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Kenetech Corp – ‘PRE 14A’ for 8/23/00

On: Monday, 7/3/00, at 7:16pm ET · As of: 7/5/00 · For: 8/23/00 · Accession #: 807708-0-10 · File #: 0-22072

  As Of                Filer                Filing    For·On·As Docs:Size

 7/05/00  Kenetech Corp                     PRE 14A     8/23/00    1:109K

Preliminary Proxy Solicitation Material — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: PRE 14A     Preliminary Proxy Statement                           33    177K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Exchange of Stock Certificates
1	1st Page - Filing Submission
23	Exchange of Stock Certificates

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 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
 of 1934
(Amendment No. )

Filed by the Registrant [x]                                                     
Filed by a Party other than the Registrant [ ]                                  

Check the appropriate box:                                                      
[x]      Preliminary Proxy Statement                                            
[ ]      Confidential, for use of the Commission Only (as permitted             
by Rule 14a-6(e)(2))                                          
[ ]      Definitive Proxy Statement                                             
[ ]      Definitive Additional Materials                                        
[ ]      Soliciting Material Pursuant to Section 240.14a-12                     

KENETECH CORPORATION
(Name of Registrant as Specified in its Charter)

_________________________ 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):                              
[x]      No fee required.                                                       
[ ]      Fee computed on table below per Exchange Act Rules 14a-6(i)(1)and 0-11.

         (1)      Title  of  each  class  of  securities  to  which  transaction
applies:                                    

       (2)      Aggregate number of securities to which transaction applies:

         (3)      Per   unit  price  or other  underlying  value of  transaction
                  computed  pursuant to Exchange  Act Rule 0-11  (set forth  the
                  amount on which the filing fee is  calculated  and  state  how
it was determined):                         

(4)      Proposed maximum aggregate value of transaction:     

(5)      Total fee paid:                                      

[ ]      Fee paid previously with preliminary materials.                        
[ ]      Check box if any part of the fee is offset as provided  by Exchange Act
         Rule 0-11(a)(2)  and identify  the  filing for which the offsetting fee
         was paid  previously.  Identify the previous  filing  by   registration
       statement number, or the Form or Schedule and the date of its filing.

(1)      Amount Previously Paid:                              

(2)      Form, Schedule or Registration Statement No.:        

(3)      Filing Party:                                        

(4)      Date Filed:                                          

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KENETECH CORPORATION
500 SANSOME STREET
 SAN FRANCISCO, CALIFORNIA 94111

 2000 Annual Meeting of Stockholders

July 20, 2000                                                                   

Dear Stockholder:                                                               

     Enclosed  you will find your 2000  Proxy,  Proxy  Statement  and  Notice of
Annual Meeting of Stockholders of KENETECH Corporation,  a Delaware corporation.
Please  review this  material and then  complete,  execute and date the enclosed
Proxy and  promptly  return it in the  enclosed  self-addressed  postage-prepaid
envelope in time for the Annual Meeting on Wednesday,  August 23, 2000, at 10:00
A.M.  The  Annual  Meeting  will be held at the Park  Hyatt San  Francisco,  333
Battery Street, San Francisco, California.                                      

     For the reasons set forth in the attached Proxy Statement,  we ask that you
(1) elect this year's two nominees to the Board of Directors;  (2) vote to amend
the  Restated  Certificate  of  Incorporation  of the Company to  eliminate  the
Company's Series U Preferred  Stock; (3) vote to amend the Restated  Certificate
of Incorporation  of the Company to effect a one-for-ten  reverse stock split of
the issued and  outstanding  shares of the Company's  common stock,  $0.0001 par
value;  (4) vote to amend  the  Restated  Certificate  of  Incorporation  of the
Company to decrease  the number of  authorized  shares of the  Company's  common
stock, $0.0001 par value, from 110,000,000 to 11,000,000 and decrease the number
of authorized  shares of the Company's  preferred stock,  par value $0.01,  from
10,000,000 to 1,000,000;  and (5) ratify the Board of Directors'  appointment of
KPMG LLP as the Company's independent auditors for the 2000 fiscal year.        

     Also  enclosed is your copy of the  Company's  1999  Annual  Report on Form
10-K.                                                                           

     We welcome any comments you have and hope to see you at the Annual Meeting.

     WHETHER OR NOT YOU INTEND TO ATTEND THE  ANNUAL  MEETING,  PLEASE  READ THE
PROXY  STATEMENT AND COMPLETE,  EXECUTE,  DATE AND RETURN THE ENCLOSED  PROXY AS
SOON AS  POSSIBLE.  SUBMITTING  YOUR PROXY DOES NOT AFFECT YOUR RIGHT TO VOTE IN
PERSON  IF YOU  ATTEND  THE  MEETING.  THE  BOARD OF  DIRECTORS  AND  MANAGEMENT
RECOMMEND THAT YOU VOTE IN FAVOR OF ALL PROPOSALS.                              

Very truly yours,                                                               

Mark D. Lerdal                                                                  
President and Chief Executive Officer                                           

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KENETECH CORPORATION
 500 Sansome Street, Suite 410
 San Francisco, CA 94111

 NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
Wednesday, August 23, 2000
10:00 A.M.

TO OUR STOCKHOLDERS:                                                            

     The Annual  Meeting of  Stockholders  of KENETECH  Corporation,  a Delaware
corporation (the "Company"),  will be held at the Park Hyatt San Francisco,  333
Battery Street,  San Francisco,  California,  on Wednesday,  August 23, 2000, at
10:00 A.M., local time, for the purpose of:                                     

     1.  Electing  two Class I  Directors  of the  Company  to hold  office  for
three-year terms;                                                               

     2. Considering and voting upon a proposal to amend the Restated Certificate
of  Incorporation  of the Company to eliminate the Company's  Series U Preferred
Stock;                                                                          

     3. Considering and voting upon a proposal to amend the Restated Certificate
of Incorporation  of the Company to effect a one-for-ten  reverse stock split of
the issued and  outstanding  shares of the Company's  common stock,  $0.0001 par
value;                                                                          

     4. Considering and voting upon a proposal to amend the Restated Certificate
of Incorporation  of the Company to decrease the number of authorized  shares of
the Company's  common stock,  $0.0001 par value,  from 110,000,000 to 11,000,000
and decrease the number of authorized  shares of the Company's  preferred stock,
par value $0.01, from 10,000,000 to 1,000,000;                                  

     5. Ratifying the Board of Directors' appointment of independent auditors to
audit the financial statements of the Company for the 2000 fiscal year; and     

     6. Acting upon all other matters which may properly come before the meeting
or any adjournments or postponements thereof.                                   

     Stockholders  of  record  at the  close of  business  on June 26,  2000 are
entitled  to  notice  of,  and to  vote  at,  the  meeting  and  any one or more
adjournments  or  postponements  thereof.  A list of such  stockholders  will be
available at the time and place of the meeting and, during the ten days prior to
the meeting, at the office of the Secretary of the Company,  500 Sansome Street,
Suite 410, San Francisco, California 94111.                                     

By Order of the Board of Directors                                              

Dianne P. Urhausen                                                              
Vice President and Secretary                                                    

San Francisco, California                                                       
July 20, 2000                                                                   

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KENETECH CORPORATION
500 Sansome Street
 San Francisco, California 94111

 PROXY STATEMENT

 ANNUAL MEETING - 10:00 A.M., WEDNESDAY, AUGUST 23, 2000

Date,  Time and Place of  Meeting,  Principal  Executive  Offices,  Proxies  and
Solicitation                                                                    

     This Proxy  Statement is furnished in connection  with the  solicitation of
proxies by the Board of Directors of KENETECH Corporation (the "Company"), to be
voted at the Annual  Meeting of  Stockholders  at 10:00 A.M.,  Pacific  Daylight
Time,  on  Wednesday,  August  23,  2000  and at any  and  all  adjournments  or
postponements  thereof.  Such Annual  Meeting will be held at the Park Hyatt San
Francisco, 333 Battery Street, San Francisco, California.                       

     The principal  executive  offices of the Company are located at 500 Sansome
Street, Suite 410, San Francisco, California 94111.                             

     Solicitation  of  proxies  by mail  (including  the  mailing  of the  Proxy
Statement and the  accompanying  form of Proxy to  stockholders)  is expected to
commence  on  or  about  July  20,  2000.  Costs  of   solicitation,   including
preparation,  assembly,  printing and mailing of this Proxy Statement, the Proxy
and any other information  furnished to the  stockholders,  will be borne by the
Company.  In  addition  to such  solicitation  by mail,  some of the  directors,
officers and regular  employees of the Company may, without extra  compensation,
solicit proxies by telephone, telegraph or personal interview. The Company will,
upon request,  reimburse the reasonable charges and expenses of brokerage houses
or other  nominees  or  fiduciaries  for  forwarding  proxy  materials  to,  and
obtaining authority to execute proxies from, beneficial owners for whose account
they hold shares of common stock of the Company.  The Company may retain, at its
expense, a proxy solicitation firm to assist it in soliciting proxies.          

Annual Report                                                                   

     An annual  report on Form 10-K for the fiscal year ended  December 31, 1999
is enclosed with this Proxy Statement.                                          

Voting Stock                                                                    

     The  securities of the Company  entitled to be voted at the Annual  Meeting
consist of shares of its common stock, $0.0001 par value ("Common Stock").  Only
stockholders  of record at the close of business  on June 26, 2000 (the  "Record
Date") will be entitled to receive notice of and to vote at the Annual  Meeting.
There are differing voting  requirements for the various  proposals.  Assuming a
quorum  is  present  in  person  or by proxy,  Directors  will be  elected  by a
plurality of the votes of the shares  present in person or  represented by proxy
at the Annual  Meeting and  entitled to vote in the election of  directors.  The
affirmative vote of a majority of the outstanding shares of the Company entitled
to vote  thereon is  required  for the  approval of  Proposals  2, 3, and 4. The
affirmative  vote of a majority of shares  present in person or  represented  by
proxy at the Annual  Meeting and  entitled to vote on the matter is required for
the  approval of Proposal 5. Each share of Common  Stock is entitled to one vote
on each proposal that comes before the  stockholders at the Annual  Meeting.  On
the Record Date, 32,960,664 shares of Common Stock were issued and outstanding. 

Page 1

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Voting Procedures                                                               

     Stockholders may vote in person or by proxy at the Annual Meeting. In order
for any  business  to be  conducted,  holders  of more  than  50% of the  shares
entitled  to vote must be  represented  at the  meeting,  either in person or by
proxy.  If a quorum is not  present,  the  holders of a  majority  of the shares
present in person or represented  by proxy at the meeting,  and entitled to vote
at the  meeting,  may adjourn the meeting to another time and/or  place.  When a
meeting is adjourned to another time and place,  notice need not be given of the
adjourned  meeting if the time and place thereof are announced at the meeting at
which the  adjournment  is taken.  At the  adjourned  meeting,  the  Company may
transact any business which might have been transacted at the original  meeting.
If the  adjournment is for more than 30 days, or if after the  adjournment a new
record  date is fixed  for the  adjourned  meeting,  a notice  of the  adjourned
meeting  will be given to each  stockholder  of record  entitled  to vote at the
meeting.                                                                        

     Votes cast by proxy or in person at the Annual  Meeting  will be  tabulated
and  certified  by the  election  inspector  appointed  for the  meeting and the
election inspector will determine whether or not a quorum is present.  Shares as
to which proxies have been  properly  executed and returned and not revoked will
be voted as specified in the proxies.  If no  specification  is made, the shares
will be voted (1) "FOR" the election of the  nominees for Class I Director;  (2)
"FOR" the amendment of the Restated  Certificate of Incorporation of the Company
to eliminate the Company's  Series U Preferred Stock; (3) "FOR" the amendment of
the Restated Certificate of Incorporation of the Company to effect a one-for-ten
reverse stock split of the issued and outstanding shares of the Company's Common
Stock;  (4) "FOR" the amendment of the Restated  Certificate of Incorporation of
the Company to decrease the number of authorized  shares of the Company's Common
Stock from  110,000,000  to  11,000,000  and decrease  the number of  authorized
shares of the Company's preferred stock, par value $0.01 (the "Preferred Stock")
from 10,000,000 to 1,000,000;  and (5) "FOR" the ratification of the appointment
of KPMG LLP as the  independent  auditors  for the  Company  for the fiscal year
ending December 31, 2000. The Board of Directors knows of no additional  matters
that will be presented for  consideration at the Annual Meeting.  Execution of a
proxy, however,  confers on the designated proxyholders  discretionary authority
to vote the shares on such other business, if any, that may properly come before
the Annual Meeting or any adjournments thereof.                                 

     Proxies that are  submitted by brokers as holders of record and that do not
indicate a vote for some of the proposals, because the brokers have not received
instructions  from their customers or other beneficial  owners on how to vote on
those  proposals  and do not have  discretionary  voting  authority,  are called
"broker non-votes." In accordance with Delaware law, abstentions, votes withheld
with  respect to the election of one or more  nominees as  Directors  and broker
non-votes  will be counted as present at the Annual  Meeting  for the purpose of
determining  whether a quorum is present.  Broker  non-votes and instructions to
withhold  authority to vote for one or both of the nominees will result in those
nominees  receiving  fewer  votes,  but  will not  reduce  the  number  of votes
otherwise  received by the  nominees or  otherwise  affect the  election of such
nominees.                                                                       

     For purposes of  determining  approval of a matter  presented at the Annual
Meeting,  abstentions  will be deemed  present  and  entitled  to vote and will,
therefore,  have the same legal effect as a vote "against" a matter presented at
the meeting. Broker non-votes will be deemed not entitled to vote on a matter at
the Annual  Meeting as to which the non-vote is indicated.  Therefore,  a broker
non-vote will have no legal effect on any matter  requiring the affirmative vote
of a  plurality  of the votes  cast or of a majority  of the  shares  present in
person or by proxy and entitled to vote on the subject matter, and will have the
same legal effect as a vote "against" any other matter  presented at the meeting
which requires approval by a majority of the outstanding shares entitled to vote
on the matter.                                                                  

Revocability of Proxies                                                         

     If you attend the Annual  Meeting,  you may vote in person,  regardless  of
whether you have submitted a Proxy.  Presence at the Annual Meeting,  by itself,
however, will not result in the revocation of a Proxy. Proxies may be revoked at
any time prior to the  exercise  thereof  by filing  with the  Secretary  of the
Company,  at  the  Company's  principal  executive  offices,  a  signed  written
revocation or by submitting a later-dated Proxy.                                

