Exhibit 3.1
                                     BY-LAWS

                                       OF

                                  CILCORP INC.

                     AMENDED AND RESTATED AS OF MAY 20, 2003


                                   ARTICLE I.

                                     OFFICES

     Section  1.  The  registered  office  of the  Corporation  required  by the
Illinois  Business  Corporation  Act of 1983,  as  amended  (the  "Act"),  to be
maintained in the State of Illinois  shall be in the City of Chicago,  County of
Cook,  State of Illinois.  The  Corporation  may also have offices at such other
places both  within and without the State of Illinois as the Board of  Directors
may from time to time determine or the business of the Corporation may require.

                                   ARTICLE II.

                                  SHAREHOLDERS

     Section  1.  Time  and  Place  of  Meetings.  The  annual  meeting  of  the
shareholders shall be held on the fourth Tuesday in May of each year (or if such
day  shall be a legal  holiday,  then upon the next  succeeding  day not a legal
holiday)  or upon  such  other  day  determined  by  resolution  of the Board of
Directors.  Each such regular  annual  meeting shall be held at such time and at
such  location,  within  or  without  the  State of  Illinois,  as the  Board of
Directors  shall order.  At such annual  meeting,  a board of directors shall be
elected and such other  business shall be transacted as may properly come before
such meeting.

     Section 2. Annual Meetings. An annual meeting of shareholders shall be held
for the purpose of electing directors and transacting such other business as may
properly be brought before the meeting.  The date of the annual meeting shall be
determined by the Board of Directors.

     Section 3. Special Meetings. Special meetings of the shareholders,  for any
purpose or purposes,  unless  otherwise  prescribed by law, may be called by the
Chief Executive  Officer,  by the President,  by the Chairman of the Board, by a
majority  of the Board of  Directors,  or by the holders of not less than twenty
percent of the  outstanding  shares entitled to vote on the matter for which the
meeting is called by written  request  executed by such holders and delivered to
the President or the Secretary of the Corporation.

     Section  4.  Notice of  Meetings.  Written  notice of each  meeting  of the
shareholders stating the place, date and time of the meeting and, in the case of
a special  meeting,  the  purpose or  purposes  for which the meeting is called,
shall be delivered not less than ten nor more than sixty days before the date of
the  meeting,  or in  the  case  of a  merger,  consolidation,  share  exchange,
dissolution or sale, lease or exchange of assets,  not less than twenty nor more
than sixty days before the date of the meeting, either personally or by mail, by
the  President,  or by the  Secretary at the  direction of the  President or the
person or persons calling the meeting, to each shareholder of record entitled to
vote at such  meeting.  If mailed,  such notice  shall be deemed to be delivered
when  deposited in the United States mail,  addressed to the  shareholder at his
address as it appears on the records of the  Corporation,  with postage  thereon
prepaid.

     Any shareholder  entitled to receive notice may waive notice of any meeting
by a writing  executed and delivered to the  Corporation  either before or after
the meeting.  Attendance  of a

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shareholder at any meeting shall  constitute a waiver of notice of such meeting,
unless the shareholder attends such meeting for the express purpose of objecting
to the holding of such meeting  because  proper  notice was not given and at the
beginning  of such  meeting  records such  objection  with the person  acting as
secretary of the meeting and does not thereafter vote on any action taken at the
meeting.

     Section 5. Quorum. The holders of record of a majority of the shares issued
and outstanding and entitled to vote thereat, represented in person or by proxy,
shall  constitute  a  quorum  at  all  meetings  of  the  shareholders  for  the
transaction  of  business,  except as  otherwise  provided  by the Act or by the
Articles of Incorporation. If a quorum is not represented, the holders of record
of the shares  represented  in person or by proxy at the meeting and entitled to
vote  thereat  shall have  power,  by the  affirmative  vote of the holders of a
majority of such shares,  to adjourn the meeting to another  time and/or  place,
without  notice other than  announcement  at the meeting,  except as hereinafter
provided,  until a quorum  shall be present or  represented.  At such  adjourned
meeting, at which a quorum shall be present or represented,  any business may be
transacted  which might have been  transacted  at the original  meeting.  If the
adjournment  is for more than thirty  days,  or if after the  adjournment  a new
record  date is fixed  for the  adjourned  meeting,  a notice  of the  adjourned
meeting  shall be given to each  shareholder  of record  entitled to vote at the
meeting. Withdrawal of shareholders from any meeting shall not cause the failure
of a duly constituted quorum at such meeting.

     Section 6. Voting.  At all meetings of the  shareholders,  each shareholder
shall be  entitled  to vote,  in person or by proxy,  each  share  owned by such
shareholder of record on the record date for the meeting. Each outstanding share
shall be entitled to one vote on each matter submitted to a vote at a meeting of
shareholders,  unless  otherwise  provided  in the  Act or in  the  Articles  of
Incorporation.  When a quorum is present at any meeting, the affirmative vote of
the  holders  of  record  of a  majority  of  the  shares  having  voting  power
represented in person or by proxy shall decide any question  brought before such
meeting,  unless the question is one upon which, by express provision of the Act
or of the Articles of Incorporation, a different vote is required, in which case
such express provision shall govern and control the decision of such question. A
shareholder  who is in attendance at a meeting of  shareholders  in person or by
proxy,  but who abstains from the vote on any matter,  shall not be deemed to be
represented at such meeting for purposes of the preceding  sentence with respect
to such vote,  but shall be deemed to be  represented  at such  meeting  for all
other purposes.

