FORMBCA
10.30(rev.
Dec. 2003)
 ARTICLES
OF AMENDMENT
 Business
Corporation Act
 
 Secretary
of State
 Department
of Business Services
 Springfield,
IL 62756
 217-782-l
832
 www.cyberdriveillinois.com
 
 Remit
payment in the form of a
 check or
money order payable
 to
Secretary of State.
 
 
  File #:
              50814180
              Filing Fee:
      $50
              Approved:– – – – Submit in duplicate– – – – Type or Print clearly in black
      ink– – – – Do not
      write above this line– – –
–
   1.
              Corporate Name
      (See Note 1 on page 4.):
              NICOR
      Inc.
   2.
              Manner of Adoption
      of Amendment:The following
      amendment of the Articles of Incorporation was adopted on
              5-28
              ,
              '08in the manner
      indicated below:
              Month &
      Day
              
              Year
   Mark
      an "X" in one box only.
 [ 
      ]
              By
      a majority of the incorporators, provided no directors were named in the
      Articles of Incorporation and no directors
      have been elected. (See
      Note 2 on page 4.)
  [ 
      ]
              By
      a majority of the board of directors, in accordance with Section 10.10,
      the Corporation having issued no sharesas
      of the time of adoption of this amendment. (See Note 2 on page
      4.)
 
 [ 
      ]
                By
      a majority of the board of directors, in accordance with Section 10.15,
      shares having been issued but shareholder
      action not being required for the adoption of the amendment. (See Note 3 on page
      4.)
 
 [x]
              By
      the shareholders, in accordance with Section 10.20, a resolution of the
      board of directors having been duly adopted and submitted to the
      shareholders. At a meeting of shareholders, not less than the minimum
      number of votes required by statute and by the Articles of Incorporation
      were voted in favor of the amendment. (See Note 4 on page
      4.)
 
 [ 
      ]
              By
      the shareholders, in accordance with Sections 10.20 and 7.10, a resolution
      of the board of directors having been duly adopted and submitted to the
      shareholders. A consent in writing has been signed by shareholders having
      not less than the minimum number of votes required by statute and by the
      Articles of Incorporation. Shareholders who have not consented in writing
      have been given notice in accordance with Section 7.10. (See Notes 4 and 5 on page
      4.)
 
 [ 
      ]
              By
      the shareholders, in accordance with Sections 10.20, a resolution of the
      board of directors having been duly adopted and submitted to the
      shareholders. A consent in writing has been signed by all the shareholders
      entitled to vote on this amendment. (See Note 5 on page
      4.)
  3.
              Text of
      Amendmenta.
              When amendment
      effects a name change, insert the New Corporate Name below. Use page 2 for
      all other amendments.Article I: Name of
      the Corporation:New
    Name
   (All
changes other than name include on page 2.)
  
 
 Page
1
 Printed by
authority of this State of Illinois. February 2008 ▪ 5M ▪ C
173.14
  
  Text
of Amendment
 
  b.
              If amendment affects
      the corporate purpose, the amended purpose is required to be set forth in
      its entirety.
 For
more space, attach additional sheets of this size.
   ARTICLE
      SIXTEENThe
      Company elects not to be governed by Section 7.85, Vote Required for
      Certain Business Combinations, or bySection
      11.75, Business Combination with interested Shareholders, of the Illinois
      Business Corporation Act of1983,
      as amended.
  
           Page 2
 
  4.
              The
      manner, if not set forth in Article 3b, in which any exchange,
      reclassification or cancellation of issued shares, or a reduction of the
      number of authorized shares of any class below the number of issued shares
      of that class, provided for or effected by this amendment, is as follows
      (If not applicable, insert "No
change"):
  No
change
 
 
 5.
              a.
              The
      manner, if not set forth in Article 3b, in which said amendment effects a
      change in the amount of paid-in capital is as follows(If not
      applicable, insert "No change"):(Paid-in
      capital replaces the terms Stated Capital and Paid-in Surplus and is equal
      to the total of these accounts.)
  No
change
 
 
 b.
              The
      amount of paid-in capital as changed by this amendment is as follows(if not
      applicable, insert "No change"):(Paid-in
      Capital replaces the terms Stated Capital and Paid-in Surplus and is equal
      to the total of these accounts.)(See Note 6 on page
      4.)
  Before
      Amendment
              
              After
      AmendmentPaid in
      Capital:
              
              $ No
      change
              
              $
 
 Complete
either Item 6 or 7 below. All signatures must be in BLACK
INK.
 
 6.
              The
      undersigned Corporation has caused this statement to be signed by a duly
      authorized officerwho affirms,
      underpenalties of
      perjury, that the facts stated herein are true and
  correct.
  
  Dated
              May
    28
              ,
              2008
              
              NICOR Inc.Month &
      Day
              
              Year
              
              Exact Name of
      Corporation/s/
      PAUL C. GRACEY, JR.Any
      Authorized Officer's SignaturePaul C.
      Gracey, Jr., Senior Vice PresidentName and Title
      (type or print)General
      Counsel and Secretary
 
  7.
              If amendment is
      authorized pursuant to Section 10. 10 by the incorporators, the
      incorporators must sign below, and type or print name and
      title.ORIf amendment is
      authorized by the directors pursuant to Section 10.10 and there are no
      officers, then a majority of the directors or such directors as may be
      designated by the board, must sign below, and type or print name and
      title.The
      undersigned affirms, under the penalties of perjury, that the facts stated
      herein are true and correct.
  
  Dated
              
              ,Month &
      Day
              
              Year
  
  Page 3  
  RESTATED
   ARTICLES OF
INCORPORATION
   NICOR INC.
   Article
One
  The name
of the corporation is NICOR Inc.
   Article
Two
  Intentionally
Left Blank
   Article
Three
  The
duration of the corporation is Perpetual.
   Article
Four
 The
purpose or purposes for which the corporation is organized are:
  To
acquire, own, sell, exchange, mortgage, pledge, otherwise dispose of, and
otherwise use and deal in, shares and other interest in and obligations of
corporations, partnerships, proprietorships, joint ventures, firms and business
entities of every type and purpose; to engage in all aspects of the energy
business and all businesses and activities directly or indirectly related
thereto, including but not limited to exploration, development, acquisition,
research, production, construction, mining, manufacturing, farming, refining,
converting, storing, exchanging, transporting, shipping, distributing,
financing, leasing and marketing; to render consulting, management, engineering,
business and financial services; to acquire, own, manage, develop, use,
exchange, convey, and otherwise dispose of and deal in real and personal
property or any interest therein, and to do any and all of the foregoing
directly or through subsidiaries or in participation in any manner with other
persons, corporations, firms or entities.
  Page 1 of
33
 
  Article
Five
  Paragraph
1: The aggregate number of shares which the Company is authorized to issue is
181,600,000 divided into three classes. The designation of each class, the
number of shares of each class, and the par value, if any, of the shares of each
class, or a statement that the shares of any class are without par value, are as
follows:
  Class
                Series
                  (if
      any)
                Number
                  of
      shares
                Par
      value per share or statement that shares are without par
    valuePreferred
                See
      Paragraph 2-I(a)
                1,600,000
                $50.00Preference
                See
      Paragraph 2-II(a)
                20,000,000
                without
      par valueCommon
                None
                160,000,000
                $2.50
  As used
in Division I of Paragraph 2 of this Article Five, “junior stock” shall mean the
Preference Stock, the Common Stock or stock of any other class ranking junior to
the Preferred Stock with respect to the payment of dividends or the distribution
of assets.
  As used
in Division II of Paragraph 2 of this Article Five, “junior stock” shall mean
the Common Stock or stock of any other class ranking junior to the Preference
Stock with respect to the payment of dividends or the distribution of
assets.
  Paragraph
2: The preferences, qualifications, limitations, restrictions and the special or
relative rights in respect of the shares of each class are:
  I.
PREFERRED STOCK
  (a) Issue of Preferred Stock in
Series. Authority is hereby expressly vested in the Board of Directors to
divide, and to provide for the issue from time to time of, the Preferred Stock
in series, and to fix and determine as to each such series:
  (1) the
designation of, and the number of shares to be issuable in, such series;
provided, however, that if the Board of Directors, at any time after the initial
issue of shares of any series issued with the privilege of conversion into
shares of the Common Stock, shall provide for the issue of additional shares of
such series, such additional shares shall not be offered by the Company at a
price per share less than that at which the shares of such series initially
issued shall have been offered;
  (2) the
dividend rate per annum for the shares of such series, expressed either as a
dollar amount per share or as a percentage of the par value
thereof;
  (3) the
price or prices at which, and the terms and conditions on which, such shares may
be redeemed;
  Page 2 of
33
 