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PROPOSAL 1

 ELECTION OF DIRECTORS

     The  Restated  Certificate  of  Incorporation,  as amended to date,  of the
Company  ("Restated  Certificate")  and Restated Bylaws, as amended to date (the
"Bylaws"),  of the Company  provide for a  classified  Board of  Directors.  The
Company's Board of Directors is separated into three classes,  and the Directors
in each  class  are  elected  to serve for  three-year  terms,  and until  their
respective  successors  are duly elected and  qualified.  The Board of Directors
currently consists of two Class I Directors, one Class II Director and one Class
III Director.  Following the 2000 Annual Meeting of  Stockholders,  the terms of
the Class I Directors expire at the annual meeting of stockholders to be held in
2003,  the term of the  Class II  Director  expires  at the  annual  meeting  of
stockholders  to be held in 2001 and the term of the Class III Director  expires
at the annual meeting of stockholders to be held in 2002.                       

Current Directors and Nominees                                                  

     The terms of the Company's Class I Directors will expire at the 2000 Annual
Meeting  of  Stockholders.   The  Board  of  Directors  has  nominated   Charles
Christenson  and Michael D. Winn for  reelection  as Class I  Directors.  If Mr.
Christenson and Mr. Winn are elected, each will serve as a Class I Director with
a three-year  term to expire at the annual meeting of stockholders to be held in
2003 and until his  successor  is elected  and  qualified  or until his  earlier
resignation or removal.                                                         

     The nominees  have  consented to serve if elected,  and at the date of this
Proxy  Statement,  the Company has no reason to believe that either of the named
nominees will be unable to act. The Directors  will be elected by a plurality of
the votes of the shares present in person or represented by proxy at the meeting
and entitled to vote in the election of directors.  Unless  otherwise  directed,
the persons  named as proxies  intend to vote for the election of the  nominees.
Proxies  cannot  be voted for a greater  number  of  persons  than the two named
nominees.                                                                       

     Set forth below is certain  information  concerning  the Company's  current
Directors and nominees to the Board of Directors:                               

Name                    Age         Position(s) with Company  

Charles Christenson               69          Director                          
Mark D. Lerdal                    41          President, Chief Executive Officer
                          and Director
Gerald R. Morgan, Jr.             37          Director                          
Michael D. Winn                   37          Director                          

Biographical Information                                                        

     The Company was formed in 1986 as a holding company for KENETECH Windpower,
Inc. (formerly,  U.S. Windpower,  Inc.). References to the Company are, prior to
1986, references to KENETECH Windpower, Inc.                                    

CHARLES CHRISTENSON                                                             

Mr.  Christenson  is the Royal  Little  Professor  of  Business  Administration,
Emeritus,  at the Harvard University Graduate School of Business  Administration
and has served as a Director of the Company  since  January  1980.  He is also a
director of Profile  Technologies,  Inc., a public company.  In the past, he was
Deputy for  Management  Systems in the Office of the Assistant  Secretary of the
Air Force,  and held a variety of teaching and  administrative  positions at the
Harvard University Graduate School of Business  Administration.  He received his
B.S. from Cornell University and his M.B.A. and D.B.A. from Harvard  University.
He is a Class I Director.                                                       

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MARK D. LERDAL                                                                  

Mr. Lerdal has served as a Director of the Company since March 1996 and as Chief
Executive  Officer and President since April 1996. He was elected as Chairman of
the Board of Directors in August 1999.  He served as Vice  President and General
Counsel of the Company  from April 1992 until March 1996.  He received  his A.B.
from Stanford  University and his J.D. from  Northwestern  University  School of
Law. He is a Class III Director.                                                

GERALD R. MORGAN, JR.                                                           

Mr.  Morgan has served as a Director of the Company since August 1999. He is the
Chief  Operating  Officer of Francisco  Partners,  L.P.,  a private  partnership
focused  on  technology  buyouts.  Previously,  Mr.  Morgan  served  in  various
capacities  for Security  Capital Group and  affiliates,  including  Senior Vice
President,  Corporate Finance,  and Chief Financial Officer for Security Capital
European  Realty.  He received his B.S. from Stanford  University  and his M.B.A
from Stanford University Graduate School of Business. He is a Class II Director.

MICHAEL D. WINN                                                                 

Mr. Winn has served as a Director of the Company since  November 1999. He is the
President and a Director of Terrasearch Inc., a financial consulting company. He
is also a Director and Officer of Sanu  Resources  Inc.,  a mineral  exploration
company, and a Manager of MDW Associates, LLC, a private investment partnership.
Prior to forming  Terrasearch  Inc.,  he was a financial  analyst for a Southern
California based brokerage firm covering the oil and gas sector. He received his
B.S. from the University of Southern California. He is a Class I Director.      

     Mark D. Lerdal was a director and executive officer of KENETECH  Windpower,
Inc. (a wholly-owned subsidiary of the Company) within the two-year period prior
to KENETECH  Windpower,  Inc.'s  chapter 11 filing on May 29, 1996 in the United
States Bankruptcy Court. In addition,  Charles  Christenson is a named defendant
in a class action filed against the Company,  certain of its former officers and
directors  and Mr.  Christenson,  in the United  States  District  Court for the
Northern  District of California,  alleging federal  securities laws violations.
Charles  Christenson  and Mark D.  Lerdal  are  named  defendants  in an  action
purportedly  filed as a class action against the Company,  certain of its former
directors,  Mr.  Christenson  and Mr.  Lerdal in the  Delaware  Chancery  Court,
alleging,  among other things,  breach of fiduciary duty in connection  with the
conversion of the  Company's  former  Preferred  Redeemable  Increased  Dividend
Equity  SecuritiesSM,  8-1/4% PRIDESSM,  Convertible  Preferred Stock, par value
$.01,  and in an action  purportedly  filed as a derivative  action  against the
Company,  certain of its former directors, Mr. Christenson and Mr. Lerdal in the
Delaware Chancery Court, alleging, among other things, the taking of a corporate
opportunity  in  connection  with the purchase of Common Stock by Mr.  Lerdal in
December 1997.                                                                  

Board Meetings and Committees                                                   

     Regular  meetings of the Board of  Directors  of the Company are  conducted
approximately  four times each year.  From time to time special  meetings of the
Board of Directors  are conducted as required.  The Board of Directors  held six
meetings  and acted once by  unanimous  written  consent  during the fiscal year
ending  December 31, 1999.  During  fiscal 1999,  each  Director  then in office
attended 75% or more of the aggregate of (i) the total number of meetings of the
Board of Directors, and (ii) the total number of meetings held by all committees
of the Board on which he served.                                                

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     The Board of Directors  has a standing  Audit  Committee  and  Compensation
Committee.                                                                      

     The Audit  Committee  was  comprised  of Charles  Christenson  and Angus M.
Duthie (1) from  January 1, 1999 until  August 18,  1999.  Gerald R.  Morgan was
elected  to the Audit  Committee  on August  18,  1999 and  Michael  D. Winn was
elected to the Audit  Committee  on  November  23,  1999 and each  served on the
Committee for the  remainder of the fiscal year ending  December 31, 1999. It is
expected that Mr.  Christenson  and Mr. Winn will remain on the Audit  Committee
with Mr. Morgan if  re-elected to the Board of Directors at the Annual  Meeting.
The functions performed by the Audit Committee include annually  recommending to
the Board of  Directors  the  appointment  of the  independent  auditors  of the
Company;  reviewing the purpose, scope and general extent of the services of the
independent  auditors,  their  procedures  and their  fees;  reviewing  with the
independent  auditors the results of their annual  audit,  including any matters
that the independent auditors bring to the attention of the Audit Committee; and
reviewing with those responsible for managing the internal audit function of the
Company the scope of their procedures,  reports and  recommendations,  and other
significant  aspects  of  their  functioning,  including  any  matters  that the
personnel  responsible  for managing the internal  audit  function  bring to the
attention  of the Audit  Committee.  The Audit  Committee  met twice  during the
fiscal year ending December 31, 1999.                                           

     The Compensation Committee was comprised of Messrs.  Christenson and Duthie
from January 1, 1999 until August 18, 1999.  Gerald R. Morgan was elected to the
Compensation Committee on August 18, 1999 and Michael D. Winn was elected to the
Compensation Committee on November 23, 1999 and each served on the Committee for
the  remainder of the fiscal year ending  December 31, 1999. It is expected that
Mr. Christenson and Mr. Winn will remain on the Compensation  Committee with Mr.
Morgan if  re-elected  to the Board of  Directors  at the  Annual  Meeting.  The
Compensation  Committee is responsible for determining the  compensation for the
Company's  management and establishing  compensation  policies for the Company's
employees generally.  The Compensation  Committee also administers the Company's
stock option plan.  The  Compensation  Committee  did not meet during the fiscal
year ending  December 31, 1999. The  Compensation  Committee did meet in January
2000 and approved  certain bonuses for the 1998 and 1999 fiscal years.  For more
information  regarding executive  compensation,  see "Report of the Compensation
Committee on Executive Compensation."                                           

Executive Officers                                                              

     Set forth below are the names,  ages,  titles of, and  certain  information
regarding,  executive  officers  of the  Company  as of the  date of this  Proxy
Statement. Officers are selected by the Board of Directors from time to time and
hold office until a successor is duly elected and  qualified or until his or her
earlier death, resignation or removal.                                          

Name                Age          Position(s) with Company     

Mark D. Lerdal                41          President, Chief Executive Officer and
              Director
Andrew M. Langtry             38          Corporate Controller and Chief        
                        Accounting Officer
Dianne P. Urhausen            42          Vice President, General Counsel and   
                         Corporate Secretary

MARK D. LERDAL                                                                  

Mr. Lerdal has served as a Director of the Company since March 1996 and as Chief
Executive  Officer and President since April 1996. He was elected as Chairman of
the Board of Directors in August 1999.  He served as Vice  President and General
Counsel of the Company  from April 1992 until March 1996.  He received  his A.B.
from Stanford  University and his J.D. from  Northwestern  University  School of
Law. He is a Class III Director.                                                

--------                                                                        
1    Mr. Duthie did not stand for  re-election to the Board of Directions at the
1999 Annual Meeting of Stockholders.                                  

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ANDREW M. LANGTRY                                                               

Mr. Langtry has served as Corporate  Controller and Chief Accounting  Officer of
the  Company  since March 2000.  He served as Tax  Director of the Company  from
April 1996 to March 2000. Prior to that, he served as Tax Manager of the Company
from July  1993 to April  1996.  He  received  his B.S.  from  California  State
University at Hayward. Mr. Langtry is a CPA licensed in California.             

DIANNE P. URHAUSEN                                                              

Ms.  Urhausen has served as Vice  President,  Corporate  Secretary,  and General
Counsel of the Company since August 1998. She served as  Administrative  Counsel
and Corporate  Secretary from August 1995 to August 1998. Prior to that, she was
an Associate at the law firm of Thelen,  Marrin, Johnson & Bridges. She received
her B.A. from St. Mary's  College of California and her J.D. from the University
of San Francisco.                                                               

Executive Compensation                                                          

Directors                                                             

     Each Director of the Company  receives a quarterly  retainer of $6,000 (see
also footnote 1 to Summary Compensation Table).                                 