     Section 7. Informal Action by Shareholders.  Unless  otherwise  provided by
the Act or by the Articles of Incorporation,  any action required to be taken at
a  meeting  of the  shareholders,  or any other  action  which may be taken at a
meeting of the shareholders,  may be taken without a meeting and without a vote,
if a consent in writing,  setting forth the action so taken,  shall be signed by
(a) the holders of outstanding shares having not less than the minimum number of
votes that would be  necessary  to authorize or take such action at a meeting at
which all shares  entitled to vote thereon  were  present and voting,  provided,
that (i) at least five days prior to the  execution  of the  consent a notice in
writing is delivered to all of the shareholders entitled to vote with respect to
the subject matter thereof,  and (ii) those  shareholders who have not consented
in  writing  are  notified  in writing  of the  taking of the  corporate  action
promptly after the effective date of such action; or (b) all of the shareholders
entitled to vote with respect to the subject matter thereof.

     Section 8. Proxies. At all meetings of shareholders, a shareholder may vote
in person or vote by proxy  which is  executed  by the  shareholder  or his duly
authorized  attorney-in-fact.  Such proxy shall be filed with the  Secretary  or
other person  authorized to tabulate votes at any time prior to the commencement
of the meeting. No proxy shall be valid after eleven months from the date of its
execution unless otherwise provided in the proxy.

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                                  ARTICLE III.

                                   DIRECTORS

     Section 1. General  Powers.  The  business  and affairs of the  Corporation
shall be  managed  and  controlled  by or under  the  direction  of its Board of
Directors, which may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by law or by the Articles of  Incorporation or
by  these  By-laws  directed  or  required  to  be  exercised  or  done  by  the
shareholders.

     Section 2. Number,  Qualification and Tenure. The Board of Directors of the
Corporation  shall  consist of not less than three (3) members and not more than
twelve (12) members, as may be determined by the Board of Directors from time to
time.  Within the limits  above  specified,  the  number of  directors  shall be
determined  from  time to time by  resolution  of the  Board of  Directors.  The
directors shall be elected at the annual meeting of the shareholders,  except as
provided in the Articles of Incorporation or Section 3 of this Article, and each
director  elected shall hold office until his successor is elected and qualified
or until his earlier death, termination, resignation or removal from office. Any
decrease in the number of directors  shall not have the effect of shortening the
term of any incumbent director.

     Section 3. Vacancies and Newly Created  Directorships.  Vacancies and newly
created directorships resulting from any increase in the number of directors may
be filled by the  appointment  of a  majority  of the  directors  then in office
though  less than a quorum,  and each  director so  appointed  shall hold office
until the next annual meeting of shareholders and until his successor is elected
and qualified or until the earlier  death,  termination,  resignation or removal
from office of such director.

     Section 4. Independent Director.
                --------------------

          (a)  The Corporation shall have at all times one individual who is an
Independent  Director (as defined below).  If the Independent  Director resigns,
dies or becomes  incapacitated,  or such position is otherwise vacant, no action
requiring the unanimous affirmative vote of the directors shall be taken until a
successor  Independent  Director is appointed  and  qualified  and approves such
action.

          (b)  Notwithstanding  any other  provision  of these  By-laws  and any
provision of law that  otherwise so empowers the  Corporation,  the  Corporation
shall  not,  without  the prior  unanimous  consent  of the Board of  Directors,
including the Independent Director, do any of the following:  (i) make a general
assignment  for the  benefit of  creditors;  (ii) file a  voluntary  petition in
bankruptcy; (iii) file a petition or answer seeking reorganization, arrangement,
composition, readjustment,  liquidation, dissolution or similar relief under any
statute,  law or regulation;  (iv) file an answer or other pleading admitting or
failing to contest the material  allegations  of a petition  filed against it in
any proceeding seeking reorganization,  arrangement, composition,  readjustment,
liquidation, dissolution or similar relief under any statute, law or regulation,
or the entry of any order appointing a trustee,  liquidator or receiver of it or
of its assets or any substantial  portion  thereof;  or (v) seek,  consent to or
acquiesce in the  appointment  of a trustee,  receiver or liquidator of it or of
all  or  any  substantial  part  of  its  assets.  With  regard  to  any  action
contemplated  by the preceding  sentence,  or with regard to any action taken or
determination made at any time when the Corporation is insolvent,  each director
will owe its primary fiduciary duty to the Corporation  (including the creditors
of the Corporation).

