<PAGE>

                                    BY-Laws
                                      Of
                                 The GSI Group
                           (a Delaware Corporation)

                                    Adopted

                                October 1, 1997


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                               Table of Contents

OFFICES


STOCKHOLDERS
2.1   ANNUAL MEETING                                         1
2.2   SPECIAL MEETINGS                                       1
2.3   PLACE OF MEETING                                       1
2.4   NOTICE OF MEETING                                      1
2.5   MEETING OF ALL STOCKHOLDERS                            2
2.6   CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE     2
2.7   VOTING LISTS                                           2
2.8   QUOROM                                                 2
2.9   PROXIES                                                3
2.10  VOTING OF SHARES                                       3
2.11  VOTING OF SHARES BY CERTAIN HOLDERS                    3
2.12  INFORMAL ACTION BY STOCKHOLDERS                        3
2.13  VOTING BY BALLOT                                       4

DIRECTORS
3.1   GENERAL POWERS                                         4
3.2   NUMBER, TENURE AND QUALIFICATION                       4
3.3   REGULAR MEETINGS                                       4
3.4   SPECIAL MEETINGS                                       4
3.5   NOTICE                                                 4
3.6   QUOROM                                                 5
3.7   MANNER OF ACTING                                       5
3.8   VACANCIES                                              5
3.9   REMOVAL OF DIRECTORS                                   5
3.10  COMPENSATION                                           5
3.11  PRESUMPTION OF ASSENT                                  5
3.12  INFORMAL ACTION BY BOARD OF DIRECTORS                  6
3.13  PARTICIPATION BY CONFERENCE TELEPHONE                  6
3.14  COMMITTEES                                             6
3.15  DIRECTOR'S PERSONAL LIABILITY                          6

OFFICERS
4.1   NUMBER                                                 7
4.2   ELECTION AND TERMS OF OFFICE                           7
4.3   REMOVAL                                                7
4.4   VACANCIES                                              7
4.5   THE PRESIDENT                                          8
4.6   THE VICE PRESIDENTS                                    8
4.7   THE TREASURER                                          8
4.8   THE SECRETARY                                          8
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4.9   ASSISTANT TREASURERS AND ASSISTANT SECRETARIES         8
4.10  SALARIES                                               9

INDEMNIFICATION OF OFFICERS AND DIRECTORS
5.1   ACTIONS AGAINST A PERSON                               9
5.2   ACTIONS BY OR IN THE RIGHT OF THE CORPORATION          9
5.3   INDEMNIFICATION IN EVENT OF SUCCESSFUL DEFENSE        10
5.4   BOARD OF DIRECTORS APPROVAL                           10
5.5   ADVANCE INDEMNITY PAYMENTS                            10
5.6   NON-EXCLUSIVITY                                       10
5.7   INDEMNITY INSURANCE                                   10
5.8   CONSOLIDATION                                         10
5.9   CONTRACTS, LOANS, CHECKS AND DEPOSITS                 11
5.10  CONTRACTS                                             11
5.11  LOANS                                                 11
5.12  CHECKS, DRAFTS, ECT.                                  11
5.13  DEPOSITS                                              12

CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1   CERTIFICATES  FOR SHARES                              12
6.2   TRANSFER OF SHARES                                    12

FISCAL YEAR                                                 12

DIVIDENDS                                                   13

SEAL                                                        13

WAIVER OF NOTICE                                            13

AMENDMENTS TO THE BY-LAWS                                   13

<PAGE>

THE GSI GROUP, INC. BY LAWS


                                   ARTICLE 1

                                    OFFICES
                                    -------


     The principal office of the Corporation shall be in the State of Illinois,
in the city of Assumption, County of Christian.  The Corporation may have such
other offices, either within or without the State of Illinois, as the business
of the Corporation may require from time to time.