     The Company reimburses  Directors for their reasonable  expenses associated
with  attending  Board of Directors  meetings and  provides the  Directors  with
liability  insurance  with  respect  to their  activities  as  directors  of the
Company.                                                                        

Executive Officers                                                    

     The  following  table sets forth,  for the fiscal years ended  December 31,
1999, 1998, and 1997, all compensation,  for services rendered in all capacities
to the Company, awarded to, earned by or paid to (i) the Chief Executive Officer
during 1999, (ii) the most highly compensated  executive officers of the Company
in  addition  to the Chief  Executive  Officer  who were  serving  as  executive
officers at the end of 1999, and (iii) the two former executive  officers of the
Company  for whom  disclosure  would  have been  provided  but for the fact such
individuals  were not serving as  executive  officers of the Company at December
31, 1999.                                                                       

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                                                        [Enlarge/Download Table]


                                           SUMMARY COMPENSATION TABLE                                             
================================================================================================================  
                                                                            Long-Term                             
                                                                           Compensation   All Other Compensation  
                                         Annual Compensation                  Awards      ($)(3)(4)               
                             -------------------------------------------   ------------   ----------------------  
                                                                            Securities                            
                                                             Other Annual   Underlying                            
Name                                                         Compensation    Options                              
  Principal Position         Year    Salary       Bonus         ($)(1)        (#)(2)                              
==========================   ----   ---------   ---------    ------------  ------------   ----------------------  
                                                                                                                  
Mark D. Lerdal               1999   $ 423,861   $  350,000(5) $    24,000              -   $                1,152 
  Chairman of the Board,     1998   $ 443,189   $  250,000(5) $    23,500              -   $                1,152 
  Chief Executive Officer,   1997   $ 401,295   $  250,000    $    21,500              -   $            1,165,071 
  and President                                                                                                   
==========================   ----   ---------   ----------    -----------   ------------   ---------------------- 
Michael U. Alvarez (6)       1999   $ 214,377   $  191,360              -              -   $                    - 
  Vice President, Chief      1998   $ 382,005   $2,887,980              -              -   $                1,388 
  Financial Officer and      1997   $ 351,134   $  364,920              -              -   $                1,388 
  Assistant Secretary                                                                                             
==========================   ----   ---------   ----------    -----------   ------------   ---------------------- 
Andrew M. Langtry            1999   $ 106,226   $   49,750              -              -   $                    - 
  Corporate Controller       1998   $  88,125   $   22,263              -              -   $                    - 
  and Chief Accounting       1997   $ 103,275   $   10,000              -              -   $                    - 
  Officer                                                                                                         
==========================   ----   ---------   ----------    -----------   ------------   ---------------------- 

Dianne P. Urhausen           1999   $ 129,249   $  160,000              -              -                        - 
  Vice President,            1998   $ 132,548   $   40,000              -              -                        - 
  Corporate Secretary        1997   $  75,243   $   37,901              -              -                        - 
  and General Counsel                                                                                             
==========================   ----   ---------   ----------    -----------   ------------   ---------------------- 
Mervin E. Werth (6)          1999   $  38,522   $  331,250              -              -   $               31,250 
  Controller, Chief          1998   $ 139,645   $  100,000              -              -                        - 
  Accounting Officer and     1997   $ 125,405   $        -              -              -                        - 
  Asst. Treasurer                                                                                                 
==========================   ----   ---------   ----------    -----------   ------------   ---------------------- 

(1)      Includes $24,000 in 1999, $23,500 in 1998, and $21,500 in 1997 for director's fees for Mark D. Lerdal.   

(2)      Shares of Common Stock subject to stock options  granted  during the fiscal year.  No stock appreciation 
         rights were granted during 1999, 1998 or 1997.                                                           
(3)      Includes  $1,152 for 1999,  1998, and 1997 for insurance  premiums paid by the Company  with  respect to 
         term life insurance for the benefit of Mark D.  Lerdal and  $1,388 in  1998 and 1997 for  the benefit of 
         Michael U. Alvarez,  respectively, and a pre-paid  severance  payment in 1997 of $1,163,919 for  Mark D. 
         Lerdal.  Also includes a severance  payment of $31,250 for Mr. Werth in 1999.                            
(4)      Mr. Lerdal, Mr. Werth, the other defendants  (including  Mr.  Christenson) and  the  Company are jointly 
         represented by the same respective counsel in (i) a class action filed  against the Company,  certain of 
         its  former officers and directors and Mr.  Christenson,  in the United States  District  Court for  the 
         Northern District of California, alleging federal securities laws violations, (ii) an action purportedly 
         filed as a class action against the Company,  certain of its former  directors,  Mr.  Christenson and Mr.
         Lerdal  in  the  Delaware  Chancery Court, alleging, among other things, breach  of  fiduciary   duty in 
         connection with the conversion of the Company's  former  Preferred  Redeemable Increased Dividend Equity 
         SecuritiesSM,  8-1/4%   PRIDESSM,  Convertible   Preferred  Stock, par value $.01, and (iii)  an  action 
         purportedly  filed  as a derivative action against the  Company,  certain  of its former  directors,  Mr.
         Christenson and Mr. Lerdal in the Delaware Chancery Court,  alleging,  among other things, the taking of 
         a corporate  opportunity in connection  with the purchase of Common Stock by Mr. Lerdal in December 1997.
         A portion of such counsel's  legal fees have been paid by the Company, however, such fees have not  been 
         apportioned among the individual defendants.                                                             
(5)      Includes a bonus of $350,000  earned for 1999 and $250,000 earned for 1998 for Mr. Lerdal.  Such bonuses 
         were approved by the Board of Directors and paid in 2000.                                                
(6)      Mr. Alvarez's   employment  agreement expired  March 23, 1999 and Mr. Werth  entered into  a  separation 
         agreement effective March 31, 1999.                                                                      


     No options or stock appreciation rights were awarded to the Chief Executive
Officer or the named  executive  officers of the Company  during the fiscal year
ended December 31, 1999.                                                        

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     The following table sets forth information  concerning option exercises and
option  holdings for the fiscal year ending  December 31, 1999,  with respect to
the Chief Executive Officer and the named executive officers of the Company.  No
stock appreciation rights were outstanding during such fiscal year.             

 Aggregated Option Exercises in Last Fiscal Year and
 Fiscal Year-End Option Values

                                                        [Enlarge/Download Table]

                 AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR                                                  
                        AND FISCAL YEAR-END OPTION VALUES                                                         
==================================================================================================================
                                                         Number of Securities            Value of Unexercised     
                         Shares                     Underlying Unexercised Options       In-the-Money Options     
                      Acquired on      Value              At Fiscal Year-End              At Fiscal Year-End      
Name                  Exercise (#)   Realized ($)     Exercisable/Unexercisable (1)  Exercisable/Unexercisable (2)
===================   ------------   ------------   ------------------------------   -----------------------------
                                                                                                                  
Mark D. Lerdal                   -              -                        -/500,000                             -/-
===================   ------------   ------------   ------------------------------   -----------------------------
Michael U. Alvarez               -              -                              -/-                             -/-
===================   ------------   ------------   ------------------------------   -----------------------------
Andrew M. Langtry                -              -                              -/-                             -/-
===================   ------------   ------------   ------------------------------   -----------------------------
Dianne P. Urhausen               -              -                              -/-                             -/-
===================   ------------   ------------   ------------------------------   -----------------------------
Mervin E. Werth                  -              -                              -/-                             -/-
===================   ------------   ------------   ------------------------------   -----------------------------

(1)  Mr.  Alvarez's  employment  agreement  expired March 23, 1999 and Mr. Werth                                  
     entered into a separation  agreement  effective March 31, 1999. All options                                  
     held by such persons had expired as of December 31, 1999.                                                    
(2)  The  exercise  price  of  all  options  exceeds  the  market  price  of the                                  
     underlying shares at December 31, 1999.                                                                      


Stock Plans                                                                     

     The 1993 Option Plan (described below) and the 1993 Employee Stock Purchase
Plan (the "Purchase Plan") were implemented in September 1993. The Purchase Plan
was discontinued following the August 1996 semi-annual purchase date. No Options
have been granted under the 1993 Option Plan since 1996.                        

     The Company has  registered  shares of Common  Stock  reserved for issuance
under  the 1993  Option  Plan  thus  permitting  the  resale  of such  shares by
non-affiliates in the public market without restriction under the Securities Act
of 1933.                                                                        

     Under the 1993 Option Plan, key employees (including officers), consultants
to the Company and  directors  are  provided an  opportunity  to acquire  equity
interests  in  the  Company.  The  1993  Option  Plan  contains  three  separate
components:  (i) a Discretionary Option Grant Program, under which key employees
(including  officers) and  consultants may be granted options to purchase shares
of Common Stock at an exercise  price not less than 85% of the fair market value
of such shares on the grant date; (ii) an Automatic Option Grant Program,  under
which option grants were  automatically  made at periodic intervals to directors
to purchase  shares of Common  Stock at an  exercise  price equal to 100% of the
fair market value of the option  shares on the grant date (this part of the plan
has been discontinued); and (iii) a Stock Issuance Program, under which eligible
individuals  may be issued shares of Common Stock  directly,  either through the
immediate  purchase of the shares (at fair market value or at discounts of up to
15%)  or as a  bonus  tied  to the  performance  of  services  or the  Company's
attainment of prescribed milestones.                                            

     The options  granted  under the  Discretionary  Option Grant Program may be
either  incentive stock options designed to meet the requirements of Section 422
of the Internal Revenue Code of 1986, as amended,  or non-statutory  options not
intended to satisfy such  requirements.  All grants under the  Automatic  Option
Grant  Program  were  non-statutory  options.  Options  may be granted or shares
issued in the Discretionary Option Grant and Stock Issuance Programs to eligible
individuals  in the employ or service of the Company or any parent or subsidiary
corporation now or subsequently existing.                                       

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     Under the Automatic Option Grant Program, each person who was a director at
the time of the Company's initial public offering,  received at the commencement
of such offering,  and each new director  thereafter  was, at the time he or she
became a director,  to receive an  automatic  option  grant for 5,000  shares of
Common Stock. In addition, at each annual stockholders' meeting,  beginning with
the 1994 annual  meeting,  each person who had been a director  for at least six
months was to be granted an option to purchase 1,000 shares of Common Stock.  No
grants under the Automatic  Option Grant Program have been made since 1995,  the
program has been discontinued and all grants previously awarded have terminated.

     A total of 6,688,020  shares of Common Stock were  originally  reserved for
issuance over the ten-year term of the 1993 Option Plan.                        

     Options  have  maximum  terms of ten years  measured  from the grant  date.
Options are not assignable or transferable  other than by will or by the laws of
inheritance following the optionee's death, and only the optionee may during the
optionee's  lifetime,  exercise  the  option.  The  optionee  does  not have any
stockholder  rights  with  respect  to the  option  shares  until the  option is
exercised  and the option price is paid for the  purchased  shares.  Individuals
holding  shares  under the  Stock  Issuance  Program  will,  however,  have full
stockholder  rights with respect to those shares,  whether the shares are vested
or unvested. The Plan Administrator under the 1993 Option Plan has the authority
to cancel  outstanding  options  under the  Discretionary  Option Grant  Program
(including  options  incorporated  from the predecessor  plan) in return for the
grant of new  options  for the same or a  different  number  of  shares  with an
exercise  price based on the lower fair market  value of the Common Stock on the
new grant date. The Board of Directors may terminate the 1993 Option Plan at any
time, and the 1993 Option Plan will in all events terminate on June 20, 2003.   

     All  of  the  Company's  employees  are  eligible  to  participate  in  the
Discretionary Option Grant Program.  Non-employee  directors are not eligible to
participate in the Discretionary Option Grant and Stock Issuance Programs.      

     If the Company is acquired by merger, consolidation or asset sale, or there
is a hostile  change in control of the Company,  each option  granted  under the
Discretionary  Option Grant Program will  automatically  accelerate in full, and
all unvested shares under the Stock Issuance Program will immediately vest.     

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Employment   Contracts,   Termination   of  Employment   and   Change-In-Control
Arrangements                                                                    

     The Company's  1993 Option Plan contains  provisions  pursuant to which all
outstanding  options  granted  under  that plan will  become  fully  vested  and
immediately  exercisable upon certain changes of control and related events (see
discussion above).                                                              

     The  Company  and  certain  direct or  indirect  wholly-owned  subsidiaries
entered into an  Employment  Agreement  with Mr.  Alvarez that became  effective
December 1, 1997 (such  agreement  superseded  Mr.  Alvarez's  prior  employment
agreement).  The  Employment  Agreement  provided  that  Mr.  Alvarez  was to be
employed  (unless  terminated  for cause) at his annual  base salary of $350,000
until the later of (i) December 31, 1998, (ii) 90 days following the sale of the
Company's  indirectly  owned 50% equity  interest in a  partnership  that owns a
gas-fired  cogeneration  facility of  approximately  540 MW located in Penuelas,
Puerto  Rico  and  other   associated   contract   rights   (collectively,   the
"EcoElectrica  Project"),  or (iii)  the date on which  all  payments  under the
Agreement had been made. Accordingly, Mr. Alvarez's Employment Agreement expired
March 23, 1999.  Under the terms of the  Employment  Agreement,  Mr. Alvarez was
paid a bonus in 1997 upon the  closing  of the  construction  financing  for the
EcoElectrica  Project,  and a bonus in 1998 from the proceeds of the sale of the
Company's  indirectly owned 50% equity interest in the EcoElectrica Project (see
Summary  Compensation Table). Mr. Alvarez also received a bonus in 1999 from the
proceeds of the sale of the Company's  indirect interest in a wood-fired project
located in Chateaugay,  New York (the "Chateaugay Project") and other bonuses in
1997 and 1998 from the proceeds of the sale of certain  other assets of KENETECH
Energy  Systems,  Inc, a  wholly-owned  subsidiary  of the Company  (see Summary
Compensation Table).                                                            

     The Company  entered into an Employment  Agreement with Mr. Lerdal on April
1, 1996. Mr. Lerdal's initial  employment period ran for a period of three years
ending March 31, 1999 and the  Agreement  was then  automatically  renewed for a
one-year  period.  Pursuant to the terms and  conditions of the  Agreement,  Mr.
Lerdal (i) received a bonus of $100,000 upon  execution of the  Agreement,  (ii)
received  an annual base salary of  $400,000,  (iii) was  eligible to receive an
annual bonus of up to 25% of his base salary, and (iv) earned additional bonuses
of  $450,000  upon the  occurrence  of  certain  stated  objectives.  All of the
objective  payments  have been earned  including the $250,000 paid as a bonus in
1997.  In the event of Mr.  Lerdal's  involuntary  termination  (other  than for
cause)  including  non-renewal  of the  employment  period,  he would  receive a
severance  payment  equal to two years base  salary  plus  health  care and life
insurance  coverage for an additional  two years.  In the event of Mr.  Lerdal's
involuntary termination or resignation within six months of a Change in Control,
Mr.  Lerdal  would  receive a lump sum  payment  equal to one  year's  salary in
addition to the payments set forth in the immediately  preceding  sentence.  The
severance  provisions of the Agreement  were paid in March 1997. Mr. Lerdal gave
the Company  notice of his intent not to renew the  Agreement  and the Agreement
expired by its terms on March 31,  2000.  Effective  April 1, 2000,  Mr.  Lerdal
became  an  at-will  employee  of the  Company  with an  annual  base  salary of
$250,000.                                                                       