          (c)  For  purposes  of these By-laws of the  Corporation, "Independent
Director"  shall mean, with respect to the  Corporation,  a director who is not,
and within the last five years was not (except solely by virtue of such person's
serving as, or  affiliation  with any other  person  serving as, an  independent
director  of The AES  Corporation  ("Parent")  or any of its  affiliates,  (i) a

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stockholder,  member, partner, director, officer, employee, affiliate, customer,
supplier, creditor or independent contractor of, or any person that has received
any  benefit in any form  whatever  from,  or any person that has  provided  any
service in any form whatever to, or any major  creditor (or any affiliate of any
major  creditor)  of,  the Parent or any of its  affiliates,  or (ii) any person
owning  beneficially,  directly or indirectly,  any outstanding shares of common
stock, any limited liability corporation interests or any partnership interests,
as applicable,  of the Parent or any of its affiliates, or of any major creditor
(or  any  affiliate  of any  major  creditor)  of any  of  the  foregoing,  or a
stockholder,  member, partner, director, officer, employee, affiliate, customer,
supplier, creditor or independent contractor of, or any person that has received
any  benefit in any form  whatever  from,  or any person that has  provided  any
service in any form whatever to, such beneficial owner or any of such beneficial
owner's  affiliates,  or (iii) a member of the  immediate  family of any  person
described  above;  provided that the indirect or  beneficial  ownership of stock
through a mutual fund or similar diversified  investment vehicle with respect to
which the owner does not have discretion or control over the investments held by
such diversified  investment vehicle shall not preclude such owner from being an
Independent  Director.  For purposes of this definition,  "major creditor" shall
mean a natural  person  or  business  entity  to which the  Parent or any of its
affiliates  has  outstanding  indebtedness  for borrowed money or credit on open
account in a sum sufficiently large as would reasonably be expected to influence
the judgment of the proposed  Independent Director adversely to the interests of
the Corporation when the interests of that person or entity are adverse to those
of the Corporation.

     Section 5.  Directors'  Duties.  The directors,  including the  Independent
Director,  will  act  in  good  faith  in  accordance  with  the  terms  of  the
organizational  documents and applicable law, and make decisions with respect to
the business and operations of the Corporation  independent of, and not dictated
by, the Parent,  or any other affiliate  thereof,  and any director shall bear a
fiduciary duty to the Corporation (including its creditors).

     Section 6. Place of  Meetings.  The Board of Directors  may hold  meetings,
both regular and special, either within or without the State of Illinois.

     Section 7. Meetings.  The Board of Directors shall hold a regular  meeting,
to be known as the annual meeting,  immediately following each annual meeting of
the shareholders  without any notice being given.  Other regular meetings of the
Board  of  Directors  shall  be held at such  time  and  place  as the  Board of
Directors may designate from time to time. No notice of regular meetings need be
given, other than by announcement at the immediately  preceding regular meeting.
Special meetings of the Board of Directors may be called by or at the request of
the Chairman of the Board or a majority of the Board of Directors. Notice of any
special  meeting of the Board  shall be given at least two days  prior  thereto,
either in writing,  or telephonically if confirmed promptly in writing,  to each
director  at  the  address  shown  for  such  director  on  the  records  of the
Corporation.

     Section 8. Waiver of Notice; Business and Purpose. Notice of any meeting of
the Board of Directors may be waived in writing  signed by the person or persons
entitled  to such notice  either  before or after the time of the  meeting.  The
attendance of a director at any meeting  shall  constitute a waiver of notice of
such meeting,  except where a director attends a meeting for the express purpose
of  objecting  to the  transaction  of any  business  because the meeting is not
lawfully  called or convened and at the  beginning of such meeting  records such
objection  with the  person  acting as  secretary  of the  meeting  and does not
thereafter  vote on any action taken at the meeting.  Neither the business to be
transacted  at, nor the purpose of, any regular or special  meeting of the Board
need be  specified  in the  notice or waiver of notice of such  meeting,  unless
specifically required by the Act.

     Section 9. Quorum and Voting.  At all  meetings of the Board of Directors a
majority of the total  number of  directors  then in office  shall  constitute a
quorum for the transaction of business.

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If a quorum shall not be present at any meeting of the Board of  Directors,  the
directors  present  thereat may adjourn the meeting  without  notice  other than
announcement  at the meeting,  to any other date,  time and place until a quorum
shall be present.  The act of a majority of the directors present at any meeting
at which there is a quorum  shall be the act of the Board of  Directors,  unless
the  act of a  greater  number  is  required  by the Act or by the  Articles  of
Incorporation.  Withdrawal  of  directors  from any meeting  shall not cause the
failure of a duly  constituted  quorum at such  meeting.  A  director  who is in
attendance at a meeting of the Board of Directors but who abstains from the vote
on any matter by announcing  his abstention to the person acting as secretary of
the meeting  and not voting on such matter  shall not be deemed to be present at
such  meeting  for  purposes  of the  preceding  sentence  or Section 15 of this
Article  with  respect to such  vote,  but shall be deemed to be present at such
meeting for all other purposes.

     Section 10. Organization.  The Chairman of the Board, if elected, shall act
as chairman at all  meetings of the Board of  Directors.  If the Chairman of the
Board is not elected or if elected, is not present,  the Vice Chairman,  if any,
or, if no such Vice Chairman is present,  a director chosen by a majority of the
directors  present,  shall  act as  chairman  at such  meeting  of the  Board of
Directors.

     Section 11. Committees.  The Board of Directors, by resolution adopted by a
majority of the whole Board,  may designate two or more  directors to constitute
an Executive  Committee.  The Board of  Directors,  by  resolution  adopted by a
majority of the whole Board, may create one or more other committees and appoint
two or more directors to serve on such  committee or  committees.  Each director
appointed  to serve on any such  committee  shall serve,  unless the  resolution
designating the respective committee is sooner amended or rescinded by the Board
of Directors, until the next annual meeting of the Board or until his respective
successor is  designated.  The Board of Directors,  by  resolution  adopted by a
majority  of the  whole  Board,  may  also  designate  additional  directors  as
alternate  members of any committee to serve as members of such committee in the
place and stead of any  regular  member or members  thereof who may be unable to
attend a meeting or otherwise  unavailable to act as a member of such committee.
In the  absence  or  disqualification  of a  member  and all  alternate  members
designated to serve in the place and stead of such member, the member or members
thereof present at any meeting and not disqualified from voting,  whether or not
such member or members  constitute a quorum,  may  unanimously  appoint  another
director  to act at the  meeting  in the  place  and  stead  of such  absent  or
disqualified member.