     The registered office of the Corporation required by the General
Corporation Law of Delaware to be maintained in the State of Delaware shall be
1013 Centre Road, Wilmington, DE 19805. The name of the registered agent of the
Corporation in Delaware shall be Corporation Service Company.

                                   ARTICLE 2

                                  STOCKHOLDERS
                                  ------------


     2.1  ANNUAL MEETING. The annual meeting of the stockholders shall be held
not less than thirty (30) days after delivery of the Corporation's annual
report, but within six (6) months after the end of each fiscal year, said date
to be fixed by the Board of Directors, at such hour as shall be designated in
the notice of the meeting for the purpose of electing directors and for the
transaction of such other business as may come before the meeting. If the day
fixed for the annual meeting shall be a weekend or a legal holiday, such meeting
shall be held on the next succeeding business day.

     2.2  SPECIAL MEETINGS. Special meetings of the stockholders may be called
by the Chief Executive Officer, by the Board of Directors, or by the holders of
not less than one-tenth of all the outstanding shares of the corporation.

     2.3  PLACE OF MEETING. The Board of Directors may designate any place,
either within or without the state of Delaware, as the place of meeting for any
stockholder meeting or for any special stockholder meeting called by the Board
of Directors. A waiver of notice signed by all stockholders may designate any
place, either within or without the State of Delaware, as the place for the
holding of such meeting.

     2.4  NOTICE OF MEETING. Written or printed notice stating the place, day
and the hour of the meeting, and in the case of a special meeting, the purposes
for which the meeting is called, shall be delivered not less than ten nor more
than sixty days before the date of the meeting, or in the case of a merger or
consolidation not less than twenty nor more than sixty days before the meeting,
either personally or by mail, by or at the direction of the Chief Executive
Officer, or the Secretary, or the officer or persons calling the meeting, to
each stockholder of record entitled to vote at such meeting. If mailed
<PAGE>

such notice shall be deemed to be delivered when deposited in the United States
mail, addressed to the stockholder at his address as it appears on the records
of the Corporation, with postage thereon prepaid.

     2.5  MEETING OF ALL STOCKHOLDERS. If all of the stockholders shall meet at
any time and place, either within or without the State of Delaware, and consent
to the holding of a meeting at such time and place, such meeting shall be valid
without call or notice, and at such meeting any corporate action my be taken.

     2.6  CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. For the purpose of
determining stockholders entitled to notice of or to vote at any meeting of
stockholders, or stockholders entitled to receive payment of any dividend, or in
order to make a determination of stockholders for any other purpose, the Board
of Directors of the Corporation may provide that the stock transfer books shall
be closed for a stated period but not to exceed, in any case, sixty days. If the
stock transfer books shall be closed for the purpose of determining stockholders
entitled to notice of or to vote at a meeting of stockholders, such books shall
be closed for at least ten days, or in the case of a merger or consolidation, at
least twenty days, immediately preceding such meeting. In lieu of closing the
stock transfer books, the Board of Directors may fix in advance a date as the
record date for any such determination of stockholders, such date in any case to
be not more than sixty days and, for a meeting of stockholders not less than ten
days, or in the case of a merger or consolidation, not less than twenty days,
immediately preceding such meeting. If the stock transfer books are not closed
and no record date is fixed for the determination of stockholders entitled to
receive payment of a dividend, the date on which notice of the meeting is mailed
or the date on which the resolution of the Board of Directors declaring such
dividend is adopted, as the case may be, shall be the record date for such
determination of stockholders.

     2.7  VOTING LISTS. The officer or agent having charge of the transfer books
for shares of the Corporation shall make at least ten days before each meeting
of the stockholders, a complete list of the stockholders entitled to vote at
such meeting, arranged in alphabetical order, with the address of and the number
of shares held by each, which list, for a period of ten days prior to such
meeting, shall be kept on file at the registered office of the Corporation and
shall be subject to inspection by any stockholder at any time during usual
hours. Such list shall be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of stockholder during the whole
time of the meeting. The original share ledger or transfer book, or a duplicate
thereof kept in this State, shall be prima facie evidence as to who are the
stockholders entitled to examine such list or share ledger or transfer book or
to vote at any meetings of stockholders.

