investment Date shall be invested,
beginning on such Investment Date, in (i) either newly issued shares or shares
of Common Stock held in the Company's treasury; or (ii) Common Stock purchased
in the open market. Initial cash investments and optional cash investments not
received by the Administrator at least one business day prior to an Investment
Date shall not be invested on such Investment Date but shall be invested
beginning on the next succeeding Investment Date. The Participant shall not earn
interest on initial or optional cash investments for the period before the
shares are purchased.
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(b) On an Investment Date with respect to which the Company elects to
invest initial cash investments or optional cash investments in newly issued
shares or shares of Common Stock held in the Company's treasury, the
Administrator shall remit to the Company the amount of such investments (as
determined in Section 3.2(a)). Upon receipt of such funds, the Company shall
issue to the Administrator for crediting to the Account of a Participant, a
number of shares (including any fraction of a share) of Common Stock equal to
the amount received from the Administrator, divided by the Company Purchase
Price applicable to such Investment Date. Such shares shall be issued or sold to
and registered in the name of, the Administrator or its nominee as custodian for
the Participant.
(c) On an Investment Date with respect to which the Company elects to
invest initial cash investments or optional cash investments in shares of Common
Stock purchased in the open market, the Administrator shall remit to the
Independent Agent the amount of such investments (as determined in Section
3.2(a)). Upon receipt of such amounts, the Independent Agent shall purchase for
crediting to the Account of a Participant a number of shares (including any
fractions of a share) of Common Stock equal to the amount paid to the
Independent Agent, divided by the Market Purchase Price applicable to such
Investment Date. Such purchases shall be made in the manner set forth in Section
3.1(c) and (d) and such shares shall be registered in the name of the
Administrator or its nominee as custodian for the Participants.
(d) Notwithstanding the foregoing, any initial cash investments and
optional cash investments to be invested in shares of Common Stock purchased in
the open market pursuant to Section 3.2(c) that are not so invested within 30
days of receipt by the Administrator shall be promptly returned to the
Participant at his address of record by first class mail.
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<PAGE>
(e) If a written request to stop investment of an initial cash investment
or optional cash investment is received by the Administrator from or on behalf
of a Participant at least one business day before the next Investment Date, any
such investment then held by the Administrator shall not be invested in Common
Stock and shall be returned to such Participant. If such a request is not
received by the Administrator at least one business day prior to an Investment
Date, any such investment shall be invested in shares of Common Stock for such
Participant's Account.
ARTICLE IV.
Safekeeping Services for Deposited Common Stock
4.1 Deposited Common Stock. A Participant may elect to have certificates
of shares of Common Stock of which the Participant is the record holder
deposited into this Plan by delivering such certificates and a completed
Enrollment Form to the Administrator. Shares of Common Stock so deposited shall
be transferred into the name of the Administrator or its nominee and credited to
the depositing Participant's Account. Dividends paid on shares of Common Stock
deposited into this Plan pursuant to this Section 4.1 shall be reinvested in
Common Stock in accordance with the Participant's Enrollment Form.
4.2 Withdrawal of Deposited Common Stock. Shares of Common Stock deposited
by a Participant pursuant to Section 4.1 may be withdrawn from this Plan
pursuant to Section 7.2.
ARTICLE V.
Sale of Account Shares; Gift or Transfer of Account Shares
5.1 Sale of Account Shares.
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<PAGE>
(a) A Participant may at any time request that all or a portion of his
whole Account Shares be sold by delivering a completed Sale/Withdrawal Request
Form to the Administrator. The Administrator shall forward such sale
instructions to the Independent Agent within five business days after receipt
thereof (except as described in (b) and (c) below). The Independent Agent shall
make such sales as soon as practicable (in accordance with stock transfer
requirements and federal and state securities laws) after processing such sale
instructions. As soon as practicable following the receipt of proceeds (less any
brokerage commissions and any applicable transfer taxes and service charges),
the Administrator shall mail by first class mail to such Participant at his
address of the record a check in an amount equal to the number of his Account
Shares sold multiplied by the weighted average sales price per share (less any
brokerage commissions and any applicable transfer taxes and service charges) of
such Account Shares sold.
(b) If a Sale/Withdrawal Request Form directing the sale of Account Shares
that are not Reinvestment Eligible Securities is received on or after the record
date but prior to the related Dividend Payment Date, the sale shall be processed
as described in (a), and as soon as practicable following receipt of Dividends
paid on such Account Shares, the Administrator shall mail a check for such
Dividends by first class mail to the Participant at his address of record.
