<PAGE>

                                                                     Exhibit 3.1
                                                                     -----------

                  RESTATED ARTICLES OF DUQUESNE LIGHT COMPANY

    RESOLVED, that the Articles of Duquesne Light Company be amended and
restated in their entirety so as to read in full as follows:

    1/st/.  The name of the Company is DUQUESNE LIGHT COMPANY.

    2/nd/.  The location and post office address of its current registered
office in the Commonwealth of Pennsylvania is 411 Seventh Avenue, City of
Pittsburgh 15219, County of Allegheny.

    3/rd/.  The purposes for which the Company is incorporated under the
Business Corporation Law of the Commonwealth of Pennsylvania are to engage in,
and do any lawful act concerning, any or all lawful business for which
corporations may be incorporated under said Business Corporation Law, including
but not limited to:

          A.  The supply of light, heat and power to the public by any means;

          B.  The production, generation, manufacture, transmission,
    transportation, storage, distribution or furnishing of electricity, natural
    or artificial gas, steam or air conditioning, or any combination thereof to
    or for the public; and

          C.  Manufacturing, processing, owning, using and dealing in personal
    property of every class and description, engaging in research and
    development, the furnishing of services, and acquiring, owning, using and
    disposing of real property of every nature whatsoever.

    4/th/.  The Company shall exist for the term of 999 years from June 18,
1890.

    5/th/.  The aggregate number of shares which the Company shall have
authority to issue shall be:

          (a) 4,000,000 shares of Preferred Stock, of the par value of $50 per
              share; and
          (b) 8,000,000 shares of Preference Stock, of the par value of $1 per
              share; and
          (c) 90,000,000 shares of Common Stock, of the par value of $1 per
              share.

The designations, preferences, qualifications, limitations, restrictions and the
special or relative rights in respect of the Preferred Stock and the six series
thereof presently outstanding, the Preference Stock and the one series thereof
presently outstanding, and the Common Stock of the Company, and a statement of
the authority hereby vested in the Board of Directors of the Company to fix and
determine the designations, preferences, qualifications, limitations,
restrictions, and special or relative rights of all series of the Preferred
Stock other than the six series thereof presently outstanding, and of all series
of Preference Stock other than the one series thereof presently outstanding,
shall be as follows:

                      Division A -- THE PREFERRED STOCK.

    1.1.  Series.  Except for the six series presently outstanding, the
provisions of which are set forth in Division E hereof, the Board of Directors
is hereby expressly authorized, at any time or from time to time, to divide any
or all of the shares of Preferred Stock into series, and in the resolution or
resolutions providing for the issue of shares of a particular series, before
issuance, to fix and determine the designation

                                      -1-
<PAGE>

and the relative rights and preferences of the series, so established (except as
otherwise expressly provided herein for all series), to the fullest extent now
or hereafter permitted by the laws of the Commonwealth of Pennsylvania,
including the variations between different series in the following respects:

    (a)  the distinctive serial designation of such series;

    (b)  the annual dividend rate of such series, and the date from which
         dividends shall commence to accrue;

    (c)  the redemption price or prices for shares of such series and the terms
         and conditions on which such shares may be redeemed;

    (d)  the sinking fund provisions, if any, for the redemption or purchase of
         shares of such series;

    (e)  the preferential amount or amounts payable upon shares of such series
         in the event of the voluntary or involuntary liquidation of the
         Company;

    (f)  the voting rights, if any, of such series in addition to those provided
         in Subdivision 1.5 of this Division A and in Subdivision 4.1 of
         Division D hereof;

    (g)  the terms and conditions, if any, upon which shares of such series may
         be converted and the class or classes or series of shares of the
         Company into which such shares may be converted; and

    (h)  such other terms, limitations and relative rights and preferences, if
         any, of shares of any such series as the Board of Directors may, at the
         time of such resolution, lawfully fix and determine under the laws of
         the Commonwealth of Pennsylvania.

All shares of Preferred Stock shall be of equal rank with each other, regardless
of series, and shall be identical with each other in all respects except as
provided pursuant to the preceding sentence or in Division E hereof.  The Board
of Directors is hereby expressly authorized to fix the number of shares which
shall constitute any series of Preferred Stock, which number, unless the Board
of Directors shall have otherwise provided in establishing such series, may at
any time or from time to time be increased or decreased, but not below the
number of shares thereof then outstanding.

    1.2.  Dividends.  Out of the assets of the Company available for dividends,
the holders of each series of the Preferred Stock at the time outstanding shall
be entitled to receive, if and when declared payable by the Board of Directors,
a dividend in cash at, but not exceeding, the fixed dividend rate for the
particular series, payable quarterly on the first day of January, April, July
and October in each year, or on such other days as may be provided for any
particular series by the Board of Directors pursuant to Subdivision 1.1 hereof,
and such dividends on each series of the Preferred Stock shall be cumulative, so
that in no event shall any dividend, whether in cash, stock or other property,
be declared or paid upon or set apart for, or any distribution be made or
ordered in respect of, the Preference Stock, the Common Stock or any other class
of stock ranking junior to the Preferred Stock as to dividends or assets nor
shall any moneys or other consideration be set aside for or applied to the
purchase of Common Stock or the purchase or redemption of the Preference Stock
or any such junior stock, unless all dividends on each of the then outstanding
series of the Preferred Stock for all past quarter-yearly dividend periods shall
have been paid, or declared and a sum sufficient for the payment thereof set
apart, and the full dividend thereon for the then current quarter-yearly
dividend period shall have been or concurrently shall be paid or declared.
Dividends on shares of the six presently outstanding series of Preferred Stock
shall commence to accrue and be cumulative from the

                                      -2-
<PAGE>

dates set forth in Division E hereof. Dividends on all shares of the Preferred
Stock of each series other than such six presently outstanding series shall
commence to accrue and be cumulative on such date as shall be provided for such
series by the Board of Directors pursuant to Subdivision 1.1 hereof; but in the
event of the issue of additional shares of Preferred Stock of any series
subsequent to the date of the initial issue of shares of such series, all
dividends paid on the Preferred Stock of such series prior to the issue of such
additional shares, and all dividends declared payable to the holders of
Preferred Stock of such series of record on a date prior to such issue, shall be
deemed to have been paid in respect to the additional shares so issued. Any
dividends declared or paid on the Preferred Stock in an amount less than full
cumulative dividends accrued or in arrears upon all Preferred Stock outstanding
shall, if more than one series be outstanding, be divided between the different
series in proportion to the aggregate amounts which would be distributable to
the Preferred Stock of each series if full cumulative dividends to the next
preceding quarterly dividend date were declared and paid thereon.

    As used herein, the expression "dividends accrued or in arrears" means, in
respect of each share of the Preferred Stock of any series, that amount which
shall be equal to simple interest upon the par value of such share at an annual
rate equal to the percentage that the fixed dividend rate for such series is of
such par value from the date from which cumulative dividends on such share
commence to accrue to the date as of which the computation is to be made, less
the aggregate amount (without interest thereon) of all dividends theretofore and
on such date paid (or deemed to have been paid) or declared and set aside for
payment in respect thereof.

    1.3.  Preference of the Preferred Stock on Liquidation, Etc.  In the event
of any liquidation, dissolution or winding up of the Company, the holders of the
Preferred Stock of each series shall be entitled to receive in cash, for each
share thereof, the fixed liquidation price for such series, plus, in case such
liquidation, dissolution or winding up shall have been voluntary, the fixed
liquidation premium, if any, for such series, together in all cases with an
amount equal to all dividends accrued or in arrears thereon to the date fixed
for such payment, before any distribution of assets shall be made to the holders
of the Preference Stock, the Common Stock or any other class of stock ranking
junior to the Preferred Stock as to dividends or assets; but the holders of the
Preferred Stock shall be entitled to no further participation in such
distribution.  If upon any such liquidation, dissolution or winding up, the
assets distributable among the holders of the Preferred Stock shall be
insufficient to permit the payment of the full preferential amounts aforesaid,
then such assets shall be distributed among the holders of all series of the
Preferred Stock then outstanding, ratably per share in proportion to the full
preferential amounts per share to which they are respectively entitled as
hereinbefore provided.  A consolidation or merger of the Company, a sale or
transfer of all or substantially all of its assets as an entirety, or any
purchase or redemption of stock of the Company of any class, shall not be
regarded as a "liquidation, dissolution or winding up" of the Company within the
meaning of this Subdivision 1.3.

    1.4.  Redemption, Repurchase and Retirement of the Preferred Stock.  The
Company, at its option, expressed by vote of its Board of Directors, may at any
time or from time to time redeem the whole or any part of the Preferred Stock or
of any series thereof at the applicable redemption price for each such series to
be redeemed.

    Notice of any proposed redemption of any shares of Preferred Stock shall be
given by mailing a copy of such notice, postage prepaid, to the holders of
record of the shares of Preferred Stock to be redeemed, at their respective
addresses then appearing on the books of the Company, not less than 30 nor more
than 90 days prior to the date designated for such redemption and by publishing
such notice at least once in each of three successive calendar weeks, in each
case on any day in the week (the first publication to be not less than 30 nor
more than 90 days prior to the redemption date) in a daily newspaper printed in
the English

                                      -3-
<PAGE>

language and published and of general circulation in the City of Pittsburgh,
Commonwealth of Pennsylvania, and in a like newspaper published in the Borough
of Manhattan, City and State of New York; provided that if notice of redemption
shall be published as aforesaid, then mailing thereof as aforesaid shall not be
a condition precedent to the redemption, and failure so to mail such notice or
any defect in the mailing thereof shall not affect the validity of the
redemption proceedings. In the case of the redemption of less than all of the
shares of any series of the Preferred Stock at the time outstanding, the shares
to be redeemed shall be determined by lot or in such other impartial manner as
the Board of Directors shall determine. From and after the date fixed in any
such notice as the date of redemption, unless default shall be made by the
Company in providing funds sufficient for such redemption at the time and at the
place or places specified for the payment pursuant to such notice, all dividends
on the shares called for redemption shall cease to accrue; and from and after
the date so fixed, unless default be made as aforesaid, or from and after the
date of the earlier deposit by the Company with a bank or trust company having
an aggregate capital and surplus of at least $2,000,000 and doing business in
the City of Pittsburgh, Commonwealth of Pennsylvania or in the Borough of
Manhattan, City and State of New York, in trust for the benefit of the holders
of the shares of Preferred Stock so called for redemption, of all funds
necessary for such redemption as aforesaid (provided in the latter case that
there shall have been mailed as aforesaid to holders of record of the shares to
be redeemed a notice of the redemption thereof containing a statement that such
deposit has been or is to be made, or the Company shall have executed and
delivered to a Transfer Agent for the Preferred Stock or to the bank or trust
company with which such deposit is made an instrument, purporting to be
irrevocable, authorizing it to mail such notice), all rights of the holders of
the shares so called for redemption as stockholders of the Company shall cease
and determine, except only the right to receive the redemption price of such
shares when due, and such shares shall be deemed to be no longer outstanding.
Any funds so deposited remaining unclaimed by holders of shares so called for
redemption at the end of a period of five years after the redemption date shall
revert to the general funds of the Company and such funds and any interest which
shall have been allowed thereon shall be paid to the Company, and thereafter the
holders of the shares called for redemption in respect of which such unclaimed
funds were held shall look only to the Company for the satisfaction of such
rights, if any, as they may have to the payment of the redemption price of such
shares.

    The Company may not purchase or redeem any of its Preferred Stock so long as
dividend arrearages exist on outstanding Preferred Stock of any series unless
the redemption or purchase offer is made applicable to all Preferred Stock
outstanding.  Where purchases are made, the price paid shall not exceed the
current redemption price applicable to the shares purchased.  Any shares of
Preferred Stock purchased, redeemed or otherwise acquired shall forthwith be
cancelled and restored to the status of authorized but unissued shares of
Preferred Stock without series designation.

    1.5.  Restrictions on Certain Corporate Action.

    (A)   So long as any shares of the Preferred Stock are outstanding, the
Company shall not, without the consent (given in writing or by vote of the
Preferred Stock as a class at a meeting called for the purpose) of the holders
of at least two-thirds of the then issued and outstanding shares of Preferred
Stock,

         (1)  amend, alter or repeal any of the rights, preferences or powers of
    the outstanding Preferred Stock of any series fixed herein or determined by
    the Board of Directors as provided herein, so as to affect adversely any
    such rights, preferences or powers; or

         (2)  create or authorize any shares of any class of stock ranking prior
    to the Preferred Stock as to dividends or assets or issue any shares of any
    such class of prior stock more than 180 days after the vote of the Preferred
    Stock pursuant to this clause (2) authorizing or creating such shares.