  (4) the
amount payable upon each of such shares in the event of voluntary dissolution,
liquidation or winding up of the Company;
  (5) the
amount payable upon each of such shares in the event of involuntary dissolution,
liquidation or winding up of the Company;
  (6)
sinking fund provisions, if any, for the redemption or purchase of such shares
(the term “sinking fund,” as used herein, including any analogous fund, however
designated); and
  (7) if
such shares are to be issued with the privilege of conversion into shares of the
Common Stock the terms and conditions on which such shares may be so
converted.
  In all
other respects shares of the Preferred Stock of all series shall be
identical.
  So long as
any shares of any series of the Preferred Stock shall be outstanding, the
resolution of the Board of Directors establishing such series shall not be
amended so as adversely to affect any of the preferences or other rights of the
holders of the shares of such series, without the affirmative vote or the
written consent of the holders of at least two-thirds of the shares of such
series outstanding at the time or as of a record date fixed by the Board of
Directors, but such resolution may be so amended with such vote or
consent.
  (b) Priority. The Preferred Stock
shall be prior and senior to the Preference Stock and the Common Stock as to the
payment of dividends and as to the distribution of assets upon dissolution,
liquidation or winding up of the Company.
  (c) Dividends. Holders of the
Preferred Stock of each series shall be entitled to receive cash dividends, out
of funds legally available therefor, when and as declared by the Board of
Directors, at such rate per annum as shall have been fixed by the Board of
Directors for the shares of such series. Dividends on the Preferred Stock of all
series shall, unless otherwise provided by the Board of Directors, be payable
quarterly on the first day of each of the months of February, May, August and
November in each year, each such quarterly payment to be in respect of the
quarterly period (or portion thereof in the case of the first dividend payable
on shares, if any, of any series issued between quarterly dividend payment
dates) ending with the day next preceding the date of such payment. Dividends on
the Preferred Stock of each series shall be cumulative with respect to each
share from the date of issue thereof. Accumulations of dividends shall not bear
interest. Whenever there shall be paid on the shares of any series of the
Preferred Stock the full amount or any part of the dividends payable thereon,
there shall also be paid at the same time on the shares of each other series of
Preferred Stock, if any, then outstanding the full amount or a like
proportionate part, as the case may be, of the dividends payable
thereon.
 Page 3 of
33
 
  No funds
shall be paid into or set aside for any sinking fund created for any series of
the Preferred Stock or for any stock of any class ranking on a parity with or
junior to the Preferred Stock with respect to the payment of dividends or the
distribution of assets, unless all dividends on the Preferred Stock for all past
quarterly dividend periods, and (subject to the limitation hereinafter stated)
for the current quarterly dividend period, shall have been paid or shall have
been declared and funds sufficient for such payment set aside by the Company,
separate and apart from its other funds.
  No dividend
shall be paid or other distribution made on any junior stock, other than a
dividend or distribution solely of shares of junior stock, and no junior stock
shall be purchased or otherwise acquired by the Company for a consideration,
unless (1) all dividends on the Preferred Stock for all past quarterly dividend
periods, and (subject to the limitation hereinafter stated) for the current
quarterly dividend period, shall have been paid or shall have been declared and
funds sufficient for such payment set aside by the Company, separate and apart
from its other funds, and (2) all funds then and theretofore required to be paid
into or set aside for any sinking fund or funds created for one or more series
of the Preferred Stock shall have been so paid or set aside.
  If the date
of any payment or setting aside of funds, referred to in the second preceding
paragraph, or the date of payment of any dividend or making of any other
distribution or any purchase or other acquisition, referred to in the next
preceding paragraph, shall be a quarterly Preferred Stock dividend payment date,
the references in such paragraphs to “the current quarterly dividend period”
shall be inapplicable for all of the purposes thereof.
  (d) Redemption of Preferred Stock.Subject to the limitations stated in subdivision (e) hereof and except as
may be otherwise provided by the Board of Directors in respect of the shares of
a particular series, shares of any one or more series of the Preferred Stock may
be called for redemption and redeemed, at the option of the Company, in whole at
any time or in part from time to time, upon the notice hereinafter provided for,
by the payment therefor in cash of the then applicable optional redemption price
or prices fixed by the Board of Directors for the shares which are to be
redeemed.
  If at any
time less than all shares of any series of the Preferred Stock shall be called
for redemption, the shares so called shall be selected by lot in such manner, or
pro rata, all as may be determined by the Board of Directors.
  Notice of any
proposed redemption shall be given by the Company by mail, or caused by the
Company to be so given, not more than 60 nor less than 30 days prior to their
redemption date, to the holders of record of the shares to be redeemed at their
respective addresses then appearing on the records of the Company.
 Page 4 of
33
 
  If notice of
redemption shall have been duly given as hereinabove provided and if, on or
before the redemption date, the funds necessary for such redemption shall have
been set aside by the Company, separate and apart from its other funds, then, on
and after the redemption date, all shares for the redemption of which such funds
shall have been so set aside shall, whether or not the certificates for such
shares shall have been surrendered for cancellation, be deemed to be no longer
outstanding for any purpose and all rights with respect to such shares shall
cease and terminate on the redemption date, except only the right of the holders
of the certificates for such shares to receive, out of the funds so set aside,
the amount payable upon the redemption thereof without interest.
  At any time
before the redemption date the Company may deposit in trust the funds necessary
for such redemption with a bank or trust company, to be designated in the notice
of such redemption, doing business in the City of Chicago, State of Illinois, or
in the Borough of Manhattan, the City of New York, State of New York, and having
capital, surplus and undivided profits aggregating at least $5,000,000. In the
event such deposit is made so that the deposited funds shall be forthwith
available to the holders of the shares to be redeemed upon surrender of the
certificates evidencing such shares, then, upon the giving of the notice of such
redemption, as hereinabove provided, or upon the earlier delivery to such bank
or trust company of irrevocable authorization and direction so to give such
notice, all shares with respect to the redemption of which such deposit shall
have been made and the giving of such notice effected or authorization therefor
given shall, whether or not the certificates for such shares shall have been
surrendered for cancellation, be deemed to be no longer outstanding for any
purpose and all rights with respect to such shares shall thereupon cease and
terminate, except only the right of the holders of the certificates for such
shares (1) to receive, out of the funds so deposited in trust, from and after
the time of such deposit, the amount payable upon the redemption thereof,
without interest, or (2) to exercise any privilege of conversion which shall not
theretofore have terminated. Any funds so deposited which shall not be required
for the payment of the redemption price of such shares by reason of the exercise
of any right of conversion subsequent to the date of such deposit shall be paid
over to the Company forthwith. At the expiration of six years after the
redemption date, any such funds then remaining on deposit with such bank or
trust company shall be paid over to the Company, free of trust, and thereafter
the holders of the certificates for such shares shall have no claims against
such bank or trust company, but only claims as unsecured creditors against the
Company for amounts equal to their pro rata portions of the funds so paid over,
without interest. Any interest on or other accretions to funds deposited with
such bank or trust company shall belong to the Company.
  The
provisions of this subdivision (d) with respect to the method and effect of
redemption shall be applicable to the redemption of shares pursuant to any
sinking fund created for any series of the Preferred Stock as well as to the
optional redemption of shares, except to the extent, if any, that the terms of
such sinking fund, as fixed and determined by the Board of Directors, shall
expressly otherwise provide.
  Page 5 of
33
 
 
 (e) Limitations on Redemption and
Purchase of Preferred Stock.If and so long as the Company shall be in
default in the payment of any quarterly dividend on shares of any series of the
Preferred Stock, or shall be in default in the payment of funds into or the
setting aside of funds for any sinking fund created for any series of the
Preferred Stock, the Company shall not (other than by the use of unapplied
funds, if any, paid into or set aside for a sinking fund or funds prior to such
default):
  (1)
redeem any shares of the Preferred Stock unless all shares thereof
are
 redeemed;
or
  (2)
purchase or otherwise acquire for a consideration any shares of the Preferred
Stock, except pursuant to offers of sale made by holders of the Preferred Stock
in response to an invitation for tenders given simultaneously by the Company by
mail to the holders of record of all shares of the Preferred Stock then
outstanding at their respective addresses then appearing on the records of the
Company.
  (f) Status of Preferred Stock Redeemed,
Purchased or Otherwise Reacquired.All shares of the Preferred Stock of
any series which shall have been redeemed, purchased or otherwise reacquired by
the Company may have the status of authorized and unissued shares of Preferred
Stock, as may, in each case, be determined by the Board of
Directors.
  (g) Liquidation Preference.In
the event of dissolution, liquidation or winding up of the Company, whether
voluntary or involuntary, holders of the Preferred Stock of each series shall be
entitled to receive out of the assets of the Company, before any payment or
distribution shall be made to the holders of any junior stock, such amount per
share as shall have been fixed by the Board of Directors as the voluntary
liquidation price or the involuntary liquidation price, as the case may be, for
the shares of such series. If upon any such dissolution, liquidation or winding
up, the assets of the Company available for payment to stockholders are not
sufficient to make payment in full to holders of the Preferred Stock, payment
shall be made to such holders ratably in accordance with the numbers of shares
held by them respectively, and, in case there shall then be outstanding more
than one series of the Preferred Stock, ratably in accordance with the
respective distributive amounts to which such holders shall be
entitled.
  Neither a
consolidation or merger of the Company with or into any other corporation, nor a
merger of any other corporation into the Company, nor the redemption or purchase
by the Company of all or a part of the outstanding shares of any class or
classes of its stock, nor a sale or transfer of the property and business of the
Company, as or substantially as an entirety, shall be considered a dissolution,
liquidation or winding up of the Company within the meaning of the foregoing
provisions.
  (h) Restrictions on Certain Corporate
Action.(1) So long as any shares of the Preferred Stock shall be
outstanding, the Company shall not, without the affirmative vote or the written
consent of the holders of at least two-thirds of the shares of the Preferred
Stock outstanding at the time or as of a record date fixed by the Board of
Directors:
  Page 6 of
33
 