(c) Notwithstanding the foregoing, if a Sale/Withdrawal Request Form
directing the sale of Account Shares which are also Reinvestment Eligible
Securities is not received by the Administrator on or before the record date
prior to the related Dividend Payment Date, such sale shall not be effected
until after such Dividend Payment Date (except in the case of instructions to
sell all whole Account Shares, in which case such sale shall not be effected
until after such Dividend has been reinvested pursuant to this Plan and the
shares of Common Stock purchased therewith are credited to the Participant's
Account). The shares of Common Stock purchased
17
<PAGE>
with the reinvestment of such Dividends shall be credited to the Participant's
Account. Following such Dividend Payment Date, the Administrator shall forward
the sale instructions to the Independent Agent, who shall effectuate the sale as
described in (a) above.
(d) With regard to open market sales of Account Shares pursuant to this
Section 5.1, none of the Company, the Administrator or any Participant shall
have any authority or power to direct the time or price at which shares of
Common Stock may be sold, the markets on which such shares are to be sold
(including on any securities exchange or in negotiated transactions) or the
selection of the broker or dealer (other than the Independent Agent) through or
from whom sales may be made, except that the timing of such sales must be made
in accordance with the terms and conditions of this Plan.
5.2 Gift or Transfer of Account Shares.
(a) A Participant may give or transfer Common Stock to anyone they choose
by: (i) making an initial $250 cash investment to establish an account in the
recipient's name; (ii) submitting an optional cash investment on behalf of
another Participant in an amount not less than $100 nor more than $10,000; or
(iii) transferring Account Shares from their Account to the recipient.
(b) A Participant must transfer a whole number of shares unless they elect
to transfer the entire account. A Participant may transfer shares to new or
existing Participants. To transfer the ownership of all or part of the whole
shares of Common Stock held in their Plan account, a Participant must mail the
Administrator a transfer request along with a properly signed stock power. A
Participant must have his signature guaranteed by a financial institution
participating in the medallion guarantee program. The Administrator will
automatically place such new
18
<PAGE>
accounts in full dividend reinvestment status. The recipients of gifts or
transfers, at their discretion, may then elect to change participation but, to
do so, they must submit a new Enrollment Form to the Administrator. The
Administrator will send recipients of gifts or transfers a notice of such
transfer.
(c) If a Participant requests to either transfer all of their shares or
make a partial sale and transfer the balance of their shares and such request is
received during the three business days prior to a Dividend Payment Date, the
processing of their request may be held until after their account is credited
with reinvested dividends. This hold period shall last no longer than four
weeks.
5.3 Reinvestment of Dividends on Remaining Account Shares. If only a
portion of a Participant's Account Shares are Reinvestment Eligible Securities
and the Participant elects to (i) sell a portion of his Account Shares pursuant
to Section 5.1; (ii) transfer a portion of his Account Shares pursuant to
Section 5.2; or (iii) withdraw a portion of his Account Shares pursuant to
Section 7.2, all of the shares held in his Account which are not Reinvestment
Eligible Securities shall be sold, transferred or withdrawn, as the case may be,
before any shares in his Account which are also Reinvestment Eligible Securities
are sold, transferred or withdrawn, unless the Participant gives specific
instructions to the contrary in connection with such sale, transfer or
withdrawal.
ARTICLE VI.
Eligible Securities
6.1 Eligible Securities. The following equity securities of the Company
and Illinois Power shall be Eligible Securities:
19
<PAGE>
(a) Common Stock;
(b) Illinois Power Serial Preferred Stock, $50 par value:
(i) 4.08% Series Preferred Stock,
(ii) 4.26% Series Preferred Stock;
(iii) 4.70% Series Preferred Stock;
(iv) 4.42% Series Preferred Stock;
(v) 4.20% Series Preferred Stock; and
(vi) 7.75% Series Preferred Stock.
6.2 Additional Eligible Securities. The Company may from time to time or
at any time designate other equity or debt securities of the Company or its
subsidiaries as Eligible Securities by giving written notification thereof to
the Administrator.
ARTICLE VII.
Treatment of Accounts
7.1 Changing Plan Options. A Participant may elect to change (i) his
reinvestment levels (i.e., full, partial or none) of Dividends on Reinvestment
Eligible Securities; and (ii) the designation of Reinvestment Eligible
Securities, by delivering a new Enrollment Form to the Administrator. To be
effective with respect to any Dividend payment, the Enrollment Form must be
received by the Administrator on or before the record date relating to such
Dividend Payment
20
<PAGE>
Date. If the Enrollment Form is not received by the Administrator before such
record date, such Enrollment Form shall not become effective until after such
Dividend Payment Date.
7.2 Right of Withdrawal.
(a) A Participant may, at any time or from time to time, withdraw all or
any of his whole Account Shares from this Plan by delivering to the
Administrator a completed Sale/Withdrawal Request Form and, if the Participant
will not be the record holder of such Account Shares after withdrawal, a stock
assignment (stock power). Subject to the limitations described below, as soon as
practicable following the Administrator's receipt of the withdraw instructions,
and a stock assignment (stock power), if applicable, the Administrator shall
mail certificates representing the withdrawn Account Shares by first class mail
to the Participant at his address of record, or to the address of any person
designated by the Participant.
