FORM 10-K.--- ANNUAL REPORT PURSUANT TO SECTION 13
               OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Mark One)
(X)   ANNUAL  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF  THE  SECURITIES
      EXCHANGE ACT OF 1934

For the fiscal year ended December_31,_2000
                                       OR
(  )  TRANSITION  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
      EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from____________________ to_________________________

Commission file number 2-28286________________________________________________

The Bureau of National Affairs, Inc.__________________________________________
(Exact name of Registrant as specified in its charter)

               Delaware                     _________53-0040540_______________
  (State or other jurisdiction of              (I.R.S. Employer
  incorporation or organization)                   Identification No.)

1231 25th St., N.W., Washington, D.C.                                 20037
(Address of principal executive offices)                            (Zip Code)

Registrant's Telephone Number, including Area Code             (202) 452-4200

Securities Registered pursuant to Section 12(b) of the Act:   None

Securities registered pursuant to Section 12(g) of the Act: Class A common
stock, $1.00 par value.

      Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No _____.

      Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( X )

    The market value of the Class A voting stock held by non-affiliates of the
registrant as of February 24, 2001 was $131,698,987. All voting stock is owned
by employees of the registrant and its subsidiaries. The market value of the
Class B and Class C non-voting stock held by non-affiliates as of February 24,
2001 was $180,337,070 and $12,919,274 respectively. In determining the above,
The Bureau of National Affairs, Inc. (the "Company"), has assumed that all of
its officers, directors, and persons known to the Company to be the beneficial
owners of more than five percent of each class of the Company's common stock are
affiliates. Such assumption should not be deemed conclusive for any other
purpose.

                                                                Page 1 of 170

<PAGE>2

      The number of shares outstanding of each of the registrant's classes of
common stock, as of February 24, 2001 was 3,210,974 Class A common shares,
4,245,003 Class B common shares, and 291,961 Class C common shares.

                      DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the Company's definitive Proxy Statement, filed with the SEC
on March 30, 2001, are incorporated by reference into Part III of this Form
10-K.


                     The Bureau of National Affairs, Inc.
                              Index to Form 10-K
                  For the fiscal year ended December 31, 2000


                                                                     Page No.
                                   PART I.
Item 1.   Business.................................................       3
Item 2.   Properties...............................................      12
Item 3.   Legal Proceedings........................................      12
Item 4.   Submission of Matters to a Vote of Security Holders......      12
Item X.   Executive Officers of the Registrant.....................      12

                                   PART II.
Item 5.   Market for the Registrant's Common Stock and Related
            Security Holder Matters................................      14
Item 6.   Selected Financial Data and Selected Quarterly Data......      15
Item 7.   Management's Discussion and Analysis of Financial
            Condition and Results of Operations....................      17
Item 7a.  Quantitative and Qualitative Disclosures About
            Market Risk............................................      20
Item 8.   Financial Statements and Supplementary Data..............      21
Item 9.   Changes in and Disagreements with Accountants on
            Accounting and Financial Disclosure....................      45

                                   PART III.
Item 10.  Directors and Executive Officers of Registrant...........      45
Item 11.  Executive Compensation...................................      45
Item 12.  Security Ownership of Beneficial Owners and Management...      45
Item 13.  Certain Relationships and Related Transactions...........      45

                                   PART IV.
Item 14.  Exhibits, Financial Statement Schedules, and Report
            on Form 8-K............................................      46

SIGNATURES.........................................................      48

EXHIBIT INDEX......................................................      49

<PAGE>3

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains and incorporates by reference certain
statements that are not statements of historical fact but are forward-looking
statements. The use of such words as "believes" and "expects" and similar
expressions are intended to identify forward-looking statements. Such statements
are subject to certain risks and uncertainties, which could cause actual results
to differ from those projected. Readers are cautioned not to place undue
reliance on these forward-looking statements which speak only as of the date
hereof.

                                    PART I

Item 1.     Business

General Development of Business and Narrative Description of Business
Business of BNA and Subsidiary Companies

The Bureau of National Affairs, Inc. (BNA), is a leading publisher of
specialized legal & regulatory information. BNA was founded in 1929, and was
incorporated in its present form as an employee-owned company in 1946. BNA is
independent, for profit, and is the oldest fully employee-owned company in the
United States.

BNA and four of its publishing subsidiaries, Tax Management Inc., Pike &
Fischer, Inc., Institute of Management and Administration, Inc. (IOMA), and
Kennedy Information, Inc., are engaged in providing legal and regulatory and
general business advisory information in labor, economic, tax, health care,
environment and safety, consulting, recruiting, and other markets to business,
professional, and academic users. They prepare, publish, and market subscription
information products in print, compact disc, and online formats, books,
pamphlets, magazines, and research and advisory reports, and hold conferences.

Sales are made principally in the United States through field sales personnel
who are supported by direct mail, space advertising, and telemarketing.
Customers include lawyers, accountants, business executives, human resource
professionals, health care administrative professionals, consultants, labor
unions, trade associations, educational institutions, government agencies, and
libraries mostly in the United States.

Online products are marketed through database vendors such as LEXIS/NEXIS and
West Publishing Company. The Company provides most of its products for
electronic delivery via Lotus Notes and the World Wide Web.

BNA Software, a division of Tax Management Inc., develops, produces, and markets
tax and financial planning software. Sales are made to accountants, lawyers, tax
and financial planners, and others. The products are marketed through direct
mail, space advertising, and BNA field sales representatives.

BNA  International  Inc. is BNA's agent  outside of North  America for sale of
its U.S. products and also engages in independent publishing activity.

The McArdle Printing Co., Inc. provides printing services to mid-Atlantic area
customers. It utilizes modern equipment and its customers include publishers,
trade associations, professional societies, other non-profit organizations,
financial institutions and governmental organizations. Approximately 40 percent
of its business is derived from the BNA publishing companies.
                                                                    Continued
<PAGE>4
                                    PART I

Review Of Operations

BNA achieved strong financial results in 2000. These included new highs for
revenues and operating profit. Net income and earnings per share were also at
record levels excluding the effect of a one-time, non-cash, change in accounting
for certain selling expenses. These achievements continue to demonstrate that
BNA can not only compete effectively in an increasingly electronic world, but
can thrive in it.

Excluding the one-time expense, net income would have been $23.2 million, a 10.2
percent improvement over the prior year. More importantly to stockholders,
earnings per share would have been $2.93, up 13.6 percent.

Consolidated revenues were over $297 million, an increase of 5.6 percent for the
ongoing businesses. Internal growth accounted for most of the gain, but
acquisitions again contributed to the overall increase. Tax Management, IOMA,
BNA International, and McArdle commercial printing again recorded strong revenue
improvements.

The consolidated operating profit for 2000 of $28 million was up 20.3 percent
over 1999. Most business units grew their operating profit and the parent
company, without the weight of heavy Y2K-related spending incurred over the last
several years, saw a big improvement. The consolidated operating profit margin
rose to 9.4 percent in 2000, a high under current accounting rules.

Total non-operating income decreased $2.1 million in 2000. Higher interest
expense, mostly associated with new borrowing to finance a major acquisition,
and losses on asset sales were the principal reasons for the decline. Investment
income was down slightly, reflecting tough financial markets in 2000.

In November, BNA acquired Kennedy Information. Serving the consulting,
recruiting, and investor relations markets, Kennedy publishes newsletters,
magazines, and directories, produces custom research and advisory reports, and
holds conferences. Kennedy has shown remarkable revenue and profit growth over
the last four years. That strong growth is expected to continue, contributing to
BNA's consolidated growth in future years.

Stock repurchases, mostly mandatory redemptions from estates of Class B
stockholders, were again high in 2000. Although employees continued to purchase
Class A stock at a healthy pace, total outstanding shares again declined. Over
the last four years, outstanding shares have been reduced by over 12 percent,
and this has had a positive effect on earnings per share. Strong operating cash
flows have provided the cash needed for the net buybacks.

BNA's cash and financial investments increased by $10.3 million in 2000 to over
$152 million. The liquidity provided by these financial reserves, as well as the
strong operating cash flows generated annually by the business, keeps BNA ready
to respond to business challenges and opportunities, to make the investments
necessary to ensure future growth, and to meet the stock repurchase obligations
inherent in an employee-owned company.


Reviews of the parent and subsidiaries' operations follow:
                                                                    Continued
<PAGE>5

Parent Company

The Internet provided both challenges and rewards for the parent company in
2000. BNA continued to invest heavily in developing and supporting a Web product
line and made a number of significant organizational changes, all designed to
operate more effectively and efficiently as a Web-based information company.
These efforts succeeded. While revenues from BNA's print and CD product lines
continued to decline, revenue from Web products doubled. And while overall
revenue growth was still slow, the operating profit for the parent improved by
more than 40 percent.

With all of BNA's major notification and reference services available on the Web
at the start of the year, the Web products garnered most of the sales force's
attention. Ten of the 13 top-selling BNA products were in a Web format. These
products also played a central role in our sales strategy to favor comprehensive
annual contracts with our larger customers over a transactional,
product-by-product sales. Overall, electronic products now represent more than
40 percent of the parent subscription revenue base, and more than half of that
electronic revenue is generated by Web products.

This success, however, required concerted effort. Performance problems with both
our e-commerce platform and with some of the products themselves interrupted
sales momentum early in the year. This required the diversion of people and
resources from other efforts in order to first stabilize, and then improve, both
the products and the platform that controls access to the products.

Significant investments were also made during the year to improve the company's
overall technological infrastructure. As a result, by the end of the year BNA
had a more stable and improved Web product line, a more functional e-commerce
platform, and a more reliable foundation on which to build, improve, and support
our electronic business and the operations that support it.

Progress was made in the development of the next generation Web platform. This
new Web platform, "BWD", will provide more customer-friendly functionality. It
will also enable us to combine different Web products on one platform, and to
dynamically update, on a daily basis where appropriate, the entire line of our
Web products. The first product on the new Web platform was released in a
limited test version near the end of the year. A more extensive test is
scheduled for the spring with the aim of commercial release in June.

Also, in 2000, BNA's customer accounts records were migrated to an Oracle
database, the first step in the ongoing development of a business system that
will support BNA's evolving business needs. During 2001, under the supervision
of a cross-departmental Business Systems Management Committee, short-term
projects will address the most pressing needs, such as creating a database to
manage BNA's contracts with subscribers and developing improved reports for
marketing purposes. Work also has begun on gathering requirements and doing the
analyses that are the necessary first steps toward implementing a new order
management system.

A changing business requires more than technological improvements. As our
product line moved into an electronic environment, the organizational structure
of the company, largely unchanged since the days of print-only publishing, began
to impede rather than facilitate our ability to respond to changes in our
markets. In order to remain flexible and agile enough to respond rapidly to
changing market needs--without sacrificing the high-quality products and service
that form the foundation of BNA's well-respected brand--BNA began the process of
transforming its organizational structure from one of functionally defined
departments servicing the entire product line to a "business unit" structure.

                                                                    Continued
<PAGE>6

The Editorial Department was divided into two publishing groups: the Legal and
Business group, consisting of products aimed primarily at lawyers, and the
Professional group, made up of products sold to all other professional groups.
Marketing resources were also divided along this basis and merged into the
publishing groups. Thus, for the first time, editorial and marketing
capabilities were combined, with each publishing group charged with developing,
maintaining, expanding, and marketing its respective product lines. This
business unit structure recognizes that the parent company sells to very diverse
markets, and that each market is best served by a single, focused,
multifunctional group working together to achieve set goals, and not by separate
departments with different missions trying to satisfy a variety of customers as
resources allow. As we gain experience with this new structure, all other
operational areas will be examined to determine which functions should be merged
into the business units and which should remain centralized, but structured in a
way to best serve the needs determined by the business units.

The creation and fine-tuning of the business unit structure, coupled with the
emphasis on stabilizing and improving the existing Web product line and on
creating a new Web platform, led to a relatively small number of new product
launches. Class Action Litigation Report, a new legal notification service, was
launched in April in both print and electronic formats. Health Care Program
Compliance Guide, a print-only reference service, was launched in July. A Web
version of that product will be released on the new Web platform next summer.
Two other new notification services, World Trade Organization Reporter and
E-Commerce Tax Report, also were launched in both print and electronic formats,
but at year-end were made available only electronically.

Perhaps the most tangible initial benefit of the new business unit structure was
in the improved performance of our Environment and Safety product line. New
sales increased for the second consecutive year and the revenue decline, which
we have endured since 1995, was significantly reduced. An aggressive new selling
program, a much-simplified pricing structure, and the opportunity created by the
sale of a major competitor should lead to continued improved performance from
this long-challenged product line.

A second, but related, major structural change was the merger of the Sales
Department with the Circulation Department and the parent's customer service
centers to form one consolidated department managing customer contact. As our
product line moves from print to Web formats, customers expect to receive not
only a product, but also to have continuing ability to easily contact BNA and to
immediately receive the support necessary to realize the full value of those
products. These expectations can best be met by a single department, whose
function is to ensure that customer satisfaction begins with the sales process
and continues every time a subscriber contacts BNA.

Finally, despite our decision to stop proactively applying for "best company"
lists, BNA continued to receive honors in 2000. The company was presented the
Award for Employee Ownership from Business Ethics, a magazine covering socially
responsible business and investing. BNA was chosen for pioneering employee
ownership, for our long track record of financial success, and for our
continuing commitment to independence at a time of wholesale corporate
consolidation. BNA's president was also named one of Washington, D.C.'s 100 most
powerful people by Regardie's Power, a Washington business magazine. "Day in and
day out, this global publisher that sounds like an obscure federal agency is
unrivaled in its coverage of the federal government," the magazine reported.
"While the print journalism world ratchets up its graphics and dumbs down its
content, BNA sticks with a vengeance to its mission." In a very challenging
industry and environment, BNA's reputation as a solid company publishing superb
products continues.
                                                                    Continued
<PAGE>7

BNA Books

BNA Books finished the year with $9.4 million in revenues, up 4.7 percent over
1999. Operating profit was 9.6 percent ahead of the previous year.

Much of the division's success in 2000 can be attributed to the release of the
long-awaited and highly respected second edition of Employee Benefits Law and to
the release of supplements to Employment Discrimination Law and Developing Labor
Law. All three of these treatises are published in cooperation with the ABA's
Labor and Employment Law Section and are considered the "bibles" in their
respective fields.

The division also published Patent Litigation Strategies Handbook, its first
treatise with the ABA's Section on Intellectual Property Law. And Books made
good progress in a new field, the health law marketplace, with Medical Ethics:
Codes, Opinions, and Statements.

The division in 2000 also added one of its most successful titles to BNA's
Intellectual Property Library on the Web (IPLW). Cases noted in Harmon's Patents
and the Federal Circuit are now linked to the full-text treatment of the case on
IPLW. The division plans to add book offerings to other Web-based reference
products in 2001.

Tax Management Inc.

Revenues and operating profits continued to grow at a healthy pace for Tax
Management in 2000, once again reaching record levels. Total revenues, including
those of BNA Software, rose almost 7 percent. Operating profits jumped ahead by
17 percent, primarily due to strong revenue growth and a modest increase in
operating expenses.

New sales results were also impressive, with TM's Portfolios Plus on the Web
producing more new sales dollars than any other BNA/TM product. Excellent
results also came from several other TM titles, including the BNA Fixed Asset
Next Dimension product line.

Two new Web-based products, TM State Tax Library on the Web and TM Tax Practice
Library on the Web, made their debut and were well-received. Information
products delivered on CD-ROM also continued to be in strong demand throughout
the year.

In addition to its fine financial performance for the year, the company also
instituted several operational programs that will continue to deliver dividends
in the years to come. These programs included improvements in editorial and
production processes, advancements in the use and delivery of technology, and
new, more cost-effective marketing programs that reinforce the Tax Management
difference.

BNA Software

BNA Software revenues increased 5.8 percent for 2000, while operating profits
increased by 66 percent. BNA Fixed Assets Next Dimension and the BNA Income Tax
Planner were the division's sales leaders.

The increase in operating profit can be attributed to higher revenues and a
reduction in total operating expenses. Editorial expenses were significantly
lower, while production and distribution expenses were also lower because
improvements in quality control reduced defects.

With the anticipation of new products and the prospect of significant new tax
legislation on the horizon, BNA Software and Tax Management look forward to
another productive year.
<PAGE>8

BNA International Inc.

BNA International achieved high revenue growth and record-breaking profits in
2000. Total revenues increased by 22 percent, with much of this growth coming
from recently launched BNAI services. International sales of BNA and TM products
were at their highest-ever level.

New products, such as Tax Planning International's e-commerce and World Internet
Law Report (WILR), continued their impressive growth. Enhanced editorial and
production systems designed to make BNAI services available through the Web were
successfully implemented and initiatives in customer service, such as accepting
renewals through the BNAI Website, resulted in higher subscriber renewal rates.

The drive to develop new products continued with the introduction of Tax
Planning International's Transfer Pricing in September and World e-commerce & IP
Report in October. In early 2001, a notification service covering international
data protection was launched to build on BNAI's success in the e-commerce and
Internet law area. Positive customer response to European Union Focus led to a
relaunch of that service featuring increased frequency and enhanced coverage of
European tax issues.

In the coming year, BNAI will continue its profitable growth by expanding its
portfolio of print and electronic products and aggressively marketing them to an
increasingly global market.

Pike & Fischer, Inc.

Pike & Fischer achieved solid revenue growth in 2000 due largely to the success
of new product development initiatives begun in 1999. While revenues from the
company's core telecommunications offerings and from contract editorial work
remained stable, Pike & Fischer experienced significant growth in its e-commerce
related services.

Leading the way were two new services, Dot.Com IP Adviser and Privacy Law
Adviser, which were spun out from the multi-volume service, Internet Law &
Regulation. A third new service, Digital Discovery and Electronic Evidence, was
begun late in the year as a direct result of discussions with ILR advisory board
members on the trend toward paperless litigation. Midyear, Pike & Fischer
acquired internet.regulation.alert and folded it into ILR.

Pike & Fischer expanded its conference business with two programs in 2000. The
2000 BNA Public Policy Forum on E-Commerce was a repeat of 1999's successful
conference. And, working closely with editors at BNA and Tax Management, Pike &
Fischer produced an E-Commerce Tax Forum that included presentations from a
number of leading government officials. A major expansion of the conference
business is planned for 2001.

Pike & Fischer continued to invest in Web delivery of its services. Having the
ability to offer Web subscriptions opened the way for the creation in 2000 of an
inside-sales "tele-web" selling effort. It proved to be productive and will be
expanded in 2001.

In a major structural change, Pike & Fischer reorganized into decentralized
publication groups, each composed of editorial, sales, and marketing resources.
A less centralized organization will promote the development of new product
lines without diverting effort from the maintenance of the mature services. This
will enable Pike & Fischer to maintain and stabilize its existing revenue base
while new product development initiatives contribute significantly to BNA's
growth strategy in coming years.
                                                                    Continued
<PAGE>9

BNA Washington Inc.

BNAW, BNA's real estate subsidiary company, posted another successful year of
containing operating expenses in 2000. Over the past four years, building
operating expenses have declined due to lower depreciation and amortization.
Other expenses were essentially unchanged. Continued efforts to identify
efficiencies in all areas of facility operations helped to offset rising labor,
material, and utility costs.

BNAW leased an additional 12,751 square feet of office space in the 23rd Street
building it already occupies. BNA Software will move into the space in March.
Now, BNAW owns and leases more than 450,000 square feet of office space in the
Washington, D.C. metropolitan area.

Renovation and relocation activity during the year focused primarily on projects
required to meet changing business requirements and improve productivity. The
subscription services unit was consolidated in newly-renovated space in
Rockville; IT applications support personnel were centralized in the data center
operations area; and the editorial and product support unit staff was
consolidated. These, and a variety of other projects, totaled 97 office moves
that accommodated more than 400 employees.

Work also continues on maintaining and upgrading building operating systems.
These efforts result in lower maintenance and utility costs, as well as increase
the comfort of building occupants.

BNAW has begun work on a long-range real estate plan that will be responsive to
the organizational changes that are occurring and will fully support the
strategic goals of the corporation. The plan will be completed in 2001

The McArdle Printing Co., Inc.

McArdle Printing Company achieved a double-digit percentage increase in
commercial sales for the fourth consecutive year. With a 15.5 percent increase
in 2000, commercial (non-BNA) business now represents 60 percent of McArdle's
revenue. A new interactive Website with e-commerce capabilities complemented the
robust sales effort.

Revenue increases were combined with successful efforts to reduce costs and
improve productivity. As a result, operating profit rose 15.2 percent.
Successful negotiation of a new four-year labor contract aided both revenue and
cost improvements by allowing for changes in the production process which led to
greater responsiveness and efficiency.

McArdle also continued to expand the capacity, capability, and scope of the
printing operation by acquiring new equipment and technology. These acquisitions
will ensure continued growth by expanding McArdle's ability to meet changing and
increasing customer demand for services. Computerized direct-to-plate technology
and sophisticated scanning capabilities were added to the electronic pre-press
area. McArdle also acquired a second six-color press, increasing capacity to
produce high-end color work and time-sensitive materials for customers who are
expanding the sizes and press runs of their products.

McArdle is now well-positioned as a 21st century printing company with an
excellent facility, modern equipment, and knowledgeable and productive
employees. The company is prepared to produce competitively priced, superior
quality products and services to BNA and to the commercial markets it serves.
                                                                    Continued
<PAGE>10

Institiute of Managment & Administration, Inc.

IOMA finished its third year as a BNA Company with nearly 18 percent growth in
operating revenues. This success was acheived in an environment of increasing
synergy between IOMA, the other subsidiary companies (including the recently
acquired Kennedy Information), and the parent company. IOMA's product launch,
marketing, electronic publishing, Web, and overall publishing strategies
continue to complement BNA's corporate objectives. Paid subscribers to IOMA
services increased 16 percent during the year, to nearly 52,000.

High on the list of accomplishments for 2000 was the launch of five new
subscription products, several of which include small repackaged subsets of
BNA-generated editorial content, combined with IOMA's traditional management
how-to advice. These titles range from Managing T&E to Diabetes Education &
Reimbursement Policy to Financial Analysis, Planning & Reporting. Internally
generated growth was augmented by the acquisition of ProPub, of Wycoff, New
Jersey, in January. ProPub publishes six newsletters in the payroll area and two
reference services, the first such products to be offered by IOMA. As a result
of those efforts, IOMA now publishes 54 subscription products. This aggressive
product development and acquisition program negatively affected operating profit
last year, but this should reverse as acquisitions and launch costs are
absorbed.

Growth occurred in non-subscription areas as well. After a downturn in 1999,
IOMA's list rental business rebounded in 2000, partially fueled by excellent
sales of e-mail lists. IOMA's revenues from its Yearbook and book products
showed healthy growth. Many of IOMA's books are published with John Wiley &
Sons.

IOMA also took several steps forward in Web product development. IOMA expanded
from one to nine "e-zines" and continues to offer 100 percent of IOMA's current
editorial content in a pay-by-the-article database at www.managementlibrary.com.
All of these products increase the speed and agility with which editorial
material in print and electronic formats can be repackaged.