  (A)
create or authorize any stock of any class ranking prior to or on a parity with
the Preferred Stock with respect to the payment of dividends or the distribution
of assets; or
  (B) amend
the Articles of Incorporation of the Company so as adversely to affect any of
the preferences or other rights of the holders of the Preferred Stock; provided,
however, that if any such amendment would adversely affect any of the
preferences or other rights of the holders of one or more, but less than all, of
the series of the Preferred Stock then outstanding, the affirmative vote or the
written consent of, and only of, the holders of at least two-thirds of the
shares of each series so adversely affected shall be required.
  (2) So long
as any shares of the Preferred Stock shall be outstanding, the Company shall
not, without the affirmative vote or the written consent of the holders of a
majority of the shares of the Preferred Stock outstanding at the time or as of a
record date fixed by the Board of Directors:
  (A) issue
any shares of the Preferred Stock in excess of 600,000 shares, or any shares of
stock of any other class, which may hereafter be authorized, ranking prior to or
on a parity with the Preferred Stock with respect to the payment of dividends or
the distribution of assets (other than for the purpose of effecting the
retirement, by redemption, exchange or otherwise, of outstanding shares ranking
at least on a parity with, and representing an aggregate amount of stated
capital at least equal to the aggregate amount of the stated capital to be
represented by, the shares proposed to be issued), if the aggregate amount of
the stated capital represented by all Preferred Stock and all prior and parity
stock to be outstanding after the proposed issue, after giving effect to the
retirement of any Preferred Stock or any prior or parity stock to be retired in
connection with such issue, would exceed 75% of the aggregate amount of the
stated capital represented by all junior stock, plus the amount of the retained
earnings of the Company and its consolidated subsidiaries, if any, as of the end
of the preceding fiscal year (the term “stated capital,” as used in this subpart
(A), includes any related paid-in surplus); or
  (B)
consolidate with or merge into any other corporation, under applicable statutory
procedure, or make any sale or transfer of the property and business of the
Company as or substantially as an entirety; provided, however, that this
restriction shall not apply to a consolidation of the Company with or its merger
into or the sale or transfer of the property and business of the Company as or
substantially as an entirety to (i) any corporation which owns directly, or
indirectly through one or more other corporations, 50% or more of the voting
securities of the Company, (ii) any corporation 50% or more of the voting
securities of which are so owned by the Company, or (iii) any corporation, when
such consolidation, merger, sale or transfer shall be required by order or
regulation of any commission or other governmental agency having jurisdiction in
the premises. The term “sale or transfer,” as used in this subpart (B), includes
a lease or exchange but does not include a mortgage or pledge.
  Page 7 of
33
 
 
 (i) Preemptive Rights.Holders of
the Preferred Stock shall not have any preemptive
 rights.
   SERIES OF
PREFERRED STOCK - PREFERENCES
  A. 4.48%
Preferred Stock Preferences
  I. Designation of Series and Number of
Shares to be Issuable Therein. Such series of the Preferred Stock shall
be designated 4.48% Preferred Stock, in which series 11,681 shares shall be
issuable.
  II. Annual Rate of Dividends.
Dividends shall be payable on the shares of the 4.48% Preferred Stock at the
rate of 4.48% per annum on the par value thereof, and no more.
  III. Redemption. The shares of the
4.48% Preferred Stock may be called for redemption and redeemed, at the option
of the Company, in whole at any time or in part from time to time, upon the
notice and in he manner provided in subdivision (d) of Division I of Paragraph 2
of Article Five of the Articles of Incorporation of the Company.
  The per share
optional redemption prices of the shares of such series shall be $51.06 if
redeemed on or after May 1, 1992, in each case plus the amount of accrued and
unpaid dividends, if any, thereon to the redemption date.
  The
redemption price of shares of the 4.48% Preferred Stock redeemed through the
sinking fund provided in Division V hereof shall be $50.50 per share plus the
amount of accrued and unpaid dividends, if any, thereon to the redemption
date.
  IV. Liquidation Prices. The
amount payable on each share of the 4.48% Preferred Stock in the event of
voluntary dissolution, liquidation or winding up of the Company shall be an
amount equal to the optional redemption price thereof applicable at the date
fixed for payment, and no more. The amount payable on each share of such series
in the event of involuntary dissolution, liquidation or winding up of the
Company shall be $50 per share plus the amount of accrued and unpaid dividends,
if any, thereon to the date fixed for payment, and no more.
  V. Sinking Fund. Subject to the
provision hereinafter set forth with respect to the application of reacquired
shares of the 4.48% Preferred Stock in lieu of the setting aside of funds, the
Company shall, on or before May 1 of each year beginning with the year 1993 so
long as any shares of the 4.48% Preferred Stock shall be outstanding, set aside
as a sinking fund for such stock, separate and apart from its other funds, but
only to the extent of “available net income” (as hereinafter defined) for the
preceding fiscal year of the Company, and in no case otherwise than out of
legally available funds, an amount sufficient to redeem on such May 1, at the
sinking fund redemption price, 6,000 shares of the 4.48% Preferred Stock. If in
any year the full amount required for such redemption of said 6,000 shares shall
not be so set aside, the deficiency shall
  Page 8 of
33
 
  accumulate
and the Company shall set aside on or before each succeeding May 1, until the
deficiency is made good in full, all, or such part as may be required, of the
amount, if any, by which available net income of the Company for the preceding
fiscal year shall exceed the amount required for such redemption of said 6,000
shares. The amount set aside, as hereinabove provided, on or before each May 1
shall be applied to the redemption on such May 1 of the greatest number of whole
shares redeemable, at the sinking fund redemption price, out of such amount, any
unapplied excess to revert to the Company’s general funds.
  The term
“available net income” as hereinabove used means, for any fiscal year, the net
income of the Company for such year determined in accordance with generally
accepted principles of accounting and as certified by independent public
accountants, who may be the regular auditors of the Company, but after deducting
from such net income an amount equal to the aggregate of the dividends payable
during such year, whether or not actually paid, on all shares of Preferred Stock
(regardless of series) outstanding during such year.
  In lieu of
all or any part of the amount otherwise required by the provisions of this
Division V to be set aside in any year, the Company may apply any shares of the
4.48% Preferred Stock, not previously so applied, which it shall have purchased
or shall have redeemed otherwise than through the sinking fund, such shares of
the Company to be taken for the purposes of such application at the sinking fund
redemption price.
  VI. Status of 4.48% Preferred Stock
Redeemed or Purchased. No shares of the 4.48% Preferred Stock redeemed,
purchased or otherwise reacquired by the Company may be reissued as shares of
the same series, but such shares shall have the status of authorized and
unissued shares of Preferred Stock, subject to later issuance as shares of one
or more other series hereafter established.
  B. 5%
Convertible Preferred Stock Preferences
  I. Designation of Series and Number of
Shares to be Issuable Therein. Such series of the Preferred Stock shall
be designated 5% Convertible Preferred Stock (hereinafter called the “5%
Convertible Preferred Series), in which not more than 775 shares shall be
issuable.
  II. Annual Amount of Dividends.
Dividends shall be payable on the shares of the 5% Convertible Preferred Series
in the amount of $2.50 per share per annum, and no more.
  III. Redemption. The shares of the
5% Convertible Preferred Series may be called for redemption and redeemed, at
the option of the Company, in whole at any time or in part from time to time,
upon the notice and in the manner provided in subdivision (d) of Division I of
Paragraph 2 of Article Five of the Articles of Incorporation of the
Company.
  The
redemption price of the shares of the 5% Convertible Preferred Series shall be
$50 per share if redeemed on or after January 1, 1993; in each case plus the
amount of accrued and unpaid dividends, if any, thereon to the redemption
date.
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33
 