     The  Executive  Committee  may exercise all the powers and authority of the
Board  of  Directors  in the  management  of the  business  and  affairs  of the
Corporation  between  the  meetings  of the  Board of  Directors,  and any other
committee  may exercise the power and authority of the Board of Directors to the
extent specified by the resolution  designating such committee,  or the Articles
of Incorporation or these By-laws; provided, however, that no committee may take
any  action  that  is  expressly   required  by  the  Act  or  the  Articles  of
Incorporation  or these By-laws to be taken by the Board of Directors and not by
a  committee  thereof.  Each  committee  shall  keep a  record  of its  acts and
proceedings,  which shall form a part of the records of the  Corporation  in the
custody of the Secretary, and all actions of each committee shall be reported to
the Board of Directors at the next meeting of the Board.

     Meetings  of  committees  may be called at any time by the  Chairman of the
Board,  if any, or the chairman of the respective  committee.  A majority of the
members  of the  committee  shall  constitute  a quorum for the  transaction  of
business and, except as expressly limited by this section, the act of a majority
of the members  present at any  meeting at which there is a quorum  shall be the
act of such  committee.  Except as expressly  provided in this section or in the
resolution  designating  the  committee,  a majority  of the members of any such
committee may select its chairman, fix its rules of procedure,  fix the time and
place of its  meetings and specify  what notice of  meetings,  if any,  shall be
given.


                                      -5-

<PAGE>

     Section  12.  Action  without  Meeting.   Unless   otherwise   specifically
prohibited  by the  Articles  of  Incorporation  or these  By-laws,  any  action
required or  permitted  to be taken at any meeting of the Board of  Directors or
any  committee  thereof  may be taken  without a meeting,  if all members of the
Board of  Directors  or such  committee,  as the case may be,  execute a consent
thereto  in  writing  setting  forth the  action so taken,  and the  writing  or
writings are filed with the minutes of  proceedings of the Board of Directors or
such committee.

     Section 13.  Attendance by Telephone.  Members of the Board of Directors or
any committee  thereof may participate in and act at any meeting of the Board of
Directors or such committee, as the case may be, through the use of a conference
telephone  or other  communications  equipment  by means  of which  all  persons
participating in the meeting can hear each other.  Participation in such meeting
shall constitute  attendance and presence in person at the meeting of the person
or persons so participating.

     Section  14.  Compensation.  By  resolution  of  the  Board  of  Directors,
irrespective  of any  personal  interest  of any of  the  members  thereof,  the
directors may be paid their reasonable  expenses,  if any, of attendance at each
meeting of the Board of Directors and may be paid a fixed sum for  attendance at
meetings or a stated salary as directors,  payable in cash or securities.  These
payments  shall not preclude any director  from serving the  Corporation  in any
other  capacity  and  receiving  compensation  therefor.  Members  of special or
standing  committees may be allowed like  compensation  for attending  committee
meetings.

     Section 15.  Presumption of Assent.  A director who is present at a meeting
of the Board of Directors or any  committee  thereof  when  corporate  action is
taken  shall be deemed to have  assented  to the  action  taken  unless:  (1) he
objects at the  beginning of the meeting to holding such meeting or  transacting
business at such  meeting;  (2) his dissent  from the action taken is entered in
the minutes of such meeting; or (3) he delivers written notice of his dissent to
the person acting as the secretary of the meeting before the adjournment thereof
or forwards  such  dissent by  registered  or  certified  mail to the  Secretary
immediately  after the adjournment of such meeting.  The right of dissent is not
available to a director who votes in favor of the action taken.

                                   ARTICLE IV.

                                    OFFICERS

     Section 1. Enumeration.  The officers of the Corporation shall be chosen by
the Board of Directors and shall include a President and a Secretary.  The Board
of Directors  may also elect a Chairman of the Board,  a Vice  Chairman,  one or
more  Vice  Presidents,  a  Treasurer,  one or more  Assistant  Secretaries  and
Assistant  Treasurers  and  such  other  officers  and  agents  as it  may  deem
appropriate. Any number of offices may be held by the same person.


     Section 2. Term of Office. The officers of the Corporation shall be elected
at the annual  meeting of the Board of  Directors  and shall hold  office  until
their  successors  are  elected and  qualified  or until  their  earlier  death,
termination,  resignation  or removal from  office.  Any officer or agent of the
Corporation  may be removed,  with or without  cause,  by the Board of Directors
whenever in its judgment the best  interests of the  Corporation  will be served
thereby,  but such removal shall be without prejudice to the contract rights, if
any, of the person so removed.  Election or  appointment  of an officer or agent
shall not of itself create contract rights. Any vacancy in any office because of
death, resignation,  termination, removal, disqualification or otherwise, may be
filled by the Board of Directors for the unexpired portion of the term.