     2.8  QUOROM. Subject to any provision of the Delaware General Corporate Law
in respect of the vote that shall be required for a specified action, a majority
of the outstanding shares of voting common stock of the Corporation, represented
in person or by proxy, shall constitute a quorum at any meeting of stockholders;
provided, that if less than a majority of the outstanding voting shares are
represented at said meeting, a majority of the shares so represented may adjourn
the meeting from time to time without
<PAGE>

further notice; provided further that if any division of the Delaware General
Corporation Law shall specify the vote required for specified action, the number
of shares of voting common stock of the Corporation, represented in person or by
proxy, shall constitute a quorum at any meeting of stockholders. If a quorum is
present, the affirmative vote of the majority of the voting shares represented
at the meeting shall be the act of the stockholders, unless the vote of a
greater number is required by the Delaware General Corporation Law or the
Amended and Restated Certificate of Incorporation.

     2.9  PROXIES. At all meetings of stockholders, a stockholder may vote by
proxy executed in writing by the stockholder or by his duly authorized attorney-
in-fact. Such proxy shall be filed with the Secretary of the Corporation before
or at the time of the meetings. No proxy shall be valid after eleven months from
date of its execution, unless otherwise provided in the proxy.

     2.10  VOTING OF SHARES. Subject to the provisions of Section 2.12 of these
By-Laws, each outstanding share, regardless of class, shall be entitled to one
vote upon each matter submitted to vote at a meeting of stockholders.

     2.11  VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the name of
another corporation, domestic or foreign, may be voted to such officer, agent or
proxy as the By-Laws of such corporation may prescribe, or, in the absence of
such provision, as the Board of Directors of such corporation may determine.

     Shares standing in the name of a deceased person may be voted by his
administrator or executor, either in person or by proxy. Shares standing in the
name of a guardian, conservator or a trustee may be voted by such fiduciary,
either in person or by proxy, but no guardian, conservator or trustee shall be
entitled, as such fiduciary, to vote shares held by him without a transfer of
such shares into his name.

     Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority so to do
contained in an appropriate order of the court by which such receiver was
appointed.

     A stockholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
therafter the pledgee shall be entitled to vote the shares so transferred,
unless otherwise provided by such parties.

     Shares of its own stock belonging to this corporation shall not be voted,
directly or indirectly, at any meeting and shall not be counted in determining
the total number of attending shares at any given time.

     2.12.  INFORMAL ACTION BY STOCKHOLDERS. Any action required to be taken in
any annual or special meeting of the stockholders, or any other action which may
be taken at any annual or special meeting of the stockholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than
<PAGE>

the minimum number of votes that should be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted. Prompt notice of the taking of the corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders who
have not consented in writing.

     2.13 VOTING BY BALLOT.  Voting on any question or in any election may be
viva voce unless the presiding officer shall order or any stockholder shall
demand that voting be by ballot.

                                   ARTICLE 3

                                   DIRECTORS
                                   ---------

     3.1  GENERAL POWERS.  The business and affairs of the Corporation shall be
managed by or under the direction of its Board of Directors.

     3.2  NUMBER, TENURE AND QUALIFICATION.  The board of directors of the
Corporation shall consist of three (3) persons, which number may be increased by
unanimous vote of the then-existing directors. The vacancy resulting from the
death, resignation, or removal of a director shall be filled by the unanimous
decision of the directors then in office. Any director elected to fill a vacancy
shall have the same remaining term as that of his predecessor. At the next
election, the positions shall be filled by the unanimous decision of the
Shareholders and until such decision is reached, that Board seat shall remain
vacant.