                                      -4-
<PAGE>

    (B)  So long as any shares of the Preferred Stock are outstanding, the
Company shall not, without the consent (given in writing or by vote of the
Preferred Stock as a class at a meeting called for the purpose) of the holders
of at least a majority of the then issued and outstanding shares of Preferred
Stock,

         (1)  create or authorize any shares of the Preferred Stock in addition
    to the 4,000,000 shares thereof hereby authorized, or any shares of any
    other class of stock ranking on a parity with the Preferred Stock as to
    dividends or assets; or

         (2)  after 700,000 shares of the Preferred Stock shall have been
    issued, issue, sell or otherwise dispose of any of the remaining shares of
    Preferred Stock now authorized or any additional shares of the Preferred
    Stock subsequently authorized, or any shares of any other class of stock
    ranking on a parity with the Preferred Stock as to dividends or assets,
    unless, after giving effect to such issuance and to the elimination of any
    indebtedness or shares of Preferred Stock, or of any shares of any other
    class of stock ranking prior to or on a parity with the Preferred Stock as
    to dividends or assets, to be retired in connection with such issuance,

              (a)  the consolidated income of the Company and its subsidiaries
         available for interest charges, as hereinafter defined, for any period
         of 12 consecutive calendar months within the 15 calendar months
         immediately preceding the issuance, sale or disposition of such shares,
         shall have been at least 1 1/2 times the sum of (i) the aggregate
         annual interest charges on all indebtedness of the Company and its
         subsidiaries consolidated (excluding inter-company items) to be
         outstanding and (ii) the aggregate annual dividend requirements on all
         shares of the Preferred Stock and of all other classes of stock ranking
         prior to or on a parity with the Preferred Stock as to dividends or
         assets to be outstanding; provided, that the earnings of any property
         acquired by the Company or any subsidiary during or after the period
         for which income is computed or which is to be acquired in connection
         with the issuance of any such additional shares, if capable of being
         separately determined or estimated under generally accepted accounting
         principles, may be included in the foregoing computations as if such
         property had been owned for the whole of such period; and

              (b)  the Common Stock equity, as hereinafter defined, of the
         Company shall be not less than the aggregate amount payable on
         involuntary dissolution, liquidation or winding up of the Company in
         respect of all shares of the Preferred Stock and all shares of stock of
         any class ranking prior thereto or on a parity therewith as to
         dividends or assets, to be outstanding; provided that if, for the
         purpose of meeting the requirements of this clause (b), it shall have
         been necessary to take into consideration any earned surplus of the
         Company, the Company shall not thereafter pay any dividends on shares
         of its Common Stock which would result in reducing the Common Stock
         equity to an amount less than the aggregate amount payable on
         involuntary dissolution, liquidation or winding up of the Company in
         respect of all outstanding shares of the Preferred Stock and of any
         stock of the Company ranking prior thereto or on a parity therewith as
         to dividends or assets.

         (3)  merge or consolidate with or into any other corporation or
    corporations or sell, lease or otherwise dispose of all or substantially all
    of its assets, unless such merger, consolidation, sale, lease or other
    disposition or the issuance or assumption of all securities to be issued or
    assumed in connection therewith, shall have been ordered, permitted or
    approved by the Securities and Exchange Commission under the provisions of
    the Public Utility Holding Company Act of 1935 as now in effect or as
    hereafter amended or by any successor commission or other regulatory
    authority of the

                                      -5-
<PAGE>

    United States of America having jurisdiction in the premises; but the
    provisions of this clause (3) shall not apply to a purchase or other
    acquisition by the Company of franchises (including franchises and rights
    granted by corporate charter) or assets of another corporation; or

        (4)  issue any unsecured notes, debentures or other securities
    representing unsecured indebtedness or assume any such unsecured securities
    for purposes other than

             (a)  the refunding of outstanding unsecured indebtedness
        theretofore issued or assumed by the Company;

             (b)  the reacquisition, redemption or other retirement of any
        indebtedness pursuant to authorization by the Securities and Exchange
        Commission under the provisions of the Public Utility Holding Company
        Act of 1935 as now in effect or as hereafter amended or by any successor
        commission or other regulatory authority of the United States of America
        having jurisdiction in the premises; or

             (c)  the reacquisition, redemption or other retirement of all
        outstanding shares of the Preferred Stock or of any other class of stock
        ranking on a parity therewith as to dividends or assets or any shares of
        any class of stock ranking prior thereto as to dividends or assets;

    if immediately after such issue or assumption the total principal amount of
    such unsecured securities issued or assumed by the Company and then
    outstanding would exceed 20% of the aggregate of (i) the total principal
    amount of all bonds or other securities representing secured indebtedness
    issued or assumed by the Company and then to be outstanding and (ii) the
    total of the capital stock and earned and capital surplus of the Company as
    then to be stated on its books plus any premiums on capital stock of the
    Company of any class then carried on its books.

    (C) So long as any shares of the Preferred Stock are outstanding, the
Company shall not declare or pay any dividends on any shares of its capital
stock of any class ranking junior to the Preferred Stock as to dividends or
assets (hereinafter in this Paragraph (C) called "junior stock"), other than
dividends payable in shares of junior stock, or make any other distribution on
junior stock, or purchase or redeem or otherwise acquire for value any shares of
junior stock, other than by the issuance in exchange therefor, or by the
application of the proceeds of the issuance and sale, of capital stock of the
Company ranking junior to the Preferred Stock as to dividends and assets, each
such declaration, payment, distribution, purchase or acquisition being
hereinafter referred to as a "junior stock payment", in contravention of the
following restrictions, namely:

        (a)  no junior stock payment shall be declared or made in an amount
    which, together with all other such junior stock payments declared or made
    in the 12 months' period ending on (and including) the date of the
    declaration or making of such junior stock payment, would in the aggregate
    exceed 50% of the consolidated net income of the Company and its
    subsidiaries available for dividends on junior stock, as hereinafter
    defined, for a period of 12 consecutive calendar months within the 15
    calendar months immediately preceding the declaration or making of such
    junior stock payment, if, after giving effect to such payment, the ratio
    (hereinafter referred to as the capitalization ratio) of the Common Stock
    equity of the Company, as hereinafter defined, to its total capitalization,
    as hereinafter defined, would be less than 20%;

                                      -6-
<PAGE>

        (b)  no junior stock payment shall be declared or made in an amount
    which, together with all other such junior stock payments declared or made
    in the 12 months' period ending on (and including) the date of the
    declaration or making of such junior stock payment, would in the aggregate
    exceed 75% of the consolidated net income of the Company and its
    subsidiaries available for dividends on junior stock for a period of 12
    consecutive calendar months within the 15 calendar months immediately
    preceding the declaration or making of such junior stock payment, if, after
    giving effect to such payment, the capitalization ratio would be 20% or
    more, but less than 25%.

    (D) Notwithstanding the foregoing provisions of this Subdivision 1.5, it
shall not be necessary to obtain any affirmative vote or written consent of
holders of the Preferred Stock under any provision of this Subdivision 1.5 in
respect of any matter therein specified, if, in connection with the
accomplishment of such matter, provision is to be made for the redemption or
retirement of all of the Preferred Stock at the time outstanding.

    (E) (a)  The term "consolidated income of the Company and its subsidiaries
available for interest charges" shall mean and include an amount computed as
follows:  From the total gross operating revenues and other income of the
Company and its subsidiaries consolidated, there shall first be eliminated
profits realized or losses sustained from the sale or other disposition of
capital assets by the Company or any of its subsidiaries, or from the
reacquisition of any securities of the Company or any of its subsidiaries, and
taxes on or in respect of any such profits.  There shall then be deducted, on a
consolidated basis, all operating expenses, including therein rentals,
expenditures for ordinary repairs and maintenance and charges to and
appropriations out of income for reserves for renewals, replacements,
retirements and depreciation, taxes (including income and excess profits taxes
and other taxes based on or measured by income or undistributed earnings or
income), miscellaneous interest charges, insurance charges, and other
appropriate items, but not including therein (A) interest charges on account of
outstanding securities of the Company or any of its subsidiaries, (B) charges
for amortization of debt and stock discount or premium and expense, or (C)
charges for amortization of electric plant acquisition adjustments and
amortization of adjustments of cost of property, or charges to reserves or
expense in respect of any thereof.  There shall also be deducted the amount, if
any, by which the expenditures for ordinary repairs and maintenance and charges
to and appropriations out of income for reserves for renewals, replacements,
retirements, and depreciation are less than an amount equal to 15% of the
consolidated gross operating revenues, after deducting from such consolidated
gross operating revenues an amount equal to the cost to the Company and its
subsidiaries of electric energy and steam purchased and resold and rentals paid
by the Company and its subsidiaries for property used in the generation,
transmission, distribution or sale of electric energy and steam and included or
reflected in operating expense accounts during the period for which income is
being computed.

    (b) The term "consolidated net income of the Company and its subsidiaries
available for dividends on junior stock" shall mean and include an amount
computed as follows:  To the "consolidated income of the Company and its
subsidiaries available for interest charges" as defined above, there shall be
credited interest charged to construction and there shall be deducted interest
on outstanding securities of the Company and its subsidiaries and charges for
amortization of debt and stock discount or premium and expense and all dividends
paid or accrued upon any shares of Preferred Stock of the Company or any class
of stock ranking prior to or on a parity with the Preferred Stock as to
dividends; but there shall not be deducted any write-off or charge-off against
surplus of expenses in connection with the issuance, redemption or retirement of
any securities of the Company or any of its subsidiaries, including any amount
paid in excess of the principal amount or par or stated value of the securities
of the Company or any of its subsidiaries, or interest or dividends on the
securities redeemed or retired from the date on which the funds required for
such redemption or retirement are deposited in trust for such purpose to the
date of redemption or retirement.

                                      -7-
<PAGE>

    (c)  The term "Common Stock equity" shall mean the aggregate of the par
value of, or stated capital represented by, the outstanding shares of Common
Stock of the Company, plus the capital surplus and earned surplus of the Company
plus any premiums on Common Stock of the Company then carried on its books.  For
the purpose of computing the Common Stock equity, the surplus accounts of the
Company shall be adjusted to eliminate (1) the amount, if any, by which the
expenditures of the Company for ordinary repairs and maintenance and charges to
and appropriations out of income for reserves for renewals, replacements,
retirements and depreciation are less than an amount equal to 15% of the gross
operating revenues of the Company, after deducting from such gross operating
revenues an amount equal to the cost to the Company of electric energy and steam
purchased and resold and rentals paid by the Company for property used by it in
the generation, transmission, distribution or sale of electric energy and steam
and included or reflected in its operating expense accounts for the period
commencing August 1, 1947 and ending on the last day of the third month
preceding the date as of which the Common Stock equity is being computed; (2)
any amounts on the books of the Company known, or estimated if not known, to
represent the excess, if any, of recorded value over original cost of used or
useful utility plant and other property, and any item set forth on the asset
side of the balance sheet of the Company as a result of accounting convention,
such as unamortized debt discount and expense, or capital stock discount and
expense, unless any such amount or item, as the case may be, is being amortized
or is being provided for by a reserve; and (3) the excess, if any, of the
aggregate amount payable on involuntary dissolution, liquidation or winding up
upon all outstanding shares of Preferred Stock of the Company of all classes
over the aggregate stated or par value of such shares.

    (d)  The term "total capitalization" of the Company shall mean the aggregate
of (1) the Common Stock equity, (2) the principal amount of all outstanding
indebtedness of the Company maturing more than 12 months after the date of issue
or assumption thereof and (3) the par value of, or stated capital represented
by, and any premiums carried on the books of the Company in respect of, the
outstanding shares of all classes of stock of the Company other than the Common
Stock.

                      Division B -- THE PREFERENCE STOCK

    2.1. Series, Rank.  Except for the one series presently outstanding, the
provisions of which are set forth in Division F hereof, the Board of Directors
is hereby expressly authorized, at any time or from time to time, to divide any
or all of the shares of Preference Stock into series, and in the resolution or
resolutions providing for the issue of shares of a particular series, before
issuance, to fix and determine the designations, preferences, qualifications,
privileges, limitations, restrictions, options, conversion rights, and other
special or relative rights in respect of the Preference Stock as a class, or of
the particular series so established (except as otherwise expressly provided
herein for all series), or both, to the fullest extent now or hereafter
permitted by the laws of the Commonwealth of Pennsylvania, including the rights
of the Preference Stock as a class and the variations between different series
in the following respects:

    (a)  the distinctive serial designations;

    (b)  the annual dividend rates, and the dates from which dividends shall
         commence to accrue;

    (c)  the redemption price or prices for shares and the terms and conditions
         on which such shares may be redeemed;

    (d)  the sinking fund provisions, if any, for the redemption or purchase of
         shares;

    (e)  the preferential amount or amounts payable upon shares in the event of
         the voluntary or involuntary liquidation of the Company;

                                      -8-
<PAGE>

    (f)  the voting rights, if any, of such series in addition to those provided
         in Subdivision 2.5 of this Division B and in Subdivision 4.1 of
         Division D hereof;

    (g)  the terms and conditions, if any, upon which shares may be converted
         and the class or classes or series of shares of the Company into which
         such shares may be converted; and

    (h)  such other terms, limitations and relative rights and preferences, if
         any, of shares of Preference Stock as a class and of any such series of
         Preference Stock as the Board of Directors may, at the time of such
         resolution, lawfully fix and determine under the laws of the
         Commonwealth of Pennsylvania.