                                      -6-

<PAGE>

     Section 3. Chief  Executive  Officer.  The Chief  Executive  Officer of the
Corporation,  if elected, shall have general supervision,  direction and control
of the  business and affairs of the  Corporation,  subject to the control of the
Board of Directors, and shall have such other functions, authority and duties as
customarily appertain to the office of the chief executive officer of a business
corporation or as may be prescribed by the Board of Directors.

     Section 4.  President.  During any period  when there shall be an office of
Chief Executive  Officer,  the President shall be the chief operating officer of
the Corporation  and shall have such  functions,  authority and duties as may be
prescribed by the Board of Directors or the Chief Executive Officer.  During any
period  when  there  shall  not be an  office of Chief  Executive  Officer,  the
President shall be the chief executive officer of the Corporation, and, as such,
shall have the functions,  authority and duties provided for the Chief Executive
Officer.

     Section 5. Vice  President.  The Vice  President or, if there shall be more
than one, each Vice  President,  in the absence of the President or in the event
of the  President's  inability  or  refusal  to act  (and if  there  be no Chief
Executive  Officer),  shall  have the  authority  to  perform  the duties of the
President, subject to such limitations thereon as may be imposed by the Board of
Directors,  and such other duties as may from time to time be  prescribed by the
Board of Directors, the Chief Executive Officer or the President.

     Section  6.  Secretary.  The  Secretary  shall:  (a) keep a  record  of all
proceedings  of the  shareholders,  the Board of  Directors  and any  committees
thereof in one of more books provided for that purpose; (b) give, or cause to be
given,  all notices that are required by law or these By-laws to be given by the
Secretary; (c) be custodian of the corporate records and, if the Corporation has
a corporate  seal, of the seal of the  Corporation;  (d) have authority to affix
the seal of the  Corporation to all  instruments the execution of which requires
such seal and to attest such  affixing  of the seal;  (e) keep a register of the
post  office  address  of each  shareholder  which  shall  be  furnished  to the
Secretary by such shareholder;  (f) sign, with the Chief Executive  Officer,  if
any,  or  President  or any  Vice  President,  or any  other  officer  thereunto
authorized  by the  Board of  Directors,  any  certificates  for  shares  of the
Corporation,  or any deeds,  mortgages,  bonds,  contracts or other  instruments
which the Board of Directors  has  authorized to be executed by the signature of
more than one officer;  (g) have general  charge of the share  transfer books of
the Corporation; (h) have authority to certify as true and correct copies of the
By-laws,  or  resolutions  of the  shareholders,  the  Board  of  Directors  and
committees  thereof,  and of  other  documents  of the  Corporation;  and (i) in
general,  perform the duties  incident to the office of secretary and such other
duties as from time to time may be  prescribed  by the Board of  Directors,  the
Chief  Executive  Officer  or the  President.  The Board of  Directors  may give
general  authority to any other officer to affix the seal of the Corporation and
to attest such affixing of the seal.

     Section 7. Assistant Secretary.  The Assistant Secretary, or if there shall
be more than one, each Assistant Secretary in the absence of the Secretary or in
the  event of the  Secretary's  inability  or  refusal  to act,  shall  have the
authority to perform the duties of the  Secretary,  subject to such  limitations
thereon as may be imposed by the Board of  Directors,  and such other  duties as
may from  time to time be  prescribed  by the  Board  of  Directors,  the  Chief
Executive Officer, the President or the Secretary.

     Section 8. Treasurer.  The Treasurer shall be the principal  accounting and
financial  officer of the  Corporation.  The Treasurer shall: (a) have charge of
and be  responsible  for the  maintenance  of adequate  books of account for the
Corporation;  (b) have  charge and  custody of all funds and  securities  of the
Corporation,  and be responsible  therefor and for the receipt and  disbursement
thereof; and (c) perform the duties incident to the office of treasurer and such
other duties as may from time to time be  prescribed  by the Board of Directors,
the Chief  Executive  Officer or the President.  The Treasurer may sign with the
Chief Executive Officer, if any, or the President, or any Vice President, or any
other officer thereunto  authorized by the Board of Directors,



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<PAGE>

certificates  for  shares  of the  Corporation.  If  required  by the  Board  of
Directors,  the  Treasurer  shall give a bond for the faithful  discharge of his
duties in such sum and with such surety or  sureties  as the Board of  Directors
may determine.

     Section 9. Assistant Treasurer.  The Assistant Treasurer, or if there shall
be more than one, each Assistant  Treasurer,  in the absence of the Treasurer or
in the event of the  Treasurer's  inability  or refusal  to act,  shall have the
authority to perform the duties of the  Treasurer,  subject to such  limitations
thereon as may be imposed by the Board of  Directors,  and such other  duties as
may from  time to time be  prescribed  by the  Board  of  Directors,  the  Chief
Executive Officer, the President or the Treasurer.

     Section 10. Other Officers and Agents.  Any officer or agent who is elected
or appointed  from time to time by the Board of  Directors  and whose duties are
not specified in these By-laws shall perform such duties and have such powers as
may from  time to time be  prescribed  by the  Board  of  Directors,  the  Chief
Executive Officer or the President.

                                   ARTICLE V.