     3.3  REGULAR MEETINGS.  A regular meeting of the Board of Directors shall
be held without other notice than this By-Law, immediately after, and at the
same place as, the annual meeting of the stockholders. The Board of Directors
may provide, by resolution, the time and place, either within or without the
State of Delaware, for the holding of additional regular meetings without other
notice than such resolution.

     3.4  SPECIAL MEETINGS.  Special meetings of the Board of Directors may be
called by or at the request of the Chief Executive Officer or any two directors.
The person or persons authorized to call special meetings of the Board of
Directors may fix any place, either within or without the State of Delaware, as
the place for holding any special meeting of the Board of Directors called by
them.

     3.5  NOTICE.  Notice of any special meeting shall be given at least five
days previous thereto by written notice delivered personally or mailed to each
director at his business address, or by telegram. If mailed, such notice shall
be deemed to be delivered when deposited in the United States mail so addressed,
with postage thereon prepaid. If notice be given by telegram, such notice shall
be deemed to be delivered when the telegram is delivered to the telegraph
company. Any director may waive notice of any meeting. The attendance of a
director at any meeting shall constitute a waiver of notice
<PAGE>

of such meeting, except where a director attends a meeting for the express
purpose of objecting to the transaction of any business because the meeting is
not lawfully called or convened. Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the Board of Directors need to
be specified in the notice or waiver of notice of such meeting.

     3.6  QUORUM.  A majority of the number of directors fixed by these By-Laws
shall quote a quorum for the transaction of business at any meeting of the Board
of Directors, provided, that if less than a majority of such number of directors
are present at said meeting, a majority of the directors present may adjourn the
meeting from time to time without further notice.

     3.7  MANNER OF ACTING.  The act of the majority of the directors present at
a meeting at which a quorum is present shall be the act of the Board of
Directors; provided that, in the event that any matter to be voted on by the
Board shall be equally divided, the deadlock shall be resolved by the director
serving as the Chief Executive Officer.

     3.8  VACANCIES.  Any vacancy occurring in the Board of Directors and any
directorship to be filled by reason of an increase in the number of directors
may be filled by the unanimous vote of the stockholders at a special meeting
called for such purpose. Any director elected to such vacancy shall hold office
until the next annual meeting of the stockholders.

     3.9  REMOVAL OF DIRECTORS.  Any director or the entire Board of Directors
of this corporation may be removed with or without cause at any annual or
special meeting of stockholders by the holders of a majority of the shares
entitled to vote at an election of directors.

     3.10 COMPENSATION.  The Board of Directors, by the affirmative vote of a
majority of directors then in office, and irrespective of any personal interest
of any of its members, shall have authority to establish reasonable compensation
of all directors, the directors may be paid their expenses, if any, of
attendance at each meeting of the Board. In the event the Internal Revenue
Service shall deem any compensation (including any fringe benefit) paid to a
director to be unreasonable or excessive, such director must repay to the
Corporation the excess over what is determined by the Internal Revenue Service
to be reasonable compensation, with interest on such excess at the rate of nine
percent (9%) per annum, with ninety days after notice from the Corporation.

     3.11 PRESUMPTION OF ASSENT.  A Director of the Corporation who is present
at a meeting of the Board of Directors at which action on any corporate matter
is taken shall be conclusively presumed to have assented to the action taken
unless his dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the person acting as the
Secretary of the meeting before the adjournment thereof or shall forward such
dissent by registered mail to the Secretary of the Corporation immediately after
the adjournment of the meeting. Such right to dissent shall not apply to a
director who voted in favor of such action.
<PAGE>

     3.12 INFORMAL ACTION BY BOARD OF DIRECTORS.  Any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board or
committee consent thereto in writing and all such writings are filed with the
minutes of proceedings of the Board or committee.

     3.13 PARTICIPATION BY CONFERENCE TELEPHONE.  Members of the Board of
directors or of any committee designated by the Board of Directors may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other. Participation in such meeting
shall constitute attendance and presence in person at the meeting of the person
or persons so participating.