Still, the primary focus remains low and mid-priced business-to-business
newsletters. Last year, IOMA built a multi-tier in-house sales operation,
focusing more of the sales effort on increasing sales to existing customers. To
guarantee accurate and timely fulfillment, print-on-demand invoicing and renewal
systems were instituted, allowing for daily mailing of billing notices and the
insertion of marketing and other materials without maintaining an inventory.
Both of these capabilities have increased IOMA's ability to customize contact
with subscribers.

IOMA's growth, as well as the expansion of its ability to develop different
types of products and to respond to customers in better ways, puts the company
in a better position to penetrate the low and mid-levels of BNA's traditional
professional markets.

Kennedy Information, Inc.

Kennedy Information solidified its position in 2000 as the premiere information
source for the consulting and recruiting industries. The company also made
significant progress in capitalizing on its third target sector, the investor
relations industry. Management believes this market shares characteristics
similar to its core sectors and holds promise for similar success.

In 2000, revenues and net profits rose substantially over the prior year
representing the strongest financial performance in Kennedy's 32-year history.
Kennedy became a subsidiary company of BNA in November 2000.
                                                                    Continued
<PAGE>11

Significant achievements include the launch of several subscription and
advertising-driven information products. These include Shareholder Value
Magazine, The Journal of Executive Talent (in conjunction with The Association
of Executive Search Consultants), and The e-Services Report. This past year also
saw a breakthrough for the company in the conference business: following the
successful e-Recruiting & Staffing Conference in Las Vegas in May, Kennedy
quickly produced the conference in November for New York with nearly doubled
results.

Kennedy also upgraded its financial reporting systems and Web-based products and
services, better preparing the company for continued growth. These improvements
included development of Kennedy's Web-based data collection system for
directories and online databases (Kennedy Information Database Online), which
allows staff to more rapidly update existing databases, as well as develop new
ones more cost effectively.

Item 1.  Business

General Development of Business and Narrative Description of Business,
Continued

The Bureau of National Affairs, Inc. ("BNA" or the "Company"), operates
primarily in the publishing, printing, and software industries. Publishing
operations consist of the production and marketing of information products in
print and electronic form. Printing operations consist of printing services to
internal and outside customers. Software operations consist of the production
and marketing of software programs. Activities in other industry segments are
less than ten percent of total revenue.

Publishing of legal, regulatory, and business advisory information is very
competitive. Some of the Company's publishing competitors are much larger and
have greater resources. Consolidation within the industry in recent years has
resulted in even larger competitors. At the same time, technological advances
have made it easier for smaller publishers to produce, market, and deliver
competing products. Many government agencies now provide direct access to their
information, resulting in another form of competition. Additionally, a plethora
of internet web sites now offer "business information" at little or no cost. The
Company produces value-added information and competes on the basis of
comprehensiveness and timelines (quality), product line breadth, brand
reputation, variety of format offerings, price, and customer service.

The Company's subsidiary, The McArdle Printing Company, Inc. (McArdle), competes
with a number of commercial and financial printers for 60 percent of its
business. McArdle competes on the basis of the breadth of its print capabilities
and related services, price, and customer service.

BNA Software competes with a number of tax and financial planning software
publishers. It competes on the basis of product features and functions, quality
and reliability, timeliness of product updates, ease of use, brand recognition,
customer support, and price.

The number of employees of BNA and its subsidiary companies was 2,085 at
December 31, 2000.
<PAGE>12

Item 2.     Properties

BNA Washington Inc. owns and manages the buildings presently used by BNA and
some of its Washington area subsidiaries. Principal operations are conducted in
three adjacent owned buildings at 1227-1231 25th Street, N.W., Washington, D.C.
The office building at 1227 25th Street is being used primarily by BNA and also
for commercial leasing. BNA also leases office space for its use at 1250 23rd
Street, N.W., Washington, D.C.

BNA's Customer  Contact  Department  operates in an owned facility at 9435 Key
West Avenue,  Rockville,  Maryland.  Pike & Fischer,  Inc. leases office space
for its  operations  at 1010  Wayne  Avenue,  Silver  Spring,  Maryland.  IOMA
conducts its operations from leased offices at 29 West 35th Street,  New York,
New York.  Kennedy  Information,  Inc.  conducts  its  operations  from leased
offices at One Kennedy Place,  Fitzwilliam,  New Hampshire.  BNA International
Inc.  conducts its  operations  from leased  offices at Heron  House,  10 Dean
Farrar  Street,  London,  England.  The McArdle  Printing  Co.,  Inc. owns its
office and plant facilities at 800 Commerce Drive, Upper Marlboro, Maryland.

Item 3.  Legal Proceedings

The Company is involved in certain legal actions arising in the ordinary course
of business. In the opinion of management the ultimate disposition of these
matters will not have a material adverse effect on the Company's consolidated
financial statements.

Item 4.  Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended December 31, 2000.


Item X.  EXECUTIVE OFFICERS OF THE REGISTRANT

The following persons were executive officers of The Bureau of National Affairs,
Inc., at December 31, 2000. Executive officers are elected annually by the Board
of Directors and serve until their successors are elected.

       Name                 Age         Present position and prior experience
----------------           -----        -------------------------------------
William A. Beltz             71         Chairman of the Board
                                         Elected chairman in 1994. Served as
                                         president from 1979 to 1995 and chief
                                         executive officer from 1980 until 1996.
                                         Joined BNA in 1956.

Jacqueline M. Blanchard      51         Vice President for Human Resources
                                         Elected vice president in 1994.
                                         Previously was director of labor and
                                         employee relations since 1987.
                                         Joined BNA in 1984.

Eunice L. Bumgardner         40         Vice President and General Counsel
                                         Elected vice president in 1996 and
                                         general counsel in 1995. Joined BNA
                                         in 1994 as associate general counsel.

<PAGE>13

Item X.     EXECUTIVE OFFICERS OF THE REGISTRANT  (Continued)

      Name                  Age         Present position and prior experience
----------------           -----        -------------------------------------
Sandra C. Degler             61         Vice Chairman of the Board
                                         Elected vice chairman in 1998. Served
                                         as president of Tax Management Inc.
                                         from 1983 to 2000. Joined BNA in 1963.

George J. Korphage           54         Vice President and Chief
                                        Financial Officer
                                         Elected vice president in 1988 and
                                         chief financial officer in 1989. Joined
                                         BNA in 1972.

Gilbert S. Lavine            49         Treasurer
                                         Elected to present position in 1998.
                                         Joined BNA in 1985.

Gregory C. McCaffery         40         Vice President and Editor in Chief
                                         Elected vice president and editor
                                         in chief in 2000. Previously was
                                         director of marketing and product
                                         development since 1996. Joined
                                         BNA in 1986.

Mary Patricia Swords         55         Vice President and Director of
                                        Sales and Marketing
                                         Elected to present position in 1996.
                                         Previously was regional manager of
                                         Mountain sales region since 1985.
                                         Joined BNA in 1977.

Robert L. Velte              53         Vice President for Strategic Development
                                         Elected to vice president in 1995.
                                         Previously was president of BNA
                                         International from 1994 to 1997.
                                         Joined BNA in 1976.

Paul N. Wojcik               52         President and Chief Executive Officer
                                         Elected president in 1995 and chief
                                         executive officer in 1997. Previously
                                         was chief operating officer from 1995
                                         to 1996, and general counsel from 1972.
<PAGE>14
                                   PART II


Item 5.     Market for the  Registrant's  Common  Stock and  Related
            Security Holder Matters

Market Information, Holders, and Dividends

There is no established public trading market for any of BNA's three classes of
stock, but the Stock Purchase and Transfer Plan provides a market in which Class
A stock can be bought and sold.

The Board of Directors semi-annually establishes the price at which Class A
shares can be bought and sold through the Stock Purchase and Transfer Plan and
declares cash dividends. In accordance with the corporation's bylaws, the price
and dividends on non-voting Class B and Class C stock are the same as on Class A
stock. Dividends have been paid continuously for 50 years, and they are expected
to continue.

As of March 1, 2001, there were 1,475 Class A shareholders, 279 Class B
shareholders, and 29 Class C shareholders. During 2000, the Company repurchased
389,500 shares of Class B stock and 4,670 shares of Class C stock from retired
employees.

Established  stock price and dividends  declared  during 2000 and 1999 were as
follows:

      Stock Price
            January 1, 1999 - March 28, 1999                $34.00
            March 29, 1999 - September 26, 1999              37.00
            September 27, 1999 - March 26, 2000              39.00
            March 27, 2000 - September 24, 2000              42.25
            September 25, 2000 - December 31, 2000           44.25

      Record  Date and Dividend Amount
            March 27, 1999                                    $.65
            September 25, 1999                                 .65
            March 25, 2000                                     .70
            September 23, 2000                                 .70


The principal market for trading of voting shares of common stock of The Bureau
of National Affairs, Inc., is through the Trustee of the Stock Purchase and
Transfer Plan.

<PAGE>15
                                   PART II

Item 6.     Selected Financial Data

                     The Bureau of National Affairs, Inc.
           Consolidated Operating and Financial Summary: 2000-1996
             (Dollar amounts in thousands, except per share data)


                                2000      1999      1998      1997      1996
                              --------  --------  --------  --------  ---------
Operating Revenues            $297,399  $283,959  $271,328  $246,290  $234,484
Operating Expenses             269,365   260,653   250,728   226,228   219,926
-------------------------------------------------------------------------------
Operating Profit                28,034    23,306    20,600    20,062    14,558
Non-operating Income:
 Investment Income, net          7,673     8,490     8,178     7,957     6,989
 Other Income                   (1,200)      112      (432)      427        82
-------------------------------------------------------------------------------
Income Before Income Taxes
 and  Cumulative Effect of
 Accounting Change (a)          34,507    31,908    28,346    28,446    21,629
Income Taxes                    11,353    10,898     8,753     8,885     7,041
                              -------------------------------------------------
Income from Operations          23,154    21,010    19,593    19,561    14,588
Cumulative Effect of
 Accounting Change              (7,470)      ---       ---       ---      ---
                              -------------------------------------------------
Net Income                     $15,684   $21,010   $19,593   $19,561  $ 14,588
------------------------------=================================================
Profit Ratios (b):
 % of Operating Revenues           7.8       7.4       7.2       7.9       6.2
 % of Average Stockholders'
   Equity                         33.5      28.7      26.6      26.8      20.9
-------------------------------------------------------------------------------
Earnings  Per Share               1.98      2.58      2.34      2.24      1.65
Dividends Per Share               1.40      1.30      1.20      1.10      1.00
-------------------------------================================================
Balance Sheet Data:
  Total Assets                $371,000  $322,728  $324,449  $300,900  $299,311
  Long-Term Debt                59,000    14,000    14,000        --        --
------------------------------=================================================
Employee Data:
  Number of Employees            2,085     2,007     2,055     1,893     1,915
  Total Employment Costs      $150,345  $146,628  $137,386  $128,095  $124,322
------------------------------=================================================
Stockholder Data at Year-End:
  Book Value Per Share           $8.52     $8.96     $9.00     $8.65     $8.15
  Number of Stockholders         1,782     1,836     1,791     1,752     1,741
  Common Shares Outstanding
   (In thousands)                7,759     8,061     8,228     8,500     8,848
------------------------------=================================================

(a)  Includes the cumulative effects of the change in accounting for selling
     expenses in 2000.

(b)  Based on net income excluding the cumulative effect of the accounting
     change.

<PAGE>16

Selected Quarterly Data

The following is quarterly financial information (unaudited) for 2000 and 1999
(in thousands of dollars).


                                       First     Second     Third     Fourth
             2000 (a,b)               Quarter    Quarter   Quarter   Quarter
                                       Ended      Ended     Ended     Ended
                                      March 25   June 17   Sept. 9   Dec. 31
-----------------------------------------------------------------------------

Revenues                              $63,293    $66,503   $64,108   $103,495
Gross Profit                           28,318     29,986    29,599     51,683
Income Before Cumulative Effect of
  Accounting Change                     4,180      4,239     4,375     10,360
Cumulative Effect of Accounting
  Change                               (7,470)       ---       ---        ---
Net Income                             (3,290)     4,239     4,375     10,360

Earnings Per Share:
Income Before Cumulative Effect of
  Accounting Change                     $0.52      $0.53     $0.56      $1.32
Cumulative Effect of Accounting
  Change                                 (.95)       ---       ---        ---
                                     ----------------------------------------
Net Income                             ($0.43)    $0.53     $0.56       $1.32


                                      Quarter    Quarter   Quarter   Quarter
              1999 (a)                 Ended      Ended     Ended     Ended
                                      March 27   June 19   Sept. 11  Dec. 31
-----------------------------------------------------------------------------

Revenues                              $61,677    $63,366   $63,458   $ 95,458
Gross Profit                           27,272     27,793    29,052     44,614
Net Income                              3,653      4,108     4,666      8,538

Earnings Per Share:                     $0.44      $0.51     $0.57      $1.06

(a)   First Quarter, 2000 restated to show effect of cumulative effect of
      accounting change for recognizing selling expenses, effective January 1,
      2000.

(b)   First, second, and third fiscal quarters restated to show effect of
      adopting Emerging Issues Task Force, Issue No. 00-10, Accounting for
      Shipping and Handling Fees and Costs. Additional amounts included in
      revenues are:

      2000: first quarter   $494          1999: first quarter       $475
            second quarter   701                second quarter       665
            third quarter    510                third quarter        586

      Additional amounts included in expenses are:

      2000: first quarter   $532          1999: first quarter       $475
            second quarter   739                second quarter       665
            third quarter    551                third quarter        586

<PAGE>17
                                 PART II

Item 7.     Management's Discussion and Analysis of Financial Condition and
            Results of Operations

2000 vs. 1999
-------------
Consolidated revenues of $297.4 million were up 4.7 percent over the prior year.
Operating expenses increased 3.3 percent, and operating profit increased 20.3
percent to $28 million. Excluding the financial results of BNA Communications,
which was sold in 1999, revenues grew 5.6 percent, and operating expenses were
up 4.3 percent. Net income for 2000 was negatively impacted by the adoption of a
new accounting standard. As discussed in Note 3 to the consolidated financial
statements, the Company adopted SEC Staff Accounting Bulletin No. 101: Revenue
Recognition in Financial Statements, effective January 1, 2000. The cumulative
effect of the accounting change was a net expense of $7.5 million. Net income
was $15.7 million and earnings per share were $1.98. Excluding the cumulative
effect of the accounting change, income was $23.2 million, a 10.2 percent
increase from 1999 and earnings per share were $2.93, an increase of 13.6
percent, also reflecting fewer outstanding shares. The consolidated federal,
state, and local effective income tax rate decreased to 32.9 percent in 2000
from 34.2 percent in 1999, mainly due to lower effective state and local taxes.

Publishing operating segment (which aggregates the Parent with Tax Management
Inc. (excluding Software), IOMA, Pike & Fischer, Inc., BNA International Inc.,
Kennedy Information, Inc., and BNA Washington Inc.) generated 86.9 percent of
consolidated revenues. Publishing revenues were up 4.7 percent, reflecting the
acquisition of Kennedy, new products and price increases. Operating expenses
increased 4.0 percent. Excluding the results of Kennedy, revenues were up 3.9
percent, and operating expenses were up 2.9 percent. Eighteen new products were
launched in 2000. Development expenses for new products and improvements on
existing products were $4.0 million compared to $4.9 million in 1999. Operating
expenses in 2000 also include an identifiable $4.8 million for developing
improved business and publishing systems, compared to $5.6 million in 1999.
Operating profit was 13.6 percent higher than in 1999.

Printing operating segment, which includes The McArdle Printing Company, Inc.,
achieved a 7.7 percent growth in revenues, reflecting a 15.5 percent increase in
revenues from external customers and a 2.3 percent decrease in intersegment
revenues. Sales to external customers have improved due to increased business
from existing customers and to the addition of new customers. Intersegment
revenues are expected to continue to decline as the Publishing product sales mix
migrates from print to electronic format products. Operating expenses increased
7.2 percent, including higher selling expenses related to higher external sales.
Printing operating profit increased 15.2 percent.

Software operating segment, which includes BNA Software, a division of Tax
Management Inc., revenues increased 5.8 percent. Operating expenses were down
7.3 percent as certain development costs were capitalized and improvements made
to production processes led to fewer software revisions.
Operating profit improved 66.2 percent.

Non-operating income was $2.1 million lower in 2000 due to higher interest
expense related to the Kennedy acquisition, slightly lower investment income,
and net losses on sales of assets, including an additional loss on the sale of
BNA Communications.

<PAGE>18

1999 vs. 1998
-------------
Consolidated revenues of $284 million were up 4.7 percent over the prior year.
Operating expenses increased 4 percent, and operating profit increased 13.1
percent to $23.3 million. Net income was $21 million, a 7.2 percent increase
from 1998. Earnings per share were $2.58, up 10.3 percent, also reflecting fewer
outstanding shares. The consolidated federal, state, and local effective income
tax rate increased to 34.2 percent in 1999 from 30.9 percent in 1998, mainly due
to higher effective state and local taxes.

Publishing operating segment revenues amounted to 86.9 percent of consolidated
revenues. Publishing revenues were up 4.9 percent, reflecting new products and
price increases. Operating expenses increased 4.1 percent, mainly due to higher
royalties and higher employment and consulting expenses. Twenty-eight new
products were launched in 1999. Development expenses for new products and
improvements on existing products were $4.9 million compared to $6 million in
1998. Operating expenses in 1999 also include an identifiable $5.6 million for
developing improved business and publishing systems and Year 2000-related
systems expenses, compared to $8.3 million in 1998. Operating profit was 12.8
percent higher than in 1998.

Printing operating segment revenues increased 7.6 percent, reflecting a 15.4
percent increase in revenues from external customers and a 0.9 percent decrease
in intersegment revenues. Sales to external customers have improved due to
increased business from existing customers and to the addition of new customers.
Intersegment revenues are expected to continue to decline as the Publishing
product sales mix migrates from print to electronic format products. Operating
expenses increased 7 percent, including higher selling expenses related to
higher external sales. Printing operating profit increased 18.8 percent.

Software operating segment revenues increased 5.7 percent. Operating expenses
were up 7.3 percent due in part to higher development expenses, and operating
profit was essentially flat.

In August 1999, BNA Communications Inc., (BNAC) a training media business, was
sold to LearnCom, Inc. An investment far in excess of BNAC's limited strategic
and financial significance to the Company would have been required to grow BNAC
into an acceptably profitable business, and a sale to another training media
business was deemed to be in the best interests of the Company. BNAC's financial
results comprise all of the "All Other" segment figures. The sale resulted in a
$281,000 pre-tax loss in 1999.

Non-operating income was $856,000 higher in 1999 due to increased investment
income, a gain on a sale of a publication (partially offset by the loss on the
sale of BNA Communications), and a smaller loss from property and equipment
disposals. Investment income net of interest expense increased 3.8 percent
compared to last year due to higher interest rates.

Deferred Tax Assets
-------------------
The Company has recorded $28 million of net deferred tax assets as of year-end
2000. The ultimate realization of deferred tax assets is dependent upon future
taxable income during the periods in which those temporary differences become
deductible. The Company has consistently achieved profitability and taxable
income. In the opinion of management, this trend will continue, and it is more
likely than not that the recorded deferred tax assets will be fully realized and
no valuation allowance is necessary.

<PAGE>19

Financial Resources and Cash Flows
----------------------------------
The Company maintains its financial reserves in cash and investment securities,
which, along with its operating cash flows, are sufficient to fund ongoing
expenditures for operations and to support employee ownership. Cash provided
from operating activities increased $9.3 million in 2000, reflecting a 5.1
percent increase in collections, and a 2.0 percent increase in operating
expenditures.

Cash outlays for investing activities totaled $61.8 million. Capital
expenditures netted to $56.4 million including $46.4 million for the purchase of
Kennedy, $7.9 million for property and equipment additions and capitalized
software, and $2.3 million for the purchase of publishing assets; $.2 million
was received in the sale of a publication. In addition, $5.4 million was
transferred to the Company's investment portfolio. Capital expenditures for
2001, including a business acquisition, is expected to be approximately $37
million.

Cash provided by financing activities netted to $20.7 million. The Company
borrowed $45 million to partially finance the Kennedy acquisition. Sales of
Class A capital stock to employees totaled $6.5 million. Capital stock
repurchases amounted to $19.6 million, most of which were mandatory redemptions.
In addition, the Company paid cash dividends of $11.2 million in 2000.

With more than nearly $152 million in cash and investment portfolios and a $30
million loan facility, the financial position and liquidity of the Company
remains very strong. Since subscription monies are collected in advance, cash
flows from operations, along with existing financial reserves and proceeds from
the sales of capital stock, have been sufficient in past years to meet all
operational needs, new product introductions, debt repayments, most capital
expenditures, and, in addition, provide funds for dividend payments and the
repurchase of stock tendered by shareholders. Should more funding become
necessary or desirable in the future, the Company has substantial debt capacity
based on its operating cash flows and real estate equity.

Accounting Pronouncements
-------------------------
In 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities," and in 1999 they
voted to delay the effective date of this SFAS by one year. SFAS No. 133
requires that derivatives and hedging agreements be recognized as assets and
liabilities, and measured at fair value. The effect of adopting the Statement is
not expected to have a material effect on the Company's future financial
position or overall trends in results of operations.

<PAGE>20

ITEM 7a.    Quantitative And Qualitative Disclosures About Market Risk

The Company is exposed to interest rate risks in its investment portfolio and
its term debt liability. A hypothetical ten percent increase in market interest
rates would result in higher interest expense on its term debt, but the increase
would be immaterial.

The maturity dates and average interest yields for fixed-income securities debt
held in the Company's investment portfolio as of December 31, 2000 was as
follows:

                     Expected Maturity Date ($ thousands)
--------------------------------------------------------------------------------
                          2001     2002     2003     2004     2005   Thereafter
--------------------------------------------------------------------------------

Municipal Bonds          $3,971  $12,610   $3,645  $13,442   $8,034    $75,896

Average Interest Rate       4.9%     5.7%     6.0%     5.7%     5.6%       5.4%

Corporate Debt              ---      ---   $1,964   $1,957      ---     $1,991

Average Interest Rate                         5.6%     5.8%                5.8%
--------------------------------------------------------------------------------

The Company manages interest rate risk in its investment portfolio by
diversifying the maturities of its fixed-income investments. Approximately 37
percent of these instruments at year-end 2000 mature within five years.
Shorter-term maturity investments reduce the risk that any decline in their fair
value will have a permanent adverse effect on the Company's financial position.
The Company does not hold securities for trading purposes, or use derivative
financial instruments.

<PAGE>21
                                   PART II


Item 8.     Financial Statements and Supplementary Data





                  THE BUREAU OF NATIONAL AFFAIRS, INC.

                   Consolidated Financial Statements

                       December 31, 2000 and 1999

              (With Independent Auditors' Report Thereon)

<PAGE>22


                      Independent Auditors' Report


The Board of Directors and Stockholders
The Bureau of National Affairs, Inc.:

We have audited the consolidated financial statements of The Bureau of National
Affairs, Inc. and subsidiaries as listed in the accompanying index in Part IV,
Item 14(a)(1). In connection with our audits of the consolidated financial
statements, we have also audited the financial statement schedule as listed in
the accompanying index in Part IV, Item 14(a)(2). These consolidated financial
statements and the financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements and the financial statement schedule based on
our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Bureau of
National Affairs, Inc. and subsidiaries as of December 31, 2000 and 1999, and
the results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States of America. Also in our
opinion, the related financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.