                             CERTIFICATES FOR SHARES

     Section 1. Form.  The shares of the  Corporation  shall be  represented  by
certificates;   provided,  however,  the  Board  of  Directors  may  provide  by
resolution  or  resolutions  that some or all of any or all classes or series of
the Corporation's  shares shall be uncertificated  shares.  Each certificate for
shares shall be  consecutively  numbered or otherwise  identified.  Certificates
representing  shares in the Corporation shall be signed by or in the name of the
Corporation by the Chief Executive  Officer or the President or a Vice President
and by the Treasurer or an Assistant  Treasurer or the Secretary or an Assistant
Secretary of the Corporation. Where a certificate is countersigned by a transfer
agent,  other than the  Corporation or an employee of the  Corporation,  or by a
registrar,  the  signatures  of one or more officers of the  Corporation  may be
facsimiles.  In case any officer,  transfer agent or registrar who has signed or
whose facsimile  signature has been placed upon a certificate  shall have ceased
to be such  officer,  transfer  agent or registrar  before such  certificate  is
issued, the certificate may be issued by the Corporation with the same effect as
if such officer,  transfer agent or registrar were such officer,  transfer agent
or registrar at the date of its issue.

     Section 2.  Transfer.  Upon  surrender to the  Corporation  or the transfer
agent  of  the  Corporation  of  a  certificate  for  shares  duly  endorsed  or
accompanied  by proper  evidence  of  succession,  assignment  or  authority  to
transfer,  it shall be the duty of the Corporation to issue a new certificate or
uncertificated  shares  in  place  of any  certificate  therefor  issued  by the
Corporation  to the person  entitled  thereto,  cancel the old  certificate  and
record the transaction in its share book.

     Section 3.  Replacement.  In case of the loss,  destruction,  mutilation or
theft of a certificate representing shares of the Corporation, a new certificate
may be issued upon the surrender of the mutilated certificate or, in the case of
loss,  destruction or theft of a certificate,  upon  satisfactory  proof of such
loss,  destruction  or theft and upon such terms as the Board of  Directors  may
prescribe. The Board of Directors may in its discretion require the owner of the
lost, destroyed or stolen certificate, or his legal representative,  to give the
Corporation  a bond,  in such  sum and in such  form  and with  such  surety  or
sureties as it may direct,  to indemnify the Corporation  against any claim that
may be made  against  it with  respect to the  certificate  alleged to have been
lost, destroyed or stolen.

                                   ARTICLE VI.

                                      -8-
<PAGE>

                     INDEMNIFICATION OF DIRECTORS, OFFICERS,
                              EMPLOYEES AND AGENTS

     Section 1. Third Party Actions.  The Corporation shall indemnify any person
who was or is a party or is  threatened  to be made a party  to any  threatened,
pending,  or completed  action,  suit or proceeding,  whether  civil,  criminal,
administrative  or  investigative,  including all appeals (other than an action,
suit or proceeding by or in the right of the  Corporation) by reason of the fact
that he is or was a director or officer of the Corporation (and the Corporation,
in the discretion of the Board of Directors, may so indemnify a person by reason
of the fact that he is or was an employee or agent of the  Corporation  or is or
was serving at the request of the Corporation, another corporation, partnership,
joint  venture,  trust or other  enterprise in any capacity),  against  expenses
(including attorneys' fees),  judgments,  decrees,  fines, penalties and amounts
paid in settlement  actually and reasonably  incurred by him in connection  with
such  action,  suit or  proceeding  if he acted in good faith and in a manner he
reasonably  believed  to be in or not  opposed  to  the  best  interests  of the
Corporation  and,  with respect to any  criminal  action or  proceeding,  had no
reasonable  cause to believe his conduct was unlawful.  The  termination  of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo  contendere  or its  equivalent,  shall not,  of  itself,  create a
presumption  that  the  person  did not  act in good  faith  or in a  manner  he
reasonably  believed  to be in or not  opposed  to  the  best  interests  of the
Corporation  and,  with  respect  to any  criminal  action  or  proceeding,  had
reasonable cause to believe his conduct was unlawful.

     Section 2. Actions By or in the Right of the  Corporation.  The Corporation
shall  indemnify  any person who was or is a party or is threatened to be made a
party to any  threatened,  pending or completed  action or suit,  including  all
appeals,  by or in the right of the  Corporation  to procure a  judgment  in its
favor by reason  of the fact  that he is or was a  director  or  officer  of the
Corporation (and the  Corporation,  in the discretion of the Board of Directors,
may so indemnify a person by reason of the fact that he is or was an employee or
agent of the  Corporation or is or was serving at the request of the Corporation
in any other  capacity for or on behalf of the  Corporation),  against  expenses
(including   attorneys'  fees)  actually  and  reasonably  incurred  by  him  in
connection  with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation,  except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have been
finally adjudged to be liable for negligence or misconduct in the performance of
his duty to the  Corporation  unless  and only to the  extent  that the court in
which  such  action  or suit  was  brought,  or any  other  court  of  competent
jurisdiction, shall determine upon application that, despite the adjudication of
liability  but in view of all the  circumstances  of the  case,  such  person is
fairly and  reasonably  entitled to  indemnity  for such  expenses as such court
shall deem proper.  Notwithstanding  the  foregoing,  the  Corporation  shall be
required to indemnify an officer or director in connection with an action,  suit
or proceeding  initiated by such person only if such action,  suit or proceeding
was authorized by the Board of Directors.