  IV. Liquidation Prices. The
amount payable on shares of the 5% Convertible Preferred Series in the event of
voluntary dissolution, liquidation or winding up of the Company shall be an
amount equal to the redemption price thereof applicable at the date fixed for
payment, and no more, plus the amount of accrued and unpaid dividends, if any,
thereon to the date fixed for payment, and no more. The amount payable on each
share of the 5% Convertible Preferred Series in the event of involuntary
dissolution, liquidation or winding up of the Company shall be $50 per share
plus the amount of accrued and unpaid dividends, if any, thereon to the date
fixed for payment, and no more.
  V. Conversion
Provisions.
  (a) The
shares of the 5% Convertible Preferred Series shall be convertible, at the
option of the respective holders thereof, into fully paid and nonassessable
shares of the Common Stock of the Company at the conversion price of $15.62 per
share, in each case taking the shares of the 5% Convertible Preferred Series at
$50 per share, that is, at the rate of 3.2010 shares of Common Stock for each
share of the 5% Convertible Preferred Series; provided, however,
that:
  (1) as
provided in subdivisions (b) and (c) of this Division V, such conversion price
shall be subject to adjustment or change in certain cases, and, as provided in
said subdivision (c), the number of shares of Common Stock issuable upon
conversion of shares of the 5% Convertible Preferred Series shall be subject to
increase or decrease in certain cases;
  (2) as
provided in subdivisions (d) and (e) of this Division V, shares or other
securities, other than shares of the Common Stock, may in certain cases become
issuable upon conversion of shares of the 5% Convertible Preferred
Series;
  (3) whenever
the Company shall call for redemption any shares of the 5% Convertible Preferred
Series, the conversion rights of the holders thereof shall terminate at the
close of business on the fifth day prior to the redemption date (except that if
the funds necessary for such redemption shall not be set aside or deposited on
or before the redemption date, as provided in the Articles of Incorporation of
the Company, such conversion rights shall be reinstated on the redemption date);
and
  (4) in case
of any dissolution, liquidation or winding up of the Company, whether voluntary
or involuntary, or in case the Company shall be required, by order or regulation
of any commission or other governmental agency having jurisdiction in the
premises, to consolidate with or merge into another corporation and such order
or regulation shall not permit the provisions of subdivision (e) of this
Division V to become effective, then and in any such case the conversion rights
of the holders of the shares of the 5% Convertible Preferred Series shall
terminate on such date as shall be fixed by the Board of Directors, but not
earlier than the close of business on the thirtieth day following the mailing by
the Company to the holders of record of the shares of the 5% Convertible
Preferred Series of the statement required by subdivision (h) of this Division V
to be so mailed.
  Page 10
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  (b) In case
the Company shall at any time or from time to time issue any shares of the
Common Stock (other than (i) additional shares issued upon conversion of shares
of the 5% Convertible Preferred Series and (ii) additional shares which may be
issued by the Company pursuant to any employee stock purchase, stock option or
similar plan or plans heretofore or hereafter adopted) and such additional
shares shall be so issued without consideration or for a consideration per share
less than the per share conversion price of the Common Stock in effect
immediately prior to the time of such issue, then upon such issue such
conversion price shall (until a further adjustment thereof shall be required by
the provisions of this subdivision (b)) be reduced to a price, calculated to the
nearest (or if there shall be no nearest, then to the next lower) cent,
determined by dividing:
  (1) an amount
equal to the sum of (i) the number of shares of the Common Stock outstanding
(determined as hereinafter provided) immediately prior to such issue multiplied
by the then effective per share conversion price of the Common Stock, and (ii)
the consideration (determined as hereinafter provided) received by the Company
upon such issue; by
  (2) the total
number of shares of the Common Stock outstanding (determined as hereinafter
provided) immediately after such issue;
  provided,
however, that if such conversion price would, by the application of the
foregoing formula, be reduced by an amount less than 25 cents, no adjustment of
such conversion price shall be made, but in that event the adjustment which,
except for this provision, would be required to be made shall be carried forward
and made at the time of and together with the next subsequent adjustment which,
together with any adjustment or adjustments so carried forward, shall amount to
a reduction of the then effective conversion price by 25 cents or
more.
  In
determining, for the purposes of this subdivision (b), the number of shares of
the Common Stock outstanding at any particular time, there shall be included,
without limiting the generally accepted meaning of the term “outstanding” (1)
any shares issued on conversion of shares of the 5% Convertible Preferred
Series, (2) any shares which, pursuant to paragraph (A) of this subdivision (b),
shall be deemed to have been issued but which shall not actually have been
issued, and (3) any shares owned or held by the Company; and there shall be
excluded any shares of the Common Stock which may have been issued by the
Company or by the Company’s predecessor, Northern Illinois Gas Company (NI-Gas)
pursuant to any employee stock purchase, stock option or similar plan or plans
of the Company or NI-Gas heretofore (in the case of the Company or NI-Gas) or
hereafter (in the case of the Company) adopted.
  In
determining, for the purposes of this subdivision (b), what constitutes the
issue of additional shares of the Common Stock by the Company and the
consideration received therefor, the following provisions shall be
applicable:
  Page 11
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  (A) In case
the Company shall issue any shares (other than shares of the 5% Convertible
Preferred Series) convertible into shares of the Common Stock or any obligations
so convertible, all shares of the Common Stock into which such convertible
shares or obligations shall be initially convertible shall, on the earliest date
on which such convertible shares or obligations shall by their terms be
convertible, be deemed to be additional shares of the Common Stock issued as of
such date, and the Company shall be deemed to have received, as of such date,
for such shares of the Common Stock so deemed to have been issued an aggregate
consideration equal to the sum of (i) the consideration received by the Company
for such convertible shares or obligations, and (ii) such additional
consideration, if any, as would be receivable by the Company for or upon
issuance of such shares of the Common Stock so deemed to have been issued if
issued on the earliest date on which such convertible shares or obligations
shall by their terms be convertible.
  (B) In case
the Company shall issue any rights to subscribe for or purchase, or any options
to purchase, shares of the Common Stock, and if any of such rights or options
shall be exercised and shares of the Common Stock shall be issued upon such
exercise, the Company shall be deemed to have received for such shares of the
Common Stock so issued an aggregate consideration equal to the sum of (i) the
consideration received by the Company for such shares upon the issuance thereof,
and (ii) such additional consideration, if any, as shall have been received by
the Company for such rights or options; provided, however, that if such rights
or options shall be exercisable over a stated period of time, a recomputation of
the conversion price by reason of the exercise thereof need not be made upon
each such exercise but may be made at such time or times as shall be determined
by the Board of Directors, subject only to the conditions that if the period of
time during which such rights or options shall be exercisable shall not exceed
30 days, such recomputation shall be made within 10 days following the
expiration of such period, and that if such period shall exceed 30 days, such
recomputation shall be made at least once in each month next succeeding a month,
within such period, during which any such exercise shall occur.
  (C) In case
the Company shall issue or sell, for cash, any additional shares of the Common
Stock or any shares (other than shares of the 5% Convertible Preferred Series)
convertible into shares of the Common Stock or any obligations so convertible,
or any rights to subscribe for or purchase, or any options to purchase, shares
of the Common Stock, the consideration received by the Company therefor shall be
deemed to be the amount of cash received therefor, plus the amount of any
discount (below the public or other offering price) at which such issue or sale
shall have been made by the Company, and before deducting the amount of any
commissions or other expenses paid or incurred by the Company for any
underwriting of, or otherwise in connection with, such issue or sale. In case
the Company shall issue or sell, for a consideration other than cash, any such
additional shares of the Common Stock or any such convertible shares or
obligations or any such rights or options, the consideration received by the
Company therefor shall be deemed to be the fair value of such consideration as
determined by the Board of Directors.
  Page 12
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  (D) In case
any shares of the Common Stock shall be issued by the Company as a dividend on
the then outstanding Common Stock or on shares of stock of any other class
ranking junior to the Preferred Stock with respect to the payment of dividends
or the distribution of assets, the shares so issued shall be deemed to have been
issued without consideration.
  (c) In case
the shares of the Common Stock at any time outstanding shall be subdivided, by
reclassification or otherwise, into a greater number of shares, the per share
conversion price of the Common Stock shall be decreased proportionately and the
number of shares of the Common Stock issuable upon conversion of each share of
the 5% Convertible Preferred Series increased proportionately. In case the
shares of the Common Stock at any time outstanding shall be combined, by
reclassification or otherwise, into a lesser number of shares, the per share
conversion price of the Common Stock shall be increased proportionately and the
number of shares of the Common Stock issuable upon conversion of each share of
the 5% Convertible Preferred Series decreased proportionately.
  (d) In case
of any reclassification of the Common Stock or any capital reorganization of the
Company involving a change in the Common Stock, other than a reclassification or
reorganization involving merely a subdivision or combination of outstanding
shares of the Common Stock, the shares of the 5% Convertible Preferred Series
shall thereafter be convertible into the number and class of shares or other
securities of the Company to which the shares of the Common Stock otherwise
issuable upon conversion of the shares of the 5% Convertible Preferred Series
would have been entitled upon such reclassification or reorganization if
outstanding at the time thereof; and in any such case appropriate adjustment, as
determined by the Board of Directors, shall be made in the application of the
provisions of this Division V with respect to the conversion rights thereafter
of the holders of the shares of the 5% Convertible Preferred Series, to the end
that such provisions shall thereafter be applicable, as nearly as reasonably may
be, in relation to any shares or other securities thereafter issuable or
deliverable upon the conversion of shares of the 5% Convertible Preferred
Series.
  (e) Subject
to the limitation hereinafter stated in this subdivision (e), in case of any
consolidation of the Company with or its merger into another corporation, the
shares of the 5% Convertible Preferred Series (or any shares issued in exchange
therefor upon such consolidation or merger) shall thereafter be convertible into
the number and class of shares or other securities of the corporation resulting
from such consolidation or merger to which the shares of the Common Stock
otherwise issuable upon conversion of the shares of the 5% Convertible Preferred
Series would have been entitled upon such consolidation or merger if outstanding
at the time thereof; and in any such case appropriate adjustment shall be made
in the application of the provisions of this Division V with respect to the
conversion rights thereafter of the holders of the shares of the 5% Convertible
Preferred Series to the end that such provisions shall thereafter be applicable,
as nearly as reasonably may be, in relation to any shares or other securities
thereafter issuable or deliverable upon the conversion of shares of the 5%
Convertible Preferred Series (or any shares issued in exchange therefor upon
such consolidation or merger); and appropriate provision, as determined by the
Board of Directors, shall be made as a part of the terms of any such
consolidation or merger whereby the conversion rights of the holders of
the
  Page 13
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  shares of
the 5% Convertible Preferred Series shall be protected and preserved in
accordance with the provisions of this subdivision (e); provided, however, that
in case of any such consolidation or merger which may be required by order or
regulation of any commission or other governmental agency having jurisdiction in
the premises, the provisions of this subdivision (e) shall be effective only if
permitted by such order or regulation.
  (f) No
payment or adjustment with respect to dividends on shares of the 5% Convertible
Preferred Series or on the Common Stock shall be made in connection with any
conversion.
  (g) Whenever
the per share conversion price of the Common Stock shall be adjusted or changed
as provided in subdivision (b) or (c) of this Division V, the Company shall
promptly file with each Transfer Agent for the shares of the 5% Convertible
Preferred Series and, as soon as practicable after such adjustment or change and
in no event later than 10 full business days thereafter, shall mail to the
holders of record of such shares at their respective addresses then appearing on
the records of the Company a statement signed by an officer of the Company,
setting forth the adjusted or changed conversion price determined as provided in
said subdivision (b) or (c), as the case may be, and setting forth in reasonable
detail the facts requiring such adjustment or change, and, in case of an
increase or decrease in the number of shares of the Common Stock issuable upon
conversion of each share of the 5% Convertible Preferred Series setting forth
such increased or decreased number of shares. Each Transfer Agent for the shares
of the 5% Convertible Preferred Series shall be fully protected in relying on
such statement and shall be under no duty to examine into the accuracy thereof.
If any question shall at any time arise with respect to an adjusted or changed
conversion price, such question shall be determined by a firm of independent
certified public accountants selected by the Company and acceptable to the
Transfer Agents for the shares of the 5% Convertible Preferred Series, and such
determination shall be binding upon the Company and the holders of such
shares.
  (h) In
case:
 