     The Company and Mr. Langtry entered into a Retention  Agreement on April 1,
1999 that  provided  that Mr.  Langtry  would be paid his annual  base salary of
$95,000  until the Agreement  expired on September 30, 1999.  Under the terms of
the Agreement, after September 30, 1999, Mr. Langtry continued to be employed by
the  Company  as an at will  employee,  his  annual  base  salary  was raised to
$120,000  and he was paid a bonus in the amount of $36,250 on  December  31,1999
(see also Summary  Compensation Table). If Mr. Langtry is discharged (other than
as a result of a  termination  for cause) he will  receive a lump sum  severance
payment in the amount of $72,500.                                               

     Ms.  Urhausen  and the Company  entered  into an  Employment  Agreement  on
December 22, 1998 that  provided  that Ms.  Urhausen was to be employed  (unless
terminated  for cause) at her annual base salary of  $160,000  for the  one-year
period beginning  January 1, 1999. Under the terms of the Employment  Agreement,
if Ms.  Urhausen's  employment with the Company ceased for any reason during the
term of the Agreement  she was to receive a lump sum severance  payment equal to
$160,000  and if Ms.  Urhausen's  employment  did not cease she was to receive a
quarterly payment.  Since Ms. Urhausen remained employed by the Company, on each
of March 31,  June 30,  September  30 and  December  31,  1999,  she  received a
quarterly  payment of $40,000 and the severance payment was reduced by each such
payment (see Summary Compensation Table).                                       

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     Mr. Werth and the Company entered into a retention  incentive  agreement in
1998  pursuant  to which Mr.  Werth  received a  quarterly  bonus  (see  Summary
Compensation Table).  Pursuant to the terms of a Separation Agreement and Mutual
Release  entered into by the Company and Mr.  Werth as of March 31,  1999,  upon
mutual agreement of Mr. Werth and the Company,  Mr. Werth's  employment with the
Company  terminated  effective March 31, 1999 and he received a lump sum payment
of $281,250 consisting of a bonus payment, severance and accrued vacation.      

Limitation of Liability and Indemnification                                     

     The  Restated  Certificate  limits,  to the  maximum  extent  permitted  by
Delaware  law, the personal  liability  of  directors  for monetary  damages for
breach of their fiduciary  duties as a director.  Delaware law does not permit a
corporation  to  eliminate  a  director's  duty of  care,  nor  does  it  permit
elimination of liability for monetary damages for breach of a director's duty of
loyalty.  Further,  the provisions of the Restated Certificate have no effect on
the  availability  of equitable  remedies such as injunction or rescission for a
breach of a  director's  duty of care.  The  Company's  Bylaws  provide that the
Company  shall  indemnify  its  officers and  directors  and may  indemnify  its
employees and other agents to the fullest extent  permitted by law. Some current
and former  directors  and officers of the Company have entered into  employment
agreements  or  severance  agreements  that  provide  that  the  indemnification
provisions for directors and officers under the Company's Bylaws (to the maximum
extent  permitted  by law) and/or  insurance  coverage  will be extended to such
director or officer following  termination of his or her employment with respect
to matters occurring during his or her employment period.                       

     Section 145 of the Delaware General Corporation Law generally provides that
a corporation may indemnify a director,  officer, employee or agent made a party
to an action by reason of the fact that he was  director,  officer,  employee or
agent of the  corporation or was serving at the request of the  corporation as a
director,  officer,  employee or agent of another  enterprise  against  expenses
actually and reasonably  incurred by him in connection  with such action,  if he
acted in good  faith and in a manner  he  reasonably  believed  to be in, or not
opposed to, the best  interests  of the  corporation  and,  with  respect to any
criminal action, had no reasonable cause to believe was unlawful.               

     Insofar as the  liability of directors  for monetary  damages for breach of
fiduciary  duty of care  under  state  law may be  limited  as  aforesaid,  such
limitations do not apply to liabilities  of directors  under federal  securities
laws.                                                                           

     Insofar  as the  Company's  Restated  Certificate  or  Bylaws  provide  for
indemnification  of  directors,  officers  and persons  controlling  the Company
against certain liabilities as aforesaid,  it is the opinion of the staff of the
SEC that such indemnification is against public policy as applied to liabilities
under federal securities laws and is therefore unenforceable. In accordance with
such  position of the staff,  no  indemnification  is  available  to  directors,
officers or controlling persons for liabilities under federal securities laws.  

     In December 1995, the Company entered into indemnification  agreements with
certain of its  directors and officers  whereby the Company  agreed to indemnify
such directors and officers, subject to the exceptions set forth therein, to the
fullest extent permitted by the Delaware General  Corporation Law and the Bylaws
of the Company and against  expenses  incurred by such  directors or officers in
connection  with any liability  which he or she may incur in his or her capacity
as such. The Company also provides  Directors and Officers  liability  insurance
and  reimbursement  insurance  policies for its officers and directors  covering
liability arising out of their actions in such capacities.                      

     Indemnification  may be  required  or  permitted  in  litigation  involving
directors or officers of the Company in  connection  with the class action filed
against  the  Company,  certain of its former  officers  and  directors  and Mr.
Christenson,  in the United States  District Court for the Northern  District of
California,   alleging  federal   securities  laws  violations,   in  an  action
purportedly  filed as a class action against the Company,  certain of its former
directors,  Mr.  Christenson  and Mr.  Lerdal in the  Delaware  Chancery  Court,
alleging,  among other things,  breach of fiduciary duty in connection  with the
conversion of the  Company's  former  Preferred  Redeemable  Increased  Dividend
Equity  SecuritiesSM,  8-1/4% PRIDESSM,  Convertible  Preferred Stock, par value
$.01,  and an  action  purportedly  filed as a  derivative  action  against  the
Company,  certain of its former directors, Mr. Christenson and Mr. Lerdal in the
Delaware Chancery Court, alleging, among other things, the taking of a corporate
opportunity  in  connection  with the purchase of Common Stock by Mr.  Lerdal in
December 1997.                                                                  

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Compensation Committee Interlocks and Insider Participation                     

     The Compensation Committee was comprised of Messrs.  Christenson and Duthie
from January 1, 1999 until August 18, 1999.  Gerald R. Morgan was elected to the
Compensation Committee on August 18, 1999 and Michael D. Winn was elected to the
Compensation Committee on November 23, 1999 and each served on the Committee for
the  remainder of the fiscal year ending  December  31,  1999.  No member of the
Compensation  Committee has ever been an officer or employee of the Company. Mr.
Lerdal and Ms.  Urhausen may have attended  meetings of the Committee,  but were
not  present  during  deliberations  or  discussions  regarding  his or her  own
compensation.  No  interlocking  relationship  exists between the members of the
Company's  Board  of  Directors  or  Compensation  Committee  and the  board  of
directors  or  compensation  committee  of any other  company,  nor has any such
interlocking relationship existed in the past.                                  

Certain Relationships and Related Transactions                                  

     Mr.  Winn  is  the  president,   sole  director  and  sole  stockholder  of
Terrasearch,  Inc.  Terrasearch  entered  into a Consulting  Agreement  with the
Company on January 1, 2000.  Pursuant to the terms of the Consulting  Agreement,
Terrasearch  will be paid a  yearly  fee of  $225,000,  plus  expenses,  through
December 31, 2000 for providing  consulting or financial  services in connection
with the  identification  of a merger  partner or company  or  business  for the
Company to acquire. The Agreement will automatically renew for a one-year period
unless either party gives notice of its intent not to renew.  In connection with
the  Consulting  Agreement,  the  Company  also issued  Terrasearch  warrants to
purchase  up to 500,000  shares of Common  Stock of the  Company at an  exercise
price of $1.00 per share. The warrants become exercisable on January 1, 2002 and
expire December 31, 2005.                                                       

     Mr. Morgan is the Chief Operating  Officer of Francisco  Partners,  L.P., a
partnership formed to make private information  technology buy-out  investments.
In April 2000,  the Company agreed to invest $5 million over the next four years
in Francisco Partners, L.P.                                                     

Compensation Committee Report on Executive Compensation                         

     The Compensation  Committee of the Board of Directors  reviews,  recommends
and approves the  compensation  arrangements  for management of the Company with
respect to salaries,  bonuses and grants of options to purchase shares of Common
Stock under the Company's 1993 Option Plan.                                     

Cash Based Compensation                                       

     All of the executives listed in the Summary  Compensation  Table except Mr.
Werth had  employment  contracts  with the Company for all or a portion of 1999.
The contracts were negotiated by the Chief Executive  Officer of the Company and
approved by the Compensation Committee.  The Company had survey information from
previous years that it used to determine the base salary of the executives. Some
of the bonus  awards for 1998 and 1999 were  payable by formula  included in the
contracts.  The  contracts  enumerated  certain  payments  when  certain  events
occurred.  The most  significant  event  in 1998  was the sale of the  Company's
indirect  interest  in the  EcoElectrica  Project  and in 1999  the  sale of the
Company"s indirect interest in the Chateaugay  Project.  The bonus payments were
based on a percentage of the proceeds received from the sale of such projects.  

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Compensation of the Chief Executive Officer                   

     Mr.  Lerdal and the Company were parties to an  employment  agreement  that
expired March 31, 2000. The initial term was for a period of three years and was
subject to renewal  periods of one year.  The agreement was renewed once and was
in effect for the 1999 fiscal  year.  Mr.  Lerdal's  base salary of $400,000 per
year and bonus  opportunities were set forth in such employment  agreement.  The
Compensation  Committee is the sole determinant of whether,  and in what amount,
any bonuses are to be paid to Mr.  Lerdal.  In January  2000,  the  Compensation
approved a bonus of $350,000  earned for 1999 and $250,000 earned for 1998. Such
bonuses  were  paid  based on a report  prepared  by Arthur  Andersen  LLP which
analyzed the compensation  paid to Mr. Lerdal in 1999 and the payment of a bonus
to Mr. Lerdal for 1998 and 1999 in light of the nature of the services  provided
by Mr. Lerdal and market competitive pay practices.                             

     The rational and  criteria  for paying  bonuses to Mr.  Lerdal for 1998 and
1999 included, among other things: the successful disposition of several assets,
including  the  sale  of the  Company's  indirectly  held  50%  interest  in the
EcoElectrica  Project  in  December  1998;  the  substantial  reduction  of  the
Company's debt, including the satisfaction and discharge of the Company's Senior
Secured Notes and all accrued  interest in December 1998 and the payment in full
of the  accrued and unpaid  dividends  in April 1999 on the  Company's  formerly
outstanding Preferred Redeemable Increased Dividend Equity SecuritiesSM,  8-1/4%
PRIDESSM,  Convertible  Preferred  Stock;  the  successful  outcome  in  several
litigation  matters involving the Company and its subsidiaries;  the increase in
the intrinsic value of the Company over the last two years;  the  identification
and investment by the Company in new development  projects;  and the substantial
completion of the KENETECH Windpower, Inc. bankruptcy.                          

Stock Option Grants                                         

     Historically,  stock  option  grants  were the  principal  vehicle  for the
payment of long term  compensation  to the Company's  employees.  No grants have
been made to any of the Company's  employees since 1996 because the value of the
Company's stock has been too uncertain to either retain employees or reward them
for their efforts.                                                              

                                             Charles Christenson
                                               Gerald R. Morgan, Jr.
                                         Michael D. Winn

Performance Graph                                                               

     The following performance graph reflects the cumulative total stockholders'
return on the Common Stock as compared with the  cumulative  total return of the
Nasdaq Stock Market (U.S.) Index,  the Russell 2000 Index,  the Nasdaq Financial
Index,  the S&P  Midcap  400 Index and the S&P Energy  Sector  Index.  The graph
assumes a $100  investment in Common Stock of the Company and a $100  investment
in each of the indices  beginning on December  31, 1994 and ending  December 31,
1999.  The graph also assumes that any dividends  were  reinvested.  The Company
chose the indices included in the performance  graph because it does not believe
it can  reasonably  identify  a peer  group.  In  addition,  there are no public
companies known to the Company with a similar scope of business as the Company. 

                                                        [Enlarge/Download Table]
                                COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN              
[CHART]                                                                                      

                                                           END OF FISCAL YEAR                
                             12/94           12/95      12/96       12/97      12/98    12/99
                                                                                             
KENETECH Corporation        100.00           11.30       0.35        0.45        1.81    4.03
Nasdaq Stock Market (U.S.)  100.00          141.33     173.90      213.07      300.43  557.58
Russell 2000                100.00          127.49     154.73      203.91      190.76  187.92
Nasdaq Financial            100.00          145.68     187.03      286.10      277.70  277.35
S&P Midcap 400              100.00          130.94     156.08      206.43      236.21  270.99
S&P Energy Sector           100.00          130.77     164.48      206.00      207.11  254.16


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Securities Ownership of Certain Beneficial Owners and Management                

     The following table sets forth certain  information to the knowledge of the
Company  regarding the beneficial  ownership of the Company's Common Stock as of
June 30, 2000 for (i) each person known to the Company beneficially to own 5% or
more of the outstanding  shares of its Common Stock,  (ii) each of the Company's
directors,  the Chief Executive  Officer and the named executive  officers,  and
(iii) all directors and executive  officers as a group.  The table is based upon
information  supplied to the Company by its  officers,  directors  and principal
stockholders.  Except as  otherwise  indicated,  the Company  believes  that the
beneficial  owners  of the  Common  Stock  listed  below,  based on  information
furnished by such owners,  have sole investment and voting power with respect to
such shares, subject to community property laws where applicable.               