The Preference Stock shall constitute a class of stock ranking "junior to the
Preferred Stock as to dividends and assets" as that phrase is used in Division A
hereof.  So long as any shares of Preferred Stock shall be outstanding, the
preferences, privileges, rights and powers granted to or imposed upon the
Preference Stock or any series thereof shall have no effect whatever on the
preferences, privileges, rights and powers of the Preferred Stock which shall
retain its rights and shall be and remain prior in all respects to the
Preference Stock.  All shares of Preference Stock shall be of equal rank with
each other, regardless of series, and shall be identical with each other in all
respects except as provided pursuant to the first sentence of this Subdivision
2.1.  The Board of Directors is hereby expressly authorized to fix the number of
shares which shall constitute any series of Preference Stock, which number,
unless the Board of Directors shall have otherwise provided in establishing such
series, may at any time or from time to time be increased or decreased, but not
below the number of shares thereof then outstanding.

    2.2. Dividends.  Out of the assets of the Company available for dividends,
the holders of each series of the Preference Stock at the time outstanding shall
be entitled to receive, if and when declared payable by the Board of Directors,
a dividend in cash at, but not exceeding, the fixed dividend rate for the
particular series, payable quarterly on the first day of January, April, July
and October in each year, or on such other days as may be provided for any
particular series in Division F or by the Board of Directors pursuant to
Subdivision 2.1 hereof, and such dividends on each series of the Preference
Stock shall be cumulative, so that in no event shall any dividend, whether in
cash, stock or other property, be declared or paid upon or set apart for, or any
distribution be made or ordered in respect of, the Common Stock or any other
class of stock ranking junior to the Preference Stock as to dividends or assets
nor shall any moneys or other consideration be set aside for or applied to the
purchase of Common Stock or the purchase or redemption of any such junior stock,
unless all dividends on each of the then outstanding series of the Preference
Stock for all past quarter-yearly dividend periods shall have been paid, or
declared and a sum sufficient for the payment thereof set apart, and the full
dividend thereon for the then current quarter-yearly dividend period shall have
been or concurrently shall be paid or declared.  Dividends on all shares of the
Preference Stock of each series shall commence to accrue and be cumulative on
such date as shall be provided for such series in Division F or by the Board of
Directors pursuant to Subdivision 2.1 hereof; but in the event of the issue of
additional shares of Preference Stock of any series subsequent to the date of
the initial issue of shares of such series, all dividends paid on the Preference
Stock of such series prior to the issue of such additional shares, and all
dividends declared payable to the holders of Preference Stock of such series of
record on a date prior to such issue, shall be deemed to have been paid in
respect to the additional shares so issued.  Any dividends declared or paid on
the Preference Stock in an amount less than full cumulative dividends accrued or
in arrears upon all Preference Stock outstanding shall, if more than one series
be outstanding, be divided among the different series in proportion to the
aggregate amounts which would be distributable to the Preference Stock of each
series if full cumulative dividends to the next preceding quarterly dividend
date were declared and paid thereon.

                                      -9-
<PAGE>

    As used herein, the expression "dividends accrued or in arrears" means, in
respect of each share of the Preference Stock of any series, that amount which
shall be equal to simple interest upon the par value of such share at an annual
rate equal to the percentage that the fixed dividend rate for such series is of
such par value from the date from which cumulative dividends on such share
commence to accrue to the date as of which the computation is to be made, less
the aggregate amount (without interest thereon) of all dividends theretofore and
on such date paid (or deemed to have been paid) or declared and set aside for
payment in respect thereof.

    2.3.  Preference of the Preference Stock on Liquidation, Etc.  In the event
of any liquidation, dissolution or winding up of the Company, the holders of the
Preference Stock of each series shall be entitled to receive in cash, for each
share thereof, the fixed liquidation price for such series, plus, in case such
liquidation, dissolution or winding up shall have been voluntary, the fixed
liquidation premium, if any, for such series, together in all cases with an
amount equal to all dividends accrued or in arrears thereon to the date fixed
for such payment, before any distribution of assets shall be made to the holders
of the Common Stock or any other class of stock ranking junior to the Preference
Stock as to dividends or assets; but the holders of the Preference Stock shall
be entitled to no further participation in such distribution.  If upon any such
liquidation, dissolution or winding up, the assets distributable among the
holders of the Preference Stock shall be insufficient to permit the payment of
the full preferential amounts aforesaid, then such assets shall be distributed
among the holders of all series of the Preference Stock then outstanding,
ratably per share in proportion to the full preferential amounts per share to
which they are respectively entitled as hereinbefore provided.  A consolidation
or merger of the Company, a sale or transfer of all or substantially all of its
assets as an entirety, or any purchase or redemption of stock of the Company of
any class, shall not be regarded as a "liquidation, dissolution or winding up"
of the Company within the meaning of this Subdivision 2.3.

    2.4.  Redemption, Repurchase and Retirement of the Preference Stock.  The
Company, at its option, expressed by vote of its Board of Directors, may at any
time or from time to time redeem the whole or any part of the Preference Stock
or of any series thereof at the applicable redemption price for each such series
to be redeemed.

    Notice of any proposed redemption of any shares of Preference Stock shall be
given by mailing a copy of such notice, postage prepaid, to the holders of
record of the shares of Preference Stock to be redeemed, at their respective
addresses then appearing on the books of the Company, not less than 30 nor more
than 90 days prior to the date designated for such redemption and by publishing
such notice at least once in each of three successive calendar weeks, in each
case on any day in the week (the first publication to be not less than 30 nor
more than 90 days prior to the redemption date) in a daily newspaper printed in
the English language and published and of general circulation in the City of
Pittsburgh, Commonwealth of Pennsylvania, and in a like newspaper published in
the Borough of Manhattan, City and State of New York; provided that if notice of
redemption shall be published as aforesaid, then mailing thereof as aforesaid
shall not be a condition precedent to the redemption, and failure so to mail
such notice or any defect in the mailing thereof shall not affect the validity
of the redemption proceedings.  In the case of the redemption of less than all
of the shares of any series of the Preference Stock at the time outstanding, the
shares to be redeemed shall be determined by lot or in such other impartial
manner as the Board of Directors shall determine.  From and after the date fixed
in any such notice as the date of redemption, unless default shall be made by
the Company in providing funds sufficient for such redemption at the time and at
the place or places specified for the payment pursuant to such notice, all
dividends on the shares called for redemption shall cease to accrue; and from
and after the date so fixed, unless default be made as aforesaid, or from and
after the date of the earlier deposit by the Company with a bank or trust
company having an aggregate capital and surplus of at least $2,000,000 and doing
business in the City of Pittsburgh,

                                      -10-
<PAGE>

Commonwealth of Pennsylvania or in the Borough of Manhattan, City and State of
New York, in trust for the benefit of the holders of the shares of Preference
Stock so called for redemption, of all funds necessary for such redemption as
aforesaid (provided in the latter case that there shall have been mailed as
aforesaid to holders or record of the shares to be redeemed a notice of the
redemption thereof containing a statement that such deposit has been or is to be
made, or the Company shall have executed and delivered to a Transfer Agent for
the Preference Stock or to the bank or trust company with which such deposit is
made an instrument, purporting to be irrevocable, authorizing it to mail such
notice), all rights of the holders of the shares so called for redemption as
stockholders of the Company shall cease and determine, except only the right to
receive the redemption price of such shares when due, and such shares shall be
deemed to be no longer outstanding. Any funds so deposited remaining unclaimed
by holders of shares so called for redemption at the end of a period of five
years after the redemption date shall revert to the general funds of the Company
and such funds and any interest which shall have been allowed thereon shall be
paid to the Company, and thereafter the holders of the shares called for
redemption in respect of which such unclaimed funds were held shall look only to
the Company for the satisfaction of such rights, if any, as they may have to the
payment of the redemption price of such shares.

    The Company may not purchase or redeem any of its Preference Stock so long
as dividend arrearages exist on outstanding Preference Stock of any series
unless the redemption or purchase offer is made applicable to all Preference
Stock outstanding.  Where purchases are made, the price paid shall not exceed
the current redemption price applicable to the shares purchased.  Any shares of
Preference Stock purchased, redeemed or otherwise acquired shall forthwith be
cancelled and restored to the status of authorized but unissued shares of
Preference Stock without series designation.

    2.5. Restrictions on Certain Corporate Action.

    (A)  So long as any shares of the Preference Stock are outstanding, the
Company shall not, without the consent (given in writing or by vote of the
Preference Stock as a class at a meeting called for the purpose) of the holders
of at least two-thirds of the then issued and outstanding shares of Preference
Stock,

         (1)  amend, alter or repeal any of the rights, preferences or powers of
    the outstanding Preference Stock of any series so as to affect adversely
    any such rights, preferences or powers; or

         (2)  create or authorize any shares of any class of stock ranking prior
    to the Preference Stock as to dividends or assets; provided, however, that
    the foregoing shall not apply to the authorization of shares or Preferred
    Stock of the par value of $50 per share in addition to the 4,000,000 shares
    of such stock presently authorized.

    (B)  So long as any shares of the Preference Stock are outstanding, the
Company shall not, without the consent (given in writing or by vote of the
Preference Stock as a class at a meeting called for the purpose) of the holders
of at least a majority of the then issued and outstanding shares of Preference
Stock,

         (1)  create or authorize any shares of (i) Preferred Stock of the par
    value of $50 per share in addition to the 4,000,000 shares of such stock
    presently authorized, or (ii) Preference Stock in addition to the 8,000,000
    shares of such stock presently authorized, or (iii) any other class of stock
    ranking on a parity with the Preference Stock as to dividends or assets; or

         (2)  merge or consolidate with or into any other corporation or
    corporations or sell, lease, or otherwise dispose of all or substantially
    all of its assets, unless such merger, consolidation, sale, lease or other
    disposition or the issuance or assumption of all securities to be issued or
    assumed in

                                      -11-
<PAGE>

    connection therewith, shall have been ordered, permitted or approved by the
    Securities and Exchange Commission under the provisions of the Public
    Utility Holding Company Act of 1935 as now in effect or as hereafter amended
    or by any successor commission or other regulatory authority of the United
    States of America having jurisdiction in the premises; but the provisions of
    this clause (2) shall not apply to the purchase or other acquisition by the
    Company of franchises (including franchises and rights granted by corporate
    charter) or assets of another corporation.

    (C)   Notwithstanding the foregoing provisions, it shall not be necessary to
obtain any affirmative vote or written consent of holders of Preference Stock
under any provision of subparagraphs (A) and (B) of this Subdivision 2.5 in
respect of any matter therein specified, if, in connection with the
accomplishment of such matter, provision is to be made simultaneously for the
concurrent redemption or retirement in full of all of the Preference Stock at
the time outstanding.

                        Division C -- THE COMMON STOCK

    3.1.  Dividends.  Out of any assets of the Company available for dividends
remaining after full cumulative dividends, up to the then current dividend
period, on the Preferred Stock and Preference Stock then outstanding shall have
been paid, or declared and sums sufficient for the payment thereof set apart,
and after or concurrently with making payment of or declaring full dividends on
the Preferred Stock and Preference Stock then outstanding for the then current
dividend period for such stock, then, and not otherwise, subject to the
restrictions set forth in paragraph (C) of Subdivision 1.5 of Division A and in
any resolution or resolutions providing for the issue of shares of a particular
series of Preferred Stock or of Preference Stock, dividends may be paid upon the
Common Stock to the exclusion of the Preferred Stock and the Preference Stock.

    3.2.  Distribution of Assets.  In the event of any liquidation, dissolution
or winding up on the Company, after there shall have been paid or set aside in
cash for the holders of the Preferred Stock and the Preference Stock the full
preferential amounts to which they are entitled under the provisions of the
foregoing Division A and Division B, the holders of the Common Stock shall be
entitled to receive pro rata all of the remaining assets of the Company
available for distribution to its stockholders.  The Board of Directors by vote
of a majority of the members thereof may distribute in kind to the holders of
the Common Stock such remaining assets of the Company or may sell, transfer or
otherwise dispose of any or all of the remaining assets of the Company and
receive payment therefor wholly or in part in cash or in stock or obligations
and may sell all or any part of the consideration received therefor and
distribute the balance thereof in kind to the holders of the Common Stock.

          Division D -- PROVISIONS APPLICABLE TO THE PREFERRED STOCK,
                   THE PREFERENCE STOCK AND THE COMMON STOCK

    4.1.  Voting Rights.

    (A)   Common Stock.  Except as hereinafter in this Subdivision 4.1 provided,
the holders of the Common Stock shall have exclusive voting rights for the
election of directors and for all other purposes and shall be entitled to one
vote for each share held.  The holders of the Common Stock shall not have
cumulative voting rights in the election of Directors.

    (B)   Preferred Stock.  The holders of the Preferred Stock shall have no
voting rights except as follows:

                                      -12-
<PAGE>

        (a)  as provided in Subdivision 1.5 of Division A hereof;

        (b)  as may be provided with respect to any particular series of the
    Preferred Stock (other than the six presently outstanding series thereof) by
    the Board of Directors pursuant to Subdivision 1.1 hereof; and

        (c)  if and whenever dividends payable on any of the Preferred Stock
    shall be in default in an amount equal to four or more full quarter-yearly
    dividends per share, then the holders of the Preferred Stock of all series
    voting together as a class shall be entitled to elect the smallest number of
    Directors necessary to constitute a majority of the full Board of Directors
    of the Company until such time as all arrears in dividends on the Preferred
    Stock and the current dividend thereon shall have been paid or declared and
    set apart for payment, whereupon all voting rights and all rights to notice
    of stockholders' meetings given by this clause (c) shall be divested from
    the Preferred Stock (subject, however, to being at any time or from time to
    time similarly revived and divested).