(b) If a completed Sale/Withdrawal Request Form with regard to Account
Shares is received by the Administrator on or after the record date but prior to
the related Dividend Payment Date, the withdrawal shall be processed as
described in (a) above and the Administrator shall as soon as practicable
following the receipt of Dividends paid on the withdrawn Account Shares, mail a
check for such Dividends by first class mail to the Participant at his address
of record. Notwithstanding the foregoing, if a completed Sale/Withdrawal Request
Form that relates to the withdrawal of Account Shares which are also
Reinvestment Eligible Securities is received by the Administrator on or after
the record date but prior to the related Dividend Payment Date, such withdrawal
shall not become effective until after such Dividend Payment Date (except in the
case of instructions to withdraw all of the whole Account Accounts of such
Participant, in which case such withdrawal shall not be effected until after
such Dividend has
21
<PAGE>
been reinvested pursuant to this Plan and the shares of Common Stock purchased
therewith are credited to his Account). As soon as practicable following such
Dividend Payment Date, the Administrator shall mail certificates representing
the withdrawn Account Shares by first class mail to the Participant at his
address of record, or to the address of any person designated by the
Participant.
(c) Withdrawal of Account Shares shall not affect reinvestment of
Dividends on the Account Shares not withdrawn unless (i) the Participant is no
longer the record holder of such Account Shares; (ii) such reinvestment is
changed by the Participant by delivering a completed Enrollment Form to the
Administrator; or (iii) the Participant has terminated his participation in this
Plan.
7.3 Right of Termination of Participation. If a Participant's
Sale/Withdrawal Request Form indicates the Participant's desire to terminate his
participation in this Plan, the Administrator shall treat such request as a
withdrawal of all of such Participant's whole Account Shares pursuant to Section
7.2. The Administrator, in addition to mailing certificates representing all
whole Account Shares, if any, pursuant to Section 7.2, shall mail by first class
mail to the Participant at his address of record a check for an amount equal to
the sum of (i) the amount of cash credited to such Participant's Account pending
investment in Common Stock; and (ii) the cash value of any fraction of a share
of Common Stock credited to his Account. Such fraction of a share shall be
valued at the Company Purchase Price for the trading day immediately preceding
the date of receipt of the completed Sale/Withdrawal Form.
7.4 Termination of Participation by Company. If a Participant does not
have at least one whole Account Share or own or hold any other Reinvestment
Eligible Securities, the
22
<PAGE>
Participant's participation in this Plan may be terminated by the Company in its
sole discretion after written notice is mailed by first class mail to such
Participant at his address of record. Additionally, the Company in its sole
discretion may terminate any Participant's participation in this Plan after
written notice mailed in advance by first class mail to such Participant at his
address of record. Upon such termination of participation, the Account of such
Participant shall be treated as if he had elected to terminate his participation
in this Plan pursuant to Section 7.3, except that any fraction of a share of
Common Stock shall be valued as of the Company Purchase Price for the trading
date immediately preceding the date on which such Participant's participation is
terminated.
7.5 Stock Splits, Stock Dividends and Rights Offerings. Any shares or
other securities representing stock splits or other noncash distributions on
Account Shares shall be credited to such Participant's Account. Stock splits,
combinations, recapitalizations and similar events affecting Account Shares
shall be credited to such Participant's Accounts on a pro rata basis. In the
event of a rights offering, a Participant shall receive rights based upon the
total number of his whole Account Shares.
7.6 Shareholder Materials; Voting Rights.
(a) The Administrator shall send or forward to each Participant all
applicable proxy solicitation materials, other shareholder materials or consent
solicitation materials. Participants shall have the exclusive right to exercise
all voting rights respecting their Account Shares. A Participant may vote any of
his whole Account Shares in person or by proxy. A Participant's proxy card shall
include all whole shares of Common Stock of which he is the record holder,
23
<PAGE>
including those held in his Account. Account Shares shall not be voted unless a
Participant or his proxy votes them. Fractions of shares of Common Stock shall
not be voted.
(b) Solicitation of the exercise of Participants' voting rights by the
management of the Company and others under a proxy or consent provision
applicable to all holders of Common Stock shall be permitted. Solicitation of
the exercise of Participants' tender or exchange offer rights by management of
the Company and others shall also be permitted. The Administrator shall notify
the Participants of each occasion for the exercise of their voting rights or
rights with respect to a tender offer or exchange offer within a reasonable time
before such rights are to be exercised. Such notification shall include all
information distributed to the shareholders of the Company by the Company
regarding the exercise of such rights.