                                                        [Enlarge/Download Table]
                                               Number of Shares                           
     Name of                                    Of Common Stock          Percentage of    
Beneficial Owners (1)                       Beneficially Owned (2)  Shares Outstanding (3)
                                                                                          
Mark D. Lerdal                                    11,365,458              34.5%           
500 Sansome Street, San Francisco, CA                                                     

Charles Christenson                                   67,000               *(4)           

Gerald R. Morgan, Jr.                                170,000                *             

Michael D. Winn                                       50,000                *             

Andrew M. Langtry                                          0                *             

Dianne P. Urhausen                                    35,000                *             

Michael U. Alvarez (5)                                 1,441                *             

Mervin E. Werth (5)                                        0                *             

All directors and executive officers as a         11,688,899              35.5%           
group (including former executive officers                                                
who are named executive officers) (8                                                      
persons)                                                                                  


(1)  Information  for  beneficial  owners of 5% or more of the Company's  Common
     Stock is reported from and as of the date of such owner's  latest  Schedule
13D or 13G (as amended) provided to the Company.                      
(2)  Except as  otherwise  specifically  noted,  the number of shares  stated as
     being  beneficially  owned includes (a) all options under which officers or
     directors could acquire common stock currently and within 60 days following
     June 30, 2000, (i.e., Charles Christenson (47,000 shares) and all directors
     and officers as a group (47,000  shares)),  and (b) shares  believed by the
     Company to be held beneficially by spouses. The inclusion of shares herein,
     however,  does  not  constitute  an  admission  that the  persons  named as
stockholders are direct or indirect beneficial owners of such shares. 
(3)  The percentages are calculated based on the number of outstanding shares of
     Common  Stock on June 30,  2000,  excluding  the shares held by the Company
pursuant to its stock repurchase program.                             
(4)  * Does not exceed one percent of the class so owned.                       
(5)  Mr.  Alvarez's  employment  agreement  expired March 23, 1999 and Mr. Werth
entered into a separation agreement effective March 31, 1999.         

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PROPOSAL 2

AMEND THE RESTATED CERTIFICATE OF INCORPORATION OF THE COMPANY
 TO ELIMINATE THE COMPANY'S SERIES U PREFERRED STOCK

     The Board of Directors has authorized, subject to stockholder approval, the
amendment of the Company's  Restated  Certificate of  Incorporation to eliminate
the  Company's  Series U  Preferred  Stock.  The  applicable  provisions  in the
Restated  Certificate provide that if a holder of shares of the Company's Common
Stock becomes an Electric  Utility  Interest (as defined  below),  each share of
Common  Stock  held  by such  holder  shall  be  automatically  and  immediately
converted  into one share of Series U  Preferred  Stock of the  Company  without
further  action  either by the holder or by the Company.  Upon  conversion,  the
holder of the  converted  stock  shall not be  recognized  as a holder of Common
Stock for any purpose  whatsoever,  including,  but not limited to, the right to
vote such shares of Common Stock or to receive dividends or other  distributions
in respect thereof,  if any, but such stockholder shall thereafter be recognized
as a holder of Series U Preferred Stock. The Restated Certificate also provides,
among other things,  that the Series U Preferred  Stock can be redeemed,  at any
time and from time to time,  by the Company and any  attempted  sale,  transfer,
assignment,  conveyance,  pledge  or  other  disposition  of  any  share  of the
Company's  Common Stock to any Electric  Utility Interest shall be null and void
ab initio.                                                                      

     For the purposes of the Restated  Certificate,  the term "Electric  Utility
Interest" means an electric  utility or utilities or an electric utility holding
company or companies,  or any  affiliate of either,  in each case as those terms
are utilized by the Federal Energy Regulatory Commission ("FERC") in regulations
or orders  implementing the Public Utility  Regulatory  Policies Act of 1978, as
amended,  and  its  successors,   and  the  regulations  promulgated  thereunder
("PURPA"),  if such entity's interest in the Company would be a utility interest
for the purposes of 18 C.F.R. Section 292.206.                                  

Reasons for Elimination of the Company's Series U Preferred Stock               

     The  Restated  Certificate  creating  the  Series  U  Preferred  Stock  and
prohibiting  stock ownership by Electric Utility Interests was filed at the time
of the Company's  initial public offering in September 1993 and at that time the
Company operated as a holding company  participating through its subsidiaries in
the electric  utility  market by  developing,  owning and operating wind powered
electric  powerplants  and  independent  power  projects.  The operations of the
Company at that time were primarily conducted in the United States. The Restated
Certificate  was  designed and adopted to meet the  criteria  necessary  for the
Company's  projects to qualify as  "qualifying  facilities"  under PURPA.  PURPA
provided  "qualifying  facilities"  with important  exemptions from  substantial
federal and state  legislation,  including,  among other  things,  regulation as
public  utilities,  and provided  certain  other  benefits.  Loss of  qualifying
facility  status by any one of the  Company's  projects  could  have  caused the
Company to become a public utility holding company,  thereby causing many of the
Company"s other projects to lose their  qualifying  status and become subject to
such regulation.  Ownership of the Company by an Electric Utility Interest could
have also  limited the  Company's  ability to sell  interests in the projects it
developed to Electric Utility Interests and still retain  "qualifying  facility"
status.                                                                         

     Beginning in 1995 the Company experienced severe liquidity constraints.  In
an effort to relieve such constraints, the Company undertook to sell its assets.
As of December  31,  1999,  the Company had  disposed of  substantially  all its
operating  assets  which  included  its  interests  in all of the  wind  powered
electric  powerplants  and  independent  power projects that it had owned and/or
developed.  Although  the  Company is  currently  pursuing  new  development  of
independent power projects, the Restated Certificate contains provisions related
to the  Series U  Preferred  Stock  which  have no  application  in light of the
Company's present operations and it is no longer necessary to prohibit ownership
of the Company by Electric Utility Interests. The Company believes that it is in
the best  interests  of the  stockholders  and the Company to amend the Restated
Certificate  to remove and  eliminate all  provisions  relating to the Company's
Series U  Preferred  Stock  thereby  allowing  any  entity  to own  stock in the
Company.                                                                        

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     If the  elimination  of the Series U  Preferred  Stock is  approved  by the
stockholders,  the Restated  Certificate will be amended as described herein and
as set forth in the form of Certificate of Amendment to the Restated Certificate
of Incorporation of the Company attached hereto as Exhibit A.                   

Effects of the Elimination of the Series U Preferred Stock                      

     The Company  believes  that there will be no effect on the Common  Stock or
the Preferred  Stock  resulting  from the  elimination of the Series U Preferred
Stock.  No shares of the  Series U  Preferred  Stock  have ever been  issued and
accordingly there are no holders of Series U Preferred Stock.                   

Vote Required and Board of Directors' Recommendation                            

     Approval of this proposal  requires the  affirmative  vote of a majority of
the outstanding shares of the Company entitled to vote thereon.                 

THE BOARD OF  DIRECTORS  UNANIMOUSLY  RECOMMENDS  A VOTE "FOR"  APPROVAL OF THIS
PROPOSAL TO AMEND THE RESTATED  CERTIFICATE OF  INCORPORATION  OF THE COMPANY TO
ELIMINATE THE COMPANY'S SERIES U PREFERRED STOCK.                               

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PROPOSAL 3

AMEND THE RESTATED CERTIFICATE OF INCORPORATION OF THE COMPANY
 TO EFFECT A ONE-FOR-TEN REVERSE STOCK SPLIT OF THE ISSUED AND
OUTSTANDING SHARES OF THE COMPANY'S COMMON STOCK

     The Board of Directors has authorized, subject to stockholder approval, the
amendment of the Company's  Restated  Certificate of  Incorporation  to effect a
one-for-ten  reverse stock split (the "Reverse  Split") of the Common Stock. The
Reverse Split would affect the Company's currently issued and outstanding Common
Stock.  In addition,  all  currently  outstanding  stock options and warrants to
purchase  Common  Stock  would be  subject  to the  one-for-ten  adjustment  and
reduction in the number of shares of Common Stock subject to acquisition through
exercise  or  conversion  thereof.  Such  adjustments,  under  the terms of each
convertible  security,  would  also  include  adjustments  to the  exercise  and
conversion  prices  thereof to maintain  economic  parity with the position held
prior to the Reverse  Split.  The number of "Rights"  (created  under the Rights
Agreement,  dated  as of  May 4,  1999,  between  the  Company  and  ChaseMellon
Shareholder  Services,  L.L.C.,  as Rights Agent)  associated with each share of
Common Stock then outstanding will also be proportionately adjusted.            

     The  proposed  Reverse  Split will not itself alter the number of shares of
Common Stock authorized for issuance, however, there is a separate proposal (see
Proposal 4) in this Proxy  Statement  that would  authorize  the decrease of the
number of  authorized  shares of Common  Stock in the same ratio as the  Reverse
Split and would  therefore  decrease the authorized  number from  110,000,000 to
11,000,000.  There  will be no change in the par value of the  Company's  Common
Stock.  Information  concerning  the  capitalization  of the  Company,  provided
elsewhere in this Proxy Statement,  does not give effect to the proposed Reverse
Split unless  specifically noted. The Board of Directors believes that action to
reduce the number of outstanding  shares of the Company's  Common Stock would be
in the best interests of the Company and its stockholders.                      

     The Reverse Split will take effect,  if at all, after it is approved by the
stockholders  of the  Company,  on the  date of  filing  of the  certificate  of
amendment of the Restated  Certificate of  Incorporation of the Company with the
Secretary  of State of the State of  Delaware  (the  "Effective  Date").  On the
Effective  Date, all  outstanding  shares of Common Stock held by each holder of
record on such date will be automatically reclassified as and converted into 0.1
of a share of  Common  Stock,  without  any  further  action  on the part of the
Company's stockholders. No fractional shares will be issued.                    

     If the Reverse Split is approved by the stockholders and implemented by the
Board of Directors, the Restated Certificate will be amended as described herein
and as set  forth  in the  form of  Certificate  of  Amendment  to the  Restated
Certificate of Incorporation of the Company attached hereto as Exhibit B.       

     In determining  when or if the Board will implement the Reverse Split,  the
Board of Directors may consider a variety of factors, including, but not limited
to, overall trends in the stock market, recent changes and anticipated trends in
the per share market price of the Common Stock,  business  developments  and the
Company's actual and projected financial performance. The Board of Directors may
abandon the Reverse Split before or after the Annual  Meeting,  without  further
action by the stockholders,  and not file the proposed amendment to the Restated
Certificate of Incorporation of the Company if at any time the Board determines,
in its sole discretion, that the proposed Reverse Split would not be in the best
interests  of the  Company  and  its  stockholders.  Presently,  the  Board  and
management  of the  Company  intend  to  effect  the  Reverse  Split  as soon as
practicable subsequent to receiving the requisite stockholder approval.         
Reasons for the One-For-Ten Reverse Split                                       

     The primary  reasons for the  one-for-ten  reverse  stock split are to: (i)
increase  the  liquidity  of the shares by  lowering  the  commissions  on stock
trades; (ii) consolidate the issued capital of the Company; and (iii) facilitate
the  potential  eligibility  of the  Common  Stock  for a future  listing  on an
exchange or quotation on Nasdaq.                                                

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     A projected benefit of the Reverse Split would be the potential substantial
reduction in the  transaction  costs  associated  with trading in the  Company's
Common  Stock.  In most cases,  trading  costs  include both  "brokers"  trading
commissions and the "indirect cost" of "dealer  markup," that is, the difference
between the buying and selling  prices of dealers in a given stock (the "bid-ask
spread").  Such  dealers  would be OTC  Bulletin  Board or "Pink  Sheet"  market
makers,  as opposed to retail  brokerage  firms such as Charles  Schwab & Co. or
Merrill Lynch. The economic costs of dealer markup are  disproportionately  high
with respect to low-priced  stocks as a proportion of such stocks' market price,
adversely affecting  investors.  Trading commissions also tend to exact a larger
proportion of the investment made in such stocks,  because such  commissions are
calculated  by and large as a function  of the number of shares  traded  more so
than in accordance with the relative price per share. The result, again, is that
persons  transacting  in  stocks  which  are  disproportionately  low-priced  in
relation  to the  economic  value  underlying  the shares tend to be, in effect,
penalized, which reduces investor acceptance of such stocks.                    

     The Board of Directors believes that a reduction in the number of shares of
Common Stock outstanding resulting in a decrease in trading commissions, without
any corresponding material alteration in the economic composition of the Company
or the relative  interests  of the  stockholders  would thus likely  enhance the
public and  institutional  perception  of the  Company's  Common  Stock and thus
increase investor interest.  However,  no assurance can be given that the market
price of the Common Stock will increase in direct proportion to the ratio of the
Reverse Split, that any such increase will be sustained for a significant period
or that trading  commissions  will be lowered.  A failure of the stock's trading
price to completely reflect the mathematics of the Reverse Split would result in
a reduction in the market value of the Company's securities.                    

     The Board also  believes that the current low per share price of the Common
Stock may have a  negative  effect on the price and  marketability  of  existing
shares  and the  potential  ability of the  Company to raise  capital by issuing
additional  shares of Common Stock or other  securities  convertible into Common
Stock or to  undertake  merger or  acquisition  transactions.  Reasons for these
effects  include  internal  policies  and  practices  of  certain  institutional
investors which prevent or tend to discourage the purchase of low-priced stocks,
the fact that many brokerage houses do not permit  low-priced  stocks to be used
as collateral for margin  accounts or to be purchased on margin and a variety of
brokerage  house  policies and  practices  which tend to  discourage  individual
brokers within those firms from dealing in or  recommending  low-priced  stocks.
The Board believes that the Reverse Split, and the expected resulting  increased
price level, may enhance investor  interest in the Common Stock and may help the
investment community realize the underlying value of the Common Stock.  However,
even if the  Reverse  Split  is  implemented,  there  can be no  assurance  that
brokerage  firms will be more  inclined to  recommend  the Common  Stock or that
institutional  investors will be more inclined to invest in the Common Stock. If
the  market  value of the  Common  Stock  does  not  adjust  proportionately,  a
significant loss of stockholder value could result.                             