    On any matter on which the holders of Preferred Stock shall be entitled to
vote they shall be entitled to one vote for each share held, except as
hereinafter in this Subdivision 4.1 provided.

    So long as the holders of the Preferred Stock shall have the right to elect
Directors under the provisions of this Subdivision 4.1, the holders of the
Common Stock voting separately as a class (subject to any voting rights which
may be granted to the Preference Stock or any series thereof) shall be entitled
to elect the remaining Directors.

    In all elections for Directors by class vote of the holders of the Preferred
Stock or the Preference Stock, every holder of such class of stock entitled to
vote shall have the right, in person or by proxy, to multiply the number of
votes to which such stockholder may be entitled by the number of Directors for
the election of whom he is entitled to vote at such meeting, and such
stockholder may cast the whole number of such votes for one candidate or may
distribute them among any two or more candidates.  The candidates receiving the
highest number of votes up to the number of Directors to be elected by such
class shall be elected.  The foregoing provisions of this paragraph shall not be
changed with respect to any class of stock unless the holders of record of not
less than two-thirds of the number of shares of such class of stock then
outstanding shall consent thereto in writing or by voting therefor in person or
by proxy at the meeting of stockholders at which any such change is considered.

    Upon the accrual of the right of the holders of the Preferred Stock to elect
a majority of the Board of Directors as above provided in this Subdivision 4.1,
the Secretary of the Company shall call a special meeting of the stockholders of
the Company for the purpose of electing a new Board of Directors, to be held not
less than 45 or more than 60 days after the accrual of such right; provided,
that no such special meeting shall be called if the date of such accrual of such
right shall be less than 120 days prior to the date fixed by the by-laws of the
Company for the next annual meeting of stockholders.

    The notice of any such special meeting and of any annual meeting of the
Company at which the holders of the Preferred Stock shall have the right to
elect Directors shall state (1) that by reason of the fact that the Company has
defaulted in the payment of dividends payable on the Preferred Stock in an
amount equal to four or more full quarter-yearly dividends per share, the
holders of the Preferred Stock, voting together as a class, are entitled to
elect the smallest number of Directors necessary to constitute a majority of the
full Board of Directors; (2) that any holder of Preferred Stock has the right at
any reasonable time to inspect and make copies of the list or lists of the
holders of Preferred Stock maintained at the principal office of the Company or
at the office of any transfer agent for the Preferred Stock; and (3) the
substance

                                      -13-
<PAGE>

of the next succeeding paragraph with respect to the number of shares of
Preferred Stock required to be represented at any meeting or adjournment thereof
for the election of Directors of the Company at which such holders have the
right to elect Directors.

    At any such special or annual meeting at which the holders of the Preferred
Stock shall have the right to elect Directors, the presence in person or by
proxy of the holders of a majority of the outstanding Common Stock shall be
required to constitute a quorum of such class for the election of Directors and
the presence in person or by proxy of the holders of a majority of the
outstanding Preferred Stock shall be required to constitute a quorum of such
class for the election of Directors; provided, however, that in the absence of
such a quorum of the holders of the Preferred Stock, no election of Directors
shall be held but a majority of the holders of the Preferred Stock who are
present in person or by proxy shall have power to adjourn the meeting for
election of directors to a date not less than 25 nor more than 60 days from the
date of such original meeting.  At any such adjourned meeting the presence in
person or by proxy of the holders of 35% of the outstanding Preferred Stock
shall constitute a quorum of such class for the election of Directors.

    In the event any such special or annual meeting of stockholders shall be
adjourned as aforesaid, the Secretary of the Company shall, within 10 days after
the date of the original meeting, cause notice of the adjourned meeting to be
given to all stockholders of the Company entitled to vote thereat.  Such notice
shall contain substantially the statements hereinabove required with respect to
the original meeting, and shall further state that the required quorum of the
holders of the Preferred Stock was not present at such original meeting and that
the holders of 35% of the outstanding Preferred Stock will constitute a quorum
of such class for the election of Directors at such adjourned meeting.

    If the requisite quorum of holders of Preferred Stock shall not be present
at such adjourned meeting, then in case the original meeting was a special
meeting called as aforesaid, the Directors of the Company then in office shall
remain in office until the next annual meeting of the stockholders of the
Company and until their successors have been elected and shall qualify; or, if
such original meeting was an annual meeting of stockholders, all members of the
Board of Directors to be elected at such meeting shall be elected by a vote of
the holders of a majority of the shares of Common Stock of the Company present
in person or represented by proxy at such adjourned meeting.

    Whenever, under the foregoing provisions of this Subdivision 4.1, the rights
of the holders of the Preferred Stock to elect a majority of the Board of
Directors of the Company shall terminate, the Secretary of the Company shall
call a special meeting of the holders of the Common Stock of the Company (and of
any other shares of stock of the Company at the time entitled to vote for the
election of Directors) for the purpose of electing a new Board of Directors,
unless the annual meeting of stockholders is to convene within 120 days after
such termination.

    If, at any meeting held for the purposes of electing Directors upon the
accrual or termination of the right of holders of the Preferred Stock to elect
Directors as provided in this Subdivision 4.1, any Director shall not be re-
elected, his term of office shall end upon the election of his successor,
notwithstanding that the term for which he was originally elected shall not at
the time have expired.

    Any vacancy among Directors occurring during any period for which members of
the Board of Directors shall have been elected by the holders of Preferred Stock
pursuant to this Subdivision 4.1 may be filled (i) by a plurality vote, at any
annual meeting of stockholders or at a special meeting which may be called for
the purpose and in the manner hereinabove in this Subdivision 4.1 provided, of
the shares of the class by which the Director whose place is to be filled (or
his predecessor in the case of a Director who has

                                      -14-
<PAGE>

succeeded to a vacancy) was elected or (ii) pending such action, by the
affirmative vote of a majority of the remaining Directors elected by vote of the
shares of the class by which such Director (or his predecessor) was elected, or
succeeding to a director or directors so elected. In any such case, any Director
so elected shall hold office, subject to the provisions of this Subdivision 4.1,
until the next annual meeting of stockholders and until his successor shall have
been duly elected and qualified.

     (C)  Preference Stock.  The holders of the Preference Stock shall have no
voting rights except as follows:

          (a)  as provided in Subdivision 2.5 of Division B hereof;

          (b)  as may be provided with respect to any particular series of the
     Preference Stock (other than the presently outstanding series thereof) by
     the Board of Directors pursuant to Subdivision 2.1 hereof; and

          (c)  if and whenever dividends payable on any series of the Preference
     Stock shall be in default in an amount equivalent to one and one-half times
     the annual dividend rate or more per share and thereafter until all
     dividends on the Preference Stock in arrears shall have been paid or
     declared and set apart for payment, the holders of the Preference Stock of
     all series voting together as a class shall be entitled to elect two
     members of the Board of Directors.  Upon any such election holders of the
     Preference Stock will have the right to cumulate their votes as provided in
     Part B of this Subdivision 4.1.  When all dividends in arrears on the
     Preference Stock and the current dividend thereon shall have been paid or
     declared and set apart for payment, all voting rights given by this
     paragraph shall be divested from the Preference Stock, subject to being at
     any time, and from time to time, similarly revived and divested.

     On any matter on which the holders of Preference Stock shall be entitled to
vote they shall be entitled to one vote for each share held, except as
specifically provided above in this Subdivision 4.1.

     Upon the accrual of the right of the holders of the Preference Stock to
elect two members of the Board of Directors as herein provided, the Secretary of
the Company shall call a special meeting of the stockholders of the Company for
the purpose of electing a new Board of Directors, to be held not less than 45
nor more than 60 days after the accrual of such right; provided, that no such
special meeting shall be called if the date of such accrual of such right shall
be less than 120 days prior to the date fixed by the by-laws of the Company for
the next annual meeting of stockholders.

     The notice of any such special meeting and of any annual meeting of the
Company at which the holders of the Preference Stock shall have the right to
elect two Directors shall state (1) that by reason of the fact that the Company
has defaulted in the payment of dividends payable on the Preference Stock in an
amount equivalent to one and one-half times the annual dividend rate or more per
share, the holders of the Preference Stock, voting together as a class, are
entitled to elect two members of the Board of Directors; (2) that any holder of
Preference Stock has the right at any reasonable time to inspect and make copies
of the list or lists of the holders of Preference Stock maintained at the
principal office of the Company or at the office of any transfer agent for the
Preference Stock; and (3) the substance of the next succeeding paragraph with
respect to the number of shares of Preference Stock required to be represented
at any meeting or adjournment thereof for the election of Directors of the
Company at which such holders have the right to elect two members of the Board
of Directors.

                                      -15-
<PAGE>

     At any such special or annual meeting at which the holders of the
Preference Stock shall have the right to elect Directors, the presence in person
or by proxy of the holders of a majority of the outstanding Preference Stock
shall be required to constitute a quorum of such class; provided, however, that
the absence of a quorum of the holders of the Preference Stock shall not prevent
the election at any such meeting or adjournment thereof of Directors by any
other class of stock of the Company entitled to elect Directors if the required
quorum of such other class is present; provided further that in the absence of a
quorum of the holders of Preference Stock a majority of the holders of the
Preference Stock who are present in person or by proxy shall have power to
adjourn the election of the Directors to be elected by the Preference Stock to a
date not less than 25 days nor more than 60 days from the date of such original
meeting.  At any such adjourned meeting the presence in person or by proxy of
the holders of 25% of the outstanding Preference Stock shall constitute a quorum
of such class for the election of Directors.

     In the event any such election of Directors by the Preference Stock shall
be adjourned as aforesaid, the Secretary of the Company shall within 10 days
after the date of the original meeting, cause notice of the adjourned meeting to
be given to all holders of the Preference Stock.  Such notice shall contain
substantially the statements herein required with respect to the original
meeting, and shall further state that the required quorum of the holders of the
Preference Stock was not present at such original meeting and that the holders
of 25% of the outstanding Preference Stock will constitute a quorum of such
class for the election of Directors at such adjourned meeting.

     If the requisite quorum of holders of the Preference Stock shall not be
present at such adjourned meeting of the holders of the Preference Stock, no
members of the Board of Directors shall be elected by the holders of the
Preference Stock, subject, however, to their right to elect Directors at the
next annual meeting of stockholders.

     Whenever, under the foregoing paragraphs of this Part C, the rights of the
holders of the Preference Stock to elect two members of the Board of Directors
of the Company shall terminate, the terms of such Directors shall be deemed to
have expired as of such time and their positions on the Board of Directors shall
be deemed to be vacant.

     Any vacancy, other than vacancies resulting from the expiration of their
terms, among Directors elected by the holders of Preference Stock pursuant
hereto may be filled (i) by plurality vote of the shares of the Preference Stock
at any annual meeting of stockholders or at a special meeting of the holders of
the Preference Stock which may be called for such purpose, or (ii) pending such
action, by the affirmative vote of the remaining Director elected by vote of the
shares of the Preference Stock, or succeeding to a director or directors so
elected.  In any such case, any Director so elected shall hold office, subject
to the provisions of this Subdivision 4.1, until the next annual meeting of
stockholders or the next special meeting of the holders of the Preference Stock
called pursuant to clause (i) above and until his successor shall have been duly
elected and qualified.

     4.2.  Preemptive Rights.  Upon any issue for money or other consideration
of any stock of the Company that may be authorized from time to time, no holder
of stock irrespective of the kind of such stock shall have any preemptive or
other right to subscribe for, purchase, or receive any proportionate or other
share of the stock so issued, but the Board of Directors may dispose of all or
any portion of such stock as and when it may determine, free of any such rights,
whether by offering the same to stockholders or by sale or other disposition as
said Board may deem advisable.

                                      -16-
<PAGE>

    4.3.  Amendments to By-laws.  The Board of Directors may make, amend and
repeal the By-Laws with respect to those matters which are not, by statute,
reserved exclusively to the stockholders, subject always to the power of the
stockholders to change such action.

    4.4.  General.  The Company may issue and dispose of any of its authorized
shares for such consideration as may be fixed by the Board of Directors subject
to the laws then applicable.  The consideration received by the Company from the
issuance and sale of any additional shares of capital stock without par value
shall be entered in the capital stock account.

      Division E -- STATEMENTS WITH RESPECT TO SERIES OF PREFERRED STOCK

    The designations of the six series of Preferred Stock outstanding on the
date of filing of these Restated Articles, and the rates of dividends thereon,
the price or prices at and the terms and conditions on which shares thereof may
be redeemed, the amounts payable in event of voluntary or involuntary
liquidation (the amount payable upon involuntary liquidation being hereinafter
referred to as the "fixed liquidation price" and the amount of premium payable
in addition to the fixed liquidation price upon voluntary liquidation being
hereinafter referred to as the "fixed liquidation premium"), and the additional
terms and conditions thereof, are as follows:

    5.1.  4% Preferred Stock.  Effective August 25, 1950, there was created and
established an initial series of Preferred Stock consisting of and limited to
530,000 shares, having the following relative rights and preferences:

    (a)   Designation.  The said initial series of Preferred Stock shall be
          designated "4% Preferred Stock".