     3.14 COMMITTEES.  The Board of Directors may, by resolution passed by a
majority of the whole Board, designate one or more committees, each committee to
consist of one or more of the directors of the Corporation. The Board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the Board of Directors, or in these By-Laws, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it; but no
such committee shall have the power or authority in reference to amending the
Certificate of Incorporation by the Board of Directors, adopting an agreement of
merger or consolidation, recommending to the stockholders the sale, lease, or
exchange of all or substantially all of the Corporation's property and assets,
recommending to the stockholders a dissolution of the Corporation or a
revocation of a dissolution, or amending the By-Laws of the Corporation; and,
unless the Board of Directors, By-Laws or Certificate of Incorporation expressly
so provide, no such committee shall have the power or authority to declare a
dividend, to authorize the issuance of stock, or to adopt a Certificate of
Ownership and Merger.

     3.15 DIRECTORS' PERSONAL LIABILITY.  As provided in the Corporation's
Certificate of Incorporation, no director shall be personally liable to the
Corporation or any stockholder for monetary damages for breach of fiduciary duty
as a director; provided, however, that the foregoing provision shall 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 stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of Title 8 of the Delaware
Code (relating to the Delaware General Corporation Law) or any amendment thereto
or successor provision thereto, or (iv) for any transaction from which the
director derived an improper personal benefit. Neither the amendment nor the
repeal of this provision in the Corporation's Certificate of Incorporation, nor
the adoption of any provision to the Certificate of Incorporation inconsistent
with this provision, shall
<PAGE>

eliminate or reduce the effect of this provision in respect of any matter
occurring, or any cause of action, suit or claim that, but for this provision,
would accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision. If the Delaware General Corporation Law is amended to
authorize the further elimination of liability of directors, then the quality of
a director of the Corporation, in addition to the limitation on personal
liability for branch of fiduciary duty shall be limited to the furthest extent
permitted by an amended Delaware General Corporation Law. Any repeal or
modification of this Article 3 by the stockholders of the Corporation shall be
prospective only, and shall not adversely affect any limitation on the personal
liability of a director of the Corporation existing at the time of such repeal
or modification.

                                   ARTICLE 4

                                   OFFICERS
                                   --------

     4.1  NUMBER.  The officers of the Corporation shall be a Chairman of the
Board, a Chief Executive Officer, a President, a Treasurer, and a Secretary, and
such Vice Presidents (the number thereof to be determined by the Board of
Directors), Assistant Treasurers, Assistant Secretaries or other officers as may
be elected or appointed by the Board of Directors. Any two or more offices maybe
held by the same person.

     4.2  ELECTION AND TERMS OF OFFICE.  The officers of the Corporation shall
be elected annually by the Board of Directors at the first meeting of the Board
of Directors held after each annual meeting of stockholders. If the election of
officers shall not be held at such meeting, such election shall be held as soon
thereafter as conveniently may be. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Election or appointment of an officer or agent shall not
of itself create contract rights.

     4.3  REMOVAL.  Any officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever in its judgment the
best interest of the Corporation would be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.

     4.4  VACANCIES.  A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, or because of the creation of an office,
may be filled by the Board of Directors for the unexpired portion of the term.

     4.5  CHAIRMAN OF THE BOARD.  The Chairman of the Board shall preside at all
meetings of the stockholders and of the Board of Directors.
<PAGE>

     4.6  THE CHIEF EXECUTIVE OFFICER.  The Chief Executive Officer shall be the
principal executive officer of the Corporation and shall in general supervise
and control all of the business and affairs of the Corporation. He may sign,
with the Secretary or any other officer of the Corporation therunto authorized
by the Board of Directors, certificates for shares of the Corporation, any
deeds, mortgages, bonds, contracts, or other instruments which the Board of
Directors has authorized to be executed, except in cases where the signing and
execution thereof shall be expressly delegated by the Board of Directors or by
these By-Laws to some other officer or agent of the Corporation, or shall be
required by law to be otherwise signed or executed; and in general shall perform
all duties incident to the office of Chief Executive Officer and such other
duties as may be prescribed by the Board of Directors from time to time.