7.7 Statement of Account. The Administrator shall send a Statement of
Account to each Participant for each month in which such Participant (i) made an
initial investment or optional cash investment; (ii) deposited Common Stock into
this Plan; (iii) transferred or withdrew Account Shares; (iv) had Dividends
reinvested in Common Stock; or (v) entered into any other transaction under this
Plan. As soon as practicable following a sale of Account Shares by a
Participant, the Administrator shall deliver a confirmation to such Participant.
ARTICLE VIII.
Certificates and Fractions of Shares
8.1 Certificates. A Participant may at any time request a certificate for
all or a portion of his whole Account Shares and upon such request the
Administrator shall promptly mail such certificate (in any event, within at
least two business days of the receipt of such written request) by first class
mail to such Participant at his address of record; provided, however, that upon
the
24
<PAGE>
mailing of such certificate, the shares of Common Stock represented by such
certificate shall no longer be Account Shares but shall remain Reinvestment
Eligible Securities (except to the extent such Participant delivers to the
Administrator an Enrollment Form electing not to have Dividends on such Account
Shares reinvested in Common Stock).
8.2 Fractional Shares. Fractions of shares of Common Stock shall be
credited to Participants' Accounts as provided in Section 3.1(b), provided,
however, that (i) no certificate for a fraction of a share shall be distributed
to any Participant at any time; and (ii) the Company shall issue and sell only
whole shares of Common Stock to the Administrator in respect of Dividends
reinvested in, and purchases of, newly issued shares or shares of Common Stock
held in the Company's treasury.
ARTICLE IX.
Amendment and Termination of this Plan
9.1 Suspension, Modification and Termination. The Company may at any time
and in its sole discretion suspend, modify, amend or terminate this Plan, in
whole, in part or in respect of Participants in one or more jurisdictions;
provided, however, that no such amendment shall decrease the Account of any
Participant or result in a distribution to the Company of any amount credited to
the Account of any Participant. Upon complete termination of this Plan, the
Accounts of all Participants (or in the case of partial termination of this
Plan, the Accounts of all affected Participants) shall be treated as if each
such Participant had elected to terminate his participation in this Plan
pursuant to Section 7.3, except that any fraction of a share of Common Stock
shall be valued as of the trading date immediately preceding the date on which
this Plan is
25
<PAGE>
terminated. The Administrator shall promptly send each affected Participant
notice of such suspension, modification or termination.
ARTICLE X.
Administration of this Plan
10.1 Rules and Regulations. The Company may from time to time adopt such
administrative rules and regulations concerning this Plan as it deems necessary
or desirable for the administration of this Plan. The Company shall have the
power and authority to interpret the terms and the provisions of this Plan and
shall interpret and construe this Plan and reconcile any inconsistency or supply
any omitted detail in a manner consistent with the general terms of this Plan
and applicable law.
10.2 Selection of an Administrator. The Administrator shall be appointed
by the Company. The Administrator's appointment to serve as such may be revoked
by the Company at any time. The Administrator may resign at any time upon
reasonable notice to the Company. If no Administrator is appointed, the Company
shall be deemed to be the Administrator for purposes of this Plan. The Company
has appointed Chase Manhattan Bank as the Administrator.
10.3 Authority and Duties of Administrator. The Administrator shall have
the authority to undertake any act necessary to fulfill its duties as set forth
in the various provisions of this Plan. The Administrator shall maintain
appropriate records of the Accounts of Participants.
10.4 Compensation. The officers of the Company shall make such
arrangements regarding compensation, reimbursement of expenses and
indemnification of the Administrator
26
<PAGE>
and any Independent Agent as they from time to time deem reasonable and
appropriate.
10.5 Costs. All costs of administration of this Plan shall be paid by the
Company; provided, however, that any brokerage commissions and any applicable
transfer taxes and service charges incurred in connection with open market sales
of Common Stock made under this Plan shall be borne by the Participants.
10.6 Liability of the Company, the Administrator and Any Independent
Agent. The Company, the Administrator and any Independent Agent shall not be
liable for any act done in good faith, or for the good faith omission to act in
administering or performing their duties with respect to this Plan, including
any claim of liability arising out of failure to terminate a Participant's
Account upon such Participant's death prior to receipt of notice in writing of
such death, or with respect to the prices at which shares are purchased or sold
for a Participant's Account and the times when such purchases and sales are
made, or with respect to any loss or fluctuation in the market value after the
purchase or sale of such shares.
10.7 Records and Reports. The Administrator shall keep appropriate records
concerning this Plan, Accounts of Participants, purchases and sales of Common
Stock made under this Plan and Participants' addresses of record and shall send
Statements of Account and confirmation to each Participant in accordance with
the provisions of Section 7.7.