    (b)   Dividend Rate. The fixed dividend rate shall be 4% per annum.
          Dividends on said initial series of Preferred Stock shall commence to
          accrue and be cumulative from November 1, 1950.

    (c)   Redemption.  The redemption price for the 4% Preferred Stock shall be
          the sum of the following: the par value per share plus a premium of $4
          per share if redeemed on or prior to December 31, 1951; of $3.50 per
          share if redeemed thereafter and on or prior to December 31, 1954; of
          $3 per share if redeemed thereafter and on or prior to December 31,
          1957; of $2.50 per share if redeemed thereafter and on or prior to
          December 31, 1960; of $2 if redeemed thereafter and on or prior to
          December 31, 1963; and of $1.50 if redeemed at any time thereafter,
          plus, in any case, an amount equal to all dividends accrued or in
          arrears on such stock to the date of redemption.

    (d)   Liquidation.  The fixed liquidation price for the 4% Preferred Stock
          shall be the par value per share thereof; and the fixed liquidation
          premium thereon shall be an amount per share equal to the redemption
          premium at the time applicable thereto.

    5.2.  3.75% Preferred Stock.  Effective September 13, 1950, there was
created and established a series of Preferred Stock consisting of and limited to
150,000 shares, having the following relative rights and preferences:

    (a)   Designation.  The said series of Preferred Stock shall be designated
          "3.75% Preferred Stock".

                                      -17-
<PAGE>

    (b)   Dividend Rate.  The fixed dividend rate shall be 3.75% per annum.

    (c)   Redemption.  The redemption price for the 3.75% Preferred Stock shall
          be the sum of the following: the par value per share plus a premium of
          $2.50 per share if redeemed on or prior to December 31, 1951; of $2.00
          per share if redeemed thereafter and on or prior to December 31, 1954;
          of $1.50 per share if redeemed thereafter and on or prior to December
          31, 1957; and of $1.00 per share if redeemed at any time thereafter,
          plus, in any case, an amount equal to all dividends accrued or in
          arrears on such stock to the date of redemption.

    (d)   Liquidation.  The fixed liquidation price for the 3.75% Preferred
          Stock shall be the par value per share thereof; and the fixed
          liquidation premium thereon shall be an amount per share equal to the
          redemption premium at the time applicable thereto.

    5.3.  4.15% Preferred Stock.  Effective September 17, 1952, there was
created and established a series of Preferred Stock consisting of and limited to
140,000 shares, having the following relative rights and preferences:

    (a)   Designation. The said series of Preferred Stock shall be designated as
          "4.15% Preferred Stock".

    (b)   Dividend Rate.  The fixed dividend rate shall be 4.15% per annum.

    (c)   Redemption.  The redemption price for the 4.15% Preferred Stock shall
          be the sum of the following: the par value per share plus a premium of
          $2.98 per share if redeemed on or prior to December 31, 1955; of $2.48
          per share if redeemed thereafter and on or prior to December 31, 1958;
          of $2.23 per share if redeemed thereafter and on or prior to December
          31, 1961; and of $1.73 per share if redeemed at any time thereafter,
          plus, in any case, an amount equal to all dividends accrued or in
          arrears on such stock to the date of redemption.

    (d)   Liquidation.  The fixed liquidation price for 4.15% Preferred Stock
          shall be the par value per share thereof; and the fixed liquidation
          premium thereon shall be an amount per share equal to the redemption
          premium at the time applicable thereto.

    5.4.  4.20% Preferred Stock.  Effective December 8, 1953, there was created
and established a series of Preferred Stock initially consisting of 100,000
shares, having the following relative rights and preferences:

    (a)   Designation. The said series of Preferred Stock shall be designated as
          "4.20% Preferred Stock".

    (b)   Dividend Rate.  The fixed dividend rate shall be 4.20% per annum.

    (c)   Redemption.  The redemption price for the 4.20% Preferred Stock shall
          be the sum of the following: the par value per share plus a premium of
          $3.46 per share if redeemed on or prior to December 31, 1958; of $2.96
          per share if redeemed thereafter and on or prior to December 31, 1963;
          of $2.21 per share if redeemed thereafter and on or prior to December
          31, 1968; and of $1.71 per share if redeemed at any time thereafter,
          plus, in any case, an amount equal to all dividends accrued or in
          arrears on such stock to the date of redemption.

                                      -18-
<PAGE>

    (d)   Liquidation.  The fixed liquidation price for the 4.20% Preferred
          Stock shall be the par value per share thereof; and the fixed
          liquidation premium thereon shall be an amount per share equal to the
          redemption premium at the time applicable thereto.

    5.5.  4.10% Preferred Stock.  Effective June 29, 1954, there was created and
established a series of Preferred Stock initially consisting of 120,000 shares,
having the following relative rights and preferences:

    (a)   Designation. The said series of Preferred Stock shall be designated as
          "4.10% Preferred Stock".

    (b)   Dividend Rate.  The fixed dividend rate shall be 4.10% per annum.

    (c)   Redemption.  The redemption price for the 4.10% Preferred Stock shall
          be the sum of the following: the par value per share plus a premium of
          $3.25 per share if redeemed on or prior to December 31, 1959; of $2.75
          per share if redeemed thereafter and on or prior to December 31, 1964;
          of $2.25 per share if redeemed thereafter and on or prior to December
          31, 1969; and of $1.75 per share if redeemed at any time thereafter,
          plus, in any case, an amount equal to all dividends accrued or in
          arrears on such stock to the date of redemption.

    (d)   Liquidation.  The fixed liquidation price for the 4.10% Preferred
          Stock shall be the par value per share thereof; and the fixed
          liquidation premium thereon shall be an amount per share equal to the
          redemption premium at the time applicable thereto.

    5.6.  $2.10 Preferred Stock.  Effective January 20, 1955, there was created
and established a series of Preferred Stock initially consisting of 160,000
shares, having the following relative rights and preferences:

    (a)   Designation.  The said series of Preferred Stock shall be designated
          as "$2.10 Preferred Stock".

    (b)   Dividend Rate.  The fixed dividend rate shall be 4.20% per annum.

    (c)   Redemption.  The redemption price for the $2.10 Preferred Stock shall
          be the sum of the following: the par value per share plus a premium of
          $3.34 per share if redeemed on or prior to December 31, 1959; of $2.84
          per share if redeemed thereafter and on or prior to December 31, 1964;
          of $2.34 per share if redeemed thereafter and on or prior to December
          31, 1969; and of $1.84 per share if redeemed at any time thereafter,
          plus, in any case, an amount equal to all dividends accrued or in
          arrears on such stock to the date of redemption.

    (d)   Liquidation.  The fixed liquidation price for the $2.10 Preferred
          Stock shall be the par value per share thereof; and the fixed
          liquidation premium thereon shall be an amount per share equal to the
          redemption premium at the time applicable thereto.

                                      -19-
<PAGE>

                    Division F -- STATEMENT WITH RESPECT TO
                        PREFERENCE STOCK, PLAN SERIES A

    The designation of the series of Preference Stock outstanding on the date of
filing of these Restated Articles, and the rate of dividends thereon, the price
or prices at and the terms and conditions on which shares thereof may be
redeemed, the amount payable in event of voluntary or involuntary liquidation,
and the additional terms and conditions thereof, are as follows:

    6.1.  Designation and Amount; Special Purpose Issue.

    (A)   The shares of this series of Preference Stock shall be designated as
"Preference Stock, Plan Series A" and the number of shares constituting such
series shall be three million five hundred thousand (3,500,000) (such series
being hereinafter called the "Series A Preference Stock"); provided, however,
that the Board of Directors shall, to the extent not prohibited by applicable
law, have the power to (i) increase the number of shares constituting the Series
A Preference Stock to a number not greater than the number of shares of the
Preference Stock then authorized and unissued and (ii) decrease the number of
shares constituting the Series A Preference Stock to a number not less than the
number of shares of such series then outstanding, and any such increase or
decrease may be effected without the consent or approval of the holders of the
shares of Series A Preference Stock or any other capital stock then outstanding
unless such consent or approval shall be specifically required by applicable
law.

    (B)   The shares of Series A Preference Stock shall be issued to one or more
trustees each of which shall be acting on behalf of an employee stock ownership
plan or other employee benefit plan of the Company or any Affiliate of the
Company (any such employee stock ownership plan or other employee benefit plan
of the Company or such Affiliate, as the same may be amended from time to time,
being hereinafter sometimes called a "Plan").  Any transfer of shares of Series
A Preference Stock, including a distribution to participants in a Plan and
whether or not registered on the books of the Company, to any person other than
the Company or the trustee of a Plan shall be deemed to constitute an
irrevocable election by the transferee to exchange such shares for shares of DQE
Common Stock as provided in Subdivision 6.4, notwithstanding the non-delivery to
the Company of the certificates representing such shares of Series A Preference
Stock or a notice of exchange, and, upon such transfer and without further act
by the Company, the transferee shall have the right to receive a certificate or
certificates for shares of DQE Common Stock as provided in, and subject to the
conditions of, Subdivision 6.4 but shall not have any of the preferences,
limitations, voting rights and special rights ascribed to shares of Series A
Preference Stock hereunder.  The pledge of Series A Preference Stock as
collateral under any credit agreement for the financing or refinancing of the
purchase of the Series A Preference Stock for the benefit of a Plan shall not
constitute a transfer for purposes of this Subdivision 6.1.  Certificates
representing shares of Series A Preference Stock shall be legended to reflect
the foregoing provisions of this Subdivision 6.1(B).  Notwithstanding the
foregoing provisions of this Subdivision 6.1(B), shares of Series A Preference
Stock (i) may be exchanged for shares of DQE Common Stock as otherwise provided
in Subdivision 6.4 hereof and (ii) shall be redeemable by the Company upon the
terms and conditions provided in Subdivisions 6.5, 6.6 and 6.7 hereof.

    6.2.  Dividends.

    Subject to the provisions for adjustment hereinafter set forth, the dividend
rate on the Series A Preference Stock shall be $2.80 per share per annum,
payable quarterly, and the dates for the payment of dividends on the Series A
Preference Stock shall be the first Business Day of January, April, July and

                                      -20-
<PAGE>

October of each year (each a "Dividend Payment Date") commencing January 2,
1992, such dividend to be paid to the holders of record on the related Record
Date; provided, however, that if, as of a given Dividend Payment Date after
January 2, 1992, $.70 is less than the amount determined by (A) multiplying

    (i)   the amount of each cash dividend or other distribution per share of
          DQE Common Stock the Record Date for which occurred during the period
          commencing on the immediately preceding Dividend Payment Date and
          ending on the day next preceding such Dividend Payment Date,
          excluding, however, from the operation of this clause (i) any dividend
          or distribution which (x) constituted on Extraordinary Distribution or
          (y) was otherwise previously included in an Extraordinary Distribution
          Adjustment Amount, by

    (ii)  the number of shares of DQE Common Stock for which each share of
          Series A Preference Stock was exchangeable as of the Record Date for
          such dividend or distribution

and (B) taking the sum of the products resulting from such multiplications, then
the dividend per share of Series A Preference Stock payable on such Dividend
Payment Date shall be an amount equal to such sum (any such dividend being
hereinafter called a "DQE Common Stock Equivalent Dividend"); and provided,
further, that the Company may, subject to the immediately preceding proviso,
pay, at any time or times during the period from and including the Record Date
with respect to any Dividend Payment Date to and including such Dividend Payment
Date, all or any portion of the dividend otherwise payable on such Dividend
Payment Date to the holders of record as of such Record Date.  Dividends on the
Series A Preference Stock shall begin to accrue and be cumulative from the date
of the initial issuance of shares of such series.  Dividends accrued on the
Series A Preference Stock for any period less than a full quarterly period shall
be computed on the basis of a 360-day year of twelve 30-day months, and shall be
calculated based upon the dividend rate in effect during the quarterly period
ended on the next preceding Dividend Payment Date.

    6.3.  Liquidation, Dissolution or Winding-up.  The liquidation value for the
Series A Preference Stock shall be $35.50 per share, whether the transaction
giving rise to the payment of such liquidation price shall be voluntary or
involuntary (such amount being hereinafter called the "Liquidation Price").

    6.4.  Exchange for DQE Common Stock.

    (A)   A holder of shares of Series A Preference Stock shall be entitled, at
any time prior to the close of business on the date, if any, fixed for
redemption of such shares pursuant to Subdivision 6.5, 6.6, or 6.7 hereof, to
cause any or all of such shares to be exchanged for shares of DQE Common Stock,
initially at an exchange ratio equal to one (1) share of DQE Common Stock for
each share of Series A Preference Stock, which exchange ratio shall be adjusted
as hereinafter provided (such exchange ratio, as so adjusted, rounded to the
nearest thousandth, being hereinafter sometimes referred to as the "Exchange
Ratio").