     Section 3. Indemnity if Successful. To the extent that a director, officer,
employee  or agent of the  Corporation  has been  successful  on the  merits  or
otherwise in defense of any action,  suit or proceeding referred to in Section 1
or 2 of this Article,  or in defense of any claim,  issue or matter therein,  he
shall be indemnified against expenses  (including  attorneys' fees) actually and
reasonably incurred by him in connection therewith.

     Section 4. Standard of Conduct. Except in a situation governed by Section 3
of this  Article,  any  indemnification  under  Section  1 or 2 of this  Article
(unless ordered by a court) shall be made by the Corporation  only as authorized
in the specific case upon a determination  that  indemnification of the director
or officer,  employee or agent is proper in the circumstances because he has met
the  applicable  standard of conduct set forth in Section 1 or 2, as applicable,
of this  Article.  Such  determination  shall be made (i) by a majority  vote of
directors acting at a

                                      -9-
<PAGE>

meeting at which a quorum  consisting  of directors who were not parties to such
action,  suit  or  proceeding  is  present,  or (ii)  if  such a  quorum  is not
obtainable,  or even if  obtainable,  a quorum  of  disinterested  directors  so
directs,  by  independent  legal counsel in a written  opinion,  or (iii) by the
shareholders.

     Section 5.  Expenses.  Expenses  of each  officer  and  director  hereunder
indemnified  actually and  reasonably  incurred in defending a civil or criminal
action, suit or proceeding or threat thereof shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding upon receipt
of any undertaking by or on behalf of such person to repay such amount unless it
shall  ultimately be  determined  that he is entitled to be  indemnified  by the
Corporation as authorized in this Article.  Such expenses  incurred by employees
and agents may be so paid upon  receipt of the  aforesaid  undertaking  and such
other terms and conditions, if any, as the Board of Directors deems appropriate.

     Section 6. Nonexclusivity.  The indemnification and advancement of expenses
provided by, or granted pursuant to other Sections of this Article, shall not be
deemed exclusive of any other rights to which those seeking  indemnification  or
advancement of expenses may now or hereafter be entitled under any law,  by-law,
agreement, vote of shareholders or disinterested directors or otherwise, both as
to action in his official  capacity and as to action in another  capacity  while
holding such office.

     Section 7. Insurance.  The Corporation may purchase and maintain insurance,
on behalf of any person who is or was a director,  officer, employee or agent of
the  Corporation,  or is or was serving at the request of the  Corporation  as a
director, officer, employee or agent of another corporation,  partnership, joint
venture,  trust or other enterprise  against any liability  asserted against him
and incurred by him in any such capacity,  or arising out of his status as such,
whether or not the  Corporation  would have the power to  indemnify  him against
such liability under the provisions of the Act.

     Section 8.  Definitions.  For purposes of this Article,  references to "the
Corporation"  shall  include,  in addition  to the  surviving  corporation,  any
merging  corporation  (including  any  corporation  having merged with a merging
corporation)  absorbed  in  a  merger  which,  if  its  separate  existence  had
continued, would have had the power and authority to indemnify any or all of its
directors,  officers,  employees  and  agents,  so  that  any  person  who was a
director, officer, employee or agent of such merging corporation, or was serving
at the request of such merging corporation in any other capacity, shall stand in
the same  position  under the  provisions  of this  Article  with respect to the
surviving corporation as such person would have had with respect to such merging
corporation  if its separate  existence  had continued as such  corporation  was
constituted immediately prior to such merger.

     For  purposes  of this  Article,  references  to "other  capacities"  shall
include serving as a trustee or agent for any employee benefit plan;  references
to "fines" shall  include any excise taxes  assessed on a person with respect to
an  employee  benefit  plan;  and  references  to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or agent
of the  Corporation  which  imposes  duties on, or  involves  services  by, such
director,  officer, employee, or agent with respect to an employee benefit plan,
its participants,  or  beneficiaries.  A person who acted in good faith and in a
manner he reasonably  believed to be in the best  interests of the  participants
and beneficiaries of an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the  Corporation" as referred to in
this Article.

     Section 9. Reports to Shareholders. If required by the Act, the Corporation
shall report any indemnity payment or advancement of expenses by the Corporation
to any director,  officer, employee or agent provided for in this Article to the
shareholders in writing either with or before the  distribution of the notice of
the next shareholders' meeting.

                                      -10-

<PAGE>

     Section  10.   Severability.   If  any  provision   hereof  is  invalid  or
unenforceable in any  jurisdiction,  the other provisions hereof shall remain in
full force and effect in such jurisdiction,  and the remaining provisions hereof
shall be liberally  construed  to  effectuate  the  provisions  hereof,  and the
invalidity  of any  provision  hereof in any  jurisdiction  shall not affect the
validity or enforceability of such provision in any other jurisdiction.

     Section  11.  Amendment.  The right to  indemnification  conferred  by this
Article shall be deemed to be a contract between the Corporation and each person
referred to herein until  amended or repealed,  but no amendment to or repeal of
these   provisions   shall  apply  to  or  have  any  effect  on  the  right  to
indemnification of any person with respect to any liability or alleged liability
of  such  person  for or with  respect  to any act or  omission  of such  person
occurring prior to such amendment or repeal.

                                  ARTICLE VII.