 (1) the
Company shall propose to pay any dividend on the Common Stock payable in shares
of the Common Stock or to make any other distribution, other than cash
dividends, to the holders of the Common Stock; or
  (2) the
Company shall propose to offer for subscription to the holders of the Common
Stock any additional shares of any class or any other rights or options;
or
  (3) the
Company shall propose to effect any reclassification of the Common Stock or any
capital reorganization involving a change in the Common Stock, other than a
reclassification or reorganization involving merely a subdivision or combination
of outstanding shares of the Common Stock; or
  (4) the
Company shall propose to consolidate with or merge into another corporation, or
to sell or transfer its property and business as or substantially as an
entirety, or shall propose to dissolve, liquidate or wind up; then, in each such
case, the Company shall file with each Transfer Agent for the shares of the 5%
Convertible Preferred Series and shall mail to the holders of record of such
shares at their respective
  Page 14
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  addresses
then appearing on the records of the Company a statement, signed by an officer
of the Company, with respect to the proposed action, such statement to be so
filed and mailed at least 10 days, if paragraph (1) or (2) of this subdivision
(h) shall be applicable, and at least 40 days, if paragraph (3) or (4) of this
subdivision (h) shall be applicable, prior to the date of the taking of such
action or the record date for holders of the Common Stock for the purposes
thereof, whichever is earlier. If such statement relates to any proposed action
referred to in paragraph (3) or (4) of this subdivision (h), it shall set forth
such facts with respect thereto as shall reasonably be necessary to inform each
Transfer Agent for the shares of the 5% Convertible Preferred Series and the
holders of such shares as to the effect of such action upon the conversion
rights of such holders.
  (i) In order
to effect the conversion of shares of the 5% Convertible Preferred Series the
holder of the certificate or certificates therefor shall surrender such
certificate or certificates to the Chicago Transfer Agent (acting as the
Conversion Agent) for the shares of the 5% Convertible Preferred Series, with
request for conversion. If the shares of the Common Stock issuable upon such
conversion are to be issued in a name other than that in which the shares of the
5% Convertible Preferred Series to be converted are registered, such certificate
or certificates shall be duly endorsed for transfer or accompanied by a duly
executed stock transfer power, and shall be accompanied by all necessary stock
transfer stamps or equivalent funds.
  Upon such
surrender of such certificate or certificates, the Company shall issue and
deliver or cause to be issued and delivered to the person entitled thereto a
certificate or certificates for the number of full shares of the Common Stock
issuable upon such conversion, together with, if the shares of the 5%
Convertible Preferred Series represented by the certificate or certificates
therefor surrendered for conversion are not evenly convertible, cash in the
amount obtained by multiplying the resulting fraction by the per share
conversion price of the Common Stock then effective. In no event shall the
Company be required to issue a fraction of a share of the Common Stock upon any
conversion of shares of the 5% Convertible Preferred Series. If the per share
conversion price of the Common Stock effective at the time of any conversion is
such that the shares of the 5% Convertible Preferred Series are not evenly
convertible into full shares of the Common Stock, the number of shares of the
Common Stock to be issuable upon such conversion shall be calculated to the
nearest (or if there shall be no nearest, then to the next higher) 1/100 of a
share. The Company shall pay all original issue taxes, if any, payable upon the
issue of shares of the Common Stock issued upon any conversion.
  Such
conversion shall be deemed to have been effected on the date of the surrender of
such certificate or certificates for shares of the 5% Convertible Preferred
Series, and the person in whose name the certificate or certificates for the
shares of the Common Stock issuable upon such conversion are to be issued shall
be deemed to be the holder of record of such shares as of such
date.
  (j) The
Company shall at all times have authorized but unissued, or in its treasury, a
number of shares of the Common Stock sufficient for the conversion of all shares
of the 5% Convertible Preferred Series from time to time
outstanding.
  Page 15
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  VI. Status of Shares of 5% Convertible
Preferred Series Redeemed or Purchased. No shares of the 5% Convertible
Preferred Series redeemed, purchased or otherwise reacquired by the Company may
be reissued as shares of the same series, but such shares shall have the status
of authorized and unissued shares of Preferred Stock, subject to later issuance
as shares of one or more other series hereafter established.
    II.
PREFERENCE STOCK
  (a) Issue of Preference Stock in Series.Authority is hereby expressly vested in the Board of Directors to divide,
and to provide for the issue from time to time of, the Preference Stock in
series, and to fix and determine as to each series:
  (1) the
designation of, and the number of shares to be issuable in, the
series;
  (2) the
rate of dividend;
  (3) the
price or prices at which, and the terms and conditions on which, shares of the
series may be redeemed;
  (4) the
amount payable upon shares of the series in the event of voluntary dissolution,
liquidation or winding up of the Company;
  (5) the
amount payable upon shares of the series in the event of involuntary
dissolution, liquidation or winding up of the Company;
  (6)
sinking fund provisions, if any, for the redemption or purchase of shares of the
series (the term “sinking fund,” as used herein, including any analogous fund,
however designated);
  (7)
whether shares of the series shall be convertible into shares of any other
class, or into shares of any series of the same or any other class, and, if so
convertible, the terms and conditions on which such shares may be so
converted;
  (8) the
relative rights and preferences, and any other terms, conditions or provisions,
of shares of the series not inconsistent with the provisions of this Article
Five or of The Business Corporation Act of the State of Illinois as such Article
or Act may be hereafter amended.
  Page 16
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  So long as
any shares of any series of the Preference Stock shall be outstanding, the
resolution of the Board of Directors establishing such series shall not be
amended, and no action of the Board of Directors shall be taken, so as to reduce
the dividend rate, to alter the provisions as to redemption, or otherwise
adversely to affect any of the preferences or other rights of the holders, of
the shares of such series, without the affirmative vote or the written consent
of the holders of at least two-thirds of the shares of such series outstanding
at the time or as of a record date fixed by the Board of Directors, but such
resolution may be so amended, or such action taken, with such vote or
consent.
  (b) Priority.The Preference
Stock shall be prior and senior to the Common Stock as to the payment of
dividends and as to the distribution of assets upon dissolution, liquidation or
winding up of the Company.
  (c) Dividends.Subject to the
preferential rights of the holders of the Preferred Stock with respect to the
payment of dividends and sinking fund payments, as set forth in subdivision (c)
of Division I, holders of the Preference Stock of each series shall be entitled
to receive cash dividends, out of funds legally available therefor, when and as
declared by the Board of Directors, at such rate per annum as shall have been
fixed by the Board of Directors for the shares of such series. Dividends on the
Preference Stock of all series shall, unless otherwise provided by the Board of
Directors, be payable quarterly on the first day of each of the months of
February, May, August and November in each year, each such quarterly dividend to
be in respect of the quarterly period ending with the day next preceding the
date of such payment; provided, however, that if shares of any series are issued
between quarterly dividend payment dates, the first dividend on such shares (1)
shall be an amount per share equal to that portion of the quarterly dividend for
such series which (A) the period beginning with the date of issue of such shares
and ending with the last day of the quarterly dividend period in which such
issue occurs, bears to (B) the full quarterly dividend period, and (2) shall be
payable on either the first or the second quarterly dividend payment date
following the date of issue of such shares as determined by the Board of
Directors. Dividends on the Preference Stock of each series shall, unless
otherwise provided by the Board of Directors, be cumulative with respect to each
share from the date of issue thereof. Accumulations of dividends shall not bear
interest. Whenever there shall be paid on the shares of any series of the
Preference Stock the full amount or any part of the dividends payable thereon,
there shall also be paid at the same time on the shares of each other series of
the Preference Stock, if any, then outstanding the full amount or a like
proportionate part, as the case may be, of the dividends payable
thereon.
  No dividend
shall be paid or other distribution made on any junior stock, other than a
dividend or distribution solely of shares of junior stock, and no junior stock
shall be purchased or otherwise acquired, other than upon conversion into or
exchange for any shares of any other class of stock, by the Company for a
consideration, unless (1) all dividends on the Preference Stock for all past
dividend periods shall have been paid or shall have been declared and funds
sufficient for such payment set aside by the Company, separate and apart from
its other funds, and (2) all funds then and theretofore required to be paid into
or set aside for any sinking fund or funds created for one or more series of the
Preference Stock shall have been so paid or set aside.
  Page 17
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  (d) Redemption of Preference Stock.Except as may be otherwise provided by the Board of Directors in respect
of the shares of a particular series, shares of any one or more series of the
Preference Stock which are redeemable under the resolution of the Board of
Directors providing for the issue of such shares may be called for redemption
and redeemed, at the option of the Company, in whole at any time or in part from
time to time, upon the notice hereinafter provided for, by the payment therefor
in cash of the then applicable optional redemption price or prices fixed by the
Board of Directors for the shares which are to be redeemed.
  If at any
time less than all shares of any series of the Preference Stock shall be called
for redemption, the shares so called shall be selected by lot in such manner, or
pro rata, all as may be determined by the Board of Directors.
  Notice of any
proposed redemption shall be given by the Company by mail, or caused by the
Company to be so given, not more than 60 nor less than 30 days prior to the
redemption date, to the holders of record of the shares to be redeemed at their
respective addresses then appearing on the records of the Company.
  If notice of
redemption shall have been duly given as hereinabove provided and if, on or
before the redemption date, the funds necessary for such redemption shall have
been set aside by the Company, separate and apart from its other funds, then, on
and after the redemption date, all shares for the redemption of which such funds
shall have been so set aside shall, whether or not the certificates for such
shares shall have been surrendered for cancellation, be deemed to be no longer
outstanding for any purpose and all rights with respect to such shares shall
cease and terminate on the redemption date, except only the right of the holders
of the certificates for such shares to receive, out of the funds so set aside,
the amount payable upon the redemption thereof without interest.
  At any time
before, or by the opening of business on, the redemption date the Company may
deposit in trust the funds necessary for such redemption with a bank or trust
company, to be designated in the notice of such redemption, doing business in
the City of Chicago, State of Illinois, or in the Borough of Manhattan, the City
of New York, State of New York, and having capital, surplus and undivided
profits aggregating at least $5,000,000. In the event such deposit is made so
that the deposited funds shall be forthwith available to the holders of the
shares to be redeemed upon surrender of the certificates evidencing such shares,
then, upon the giving of the notice of such redemption, as hereinabove provided,
or upon the earlier delivery to such bank or trust company of irrevocable
authorization and direction so as to give such notice, all shares with respect
to the redemption of which such deposit shall have been made and the giving of
such notice effected or authorization therefor given shall, whether or not the
certificates for such shares shall have been surrendered for cancellation, be
deemed to be no longer outstanding for any purpose and all rights with respect
to such shares shall thereupon cease and terminate, except only the right of the
holders of the certificates for such shares (1) to receive, out of the funds so
deposited in trust, from and after the time of such deposit, the amount payable
upon the redemption thereof, without interest, or (2) to exercise any privilege
of conversion which shall not theretofore have terminated. Any funds so
deposited which shall not be required for the payment of the redemption price of
such shares by reason of the exercise of any right of conversion subsequent to
the date of such deposit shall be paid over to the Company
forthwith.
  Page 18
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  At the
expiration of six years after the redemption date, any such funds then remaining
on deposit with such bank or trust company shall be paid over to the Company,
free of trust, and thereafter the holders of the certificates for such shares
shall have no claims against such bank or trust company, but only claims as
unsecured creditors against the Company for amounts equal to their pro rata
portions of the funds so paid over, without interest. Any interest on or other
accretions to funds deposited with such bank or trust company shall belong to
the Company.
  The
provisions of this subdivision (d) with respect to the method and effect of
redemption shall be applicable to the redemption of shares pursuant to any
sinking fund created for any series of the Preference Stock as well as to the
optional redemption of shares, except to the extent, if any, that the terms of
such sinking fund, as fixed and determined by the Board of Directors, shall
expressly otherwise provide.
  (e) Status of Preference Stock Redeemed,
Purchased or Otherwise Reacquired.All shares of the Preference Stock of
any series which shall have been redeemed, purchased or otherwise reacquired by
the Company (including shares issued with the privilege of conversion which
shall have been surrendered for conversion) may have the status of authorized
and unissued shares of Preference Stock, as may, in each case, be determined by
the Board of Directors.
  (f) Liquidation Preferences.In
the event of dissolution, liquidation or winding up of the Company, whether
voluntary or involuntary, holders of the Preference Stock of each series shall
be entitled to receive out of the assets of the Company remaining after payment
in full shall have been made to the holders of the Preferred Stock, or funds or
other assets sufficient for such payment shall have been set aside by the
Company, separate and apart from its other assets, such amount per share as
shall have been fixed by the Board of Directors as the voluntary liquidation
price or the involuntary liquidation price, as the case may be, for the shares
of such series. If upon any such dissolution, liquidation or winding up, the
assets of the Company available for payment to holders of the Preference Stock
are not sufficient to make payment in full to the holders of such stock, payment
shall be made to such holders ratably in accordance with the numbers of shares
held by them respectively, and, in case there shall then be outstanding more
than one series of the Preference Stock, ratably in accordance with the
respective distributive amounts to which such holders shall be
entitled.
  Neither a
consolidation or merger of the Company with or into any other corporation, nor a
merger of any other corporation into the Company, nor the redemption or purchase
by the Company of all or a part of the outstanding shares of any class or
classes of its stock, nor a sale or transfer of the property and business of the
Company, as or substantially as an entirety, shall be considered a dissolution,
liquidation or winding up of the Company within the meaning of the foregoing
provisions.
  (g) Restrictions on Certain Corporate
Action.(1) So long as any shares of the Preference Stock shall be
outstanding, the Company shall not, without the affirmative vote or the written
consent of the holders of at least two-thirds of the shares of the Preference
Stock outstanding at the time or as of a record date fixed by the Board of
Directors:
  Page 19
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  (A)
create or authorize any stock of any class ranking prior to or on a parity with
the Preference Stock with respect to the payment of dividends or the
distribution of assets; or
  (B) amend
the Articles of Incorporation of the Company so as adversely to affect any of
the preferences or other rights of the holders of the Preference Stock;
provided, however, that if any such amendment would adversely affect any of the
preferences or other rights of the holders of one or more, but less than all, of
the series of the Preference Stock then outstanding, the affirmative vote or the
written consent of, and only of, the holders of at least two-thirds of the
shares of the series so adversely affected shall be required;
  (2) So long
as any shares of the Preference Stock shall be outstanding, the Company shall
not, without the affirmative vote or the written consent of the holders of a
majority of the shares of the Preference Stock outstanding at the time or as of
a record date fixed by the Board of Directors, consolidate with or merge into
any other corporation, under applicable statutory procedure, or make any sale or
transfer of the property and business of the Company as or substantially as an
entirety; provided, however, that this restriction shall not apply to a
consolidation of the Company with or its merger into or the sale or transfer of
the property and business of the Company as or substantially as an entirety to
(A) any corporation which owns directly, or indirectly through one or more other
corporations, 50% or more of the voting securities of the Company, (B) any
corporation 50% or more of the voting securities of which are so owned by the
Company, or (C) any corporation, when such consolidation, merger, sale or
transfer shall be required by order or regulation of any commission or other
governmental agency having jurisdiction in the premises. The term “sale or
transfer,” as used in this part (2), includes a lease or exchange but does not
include a mortgage or pledge.
  (h) Preemptive Rights.Holders of
the Preference Stock shall not have any preemptive rights.
  Page 20
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  SERIES OF
PREFERENCE STOCK - PREFERENCES
  Series A
Junior Preference Stock Preferences
  Section 1.
Designation and Amount.
There shall be a series of Preference Stock of the Corporation which shall be
designated as "Series A Junior Participating Preference Stock," with no par
value per share (hereinafter called "Series A Junior Preference Stock"), and the
number of shares constituting such series shall be 800,000. Such number of
shares may be increased or decreased by resolution of the Board of Directors of
the Corporation and by the filing of a statement pursuant to the provisions of
the Illinois Business Corporation Act of 1983 stating that such increase or
reduction has been so authorized; provided, however, that no decrease shall
reduce the number of shares of Series A Junior Preference Stock to a number less
than that of the shares then outstanding plus the number of shares of Series A
Junior Preference Stock issuable upon exercise of outstanding rights, options or
warrants or upon conversion of outstanding securities issued by the
Corporation.
  Section 2.
Dividends and
Distributions.
  (A) Subject
to the prior and superior rights of the holders of any shares of any series of
Preference Stock ranking prior and superior to the shares of Series A Junior
Preference Stock with respect to dividends, the holders of shares of Series A
Junior Preference Stock shall be entitled to receive, when, as and if declared
by the Board of Directors of the Corporation out of funds legally available for
such purpose, quarterly dividends payable in cash to holders of record on the
last business day of March, June, September and December in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Junior Preference Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00
and (b) subject to the provision for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 100 times the
aggregate per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock
(hereinafter defined) or a subdivision of the outstanding shares of Common Stock
(by reclassification or otherwise), declared on the common stock, par value
$2.50 per share, of the Corporation (the "Common Stock") since the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the first
Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Preference Stock. If the Corporation
shall at any time following September 9, 1997 (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares of Series A
Junior Preference Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying each such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
  Page 21
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  (B) The
Corporation shall declare a dividend or distribution on the Series A Junior
Preference Stock as provided in paragraph (A) above at the time it declares a
dividend or distribution on the Common Stock (other than a dividend payable in
shares of Common Stock).
  (C) No
dividend or distribution (other than a dividend payable in shares of Common
Stock) shall be paid or payable to the holders of shares of Common Stock unless,
prior thereto, all accrued but unpaid dividends to the date of such dividend or
distribution shall have been paid to the holders of shares of Series A Junior
Preference Stock.
  (D) Dividends
shall begin to accrue and be cumulative on outstanding shares of Series A Junior
Preference Stock from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares of Series A Junior Preference Stock, unless the
date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Junior Preference Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series A Junior Preference
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors of the Corporation may fix a record date for the determination of
holders of shares of Series A Junior Preference Stock entitled to receive
payment of a dividend or distribution declared thereon, which record date shall
be no more than 30 days prior to the date fixed for the payment
thereof.
  Section 3.
Voting Rights. The
holders of shares of Series AJunior Preference Stock
shall have the following voting rights:
  (A) Each
share of Series A Junior Preference Stock shall entitle the holder thereof to
one vote on all matters submitted to a vote of the shareholders of the
Corporation.
  (B)Except as otherwise
provided herein or in the Articles of Incorporation of the Corporation or by
law, the holders of shares of Series A Junior Preference Stock and the holders
of shares of Common Stock and any other capital stock of the Corporation having
general voting rights shall vote together as one class on all matters submitted
to a vote of shareholders of the Corporation.
  (C) Except as
set forth herein or in the Articles of Incorporation of the Corporation, holders
of Series A Junior Preference Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock and other capital stock of the Corporation as
set forth herein) for taking any corporate action.
  Page 22
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  Section
4.Certain
Restrictions.
  (A) Whenever
quarterly dividends or other dividends or distributions payable on the Series A
Junior Preference Stock as provided in Section 2 hereof are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Junior Preference Stock outstanding shall
have been paid in full, the Corporation shall not:
  (i) declare
or pay dividends on, make any other distributions on, or redeem or purchase or
otherwise acquire for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series A
Junior Preference Stock;
  (ii) declare
or pay dividends on or make any other distributions on any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Preference Stock, except dividends paid
ratably on the Series A Junior Preference Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the total amounts to
which the holders of all such shares are then entitled;
  (iii) redeem
or purchase or otherwise acquire for consideration shares of any stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Junior Preference Stock, provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of any such parity
stock in exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to the
Series A Junior Preference Stock; or
  (iv) purchase
or otherwise acquire for consideration any shares of Series A Junior Preference
Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will result in
fair and equitable treatment among the respective series or
classes.
  (B) The
Corporation shall not permit any direct or indirect subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section, purchase or otherwise acquire such shares at such time and in such
manner.
  Page 23
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  Section 5.
Reacquired Shares. Any
shares of Series A Junior Preference Stock purchased or otherwise acquired by
the Corporation in any manner whatsoever shall be retired and canceled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preference Stock and may be reissued as
part of a new series of Preference Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein and in the Articles of Incorporation
of the Corporation.
  Section
6. Liquidation, Dissolution or
Winding Up.
  (A) Upon any
voluntary liquidation, dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Preference Stock unless, prior thereto, the holders of shares of
Series A Junior Preference Stock shall have received $.01 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment (the "Series A Liquidation
Preference"). Following the payment of the full amount of the Series A
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Series A Junior Preference Stock unless, prior thereto, the holders
of shares of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph C below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause (ii),
the "Adjustment Number"). Following the payment of the full amount of the Series
A Liquidation Preference and the Common Adjustment in respect of all outstanding
shares of Series A Junior Preference Stock and Common Stock, respectively,
holders of Series A Junior Preference Stock and holders of shares of Common
Stock shall receive their ratable and proportionate share of the remaining
assets to be distributed in the ratio, on a per share basis, of the Adjustment
Number to one with respect to such Preference Stock and Common Stock, on a per
share basis, respectively.
  (B) If,
however, there are not sufficient assets available to permit payment in full of
the Series A Liquidation Preference and the liquidation preferences of all other
series of Preference Stock, if any, which rank on a parity with the Series A
Junior Preference Stock, then such remaining assets shall be distributed ratably
to the holders of such parity shares in proportion to their respective
liquidation preferences.
  (C) If the
Corporation shall at any time following September 9, 1997 (i) declare any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock or (iii) combine the outstanding Common Stock
into a smaller number of shares, then in each such case the Adjustment Number in
effect immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
  Page 24
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  Section 7.
Consolidation, Merger,
etc. If the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series A Junior Preference Stock
shall at the same time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 100
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. If the Corporation shall at any time (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A Junior Preference Stock shall be adjusted by multiplying such amount
by a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
  Section 8.
Redemption. The shares
of Series A Junior Preference Stock shall not be redeemable by the Corporation.
The preceding sentence shall not limit the ability of the Corporation to
purchase or otherwise deal in such shares of stock to the extent permitted by
law.
  Section 9.
Ranking. The Series A
Junior Preference Stock shall rank junior to all other series of the
Corporation's preference stock (whether with or without par value as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
  Section 10.
Amendment. The Articles
of Incorporation of the Corporation shall not be amended in any manner which
would materially alter or change the powers, preferences or special rights of
the Series A Junior Preference Stock so as to affect them adversely without the
affirmative vote of the holders of two-thirds or more of the outstanding shares
of Series A Junior Preference Stock, voting separately as a class.
  Section 11.
Fractional Shares.
Series A Junior Preference Stock may be issued in fractions of a share which
shall entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Junior Preference
Stock.
   III.
COMMON STOCK
  (a) Dividends.Subject to the
preferential rights of the holders of the Preferred Stock and the Preference
Stock with respect to the payment of dividends and sinking fund payments, as set
forth in subdivisions (c) of Division I and Division II, respectively, holders
of the Common Stock shall be entitled to receive dividends, out of funds legally
available therefor, when and as declared by the Board of Directors.
  Page 25
of 33
 