As disclosed in Note 3 to the consolidated financial statements, the Company
adopted the provisions of SEC Staff Accounting Bulletin No.
101: Revenue Recognition in Financial Statements.


                        s\ KPMG LLP
                        KPMG LLP

Washington, D.C.
February 23, 2001

<PAGE>23

                      THE BUREAU OF NATIONAL AFFAIRS, INC.
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 1999
                            (In thousands of dollars)

                                     ASSETS

                                                         December 31,
                                                  ---------------------------
                                                     2000            1999
                                                  -----------     -----------
    CURRENT ASSETS:
    Cash and cash equivalents (Note 5)            $   16,190      $   16,200
    Short-term investments (Note 5)                    3,971           4,120
    Receivables (Note 9)                              48,985          43,930
    Inventories (Note 9)                               4,542           4,707
    Prepaid expenses                                   4,444           4,372
    Deferred selling expenses (Note 3)                 8,320          20,668
    Deferred income taxes (Note 8)                     3,027             ---
                                                  -----------     -----------
     Total current assets                         $   89,479      $   93,997

    MARKETABLE SECURITIES (Note 5)                   132,098         121,670
    PROPERTY AND EQUIPMENT (Note 9)                   37,126          40,111
    DEFERRED INCOME TAXES (Note 8)                    24,950          26,548
    GOODWILL (Note 7)                                 26,897          27,800
    OTHER ASSETS (Note 9)                             60,450          12,602
                                                  -----------     -----------
    Total assets                                  $  371,000      $  322,728
                                                  ===========     ===========


                                                                  (Continued)
<PAGE>24
                     THE BUREAU OF NATIONAL AFFAIRS, INC.
                         CONSOLIDATED BALANCE SHEETS
                          DECEMBER 31, 2000 AND 1999
                          (In thousands of dollars)

                     LIABILITIES AND STOCKHOLDERS' EQUITY

                                                         December 31,
                                                  ---------------------------
                                                     2000            1999
                                                  -----------     -----------
    CURRENT LIABILITIES:
    Payables and accrued liabilities (Note 9)     $    37,600     $   32,797
    Deferred income taxes (Note 8)                        ---          1,774
    Deferred subscription revenue (Note 3)            133,206        126,938
                                                  -----------     -----------

    Total current liabilities                         170,806        161,509

    LONG-TERM DEBT (Note 10)                           59,000         14,000
    POSTRETIREMENT BENEFITS, less current              69,757         70,129
    portion (Note 4)
    OTHER LIABILITIES                                   5,324          4,887
                                                  -----------     -----------
    Total liabilities                                 304,887        250,525
                                                  -----------     -----------

    COMMITMENTS AND CONTINGENCIES (Notes 11 & 12)
    STOCKHOLDERS' EQUITY (Note 12):
    Common stock issued, $1.00 par value --
      Class A - 6,478,864 shares                        6,479          6,479
      Class B - 4,926,973 shares                        4,927          4,927
      Class C -    506,336 shares                         506            506
    Additional paid-in capital                         48,920         44,421
    Retained earnings                                  84,604         80,107
    Treasury stock, at cost                           (78,986)       (61,380)
    Elements of other comprehensive income:
      Net unrealized (loss) on marketable                (314)        (2,802)
    securities
      Foreign currency translation adjustment             (23)           (55)
                                                  -----------     -----------
    Total stockholders' equity                         66,113         72,203
                                                  -----------     -----------
    Total liabilities and stockholders' equity        371,000     $  322,728
                                                  ===========     ===========


         See accompanying notes to consolidated financial statements.

<PAGE>25
                     THE BUREAU OF NATIONAL AFFAIRS, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
                  YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
               (In thousands of dollars, except per share amounts)


                                                           Percent of Operating
                                                                   Revenue
                                                            --------------------
                                2000      1999      1998     2000   1999   1998
                              --------  --------  --------  ------ ------ ------
OPERATING REVENUES (Note 3)   $297,399  $283,959  $271,328  100.0% 100.0% 100.0%
                              --------  --------  --------  ------ ------ ------
OPERATING EXPENSES
 (Notes 3,4,7,9 and 11):
 Editorial, production, and    157,813   155,228   146,488   53.1   54.7   54.0
  distribution
 Selling                        62,776    60,307    59,626   21.1   21.2   22.0
 General and administrative     46,156    42,856    42,646   15.5   15.1   15.7
 Profit sharing                  2,620     2,262     1,968    0.9    0.8    0.7
                              --------  --------  --------  ------ ------ ------
                               269,365   260,653   250,728   90.6   91.8   92.4
                              --------  --------  --------  ------ ------ ------
OPERATING PROFIT                28,034    23,306    20,600    9.4    8.2    7.6
                              --------  --------  --------  ------ ------ ------
NON-OPERATING INCOME:
 Investment income (Note 5)      9,327     9,516     9,077    3.1    3.4    3.3
 Interest expense (Note 10)     (1,654)   (1,026)     (899)  (0.5)  (0.4)  (0.3)
 Other income (expense)         (1,200)      112      (432)  (0.4)    --   (0.2)
  (Notes 2 and 6)             --------  --------  --------  ------ ------ ------
TOTAL NON-OPERATING INCOME       6,473     8,602     7,746    2.2    3.0    2.8
                              --------  --------  --------  ------ ------ ------
INCOME BEFORE PROVISION FOR
 INCOME TAXES                   34,507    31,908    28,346   11.6   11.2   10.4
PROVISION FOR INCOME TAXES
 (Note 8)                       11,353    10,898     8,753    3.8    3.8    3.2
                              --------  --------  --------  ------ ------ ------
INCOME BEFORE CUMULATIVE
 EFFECT OF ACCOUNTING CHANGE    23,154    21,010    19,593    7.8%   7.4%   7.2%
                              --------  --------  --------  ====== ====== ======
CUMULATIVE EFFECT OF CHANGE IN
 ACCOUNTING FOR SELLING EXPENSE
 (Note 3)                       (7,470)      ---       ---
                              --------  --------  --------
NET INCOME                    $ 15,684  $ 21,010  $ 19,593
                              --------  --------  --------

EARNINGS PER SHARE (Note 12)

INCOME BEFORE CUMULATIVE
 EFFECT OF ACCOUNTING CHANGE  $  2.93   $  2.58   $  2.34
CUMULATIVE EFFECT OF
 ACCOUNTING CHANGE               (.95)       --        --
                              --------  --------  --------
NET INCOME                    $  1.98   $  2.58   $  2.34
                              ========  ========  ========

         See accompanying notes to consolidated financial statements.

<PAGE>26

                      THE BUREAU OF NATIONAL AFFAIRS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
                            (In thousands of dollars)


                                                2000       1999       1998
                                             ---------  ---------  ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income                                  $ 15,684   $ 21,010   $ 19,593
 Items with different cash requirements
  than that reflected in net income -
   Cumulative effect of accounting change       7,470        ---        ---
   Depreciation and amortization               11,129     10,637     10,533
   (Gain) on sales of securities                 (913)    (1,497)    (1,423)
   (Gain) loss on sales of assets               1,200       (112)       432
   Others                                        (137)      (407)        48
 Changes in operating assets and
  liabilities -
   Receivables                                 (4,248)       773     (1,806)
   Deferred subscription revenue                4,301       (859)      (349)
   Payables and accrued                         4,656     (1,182)     1,663
    liabilities
   Postretirement benefits                       (372)     1,023      3,786
   Deferred income taxes                          246      1,827     (4,275)
   Deferred selling expenses                       72        866      1,658
   Inventories                                    200        (52)       441
   Other assets and libilities-net              1,814       (209)       240
                                             ---------  ---------  ---------
Net cash provided from operating
 activities                                    41,102     31,818     30,541
                                             ---------  ---------  ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Capital expenditures
  Acquisition of businesses
  (net of $750 cash acquired in 1998)         (46,360)       ---    (18,289)
  Purchases of equipment and furnishings       (3,345)    (2,803)    (4,272)
  Capitalized software                         (4,345)    (6,642)       ---
  Building improvements                          (267)      (328)      (170)
  Proceeds from sales of assets                   156      1,120         96
  Purchase of publishing assets                (2,255)    (2,526)      (132)
                                             ---------  ---------  ---------
  Net cash used for capital expenditures      (56,416)   (11,179)   (22,767)
expenditures                                 ---------  ---------  ---------


                                                                  (Continued)
<PAGE>27

                     THE BUREAU OF NATIONAL AFFAIRS, INC.
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
                YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
                          (In thousands of dollars)

                                                2000       1999       1998
                                             ---------  ---------  ---------
 Securities investments
  Proceeds from sales and maturities          102,403     57,142     75,267
  Purchases                                  (107,805)   (59,880)   (82,127)
                                             ---------  ---------  ---------
  Net cash used for securities investments     (5,402)    (2,738)    (6,860)
                                             ---------  ---------  ---------
Net cash used for investing activities        (61,818)   (13,917)   (29,627)
                                             ---------  ---------  ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Sales of capital stock to employees            6,481      6,493      5,727
 Purchases of treasury stock                  (19,588)   (12,816)   (14,702)
 Dividends paid                               (11,187)   (10,637)   (10,101)
 Borrowings                                    45,000        ---     15,000
 Repayment of borrowings                          ---        ---     (1,000)
                                             ---------  ---------  ---------
 Net cash provided by (used for)
 financing activities                          20,706    (16,960)    (5,076)
                                             ---------  ---------  ---------
NET INCREASE (DECREASE) IN CASH
 AND CASH EQUIVALENTS                             (10)       941     (4,162)

CASH AND CASH EQUIVALENTS,
 beginning of year                             16,200     15,259     19,421
                                             ---------  ---------  ---------
CASH AND CASH EQUIVALENTS,
 end of year                                 $ 16,190   $ 16,200   $ 15,259
                                             =========  =========  =========
SUPPLEMENTAL DISCLOSURES OF CASH
FLOW INFORMATION:
 Interest paid                               $    968   $  1,063   $    678
 Income taxes paid                             11,730      8,973     13,627

NONCASH INVESTING ACTIVITIES-
Acquisitions of businesses:
  Fair value of assets acquired              $ 47,561              $ 26,628
  Cash paid                                   (46,360)              (19,039)
                                             ---------             ---------
  Liabilities assumed                        $  1,201              $  7,589
                                             =========             =========

         See accompanying notes to consolidated financial statements.

<PAGE>28

<TABLE>
                  THE BUREAU OF NATIONAL AFFAIRS, INC.
      CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
              YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
                      (In thousands of dollars)

<CAPTION>
                                                  Comprehensive   Capital   Additional                         Accum. Other
                                                    Income         Stock     Paid-In     Retained   Treasury   Comprehensive
                                                   (Note 13)      Issued     Capital     Earnings    Stock        Income
                                                  ------------   ---------  ----------   ---------  ---------  ------------
<S>                                               <C>            <C>        <C>          <C>        <C>          <C>
BALANCE, January 1, 1998                                         $ 11,912   $ 35,668     $ 60,242   $(37,329)    $ 3,058
Net Income                                           $19,593          ---        ---       19,593        ---         ---
Other Comprehensive Income, net of tax:
 Unrealized (loss) on marketable securities              (45)         ---        ---          ---        ---         (45)
 Currency translation adjustment                         ( 2)         ---        ---          ---        ---          (2)
                                                  ------------
Comprehensive Income                                 $19,546
                                                  ============
Sales of Class A treasury shares to employees                         ---      4,114          ---      1,613         ---
Repurchases of shares                                                 ---        ---          ---    (14,702)        ---
Cash dividends--$1.20 per share                                       ---        ---      (10,101)       ---         ---
                                                                 ---------  ----------   ---------  ---------  ------------
 BALANCE, December 31, 1998                                        11,912     39,782       69,734    (50,418)      3,011

Net Income                                           $21,010          ---        ---       21,010        ---         ---
Other Comprehensive Income, net of tax:
 Unrealized (loss) on marketable securities           (5,883)         ---        ---          ---        ---      (5,883)
 Currency translation adjustment                          15          ---        ---          ---        ---          15
                                                  ------------
Comprehensive Income                                 $15,142
                                                  ============
Sales of Class A treasury shares to employees                         ---      4,639          ---      1,854         ---
Repurchases of shares                                                 ---        ---          ---    (12,816)        ---
Cash dividends--$1.30 per share                                       ---        ---      (10,637)       ---         ---
                                                                 ---------  ----------   ---------  ---------  ------------
 BALANCE, December 31, 1999                                        11,912     44,421       80,107    (61,380)     (2,857)
Net Income                                           $15,684          ---        ---       15,684        ---         ---
Other Comprehensive Income, net of tax:
 Unrealized (loss) on marketable securities            2,488          ---        ---          ---        ---       2,488
 Currency translation adjustment                          32          ---        ---          ---        ---          32
                                                  ------------
Comprehensive Income                                 $18,204
                                                  ============
Sales of Class A treasury shares to employees                         ---      4,499          ---      1,982         ---
Repurchases of shares                                                 ---        ---          ---    (19,588)        ---
Cash dividends--$1.40 per share                                       ---        ---      (11,187)       ---         ---
                                                                 ---------  ----------   ---------  ---------  ------------
 BALANCE, December 31, 2000                                      $ 11,912   $ 48,920     $ 84,604   $(78,986)    $  (337)
                                                                 =========  ==========   =========  =========  ============
</TABLE>

          See accompanying notes to consolidated financial statements.
<PAGE>29

                      THE BUREAU OF NATIONAL AFFAIRS, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                  YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998

(1)   PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION

      The accompanying consolidated financial statements include the accounts of
      The Bureau of National Affairs, Inc. (the Parent), and its subsidiary
      companies (consolidated, the Company). Material intercompany transactions
      and balances have been eliminated. Certain prior year balances have been
      reclassified to conform to the current year presentation. Effective
      January 1, 2000, the Company adopted the provisions of Emerging Issues
      Task Force Issue No. 00-10 Accounting for Shipping and Handling Fees and
      Costs, and accordingly, increased revenues and distribution expenses for
      1999 by $3,062,000 and for 1998 by $2,499,000. The restatement had no
      impact on net income.

      The carrying value of financial assets and liabilities reported in the
      financial statements approximates fair value. The reported amounts of some
      assets and liabilities, and the disclosures of contingent assets and
      liabilities, result from management estimates and assumptions which are
      required to prepare financial statements in conformity with accounting
      principles generally accepted in the United States of America. Estimates
      and assumptions may also affect the reported amounts of revenues and
      expenses during the reporting period. Actual results could differ from
      those estimates.


(2)   ACQUISITIONS AND DISPOSITIONS

      In November 2000, the Company acquired all of the publishing and operating
      assets of Kennedy Information, LLC (Kennedy), a publisher of newsletters,
      magazines, directories, and conferences. The Company paid $46.4 million in
      cash and assumed liabilities of $1.2 million, based on estimated Kennedy
      asset and liability balances; these are subject to a final accounting and
      purchase price adjustment. Additional monies could also be paid out if
      performance targets are exceeded for fiscal years ending December 31, 2001
      through 2004. The acquisition was partially financed with a $45 million
      loan from an insurance company. The acquisition was accounted for as a
      purchase and, accordingly, Kennedy's financial results have been included
      with those of the Company since the acquisition date. The final purchase
      price will be allocated to the Kennedy assets, primarily intangible
      assets, based on valuations performed by an independent appraiser to be
      completed in the first quarter of 2001. Pending the final allocation of
      the purchase price, the estimated total value of Kennedy intangible assets
      has been classified as an Other Asset.

      The following unaudited pro forma information presents a summary of
      consolidated results of operations of the Company and Kennedy Information
      as if the acquisition had occurred at the beginning of 1998. The pro forma
      information includes adjustments for interest expense that would have been
      incurred to finance the purchase, amortization of goodwill and customer
      lists, and certain other adjustments, together with related income tax
      effects. (in thousands, except per share data).

                                      2000        1999         1998
                                    ---------   ----------   ---------
       Revenues                     $ 308,535   $ 290,784    $ 275,621
       Net Income                   $  14,054   $  16,884    $  15,268
       Earnings per share           $    1.78   $    2.07    $    1.82

                                                                  (Continued)
<PAGE>30
                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      On a pro forma basis for 2000, 1999 and 1998, earnings per share would
      have decreased by $0.20, $0.51, and $0.52, respectively. However, these
      pro forma results may not be indicative of the results of operations which
      would have resulted had Kennedy and the Company been a consolidated entity
      during those years or of future results of operations of the consolidated
      entities, and are not indicative of what the purchase price would have
      been at that time.

      During 2000, the Company purchased subscriber lists from other publishers.
      The total cost was $3,255,000, consisting of $2,255,000 in cash and the
      balance in assumed liabilities. The cost was assigned to subscription
      lists.

      In August 1999, the Company sold BNA Communications Inc. (BNAC), a
      media-based training enterprise. The sales price was $2.1 million,
      consisting of cash and royalty receivables, and an after-tax loss of
      $188,000 was recorded in 1999. In 2000, the collection of the receivable
      became doubtful and was fully reserved, resulting in an additional
      after-tax loss of $613,000. BNAC's revenues were $2,262,000 in 1999 (prior
      to the sale) and $4,597,000 in 1998; operating expenses were $2,460,000 in
      1999, and $4,736,000 in 1998.

      During 1999, the Company purchased subscriber lists from other publishers.
      The total cost was $3,085,000, consisting of $2,526,000 in cash and the
      balance in assumed liabilities. The cost was assigned to subscription
      lists.

      In January 1998, the Company acquired all of the outstanding stock of
      Institute of Management and Administration, Inc. (IOMA), a newsletter
      publisher. The acquisition was accounted for as a purchase and,
      accordingly, IOMA's financial results have been included with those of the
      Company since the acquisition date. IOMA was acquired for $19 million in
      cash, partially financed with a $15 million bank loan. A portion of the
      cost was assigned to subscription lists, which are being amortized over
      three years. The majority of the cost was assigned to goodwill, which is
      being amortized over 35 years.



(3)   RECOGNITION OF REVENUES AND SELLING EXPENSES

      Subscription revenues and related sales commission expenses are deferred
      and amortized over the subscription terms, which are primarily one year.
      Deferred subscription revenue is classified on the balance sheet as a
      current liability; however, the cost to fulfill the Company's subscription
      obligation will be substantially less than the liability amount shown.
      Software revenues are recognized at the time of shipment, net of a reserve
      for returns. Advertising expenses were $8,423,000 in 2000, $11,963,000 in
      1999 and $10,666,000 in 1998.

      Prior to 2000, the Company deferred all subscription-related field-selling
      expenses. Effective January 1, 2000, the Company adopted SEC Staff
      Accounting Bulletin No. 101: Revenue Recognition in Financial Statements;
      which permits the deferral of only direct and incremental expenses (sales
      commissions) when related revenues are deferred. This change in accounting
      required that $12,276,000 in previously deferred selling expenses be
      written off, resulting in a one-time, non-cash expense of $7,470,000 after
      taxes.

                                                                  (Continued)
<PAGE>31

                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(4)   EMPLOYEE BENEFIT PLANS

      The Company has noncontributory defined benefit pension plans covering
      employees of the Parent and certain subsidiary companies. Benefits are
      based on years of service and average annual compensation for the highest
      paid five years during the last 10 years of service. The plans provide for
      five-year cliff vesting.

      Pension expense is recorded on an accrual basis in accordance with
      financial reporting standards. Components of the net pension expense,
      based on the actuarial study as of January 1 for each year, were as
      follows (in thousands of dollars):

                                                   2000       1999       1998
                                                 --------   ---------  ---------
  Service cost benefits earned during the year   $ 4,472    $ 4,689    $ 4,415
  Interest cost                                    7,183      6,514      6,249
  Expected return on plan assets during the year  (7,436)    (7,058)    (6,372)
  Recognized net actuarial gain and amortization
   of transition assets and prior service costs   (1,042)      (164)       (50)
                                                 --------   --------   --------
  Net pension expense                            $ 3,177    $ 3,981    $ 4,242
                                                 ========   ========   ========

      In addition to providing pension benefits, the Company extends certain
      health care and life insurance benefits (other postretirement benefits) to
      retired employees. Most of the Company's employees are eligible for these
      benefits if they retire while working for the Company.

      Other postretirement benefits expense is recorded in accordance with
      financial reporting standards which require that the present value of
      these benefits be accrued during employees' working careers. Components of
      the postretirement benefit expense, based on the actuarial study as of
      January 1 for each year, were as follows (in thousands of dollars):

                                                   2000       1999       1998
                                                 --------   --------   --------
  Service cost benefits earned during the year   $ 1,911    $ 2,004    $ 1,927
  Interest cost                                    3,477      2,889      2,800
  Expected return on plan assets during the year  (1,053)      (539)      (240)
  Recognized net actuarial gain                     (775)      (734)      (655)
  Amortization of prior service cost                 (54)       (55)       (55)
                                                 --------   --------   --------
       Other postretirement benefits expense     $ 3,506    $ 3,565    $ 3,777
                                                 ========   ========   ========

                                                                  (Continued)
<PAGE>32

                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      The following table sets forth the changes in benefits obligations and
      assets, the funded status of the plans, and the liabilities recognized in
      the Company's Consolidated Balance Sheets as of December 31 (in thousands
      of dollars, except percentages):

                                                                  Other
                                      Pension Benefits       Postretirement
                                                                Benefits
                                     --------------------  --------------------
                                        2000      1999       2000       1999
                                     ---------- ---------  --------- ----------
   Change in benefit obligation:
   Benefit obligation--January 1      $ 88,768  $  95,494  $ 43,872  $  44,008
   Service cost                          4,472      4,689     1,911      2,004
   Interest cost                         7,183      6,514     3,477      2,889
   Actuarial (gain) loss                 7,739    (12,251)    3,221     (3,718)
   Benefits paid                        (6,707)    (5,678)   (1,609)    (1,311)
                                     ---------- ---------  --------- ----------
   Benefit obligation--December 31     101,455     88,768    50,872     43,872
                                     ---------- ---------  --------- ----------
   Change in plan assets:
   Fair value of plan
    assets--January 1                   89,384     84,728    12,414      6,378
   Actual return on plan assets          6,610     10,205       106      1,036
   Employer contribution                   ---        ---     5,000      5,000
   Benefits paid                        (6,564)    (5,549)      ---        ---
                                     ---------- ---------  --------- ----------
   Fair value of plan
   assets--December 31                  89,430     89,384    17,520     12,414
                                     ---------- ---------  --------- ----------
   Projected benefit obligation in
    excess of plan assets               12,025      (616)    33,352     31,458
   Unrecognized transition asset           751      1,128       ---        ---
   Unrecognized net gain                13,233     22,536    11,861     16,752
   Unrecognized prior service cost           4        (69)      292        394
                                     ---------- ---------  --------- ----------
   Accrued liability                    26,013     22,979    45,505     48,604
     Less current portion                  164        143     1,597      1,311
                                     ---------- ---------  --------- ----------
   Long-term portion                 $  25,849  $  22,836  $ 43,908  $  47,293
                                     ========== =========  ========= ==========

   Assumed discount rate                 7.25%      7.5%      7.25%       7.5%
   Assumed rate of compensation           5.0%      5.0%        ---        ---
    increase
   Expected long term rate of             8.5%      8.5%       8.5%       8.5%
    return on assets

      Plan assets include equity securities, fixed income securities, and
      temporary investments. The benefit obligations as of December 31, 2000
      have been calculated by an independent actuary.