10.8 Selection of Independent Agent. Any Independent Agent serving in such
capacity pursuant to this Plan shall be selected by the Company, and the
Administrator and the Company, or either of them, shall, subject to the
provisions of Section 3.3, make such arrangements and enter into such agreements
with the Independent Agent in connection with the activities
27
<PAGE>
contemplated by this Plan as the Administrator and the Company, or either of
them, deem reasonable and appropriate.
10.9 Source of Shares of Common Stock. The Company shall not change the
source of shares of Common Stock purchased by Participants in this Plan (i.e.,
either (i) newly issued shares of Common Stock or shares of Common Stock held in
the Company's treasury purchased from the Company or (ii) shares of Common Stock
purchased in the open market) more than once in any three-month period. At any
time that the source of shares of Common Stock purchased in this Plan are shares
purchased in the open market, the Company shall not exercise its right to change
the source of shares absent a determination by the Company's Board of Directors
or Chief Financial Officer that the Company has a need to raise additional
capital or there is another valid reason for a change.
ARTICLE XI.
Miscellaneous Provisions
11.1 Controlling Law. This Plan shall be construed, regulated and
administered under the laws of the State of Illinois.
11.2 Acceptance of Terms and Conditions of Plans by Participants. Each
Participant, by completing an Enrollment Form and as a condition of
participation herein, for himself, his heirs, executors, administrators, legal
representatives, and assigns, approves and agrees to be bound by the provisions
of this Plan and any subsequent amendments hereto, and all actions of the
Company and the Administrator hereunder.
[LETTERHEAD OF TROUTMAN SANDERS LLP, ATTORNEYS AT LAW]
March 9, 2000
Dynegy Inc.
1000 Louisiana Street, Suite 5800
Houston, Texas 77002
Ladies and Gentlemen:
We have acted as special counsel to Dynegy Inc., an Illinois corporation
("you" or "Dynegy"), in connection with the filing of a Registration Statement
(the "Registration Statement") on Form S-3 under the Securities Act of 1933, as
amended (the "Act"), relating to the registration of up to 5,000,000 shares of
Class A Common Stock, no par value, of Dynegy (the "Shares"), which may be
issued pursuant to Dynegy Investment Plus plan (the "Plan"). This opinion is
being provided at your request for use in the Registration Statement.
In connection with this opinion, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such instruments,
certificates, records and documents, and have reviewed such questions of law, as
we have deemed necessary or appropriate for purposes of this opinion. In such
examination, we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity to the original
documents of all documents submitted as copies and the authenticity of the
originals of such latter documents. As to any facts material to our opinion, we
have relied upon the aforesaid instruments, certificates, records and documents
and inquiries of your representatives.
Based upon the foregoing examination, we are of the opinion that the
Shares have been duly authorized and, when issued by you in the manner
contemplated by the Plan (as currently in effect) and the Registration Statement
(including the declaration and maintenance of the effectiveness of the
Registration Statement and the obtaining and maintenance of all requisite
regulatory and other approvals), will be validly issued, fully paid and
nonassessable.
We are, in this opinion, opining only on the Business Corporation Act of
the State of Illinois. We are not opining on "blue sky" or other state
securities laws.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the caption "Legal
Matters" therein and in the related
<PAGE>
[LETTERHEAD OF TROUTMAN SANDERS LLP, ATTORNEYS AT LAW]
March 9, 2000
Page 2
prospectus, and in any supplements thereto or amendments thereof. Our consent to
such reference does not constitute a consent under Section 7 of the Act, and in
consenting to such reference we have not certified any part of the Registration
Statement and do not otherwise come within the categories of persons whose
consent is required under Section 7 or under the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Troutman Sanders LLP
------------------------
TROUTMAN SANDERS LLP
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 28, 2000
included in Dynegy Inc.'s Form 10-K for the year ended December 31, 1999 and to
all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
-----------------------
ARTHUR ANDERSEN LLP
Houston, Texas
March 6, 2000
[DYNEGY LETTERHEAD]
March 9, 2000
Re: Dynegy Investment Plus
Dear Plan Participant:
Enclosed you will find a prospectus describing the terms of Dynegy
Investment Plus. As you know, at the closing of the merger between Illinova
Corporation, an Illinois corporation ("Illinova") and Dynegy Inc., a Delaware
corporation since renamed Dynegy Holdings Inc. ("Old Dynegy"), Old Dynegy and
Illinova merged into subsidiaries of Dynegy Inc., an Illinois corporation
formerly known as Energy Convergence Holding Company ("New Dynegy"). As
described in the letter dated January 22, 2000 sent by Illinova to participants
in Illinova Investment Plus, the plan was temporarily suspended as of that date.