  (b) Liquidation Preferences. In
the event of dissolution, liquidation or winding up of the Company, whether
voluntary or involuntary, holders of the Common Stock shall be entitled to
receive, ratably in accordance with the numbers of shares held by them
respectively, the assets of the Company, available for payment to shareholders,
remaining after payment in full shall have been made to holders of the Preferred
Stock and the Preference Stock in accordance with the provisions of subdivision
(g) of Division I and subdivision (f) of Division II, respectively.
  Neither a
consolidation or merger of the Company with or into any other corporation, nor a
merger of any other corporation into the Company, nor the redemption or purchase
by the Company of all or a part of the outstanding shares of any class or
classes of its stock, nor a sale or transfer of the property and business of the
Company, as or substantially as an entirety, shall be considered a dissolution,
liquidation or winding up of the Company within the meaning of the foregoing
provisions.
  (c) Preemptive Rights.Holders of
the Common Stock shall not have any preemptive rights.
   Article
Six
  Intentionally
Left Blank
   Article
Seven
  The
corporation will not commence business until at least one thousand dollars has
been received as consideration for the issuance of shares.
   Article
Eight
  The
number of directors to be elected at the first meeting of the shareholders is
Three.
   Article
Nine
  Intentionally
Left Blank
   Page 26
of 33
 