                                                                  (Continued)
<PAGE>33

                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      The Company's funding practice with respect to pension benefits is to
      contribute amounts which, at a minimum, satisfy ERISA requirements. No
      contributions have been allowed since 1997 due to Internal Revenue Service
      funding limitations. The Company's policy with respect to other
      postretirement benefits is to fund these benefits as claims and premiums
      are paid or through a Voluntary Employees' Beneficiary Association (VEBA)
      trust.

      The December 31, 2000 postretirement benefit obligation was determined
      using an assumed health care cost trend rate of 4.5 percent in 2001 and
      each year thereafter over the projected payout period of the benefits. A
      one percent increase in the assumed health care cost trend rate for each
      year would increase the year-end postretirement benefit obligation by $8.7
      million and the 2000 postretirement benefit expense by $1 million. A one
      percent decrease in the assumed health care cost trend rate would decrease
      the postretirement benefit obligation by $7 million and the postretirement
      benefit expense by $.8 million.

      In addition, some acquired subsidiary companies have defined contribution
      pension plans and union-sponsored multi-employer pension plans.
      Contributions under some of these plans are at the discretion of the Board
      of Directors of the respective subsidiaries. Pension expense for these
      plans was $1,282,000 in 2000, $1,126,000 in 1999, and $1,001,000 in 1998.


 (5)  INVESTMENTS AND INVESTMENT INCOME

      Cash and investments were as follows (in thousands of dollars):

                                                        December 31,
                                                 ---------------------------
                                                     2000            1999
                                                 -----------     -----------
       Cash and cash equivalents                 $    16,190     $   16,200
       Short-term investments                          3,971          4,120
       Marketable securities                         132,098        121,670
                                                 -----------     -----------
       Total                                     $   152,259     $  141,990
                                                 ===========     ===========

      Cash equivalents consist of short-term investments, with a maturity of
      three months or less at the time of purchase. Short-term investments
      consist of other fixed-income investments, maturing in one year or less.
      Marketable securities consist of fixed-income securities maturing in more
      than one year and equity securities.

                                                                  (Continued)
<PAGE>34

                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      Investment income consisted of the following (in thousands of dollars):

                                              2000        1999         1998
                                           ---------   ----------   ----------
       Interest income                     $   7,592   $   6,561    $   6,096
       Dividend income                           822       1,458        1,558
       Net gain on sales of securities           913       1,497        1,423
                                           ---------   ----------   ----------
       Total                               $   9,327   $   9,516    $   9,077
                                           =========   ==========   ==========

      Proceeds from the sales and maturities of securities were $102,403,000,
      $57,142,000 and $75,267,000 in 2000, 1999, and 1998, respectively. Gross
      realized gains and (losses) from these sales were $1,043,000 and
      $(130,000) in 2000, $1,587,000 and $(90,000) in 1999, and $1,614,000 and
      $(191,000) in 1998. The specific identification method is used in
      computing realized gains and losses.

      The Company's investment securities are classified as available-for-sale
      and are reported at their fair values (quoted market price), which were as
      follows (in thousands of dollars):

                                               Gross       Gross
                                  Amortized  Unrealized  Unrealized    Fair
       December 31, 2000            Cost       Gains       Losses      Value
                                  ---------- ----------  ---------- ----------
       Equity securities          $   13,131 $      232  $    (804) $   12,559
       Municipal bonds               117,565      1,562     (1,529)    117,598
       Corporate debt                  5,856         91        (35)      5,912
                                  ---------- ----------  ---------- ----------
       Total                      $  136,552 $    1,885  $  (2,368) $  136,069
                                  ========== ==========  ========== ==========


       December 31, 1999

       Equity securities          $   11,131 $       70  $    (946) $   10,255
       Municipal bonds               103,806        525     (4,019)    100,312
       Corporate debt                 15,163        266       (206)     15,223
                                  ---------- ----------  ---------- ----------
       Total                      $  130,100 $      861  $  (5,171) $  125,790
                                  ========== ==========  ========== ==========


                                                                  (Continued)
<PAGE>35

                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      Fair values of the Company's fixed-income securities are inversely
      affected by changes in market interest rates. Generally, the longer the
      maturity of fixed-income securities, the larger the exposure to the risks
      and rewards resulting from changes in market interest rates. Contractual
      maturities of the fixed-income securities as of December 31, 2000 were as
      follows (in thousands of dollars):

                                                  Amortized         Fair
                                                     Cost           Value
                                                 -----------     -----------
       Within one year                           $     3,961     $    3,971
       One through five years                         41,367         41,652
       Five through ten years                         22,855         22,781
       Over ten years                                 55,238         55,106
                                                 -----------     -----------
       Total                                     $   123,421     $  123,510
                                                 ===========     ===========


(6)   OTHER INCOME (EXPENSE)

      Other income (expense) was comprised of the following (in thousands of
      dollars):
                                              2000         1999        1998
                                           ----------   ----------  ----------
       Gain on sales of publishing assets  $      16    $     569   $     ---
       Loss on sale of BNAC                   (1,035)        (283)        ---
       Loss on disposals of property
          and equipment                         (181)        (174)       (432)
                                           ----------   ----------  ----------
       Total                               $  (1,200)   $     112   $    (432)
                                           ==========   ==========  ==========


(7)   GOODWILL

      Goodwill represents the excess of the cost of purchased publications and
      the capital stock of subsidiaries over the fair value of net assets at the
      dates of their respective acquisitions, net of accumulated amortization of
      $6,895,000 in 2000 and $5,992,000 in 1999.

      Goodwill acquired before mandatory amortization rules, in the amount of
      $634,000, is not being amortized because, in management's opinion, it has
      continuing value. Other goodwill is amortized on a straight-line basis,
      over periods not exceeding forty years. Amortization expense was $903,000
      for 2000, $902,000 for 1999, and $881,000 for 1998.

      The recoverability of goodwill is evaluated periodically to determine if
      an impairment has occurred. The Company measures the potential impairment
      of recorded goodwill by comparing the undiscounted value of expected
      future operating cash flows to its book value, and records impairments
      when appropriate. If any impairment has occurred, goodwill will be written
      down to its fair value.

                                                                  (Continued)
<PAGE>36

                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(8)   INCOME TAXES

      The total income tax expense (benefit) was allocated as follows (in
      thousands of dollars):

                                            2000        1999          1998
                                          ---------   ---------    ---------
    Income Statement Provision for
      Income Taxes                        $ 11,353    $ 10,898     $  8,753
    Stockholders' Equity--Change in:
      Unrealized gain (loss) on
       marketable securities                 1,339      (3,167)         (24)
      Foreign currency translation
       adjustment                               18           8           (1)
                                          ---------   ---------    ----------
    Total                                 $ 12,710    $  7,739     $   8,728
                                          =========   =========    ==========

      The provision for income taxes consisted of the following (in thousands of
      dollars):
                                             2000        1999         1998
                                           ----------  ----------   ----------
       Taxes currently payable:
          Federal                          $   9,924   $   8,352    $  11,296
          State and local                      1,456         850        1,732
                                           ----------  ----------   ----------
                                              11,380       9,202       13,028
                                           ----------  ----------   ----------
       Deferred tax provision:
          Federal                                 93       1,017       (2,811)
          State and local                       (120)        679       (1,464)
                                           ----------  ----------   ----------
                                                 (27)      1,696       (4,275)
                                           ----------  ----------   ----------
       Total                               $  11,353   $  10,898    $   8,753
                                           ==========  ==========   ==========

      Reconciliation of the U.S. statutory rate to the Company's  consolidated
      effective income tax rate was as follows:

                                               Percent of Pretax Income
                                           ---------------------------------
                                             2000        1999        1998
                                           ---------   ---------   ---------
       Federal statutory rate                  35.0%       35.0%       35.0%
       State and local income taxes, net
         of federal income tax benefit          2.5         3.1         0.6
       Goodwill amortization and other
         nondeductible expenses                 1.7         2.1         2.0
       Tax exempt interest exclusion           (5.7)       (5.0)       (5.3)
       Dividends received exclusion            (0.6)       (1.0)       (1.4)
                                           ---------   ---------   ---------
       Total                                   32.9%       34.2%       30.9%
                                           =========   =========   =========

                                                                  (Continued)
<PAGE>37

                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      The tax effects of temporary differences that gave rise to the deferred
      tax assets and liabilities were as follows (in thousands of dollars):

                                                        December 31,
                                                 ---------------------------

                                                    2000            1999
                                                 -----------     -----------
       Deferred tax assets:
          Other postretirement benefits          $    18,243     $   19,496
          Pension expense                             10,624          9,378
          Inventories                                  2,041          1,825
          Annual leave                                 1,828          2,084
          Tax loss carryforwards                         453            946
          Others                                       3,042          3,082
                                                 -----------     -----------
       Total deferred tax assets                      36,231         36,811
                                                 -----------     -----------
       Deferred tax liabilities:
          Deferred selling expenses                   (3,246)        (8,092)
          Depreciation                                   (65)        (1,815)
          Others                                      (4,943)        (2,130)
                                                 -----------     -----------
       Total deferred tax liabilities                 (8,254)       (12,037)
                                                 -----------     -----------
       Net deferred tax assets                   $    27,977     $   24,774
                                                 ===========     ===========

      To the extent not utilized, the tax loss carryforwards expire in 2004
      through 2012. In the opinion of management, based on expected future
      earnings and available tax planning strategies, it is more likely than not
      that the deferred tax assets will be realized in future years, and no
      valuation allowance is necessary.


(9)         OTHER BALANCE SHEET INFORMATION

      Certain year-end balances consisted of the following (in thousands of
      dollars):

                                                    2000            1999
                                                 -----------     -----------
       Receivables:
          Customers                              $    46,405     $   40,706
          Others                                       4,609          4,675
          Allowance for doubtful accounts             (2,029)        (1,451)
                                                 -----------     -----------
       Total                                     $    48,985     $   43,930
                                                 ===========     ===========

                                                                  (Continued)
<PAGE>38

                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                    2000            1999
                                                 -----------     -----------
       Inventories:
          Materials and supplies                 $     3,103     $    3,178
          Work in process                                196            313
          Finished goods                               1,243          1,216
                                                 -----------     -----------
       Total                                     $     4,542     $    4,707
                                                 ===========     ===========

      Inventories are valued at the lower of cost (principally average cost
      method) or market.

                                                    2000            1999
                                                 -----------     -----------
       Property and Equipment, at cost:
          Land                                   $     4,250     $    4,250
          Buildings and improvements                  49,962         49,695
          Furniture and equipment                     55,297         58,976
          Accumulated depreciation                   (72,383)       (72,810)
                                                 -----------     -----------
       Total                                     $    37,126     $   40,111
                                                 ===========     ===========

      The Company uses straight-line and accelerated methods of depreciation
      based on estimated useful lives ranging from 5 to 45 years for buildings
      and improvements, and 3 to 10 years for furniture and equipment.
      Depreciation expense was $6,450,000 in 2000, $7,114,000 in 1999, and
      $7,657,000 in 1998. Expenditures for maintenance and repairs are expensed
      while major replacements and improvements are capitalized.

                                                    2000            1999
                                                 -----------     -----------
       Other assets:
          Amortizable assets--
            Software                             $     9,401     $    7,018
            Customer lists                             5,388          4,210
            Kennedy intangible assets                 45,188            ---
            Others                                       360            260
                                                 -----------     -----------
                                                      60,337         11,488
       Other receivables                                 113          1,114
                                                 -----------     -----------
       Total                                     $    60,450     $   12,602
                                                 ===========     ===========

                                                                  (Continued)

<PAGE>39


                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      Amortizable assets are expensed evenly over their respective estimated
      lives, ranging from 3 to 10 years. Amortization expense for these assets
      was $3,776,000 in 2000, $2,621,000 in 1999, and $1,995,000 in 1998.
      Accumulated amortization for these amortizable assets was $10,231,000 in
      2000 and $6,455,000 in 1999.

                                                     2000             1999
                                                  -----------     -----------
     Payables and accrued liabilities:
       Accounts payable                           $   20,483      $   16,820
       Employee compensation and benefits             15,521          13,945
       Postretirement benefits, current portion        1,761           1,454
       Income taxes                                     (165)            578
                                                  -----------     -----------
       Total                                      $   37,600      $   32,797
                                                  ===========     ===========


(10)  LONG-TERM DEBT

      Long-term debt consisted of the following (in thousands of dollars):
                                                        December 31,
                                                 ---------------------------
                                                    2000            1999
                                                 -----------     -----------
   Note payable, unsecured, variable interest
    LIBOR plus.2%; 6.76% for 2000, 5.52% for     $    14,000     $   14,000
    1999), due 2003-2004
   Notes payable, unsecured, 8.15%, due
    2005-2010                                         45,000            ---
                                                 -----------     -----------
       Total                                     $    59,000     $   14,000
                                                 ===========     ===========

      During 2000, the Company entered into a $75 million shelf financing
      agreement with an insurance company, of which $45 million was used to
      partially finance an acquisition. The Company also has a $1.5 million
      unsecured line of credit, of which $.5 million is being used to secure a
      letter of credit.

      Maturities of long-term debt are as follows: 2003 and 2004, $7,000,000;
      2005 through 2010, $7,500,000. The current rate of the variable bank note,
      effective through May 1, 2001, is 5.6%.
      Carrying values of debt approximate fair values.


(11)   COMMITMENTS AND CONTINGENCIES

      On March 1, 2001, the Company entered into an agreement to acquire all of
      the outstanding stock of an electronic forms publisher for a purchase
      price of approximately $27.5 million, plus additional monies if
      performance targets are exceeded for fiscal years ending December 31, 2001
      through 2004. The acquisition, expected to be consummated in April 2001,
      will be accounted for as a purchase.

      The Company has non-cancelable operating leases for office space and
      vehicles. Total rent expense was $6,468,000 in 2000, $6,222,000 in 1999,
      and $5,671,000 in 1998.


                                                                  (Continued)
<PAGE>40
                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      As of December 31, 2000, future minimum lease payments under
      non-cancelable operating leases were as follows: 2001 - $7,288,000; 2002 -
      $6,111,000; 2003 - $5,852,000; 2004 - $4,924,000; 2005 - $4,669,000;
      thereafter - $7,519,000

      The Company is involved in certain legal actions arising in the ordinary
      course of business. In the opinion of management the ultimate disposition
      of these matters will not have a material adverse effect on the
      consolidated financial statements.

 (12) STOCKHOLDERS' EQUITY

      Ownership and transferability of Class A, Class B, and Class C stock are
      substantially restricted to current and former employees by provisions of
      the Parent's certificate of incorporation and bylaws. Ownership of Class A
      stock, which is voting, is restricted to active employees. Class B stock
      and Class C stock are nonvoting. No class of stock has preference over
      another upon declaration of dividends or liquidation. As of December 31,
      2000 and 1999, authorized shares of Class A, Class B, and Class C were
      6,700,000, 5,300,000, and 1,000,000, respectively.

      The Company's commitment to employee ownership is supported by its policy
      to repurchase all stock tendered by stockholders that is in excess of
      employee stock plan purchases. Stock repurchases have ranged from $12.8 to
      $19.6 million over the last three years, a level that can be expected to
      continue. In addition, the majority of the outstanding Class C stock, with
      a market value of $11.4 million at December 31, 2000, is expected to be
      tendered in 2003.

      Treasury share transactions were as follows:

                                                Treasury Stock Shares
                                           --------------------------------
                                           Class A     Class B     Class C
                                           ---------   --------    --------
       Balance, January 1, 1998            2,959,761    349,685     102,923

       Sales to employees                  (174,405)        ---         ---
       Repurchases                           76,059     265,932     104,154
       Conversions of Class A to Class B    108,241    (108,241)        ---
                                           ---------   --------    --------
       Balance, December 31, 1998          2,969,656    507,376     207,077

       Sales to employees                  (175,547)        ---         ---
       Repurchases                           80,069     257,788       4,788
       Conversions of Class A to Class B
        and Class C                         131,304    (128,428)     (2,876)
                                           ---------   --------    --------
       Balance, December 31, 1999          3,005,482    636,736     208,989

       Sales to employees                  (155,184)        ---         ---
       Repurchases                           62,660     389,500       4,670
       Conversions of Class A to Class B    313,657    (313,657)        ---
                                           ---------   --------    --------
       Balance, December 31, 2000          3,226,615    712,579     213,659
                                           =========   ========    ========

                                                                  (Continued)

<PAGE>41

                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      Earnings per share have been computed based on the aggregate weighted
      average number of all outstanding shares of stock, which was 7,912,881 in
      2000, 8,158,816 in 1999, and 8,367,904 in 1998.

      The differences between amortized cost and fair value of the Company's
      investment securities result in unrealized gains or losses, which are
      reported, net of tax, as a component of Stockholders' Equity. Assets and
      liabilities of the Company's United Kingdom subsidiary are denominated in
      British pounds and translated into U.S. dollars at year-end exchange
      rates. Any resulting gain or loss is reflected, net of taxes, as a
      component of Stockholders' Equity.


(13)  OTHER COMPREHENSIVE INCOME

      Comprehensive income encompasses all changes in Stockholders' Equity
      except those arising from transactions with shareholders, and includes net
      income and other comprehensive income.

      Elements of other comprehensive income are shown below:

                                                2000        1999        1998
                                             ----------  ----------  ----------
     Holding gains (losses) on securities
      arising during the year                $  4,740    $ (7,553)   $  1,354
     Less net gains included in net income        913       1,497       1,423
                                             ----------  ----------  ----------
     Changes in unrealized gains/losses         3,827      (9,050)        (69)
     Less income taxes                          1,339      (3,167)        (24)
                                             ----------  ----------  ----------
     Net unrealized gains(losses)               2,488      (5,883)        (45)
                                             ----------  ----------  ----------
     Currency translation gains(losses)            50          23          (3)
     Less income taxes                             18           8          (1)
                                             ----------  ----------  ----------
     Net currency translation gains(losses)        32          15          (2)
                                             ----------  ----------  ----------
     Other comprehensive income              $  2,520    $ (5,868)   $    (47)
                                             ==========  ==========  ==========


                                                                  (Continued)
<PAGE>42


                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(14)  SEGMENTS AND RELATED INFORMATION

      Operating segments are components of an enterprise whose separate
      financial information is reviewed regularly by the chief operating
      decision-maker in deciding how to allocate resources and in assessing
      performance. Operating segments may be aggregated for presentation
      purposes if they have similar economic characteristics.

      The Company has three primary operating segments, Publishing, Printing,
      and Software. Publishing operations consist primarily of the creation,
      production and marketing of legal and regulatory and general business
      advisory information, in print and electronic formats. Publishing
      aggregates the operations of the Parent with Tax Management Inc.,
      excluding its software division and also includes the Parent's other
      publishing subsidiary companies. Customers are primarily lawyers,
      accountants, human resource professionals, business executives, health
      care administrative professionals, trade associations, educational
      institutions, government agencies, and libraries. Printing includes the
      operations of The McArdle Printing Co., Inc. Software includes the
      operations of BNA Software, a division of Tax Management Inc.

      The All Other segment includes the operations, prior to its sale in 1999,
      of BNA Communications Inc., a media-based training enterprise.
      Intersegment revenues approximate current market prices. The Company did
      not derive ten percent or more of its revenues from any one customer or
      government agency or from foreign sales, nor did it have ten percent or
      more of its assets in foreign locations.

      Operating segment information is presented below:


  Year Ended December 31,2000      Publishing Printing Software   Total
  ---------------------------      ---------- -------- -------- ---------
  Revenues from external customers  $258,483  $ 24,258 $ 14,658 $ 297,399
  Intersegment revenues                  ---    15,995      ---    15,995
  Operating profit                    21,357     2,594    4,083    28,034
  Interest expense                     1,635       268      ---     1,903
  Identifiable assets                353,335    18,059    2,564   373,958
  Depreciation and amortization       10,037     1,092      ---    11,129
  Capital expenditures                54,518       513    1,935    56,966

                                                                  (Continued)

<PAGE>43
                      THE BUREAU OF NATIONAL AFFAIRS, INC.

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


                                                                All
Year Ended December 31, 1999    Publishing Printing  Software  Other     Total
----------------------------    ---------- --------  --------  ------  --------
Revenues from external customers $246,835  $ 21,003  $ 13,859  $2,262  $283,959
Intersegment revenues                 ---    16,373       ---     ---    16,373
Operating profit (loss)            18,796     2,251     2,457    (198)   23,306
Interest expense                    1,026       353       ---      29     1,408
Identifiable assets               307,296    19,077       650     ---   327,023
Depreciation and amortization       9,417     1,060       ---     160    10,637
Capital expenditures               12,186       568         2     129    12,885


                                                                All
Year Ended December 31, 1998    Publishing Printing  Software  Other     Total
----------------------------    ---------- --------  --------  ------  --------
Revenues from external customers $235,415  $ 18,199  $ 13,117  $4,597  $271,328
Intersegment revenues                 ---    16,524       ---     ---    16,524
Operating profit (loss)            16,354     1,894     2,491    (139)   20,600
Interest expense                      899       419       ---      17     1,335
Identifiable assets               310,338    17,617       930   2,704   331,589
Depreciation and amortization       9,107     1,053       ---     373    10,533
Capital expenditures               28,237       439       ---     563    29,239

  Reconciliation of items differing from consolidated totals are shown below:

                                                  2000      1999       1998
                                                --------  --------   --------
Total interest expense for reportable segments  $ 1,903   $  1,408   $  1,335
Elimination of intersegment interest expense       (249)      (382)      (436)
                                                --------  --------   --------
  Consolidated interest expense                 $ 1,654   $  1,026   $    899
                                                --------  --------   --------

Total assets for reportable segments            $373,958  $327,023   $331,589
Elimination of intersegment assets                (2,958)   (4,295)    (7,140)
                                                --------  --------   --------
  Consolidated assets                           $371,000  $322,728   $324,449
                                               =========  ========   ========


<PAGE>44

         SCHEDULE V - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

                     THE BUREAU OF NATIONAL AFFAIRS, INC.
                YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998
                          (In Thousands of Dollars)


--------------------------------------------------------------------------------
        Column A              Column B        Column C        Column D  Column E
--------------------------------------------------------------------------------
                                              Additions
                                         --------------------
                                           (1)        (2)
                                         --------------------
                                                    Charged              Balance
                              Balance at Charged to to Other   Deduct-   at End
                              Beginning  Costs and  Accounts;   ions;      of
           Description        of Period  Expenses   Describe   Describe  Period
----------------------------- ---------- ---------- --------- ---------- -------

VALUATION ACCOUNTS DEDUCTED
 FROM ASSETS TO WHICH THEY APPLY:
-----------------------------------

Allowance for Doubtful Accounts
Receivable:
 Year ended December 31, 2000    $1,451   $1,127    $ 26 (a,b) $575(c)   $2,029
 Year ended December 31, 1999     1,714      738    (146)(a)    855(c)    1,451
 Year ended December 31, 1998     1,576      876      51 (a,d)  834(c)    1,714




Notes:
(a) Charged to deferred subscription revenue; portion of allowance for
    doubtful accounts receivable not included in revenues.