     4.7  THE PRESIDENT.  In the absence of the Chief Executive Officer or in
the event of his inability or refusal to act, the President shall perform the
duties, of the Chief Executive Officer, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the Chief Executive
Officer. The President may sign, with the Secretary or an Assistant Secretary,
certificates for shares of the Corporation, and shall perform such other duties
as from time to time may be assigned to him by the Chief Executive Officer or by
the Board of Directors.

     4.8  THE VICE PRESIDENTS.  In the absence of the President or in the event
of his inability or refusal to act, the Vice president (or in the event there be
more than one Vice President, the Vice Presidents in the order designated, or in
the absence of any designation, then in the order of their election) shall
perform the duties of the President, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the President. Any Vice
President may sign, with the Secretary or an Assistant Secretary, certificates
for shares of the Corporation, and shall perform such other duties as from time
to time may be assigned to him by the Chief Executive Officer, the President or
by the Board of Directors.

     4.9  THE TREASURER.  If required by the Board of Directors, the Treasurer
shall give a bond for the faithful discharge of his duties in such sum and with
such surety or sureties as the Board of Directors shall determine. He shall: (a)
have charge and custody of and be responsible for all funds and securities of
the Corporation, receive and give receipts for moneys due and payable to the
Corporation from any source whatsoever, and deposit all such moneys in the name
of the Corporation in such banks, trust companies or other depositaries as shall
be elected in accordance with the provisions of Article 6 of these By-Laws: (b)
in general perform the duties incident to the office of Treasurer and such other
duties as from time to time may be assigned to him by the Chief Executive
Officer or by the Board of Directors.

     4.10  THE SECRETARY.  The Secretary shall: (a) keep the minutes of the
stockholder's and of the Board of Directors' meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the provisions of these By-Laws as required by law; (c) be custodian of the
corporate records and of the seal of the Corporation and see that the seal of
the Corporation is affixed to all certificates for shares prior to the issue
thereof and to all documents, the execution of which on
<PAGE>

behalf of the Corporation under the seal is duly authorized in accordance with
the provisions of these By-Laws; (d) keep a register of post office address of
each stockholder which shall be furnished to the Secretary by such stockholder;
(e) sign with the Chief Executive Officer, or the President, certificates for
shares of the Corporation; (f) have general charge of the stock transfer books
of the Corporation; and (g) in general perform all duties incident to the office
of Secretary and such other duties as from time to time to may be assigned to
him by the Chief Executive Officer or by the Board of Directors.

     4.11  ASSISTANT TREASURERS AND ASSISTANT SECRETARIES.  The Assistant
Treasurers shall respectively, if required by the Board of Directors, give bonds
for the lawful discharge of their duties in such sums and with such sureties as
the Board of Directors may determine. The Assistant Secretaries as thereunto
authorized by the Board of Directors may sign with the Chief Executive Officer
or the President certificates for shares of the Corporation, the issue of which
shall have been authorized by a resolution of the Board of Directors. The
Assistant Treasurers and Assistant Secretaries, in general, shall perform such
duties as shall be assigned to them by the Treasurer or the Secretary,
respectively, or by the Chief Executive Officer or the Board of Directors.

     4.12  SALARIES.  The salaries of the officers shall be fixed from time to
time by the Board of Director and no officer shall be prevented from receiving
such salary by reason of the fact that he is also a director of the Corporation.
In the event that the Internal Revenue Service shall deem any compensation
(including any fringe benefit) paid to an officer to be unreasonable or
excessive, such officer must repay to the Corporation the excess over what is
determined by the Internal Revenue Service to be reasonable compensation, with
interest on such excess at the rate of nine percent (9 %) per annum, within
ninety days after notice from the Corporation.