  Article
Ten
  Paragraph
1: The Corporation shall indemnify, to the fullest extent permitted under the
laws of the State of Illinois and any other applicable laws, as they now exist
or as they may be amended in the future, 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, without limitation, an action by or in the right of the
Corporation), by reason the fact that he or she is or was a director, officer or
employee of the Corporation, or is or was serving at the request of the
Corporation as a director, officer or employee of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding.
  Paragraph
2: Expenses incurred by such a director, officer or employee in defending a
civil or criminal action, suit or proceeding shall be paid by the Corporation in
advance of the final disposition of such action, suit or proceeding, to the
fullest extent permitted under the laws of the State of Illinois and any other
applicable laws, as they now exist or as they may be amended in the
future.
  Paragraph
3: The rights provided by or granted under this Article Ten are not exclusive of
any other rights to which those seeking indemnification or advancement of
expenses may be entitled.
  Paragraph
4: The indemnification and advancement of expenses provided by or granted under
this Article Ten shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of that person.
  Paragraph
5: The Board of Directors may, by resolution, extend the indemnification and
advancement of expenses provisions of this Article Ten to 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 by reason of the fact that he or she is or
was an agent of the Corporation or is or was serving at the request of the
Corporation as an agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise.
   Article
Eleven
  The Board
of Directors of the Company may, by action of a majority of directors then in
office, fill one or more vacancies arising between meetings of stockholders by
reason of an increase in the number of directors or otherwise. Any director so
selected shall serve until the next annual meeting of stockholders of the
Company, but at no time may the number of directors selected to fill vacancies
in this manner exceed 33-1/3% of the total membership of the Board of
Directors.
  Page 27
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  Article
Twelve
  Paragraph
1: Except as otherwise expressly provided in Article Five or in this Article
Twelve, amendments to these Articles of Incorporation must be approved by the
holders of a majority of the outstanding shares of stock entitled to vote
thereon and, if class voting is required with respect to any such amendment to
these Articles of Incorporation, by the holders of a majority of the outstanding
shares of each class of stock entitled to vote as a class thereon.
Notwithstanding the above, any amendment to these Articles of Incorporation
eliminating cumulative voting rights must be approved by the holders of
two-thirds of the outstanding shares of stock entitled to vote thereon and, if
class voting is required with respect to any such amendment, by the holders of
two-thirds of the outstanding shares of each class of stock entitled to vote as
a class thereon.
  Paragraph
2. Except as otherwise expressly provided in Article Five, if the following
actions are approved by at least 80% of all Directors of the Company and 80% of
all Directors of the Company who have been in office for at least three years,
and if at the time of approval Directors who have been in office for at least
three years constitute a majority of the Board of Directors, such actions must
be approved by the holders of a majority of the outstanding shares of stock
entitled to vote thereon and, if class voting is required with respect to any
such action, by the holders of a majority of the outstanding shares of each
class of stock entitled to vote as a class thereon:
  (1) a
plan of merger wherein the Company merges into another corporation or wherein
one or more corporations (other than solvent corporations at least 90% of the
outstanding shares of each class of which are owned by the Company) merge into
the Company, or a plan of consolidation with one or more corporations or a plan
of mandatory share exchange with another corporation,
  (2) a
sale, lease, exchange or other disposition of all, or substantially all, of the
Company’s property and assets, with or without goodwill, if not made in the
usual and regular course of the Company’s business, and
  (3) the
voluntary dissolution of the Company by a vote of shareholders.
  In all
other cases, the foregoing actions must be approved by the holders of two-thirds
of the outstanding shares of stock entitled to vote thereon and, if class voting
is required with respect to any such action, by the holders of two-thirds of the
outstanding shares of each class of stock entitled to vote as a class
thereon.
  Paragraph
3. No amendments to these Articles of Incorporation shall change, repeal or make
inoperative any of the provisions of this Article Twelve in such a way as to
lower the voting requirements specified therein unless such amendment receives
the affirmative vote of the holders of two-thirds of all outstanding shares of
stock entitled to vote thereon and, if class voting is required with respect to
any such amendment, by the holders of two-thirds of the outstanding shares of
each class of stock entitled to vote as a class thereon.
  Page 28
of 33
 