(b) Includes $65 acquired with Kennedy Information, Inc.

(c) Net accounts written off.

(d) Includes $30 acquired with IOMA.



<PAGE>45

                                     PART II


Item 9.     Changes in and Disagreements with Accountants on Accounting
            and Financial Disclosure

There were no changes in or disagreements with accountants on accounting and
financial disclosures during the three years ended December 31, 2000 or through
the date of this Form 10K.

                                    PART III

Except as set forth in this Form 10-K under Part I, Item X, "EXECUTIVE OFFICERS
OF THE REGISTRANT," the information required by Items 10, 11, 12, and 13, is
contained in the Company's definitive Proxy Statement (the "Proxy Statement")
filed pursuant to Regulation 14A under the Securities Exchange Act of 1934, to
be filed with the SEC within 120 days of December 31, 2000.
Such information is incorporated herein by reference.


Item 10.    Directors and Executive Officers of the Registrant

The information required under this Item 10 is contained in the Proxy Statement
under the headings "I. Election of Directors" and "Biographical Sketches of
Nominees," and is incorporated herein by reference. Information related to
Executive Officers is omitted from the Proxy Statement in reliance on
Instruction 3 to Regulation S-K, Item 401(b), and included as Item X of Part I
of this report.

Item 11.    Executive Compensation

The information required under this Item 11 is contained in the Proxy Statement
under the headings "V. Executive Compensation" and "VI. Employee Benefit Plans"
and is incorporated herein by reference.

Item 12.    Security Ownership of Beneficial Owners and Management

The information required under this Item 12 is contained in the Proxy Statement
under the heading "I. Election of Directors" and is incorporated herein by
reference.

Item 13.    Certain Relationships and Related Transactions

The information required under this Item 13 is contained in the Proxy Statement
under the heading "V. Executive Compensation" and is incorporated herein by
reference.


<PAGE>46

                                     PART IV


Item 14.    Exhibits, Financial Statement Schedules, and Report on Form 8-K

            The following documents are filed as part of this report.

(a)(1)  Financial Statements:                                         Page
            Report of Independent Auditors                             22
            Consolidated Balance Sheets as of December 31, 2000
              and 1999.                                                23
            Consolidated Statements of Income, Consolidated            25
              Statements of Cash Flows, and Consolidated
              Statements of Changes in Stockholders' Equity
              for each of the years ended December 31, 2000,
              1999, and 1998
            Notes to Consolidated Financial Statements                 29

   (2)  Financial Statement Schedule:

            Report of Independent Auditors as to the
              financial statement schedule                             22

        V   Valuation and Qualifying Accounts and Reserves             44

            All other schedules are omitted because they are not applicable or
            the required information is shown in the financial statements or
            notes thereto.


<PAGE>47

(a)(3)      Exhibits:

       3.1  Certificate of Incorporation, as amended***

       3.2  By laws, as amended*

      11    Statement re: Computation of Per Share Earnings is contained in the
            2000 Consolidated Financial Statements in the Notes to Consolidated
            Financial Statements, Note 12, "Stockholders' Equity," at page 41 of
            this Form 10-K.

      22    Subsidiaries of the Registrant.*

      28.1  Proxy Statement for the Annual Meeting of security holders to be
            held on April 21, 2001**

      28.2  Annual Report on Form 11-K related to the BNA 401(k) Plan for the
            fiscal year ended December 31, 2000.*

      *     Filed herewith.

      **    Incorporated by reference to the Company's Definitive Proxy
            Statement, to be filed with the SEC within 120 days of December 31,
            2000.

      ***   Incorporated by reference to the Company's 1993 Form 10-K,
            Commission File Number 2-28286, filed on March 31, 1994. The exhibit
            numbers indicated above correspond to the exhibit numbers
            in that filing.

            Upon written or oral request to the Company's General Counsel, a
            copy of any of the above exhibits will be furnished at cost.


(b)         Reports on Form 8-K:

            A Current Report on Form 8-K was filed November 21, 2000, which
            included disclosure under Item 2 relating to the Company's
            acquisition of Kennedy Information on November 10, 2000.


<PAGE>48
                                  SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                     THE BUREAU OF NATIONAL AFFAIRS, INC.


                  By: s/Paul N. Wojcik
                  Paul N. Wojcik, Chief Executive Officer

                     Date: 3/8/01

  Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on dates indicated.


By: s/Paul N. Wojcik                    By: s/Gorge J. Korphage
    ----------------------                  -------------------------
     Paul N. Wojcik,                         George J. Korphage,
     President and CEO                       Vice President and CFO
     Director                                (Chief Accounting Officer)
                                             Director

Date: 3/8/01                            Date: 3/8/01
      --------------                          ------------

By: s/William A. Beltz        3/8/01         By: s/David P. McFarland    3/8/01
    -----------------------  -------             --------------------   -------
     William A. Beltz         Date               David P. McFarland      Date
     Chairman of the Board of Directors          Director


By: s/Thomas W. Ball          3/8/01         By: s/Gregory C. McCaffery  3/8/01
    -----------------------  -------             --------------------   -------
     Thomas W. Ball           Date               Gregory C. McCaffery    Date
     Director                                    Director


By: s/Eunice Lin Bumgardner   3/8/01         By: s/Frederick A. Schenck  3/8/01
    -----------------------  -------             --------------------   -------
     Eunice Lin Bumgardner    Date               Frederick A. Schenck    Date
     Director                                    Director


By: s/Richard H. Cornfield   3/8/01          By: s/Daniel W. Toohey      3/8/01
    -----------------------  -------             --------------------   -------
     Richard H. Cornfield     Date               Daniel W. Toohey        Date
     Director                                    Director


By: s/Sandra C. Degler       3/8/01          By: s/Loene Trubkin         3/8/01
    -----------------------  -------             --------------------   -------
     Sandra C. Degler         Date               Loene Trubkin           Date
     Director                                    Director


By: s/John E. Jenc           3/8/01          By: s/Robert L.Velte       3/8/01
    -----------------------  -------             --------------------   -------
     John E. Jenc             Date           Robert L. Velte             Date
     Director                                Director

By: s/Eileen Z. Joseph       3/8/01
    -----------------------  -------
     Eileen Z. Joseph         Date
     Director


<PAGE>49

                                EXHIBIT INDEX


Sequential Page
Number             Exhibit Description                                Number

   3.1             Certificate of Incorporation, as amended            ***

   3               By laws, as amended                                  52

  11               Statement re: Computation of Per Share Earnings
                    is contained in the 2000 Consolidated Financial
                    Statements in the Notes to Consolidated Financial
                    Statements, Note 12, "Stockholders' Equity,"        41

  22                Subsidiaries of the Registrant                     160

  28.1             Proxy Statement for the Annual Meeting of
                    Stockholders to be held on April 21, 2001           **

  28.2             Annual Report on Form 11-K related to the
                    BNA 401(k) Plan for the fiscal year ended
                    December 31, 2000.                                 161


                   ** The Definitive Proxy Statement is expected to be filed
                      with the SEC within 120 days of December 31,2000.

                  ***  Incorporated by reference to the Company's 1993 Form 10K,
                       commission File Number 2-28286, filed on March 31, 1994.
                       The exhibit numbers indicated above correspond to the
                       exhibit numbers in that filing.

<PAGE>50


                       Page 50 intentionally left blank


<PAGE>51



                       Page 51 intentionally left blank







<PAGE>52
                                                                     EXHIBIT 3.2

                                     BYLAWS

                                       OF

                      THE BUREAU OF NATIONAL AFFAIRS, INC.

<PAGE>53

                                TABLE OF CONTENTS

                                                                     Page Number
         Section I - Offices
                  Delaware Office                                        1
                  Other Offices                                          1

         Section II - Seal                                               1

         Section III - Meetings of Stockholders                          2
                  Place of Meeting                                       2
                  Notice of Meeting                                      2
                  Annual Meeting                                         2
                  Special Meetings                                       3
                  Quorum                                                 4
                  Voting Rights                                          4
                  Manner of Voting                                       5
                  Nominations of Directors                               6

         Section IV - Determination of Eligible Stockholders             7
                  Closing Transfer Books                                 7
                  Record Date for Stockholders                           7

<PAGE>54
                                                                     Page Number

         Section V - Directors                                           8
                  Eligibility                                            8
                  Powers                                                 8
                  Number; Election; Term                                 9
                  Meetings                                              10
                  Quorum                                                11
                  Annual Statement                                      11
                  Indemnification                                       11
                  Indemnification - Fiduciaries                         14

         Section VI - Executive and Other Committees                    17
                  Powers                                                17
                  Meetings                                              19

         Section VII - Compensation of Directors                        19

         Section VIII - Officers                                        20
                  Appointment and Tenure                                20
                  Chairman of the Board                                 21
                  President                                             22
                  Chief Executive Officer                               23
                  Vice-Presidents                                       24
                  President Pro Tem                                     25
                  Secretary                                             25
                  Treasurer                                             26
                  Chief Financial Officer                               26
                  Bonding of Officers                                   27
                  Delegation of Powers                                  27

<PAGE>55

                                                                     Page Number


         Section IX - Capital Stock                                     27
                  Amount                                                27
                  Eligible Stockholders                                 28
                           Class A Stock                                28
                           Class B Stock                                29
                           Class C Stock                                31
                           Transfer on Death                            32
                  Consideration for Class A Stock                       33
                  Rate of Exchange of Class B Stock                     33
                  Form of Certificates                                  33
                  Transfer of Stock                                     33
                  Purchase of Class A and Class B Stock by Corporation  34
                  Redemption of Class B Stock by the Corporation        37
                  Purchase Price                                        37
                           Class A Stock                                37
                           Class B Stock                                38
                  Fractional Shares                                     40
                  Dissolution of Distribution of Assets                 40
                  Lost Certificate                                      40

         Section X - Distribution and Marketing of Stock                41
                  Stock Transfer in Conformity with Section             41
                  Stock Purchase and Transfer Plan                      41
                           Operation by Trustee                         41
                           Eligibility for Participation                41
                           Stock Purchase Fund                          42
                           Functions of Stock Purchase Fund             42

<PAGE>56

                                                                     Page Number

                           Priorities in Purchase and Sale of Stock     43
                           Price of Class A Stock                       44
                           Issuance of Class A Stock to Fund            45
                           Settlement Dates                             45
                           Payroll Deductions for Purchase of Stock     45
                           Offers to Buy                                47
                           Place and Sale of Stock                      50
                  Register of Supplemental Bids                         50
                           Stock Transfer Pursuant to Supplemental Bids 51
                           Priority in Execution                        51
                           Annual Statement of Trustee                  51
                           Sale of Stock of the Corporation             51

         Section XI -      Optional Agreements For Transfer Of
                           Class A Stock On Termination Of Employment   52

         Section XII - Books and Accounts                               56
                  Place                                                 56
                  Inspection                                            56

         Section XIII - Checks                                          57

         Section XIV - Dividends; Reserves                              57
                  Dividends                                             57
                  Reserves                                              57

         Section XV - Definitions                                       57

<PAGE>57
                                                                     Page Number

         Section XVI - Notices                                          58
                  Form                                                  58
                  Waiver                                                58

         Section XVII - Amendments                                      58

         Footnotes                                                      59
<PAGE>58



                                     BY-LAWS
                                       OF
                      THE BUREAU OF NATIONAL AFFAIRS, INC.


                               SECTION I - OFFICES

1.   Delaware Office

     The principal  office of the  Corporation in the State of Delaware shall be
at 100 West Tenth Street in the City of Wilmington and County of New Castle; and
the resident agent in charge thereof shall be the Corporation Trust Company, 100
West Tenth Street, Wilmington, Delaware.<F74> (a)

2.   Other Offices

     The  Corporation  may  also  have  an  office  or  offices  in the  City of
Washington,  District  of  Columbia,  and at such  other  places as the Board of
Directors may from time to time designate or appoint,  or as the business of the
Corporation may require.

                                SECTION II - SEAL

     The  corporate  seal  shall  have   inscribed   thereon  the  name  of  the
Corporation,  the  year  of  its  incorporation,  and  the  words  "Incorporated
Delaware, 1946."


(a) Footnotes  showing  prior  versions of changed  provisions  appear at end of
By-Laws in numerical and chronological order of the By-Laws changes.

                                        1

<PAGE>59

                     SECTION III - MEETINGS OF STOCKHOLDERS

1.   Place of Meeting

     Meetings  of  stockholders  shall  be  held  at  the  main  office  of  the
Corporation  in the City of Washington,  District of Columbia,  or at such other
place as may be fixed by resolution of the Board of Directors.<F121>

2.   Notice of Meeting

     Written notice of all meetings of  stockholders  stating the time and place
thereof shall be mailed by the Secretary,  postage prepaid,  to each stockholder
of record,  at his or her post office  address as it appears on the books of the
Corporation.

     In the case of a regular annual meeting,  such notice shall be so mailed at
least 40 days in advance  thereof;  and in the case of a special  meeting,  such
notice shall be so mailed at least 10 days<F132> in advance  thereof.  Notice of
any  special  meeting of  stockholders  shall also state the purpose or purposes
thereof,  and may  provide  for the  transaction  of such other  business as may
properly come before the meeting.

3.   Annual Meeting

     (a) An annual meeting of  stockholders  shall be held at 10 o'clock A.M. on
the succeeding  Saturday.  At such meeting,  the  stockholders  entitled to vote
thereat<F55>  shall elect a Board of  Directors<F3>  and may transact such other
business as may  properly be brought  before the  meeting.  If the  election for
directors  is not held on the day  designated  third  Saturday  in April of each
year,<F2> but if that day be a legal holiday then on the next herein,  the Board
of  Directors  shall  cause  the  election  to be  held as  soon  thereafter  as
conveniently may be.

                                       2

<PAGE>60


    (b) No  change  of the  time or  place  of a  meeting  for the  election  of
directors  as fixed by  these  By-Laws  shall be made  within  sixty  (60)  days
preceding  the day on which  such  election  is to be held.  In the event of any
change in such time or place for such  election  of  directors,  notice  thereof
shall be given to each stockholder at least twenty (20) days before the election
is held,  in person or by letter  mailed to his or her last  known  post  office
address.

     (c) At least  ten  (10)  days  before  every  election  of  directors,  the
Secretary  shall  prepare and make a complete list of  stockholders  entitled to
vote at said elections,  arranged in  alphabetical  order (with the residence of
each and the number of voting shares held by each).  Such list shall be open for
said ten (10) days to the examination of any stockholder at the place where said
election  is to be held and shall be  produced at the time and place of election
and  kept  open  during  the  whole  time  thereof  for  the  inspection  of any
stockholder  who may be present.  The original or duplicate  stock ledger of the
Corporation  shall be the  only  evidence  as to the  stockholders  entitled  to
examine such list.

4.   Special Meetings

     Special  meetings of the  stockholders  for any purpose or purposes  may be
called by the  President,  and shall be called by the  President or Secretary at
the  request  in writing or by vote of a  majority  of the  directors  or at the
request in writing of  stockholders of record owning a majority in amount of the
shares of the stock of the  Corporation  outstanding  and entitled to vote. Such
request shall state the purpose or purposes of the proposed meeting.

                                       3

<PAGE>61

5.   Quorum

     At any  meeting of  stockholders  the  holders of a majority of the Class A
stock<F56>  outstanding  and  entitled  to vote  thereat,  present  in person or
represented by proxy,  shall be requisite and shall  constitute a quorum for the
transaction of business, except as otherwise provided by law, by the Certificate
of  Incorporation,  or  herein.  In the  absence of a quorum,  the  stockholders
entitled to vote at said  meeting,  present in person or  represented  by proxy,
shall have power to adjourn the meeting  from time to time until a quorum  shall
be secured,  whereupon  any  business  may be  transacted  which might have been
transacted at the meeting as originally notified or fixed.

6.   Voting Rights

     (a) At every meeting of  stockholders,  each  stockholder  entitled to vote
thereat shall have one vote for each share of Class A stock <F56>  registered in
his name on the books of the Corporation.<F4>

     (b) The original or duplicate stock ledger of the Corporation  shall be the
only evidence as to the  stockholders  entitled to vote.  The Board of Directors
may,  however,  close the transfer books of the Corporation or fix a record date
for the  determination  of its  stockholders  entitled  to vote,  as provided in
Section IV of these By-Laws.  Except where the transfer books shall have been so
closed or a record date for voting  stockholders have been so fixed, no share of
stock  shall be voted on at any  election  for  directors  which shall have been
transferred  on the  books of the  Corporation  within  twenty  (20)  days  next
preceding such election.

     (c) Except as otherwise  provided in the  Certificate of  Incorporation  or
By-Law,<F5> all questions before any meeting of stockholders shall be decided by
a vote of the  holders of a majority  of the  shares of stock  entitled  to vote
thereat.

                                       4

<PAGE>62

7.   Manner of Voting

     (a) The vote for  directors  at any  meeting  of  stockholders  shall be by
ballot. The vote upon any other question at any meeting of stockholders shall be
by ballot or viva voce, as may be determined by the presiding officer: PROVIDED,
That  if  objection  be  raised  by any  stockholder  to the  manner  of  voting
designated by the presiding officer upon any such question, the manner of voting
shall be  determined  by the  holders  of the  majority  of the  shares of stock
present or represented at any such meeting and entitled to vote thereat.

     (b) Each  stockholder  entitled to vote at any meeting of stockholders  may
vote (i) in  person,  or (ii) by proxy  appointed  by an  instrument  in writing
subscribed  by him and bearing a date no more than six (6) months  prior to said
meeting,  unless said instrument  provides for a longer period,  or (iii) at any
election  for  directors,  but on no  other  question,  by mail as  provided  in
sub-paragraph (c) of this Paragraph 7.

     (c) At any election for directors, any stockholder entitled to vote thereat
may submit his vote or votes for  directors  by mailing to the  Secretary of the
Corporation or his  designees<F201>  a written ballot  subscribed by him setting
forth the names of the  directors  for whom he desires to vote and the number of
shares to be voted for each director;<F6> PROVIDED, That said ballot in order to
be effective as the vote of the  stockholder,  must be received by the Secretary
of the  Corporation  or his  designees<F201>  not later  than the day before the
meeting for such election of directors.

     (d) If at any meeting of stockholders there shall be presented in behalf of
a  stockholder  more than one proxy  signed by him on any  question  before said
meeting, or if at any election for directors there shall be presented in behalf

                                     5

<PAGE>63

of a stockholder  more than one proxy signed by him  authorizing  the casting of
votes in his  behalf  or more than one  ballot  mailed  by him  pursuant  to the
preceding  subparagraph  or both a proxy  and a  mailed  ballot,  then  all such
proxies and mailed ballot  signed by such  stockholder  shall be invalid  unless
identical.

     (e) A proxy may be withdrawn  for filing  written  notice  thereof with the
Secretary at any time prior to the  presiding  officer's  call for a vote at any
meeting of stockholders.<F7>

8.   Nominations of Directors

     (a)  At  least  forty-five  (45)  days  prior  to  any  annual  meeting  of
stockholders  a list of  nominations  for  directors,  prepared by a  Nominating
Committee  to be  appointed  by the Board of  Directors,  shall be mailed by the
Secretary to each Class A<F56> stockholder. The Committee shall make at least as
many  nominations  as  there  are  directorships  to be  filled  at  the  annual
meeting,<F8> but may nominate  candidates in excess of such number.  Three<F216>
nominees shall be neither  stockholders of the Corporation nor active or retired
officers  or  employees  of  the   Corporation  or  of  one  of  its  subsidiary
corporations.<F170>  Said list shall  also  state the total  number of shares of
Class A stock of the Corporation then outstanding.<F56>

     (b) Any Class A<F56>  stockholder  (or  stockholders)  who is the record or
beneficial  owner of at least two (2) percent of the  outstanding  Class  A<F56>
shares of the  Corporation may submit  additional  nominations to the Nominating
Committee   not  less  than  thirty   (30)<F189>   days  prior  to  such  annual
meeting.<F50>  Each additional  nomination  made pursuant to this  sub-paragraph
shall  be  accompanied  by  the  nominee's  written  acceptance  of  his  or her
nomination.<F190>

                                       6

<PAGE>64

     (c) A final list of nominations,  including  nominations made in the manner
provided  by  sub-paragraph  (b)  together  with  nominations  made  pursuant to
sub-paragraph (a), shall be mailed by the Secretary to Class A<F56> stockholders
not less than twenty-two (22)<F191> days prior to such annual meeting.<F192>


               SECTION IV - DETERMINATION OF ELIGIBLE STOCKHOLDERS


1.   Closing Transfer Books

     The Board of Directors  may, in its  discretion,  close the stock  transfer
books of the  Corporation  for a period not exceeding  fifty (50) days preceding
the date of any  meeting  of the  stockholders,  or the date for  payment of any
dividend,  or the date for the allotment of rights, or the date when any change,
conversion,  or exchange of capital  stock shall go into  effect,  or a date for
obtaining the consent of the stockholders for any purpose.

2.   Record Date for Stockholders

     In lieu of closing  the stock  transfer  books as  aforesaid,  the Board of
Directors may fix in advance a date not exceeding  fifty (50) days preceding the
date  of any  meeting  of  stockholders,  or the  date  for the  payment  of any
dividend,  or the date for the allotment of rights, or the date when any change,
conversion  or exchange  of capital  stock  shall go into  effect,  or a date in
connection  with  obtaining the consent of  stockholders  for any purpose,  as a
record date for the determination of the stockholders entitled to notice of, and
to vote at, any such meeting and adjournment thereof, or entitled to receive and
exercise the other rights and privileges referred to in this paragraph.  In such
case only  stockholders  of record on the date so fixed shall be entitled to the
notice, voting rights, and other rights and privileges referred to herein above,
notwithstanding  the transfer of any stock on the books of the Corporation after
such record date fixed as aforesaid.

                                       7

<PAGE>65

                              SECTION V - DIRECTORS

1.   Eligibility

     (a) Three<F217> persons who are not stockholders of the Corporation and not
active or retired  officers or  employees  of the  Corporation  or of one of its
subsidiary corporations shall be elected or appointed as directors.

     (b) Other than the persons  elected or appointed  as directors  pursuant to
sub-paragraph  (a) above,  no person shall be elected or appointed as a director
unless  he or she is a record  or  beneficial  owner of Class A or Class B stock
and, in addition, is an active or retired officer or employee of the Corporation
or of one of its subsidiary corporations,  and any director elected or appointed
pursuant to this  Paragraph  who ceases to fulfill these  requirements  shall be
disqualified  to exercise  any of the powers or duties of director  and shall be
deemed to have resigned from such position.<F171>

2.   Powers

     The  property  and  business  of this  Corporation  shall  be  managed  and
controlled by its Board of Directors. The Board of Directors shall have power --

     (a) To purchase or otherwise acquire for the Corporation property, real and
personal,  tangible and intangible, and any rights or privileges, at such prices
and upon such terms as the Board may deem proper.