                                  SEPARATENESS

     Section 1. Funds,  Assets and  Accounts.  The funds and other assets of the
Corporation  shall not be  commingled  with those of any other  entity,  and the
Corporation  shall  maintain  its  accounts  separate  from any other  person or
entity.

     Section 2.  Liability for Debts and Name.  The  Corporation  shall not hold
itself out as being liable for the debts of any other entity,  and shall conduct
its own business in its own name.

     Section 3. Action through Agents and Identity.  The  Corporation  shall act
solely in its own name and through its duly  authorized  directors,  officers or
agents in the conduct of its business,  and shall conduct its business so as not
to mislead others as to the identity of the entity or assets with which they are
concerned.

     Section 4.  Separate  Records.  The  Corporation  shall  maintain  separate
records, books of account and financial statements,  and shall not commingle its
records and books of account  with the records and books of account of any other
entity.

     Section 5.  Formalities.  The  Corporation  shall  observe in all  material
respects all formalities required by its organizational documents and applicable
law.

     Section 6.  Capitalization.  The Corporation shall at all times ensure that
its capitalization is adequate in light of its business and purpose.

     Section  7.  Debts of  Affiliates.  Subject  to the last  sentence  of this
Section 7, (i) neither the Parent nor any  affiliate  of the Parent  (other than
the  Corporation)  shall guaranty,  become liable on or hold itself out as being
liable  for the  debts  of the  Corporation;  (ii)  the  Corporation  shall  not
guarantee  or  become  obligated  for the debts of the  Parent or any  affiliate
thereof (other than the Corporation),  or otherwise hold out its credit as being
available  to satisfy the  obligations  of the Parent or any  affiliate  thereof
(other than the Corporation);  (iii) the Corporation shall not pledge its assets
for the benefit of Parent or any of its affiliates;  (iv) the Corporation  shall
not make loans or  advances  to Parent or any of its  affiliates,  and shall not
acquire  obligations or securities of the Parent or any affiliate thereof (other
than the  Corporation),  other than the  settlement of purchase  contracts  with
respect to any Premium Income Equity Securities or similar  securities issued by
the  Corporation.  Notwithstanding  the foregoing,  the Corporation may take any
action  otherwise  prohibited  under this Section 7 if such action is taken with
respect to its own  subsidiaries,  and its own  subsidiaries may take any action
otherwise  prohibited  under this Section 7 if such action is taken with respect
to the Corporation.


                                      -11-

<PAGE>

     Section  8.  Payment  of  Liabilities.  The  Corporation  shall pay its own
liabilities out of its own funds.

     Section 9. Arm's Length Relationship with Affiliates. The Corporation shall
maintain an arm's-length relationship with its affiliates.

     Section 10.  Overhead and Office  Space.  The  Corporation  shall  allocate
fairly and  reasonably  any  overhead for office space shared with the Parent or
any affiliate thereof.

     Section 11.  Separate  Business Forms.  The  Corporation  shall use its own
separate stationery, invoices, checks and other business forms.

     Section 12. Correction of Misunderstandings.  The Corporation shall correct
any known misunderstanding regarding its separate identity.


                                  ARTICLE VIII.

                               GENERAL PROVISIONS

     Section 1. Fiscal Year. The fiscal year of the  Corporation  shall be fixed
from time to time by resolution of the Board of Directors.

     Section 2. Corporation Seal. The corporate seal, if any, of the Corporation
shall  be in such  form as may be  approved  from  time to time by the  Board of
Directors.  The seal may be used by  causing  it or a  facsimile  thereof  to be
impressed or affixed or in any other manner reproduced.

     Section 3.  Notices and Mailing.  Except as otherwise  provided in the Act,
the Articles of Incorporation or these By-laws, all notices required to be given
by any  provision of these  By-laws  shall be deemed to have been given (i) when
received,  if given in person, (ii) on the date of acknowledgment of receipt, if
sent by  telex,  facsimile  or other  wire  transmission,  (iii)  one day  after
delivery,  properly addressed,  to a reputable courier for same day or overnight
delivery, or (iv) three days after being deposited,  properly addressed,  in the
U.S. mail, certified or registered mail, postage prepaid.

     Section 4.  Waiver of Notice.  Whenever  any notice is required to be given
under  the Act or the  provisions  of the  Articles  of  Incorporation  or these
By-laws,  a waiver thereof in writing,  signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be deemed
equivalent to notice.

     Section  5.  Interpretation.  In these  By-laws,  unless  a clear  contrary
intention  appears,  the singular  number  includes  the plural  number and vice
versa, and reference to either gender includes the other gender.

                                   ARTICLE IX.

                                   AMENDMENTS

     Unless the power to make, alter,  amend or repeal these By-laws is reserved
to the shareholders by the Articles of Incorporation,  these By-laws,  including
any  By-law  adopted  by the  shareholders,  may be made,  altered,  amended  or
repealed by the shareholders or the Board of Directors,  provided,  that (i) the
unanimous consent of the Board of Directors, including the Independent Director,
shall be  required  to alter,  amend or repeal  (a)  Section 4 and  Section 5 of

                                      -12-

<PAGE>


Article III hereof;  (b) Article VII hereof;  and (c) this  Article IX; and (ii)
subject to paragraph (i) above, the fact that the power to make, alter, amend or
repeal these By-laws has been  conferred  upon the Board of Directors  shall not
divest the shareholders of the same powers.


                                      -13-