In the merger, New Dynegy assumed Illinova's obligations under Illinova
Investment Plus and your account in Illinova Investment Plus was automatically
converted into an account under the New Dynegy plan. Dynegy Investment Plus,
which is described in the enclosed prospectus, represents an amendment and
restatement of Illinova Investment Plus. When you receive this letter, your
account in Dynegy Investment Plus will become active.
In connection with the amendment and restatement of Illinova Investment
Plus by New Dynegy, some changes have been made to the plan, including but not
limited to the following:
o The maximum amount allowed for initial and optional investments has
been changed from $60,000 per year to $10,000 per month;
o Under certain circumstances, you may request a waiver of this
maximum so that you may make initial and optional investments in
excess of the monthly maximum;
o The minimum amount allowed for an optional cash investment has been
changed from $25 to $100, except that active employees of New Dynegy
or one of its subsidiaries may still make optional cash investments
in even multiples of $1 but not less than $5 per pay period; and
o Chase Manhattan Bank is the administrator of the plan.
These and other changes, and the other features of the plan, are described
in the enclosed prospectus, which we encourage you to read carefully.
If you wish to continue your participation in Dynegy Investment Plus you
do not need to do anything at this time. If, after reviewing the enclosed
prospectus, you do not wish to continue participation in Dynegy Investment Plus,
you should submit a Sale/Withdrawal Request Form to the administrator. We
appreciate your participation in the plan, and we look forward to your continued
participation in Dynegy Investment Plus.
Sincerely,
/s/ C. L. Watson
C. L. Watson
[DYNEGY LETTERHEAD]
March 9, 2000
Re: Dynegy Investment Plus
Dear Fellow Shareholders:
I am pleased to provide you with detailed information on our dividend
reinvestment and stock purchase plan, Dynegy Investment Plus. This plan allows
you to purchase your initial shares of Class A common stock directly from
Dynegy, easily reinvest your dividend payments or make additional cash purchases
of our common stock, directly through Dynegy. Here are some of the main
features:
o Direct Purchase and Sale of Stock: You may purchase shares directly
from Dynegy - and you may sell shares through the plan.
o Dividend Reinvestment: You may elect to reinvest dividends on all or
a portion of your holdings of Dynegy Class A common stock and
certain eligible securities of Illinois Power Company.
o Safekeeping: You may send your stock certificates to ChaseMellon
Shareholder Services, our transfer agent, to have your shares held
in safekeeping. A statement of holdings will be sent after each
transaction.
Please review the enclosed prospectus on our plan. You will find a summary
of the plan under "Key Features of Plan" on page 2. This prospectus should help
you to understand the features of the plan and better match our services to fit
your investment needs. To participate, simply complete and return the enclosed
enrollment form to ChaseMellon Shareholder Services in the enclosed envelope.
Should you have any additional questions, please feel free to contact
ChaseMellon, toll free at 1-888-921-5563.
As always, I appreciate your interest in Dynegy.
Sincerely,
/s/ C. L. Watson
C. L. Watson
DYNEGY INC.
Enrollment Form for
Dynegy Investment Plus
Dividend Reinvestment and
Stock Purchase Plan
-------------------------------------------------------
This form when completed and signed, should be mailed
in the courtesy envelope provided to: ChaseMellon
Shareholder Services Investor Services Program,
P.O. Box 3339, South Hackensack,
NJ 07606-1939
Is this account for an existing stockholder? YES |_| NO |_|
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1. Account Registration Complete only one section. Print clearly in CAPITAL
LETTERS.
|_| INDIVIDUAL OR JOINT ACCOUNT
Owner's name
|_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_|
Owner's Social Security number Owner's date of birth
(used for tax reporting) Month Day Year
|_||_||_| - |_||_| - |_||_||_||_| |_||_| / |_||_| / |_||_|
Joint Owner's name
|_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_|
Joint Owner's Social Security number
(used for tax reporting)
|_||_||_| - |_||_| - |_||_||_||_|
The account will be registered "Joint Tenants with Rights of Survivorship"
unless you check a box below:
|_| Tenants in common |_| Tenants by entirety |_| Community property
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|_| GIFT TRANSFER TO A MINOR (UGMA/UTMA)
Custodian's name
|_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_|
Minor's name
|_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_|
Minor's Social Security number Minor's date of birth
(required) Month Day Year
|_||_||_| - |_||_| - |_||_||_||_| |_||_| / |_||_| / |_||_|
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|_| TRUST (Please check only one of the trustee types)
|_| Person as trustee |_| Organization as trustee
Trustee: Individual or organization name
|_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_|
and Co-trustee's name, if applicable
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Name of trust
|_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_|
For the benefit of
|_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_|
Date of trust
Trust taxpayer identification number Month Day Year
|_||_||_| - |_||_| - |_||_||_||_| |_||_| / |_||_| / |_||_|
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|_| ORGANIZATION OR BUSINESS ENTITY
Check one: |_| Corporation |_| Partnership |_| Other
Name of entity
|_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_|
Taxpayer identification number
|_||_| - |_||_||_||_||_||_||_|
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2. Address
Mailing address (including apartment or box number)
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|_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_||_|
City State Zip
|_||_||_||_||_||_||_||_||_||_||_||_||_| |_||_| |_||_||_||_||_| - |_||_||_||_|
Home phone Work phone
(|_||_||_|) |_||_||_| - |_||_||_||_| (|_||_||_|) |_||_||_| - |_||_||_||_|
For mailing address outside the U.S.: Routing or
Country of residence Province postal code
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3. Dividend Reinvestment
You may choose to reinvest all or part of the dividends paid on Dynegy Inc.