     (b) To pay for such  property,  rights,  or  privileges in whole or in part
with money,  services,  stock,  bonds,  debentures,  or other  securities of the
Corporation, or by the delivery of other property of the Corporation.

                                       8

<PAGE>66

     (c) To create,  make, and issue  mortgages,  bonds,  deeds of trust,  trust
agreements,  and negotiable or transferable instruments and securities,  secured
by mortgages or otherwise, and to do every act and thing necessary to effectuate
the same.

     (d) To appoint agents, clerks, assistants,  factors, and to dismiss them at
its discretion,  to fix their duties and emoluments and to change them from time
to time, and to require security as it may deem proper.

     (e) To confer on any  officer of the  Corporation  the power of  selecting,
discharging, or suspending employees.

     (f) To determine by whom and in what manner the Corporation's bills, notes,
receipts,  acceptances,  endorsements,  checks,  releases,  contracts,  or other
documents shall be signed.

     (g) To exercise any and all powers of the Corporation,  including the power
to do all lawful acts and things on behalf of the  Corporation  which are not by
statute or by the  Certificate of  Incorporation  or by these Bylaws directed or
required to be exercised or done by the stockholder.

3.   Number; Election; Term

     The Board of Directors shall consist of fifteen(15)<F214> members who shall
be elected by the Class A<F56>  stockholders  at the regular  annual  meeting of
stockholders.<F150>  The Board of Directors so elected  shall be composed of (i)
the three<F218> (3) nominees eligible only under sub- paragraph (a) of Paragraph
1 hereof who shall have received the highest  number of votes among the nominees
eligible  only  under that  provision,  and (ii) the  twelve(12)<F218>  nominees
eligible  only  under  sub-paragraph  (b) of  Paragraph  1 hereof who shall have
received the highest number of votes among the nominees eligible only under that

                                       9

<PAGE>67

provision.<F173>  Each director  shall hold office until the  succeeding  annual
election  and until his  successor  shall have been  elected and shall have duly
qualified: PROVIDED, that if there be a vacancy in the Board by reason of death,
resignation,  or otherwise,  such vacancy shall be filled for the unexpired term
by majority vote of all the remaining directors, although less than a quorum.

4.   Meetings

     (a) After each  election of  directors  at a meeting of  stockholders,  the
newly  elected  directors  shall  meet for the  purposes  of  organization,  the
election of officers,  and the transaction of other business,  at such place and
time as may be designated by the stockholders at such annual meeting,  or in the
absence of such designation, as may be fixed by written consent of a majority of
the newly elected  directors.  If a majority of the directors be present at such
place and time, no prior notice of such meeting need be given to the directors.

     (b) Regular  meetings of the  Board of Directors shall be held at 9:00 a.m.
<F213> on the Thursday<F186> after the first  Saturday of February, March, June,
September,  and December<F215><F231> at the  main office of  the  Corporation in
Washington, District of  Columbia,  and/or at such other times and places as may
be fixed by  resolution  of  the Board or by  written waiver of all its members.
<F174> No other notice of any regular meeting shall be required.

     (c)  Special  meetings  of the  Board of  Directors  may be  called  by the
Chairman of the  Board<F99>  or the President at any time upon notice to all the
directors;  and upon  the  written  request  of two or more  directors,  special
meetings  shall be called by the  President or Secretary  upon one day's notice.
Such meetings may be held within or without the State of Delaware,  at such time
and place indicated in the notice or waiver of notice thereof.

                                       10

<PAGE>68

5.  Quorum

     At all meetings of the Board of Directors four directors shall constitute a
quorum for the transaction of business,  but if less than four be present at any
meeting they may adjourn from time to time without further notice until a quorum
is  secured.  The act of a majority of the  directors  present at any meeting at
which there is a quorum  shall be the act of the Board of  Directors,  except as
may  otherwise  be  specifically  provided by statute or by the  Certificate  of
Incorporation or by these By-Laws.

6.  Annual Statement

     The Board of Directors shall present at each annual meeting of stockholders
a full and clear statement of business and conditions of the Corporation.

7.<F196> Indemnification

     Any person who was or is a party,  or who was or is threatened to be made a
party, to any threatened,  pending,  or completed  action,  suit, or proceeding,
whether civil, criminal,  administrative,  investigative, or otherwise by reason
of the fact that he or she is or was a director or officer of the Corporation or
of one of the Corporation's subsidiaries shall be indemnified by the Corporation
to the fullest extent now or hereafter  permitted by law.  Without  limiting the
generality of the foregoing.

     (a) The Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened,  pending, or completed action,
suit, or proceeding, whether civil, criminal,  administrative,  or investigative
(other than an action by or in the right of the  Corporation),  by reason of the
fact that he or she is or was a director or officer of the Corporation or one of
its subsidiaries against expenses (including attorney's fees), judgment, fines

                                       11

<PAGE>69

and amounts paid in settlement actually and reasonably incurred by him or her in
connection with such action, suit, or proceeding,  if he or she is acted in good
faith and in a manner he or she reasonably  believed to be in the best interests
of the Corporation,  and, with respect to any criminal action or proceeding, had
no  reasonable  cause  to  believe  his  or  her  conduct  to be  unlawful.  The
termination of any action,  suit or proceeding by judgment,  order,  settlement,
conviction,  or upon a plea of nolo contendere or its equivalent,  shall not, of
itself,  create a presumption that the person did not act in good faith and in a
manner which he or she  reasonably  believed to be in the best  interests of the
Corporation and, with cause to believe that his or her conduct was unlawful.

     (b) The Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened,  pending,  or completed action
or suit by or in the right of the Corporation to procure a judgment in its favor
by reason  of the fact that he or she is or was a  director  or  officer  of the
Corporation or one of its subsidiaries  against expenses  (including  attorney's
fees)  actually and  reasonably  incurred by him or her in  connection  with the
defense or  settlement  of such  action or suit if he or she acted in good faith
and  in a  manner  reasonably  believed  to be in  the  best  interests  of  the
Corporation,  except that no  indemnification  shall be made with respect to any
claim,  issue,  or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his or her duty of the
Corporation unless and only to the extent that the Court of Chancery of Delaware
or the Court in which  such  action or suit was  brought  shall  determine  upon
application that,  despite the adjudication of liability,  such person is fairly
and  reasonably  entitled  to  indemnity  for such  expenses  which the Court of
Chancery of Delaware or such other Court shall deem proper.

                                       12

<PAGE>70

     (c) To the extent  that a director or officer of the  Corporation  has been
successful on the merits in defense of any action,  suit, or proceeding referred
to in Subparagraph  (a) and (b) of this  Paragraph,  or in defense of any claim,
issue,  or matter  therein,  he or she  shall be  indemnified  against  expenses
(excluding  attorneys'  fees) actually and reasonably  incurred by him or her in
connection therewith.

     (d) Any  indemnification  under  Subparagraph  (a) or (b) of this Paragraph
(unless ordered by a court) shall be made by the Corporation  only as authorized
in the  specific  case  upon a  determination  that the  indemnification  of the
director or officer is proper in the circumstances because he or she has met the
applicable  standard  of  conduct  set forth in  Subparagraph  (a) or (b).  Such
determination  may be made (i) by the Board of Directors by a majority vote of a
quorum consisting of directors who were or are not parties to such action, suit,
or proceeding, or (ii) if such a quorum is not obtainable, or even if obtainable
quorum of disinterested  directors so directs, by independent legal counsel in a
written opinion,  or (iii) by the stockholders.  Such determination shall not be
arbitrary  but shall be made in  keeping  with the  precepts  expressed  in this
Paragraph.  Upon such  determination,  the  Board of  Directors  shall  promptly
authorize   indemnification   in  accordance  with  such  determination  and  in
accordance with Subparagraphs (a) and (b) of this Paragraph.

     (e) 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 as authorized by the Board of Directors in the
manner  provided  by  Subparagraph  (d) of this  Paragraph  upon  receipt  of an
undertaking  by or on behalf of the  director or officer  involved to repay such
amounts unless it shall  ultimately be determined  that he or she is entitled to
be indemnified by the Corporation.

                                       13

<PAGE>71

     (f) The  indemnification  provided  in this  Paragraph  shall not be deemed
exclusive of any other rights to which those  indemnified  may be entitled under
any by-law,  agreement,  vote of stockholders,  or disinterested  directors,  or
otherwise, both as to action in his or her official capacity and as to action in
any other capacity while holding such office,  and shall continue as to a person
who has ceased to be a director or officer and shall inure to the benefit of the
heirs, executors, and administrators of such a person.

     (g) It shall  be  conclusively  presumed  that  every  person  entitled  to
mandatory  indemnification  under  this  Paragraph  served  the  Corporation  in
reliance hereon.  Any such person may continue to rely on the provisions of this
Paragraph, as presently constituted,  even after its amendment, unless and until
he or she is given  written  notice of such  amendment  or unless he or she is a
member of the Board of Directors which so amends this Paragraph.

     (h) For the purposes of this  Paragraph,  references  to the  "Corporation"
include all  subsidiaries of the  Corporation  and all constituent  corporations
absorbed in a  consolidation  or merger as well as the  resulting  or  surviving
corporation  so that any person  who is or was a  director  or officer of such a
constituent corporation shall stand in the same position under the provisions of
this Paragraph  with respect to the resulting or surviving  corporation as he or
she would if he or she had served the resulting or surviving  corporation in the
same capacity.

8.<F197> Indemnification-Fiduciaries

     Any person who was or is a party,  or who was or is threatened to be made a
party, to any threatened,  pending,  or completed  action,  suit, or proceeding,
whether civil, criminal,  administrative,  investigative, or otherwise by reason
of the fact that he or she is or was serving at the  request of the  Corporation
or at the request of one of the Corporation's subsidiaries as a trustee or as a

                                       14

<PAGE>72

"fiduciary" as the term "fiduciary" is defined in the Employee Retirement Income
Security Act of 1974, as the Act may be amended, under any employee benefit plan
at any time established or maintained by the Corporation shall be indemnified by
the Corporation to the fullest extent now or hereafter permitted by law. Without
limiting the generality of the foregoing.

     (a) The Corporation shall indemnify any person who was or is a party, or is
threatened to be made a party, to any threatened,  pending, or completed action,
suit, or proceeding, whether civil, criminal,  administrative,  or investigative
by reason of the fact that he or she is or was  serving  at the  request  of the
Corporation  or at the  request of one of the  Corporation's  subsidiaries  as a
trustee or fiduciary against expenses  (including  attorneys' fees),  judgments,
fines, and amounts paid in settlement actually and reasonably incurred by him or
her in connection with such action,  suit, or proceeding,  if he or she acted in
good  faith  and in a  manner  he or she  reasonably  deemed  to be in the  best
interests of the  participants  of the employee  benefit plan or plans  involved
and/or  their  beneficiaries,  and,  with  respect  to any  criminal  action  or
proceeding,  had no  reasonable  cause  to  believe  his or  her  conduct  to be
unlawful. The termination of any action, suit or proceeding by judgment,  order,
settlement,  conviction,  or upon a plea of nolo  contendere or its  equivalent,
shall not, of itself,  create a presumption  that the person did not act in good
faith  and in a  manner  which  he or she  reasonably  believed  to be in or not
opposed to the exclusive  purposes of providing  benefits to participants of the
employee  benefit  plan or plans  involved  and  their  beneficiaries,  and with
respect to any criminal  action or proceeding,  had reasonable  cause to believe
that his or her conduct was unlawful.

     (b) In any proceeding  involving a trustee or fiduciary no  indemnification
shall be provided  with respect to any claim,  issue,  or matter as to which the
trustee or fiduciary  shall have been  adjudged to have dealt with the assets of
the employee benefit plan or plans involved in his or her own interest or for

                                      15

<PAGE>73

his or her own account or to have received consideration for his or her personal
account from a party  dealing with the plan.  This  Paragraph  shall not provide
indemnification for any bank, trust company, insurance company,  partnership, or
other entity or person not an officer, director, or employee of the Corporation,
even though retained as an investment advisor, actuary,  custodian,  trustee, or
consultant  to any plan, or for any director,  officer,  agent,  employee of any
such bank,  trust company,  insurance  company,  partnership,  other entity,  or
person.

     (c) Any  indemnification  under  Subparagraph (a) of this Paragraph (unless
ordered by a court) shall be made by the  Corporation  only as authorized in the
specific case upon a determination  that the  indemnification  of the trustee or
fiduciary  is  proper  in the  circumstances  because  he or  she  has  met  the
applicable  standard of conduct set forth in Subparagraph (a) of this Paragraph.
Such  determination  may be made (i) by  independent  legal counsel in a written
opinion, or (ii) by the stockholders.  Such determination shall not be arbitrary
but shall be made in keeping with the precepts expressed in this Paragraph. Upon
any  such  determination,  the  Board of  Directors  shall  promptly  authorized
indemnification  in accordance  with such  determination  and in accordance with
Subparagraphs (a) and (d) of this Paragraph.

     (d) Expenses  incurred in defending a civil or criminal  action,  suit,  or
proceeding,  as contemplated by this Paragraph may be paid by the Corporation in
advance of the final  disposition  of such action,  suit,  or  proceeding,  upon
authorization  by the  Board of  Directors  and  upon  receipt  by the  Board of
Directors of an undertaking by or on behalf of the trustee or fiduciary to repay

                                       16

<PAGE>74

such amounts unless it shall ultimately be determined that he or she is entitled
to be indemnified by the Corporation.

     (e) The  indemnification  provided  in this  Paragraph  shall not be deemed
exclusive of any other rights to which those  indemnified  may be entitled under
any agreement,  vote of stockholders,  or otherwise, both as to action in his or
her official  capacity and as to action in another  capacity  while holding such
office,  and shall  continue  as to a person  who has  ceased to be a trustee or
fiduciary  and  shall  inure  to  the  benefit  of  the  heirs,  executors,  and
administrators of such a person.

     (f) It shall  be  conclusively  presumed  that  every  person  entitled  to
mandatory  indemnification  under this Paragraph served the Corporation or other
organization or enterprise at the Corporation's  request in reliance hereon. Any
such  person  may  continue  to rely on the  provisions  of this  Paragraph,  as
presently constituted,  even after their amendment unless and until he or she is
given  written  notice of such  amendment or unless he or she is a member of the
Board of Directors which so amends this Paragraph.


                   SECTION VI - EXECUTIVE AND OTHER COMMITTEES

1.  Powers

     (a) The Board of Directors  may, by resolution or  resolutions  passed by a
majority of the whole Board,  designate an Executive  Committee  and one or more
other committees, each consisting of two or more directors.

     (b) The  Executive  Committee  shall have such  powers and duties as may be
directed or authorized by the Board of Directors from time to time, including

                                       17

<PAGE>75

the  authority  to  exercise  all  powers of the Board  when the Board is not in
session; and during the intervals between meetings of the Board of Directors the
Executive Committee shall advise with and aid the officers of the Corporation in
all  matters  concerning  its  interest  and  the  management  of its  business:
PROVIDED,  That the Executive Committee shall not have the power to make, alter,
amend,  or  repeal  the  By-Laws,  nor to fill  any  vacancies  on the  Board of
Directors  or  the  Executive  Committee.  Vacancies  in the  membership  of the
Executive Committee shall be filled by the Board of Directors.

     (c)<F194> The Audit Committee of the Board of Directors shall consist of no
fewer  than  three  members  of the Board of  Directors  elected  annually  by a
majority  of the  Board  of  Directors  at the  Directors'  meeting  immediately
following the annual meeting of  stockholders.  The Committee shall consist,  so
far as possible,  of  non-employee  directors  and in no case shall an operating
officer of the  Corporation  be  elected to serve as a member of the  Committee.
Immediately  following  election of the Committee,  the Board of Directors shall
elect one of its members to serve as chairman of the Committee.<F227>

     The duties and  functions of the Audit  Committee  shall be as specified in
the Audit  Committee  Charter,  which shall be adopted by the Board of Directors
and shall be reviewed by the Board annually.<F228>

                                       18

<PAGE>76

     (d)<F195> Other committees  designated by the Board of Directors shall have
such powers as may be specifically delegated to them by resolution of the Board.

2.  Meetings

     The Executive Committee and any other committees shall meet at stated times
or on notice to all by any of its  members.  Each  committee  shall keep regular
minutes of its proceedings, shall report the same to the Board of Directors, and
shall fix its rules of procedure,  but an affirmative  vote of a majority of the
whole  Committee  shall  be  necessary  in  every  case  for the  action  of the
Committee.




                   SECTION VII - COMPENSATION OF<F158> DIRECTORS

     Directors  and  members  of  committees  who  are  on  the  payroll  of the
Corporation  or of one  of its  subsidiary  corporations<F165>  shall<F167>  not
receive any salary or fee for their  services as such,  but by resolution of the
Board they shall be allowed reimbursement for their traveling and other

                                     19

<PAGE>77


reasonably  necessary expenses for attendance at any regular or special meeting:
Provided, That nothing herein contained shall preclude any director or member of
a  committee  from  serving  the  Corporation  in  any  other  capacity  upon  a
compensated basis.<F159>


                             SECTION VIII - OFFICERS

1.  Appointment and Tenure

     (a) The officers of the Corporation shall be a Chairman and a Vice Chairman
<F160> of the Board,<F86> a President, one or more Vice-Presidents, a Secretary,
and a  Treasurer.  The Chairman of the Board and the  President  may be the same
person, the<F87> Secretary and the Treasurer may be the same person, and a Vice-
President  may  hold  at the  same  time  the  office  of Vice  Chairman  of the
Board,<F161>  Secretary,  or Treasurer.  The Chairman and Vice Chairman<F162> of
the  Board<F100>,  the President,  and one  Vice-President  shall be chosen from
among the directors;  the other officers may, but need not be, chosen from among
the  directors.  No person shall be an officer of the  Corporation  unless he or
she, if eligible to purchase stock under the Corporation's  By-Laws, is a holder
of Class A stock or Class B stock, and any officer who ceases to hold any shares
of stock in the Corporation  shall be disqualified to exercise any of the powers
or  duties  of  an  officer   and  shall  be  deemed  to  have   resigned   from
office.<F59><F220>

     (b) The directors shall at their first meeting after each annual meeting of
stockholders  choose a Chairman and a Vice  Chairman<F160> of the Board,  a<F88>
President, a Vice-President,  a Secretary, and a Treasurer. They may also choose
additional  Vice-Presidents,  an Assistant Secretary,  and one or more Assistant
Treasurers.<F175>  In  the  event  that  the  Board  shall  elect  two  or  more
Vice-Presidents,    it   may<F193>    designate    one   of   them   as   Senior
Vice-President.<F113> The directors shall designate either the Chairman of the

                                      20

<PAGE>78

Board or the President,  in their discretion,  as the Chief Executive Officer of
the Corporation.<F101>

     (c)  The  officers  of  the  Corporation  shall  hold  office  until  their
successors  are  chosen  and  qualify  in their  stead.  Any  officer  chosen or
appointed  by  the  Board  of  Directors  may be  removed  at  any  time  by the
affirmative vote of a majority of the whole Board of Directors,  with or without
cause.  If the office of any officer or officers  becomes vacant for any reason,
the vacancy shall be filled by the  affirmative  vote of a majority of the whole
Board of Directors.

2.  Chairman of the Board

     (a)  The  Chairman  of the  Board  shall  preside  at all  meetings  of the
stockholders  and the Board of  Directors.  He shall  serve as  chairman  of the
Executive Committee, if such committee is designated, and of any other committee
designated by the Board of Directors, except as otherwise provided by resolution
of the Board.

     (b) On  behalf  of the  Board of  Directors,  and in  association  with the
President,  he shall make to  stockholders  an annual  statement of the business
operations and financial  condition of the  Corporation  and such reports as the
Board shall direct.

     (c) He shall oversee  generally,  on behalf of the Board of Directors,  the
operation and  administration  of all employee benefit plans and of any plan for
the sale and purchase of the stock of the Corporation.

                                       21

<PAGE>79

     (d) He shall  consult  with and advise  the  President,  or any  officer or
manager  as the  President  requests,  regarding  such  matters or  problems  as
mutually may be chosen by him and the President.

     (e) He shall  perform such other  functions and duties as may be prescribed
by the Board of Directors.

     (f) In  the  absence  or  disability  of the  Chairman  of the  Board,  the
foregoing  stated  functions  shall be  performed  by the Vice  Chairman  of the
Board.<F102><F163>

3.  President

     (a) The President  shall be  responsible  for the active  management of the
day-to-day  business and  operations of the  Corporation.  He shall be the chief
administrative  officer and shall appoint and have  supervision and direction of
the operating and staff managers of the business,  except as otherwise  provided
in this Section.

     (b) He shall  make  such  undertakings,  and  execute  such  contracts  and
agreements,  in the name of the Corporation,  as may be necessary to the normal,
budgeted operations of the Corporation, subject to any limitations prescribed by
the Board of Directors.

     (c) He shall be  responsible  for  submitting  for approval to the Board of
Directors,  or to such committee of the Board as it shall  determine,  not later
than 45<F111> days preceding each fiscal year, a proposed  operating  budget and
financial forecast for such succeeding fiscal year.

                                       22

<PAGE>80

     (d) He shall  submit to the  Board of  Directors  an  annual  report of the
operations of the  Corporation,  not later than the regular meeting of directors
next  preceding  the  annual  meeting  of  stockholders,  and he  shall  make to
stockholders, in association with the Chairman of the Board, an annual statement
of the business operations of the Corporation.

     (e) He shall  perform such other  functions and duties as may be prescribed
by the Board of Directors.

     (f) In the absence or disability  of the  President,  the foregoing  stated
functions shall be performed by the Senior Vice-President.<F103><F114>

4.  Chief Executive Officer

     (a)  The  Chief  Executive  Officer  (the  Chairman  of  the  Board  or the
President, as the Board of Directors may designate) shall have final supervisory
power  over  the   business  and  affairs  of  the   Corporation   and  ultimate
responsibility   and   accountability   to  the  Board  of  Directors   for  the
Corporation's  total efforts and total results. He shall see that all orders and
resolutions  of the Board of Directors are carried into effect.  It shall be his
duty to assure that  adequate  planning and attention are given to the long-term
stability and growth of the Corporation.  He shall develop  over-all  objectives
and broad basic  policies and plans of the  Corporation  for the approval of the
Board of Directors.

     (b) He shall  conducts  the  Corporation's  external  financial  and  legal
relations  and  shall  be  the  Corporation's  principal  representative  in its
relations  with the public,  the  community,  other  businesses,  and government
agencies.

                                       23



<PAGE>81

     (c) Except  where by law the  signature of the  President  is required,  he
shall execute all deeds, bonds, mortgages, and other obligations and instruments
(other than such contracts and  agreements  that may be necessary to the normal,
budgeted operations of the Corporation) in the name of the Corporation.

     (d) He shall  approve the  appointment  by the  President of the  principal
operating  and staff  managers  of the  business,  and shall have final  general
responsibility for the setting and adjusting of the salaries of all employees of
the Corporation.

     (e) He shall have general  supervision  and direction of the other officers
in their  corporate  capacities  and shall see that their  corporate  duties are
properly performed.<F104>

     (f) In the  absence  or  disability  of the  President,  when  he has  been
designated the Chief Executive Officer,  the foregoing stated functions shall be
performed  by the  Chairman of the Board.  In the absence or  disability  of the
Chairman of the Board, when he has been designated the Chief Executive  Officer,
the foregoing  stated  functions  shall be performed by the Vice Chairman of the
Board.<F164.