  Article
Thirteen
   A. Vote Required for Certain Business
Transactions
  (1)
Higher Vote for Certain Business Transactions. In addition to any affirmative
vote required by law or the Articles of Incorporation and except as otherwise
expressly provided in paragraph B of this Article Thirteen, the following
Extraordinary Business Transactions (as hereinafter defined) shall require the
affirmative vote of the holders of at least 80% of the combined voting power of
the then outstanding shares of all classes and series of the Company entitled to
vote generally in the election of directors (the “Voting Shares”) voting
together as a single class:
  (a) any
merger, consolidation or share exchange of the Company with or involving any
Interested Shareholder (as hereinafter defined);
  (b) any
sale, lease, exchange or other disposition in one transaction or a series of
transactions to or with any Interested Shareholder of any assets of the Company
having an aggregate Fair Market Value (as hereinafter defined) equal to 10% or
more of the Company’s total assets or 10% or more of the going concern value of
the Company as determined by the Board of Directors; or
  (c) the
issuance or transfer by the Company or any Subsidiary (as hereinafter defined)
to any Interested Shareholder in one transaction or a series of transactions of
any securities of the Company or any Subsidiary in exchange for the sale or
lease of any assets with an aggregate Fair Market Value in excess of
$5,000,000.
  (2)
Definition of “Extraordinary Business Transaction.” The term “Extraordinary
Business Transaction” as used in this Article Thirteen shall mean any
transaction which is referred to in any one or more of clauses (a) through (c)
of subparagraph (1) of this paragraph A.
  B. When Higher Vote Is Not
Required
  The
provision of subparagraph (1) of paragraph A of this Article Thirteen shall not
be applicable to any particular Extraordinary Business Transaction, and such
Extraordinary Business Transaction shall require only such affirmative vote as
is required by law and any other provision of the Company’s Articles of
Incorporation if all of the conditions specified in either of the following
subparagraphs (1) or (2) of this paragraph B are met:
  (1)
Approval by Continuing Directors. The Extraordinary Business Transaction shall
have been approved by the affirmative vote of two-thirds of the Continuing
Directors (as hereinafter defined) and the Continuing Directors shall constitute
a majority of the Board of Directors.
  Page 29
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  (2) Price
and Procedure Requirements. All of the following conditions shall have been
met:
  (a) The
Extraordinary Business Transaction shall provide for consideration to be
received by all holders of common stock in exchange for all their shares, and
the aggregate amount of the cash and the Fair Market Value as of the date of
consummation of the Extraordinary Business Transaction of consideration other
than cash to be received per share by holders of common stock in such
Extraordinary Business Transaction shall be at least equal to the higher of (i)
the highest per share price (including any brokerage commissions, transfer taxes
and soliciting dealers’ fees) paid by such Interested Shareholder in acquiring
any of the Company’s common stock within the two-year period preceding the date
of consummation of the Extraordinary Business Transaction and (ii) the book
value per share of the Company’s common stock as shown on the Company’s then
most recently published financial statements; and
  (b) A
proxy statement describing the proposed Extraordinary Business Transaction and
complying with the requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder as in effect on January 1, 1987 shall be mailed
to shareholders of the Company at least 30 days prior to the consummation of
such Extraordinary Business Transaction (whether or not such proxy statement is
then required to be mailed pursuant to such Act or subsequent provisions) and
shall contain (i) any recommendations as to the advisability of the
Extraordinary Business Transaction which the Continuing Directors, or any of
them, may choose to state and (ii) any opinions received by the Board of
Directors from independent experts as to the fairness of the terms of the
Extraordinary Business Transaction from the point of view of the remaining
common shareholders of the Company (such experts to be selected by a majority of
the Continuing Directors and to be paid a reasonable fee for their services by
the Company).
  C. Certain
Definitions
  For the
purposes of this Article Thirteen:
  (1) A
“person” shall mean any individual, firm, corporation, partnership, trust or
other entity.
  (2)
“Interested Shareholder” shall mean any person (other than the Company or any
Subsidiary) who or which (a) is the beneficial owner, directly or indirectly, of
Voting Shares conveying 5% or more of the combined voting power of the
outstanding Voting Shares; or (b) is an Affiliate or Associate of the Company
and at any time within the two-year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of Voting Shares
conveying 5% or more of the combined voting power of the then outstanding Voting
Shares.
  Page 30
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  (3) A
person shall be a “beneficial owner” of any Voting Shares (a) which such person
or any of its Affiliates or Associates beneficially owns, directly or
indirectly; (b) which such person or any of its Affiliates or Associates has (1)
the right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (2) the right to vote or direct the vote
pursuant to any agreement, arrangement or understanding; or (c) which are
beneficially owned, directly or indirectly, by any other person which such
person or any of its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
Voting Shares.
  (4) For
the purpose of determining whether a person is an Interested Shareholder
pursuant to subparagraph (2) of this paragraph C, the number of Voting Shares
deemed to be outstanding shall include shares deemed owned by such person
through application of subparagraph (3) of this paragraph C but shall not
include any other Voting Shares which may be issuable to other persons pursuant
to any agreement, arrangement or understanding, or upon exercise of conversion
rights, exchange rights warrants or options, or otherwise.
  (5)
“Affiliate” and “Associate” shall have the respective meanings ascribed to such
terms in Rule 12b-2 of the General Rules and Regulations under the Securities
Exchange Act of 1934, in effect on January 1, 1987.
  (6)
“Subsidiary” means any corporation of which a majority of any class of equity
security is owned, directly or indirectly, by the Company; provided, however,
that for the purpose of the definition of Interested Shareholder set forth in
subparagraph (2) of this paragraph C, the term “Subsidiary” shall mean only a
corporation of which a majority of each class of equity security is owned,
directly or indirectly, by the Company.
  (7)
“Continuing Director” means any member of the Board of Directors of the Company
who was such prior to the time an Interested Shareholder became an Interested
Shareholder or a person designated (whether before or after election as a
director) to be a Continuing Director by a majority of the Continuing
Directors.
  (8) “Fair
Market Value” of other consideration referred to in Sections A and B of this
Article Thirteen shall be determined in good faith by the Board of Directors of
the Company and concurred in by a majority of the Continuing
Directors.
  (9) A
majority of the Continuing Directors shall have the power and duty to determine,
for the purposes of this Article Thirteen, (a) whether a person is an Interested
Shareholder, (b) the number of Voting Shares beneficially owned by any person,
(c) whether a person is an Affiliate or Associate of another, (d) whether an
Interested Shareholder has an agreement, arrangement or understanding with
another, and (e) whether a particular transaction is an Extraordinary Business
Transaction for the purpose of this Article Thirteen.
  Page 31
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  D. Amendment or
Repeal
  Notwithstanding
any other provisions of these Articles of Incorporation or the By-Laws of the
Company (and notwithstanding the fact that a lesser percentage may be specified
by law, these Articles of Incorporation or the By-Laws of the Company), the
affirmative vote of the holders of at least 80% of the combined voting power of
the then outstanding shares of all classes and series of the Company entitled to
vote generally in the election of directors, voting together as a single class,
shall be required to amend or repeal, or adopt any provisions inconsistent with,
this Article Thirteen; provided, further, that such 80% vote shall not be
required for any such amendment or repeal which is unanimously recommended to
the shareholders by the Board of Directors (a) at a time when no other entity
owns or to the knowledge of any director proposes to acquire 5% or more of the
Company’s Voting Shares, or (b) if all of such directors are Continuing
Directors within the meaning of this Article Thirteen.
    Article
Fourteen
  Any
action required or permitted to be taken by the shareholders of the Company,
whether voting as a class or otherwise, must be taken at a duly called annual or
special meeting of shareholders of the Company and may not be taken by written
consent of such shareholders without a meeting, except that the Board of
Directors at any time may by resolution provide that the holders of Preferred
Stock or Preference Stock may take any action required or permitted to be taken
by such holders by consent in writing without a meeting.
  Notwithstanding
any other provisions of these Articles of Incorporation or the By-Laws of the
Company (and notwithstanding the fact that a lesser percentage may be specified
by law, these Articles of Incorporation or the By-Laws of the Company), the
affirmative vote of the holders of at least 80% of the combined voting power of
the then outstanding shares of all classes and series of the Company entitled to
vote generally in the election of directors (“Voting Shares”), voting together
as a single class, share be required to amend or repeal, or adopt any provisions
inconsistent with, this Article Fourteen provided; further, that such 80% vote
shall not be required for any such amendment or repeal which is unanimously
recommended to the shareholders by the Board of Directors (a) at a time when no
other entity owns or to the knowledge of any director proposes to acquire 5% or
more of the Company’s Voting Shares, or (b) if all of such directors are
Continuing Directors within the meaning of Article Thirteen.
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  Article
Fifteen
  No
director of the Corporation shall have any personal liability to the Corporation
or its shareholders for monetary damages for breach of fiduciary duty as a
director, provided that this Article Fifteen does not eliminate or limit the
liability of a director (i) for any breach of the director's duty of loyalty to
the Corporation or its shareholders, (ii) for acts or omissions not in good
faith or that involve intentional misconduct or a knowing violation of law,
(iii) under Section 8.65 of the Illinois Business Corporation Act of 1983, as
amended, or (iv) for any transaction from which the director derived an improper
personal benefit. This Article Fifteen shall not eliminate or limit the
liability of a director for any act or omission occurring before the date when
this Article Fifteen becomes effective.
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