    (B)   Any holder of shares of Series A Preference Stock desiring to exchange
such shares for shares of DQE Common Stock shall surrender the certificate or
certificates representing the shares of Series A Preference Stock being
exchanged, duly assigned or endorsed for transfer to the Company (or accompanied
by duly executed stock powers relating thereto), at the principal executive
office of the Company or such office or offices in the continental United States
of an agent for exchange as may from time to time be designated by notice to the
holders of Series A Preference Stock, accompanied by written notice of exchange.
Such notice of exchange shall specify (i) the number of shares of Series A
Preference Stock to be exchanged and the name or names in which the holder
giving such notice wishes the certificate or

                                      -21-
<PAGE>

certificates for DQE Common Stock, and for any shares of Series A Preference
Stock not to be so exchanged, to be registered and (ii) the address to which
such holder wishes delivery to be made of such new certificates to be delivered
upon such exchange.

    (C)  Upon surrender of a certificate representing a share or shares of
Series A Preference Stock for exchange, the Company or the exchange agent, if
any, shall cause to be delivered by hand (with receipt to be acknowledged) or by
first class mail, postage prepaid, to the holder thereof or to such holder's
designee, at the address designated by such holder, a certificate or
certificates for the number of shares of DQE Common Stock to which such holder
shall be entitled upon such exchange.  In the event that there shall have been
surrendered a certificate or certificates representing shares of Series A
Preference Stock, only part of which are to be exchanged, the Company or the
exchange agent, if any, shall similarly cause to be delivered to such holder or
such holder's designee a new certificate or certificates representing the number
of shares of Series A Preference Stock which shall not have been exchanged.

    (D)  The exchange of shares of Series A Preference Stock for shares of DQE
Common Stock made at the option of the holder thereof shall be deemed to be
effective as of the earlier of (i) the delivery to such holder or such holder's
designee of the certificates representing the shares of DQE Common Stock
delivered upon such exchange and (ii) the commencement of business, at the
principal executive office of the Company, on the second Business Day after the
surrender of the certificate or certificates for the shares of Series A
Preference Stock to be exchanged in accordance with the provisions of subsection
(B) of this Subdivision 6.4.  At and after the time at which an exchange becomes
effective, (i) the person or persons entitled to receive the DQE Common Stock
deliverable upon such exchange shall, as between the Company and such person or
persons, be deemed to be the record holder or holders of such shares of DQE
Common Stock, no allowance or adjustment to be made in respect of dividends or
other distributions payable to holders of DQE Common Stock in respect of any
period prior to such time of effectiveness and (ii) such person or persons shall
not have any of the preferences, limitations, voting rights and special rights
ascribed to shares of Series A Preference Stock hereunder.

    (E)  The Company may, but shall not be obligated to, deliver to holders of
Series A Preference Stock a fractional share or shares of DQE Common Stock
deliverable upon any exchange of shares of Series A Preference Stock.  If the
Company shall elect not to deliver a fractional share or shares, the Company
shall either (i) make a cash payment in an amount equal to the Fair Market Value
of such fractional share or shares of DQE Common Stock or (ii) deliver scrip or
other evidence of ownership in such form and upon such terms and conditions as
the Company shall deem advisable and as shall be required or permitted by
applicable law.

    (F)  Anything herein to the contrary notwithstanding, upon the exchange of
shares of Series A Preference Stock as contemplated herein, the Company shall
have the right to elect to deliver, or cause to be delivered, either (i)
authorized but previously unissued, or previously issued but not then
outstanding, shares of DQE Common Stock upon acquisition thereof from DQE or
(ii) authorized, previously issued and then outstanding shares of DQE Common
Stock upon acquisition thereof other than from DQE.

    (G)  If, at the time of any exchange of shares of Series A Preference Stock
as contemplated by this Subdivision 6.4, there shall be in effect any
shareholder rights plan pursuant to which DQE shall have undertaken to issue to
holders of DQE Common Stock rights to acquire securities of DQE, the Company
shall, upon such exchange, deliver to the holder or holders of the shares of DQE
Common Stock for which such shares of Series A Preference Stock shall have been
exchanged all rights appurtenant to such shares of DQE Common Stock to the
extent such rights shall be separately tradable.

                                      -22-
<PAGE>

    (H)   The Company shall purchase or otherwise acquire shares of DQE Common
Stock, either from DQE or in the open market or otherwise, or a combination
thereof, at such time or times and in such number or numbers as shall be
necessary in order to enable the Company to deliver shares of DQE Common Stock
pursuant to this Subdivision 6.4, all subject, however, to Subdivision 6.7(D).

    6.5.  Redemption At the Option of the Company.

    (A)   The Series A Preference Stock shall be redeemable, in whole or in
part, at the option of the Company (i) at any time on or after December 19, 1999
and (ii) if permitted by subsection (C) of this Subdivision 6.5, at any time
prior to December 19, 1999, at the following percentages of the Liquidation
Price:

<TABLE>
<CAPTION>
                    If Redeemed During
                    the Twelve-Month Period       Percentage of
                    Beginning December 19,        Liquidation Price
                    -----------------------       -----------------
                    <S>                           <C>
                              1991                     107.90
                              1992                     107.11
                              1993                     106.32
                              1994                     105.53
                              1995                     104.74
                              1996                     103.95
                              1997                     103.16
                              1998                     102.37
                              1999                     101.58
                              2000                     100.79
</TABLE>

and thereafter at 100% of the Liquidation Price, plus, in each case, an amount
equal to all dividends accrued or in arrears thereon to the date fixed as the
date of redemption.

    (B)   [This paragraph is intentionally deleted].

    (C)   Notwithstanding anything to the contrary in subsection (A) of this
Subdivision 6.5, if a Plan pursuant to which shares of Series A Preference Stock
are then held by a trustee shall have been terminated, the Company may elect to
redeem any or all of such shares at any time prior to December 19, 1999 on the
terms set forth in subsection (A) of this Subdivision 6.5.

    (D)   Anything herein to the contrary notwithstanding, if any shares of
Series A Preference Stock called for redemption shall have been (i) exchanged
for shares of DQE Common Stock in accordance with Subdivision 6.4 or (ii)
redeemed with the redemption price being paid, in whole or in part, in shares of
DQE Common Stock in accordance with subsection (E) of this Subdivision 6.5,
then, in either case, there shall be paid over to the Company and/or returned to
its general funds all money which, in connection with such redemption, shall
have been set aside by the Company or deposited with a transfer or redemption
agent and which shall be in excess of the amount, if any, payable to the holders
of such shares of Series A Preference Stock pursuant to subsection (A) of this
Subdivision 6.5.

    (E)   Anything herein to the contrary notwithstanding, the Company, at its
option, may make payment of the redemption price required upon redemption of
shares of Series A Preference Stock pursuant to this Subdivision 6.5 or
subsections (A) and (B) of Subdivision 6.6 hereof in cash or in shares of DQE
Common

                                      -23-
<PAGE>

Stock, or in a combination of such shares and cash, any such shares of DQE
Common Stock to be valued for such purpose at their Fair Market Value determined
as of the date of redemption.

    6.6.  Other Redemption Rights.

    (A)   Notwithstanding anything to the contrary in subsection (A) of
Subdivision 6.5, if

               (i)  there shall have been a change in the federal income tax
    laws of the United States of America or a determination by a court of
    competent jurisdiction, which, in either case, has the effect of terminating
    or materially reducing the deductibility for federal income tax purposes of
    dividends paid on any shares of Series A Preference Stock when such
    dividends are used as provided under Section 404(k)(2) of the Internal
    Revenue Code of 1986, as amended (the "Code"), as in effect on the date
    shares of Series A Preference Stock are initially issued, or

               (ii) a Plan pursuant to which shares of Series A Preference Stock
    are then held by a trustee shall have been determined by the Internal
    Revenue Service not to be qualified within the meaning of Section 401(a) or
    Section 4975(e)(7), whichever may be applicable, of the Code,

the Company may elect to redeem any or all of such shares of Series A Preference
Stock at a redemption price equal to the Liquidation Price plus an amount equal
to all dividends accrued or in arrears thereon to the date fixed as the date of
redemption; provided, however, that the notice of any such redemption shall be
given on or prior to the first day which is nine months after the later of (x)
the date of the enactment of such change, the date of such determination or the
date of issuance of such regulations, as the case may be, and (y) the effective
date of such change, determination or regulations, as the case may be.

    (B)   Subject to any restriction of applicable law, each share of Series A
Preference Stock shall be redeemed by the Company for cash or, if the Company so
elects, in shares of DQE Common Stock, or a combination of such shares and cash
(any shares of DQE Common Stock to be valued for such purpose in accordance with
the provisions of Subdivision 6.5(E)), at a redemption price equal to the
Liquidation Price plus an amount equal to all dividends accrued or in arrears
thereon to the date fixed as the date of redemption, such redemption to be
effected at the option of the holder in the event that the Plan as to which such
holder acts as trustee is not determined by the Internal Revenue Service to be
qualified within the meaning of Section 401(a) or Section 4975(e)(7), whichever
may be applicable, of the Code.

    (C)   Subject to any restriction of applicable law, each share of Series A
Preference Stock shall be redeemed by the Company for cash or, if the Company so
elects, in shares of DQE Common Stock, or a combination of such shares and cash
(any such shares of DQE Common Stock to be valued for such purpose at their Fair
Market Value on the next preceding Appraisal Date), at a redemption price equal
to the greater of (a) the Liquidation Price plus an amount equal to all
dividends accrued or in arrears thereon to the next preceding Appraisal Date and
(b) an amount equal to the aggregate Fair Market Value of the number of shares
of DQE Common Stock for which each share of Series A Preference Stock could have
been exchanged on the next preceding Appraisal Date, such redemption to be
effected at the option of the holder when and to the extent necessary for such
holder to satisfy an investment election provided to participants in accordance
with, the Plan as to which such holder acts as trustee.

                                      -24-
<PAGE>

    6.7.  Merger, Consolidation, Other Combination, etc.

    (A)   If DQE shall consummate any merger, consolidation, share exchange or
similar business combination transaction, pursuant to which the outstanding
shares of DQE Common Stock are exchanged solely for, or changed, reclassified or
converted solely into, stock of any successor or resulting company (including
DQE or the Company) that constitutes "qualifying employer securities" with
respect to a holder of Series A Preference Stock within the meaning of Section
409(1) of the Code and Section 407(d)(5) of the Employee Retirement Income
Security Act of 1974, as amended, or any successor provisions of law (together
with, if applicable, a cash payment or scrip or other evidence of ownership in
lieu of fractional shares, if any), after such transaction each share of Series
A Preference Stock shall be exchangeable, otherwise on the terms and conditions
provided by Subdivision 6.4, for the number and kind of "qualifying employer
securities" receivable in such transaction by a holder of the number of shares
of DQE Common Stock for which such share of Series A Preference Stock could have
been exchanged immediately prior to such transaction (together with, if
applicable, a cash payment or scrip or other evidence of ownership of fractional
shares, if any); provided, however, that if, by virtue of the structure of such
transaction, a holder of DQE Common Stock is required to make an election with
respect to the nature and kind of consideration to be received in such
transaction, then each share of Series A Preference Stock shall be exchangeable
for the number and kind of "qualifying employer securities" (together with, if
applicable, a cash payment or scrip or other evidence of ownership of fractional
shares, if any) receivable in such transaction by a holder of the number of
shares of DQE Common Stock for which a share of Series A Preference Stock could
have been exchanged immediately prior to such transaction if such holder of DQE
Common Stock had failed to exercise any rights of election to receive any kind
or amount of stock, securities, cash or other property (other than "qualifying
employer securities" and cash payment or scrip or other evidence of ownership,
if applicable, in lieu of fractional shares) receivable upon such transaction
(provided that, if the kind or amount of "qualifying employer securities"
receivable upon such transaction is not the same for each non-electing share,
then the kind and amount of "qualifying employer securities" deemed, for
purposes of this subsection (A), to be receivable upon such transaction for each
non-electing share shall be the kind and amount so receivable per share by a
plurality of the non-electing shares, shares held by the Company not to be
counted in determining such plurality).  The rights of the holders of the Series
A Preference Stock shall successively be subject to adjustments pursuant to
Subdivision 6.8 after any such transaction as nearly equivalent as practicable
to the adjustments provided for by Subdivision 6.8 prior to such transaction.

    (B)   If DQE shall consummate any merger, consolidation, share exchange or
similar business combination transaction, pursuant to which the outstanding
shares of DQE Common Stock are exchanged for, or changed, reclassified or
converted into, stock or securities or cash or any other property (payable in
kind), or any combination thereof, other than any such consideration which is
constituted solely of "qualifying employer securities" (as referred to in
subsection (A) of this Subdivision 6.7) and cash payments or scrip or other
evidence of ownership in lieu of fractional shares, after such transaction each
share of Series A Preference Stock shall be exchangeable, otherwise on the terms
and conditions provided by Subdivision 6.4, for the aggregate amount of stock,
securities, cash or other property (payable in like kind) receivable in such
transaction by a holder of the number of shares of DQE Common Stock for which
such shares of Series A Preference Stock could have been exchanged immediately
prior to such transaction; provided, however, that if, by virtue of the
structure of such transaction, a holder of DQE Common Stock is required to make
an election with respect to the nature and kind of consideration to be received
in such transaction, then each share of Series A Preference Stock shall be
exchangeable for the aggregate amount of stock, securities, cash or other
property (payable in kind) receivable in such transaction by a holder of the
number of shares of DQE Common Stock for which such share of Series A Preference
Stock could have been exchanged immediately prior to such transaction if such
holder of DQE Common Stock had failed to exercise any rights of election as to
the kind or amount of stock, securities, cash or other property

                                      -25-
<PAGE>

receivable upon such transaction (provided that, if the kind or amount of stock,
securities, cash or other property receivable upon such transaction is not the
same for each non-electing share, then the kind and amount of stock, securities,
cash or other property deemed, for purposes of this subsection (B), to be
receivable upon such transaction for each non-electing share shall be the kind
and amount so receivable per share by a plurality of the non-electing shares,
shares held by the Company not to be counted in determining such plurality).