5.<F92>     Vice-Presidents

     In the absence or  disability of both the President and the Chairman of the
Board,<F105> the Senior Vice-President<F116> shall be vested with all the powers
and be required to perform all the duties of the President.  The  Vice-President
or  Vice-Presidents  shall perform such duties as may be prescribed by the Board
of Directors.<F117>

                                       24

<PAGE>82

6.<F93> President Pro Tem

     In the absence or disability of the  President  and the  Vice-President  or
Vice-Presidents, the Board may appoint from its own number a president pro tem.

7.<F94> Secretary

     (a) The Secretary shall attend all meetings of the Board of Directors,  the
stockholders,  and the Executive  Committee.  He shall act as clerk thereof, and
shall record all votes and all of the  proceedings of such meetings in a book to
be kept for that  purpose;  and  shall  perform  like  duties  for the  standing
committees of the Board of Directors when required.

     (b) He shall  give or  cause  to be  given  proper  notice  of  meeting  of
stockholders and directors, whenever required.<F106>

     (c) He shall record and effectuate all proper transfers of stock, and shall
keep an account of stock registered and transferred,  in such manner and subject
to such regulations as the Board of Directors may prescribe.

     (d) He shall have  custody of the seal of the  Corporation  and shall affix
the seal to contracts, agreements, deeds, mortgages and other instruments of the
Corporation  requiring  a seal;  and when the  seal is so  affixed,  it shall be
attested by his signature, or by the signature of the Treasurer.

     (e) He  shall  perform  all  other  functions  incident  to the  office  of
Secretary,  and such  other  functions  as the Board of  Directors  or the Chief
Executive Officer may prescribe.<F107>

                                       25

<PAGE>83

8.  Treasurer

     (a) The  Treasurer  shall have custody of the funds and  securities  of the
Corporation and shall deposit all monies and other valuable  effects in the name
and to the credit of the  Corporation in such  depositories as may be designated
by the  Board of  Directors.  The  Treasurer  shall  disburse  the  funds of the
Corporation  as may be  ordered by the Board of  Directors  and either the Chief
Executive  Officer or the  President,  in  relation to their  functions,  taking
proper vouchers for such disbursements,  and shall render to the Chief Executive
Officer and the  directors,  whenever they may require it, an account of all his
or her transactions as Treasurer.

     (b) The  Treasurer  shall  invest  funds  of the  Corporation  pursuant  to
guidelines  established  by the Board of Directors  and shall perform such other
duties  as are  properly  required  of him or  her by the  Board  of  Directors,
including the payment of dividends as declared by the Board of Directors.<F184>

9.  Chief Financial Officer

     The Chief Financial  Officer (a vice president)  shall have  responsibility
for the financial management of the business, including: obtaining financing for
the  business;  managing the  accounting  system and other  financial  reporting
systems;  formulating  financial  plans and  evaluating  performance  under such
plans; complying with the financial reporting requirements of appropriate taxing
and  other  regulatory  agencies;   and  consulting  with  other  company  units
concerning  the  financial  aspects  of their  activities.  The Chief  Financial
Officer  shall  also be  responsible  for  maintaining  accurate  records of all
financial  transactions  of the  Corporation.  In  relation  thereto,  the Chief
Financial  Officer shall  establish and supervise the functions of the office of
the  Controller  of the  Corporation.  He or she  shall be the  primary  liaison
between the  Corporation  and its  independent  auditors and shall render to the
Chief  Executive  Officer and the  directors,  whenever  they may require it, an
account of the financial condition of the Corporation, and at the meeting of the

                                       26

<PAGE>84

Board of Directors next preceding the annual meeting of  stockholders  he or she
shall make a like report for the preceding fiscal year.

10. Bonding of Officers

     Any  officer  shall  give  the  Corporation  a bond at the  expense  of the
Corporation,  if required to do so by the Board of Directors, in such sum and in
form and with security  satisfactory to the Board, for the faithful  performance
of the duties of his or her office and the  restoration to the  Corporation,  in
case of his or her death,  resignation,  retirement,  or removal from office, of
all books, papers, vouchers, money and other property of whatever kind belonging
to the Corporation in his or her possession or under his or her control.<F185>

11.<F96> Delegation of Powers

     In case of the absence or disability of any officer of the Corporation,  or
for any other  reason  deemed  sufficient  by a majority  of the whole  Board of
Directors,  the Board may  delegate  any or all of the  powers or duties of such
officer to any other officer, or to any director, for the time being.


                         SECTION IX - CAPITAL STOCK<F11>

1.  Amount

     The total number of shares of stock which the  Corporation is authorized to
issue is thirteen million  (13,000,000)  shares divided into three classes:  one
class  designated  as Class A common  shares shall  consist of six million seven
hundred thousand  (6,700,000) shares,  $1.00 par value per share and with voting
rights,  another class designated as Class B common shares shall consist of five
million three hundred thousand (5,300,000) shares, $1.00 par value per share and

                                       27

<PAGE>85


without  voting  rights,  and another class  designated as Class C common shares
shall  consist  of one  million  (1,000,000)  shares,  $1.00 par value per share
without voting rights.<F208><F219>

2.  Eligible Stockholders

    (a) Class A Stock

         (i) The shares of Class A stock shall be issued only to persons (1) who
are  officers or  employees of the  Corporation  or of a subsidiary  eighty (80)
percent or more of whose stock is owned by the  Corporation  and (2) who possess
such  other  qualifications  as the Board of  Directors  shall from time to time
prescribe by resolution  (all such officers and employees  being  hereinafter in
this Section IX referred to as "officers and employees of the  Corporation") and
to a trustee under a stock bonus plan of the Corporation.<F136>

         (ii) Except as provided  in  Sections V and VIII of these  By-Laws,  in
respect of  qualifications  of directors  and  officers,  no officers  and<F137>
employees of the Corporation  shall be obligated or required to subscribe for or
own any stock of the  Corporation;  and the subscription or failure to subscribe
for any shares of stock of the  Corporation  shall in no way affect or prejudice
the position,  status,  tenure,  continued  employment,  or  advancement  of any
officer or<F138> employee.

                                       28

<PAGE>86

    (b) Class B Stock

         (i) The Class B stock  shall be  issued  only in  exchange  for Class A
stock (A) to officers or employees of the Corporation upon retirement because of
age or  disability,  or (B)  upon the  death of  officers  or  employees  of the
Corporation,  to the estates of such officers or employees, to the dependents of
such  officers or  employees,  or to persons who are the natural  objects of the
bounty of such officers or employees:  Provided, That death occurs (1) while the
officers or employees  are in the service of the  Corporation  or on military or
disability  leave,  or (2)  within 90 days  after  retirement  because of age or
disability.<F122>

         (ii) No person  shall be  obligated or required to accept Class B stock
in exchange for Class A stock.

         (iii) Any person qualified under sub-paragraph  (b)(i) above to receive
Class B stock in exchange for Class A stock who elects to exercise such right of
exchange  shall so notify the  Secretary  of the  Corporation  in writing at the
following times:

              (A) In the  case of an  officer  or  employee  of the  Corporation
entitled to  exchange  Class A stock for Class B stock upon  retirement,  within
ninety  (90)  days  after  retirement,  and in the case of  anyone  entitled  to
exchange Class A stock for Class B stock upon the death of a retired  officer or
employee,  within one hundred  eighty (180) days after the death of such officer
or employee;

                                       29

<PAGE>87

              (B) In the case of anyone  entitled to exchange  Class A stock for
Class B stock upon the death of an officer or employee of the Corporation  while
in the service of the Corporation or on military or disability leave, within one
hundred (180) days after such death.<F123>

     PROVIDED,  however,  that  with  respect  to an  exchange  involving  stock
distributed to a qualified  person under a stock bonus plan of the  Corporation,
the  aforesaid  ninety  (90) day and one  hundred  and eighty  (180) day periods
<F124> for  notification  shall begin to run upon  distribution  of stock by the
trustee of said plan.<F61>

         (iv) In the event that a holder of Class A stock  elects to  exercise a
right to  exchange  such  stock  for  Class B stock  and  that at such  time the
Corporation  does not have  available  authorized  Class B stock  with  which to
effectuate  such exchange,  said holder of Class A stock shall be so informed by
the  Corporation  and such Class A stock may be retained  by the holder  thereof
until  receipt of  notification  from the  Corporation  that Class B stock is so
available. Upon receipt of such notification from the Corporation,  the exchange
shall  promptly be  effected:  Provided,  That  nothing  contained  herein shall
preclude such holder of Class A stock prior to receipt of such notification from
the Corporation from tendering any or all of such shares of Class A stock (A) to
the  Corporation  for  purchase  by it in  accordance  with  Paragraph 7 of this
Section or (B) for  purchase  in  accordance  with the  provisions  of the Stock
Purchase and Transfer Plan of the Corporation.<F125>


                                       30

<PAGE>88

    (c) Class C Stock

     The Class C common stock of the  Corporation may be issued only in exchange
for Class A stock to  officers  and  employees  of any  subsidiary  corporation,
eighty (80) percent or more of whose stock is owned by the Corporation or to the
officers  and  employees  of the  Corporation  assigned  to  such  a  subsidiary
corporation,  upon the  disposition of that  subsidiary or upon reduction of the
Corporation's stock ownership to less than eighty (80) percent.  The exchange of
Class A stock  for Class C stock  shall be at the  option  of such  officer  and
employee and shall be on a share for share basis.  An election to exercise  such
right of exchange shall be made by so notifying the Secretary of the Corporation
in  writing  by the  later of July 19,  1986,  or  ninety  (90)  days  after the
disposition or reduction.

     Any  holder  of Class C stock  may at any time,  by  written  notice to the
Secretary  of the  Corporation,  tender  any or all  shares of such stock to the
Corporation for purchase by it. The Board of Directors may accept or reject such
tender,  in whole or in part;  and if it accepts the tender or any part thereof,
the  Corporation  shall purchase the shares of stock so accepted at the price in
effect for purchase and sale of shares of Class A stock of the Corporation under
the  Stock  Purchase  and  Transfer  Plan of the  Corporation.  If the  Board of
Directors rejects such tender in whole or in part, the shares may be transferred
to any  person  whomsoever,  subject,  however,  to a  continuing  right  of the
Corporation  to purchase  any and all of said  shares in the event that,  and at
such times as, any or all of such shares are  presented  for  transfer,  and the
price payable by the  Corporation  shall be the price in effect for the purchase
and  sale of Class A stock of the  Corporation  under  the  Stock  Purchase  and
Transfer Plan of the Corporation. Except as provided above, no shares of Class C
stock may be transferred or pledged  without the written consent of the Board of
Directors.

     The Corporation  shall have the right to redeem from the holder thereof all
or any part of the  outstanding  shares of Class C stock (a) one (1) year  after
the death of the officer or employee,  or (b) ninety (90) days after the officer
or  employee  has held the Class C stock for the number of years equal to his or
her years of service as an officer or employee of the Corporation or the

                                       31

<PAGE>89

the  subsidiary  company  while the  subsidiary  was owned at least  eighty (80)
percent by the  Corporation,  whichever  shall first occur.  Prior to exercising
such right of redemption, the Corporation shall notify the holder of the Class C
stock by written notice to the address of such holder as it appears on the stock
books of the Corporation and shall give the holder the opportunity to tender the
shares to the  Corporation  in accordance  with the previous  paragraph.  If the
holder  fails to tender the shares,  the  Corporation  may exercise the right to
redeem the outstanding shares of Class C stock at a price per share equal to the
book value per  outstanding  share at the close of the next  preceding  calendar
year, as determined by independent  auditors,  and the said holder shall have no
further rights, privileges, or powers in respect of such stock.<F204>

    (d) Transfer on Death<F221>

     Notwithstanding  any  provision  of this  Paragraph  2 of Section IX to the
contrary,  any holder of shares of Class A,  Class B, or Class C stock  shall be
entitled to hold such shares in  transfer-on-death  ("TOD") form pursuant to the
provisions of Chapter 8 of Part III, Title 12 of the Delaware Code ("Uniform TOD
Security Registration Act") subject to such conditions as the Board of Directors
may  establish  by  resolution   from  time  to  time  and  in  accordance  with
registration procedures to be adopted by the Secretary of the Corporation.  Upon
receipt of (i) an  affidavit  of the  personal  representative  of the  deceased
owner's  estate or such  other  proof of death of the  deceased  owner as may be
satisfactory to the Secretary of the Corporation,  and (ii) satisfaction of such
other requirements as the Corporate  Secretary may establish,  shares of Class A
stock,  Class B stock, or Class C stock  transferred upon the death of the owner
pursuant to TOD  registration  shall be  registered in the name of the surviving
beneficiary(ies). Shares of any class of the Corporation's stock received by any
person   as  a   surviving   beneficiary   (or   the   surviving   beneficiary's
representatives, if applicable) under a TOD registration of such shares shall be
subject to the provisions of the Corporation's  Certificate of Incorporation and
By-Laws in the same  manner as if such  shares had been  received by such holder
under a will or under the laws of descent and distribution. Without limiting the
generality  of the foregoing  sentence,  any such shares shall be subject to the
Corporation's redemption or repurchase rights applicable to the personal

                                       32

<PAGE>90

representative  of any  deceased  holder  of the  Corporation's  stock or to any
recipient of the  Corporation's  stock under a will or under the laws of descent
and distribution.


3.  Consideration for Class A Stock

     The Class A stock  shall be issued  for money  only,  at such  price as the
Board of  Directors  may from time to time  prescribe by  resolution,  except as
issued pursuant to the provisions of a stock bonus plan of the Corporation.<F62>

4.  Rate of Exchange of Class B Stock

     The  exchange  of Class A stock for  Class B stock  shall be on a share for
share basis.<F126>

5.  Form of Certificates; Uncertificated Shares <F229>

     (a) The certificates of stock of the Corporation shall, as to each class of
stock,  be  numbered  consecutively  and  shall be  entered  in the books of the
Corporation as they are issued. Each certificate shall exhibit the holder's name
and the number of shares of stock  represented  thereby,  and shall be signed by
the President or a Vice-President,  and by either the Secretary,  the Treasurer,
the Assistant Secretary or the Assistant Treasurer.

     (b) All  shares of the  Corporation's  Class A,  Class B, and Class C stock
issued on and after March 25, 2000, shall be uncertificated  shares;  any shares
of the  Corporation's  Class A, Class B, and Class C stock  issued prior to that
date  shall  become  uncertificated  upon  the  stockholder's  surrender  to the
Corporation  of  the  certificate   representing  such  shares.  Any  holder  of
uncertificated  shares  shall  be  entitled,  upon  request,  to  a  certificate
representing those shares.

6.  Transfer of Stock

     (a) Except as provided in<F64>  Paragraph 7 of this Section and in Sections
X and XI,<F16> no shares of Class A and Class B<F65> stock may be transferred or
pledged without the written consent or  authorization  of the Board of Directors
or of  such  officer  as  may be  designated  by it to  grant  such  consent  or
authorization.

                                       33

<PAGE>91

     (b) All transfers of stock of the  Corporation  represented by certificates
shall be made upon its books by the person  named in the  certificate  or by his
lawfully constituted  representative,  and upon surrender of the certificate for
cancellation;  transfers of stock represented by uncertificated  shares shall be
made by the person named in the Corporation's  records or by his or her lawfully
constituted representative, without the need for a surrender of the certificate.
<F230> For purposes of this Paragraph 6(b) and Article IV, Section 1A, Paragraph
16 of the  Corporation's  Certificate  of  Incorporation,  a  transfer  of stock
registered  in  Transfer  on Death form that occurs upon the death of the holder
thereof shall be deemed to be made by the person named in the certificate, or by
the person named in the Corporation's record,  provided that the Corporation has
received an  affidavit of the personal  representative  of the deceased  owner's
estate or such other proof of death of the deceased owner as may be satisfactory
to the Secretary of the Corporation.<F222>

     (c) The Corporation  shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof,  and  accordingly  shall
not be bound to recognize  any  equitable or other claims to or interest in such
shares on the part of any person,  whether or not it shall have express or other
notice thereof, save as expressly provided by the laws of Delaware.

7. Purchase of Class A and Class B<F65> Stock by Corporation

     (a) Any holder of Class A<F66> stock may at any time, by written  notice to
the  Secretary  of the  Corporation,  tender  any or  all of his  shares  to the
Corporation for purchase by it. The Board of Directors may accept or reject such
tender,  in whole or in part;  and if it accepts the tender or any part thereof,
the  Corporation  shall purchase the shares of Class A<F66> stock so accepted at
the price provided for in sub-paragraph (a) of Paragraph 9 hereof, determined as
of the date of presentation for transfer.<F18>

    (b) In the event of (i)<F19> the resignation, retirement, dismissal or death
of any officer or employee of the Corporation who owns any shares of Class

                                       34

<PAGE>92

A<F66> stock thereof or (ii) the distribution of shares of Class A<F66> stock of
the Corporation by a trustee under any stock bonus plan of the Corporation,<F20>
the  Corporation  shall have the exclusive  right,  subject to the provisions of
sub-paragraph  (b) of  Paragraph  2 of this  Section  and to the  provisions  of
Section X and Section XI of the  By-Laws,<F21>  for a period of ninety (90) days
from the occurrence of such  event<F22> to purchase any or all such Class A<F66>
stock so owned or so  distributed.<F23>  If the  Board of  Directors  elects  to
exercise such right of purchase, it shall notify the stockholder or his personal
representative   or  the   distributee   under  a  stock   bonus   plan  of  the
Corporation<F24>  within said period of ninety (90) days by written  notice sent
to the stockholder or his representative at the address of the stockholder as it
appears  on the stock  books of the  Corporation  and by  written  notice to the
distributee  at his address as it appears on the  records of the  Administrative
Committee established under the stock bonus plan,<F127> and within not more than
one (1) year after such exercise of its right to purchase the Corporation  shall
pay the said stockholder or his representative or the said  distributee<F25> the
applicable price per share specified in sub-paragraph (a) of Paragraph 9 of this
Section,  determined as of the date of such separation or such distribution<F26>
and with interest at the rate of six  percentum  (6%) per annum from the date of
such purchase until the date of payment. Upon the exercise by the Corporation of
its  right  to  purchase  any  such  shares  of  Class  A<F66>  stock,  the said
stockholder or his  representative  or the said  distributee<F27>  shall have no
further  rights,  privileges,  or powers in respect of such stock. If payment of
the purchase price for such shares is not made by the Corporation at the time of
such purchase,  the Corporation  shall within a reasonable time thereafter issue
to the stockholder or his representative or the distributee<F28> a note or other
evidence  of  indebtedness  fixing  the  amount  to be paid  by the  Corporation
pursuant  to  sub-paragraph  (a) of  Paragraph  9 of this  Section  and  bearing
interest at the rate of six percent  (6%) per annum from the date of purchase to
the date of payment. If the Board of Directors elects not to exercise such right

                                      35

<PAGE>93

of  purchase  within  the said  period of ninety  (90)  days,  the shares may be
retained by or transferred to any person  whatsoever,  subject to the continuing
right of the  Corporation  to  purchase  all or any of said  shares in the event
that, and at such times as, any or all of such shares are presented for transfer
to any other person,  and the price payable by the Corporation shall be<F29> the
applicable price per share specified in sub-paragraph (a) of Paragraph 9 of this
Section,30 determined as of the date of presentation for transfer.<F31>

     (c) The  Corporation  shall have the right to purchase  Class  A<F56> stock
through  the  Stock  Purchase  Plan for the  purposes  set forth in  Section  X,
Paragraph 4, of the By-Laws.<F51>


     (d) Any holder of Class B stock may at any time,  by written  notice to the
Secretary of the  Corporation,  tender any or all his shares to the  Corporation
for purchase by it. The Board of Directors may accept or reject such tender,  in
whole or in  part;  and if it  accepts  the  tender  or any  part  thereof,  the
Corporation  shall  purchase  the shares so  accepted at a price  determined  in
accordance  with the provisions of  sub-paragraph  (b)(i) of Paragraph 9 hereof.
Where shares are tendered by several  stockholders,  the Board of Directors  may
accept all or any part thereof as it deems proper,  either in the  chronological
order of tender, or according to a percentage of all shares tendered,  or by any
combination  of these  methods,  at its  discretion.  If the Board of  Directors
rejects such tender in whole or in part,  the shares may be  transferred  to any
person  whatsoever,  subject  to the  continuing  right  of the  Corporation  to
purchase any or all of said shares in the event that,  and at such times as, any
or all of such shares are presented  for transfer to any other  person,  and the
price  payable  by the  Corporation  shall be a price  per share  determined  in
accordance with the provisions of  sub-paragraph  (b)(ii) of paragraph 9 hereof,
determined as of the date of presentation for transfer.<F67>

                                       36

<PAGE>94

8. Redemption of Class B Stock by the Corporation

     The  Corporation  shall have the right at any time (a) after the expiration
of eight (8) years from the date of  retirement of an officer or employee or one
(1) year after the death of such retired  officer or employee,  whichever of the
two periods is longer,  to redeem from the holder thereof all or any part of the
outstanding  shares of Class B stock issued to such retired officer or employee,
and (b) after  the  expiration  of eight (8) years  from the date of death of an
officer or employee (i) while in the service of the  Corporation  or on military
or disability  leave or (ii) who dies within ninety (90) days after  retirement,
to redeem from the holder thereof all or any part of the  outstanding  shares of
Class B stock issued in exchange for Class A stock to the estate, dependents, or
persons who are the natural  objects of the bounty of such  employee or officer.
If the  Corporation  elects to exercise  such right of  redemption,  it shall so
notify the holder of the Class B stock by written  notice sent to the address of
such holder as it appears on the stock books of the  Corporation  and, upon such
exercise by the Corporation of its right to redeem any of such shares of Class B
stock,  the said holder shall have no further rights,  privileges,  or powers in
respect of such  stock.<F128> The Corporation  shall make payment for the shares
redeemed at a price per share  determined in accordance  with the  provisions of
sub-paragraph (b)(iii) of Paragraph 9 hereof, as of the date of redemption.<F68>

9.  Purchase Price

    (a) Class A<F66> Stock

     The  price to be paid by the  Corporation  for any  shares of Class A <F66>
stock acquired by it pursuant to a tender under  Subparagraph (a) of Paragraph 7
of this  Section,  or pursuant to notice or demand  under  sub-paragraph  (b) of
Paragraph 7 of this Section shall be as follows:

                                       37

<PAGE>95

         (i) During the period  ending  December  31,  1950,  the book value per
outstanding  share  for the next  preceding  calendar  year,  as  determined  by
independent auditors.

         (ii) From and after  January  1, 1951,  the book value per  outstanding
share at the close of<F32> the next  preceding  calendar  year, as determined by
independent  auditors:   PROVIDED,  That  if  the  book  value  per  outstanding
share,<F33> as so determined,  exceeds ten times the average annual net earnings
per outstanding  share,<F34> if any, of the Corporation (after taxes,  including
income taxes) for the next  preceding  three  calendar  years,  as determined by
independent  auditors  then the price  shall be the  average of such two figures
(book value and ten times average net earnings) per outstanding share.