                                   ARTICLE 5
                   INDEMNIFICATION OF OFFICERS AND DIRECTORS
                   -----------------------------------------

     5.1  ACTIONS AGAINST A PERSON.  The Corporation shall indemnify each
director or officer 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, arbitrative or investigative (other than an action by
or in the right of the Corporation) by reason of the fact that he is or was a
director or officer of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgment, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendre or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
<PAGE>

reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.

     5.2  ACTIONS BY OR IN THE RIGHT OF THE CORPORATION.  The Corporation shall
indemnify any director or officer who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in the
right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Corporation provided however, that
except for any proceeding seeking to enforce or obtain payment under any right
to indemnification by the corporation, the corporation shall indemnify any such
person seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if the corporation has joined in or consented to
the initiation of such proceeding (or part thereof) and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Court of Chancery or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery or such other court shall deem proper.

     5.3  INDEMNIFICATION IN EVENT OF SUCCESSFUL DEFENSE.  To the extent that a
director or officer of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in Sections
5.1 and 5.2 hereof, or in defense of any claim, issue or matter therein, he
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.

     5.4  BOARD OF DIRECTORS' APPROVAL.  Any indemnification under Sections 5.1
and 5.2 of these By-Laws (unless ordered by a court) shall be made by the
Corporation only as authorized in the specific case upon a determination that
indemnification of the director or officer is proper in the circumstances
because he has met the applicable standard of conduct set forth in Sections 5.1
and 5.2 hereof. Such determination shall be made (1) by the Board of Directors
by a majority vote of a quorum consisting of directors who were not parties to
such action, suit or proceeding, or (2) if such a quorum is not obtainable, or,
even if obtainable but a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (3) by the stockholders.

     5.5  ADVANCE INDEMNITY PAYMENTS.  Expenses incurred in defending a civil or
criminal action, suit or proceeding may be paid by the Corporation in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking
<PAGE>

by or on behalf of the director, officer, employee or agent to repay such amount
if it shall ultimately be determined that he is not entitled to be indemnified
by the Corporation as authorized in this Article.

     5.6  NON-EXCLUSIVITY.  The indemnification and advancement of expenses
provided by or granted pursuant to, Article NINTH of the Corporation's
Certificate of Incorporation, the Delaware General Corporation Law and this
Article shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any By-Law,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office.

     5.7  INDEMNITY AGREEMENTS.  The corporation may enter into indemnity
agreements with the persons who are members of its board of directors from time
to time, and with such officers, employees and agents of the corporation and
with such officers, directors, employees and agents of subsidiaries as the board
may designate, such indemnity agreements to provide in substance that the
corporation will indemnify such persons as contemplated by this Section 5, and
to include any other substantive or procedural provisions regarding
indemnification as are not inconsistent with the General Corporation Law of
Delaware. The provisions of such indemnity agreements shall prevail to the
extent that they limit or condition or differ from the provisions of this
Section 5.

     5.8  INDEMNITY INSURANCE.  The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or is or was serving at the request of the Corporation
as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against any liability asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not he is indemnified against such liability under the
provisions of this Article.

     5.9  INDEMNITY OF OTHER PERSONS.  The corporation may, by action of its
Board of Directors, either on a general basis or as designated by the Board of
Directors, provide indemnification to employees and agents of the corporation,
and to directors, officers, employees and agents of the Company's subsidiaries,
with indemnification of the same scope and effect as the foregoing
indemnification of directors and officers. Notwithstanding anything in this
Section 5 to the contrary, no person shall be entitled to indemnification
pursuant to this Section on account of any suit in which judgment is rendered
against such person for an accounting of profits made from the purchase and sale
by such person of securities of the corporation pursuant to the provisions of
Section 16(b) of the Securities Exchange Act of 1934.