    (C)  If DQE shall enter into any agreement providing for any merger,
consolidation, share exchange or similar business combination transaction
described in subsection (B) of this Subdivision 6.7, then the Company shall as
soon as practicable after it has actual notice thereof (and in any event at
least ten (10) Business Days before consummation of such transaction), give
notice of such agreement and the material terms thereof to each holder of Series
A Preference Stock and each such holder shall have the right, subject to any
restrictions of applicable law, to elect, by written notice to the Company, to
receive, immediately prior to the consummation of such transaction (and only if
such transaction is consummated), from the Company, in redemption and retirement
of such Series A Preference Stock and in lieu of the consideration provided in
subsection (B) of this Subdivision 6.7, a cash payment equal to the amount
payable in respect of shares of Series A Preference Stock upon redemption
pursuant to Subdivision 6.5(A).  No such notice of redemption shall be effective
unless given to the Company prior to the close of business on the second
Business Day prior to consummation of such transaction, unless the Company or
the successor of the Company shall waive such prior notice, but any notice of
redemption so given prior to such time may be withdrawn by notice of withdrawal
given to the Company prior to the close of business on the second Business Day
prior to consummation of such transaction.

    (D)  If and to the extent that shares of Series A Preference Stock are to be
exchangeable for consideration other than DQE Common Stock as a result of any
merger, consolidation, share exchange or similar business combination
transaction described in subsection (A) or (B) of this Subdivision 6.7 and are
not to be redeemed pursuant to subsection (C) of this Subdivision 6.7, (i) the
Company shall take such actions as shall be necessary or appropriate in order
that the DQE Common Stock, if any, then held by it as contemplated by
Subdivision 6.4(H) shall be exchanged for, or changed, reclassified or converted
into, such consideration and (ii) the covenant contained in Subdivision 6.4(H)
shall thereafter be deemed to relate to such consideration and not to DQE Common
Stock.

    (E)  If the Company shall consummate any merger, consolidation, share
exchange or similar business combination transaction, the shares of Series A
Preference Stock shall by virtue of such merger, consolidation, share exchange
or similar business combination transaction be exchanged for, or changed,
reclassified or converted into, preferred or preference stock of such successor
or resulting company (or in the event such successor or resulting company is the
Company, such shares shall remain outstanding as shares of Series A Preference
Stock of the Company), in each case, having in respect to such company insofar
as practicable the same preferences, limitations, voting rights and special
rights (including the redemption rights provided by Subdivisions 6.5 and 6.6 and
this Subdivision 6.7), that the Series A Preference Stock had immediately prior
to such transaction.  The rights of the preferred or preference stock of such
successor or resulting company issued in exchange for the Series A Preference
Stock, or, if the Company be the surviving corporation of such transaction, the
Series A Preference Stock, shall successively be subject to adjustment pursuant
to Subdivision 6.8 after any such transaction as nearly equivalent as
practicable to the adjustments provided for by Subdivision 6.8 prior to such
transaction.  The Company shall not consummate any such merger, consolidation,
share exchange or similar business combination transaction unless the successor
or  resulting company shall make appropriate provision for the authorization and
issuance of preferred or preference stock in exchange for the Series A
Preference Stock as aforesaid or into which the Series A Preference Stock shall
be changed, reclassified or converted.

                                      -26-
<PAGE>

    6.8.  Anti-dilution Adjustments.

    (A)   if DQE shall, at any time or from time to time while any of the shares
of Series A Preference Stock are outstanding, (i) pay a dividend or make any
other distribution in respect of the DQE Common Stock in shares of DQE Common
Stock, (ii) subdivide the outstanding shares of DQE Common Stock or (iii)
combine the outstanding shares of DQE Common Stock into a smaller number of
shares, in each case whether by reclassification of shares, recapitalization of
DQE (including a recapitalization effected by a merger or consolidation to which
Subdivision 6.7 hereof does not apply) or otherwise, the Exchange Ratio in
effect immediately prior to such action shall be adjusted by multiplying such
Exchange Ratio by a fraction, the numerator of which is the number of shares of
DQE Common Stock outstanding immediately after such event, and the denominator
of which is the number of shares of DQE Common Stock outstanding immediately
before such event.  An adjustment made pursuant to this subsection (A) of
Subdivision 6.8 shall be given effect, in the case of such a dividend or
distribution, as of the Record Date therefor and, in the case of such a
subdivision, or combination, as of the effective date thereof.

    (B)   (i) If DQE shall, at any time or from time to time while any of the
shares of Series A Preference Stock are outstanding, issue, sell or exchange
shares of DQE Common Stock (other than pursuant to (a) any right or warrant to
purchase or acquire shares of DQE Common Stock (including as such a right or
warrant any security convertible into or exchangeable for shares of DQE Common
Stock), (b) any right to purchase or acquire DQE Common Stock pursuant to any
shareholder rights plan or any rights agreement relating thereto or (c) any
employee or director incentive, compensation or benefit plan or arrangement
(including any employment, severance or consulting agreement) of DQE or any
Affiliate of DQE heretofore or hereafter adopted) for a consideration having a
Fair Market Value on the date of issuance, sale or exchange less than the Fair
Market Value of such shares of DQE Common Stock on the date of issuance, sale or
exchange thereof, then, subject to the provisions of subsections (D) and (E) of
this Subdivision 6.8, the Exchange Ratio in effect immediately prior to such
issuance, sale or exchange shall be adjusted by multiplying such Exchange Ratio
by a fraction, the numerator of which shall be the product of

          (a)  the Fair Market Value of a share of DQE Common Stock on the day
    immediately preceding the first public announcement of such issuance, sale
    or exchange and

          (b)  the sum of the number of shares of DQE Common Stock outstanding
    on such day plus the number of shares of DQE Common Stock so issued, sold or
    exchanged by DQE,

and the denominator of which shall be the sum of

          (c)  the Fair Market Value of all the shares of DQE Common Stock
    outstanding on the day immediately preceding the first public announcement
    of such issuance, sale or exchange and

          (d)  the Fair Market Value of the consideration received by DQE in
    respect of such issuance, sale or exchange of shares of DQE Common Stock, as
    of the date of such receipt.

    (ii)  If DQE shall, at any time or from time to time while any shares of
Series A Preference Stock are outstanding, issue, sell or exchange any right or
warrant to purchase or acquire shares of DQE Common Stock (including as such a
right or warrant any security convertible into or exchangeable for shares of DQE
Common Stock), other than any such issuance to holders of shares of DQE Common
Stock as a dividend or distribution (including by way of a reclassification of
shares or a recapitalization of DQE) and other than pursuant to (a) any
shareholder rights plan or any rights agreement relating thereto or (b) any
employee or director incentive, compensation or benefit plan or arrangement
(including any employment,

                                      -27-
<PAGE>

severance or consulting agreement) of DQE or any Affiliate of DQE heretofore or
hereafter adopted, for a consideration having a Fair Market Value on the date of
such issuance, sale or exchange less than the Non-Dilutive Amount, then, subject
to the provisions of subsections (D) and (E) of this Subdivision 6.8, the
Exchange Ratio in effect immediately prior to such issuance, sale or exchange
shall be adjusted by multiplying such Exchange Ratio by a fraction, the
numerator of which shall be the product of

        (a)  the Fair Market Value of a share of DQE Common Stock on the day
    immediately preceding the first public announcement of such issuance, sale
    or exchange and

        (b)  the sum of the number of shares of DQE Common Stock outstanding on
    such day plus the maximum number of shares of DQE Common Stock which could
    be acquired pursuant to such right or warrant at the time of the issuance,
    sale or exchange of such right or warrant (assuming shares of DQE Common
    Stock could be acquired pursuant to such right or warrant at such time),

and the denominator shall be the sum of

        (c)  the Fair Market Value of all the Shares of DQE Common Stock
    outstanding on the day immediately preceding the first public announcement
    of such issuance, sale or exchange,

        (d)  the Fair Market Value of the consideration received by DQE in
    respect of such issuance, sale or exchange of such right or warrant, as of
    the date of such receipt, and

        (e)  the Fair Market Value as of the time of such issuance of the
    consideration which DQE would receive upon exercise in full of all such
    rights or warrants.

    (C) If DQE shall, at any time or from time to time while any of the shares
of Series A Preference Stock are outstanding, make or authorize an Extraordinary
Distribution in respect of the DQE Common Stock, whether by dividend,
distribution, reclassification of shares or recapitalization of DQE (other than
a recapitalization or reclassification effected by a merger, consolidation or
other combination to which Subdivision 6.7 applies) or effect a Pro Rata
Repurchase of DQE Common Stock, the Exchange Ratio in effect immediately prior
to the Record Date for such Extraordinary Distribution or the Effective Date of
such Pro Rata Repurchase, as the case may be, shall, subject to subsections (D)
and (E) of this Subdivision 6.8, be adjusted by multiplying such Exchange Ratio
by a fraction, the numerator of which shall be the product of

    (i)  the difference of (x) the number of shares of DQE Common Stock
         outstanding immediately before such Extraordinary Distribution or Pro
         Rata Repurchase minus (y) in the case of a Pro Rata Repurchase, the
         number of shares of DQE Common Stock thereby repurchased by DQE and

    (ii) the Fair Market Value of a share of DQE Common Stock on the applicable
         Valuation Date, in the case of an Extraordinary Distribution, or on the
         applicable Effective Date, in the case of a Pro Rata Repurchase, as the
         case may be,

and the denominator of which shall be the difference of

    (i)  the product of

         (x) the number of shares of DQE Common Stock outstanding immediately
             before such Extraordinary Distribution or Pro Rata Repurchase and

                                      -28-
<PAGE>

         (y) the Fair Market Value of a share of DQE Common Stock on the
             applicable Valuation Date, in the case of an Extraordinary
             Distribution, or on the applicable Effective Date, in the case of a
             Pro Rata Repurchase, as the case may be,

                                                                           minus

    (ii) the Extraordinary Distribution Adjustment Amount relating to such
         Extraordinary Distribution or the aggregate purchase price paid in
         connection with such Pro Rata Repurchase, as the case may be.

An adjustment made pursuant to this subsection (C) of Subdivision 6.8 shall be
given effect, in the case of an Extraordinary Distribution, as of the Record
Date therefor and, in the case of a Pro Rata Repurchase, as of the Effective
Date thereof.

    (D)  Not withstanding any other provisions of this Subdivision 6.8, the
Company shall not be required to make any adjustment of the Exchange Ratio
unless such adjustment would require an increase or decrease of at least one
percent (1%) in the Exchange Ratio.  Any lesser adjustment shall be carried
forward and shall be made no later than the time of, and together with, the next
subsequent adjustment which, together with any adjustment or adjustments so
carried forward, shall amount to an increase or decrease of at least one percent
(1%) in the Exchange Ratio.

    (E)  If DQE shall pay a dividend or make any other distribution on the DQE
Common Stock or issue any DQE Common Stock, other capital stock or other
security of DQE or any rights or warrants to purchase or acquire any such
security, which transaction does not result in an adjustment to the Exchange
Ratio pursuant to the foregoing provisions of this Subdivision 6.8, the Board of
Directors shall in its sole discretion consider whether such action is of such a
nature that it adversely affects the holders of the Series A Preference Stock
and that an adjustment to the Exchange Ratio should equitably be made in respect
of such transaction.  If in such case the Board of Directors determines that an
adjustment to the Exchange Ratio should be made, an adjustment shall be made
effective as of such date, as determined by the Board of Directors.  The
determination of the Board of Directors as to whether an adjustment to the
Exchange Ratio should be made pursuant to this subsection (E), and, if so, as to
what adjustment should be made and when, shall be final and binding on the
Company and all shareholders of the Company.  The Board of Directors may, but
shall not be obligated to, make such additional adjustments in the Exchange
Ratio, in addition to those required by this Subdivision 6.8, as shall be
necessary in order that any dividend or distribution in shares of capital stock
of DQE, subdivision, reclassification or combination of shares of stock of DQE
or any recapitalization of DQE, or the exercise of the rights of exchange set
forth in Subdivisions 6.4 and 6.7 shall not be taxable to holders of the Series
A Preference Stock.

    (F)  Whenever an adjustment to the Exchange Ratio is made pursuant hereto,
the Company shall forthwith deliver to the transfer agents, if any, for the
Series A Preference Stock, and file with the Secretary of the Company, a
statement signed by two officers of the Company stating the adjusted Exchange
Ratio determined as provided herein and the voting rights of the Series A
Preference Stock reflecting a correlative adjustment.  Such statement shall set
forth in reasonable detail such facts as shall be necessary to show the reason
and the manner of computing such adjustment, including any determination of Fair
Market Value involved in such computation.  Promptly after each adjustment to
the Exchange Ratio, the Company shall mail a notice thereof and of the Exchange
Ratio, as so adjusted, as well as the voting rights of the Series A Preference
Stock reflecting a correlative adjustment, to each holder of Series A Preference
Stock.