     The Common Stock is currently quoted on the  over-the-counter  market.  The
Company believes the Reverse Split may facilitate the possible future compliance
with the listing criteria  established by Nasdaq regarding the minimum bid price
of listed  securities.  For initial inclusion on the Nasdaq National Market, the
minimum bid price per share is required to be at least $5.00.                   

     In addition, because the Common Stock is not listed on Nasdaq and presently
trades at less than $5.00 per share, trading in the Common Stock is also subject
to the requirements of certain rules promulgated  under the Securities  Exchange
Act  of  1934,  as  amended  (the  "Exchange  Act"),  which  require  additional
disclosure by brokers or dealers in connection with any trades involving a stock
defined as a "penny stock" (generally, any non-Nasdaq equity security that has a
market  price of less than  $5.00 per share,  subject  to  certain  exceptions).
Because the Company's  Common Stock is presently  classified as a "penny stock,"
prior to  effectuating  any  trade in the  Common  Stock,  a broker or dealer is
required under such Exchange Act rules to make a suitability determination as to
such proposed  purchaser of the Common Stock and to receive a written agreement,
meeting  certain  requirements,  prior to  effectuating  any  transaction in the
Common Stock.  The  additional  burdens  imposed upon brokers or dealers by such
requirements could discourage brokers or dealers from effecting  transactions in
the Common Stock,  which may limit the market  liquidity of the Common Stock and
the ability of investors to trade the Common Stock.                             

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     There can be no assurance, however, that approval of the Reverse Split will
succeed in raising the bid price of the Common Stock above $5.00 per share, that
such minimum price, if achieved,  would be maintained,  or that even if Nasdaq's
minimum bid price  requirements  were  satisfied,  the Common Stock would not be
eligible for listing by the Nasdaq for other reasons.                           

Effects of the One-For-Ten Reverse Stock Split                                  

     The  Company is  currently  authorized  to issue a maximum  of  110,000,000
shares of Common Stock. As of the Record Date,  there were 32,960,664  shares of
Common Stock issued and outstanding. Although the number of authorized shares of
Common Stock will not change as a result of the Reverse  Split (but see Proposal
4), the number of shares of Common Stock issued and outstanding  will be reduced
to a number that will be  approximately  equal to the number of shares of Common
Stock  issued and  outstanding  immediately  prior to the  effectiveness  of the
Reverse  Split,  divided by ten. In addition,  on the Effective Date each option
and  warrant  to  purchase  Common  Stock  and any  other  convertible  security
outstanding  on the Effective Date will be adjusted so that the number of shares
of Common Stock  issuable  upon their  exercise  shall be divided by ten and the
exercise  price of each  option  and  warrant  shall be  multiplied  by ten.  No
fractional shares will be issued upon the Reverse Split.                        

     With the  exception  of the number of shares  issued and  outstanding,  the
rights and preferences of the shares of Common Stock prior and subsequent to the
Reverse Split,  will remain the same. It is not  anticipated  that the financial
condition of the Company, the percentage ownership of management,  the number of
the  Company's  stockholders,  or any  aspect of the  Company's  business  would
materially change as a result of the Reverse Split.                             

     Except for the negligible  effect that the Company believes may result from
the payment of cash for fractional  shares as described below,  each stockholder
will hold the same percentage of Common Stock outstanding  immediately following
the one-for-ten reverse stock split as each stockholder did immediately prior to
the Reverse Split. The Reverse Split would not affect the voting rights or other
rights  of  the  holders  of  Common  Stock  or the  rights  of  holders  of any
convertible  securities.  The  Reverse  Split  will  also  have no effect on the
Company's preferred stock, of which no shares are issued and outstanding.       

     By decreasing by ten times the number of  outstanding  shares of the Common
Stock,  the Reverse Split may  adversely  affect the liquidity of the market for
the Common Stock by making it more difficult for holders of common stock to sell
their shares.  The Board of Directors  believes that, if it occurs,  this effect
would be offset by the positive effect on liquidity which would likely result if
the Company were able to list shares of Common Stock on a national market system
and/or lower the trading commissions.                                           

     The one-for-ten  reverse stock split will also result in some  stockholders
owning "odd lots" of less than 100 shares of Common Stock. Brokerage commissions
and other costs of  transactions  in odd lots may be higher,  particularly  on a
per-share basis, than the cost of transactions in even multiples of 100 shares. 

     Even  though  a  reverse  stock  split,  by  itself,   does  not  impact  a
corporation's  assets or prospects,  reverse  splits can result in a decrease in
the  aggregate  market value of a  corporation's  equity  capital.  The Board of
Directors,  however, believes that the likelihood that the trading price of each
share of the Common Stock will increase and the resulting  benefits  offset this
risk.  However,  there can be no  assurance  that the market price of the Common
Stock  immediately  after the Reverse Split will be approximately  ten times the
market price of the Common shares  immediately  before the Reverse Split or that
any increased  market price can be  maintained  for any period of time after the
Reverse Split.                                                                  

Effect on Registration                                                          

     The  Common  Stock  is  currently  registered  under  Section  12(g) of the
Exchange Act, and as a result,  the Company is subject to the periodic reporting
and other  requirements  of the Exchange  Act. The Company does not believe that
the Reverse  Split will affect the  registration  of the Common  Stock under the
Exchange Act.                                                                   

Accounting Effects of the Reverse Split                                         

     Following the Effective  Date, the par value of the Company's  Common Stock
will remain at $0.0001 per share. As a result, the Company's stated capital will
be  reduced  and  capital  in excess of par value  (paid-in  capital)  increased
accordingly. Stockholders' equity will remain unchanged.                        

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Exchange of Stock Certificates                                                  

     Beginning on the Effective Date, each  certificate  representing  shares of
the Company's Common Stock will be deemed for all corporate purposes to evidence
ownership of as many shares of  post-reverse  split Common Stock after  applying
the split factor and  otherwise  making  adjustments  for  fractional  shares as
described below.                                                                

     The Company  will  instruct  its transfer  agent  (ChaseMellon  Shareholder
Services) to act as its exchange  agent (the "Exchange  Agent") in  implementing
the exchange of certificates  representing  outstanding Common Stock. As soon as
practicable  after  the  Effective  Date,  the  Company  will  send  letters  of
transmittal  to all  stockholders  of  record on the  Effective  Date for use in
transmitting  stock  certificates  ("Old  Certificates")  to the Exchange Agent.
Fractional  shares of Common Stock will not be issued as a result of the Reverse
Split.  Upon proper  completion and execution of the letter of  transmittal  and
return thereof to the Exchange Agent,  together with the Old Certificates,  each
stockholder  who holds of record  fewer than ten  shares of Common  Stock on the
Effective  Date will  receive  cash in the amount to which he or she is entitled
(as specified  below) and the interest of such  stockholder  in the Company will
thereby be terminated.  Holders of record of ten or more shares on the Effective
Date will receive new certificates ("New Certificates")  representing the number
of whole  shares of Common  Stock into which their  shares of Common  Stock have
been  converted  as a result of the Reverse  Split.  Holders of record of ten or
more shares on the Effective  Date whose shares are not evenly  divisible by ten
will  receive  cash in the  amount  to which  they are  entitled  in lieu of any
fractional  shares.   Until  a  stockholder   forwards  a  completed  letter  of
transmittal,  together  with the Old  Certificates  to the  Exchange  Agent  and
receives in return a New Certificate,  such stockholders'  Common Stock shall be
deemed  equal to the  number  of whole  shares  of  Common  Stock to which  such
stockholder  is  entitled  as a result of the Reverse  Split.  Old  Certificates
should not be sent to the Company and should not be sent to the  Exchange  Agent
before receipt of the letter of transmittal from the Company.                   

     If Common  Stock is held on a  stockholder's  behalf  by a broker,  bank or
other  nominee,  the  adjustment  of such position will be handled in accordance
with the procedures of The Depository Trust Company.                            

Fractional Shares                                                               

     No fractional  shares of Common Stock will be issued in connection with the
foregoing  reclassification  of shares of Common Stock.  In lieu  thereof,  upon
surrender after the Effective Date of a certificate formerly representing shares
of Common Stock issued and outstanding  immediately prior to the Effective Date,
the Company will pay to the holder of the certificate an amount in cash (without
interest)  equal to the product  obtained by  multiplying  (a) the fraction of a
share of Common Stock to which such holder (after taking into account all shares
of Common Stock held  immediately  prior to the  Effective  Date by such holder)
would  otherwise  be  entitled  to, by (b) the  closing  sale price per share of
Common Stock as quoted on The OTC Bulletin  Board on the last trading date prior
to the Effective Date, by (c) ten.                                              

Federal Income Tax Consequences of the Reverse Split                            

THE FOLLOWING  DISCUSSION IS NOT TAX ADVICE. EACH STOCKHOLDER SHOULD CONSULT HIS
OR HER OWN TAX ADVISOR WITH RESPECT TO THE CONSEQUENCES OF THE REVERSE SPLIT.   

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     The following is a summary of the material  anticipated  federal income tax
consequences of the Reverse Split to stockholders of the Company.  The following
discussion  is based upon  present  federal tax law and does not purport to be a
complete   discussion  of  such   consequences   for  all  stockholders  in  all
circumstances,  nor does it address state,  local or foreign tax consequences or
considerations.  This summary is based on the provisions of the Internal Revenue
Code of 1986,  as amended  (the  "Code"),  the Treasury  Department  Regulations
issued pursuant thereto,  and published rulings and court decisions in effect as
of the date  hereof,  all of which are subject to change.  This summary does not
take into account  possible changes in such laws or  interpretations,  including
amendments  to  the  Code,   applicable   statutes,   regulations  and  proposed
regulations or changes in judicial or administrative  rulings, some of which may
have  retroactive  effect.  The federal income tax  consequences  of the Reverse
Split will vary among  stockholders  depending  upon  whether  they  receive (i)
solely  cash for  their  shares,  (ii)  solely  New  Certificates,  or (iii) New
Certificates plus cash for fractional  shares, in exchange for Old Certificates.
No ruling from the  Internal  Revenue  Service  nor  opinion of counsel  will be
sought  or  obtained  regarding  the  federal  income  tax  consequences  to the
stockholders of the Company as a result of the Reverse Split. Accordingly,  each
stockholder  is  encouraged  to  consult  such  stockholder's  own  tax  advisor
regarding  the  specific  tax   consequences   of  the  Reverse  Split  to  such
stockholder.  The Company believes that because the Reverse Split is not part of
a plan to  periodically  increase  stockholders'  proportionate  interest in the
assets or earnings and profits of the  Company,  and because the cash payment in
lieu  of  fractional  shares  represents  a  mechanical   rounding  rather  than
separately bargained for consideration, the proposed Reverse Split will have the
following federal income tax effects:                                           

1).  A stockholder will not recognize taxable gain or loss on the receipt of New
     Certificates in exchange for Old  Certificates in the Reverse Split. In the
     aggregate,  a  stockholder's  basis in the Common Stock  represented by New
     Certificates  will  equal  his or her basis in the  shares of Common  Stock
     represented by Old Certificates  exchanged  therefor (but not including the
     basis of any shares of Common  Stock  represented  by Old  Certificates  to
     which a  fractional  share  interest in Common Stock  represented  by a New
     Certificate is attributable), and such stockholder's holding period for the
     New  Certificates  will include the holding period for the Old Certificates
     if the shares of Common Stock  represented by such certificates are capital
assets in the hands of such stockholder.                              

2).  To the extent that a stockholder receives cash in the Reverse Split in lieu
     of the  issuance of a  fractional  share by the Company  (whether or not in
     addition to receiving New  Certificates in exchange for Old  Certificates),
     such  stockholder will generally be treated as having received a fractional
     interest in a share of Common Stock  represented by a New Certificate which
     is then  redeemed by the Company.  A  stockholder  who  receives  only cash
     generally will recognize taxable gain or loss, as the case may be, equal to
     the  difference,  if any,  between  the  amount of cash  received  and such
     stockholders'  aggregate  basis in the  pre-Reverse  Split  share of Common
     Stock to which such  fractional  share  interest is  attributable.  If such
     shares are a capital  asset in the hands of such  stockholder,  the gain or
     loss will be  long-term  gain or loss if the shares were held for more than
     one year.  Stockholders  who receive  cash in addition to New  Certificates
     generally  will be treated as having  received a  distribution  essentially
    equivalent to a dividend, the taxability of which is yet to be determined.

3).  The Company  believes  that the  proposed  Reverse  Split will qualify as a
     "recapitalization" under Section 368(a)(1)(E) of the Code. As a result, the
     Company  will not  recognize  any gain or loss as a result of the  proposed
Reverse Split.                                                        

     Special taxation and withholding rules may apply to any stockholder that is
a nonresident alien or a foreign  corporation.  Those rules are beyond the scope
of this  discussion.  Stockholders  will be  required  to provide  their  social
security  or other  taxpayer  identification  numbers  (or,  in some  instances,
certain other  information) to the Exchange Agent in connection with the Reverse
Split to avoid backup  withholding  requirements that might otherwise apply. See
"Exchange of Stock  Certificates."  The letter of transmittal  will require each
stockholder to deliver such information  when the Common Stock  certificates are
surrendered  following the Effective Date.  Failure to provide such  information
may result in backup withholding.                                               

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No Dissenter's Rights                                                           

     Under the Delaware General Corporation Law, stockholders of the Company are
not entitled to any rights of appraisal or dissenters' rights in connection with
the adoption of the Reverse Split proposal.                                     