Class A common stock and certain equity securities of Illinois Power Company. If
neither box is selected, The Chase Manhattan Bank will automatically remit any
dividends to you.
|_| Reinvest the dividends on ALL shares.
|_| I would like a portion of my dividends reinvested. Please reinvest the
dividends on (a)____________ of my shares; or (b) $_________ of my
dividends. 100% of your dividends will be reinvested if a specific number
of shares or a specific dollar amount is not indicated.
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4. Initial and Optional Cash Purchases (Make checks payable to The Chase
Manhattan Bank)
|_| As a NEW plan participant I wish to enroll in the plan by making an initial
investment. Enclosed is my check or money order for $__________. Initial
investment must be at least $250 not to exceed $10,000 per month. AS A NEW
INVESTOR YOU MUST COMPLETE SECTIONS 1, 2 & 8.
|_| As a CURRENT registered shareholder I wish to make an additional investment.
Enclosed is my check or money order for $__________. (Minimum $100 with the
Maximum not to exceed $10,000 per month.)
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5. Bank Authorization Agreement
|_| DIRECT DEPOSIT OF DIVIDENDS
I hereby authorize to have my dividends deposited automatically in my bank
account. (Please complete Section 6.) If this option is not selected, your
dividend check will be automatically mailed to your address.
|_| AUTOMATIC ADDITIONAL INVESTMENT
I hereby choose to make additional investments in Dynegy Inc. Class A common
stock by authorizing automatic monthly debits from my bank account.
Upon receipt of this form, properly completed, the Administrator will contact
your bank to deduct the amount indicated from your bank account on or about the
25th of each month. The Administrator will invest in Dynegy Inc. Class A common
stock beginning on the next Investment Date. Such deductions and investments
will continue monthly until you notify the Administrator to change or
discontinue them. Should your bank account contain insufficient funds to cover
the authorized deduction, no deduction or investment will occur. In such event,
you may be charged a fee by your bank for insufficient funds.
Please complete the following and Section 6:
I hereby authorize the Chase Manhattan Bank and the Financial Institution
indicated below to deduct from my bank account $_____________ per month ($100
minimum, $10,000 maximum) and apply amounts so deducted to the purchase of
Dynegy Inc. Common Stock under the account designated (Note: Deductions will
occur on or about the 25th of each month.)
<PAGE>
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6. Bank Account Information (complete only if a feature in Section 5 is
selected)
This information will be used for
|_| Direct Deposit of Dividends (Sec. 5) |_| Automatic Investments (Sec. 5)
|_| Checking account Bank or credit union's ABA transit routing number
(available from the bank or credit union)
|_||_||_||_||_||_||_||_||_|
|_| Savings account Bank or credit union account number
|_||_||_||_||_||_||_||_||_||_||_||_|
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Tape your voided check here
Bank and credit union routing information.
For deposits or withdrawals to your checking account, please tape a
voided check so the Administrator may obtain bank or credit union
account information.
For deposits or withdrawals to a savings account, please tape a
preprinted deposit slip. (Do not staple the slips.)
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7. Safekeeping
Dynegy Inc. Class A common stock certificates deposited for safekeeping in your
account must be in the same registration as your plan account.
|_| Please accept the enclosed certificate(s) for deposit to my account.
Enclosed are ______________ share certificates.
insert number
certificate number number of shares
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| T O T A L |
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8. Account Authorization Signature (required)
|_| REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (Substitute Form W-9)
I am a U.S. citizen or a resident alien. I certify, under penalties of
perjury, that (1) the taxpayer identification number in Section 1 is
correct (or I am waiting for a number to be issued to me) and (cross out
the following if not true) (2) I am not subject to backup withholding
because: (a) I am exempt from backup withholding, or (b) I have not been
notified by the Internal Revenue Service that I am subject to backup
withholding as a result of failure to report all interest or dividends, or
(c) the IRS has notified me that I am no longer subject to backup
withholding.
|_| CERTIFICATE OF FOREIGN STATUS (Substitute Form W-8)
I am an exempt foreign citizen. I certify, under penalties of perjury,
that for dividends, I am not a U.S. citizen or resident alien (or I am
filing for a foreign corporation, partnership, estate, or trust) and I am
an exempt foreign person. I have entered in Section 2 of this enrollment
form the country where I reside permanently for income-tax purposes.
|_| FOR ORGANIZATION AND BUSINESS ENTITIES EXEMPT FROM BACKUP WITHHOLDING
I qualify for exemption and my account will not be subject to tax
reporting and backup withholding.