                                      -29-
<PAGE>

    6.9.  Definitions.  The terms defined in this Subdivision 6.9 shall for all
purposes of the terms and provisions of the Preference Stock, Plan Series A of
the Company have the meanings specified below, unless the context clearly
requires otherwise:

          "Adjustment Period" shall mean, with respect to any date as of which
    the Fair Market Value of a security is to be determined, the period of five
    (5) consecutive trading days ending on and including such date.

          "Affiliate" of any specified person shall mean any other person
    directly or indirectly controlling or controlled by or under direct or
    indirect common control with such specified person. For the purposes of this
    definition, (a) "control" when used with respect to any specified person
    means the power to direct the management and policies of such person,
    directly or indirectly, whether through the ownership of voting securities,
    by contract or otherwise, and the term "controlling" and "controlled" have
    meanings correlative to the foregoing, and (b) "person" means any
    individual, corporation, partnership, joint venture, trust or unincorporated
    organization.

          "Appraisal Date" shall mean the date or dates established from time to
    time by the Company for purposes of valuing the DQE Common Stock.

          "Board of Directors" shall mean the Board of Directors of the Company
    or, to the extent not prohibited by applicable law, any duly authorized
    committee thereof.

          "Business Day" shall mean any day other than a Saturday, Sunday or
    other day which is a legal holiday in Pennsylvania or is otherwise a day on
    which banking institutions in Pennsylvania are authorized by law or other
    governmental action to remain closed.

          "Code" shall have the meaning specified in Subdivision 6.6(A).

          "Composite Tape" shall mean the Composite Tape for New York Stock
    Exchange transactions.

          "Current Market Price" of DQE Common Stock or any other class of
    publicly traded capital stock or other security of DQE or any other issuer
    for a day shall mean the last reported sales price, regular way, on such
    day, or, if no sale takes place on such day, the average of the reported
    closing bid and asked prices, regular way, on such day, in either case as
    reported on the Composite Tape or, if such security is not listed or
    admitted to trading on the NYSE, on the principal national securities
    exchange on which such security is listed or admitted to trading or, if such
    security is not listed or admitted to trading on any national securities
    exchange, on the NASDAQ National Market System or, if such security is not
    quoted on the NASDAQ National Market System, the average of the closing bid
    and asked prices on such day in the over-the-counter market as reported by
    NASDAQ or, if bid and asked prices for such security on each such day shall
    not have been reported by NASDAQ, the average of the bid and asked prices
    for such day as furnished by any NYSE member firm regularly making a market
    in such security selected for such purpose by the Board of Directors.

          "Dividend Payment Date" shall have the meaning specified in
    Subdivision 6.2.

          "DQE" shall mean DQE, Inc., a corporation organized and existing under
    the laws of the Commonwealth of Pennsylvania.

                                      -30-
<PAGE>

          "DQE Common Stock" shall mean the Common Stock of DQE, of the par
    value of $1 per share.

          "DQE Common Stock Equivalent Dividend" shall have the meaning
    specified in Subdivision 6.2(A).

          "Effective Date" shall have the meaning specified in the definition of
    "Pro Rata Repurchase" in this Subdivision 6.9.

          "Exchange Ratio" shall have the meaning specified in Subdivision
    6.4(A).

          "Extraordinary Distribution" shall mean any dividend or other
    distribution (the Record Date for which occurs while any shares of Series A
    Preference Stock are outstanding) of

          (a)  Cash, if the sum of

               (i)    the amount of such cash dividend or distribution,

               (ii)   the aggregate amount of all other cash dividends and
                      distributions made during the period of twelve consecutive
                      calendar months ended the day next preceding the Record
                      Date for such dividend or distribution (portions of a
                      calendar month being counted as such), excluding, however,
                      from such aggregate amount any dividend or distribution
                      which was previously included in a DQE Common Stock
                      Equivalent Dividend theretofore paid, and

               (iii)  the aggregate amount of all Pro Rata Repurchases (for this
                      purpose, including only the excess of the aggregate
                      purchase price of each such Pro Rata Purchase over the
                      aggregate Fair Market Value of the Shares for DQE Common
                      Stock repurchased thereby as determined as of the
                      Effective Date of such Pro Rata Repurchase), the Effective
                      dates of which fall within the aforesaid twelve-month
                      period,

               exceeds fifteen percent (15%) of the aggregate Fair Market Value
               of all shares of DQE Common Stock outstanding on the Record Date
               for such dividend or distribution and/or

          (b)  shares of capital stock of DQE (other than shares of DQE Common
               Stock), other securities of DQE, evidences of indebtedness of DQE
               or any other person or any other property (including shares of
               any Affiliate of DQE), or any combination thereof.

          "Extraordinary Distribution Adjustment Amount" shall mean, with
    respect to any Extraordinary Distribution, the sum of

          (a)  the Fair Market Value of such Extraordinary Distribution and

          (b)  the aggregate amount of cash dividends and other distributions
               paid or made during the twelve-month period applicable to the
               determination that such Extraordinary Distribution was an
               Extraordinary Distribution, excluding, however, from such
               aggregate amount any dividend or distribution which (i)
               constituted an Extraordinary

                                      -31-
<PAGE>

               Distribution, (ii) was otherwise previously included in an
               Extraordinary Distribution Adjustment Amount or (iii) was
               previously included in a DQE Common Stock Equivalent Dividend
               theretofore paid.

          "Fair Market Value" shall mean, as to cash, the amount of such cash,
    and, as to shares of publicly traded capital stock or securities of any
    issuer, the average of the Current Market Prices of such shares or
    securities for each day of the Adjustment Period; provided, however, that
    for purposes of subsection (C) of Subdivision 6.6 hereof, the Fair Market
    Value of shares of publicly traded capital stock or securities shall be the
    Current Market Price of such shares or securities on the next preceding
    Appraisal Date.  The "Fair Market Value" of any security which is not
    publicly traded or of any other property shall mean the fair value thereof
    as determined by an independent investment banking or appraisal firm
    experienced in the valuation of such securities or property selected in good
    faith by the Board of Directors, or, if no such investment banking or
    appraisal firm is in the good faith judgment of the Board of Directors
    available to make such determination, as determined in good faith by the
    Board of Directors.

          "Liquidation Price" shall have the meaning specified in Subdivision
    6.3.

          "NASDAQ" shall mean the National Association of Securities Dealers,
    Inc. Automated Quotation System.

          "NASDAQ National Market System" shall mean the National Market System
    of NASDAQ.

          "Non-Dilutive Amount" in respect of an issuance, sale or exchange by
    DQE of any right or warrant to purchase or acquire shares of DQE Common
    Stock (including any security convertible into or exchangeable for shares of
    DQE Common Stock) shall mean (a) the product of (i) the Fair Market Value of
    a share of DQE Common Stock on the trading day immediately preceding the
    first public announcement of such issuance, sale or exchange and (ii) the
    maximum number of shares of DQE Common Stock which could be acquired on such
    date upon the exercise in full of such rights and warrants (including upon
    the conversion or exchange of all such convertible or exchangeable
    securities), whether or not exercisable (or convertible or exchangeable) at
    such date, minus (b) the aggregate amount payable pursuant to such right or
    warrant to purchase or acquire such maximum number of shares of DQE Common
    Stock; provided, however, that in no event shall the Non-Dilutive Amount be
    less than zero. For purposes of the foregoing sentence, in the case of a
    security convertible into or exchangeable for shares of DQE Common Stock,
    the amount payable pursuant to a right or warrant to purchase or acquire
    shares of DQE Common Stock shall be deemed to be the Fair Market Value of
    such security on the date of the issuance, sale or exchange of such security
    by DQE.

          "NYSE" shall mean the New York Stock Exchange, Inc., and its
    successors and assigns.

          "Plan" shall have the meaning specified in Subdivision 6.1(B)

          "Pro Rata Repurchase" shall mean any purchase of shares of DQE Common
    Stock by DQE or any Affiliate thereof, whether for cash, shares of capital
    stock of DQE, other securities of DQE, evidences of indebtedness of DQE or
    any other person or any other property (including shares of an Affiliate of
    DQE), or any combination thereof, effected while any of the shares of Series
    A Preference Stock are outstanding, pursuant to any tender offer or exchange
    offer subject to Section 13(e) of the Securities Exchange act of 1934, as
    amended (the "Exchange Act"), or any successor

                                      -32-
<PAGE>

    provision of law, or pursuant to any other offer available to substantially
    all holders of DQE Common Stock; provided, however, that no purchase of
    shares by DQE or any Affiliate thereof made in open market transactions
    shall be deemed a Pro Rata Repurchase. For purposes of Subdivision 6.8 and
    this Subdivision 6.9, shares shall be deemed to have been purchased by DQE
    or any Affiliate thereof "in open market transactions" if they have been
    purchased substantially in accordance with the requirements of Rule 10b-18,
    as such rule is in effect under the Exchange Act on the date shares of
    Series A Preference Stock are initially issued by the Company, or on such
    other terms and conditions as the Board of Directors shall have determined
    are reasonably designed to prevent such purchases from having a material
    effect on the trading market for the DQE Common Stock. The "Effective Date"
    of a Pro Rata Repurchase shall mean the applicable expiration date
    (including all extensions thereof) of any tender offer which is a Pro Rata
    Repurchase, or the date of purchase with respect to any Pro Rata Repurchase
    which is not a tender offer.

          "Record date", with respect to any dividend or other distribution on
    shares of capital stock, shall mean the date and time determined by the
    Board of Directors as of which the holders of record of such shares which
    are entitled to receive such dividend or other distribution shall be
    determined.

          "Series A Preference Stock" shall have the meaning specified in
    Subdivision 6.1(A)

          "Valuation Date" with respect to an Extraordinary Distribution shall
    mean the date that is five Business Days prior to the record date for such
    Extraordinary Distribution.

    6.10. Miscellaneous.

    (A)   All notices referred to herein shall be in writing, and all notices
hereunder shall be deemed to have been given upon the earlier of receipt thereof
or three (3) Business Days after the mailing thereof if sent by first class mail
with postage prepaid, addressed:  (i) if to the Company, to its principal
executive office, Attention:  Secretary, or to the transfer agent, if any, for
the Series A Preference Stock, or other agent of the Company designated as
permitted herein or (ii) if to any holder of the Series A Preference Stock to
such holder at the address of such holder as listed in the stock record books of
the Company (which may include the records of any transfer agent for the Series
A Preference Stock) or (iii) to such other address as the Company or any such
holder, as the case may be, shall have designed by notice similarly given.

    (B)   The Company shall pay any and all stock transfer and documentary stamp
taxes that may be payable in respect of any issuance or delivery of shares of
Series A Preference Stock or shares of DQE Common Stock or other securities
delivered on account of Series A Preference Stock pursuant hereto or
certificates representing such shares or securities.  The Company shall not,
however, be required to pay any such tax which may be payable in respect of any
transfer involved in the issuance or delivery of shares of Series A Preference
Stock or the delivery of DQE Common Stock or other securities in a name other
than that in which the shares of Series A Preference Stock with respect to which
such shares or other securities are issued or delivered were registered, or in
respect of any payment to any person with respect to any such shares or
securities other than a payment to the registered holder thereof, and the
Company shall not be required to make any such issuance, delivery or payment
unless and until the person otherwise entitled to such issuance, delivery or
payment has paid to the Company the amount of any such tax or has established,
to the satisfaction of the Company, that such tax has been paid or is not
payable.

                                      -33-
<PAGE>

    (C)  In the event that a holder of shares of Series A Preference Stock shall
not by written notice designate the name in which shares of DQE Common Stock to
be delivered upon exchange of such shares should be registered or to whom
payment upon redemption of shares of Series A Preference Stock should be made or
the address to which the certificate or certificates representing such shares,
or such payment, should be sent, the Company shall be entitled to cause the
registration of such shares to be made, and to make such payment, in the name of
the holder of such Series A Preference Stock as shown on the records of the
Company and to send the certificate or certificates representing such shares, or
such payment, to the address of such holder shown on the records of the Company.

    (D)  The Company may appoint, and from time to time discharge and change, a
transfer agent and/or exchange agent for the Series A Preference Stock.  Upon
any such appointment or discharge of a transfer agent or exchange agent, the
Company shall send notice thereof to each holder of record of Series A
Preference Stock.

    6/th/. Personal Liability of Directors.

    (a)    To the fullest extent that the laws of the Commonwealth of
Pennsylvania, as in effect on January 27, 1987 or as thereafter amended, permit
elimination or limitation of the liability of directors, no Director of the
Company shall be personally liable for monetary damages as such for any action
taken, or any failure to take action, as a Director.

    (b)    This Article 6th shall not apply to any action filed prior to January
27, 1987, nor to any breach of performance or failure of performance of duty by
a Director occurring prior to January 27, 1987.  Any amendment or repeal of this
Article 6th which has the effect of increasing Director liability shall operate
prospectively only, and shall not affect any action taken, or any failure to
act, prior to its adoption.

                                      -34-