Vote Required and Board of Directors' Recommendation                            

     Approval of this proposal  requires the  affirmative  vote of a majority of
the outstanding shares of the Company entitled to vote thereon.                 

THE BOARD OF  DIRECTORS  UNANIMOUSLY  RECOMMENDS  A VOTE "FOR"  APPROVAL OF THIS
PROPOSAL TO AMEND THE COMPANY'S RESTATED  CERTIFICATE OF INCORPORATION TO EFFECT
A ONE-FOR-TEN  REVERSE STOCK SPLIT OF THE ISSUED AND  OUTSTANDING  SHARES OF THE
COMPANY'S COMMON STOCK.                                                         

PROPOSAL 4

AMEND THE RESTATED CERTIFICATE OF INCORPORATION OF THE COMPANY
TO DECREASE THE NUMBER OF AUTHORIZED SHARES OF
 THE COMPANY'S COMMON STOCK FROM 110,000,000 TO 11,000,000
 AND DECREASE THE NUMBER OF AUTHORIZED SHARES OF THE COMPANY'S
PREFERRED STOCK FROM 10,000,000 TO 1,000,000

     The Board of Directors has authorized, subject to stockholder approval, the
amendment of the Company's Restated Certificate of Incorporation to decrease the
number of authorized  shares of the Company's  Common Stock from  110,000,000 to
11,000,000  and  decrease  the  number of  authorized  shares  of the  Company's
Preferred  Stock from  10,000,000  to  1,000,000.  The decrease in the number of
authorized shares is in direct proportion to the Reverse Split under Proposal 3.
If the  stockholders at the Annual Meeting do not approve  Proposal 3, the Board
will abandon  this  Proposal 4 and will not amend the  Restated  Certificate  of
Incorporation  of the Company to  decrease  the number of  authorized  shares of
either the Common Stock or the Preferred Stock.                                 

     The Board of  Directors  may abandon the proposal to decrease the number of
authorized  shares of the Common Stock and the  Preferred  Stock before or after
the Annual Meeting, without further action by the stockholders, and not file the
proposed  amendment to the Restated  Certificate of Incorporation of the Company
if at any time the Board determines,  in its sole discretion,  that the proposed
decrease in authorized  shares would not be in the best interests of the Company
and its stockholders.                                                           

     The Board of Directors has adopted the resolutions  approving the amendment
of the  Restated  Certificate  to decrease  the number of  authorized  shares of
Common Stock and Preferred Stock in order to avoid a substantial increase in the
annual  franchise  tax payable by the Company to the State of Delaware that will
result  from the  Reverse  Split.  By  proportionally  decreasing  the number of
authorized  shares,  the  Company  will avoid the  substantial  increase  in the
Delaware franchise tax.                                                         

     Decreasing  the number of  authorized  shares of Common Stock and Preferred
Stock will not impair the capital of existing  stockholders in any way. Although
the approval of this Proposal 4 will decrease the number of shares of authorized
capital  stock,  it will not result in any change in the  relative  voting power
among stockholders nor their percentage ownership of the Company. The rights and
preferences of shares of the Common Stock and the Preferred Stock and the rights
and preferences of holders of any convertible securities prior and subsequent to
the decrease in authorized shares, will remain the same.                        

     If the decrease in the number of authorized  shares of the Common Stock and
the Preferred Stock is approved by the stockholders and implemented by the Board
of Directors,  the Restated  Certificate will be amended as described herein and
as set  forth  in the  form of the  Certificate  of  Amendment  to the  Restated
Certificate of Incorporation of the Company attached hereto as Exhibit C.       

Vote Required and Board of Directors' Recommendation                            

     Approval of this proposal  requires the  affirmative  vote of a majority of
the outstanding shares of the Company entitled to vote thereon.                 

THE BOARD OF  DIRECTORS  UNANIMOUSLY  RECOMMENDS  A VOTE "FOR"  APPROVAL OF THIS
PROPOSAL  TO AMEND  THE  COMPANY'S  RESTATED  CERTIFICATE  OF  INCORPORATION  TO
DECREASE  THE NUMBER OF  AUTHORIZED  SHARES OF THE  COMPANY'S  COMMON STOCK FROM
110,000,000  TO 11,000,000  AND DECREASE THE NUMBER OF AUTHORIZED  SHARES OF THE
COMPANY'S PREFERRED STOCK FROM 10,000,000 TO 1,000,000.                         

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PROPOSAL 5

 RATIFICATION OF APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS

     Subject to  ratification by the  stockholders  at the Annual  Meeting,  the
Audit  Committee has  recommended  to the Board of  Directors,  and the Board of
Directors has approved,  the  appointment of the independent  public  accounting
firm of KPMG LLP ("KPMG") to audit the Company's  financial  statements  for the
current   fiscal  year  ending   December  31,  2000.  It  is  expected  that  a
representative  of KPMG will be  present at the  Annual  Meeting,  will have the
opportunity to make a statement if he or she so desires and will be available to
respond to appropriate questions from stockholders present at the meeting.      

     If the foregoing  recommendation  is rejected or if KPMG declines to act or
otherwise  becomes  incapable  of  acting  or if its  appointment  is  otherwise
discontinued,  the Board of Directors  will appoint other  independent  auditors
whose  appointment  for any  period  subsequent  to the 2000  Annual  Meeting of
Stockholders shall be subject to ratification by the stockholders.              

     Vote  Required  and Board of  Directors'  Recommendation  Approval  of this
proposal  requires the  affirmative  vote of a majority of the votes  present or
represented by proxy and entitled to vote on the matter at the Annual Meeting.  

THE BOARD OF  DIRECTORS  UNANIMOUSLY  RECOMMENDS  A VOTE "FOR"  APPROVAL OF THIS
PROPOSAL TO RATIFY THE APPOINTMENT OF KPMG AS THE COMPANY'S INDEPENDENT AUDITORS
FOR FISCAL YEAR 2000.                                                           

Section 16(a) Beneficial Ownership Reporting Compliance                         

     Section 16(a) of the Exchange Act and  regulations  of the  Securities  and
Exchange  Commission  thereunder  require the Company's  executive  officers and
directors and persons who own more than ten percent of the Company's  stock,  as
well as certain affiliates of such persons, to file initial reports of ownership
and changes in ownership with the Securities  and Exchange  Commission  ("SEC").
Executive  officers,  directors and persons  owning more than ten percent of the
Company's  stock are  required by the SEC's  regulations  to furnish the Company
with copies of all Section 16(a) forms they file.  Based solely on its review of
the copies of Forms 3, 4 and 5 and  amendments  thereto  received by the Company
and  written  representations  that no other  reports  were  required  for those
persons,  the Company  believes that,  during the fiscal year ended December 31,
1999, all filing requirements  applicable to its executive  officers,  directors
and owners of more than ten percent of the Company's stock were complied with on
a timely basis.                                                                 

Nomination  and  Stockholder  Proposal  Deadline  for 2001  Annual  Stockholders
Meeting                                                                         

     Any  stockholder  proposal  intended  to be  presented  at the next  Annual
Meeting of  Stockholders  pursuant to Rule 14a-8 of Regulation  14A of the proxy
rules of the  Securities  and Exchange  Commission  ("Rule  14a-8"),  must be in
writing and received at the Company's  principal executive offices for inclusion
in the Company's  proxy statement and form of proxy relating to such meeting not
later  than  March 22,  2001,  unless  the  Company  notifies  the  stockholders
otherwise.  Any such proposal must comply with Rule 14a-8.  Written requests for
inclusion should be addressed to Corporate Secretary,  KENETECH Corporation, 500
Sansome Street, Suite 410, San Francisco, California 94111.                     

     To be timely,  any nominations for the election of directors or stockholder
proposals  submitted  outside  Rule  14a-8  must be  delivered  or mailed to and
received by the Secretary of the Company not less than 90 days prior to the 2001
Annual  Meeting;  provided,  however,  that in the event that less than 100 days
notice or prior public disclosure of the date of the meeting is given or made to
stockholders,  notice by the  stockholder  to be timely must be so received  not
later than the close of  business  on the tenth day  following  the day on which
such notice of the date of the meeting was mailed or such public  disclosure was
made.  Such  nomination  or  proposal  must  be  made  in  accordance  with  the
provisions, requirements and procedures set forth in the Company's Bylaws.      

Stockholder List                                                                

     The Company will maintain at its principal executive offices at 500 Sansome
Street,  Suite 410, San Francisco,  California,  a list of the stockholders that
are  entitled  to  vote at the  Annual  Meeting.  The  list  will  be  open  for
examination  by any  stockholder,  for purposes  germane to the meeting,  during
ordinary  business hours for a period of 10 days prior to the meeting.  The list
will also be available for examination at the Annual Meeting.                   

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Annual Report and Form 10-K                                                     

     The 1999 Annual Report of the Company,  in the form of the Company's Annual
Report on Form 10-K for the fiscal  year  ending  December  31,  1999,  has been
mailed with this Proxy  Statement to  stockholders of record on the Record Date.
In addition, the EDGAR version of such report is available at the World Wide Web
site of the Securities and Exchange Commission (www.sec.gov).                   

Contacting the Transfer Agent                                                   

     Any  stockholder  inquiries to the Company's  transfer  agent,  ChaseMellon
Shareholder Services,  may be directed to 800-356-2017 or to ChaseMellon's World
Wide Web site (www.chasemellon.com).                                            

Other Matters That May Come Before the Meeting                                  

     As of this  date,  the  Company  is not aware  that any  matters  are to be
presented for action at the meeting  other than those  referred to in the Notice
of Annual Meeting,  but the proxy form sent herewith,  if executed and returned,
gives  discretionary  authority  with respect to any other matters that may come
before the meeting.                                                             

By Order of the Board of Directors,               

Dianne P. Urhausen                                
Vice President and Secretary                      

San Francisco, California                                                       
July 20, 2000                                                                   

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APPENDIX A                                                                      
PROXY                                                                           
KENETECH CORPORATION
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, AUGUST 23, 2000

     The undersigned  hereby appoints Dianne P. Urhausen and Mark D. Lerdal, and
each of them as attorneys  and proxies of the  undersigned,  with full power and
substitution,  to vote all of the shares of stock of KENETECH  Corporation which
the undersigned may be entitled to vote at the Annual Meeting of Stockholders of
KENETECH  Corporation  to be held at the Park Hyatt San  Francisco,  333 Battery
Street, San Francisco, California, on Wednesday, August 23, 2000, at 10:00 A.M.,
local time, and at any one or more adjournments or postponements  thereof,  with
all powers that the undersigned would possess if personally present, upon and in
respect  of  the  following   matters  and  in  accordance  with  the  following
instructions,  with discretionary authority as to any and all other matters that
may properly come before the meeting.                                           

UNLESS A CONTRARY  DIRECTION IS INDICATED,  THIS PROXY, WHEN PROPERLY  EXECUTED,
WILL BE VOTED FOR THE  NOMINEES  LISTED IN PROPOSAL 1, FOR THE  AMENDMENT OF THE
RESTATED  CERTIFICATE OF INCORPORATION TO ELIMINATE THE SERIES U PREFERRED STOCK
IN PROPOSAL 2, FOR THE AMENDMENT OF THE RESTATED CERTIFICATE OF INCORPORATION TO
EFFECT A ONE-FOR-TEN REVERSE STOCK SPLIT OF THE ISSUED AND OUTSTANDING SHARES OF
COMMON STOCK IN PROPOSAL 3, FOR THE  AMENDMENT OF THE  RESTATED  CERTIFICATE  OF
INCORPORATION  TO DECREASE THE NUMBER OF  AUTHORIZED  SHARES OF COMMON STOCK AND
PREFERRED STOCK IN PROPOSAL 4 AND FOR THE RATIFICATION OF THE APPOINTMENT OF THE
INDEPENDENT AUDITORS LISTED IN PROPOSAL 5 AND AS MORE SPECIFICALLY  DESCRIBED IN
THE PROXY  STATEMENT OF KENETECH  CORPORATION  DATED JULY 20, 2000.  IF SPECIFIC
INSTRUCTIONS ARE INDICATED, THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.   

 (Continued, and to be signed on the other side)

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                                                                   Please mark
                                                              [ X ] your votes
                                                                       as this

THE BOARD OF DIRECTORS  RECOMMENDS  A VOTE FOR THE NOMINEES FOR DIRECTOR  LISTED
BELOW                                                                           
1.   To elect two  directors as Class I Directors to hold office for  three-year
terms.                                                                

                                                WITHHOLD
                            FOR                  FOR ALL
                          [ ]                    [ ]

Charles Christenson                  Michael D. Winn                            

FOR both nominees listed above (except as indicated to the contrary).           
WITHHOLD AUTHORITY to vote for both nominees listed above.                      