MY/OUR SIGNATURE(S) BELOW INDICATES I/WE HAVE READ THE PROSPECTUS AND AGREE TO
THE TERMS THEREIN AND HEREIN.
Signature of Owner Date (month, day, year)
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Signature of Joint Owner Date (month, day, year)
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If you need assistance, please call the Administrator at 1-888-921-5563
Optional Cash Purchases of More than $10,000
<TABLE>
<CAPTION>
(A) (B) (C) (D)
Threshold Price Optional Cash
and Waiver Investments
Discount, if any, Must be Pricing Period Investment
Year will be set by received by Start Date Date
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<S> <C> <C> <C> <C>
2000.............. 3/22/00 3/24/00 3/27/00 4/3/00
4/5/00 4/7/00 4/10/00 4/17/00
4/19/00 4/21/00 4/24/00 5/1/00
5/3/00 5/5/00 5/8/00 5/15/00
5/19/00 5/23/00 5/24/00 6/1/00
6/5/00 6/7/00 6/8/00 6/15/00
6/21/00 6/23/00 6/26/00 7/3/00
7/5/00 7/7/00 7/10/00 7/17/00
7/20/00 7/24/00 7/25/00 8/1/00
8/3/00 8/7/00 8/8/00 8/15/00
8/22/00 8/24/00 8/25/00 9/1/00
9/5/00 9/7/00 9/8/00 9/15/00
9/20/00 9/22/00 9/25/00 10/2/00
10/4/00 10/6/00 10/9/00 10/16/00
10/20/00 10/24/00 10/25/00 11/1/00
11/3/00 11/7/00 11/8/00 11/15/00
11/20/00 11/22/00 11/24/00 12/1/00
12/5/00 12/7/00 12/8/00 12/15/00
2001.............. 12/19/00 12/21/00 12/22/00 1/2/01
1/1/01 1/5/01 1/8/01 1/16/01
1/22/01 1/24/01 1/25/01 2/1/01
2/5/01 2/7/01 2/8/01 2/15/01
2/16/01 2/21/01 2/22/01 3/1/01
3/5/01 3/7/01 3/8/01 3/15/01
3/21/01 3/23/01 3/26/01 4/2/01
4/3/01 4/5/01 4/6/01 4/16/01
4/19/01 4/23/01 4/24/01 5/1/01
5/3/01 5/7/01 5/8/01 5/15/01
5/21/1 5/23/01 5/24/01 6/1/01
6/5/01 6/7/01 6/8/01 6/15/01
6/20/01 6/22/01 6/25/01 7/2/01
7/3/01 7/6/01 7/9/01 7/16/01
7/20/01 7/24/01 7/25/01 8/1/01
8/3/01 8/7/01 8/8/01 8/15/01
8/22/01 8/24/01 8/24/01 9/4/01
9/5/01 9/7/01 9/10/01 9/17/01
9/19/01 9/21/01 9/24/01 10/1/01
10/3/01 10/5/01 10/8/01 10/15/01
10/22/01 10/24/01 10/25/01 11/1/01
11/5/01 11/7/01 11/8/01 11/15/01
11/20/01 11/23/01 11/26/01 12/3/01
12/5/01 12/7/01 12/10/01 12/17/01
</TABLE>
DIVIDEND PAYMENT DATES ARE AT THE DISCRETION OF DYNEGY. INVESTORS SHOULD NOT
RELY SOLELY ON THE ABOVE SCHEDULE AS PRICING PERIODS AND INVESTMENT DATES MAY
VARY. FOR MORE INFORMATION, PLEASE CONTACT THE ADMINISTRATOR AT (212) 273-8200.
A. The Threshold Price and the Waiver Discount, if any, will be established
three business days prior to the first day of the Pricing Period.
B. Optional cash purchases made pursuant to a request for waiver are due by
the close of business on the last business day immediately preceding the
first day of the Pricing Period.
C. The Pricing Period will be the five consecutive Trading Days ending on the
Trading Day immediately preceding the Investment Date.
D. The Investment Date will be (i) in any month in which a dividend payment
occurs, such dividend payment date and the 15th day of the month or, if
either day is not a business day, the business day immediately following
that day; and (ii) in any month in which no dividend payment occurs, the
first and 15th day of the month or, if either day is not a business day,
the business day immediately following that day.