     5.10  CONSOLIDATION.  For the purposes of this Article, references to "the
Corporation" include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would
have had the power and authority to indemnify its directors, officers and
employees or agents, so that any person who is or was serving at the request of
such constituent corporation as a director, officer, employee
<PAGE>

or agent of another corporation or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Article with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.

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

     The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article shall, unless otherwise provided when authorized or
ratified, 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 such a person.

                                   ARTICLE 6
                     CONTRACTS, LOANS, CHECKS AND DEPOSITS
                     -------------------------------------

6.1  CONTRACTS.  The Board of Directors may authorize any officer or officers,
agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.

6.2  LOANS.  No loans shall be contracted on behalf of the Corporation and no
evidence of indebtedness shall be issued in its name unless authorized by a
resolution of the Board of Directors. Such authority may be general or confined
to specific instances.

6.3  CHECKS, DRAFTS, ETC.  All checks, drafts or other orders for the payment of
money, notes or other evidences of indebtedness issued in the name of the
Corporation, shall be signed by (i) the Chief Executive Officer, or the
Executive Vice President or (ii) such officer or officers, agent or agents of
the Corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.

6.4  DEPOSITS.  All funds of the Corporation not otherwise employed shall be
deposited from time to time to the credit of the Corporation in such banks,
trust companies or other depositories as the Board of Directors may select.
<PAGE>

                                   ARTICLE 7
                  CERTIFICATES FOR SHARES AND THEIR TRANSFER
                  ------------------------------------------

7.1  CERTIFICATES FOR SHARES.  Certificates representing shares of the
Corporation shall be in such form as may be determined by the Board of
Directors. Such certificates shall be signed by the Chief Executive Officer or
the President and by the Secretary or an Assistant Secretary and shall be sealed
with the seal of the Corporation. All certificates for shares shall be
consecutively numbered or otherwise identified. The name of the person to whom
the shares represented thereby are issued, with the number of shares and date of
issue, shall be entered on the books of the Corporation. All certificates
surrendered to the Corporation for transfer shall be canceled and no new
certificate shall be issued until the former certificate for a like number of
shares shall have been surrendered and canceled, except that in case of a lost,
destroyed or mutilated certificate, a new one may be issued therefor upon such
terms and indemnity to the Corporation as the Board of Directors may prescribe.

7.2  TRANSFER OF SHARES.  Transfers of shares of the Corporation shall be made
only on the books of the Corporation by the holder of record thereof or by his
legal representative, who shall furnish proper evidence of authority to
transfer, or by his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary of the Corporation, and on surrender for
cancellation of the certificate for such shares. The person in whose name shares
stand on the books of the Corporation shall be deemed the owner thereof for all
purposes as regards the Corporation.

                                   ARTICLE 8
                                  FISCAL YEAR
                                  -----------

     The fiscal year of the Corporation shall begin on the first day of January
in each year and end on the last day of December in each year.

                                   ARTICLE 9
                                   DIVIDENDS
                                   ---------

     The Board of Directors may from time to time, declare, or the Corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law and its Certificate of Incorporation.

                                  ARTICLE 10
                                     SEAL
                                     ----
<PAGE>

     The Board of Directors may provide a corporate seal which shall be in the
form of a circle and shall have inscribed thereon the name of the Corporation
and the words, "Corporate Seal, Delaware."

                                  ARTICLE 11
                               WAIVER OF NOTICE
                               ----------------

     Whenever any notice whatever is required to be given under the provisions
of these By-laws under the provisions on the Certificate of Incorporation or
under the provisions of the Delaware General Corporation law, a waiver thereof
in writing, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent in the
giving of such notice.

                                  ARTICLE 12
                           AMENDMENTS TO THE BY-LAWS
                           -------------------------

     These By-Laws may be altered, amended or repealed and new By-Laws may be
adopted at any meeting of the Board of Directors of the Corporation by a vote of
all of the directors, subject to the power of the stockholders to alter or
repeal By-Laws made by the Board of Directors.