INSTRUCTIONS:  To withhold authority to vote for any individual  nominee,  write
that nominee's name in the space provided below:                                
--------------------------------------------------------------------------      

THE BOARD OF  DIRECTORS  RECOMMENDS A VOTE FOR THE  ELIMINATION  OF THE SERIES U
PREFERRED STOCK.                                                                
2.   To amend the Restated  Certificate of Incorporation to eliminate the Series
U Preferred Stock.                                                    
                                    FOR       AGAINST      ABSTAIN
                                  [   ]      [   ]         [   ]

THE BOARD OF  DIRECTORS  RECOMMENDS  A VOTE FOR THE  ONE-FOR-TEN  REVERSE  STOCK
SPLIT.                                                                          
3.   To amend the Restated  Certificate of Incorporation to effect a one-for-ten
     reverse stock split of the issued and  outstanding  shares of the Company's
common stock, $0.0001 par value.                                      
                                  FOR       AGAINST      ABSTAIN
                                  [   ]      [   ]         [   ]

THE BOARD OF  DIRECTORS  RECOMMENDS  A VOTE FOR THE  DECREASE  IN THE  NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK AND PREFERRED STOCK.                          
4.   To amend the Restated  Certificate of  Incorporation to decrease the number
     of authorized  shares of common stock,  $0.0001 par value, from 110,000,000
     to  11,000,000  and decrease the number of  authorized  shares of preferred
stock, par value $0.01, from 10,000,000 to 1,000,000.                 
                                  FOR       AGAINST      ABSTAIN
                                  [   ]      [   ]         [   ]

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE RATIFICATION OF THE INDEPENDENT
AUDITORS.                                                                       
5.   To ratify the appointment of the Independent Auditors.                     
                                  FOR       AGAINST      ABSTAIN
                                  [   ]      [   ]         [   ]

                             I PLAN TO ATTEND THE MEETING. [   ]

Please sign exactly as your name appears  hereon.  If the stock is registered in
the names of two or more persons, each should sign.  Executors,  administrators,
trustees,  guardians and attorneys-in-fact should add their titles. If signer is
a  corporation,  please  give  full  corporate  name and have a duly  authorized
officer  sign,  stating  title.  If  signer  is a  partnership,  please  sign in
partnership name by authorized person.                                          

Signature(s) ____________________________                Date _________________ 

NOTE:  Please vote,  date and promptly  return this proxy in the enclosed return
envelope which is postage prepaid if mailed in the United States.               

FOLD AND DETACH HERE

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                                                    EXHIBIT A TO PROXY STATEMENT

CERTIFICATE OF AMENDMENT

TO THE

RESTATED CERTIFICATE OF INCORPORATION FILED SEPTEMBER 27, 1993

OF

KENETECH CORPORATION

 _________________
Pursuant to Section 242 of the General
 Corporation Law of the State of Delaware.

     KENETECH Corporation (herein called the "Corporation" or the "Company"),  a
corporation   organized  and  existing  under  and  by  virtue  of  the  General
Corporation Law of the State of Delaware, does hereby certify:                  

FIRST:    That the Board of Directors of the  Corporation  at a regular  meeting
     duly  called and held on April 19,  2000 at which a quorum was at all times
     present and acting, unanimously adopted resolutions proposing and declaring
     advisable  the  following   Amendment  to  the  Restated   Certificate   of
     Incorporation of the Corporation filed September 27, 1993 and directed that
     said  amendment be  considered  and  submitted to a vote at the next annual
meeting of the stockholders of the Corporation:                       

RESOLVED:      That the Restated  Certificate of Incorporation of the Company be
           amended by deleting Section 4.2 of Article 4 in its entirety.

RESOLVED                                                                        
FURTHER:       That the Restated  Certificate of Incorporation of the Company be
               amended  by  revising  Section  4.4 of  Article  4 to read in its
entirety as follows:                              

                    4.4 Dividends. Subject to any preferential rights granted to
               any  series of  Preferred  Stock,  the  holders  of shares of the
               Common Stock shall be entitled to receive  dividends,  out of the
               funds of the Corporation legally available therefor,  at the rate
               and at the time or times, whether cumulative or noncumulative, as
               may be provided by the Board of Directors.  The holders of shares
               of Preferred Stock shall be entitled to receive  dividends to the
               extent  provided by the Board of  Directors  in  designating  the
particular series of Preferred Stock.             

RESOLVED                                                                        
FURTHER:       That the Restated  Certificate of Incorporation of the Company be
               amended  by  revising  Section  4.5 of  Article  4 to read in its
entirety as follows:                              

                    4.5 Voting Rights of Preferred  Stock.  The voting rights of
               the holders of shares of a series of Preferred  Stock shall be as
               set  forth  in  the   certificate  or  statement  of  rights  and
preferences of such series.                       

RESOLVED                                                                        
FURTHER:       That the Restated  Certificate of Incorporation of the Company be
               amended  by  deleting  each of  Section  4.6 and  Section  4.7 of
Article 4 in its entirety.                        

RESOLVED                                                                        
FURTHER:       That the Restated  Certificate of Incorporation of the Company be
amended by deleting Article 11 in its entirety.   

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RESOLVED                                                                        
FURTHER:       That the Restated  Certificate of Incorporation of the Company be
               amended  by  revising  Article  14 to  read  in its  entirety  as
follows:                                          

                    The Corporation  reserves the right to amend,  alter, change
               or repeal any provision contained in this Restated Certificate of
               Incorporation,  in the  manner  now or  hereafter  prescribed  by
               statute,  and all rights conferred upon  stockholders  herein are
               granted subject to this  reservation.  Notwithstanding  any other
               provision of this Restated  Certificate of  Incorporation  or any
               provision of law which might otherwise permit a lesser vote or no
               vote, but in addition to any  affirmative  vote of the holders of
               the capital stock required by law or this Restated Certificate of
               Incorporation,  the  affirmative  vote of the holders of at least
               two-thirds  (2/3)  of the  combined  voting  power  of all of the
               then-outstanding shares of the Corporation entitled to vote shall
               be  required  to alter,  amend or  repeal  Articles  THIRTEEN  OR
               FOURTEEN or any provision thereof, unless such amendment shall be
               approved by a majority of the  directors of the  Corporation  not
               affiliated  or associated  with any person or entity  holding (or
               which has  announced  an  intention to obtain) 25% or more of the
          voting power of the Corporation's outstanding capital stock.

SECOND:   That said amendment was thereafter duly adopted in accordance with the
     provisions  of Section 242 of the General  Corporation  Law of the State of
     Delaware by the holders of a majority of the outstanding shares entitled to
     vote thereon  acting at the Annual  Meeting duly called and held August 23,
2000.                                                                 

          IN WITNESS WHEREOF,  KENETECH  Corporation has caused this Certificate
     to  be  signed  by  it  duly  authorized  officer  on  this  _____  day  of
_______________, 2000.                                                

                                              KENETECH Corporation

                             By:
                                             Name:
                                              Title:

[SEAL]                                                                          

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                                                    EXHIBIT B TO PROXY STATEMENT

CERTIFICATE OF AMENDMENT

TO THE

RESTATED CERTIFICATE OF INCORPORATION FILED SEPTEMBER 27, 1993

OF

KENETECH CORPORATION

 _________________
Pursuant to Section 242 of the General
 Corporation Law of the State of Delaware.

          KENETECH   Corporation   (herein  called  the   "Corporation"  or  the
     "Company"), a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware, does hereby certify:

FIRST:    That the Board of Directors of the  Corporation  at a regular  meeting
     duly  called and held on April 19,  2000 at which a quorum was at all times
     present  and  acting,   unanimously  adopted  a  resolution  proposing  and
     declaring advisable the following Amendment to the Restated  Certificate of
     Incorporation of the Corporation filed September 27, 1993 and directed that
     said  amendment be  considered  and  submitted to a vote at the next annual
meeting of the stockholders of the Corporation:                       

RESOLVED:      That the Restated  Certificate of Incorporation of the Company be
amended by adding to Article 4 the following:     

               Reclassification  of  Common  Stock.  Upon  this  Certificate  of
               Amendment  becoming  effective  in  accordance  with the  General
               Corporation Law of the State of Delaware (the "Effective  Time"),
               each share of Common Stock,  par value $0.0001 per share,  of the
               Corporation   ("Old  Common   Stock")   issued  and   outstanding
               immediately  prior to the Effective  Time shall be  automatically
               reclassified as and converted into 0.1 of a validly issued, fully
               paid and  nonassessable  share of Common Stock, par value $0.0001
 per share, of the Corporation ("New Common Stock").

               Notwithstanding the immediately preceding sentence, no fractional
               shares of New Common Stock shall be issued in connection with the
               foregoing reclassification of shares of Old Common Stock. In lieu
               thereof, upon surrender after the Effective Time of a certificate
               formerly representing shares of Old Common Stock, the Corporation
               shall  pay to the  holder  of the  certificate  an amount in cash
               (without  interest) equal to the product  obtained by multiplying
               (a) the  fraction  of a share of New  Common  Stock to which such
               holder  (after taking into account all shares of Old Common Stock
               held  immediately  prior to the  Effective  Time by such  holder)
               would otherwise be entitled to, by (b) the closing sale price per
               share of Old Common Stock of the Corporation as quoted on The OTC
               Bulletin  Board on the  last  trading  date  prior to the date on
which the Effective Time occurs, by (c) ten.      

               Each stock certificate  that,  immediately prior to the Effective
               Time,  represented  shares of Old Common  Stock  shall,  from and
               after the Effective Time, automatically and without the necessity
               of  presenting  the same for exchange,  represent  that number of
               shares of New  Common  Stock  into which the shares of Old Common
               Stock   represented   by  such   certificate   shall   have  been
               reclassified  (as well as the  right to  receive  cash in lieu of
               fractional shares of New Common Stock),  provided,  however, that
               each  person of record  holding a  certificate  that  represented
               shares of Old Common Stock shall receive,  upon surrender of such
               certificate,  a new certificate  evidencing and  representing the
               number of shares of New Common Stock into which the shares of Old
               Common  Stock  represented  by such  certificate  shall have been
reclassified.                                     

SECOND:   That said amendment was thereafter duly adopted in accordance with the
     provisions  of Section 242 of the General  Corporation  Law of the State of
     Delaware by the holders of a majority of the outstanding shares entitled to
     vote thereon  acting at the Annual  Meeting duly called and held August 23,
2000.                                                                 

          IN WITNESS WHEREOF,  KENETECH  Corporation has caused this Certificate
     to  be  signed  by  it  duly  authorized  officer  on  this  _____  day  of
_______________, 2000.                                                
                                            KENETECH Corporation

                             By:
                                             Name:
                                              Title:
[SEAL]                                                                        
Page 29 

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                                                    EXHIBIT C TO PROXY STATEMENT

CERTIFICATE OF AMENDMENT

TO THE

RESTATED CERTIFICATE OF INCORPORATION FILED SEPTEMBER 27, 1993

OF

KENETECH CORPORATION

 _________________
Pursuant to Section 242 of the General
 Corporation Law of the State of Delaware.

          KENETECH   Corporation   (herein  called  the   "Corporation"  or  the
     "Company"), a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware, does hereby certify:

FIRST:    That the Board of Directors of the  Corporation  at a regular  meeting
     duly  called and held on April 19,  2000 at which a quorum was at all times
     present  and  acting,   unanimously  adopted  a  resolution  proposing  and
     declaring advisable the following Amendment to the Restated  Certificate of
     Incorporation of the Corporation filed September 27, 1993 and directed that
     said  amendment be  considered  and  submitted to a vote at the next annual
meeting of the stockholders of the Corporation:                       

RESOLVED:      That Article 4.1 of the Restated  Certificate of Incorporation of
the Company be amended to read as follows:        

          4.1 Authorized  Stock.  The Corporation is authorized to issue a total
     of Tweleve  Million  (12,000,000)  shares of capital stock divided into two
     classes of stock,  denominated Common Stock and Preferred Stock. The Common
     Stock shall have a par value of $0.0001 per share,  and the Preferred Stock
     shall  have a par value of $0.01 per share.  The total  number of shares of
     Common Stock which the Corporation is authorized to issue is Eleven Million
     (11,000,000),  and the  number  of  shares  of  Preferred  Stock  which the
     Corporation is authorized to issue is One Million (1,000,000), which shares
shall be undesignated as to series.                                   

SECOND:   That said amendment was thereafter duly adopted in accordance with the
     provisions  of Section 242 of the General  Corporation  Law of the State of
     Delaware by the holders of a majority of the outstanding shares entitled to
     vote thereon  acting at the Annual  Meeting duly called and held August 23,
2000.                                                                 

          IN WITNESS WHEREOF,  KENETECH  Corporation has caused this Certificate
     to  be  signed  by  it  duly  authorized  officer  on  this  _____  day  of
_______________, 2000.                                                

                                              KENETECH Corporation

                             By:
                                             Name:
                                              Title:

[SEAL]                                                                        

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘PRE 14A’ Filing	Date	First	Last	Other Filings

	12/31/05	15
	6/20/03	12
	1/1/02	15
	3/22/01	26
	12/31/00	5	26
For Period End:	8/23/00	2	33	DEF 14A
	7/20/00	2	28
Filed as of:	7/5/00
Filed on:	7/3/00
	6/30/00	17		10-Q
	6/26/00	3	4
	4/19/00	30	33
	4/1/00	13
	3/31/00	13	16	10-Q
	1/1/00	15
	12/31/99	4	27	10-K405
	11/23/99	8	15	8-K
	9/30/99	13		10-Q
	8/18/99	8	15
	5/4/99	20
	4/1/99	13
	3/31/99	10	17	10-K, 10-Q
	3/23/99	10	17
	1/1/99	8	15
	12/31/98	9	13	10-K
	12/22/98	13
	12/31/97	9		10-K
	12/1/97	13
	5/29/96	7		8-K
	4/1/96	13
	12/31/94	16
	9/27/93	30	33
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Filing Submission 0000807708-00-000010 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Kenetech Corp – ‘PRE 14A’ for 8/23/00

On: Monday, 7/3/00, at 7:16pm ET · As of: 7/5/00 · For: 8/23/00 · Accession #: 807708-0-10 · File #: 0-22072

Preliminary Proxy Solicitation Material — Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Preliminary Proxy Solicitation Material — Schedule 14A
Filing Table of Contents