    (b) Class B Stock

         (i) The price to be paid by the  Corporation  for any shares of Class B
stock  acquired by it pursuant to tender under  Subparagraph  (d) of Paragraph 7
hereof shall be:

              (A) The price in effect for purchase and sale of shares of Class A
stock of the  Corporation  under the Stock  Purchase  and  Transfer  Plan of the
Corporation,  if tender is made  prior to the time  that the  Corporation  shall
first have the right under  Paragraph 8 hereof to redeem such Class B stock from
the holder thereof; or

              (B) The  price  determined  for the  purchase  of Class A stock in
accordance with the provisions of  sub-paragraph  (a) of Paragraph 9 hereof,  if
tender is made at a time when the Corporation shall first have the right under

                                      38

<PAGE>96

Paragraph 8 hereof to redeem such Class B stock from the holder thereof.<F129>

         (ii) Except as provided for in Subparagraph  (iv) hereof,  the price to
be paid by the  Corporation  for  any  share  of  Class B stock  acquired  by it
pursuant to the  exercise of its right under  sub-paragraph  (d) of  Paragraph 7
hereof after rejection of tender shall be:

              (A) The price in  effect  for the  purchase  and sale of shares of
Class A stock of the  Corporation  under the Stock Purchase and Transfer Plan of
the  Corporation,  if the stock is presented for transfer prior to the time that
the  Corporation  shall first have the right under  Paragraph 8 hereof to redeem
such Class B stock from the holder thereof; or

              (B) The  price  determined  for the  purchase  of Class A stock in
accordance with the provisions of  sub-paragraph  (a) of Paragraph 9 hereof,  if
the stock is presented for transfer at a time when the  Corporation  shall first
have the right  under  Paragraph  8 hereof to redeem such Class B stock from the
holder thereof.<F130>

         (iii) Except as provided for in sub-paragraph (iv) hereof, the price to
be paid by the  Corporation  for any share of Class B stock acquired by it under
Paragraph 8 hereof shall be a price determined in accordance with the provisions
of sub-paragraph (a) of Paragraph 9 hereof.

         (iv) If the  Corporation  shall  refuse a tender of Class B stock  made
pursuant to the provisions of sub-paragraph (d) of Paragraph 7 hereof within six

                                      39

<PAGE>97

months  prior to the time at which the  Corporation  shall  first have the right
under  Paragraph 8 hereof to redeem such Class B stock from the holder  thereof,
<F131> the price to be paid by the Corporation  upon acquisition of such Class B
stock  either  under the  provisions  of  sub-paragraph  (d) of  Paragraph  7 or
Paragraph 8 hereof shall be the price in effect at the time of  acquisition  for
the  purchase  and sale of Class A stock under the Stock  Purchase  and Transfer
Plan of the Corporation.<F69>

10. Fractional Shares

     No  fractional  shares  of<F70>  stock  may be  subscribed  for,  issued or
exchanged,  except as the Board of Directors may by  resolution  determine to be
necessary  or  advisable  in the  effectuation  of a  stock  bonus  plan  of the
Corporation.<F35> The Board of Directors may, in its discretion, provide for the
payment  of a sum of  money  to  cover  fractional  interests  arising  from  an
exchange, redemption or acquisition of stock by the Corporation.

11. Dissolution or Distribution of Assets

     In the event of dissolution  of, or any  distribution of the assets of, the
Corporation,  the  holders  of Class A stock,  Class B stock,  and Class C stock
shall  be  entitled  to  participate  ratably,  share  for  share,  and  without
preference of any class over the others.<F205>

12. Lost Certificate

     If a certificate of stock of the Corporation be lost or destroyed,  another
certificate of the same tenor and for the same number of shares may be issued in
its  stead,  upon  proof  of  such  loss or  destruction  and  the  giving  of a
satisfactory  bond  of  indemnity  in an  amount  sufficient  to  indemnify  the
Corporation against any claim:  PROVIDED,  That the Board of Directors may waive
the requirement of a bond if in its judgment it is proper to do so.

                                       40

<PAGE>98

                SECTION X - DISTRIBUTION AND MARKETING OF STOCK<F36>

1.  Stock Transfer in Conformity with Section

     For all  transfers  of  Corporation  stock  made  in  conformity  with  the
requirements  of this Section,  approval by the Board of Directors  shall not be
required.

2.  Stock Purchase and Transfer Plan

     The Board of Directors  shall set up a Stock  Purchase  and  Transfer  Plan
which shall contain the following features:

    (a) Operation by Trustee

     The Plan  shall be  operated  in  accordance  with the  provisions  of this
Section by a Trustee,  who shall be  designated  by the Board and shall serve at
the  pleasure  of the  Board.  The Board  may  designate  one or more  Assistant
Trustees with powers to perform any of the Trustee's duties herein prescribed in
the absence of the Trustee.<F198>

    (b) Eligibility for Participation

     Except as  otherwise  provided  in this  Section,  officers  and  employees
eligible to  participate  shall be persons (1) who are  officers or employees of
the  Corporation or of a subsidiary  corporation  eighty (80) percent or more of
whose  stock  is  owned  by the  Corporation  and (2)  who  possess  such  other
qualifications  as the Board of Directors  shall from time to time  prescribe by
resolution (all such officers and employees being  hereinafter in this Section X
referred to as "officers and  employees").<F140>  The term  "stockholder,"  used
without  qualification,  means any holder of Class A stock<F66> whether he is an
officer or<F138> employee or not.

                                       41

<PAGE>99

    (c) Stock Purchase Fund

     The  Board of  Directors  shall  set up a Stock  Purchase  Fund  under  the
direction  and  control of the  Trustee.  The Trustee is  empowered  to select a
depository  with which this fund is to be deposited.  Withdrawal of amounts from
the account with the depository may be made upon the signature of the Trustee or
his duly designated agent.

    (d) Functions of Stock Purchase Fund

     The functions of the Stock Purchase Fund shall be:

         (i) To accept deductions from the weekly or biweekly salary of eligible
officers and<F137>  employees  authorizing  deductions for the purchase of Class
A<F66> stock of the  Corporation.  The deducted amounts shall remain in the Fund
to the credit of the  respective  officers  and<F137>  employees  until they are
applied to the purchase of stock. In the event of termination of employment, any
amount in the Stock Purchase Fund to the credit of the officer or<F138> employee
shall be refunded.

         (ii) To  maintain  a list of  "offers  to buy" from  eligible  officers
and<F137> employees.

         (iii)  To  purchase  from  stockholders   Class  A<F66>  stock  of  the
Corporation,  so far as  available,  up to the amount  sufficient to satisfy the
claims of those  who (1) have  deposited  funds  with the Fund  through  payroll
deductions and (2) have listed with the Trustee "offers to buy."

         (iv) To purchase from the Corporation  such treasury Class A<F66> stock
or unissued Class A<F66> stock as the Board of Directors may authorize to be

                                       42

<PAGE>100

purchased,  for the  purpose  of  satisfying  the  demands of those who (1) have
deposited  funds with the Fund through  payroll  deductions  and (2) have listed
with the Trustee "offers to buy".

         (v) To sell  stock to the  Corporation  for the  purposes  set forth in
Section X, Paragraph 4, of the By-Laws.<F52>

    (e) Priorities in Purchase and Sale of Stock

     The Trustee shall observe the following  rules as to priorities in purchase
and distribution of Class A<F66> stock:

         (i) When the number of shares which can be purchased  with  accumulated
funds from payroll  deductions  and by calling upon  officers and  employees who
have  submitted  "offers to buy" exceeds the total of shares which are available
to the Fund for  distribution,  the claims of those who have  contributed  funds
through payroll deductions shall be satisfied before  satisfaction of any of the
claims of those who have submitted "offers to buy".

         (ii) When the number of shares offered to the Fund by stockholders plus
the  shares  subject  to  purchase  by the Fund  under the  optional  agreements
provided  for in Section  XI of these  Bylaws  exceeds  the number of shares for
which  there is a demand  through  payroll  deductions  and "offers to buy," the
Trustee  shall  apply  such  funds as are  available  to  purchase  stock in the
following order of priority:

              (aa)  Such  shares  of  stock  held by a former  officer  or<F138>
employee, or the heirs or legatees of a former officer or <F138> employee, whose
employment  has been  terminated  for  three  years or more and  whose  stock is
subject to purchase by the Fund  pursuant to the  agreement set forth in Section
XI of these Bylaws.

                                       43

<PAGE>101

              (bb) All  other  stock  offered  to the Fund for  purchase  in the
chronological  order in which such offers  have been  received in writing by the
Trustee: PROVIDED, however, that, whenever the Trustee has unsatisfied offers of
stock from two or more  stockholders,  not more than three  thousand two hundred
(3,200)  shares may be purchased  from a  stockholder  having a higher  priority
until three thousand two hundred (3,200) shares (or all shares offered,  if less
than three  thousand two hundred  (3,200))  have been  purchased  from each such
stockholder  having a lower  priority.  Where  two or more  offers  of stock are
received simultaneously by the Trustee, the order shall be determined by lot.
<F209>

    (f) Price of Class A<F56> Stock

     Not more than  70<F80> days and not less than 15 days prior to (1) the date
of record for voting at the regular annual meeting of  stockholders  and (2) the
date which follows such record date by six months,  the Board of Directors shall
determine  the price of the Class A<F56> stock for purchase and sale by the fund
during the six-month  periods  beginning with the two dates specified above. The
price set shall not be below  the book  value per share as  determined  from the
most  recent  period  financial  statement  available  to the  Board at the time
determination  is made.  The price  shall be the same for stock  purchase by the
Stock  Purchase Fund and for stock sold by the Fund.  Announcement  of the price
shall be made to all stockholders and eligible officers  and<F137>  employees at
least one week<F112> in advance of the effective date.

                                      44

<PAGE>102

    (g) Issuance of Class A<F56> Stock to Fund

     The Board of  Directors  shall  determine  twice each year  whether to make
available  treasury or unissued  Class A  stock<F56>  for  purchase by the Stock
Purchase  Fund  and,  if it  decided  to make  such  stock  available,  it shall
determine  the  maximum  number of  shares to be sold to the Fund.  The price at
which such stock shall be sold shall be the same as the price fixed for purchase
and sale of stock by the Stock Purchase Fund.<F120>

    (h) Settlement Dates

     On the dates designated below, money accumulated in the Stock Purchase Fund
shall  be  applied  to the  purchase  of Class A  stock<F66>  in the name of the
officers and<F137> employees  authorizing payroll deductions for the purpose. As
of these dates the Trustee of the Fund shall also make  available,  to those who
have submitted "offers to buy," stock to satisfy these offers to the extent that
such stock is available to the Fund. Stock  certificates shall be issued to each
officer or<F138> employee for shares then fully paid through payroll  deductions
or by  satisfaction of "offers to buy" as soon as possible after each settlement
date.  The  settlement  dates are the days next  preceding each of the following
dates:

         (i) Record date fixed prior to (a) regular stockholders'  meetings: (b)
special stockholders' meeting; and (c) payment of dividends.

         (ii)  Date  six  months  after  record  date of  regular  stockholders'
meetings.

    (i) Payroll Deductions for Purchase of Stock

     Eligible officers and<F137> employees may, upon written authorization, have
deducted from their  salaries and paid into the Stock  Purchase Fund  designated
amounts each pay period to be applied on purchase of Class A  stock<F66>  of the
Corporation, subject to the following rules:

                                       45

<PAGE>103

         (i) Limitations on Amount

     Deductions from salary for such purchase shall not be in excess of 80 times
the current price per share and not less than one dollar ($1.00) per week.<F210>

         (ii) When Deductions Begin

     Deductions  from payroll for the purpose of this  subparagraph  shall begin
with  salary  for  the  first  full  pay  period<F156>   after  receipt  of  the
authorization,  except  that  deductions  from  payroll  authorized  within  the
forty-two<F202>  days  preceding  the close of the then current Plan shall begin
with salary for the first full week of the succeeding Plan period. <F152>

         (iii) Change in Amount of Authorized Deduction

     Any  eligible  officer  or<F138>  employee  who has  authorized  a  payroll
deduction  for the  purposes of this  subparagraph  may increase or decrease the
amount of the deduction  authorized,  subject to the  limitations of subdivision
(i) of this  subparagraph,  by giving written notice to the Trustee of the Stock
Purchase Fund.  Such notice shall take effect with salary for the first full pay
period<F156> after submission of notice,  except that if such notice is received
within the forty-two<F202>  days preceding the close of the then current Plan it
shall take  effect with  salary for the first full week of the  succeeding  Plan
period.<F153>

                                       46

<PAGE>104


         (iv) Withdrawal of Authorization

     Any  eligible  officer  or<F138>  employee  who has  authorized  a  payroll
deduction for the purposes of this  subparagraph may withdraw his  authorization
at any time by giving  written notice to the Trustee of the Stock Purchase Fund.
Such notice  shall take  effect with salary for the first full pay  period<F156>
after  submission of notice.<F47>  Upon request,  and with two weeks' notice,  a
person  withdrawing  from the Plan may have  refunded any amount  deducted  from
salary which has not at that time been applied to the purchase of stock. <F82>

         (v) No Fractional Shares

     No fractional  shares shall be purchased or distributed.  On any settlement
date,  the Stock Purchase Fund shall refund to any office  or<F138>  employee on
request any amount remaining after application of the deductions to the purchase
of full shares of stock.

    (j) "Offers to Buy"

     Eligible  officers   and<F137>   employees  may  at  any  time  before  the
forty-second<F202>  day  preceding  the close of the then current Plan submit to
the  Trustee   "offers  to  buy"  shares  of  the  Class  A  stock<F66>  of  the
Corporation.<F48>  Such "offers to buy" shall be satisfied at the price of stock
currently  established,  and shall  become void at the end of the current  stock
plan.<F226>

     Stock  may be  sold by the  Trustee  in  satisfaction  of  "offers  to buy"
whenever he has stock  available for sale after the  satisfaction  of all claims
arising from those who have authorized payroll deductions for purchase of stock:
PROVIDED, however, that no treasury or unissued stock shall be issued to satisfy

                                       47

<PAGE>105

such "offers to buy" except at the following  settlement dates: (1) the day next
preceding the record date for the regular annual  stockholders'  meeting and (2)
the day next preceding the date six months after such record date.

         (i) Filing

     "Offers to buy" must be  submitted in writing in a form  prescribed  by the
Board of Directors and filed with the Trustee.

         (ii) Records

     The  Trustee  shall keep a record of "offers to buy" filed with him,  which
shall  show the name,  date of  filing,  terms of offer,  and date and extent of
satisfaction  or date of withdrawal or decrease.  He shall assign to each "offer
to buy" a listing  number,  which  shall  show the time  sequence  in which such
"offers to buy" have been  filed.  When two or more  offers are  received at the
same time, priority among them shall be determined by lot.

         (iii)    Obligations Entailed

     "Offers to buy" when filed,  shall constitute a binding obligation upon the
person  filing the same to execute the  purchase at any time when called upon by
the Trustee to do so. If the offeror does not then execute the purchase,  all of
his  "offers  to buy"  shall  be  canceled  by the  Trustee  and  the  offeror's
subsequent  "offers to buy" shall not be accepted  prior to the beginning of the
next Plan period.<F157>

                                       48

<PAGE>106

         (iv) Limitations on Amount

     "Offers to buy" may be satisfied by the Trustee,  if stock is available for
each  eligible  officer and  employee  without  limitation  in amount:  PROVIDED
however,  that shares made  available to the Trustee  from  unissued or treasury
stock may not be sold to any one  individual in excess of that amount  necessary
to permit  such  individual  to purchase a total of three  thousand  two hundred
(3,200)  shares  of  stock  through  "offers  to  buy"  in  any  period  of  six
months.<F211>

         (v) Withdrawal or Decrease in Amount

     Any  person  who has filed an "offer to buy"  may,  on two  weeks'  written
notice, withdraw such offer or decrease the amount thereof.<F49>

         (vi) Increase in Amount

     An  "offer to buy" may not be  increased  in  amount,  but any  person  who
already has filed an "offer to buy" may file one or more  additional  "offers to
buy" up to the applicable limits.  Allotments of stock shall not be made to such
additional offer until the first offer has been satisfied.

         (vii) Fulfillment

     Offers to buy" shall be  satisfied  in order of priority  based on the date
when the "offer to buy" is listed according to the following system:

                                       49

<PAGE>107

     When the  Trustee  has  available  shares  for sale to makers of "offers to
buy," he shall allot to each "live"  listing  number in  numerical  sequence one
hundred and sixty (160) shares,  or the full amount of the "offer to buy" if the
"offer" is for fewer than one hundred and sixty (160) shares,  until all listing
numbers have received  their  allotments or until all the available  shares have
been  allotted.  If  additional  shares  for  allotment  remain,  they  shall be
allocated  in the same  manner,  one  hundred  and sixty  (160) or fewer (if the
unfulfilled  "offer to buy" is less than one hundred  sixty (160)  shares  being
allotted to each number in rotation until all available  shares are sold.  After
each such  allotment the "live" listing shall be  reconstituted,  beginning with
the first "offer to buy" that was not satisfied in the previous  allotment,  and
the same procedure followed on subsequent allotments.<F212>"

    (k) Place and Sale of Stock

     All  stock  under  this  Plan  is to be  issued,  sold,  and  paid  for  in
Washington,  D.C.  No notice of  participation  in the Plan is  effective  until
received and accepted at the principal office of the Corporation.

3.  Register of Supplemental Bids

     The  Trustee of the Stock  Purchase  and  Transfer  Plan  shall  maintain a
Register of Supplemental  Bids. In this Register shall be entered bids for Class
A<F66> of the Corporation which have been communicated in writing to the Trustee
by eligible officers and<F137>  employees.  The Register shall show in the order
of receipt  the name of the  bidder,  the price at which he bid for  stock,  the
number of shares bid for,  and the date as of which the bid expires  (unless the
bid is open).  Any bid may be withdrawn  upon one week's  written  notice to the
Trustee.  The Register shall be open for  inspection at the principal  office of
the Corporation at all reasonable hours to stockholders and eligible officers

                                      50

<PAGE>108

and<F137>  employees.  The Trustee  shall reply  promptly to mail  inquiries  of
stockholders and eligible officers and<F137> employees respecting the Register.

    (a) Stock Transfer Pursuant to Supplemental Bids

     Whenever the Trustee shall  certify that the Stock  Purchase Fund is unable
to absorb stock subject to purchase by the Fund pursuant to agreements  provided
for in Section XI of these  Bylaws,  or offered  for sale by  stockholders,  any
stockholder  may offer his stock in  satisfaction  of the  registered  bids, and
transfer shall be made upon the books of the Corporation from the offerer to the
bidder.

    (b) Priority in Execution

     When two or more bids at the same price have been registered,  bids at that
price will be satisfied in time order of their registration.

    (c) Annual Statement of Trustee

     The Trustee shall send once each year to all Class A<F56>  stockholders and
eligible  officers  and<F137>  employees a statement  of the manner in which the
system of  Supplemental  Bids will be operated and the conditions  which must be
met by those who wish to avail themselves of its use.

4. Sale of Stock of the Corporation.

     (a)<F97> In the event the Board of Directors, during any six months' period
specified in Subparagraph  (f) of Paragraph 2 of this Section X, shall determine
that the orderly and  successful  operation  of the Stock  Purchase and Transfer
Plan  requires,  and  that  the  best  interests  of  the  Corporation  and  its
stockholders  and employees  will be served by, the purchase by the  Corporation
through the Stock Purchase Fund of the whole, or any part, of the Class A <F66>

                                      51

<PAGE>109

stock of the Corporation,  which,  during such six months' period, is subject to
purchase by the Fund pursuant to agreements  provided for in Section XI of these
By-Laws or is offered for sale by stockholders,  but which the Fund is unable to
absorb  unless  purchased  by the  Corporation,  the  Trustee  shall sell to the
Corporation  all,  or such  part of,  the said  unabsorbed  stock as the  Board,
through its designated  officer,  shall notify the Trustee the Corporation  will
purchase, at the price determined pursuant to Subparagraph (f) of Paragraph 2 of
Section X for the  purchase  and sale of stock by the Fund  during  the said six
months' period.<F53>

     (b) In the event that,  during any six months' period in sub-paragraph  (f)
of  Paragraph  2 of this  Section X, any Class A stock  offered  for sale by the
trustee under a stock bonus plan of the  Corporation  in order to effectuate the
purposes of such plan is not absorbed through the Stock Purchase Fund, including
purchases by the Corporation  pursuant to Subparagraph  (a) of this Paragraph 4,
the Trustee shall sell to the Corporation,  and the Corporation  shall purchase,
the stock so offered,  at the price determined  pursuant to sub-paragraph (f) of
Paragraph 2 of Section X for the  purchase  and sale of stock by the Fund during
the said six months'  period.<F98> SECTION XI - OPTIONAL AGREEMENTS FOR TRANSFER
OF
           CLASS A<F66> STOCK ON TERMINATION OF EMPLOYMENT<F37><F223>

1. The  Corporation  shall,  prior to January 1, 1998,  offer to all officer and
employee holders of Class A stock the option to execute the following agreement:

    Agreement between The Bureau of National  Affairs,  Inc., party of the first
part,  and  _____________,  holder of one or more shares of the Class A stock of
The Bureau of National Affairs, Inc., party of the second part:

                                       52

<PAGE>110

    In consideration of mutual advantages accruing therefrom, the parties hereby
covenant and agree as follows:

     1. The party of the second part will,  within not more than three (3) years
of his or her separation from employment by The Bureau of National Affairs, Inc.
(herein called the  Corporation) or by a subsidiary  eighty (80) percent or more
of  whose  stock is owned by the  Corporation,  offer  all  Class A stock of the
Corporation  held by him or her to be  purchased  under the Stock  Purchase  and
Transfer  Plan set up pursuant  to Section X of the By-laws of the  Corporation.
Such offer or offers may be made at any time within the said three (3) years for
any part or all of the Class A stock so held.

     2. In the event  that the Stock  Purchase  Fund,  provided  for in the said
Plan, is unable to purchase any or all of the shares  offered,  the party of the
second part may, at that time, at his or her option,  accept  Supplemental Bids,
if any,  registered with the Trustee of the Plan. If such  Supplemental Bids are
not  accepted,  the party of the  second  part may  retain his or her shares for
later offers through the Stock Purchase and Transfer Plan,  including acceptance
of Supplemental Bids.

     3.  If at the  end of  three  (3)  years  after  termination  of his or her
employment,  the party of the second part still retains any Class A stock of the
Corporation,  she or he shall offer it forthwith for purchase  through the Stock
Purchase  Fund.  If the Stock  Purchase Fund is unable to purchase any or all of
the shares so  offered,  the  Trustee of the Plan shall so notify her or him and
she or he may  thereafter  retain such shares as have not been  purchased or may
dispose of them by accepting  Supplemental  Bids.  Upon receipt of  notification
from the Trustee that the Fund is able to purchase any part or all of the shares
then held,  the party of the second part shall,  within sixty (60) days from the
mailing of such notification, which shall state the number of shares the Fund

                                       53

<PAGE>111

can  purchase  from the  stockholder,  present  such  shares to the  Trustee for
purchase by the Fund. A like  procedure  shall be followed until all shares held
by the party of the second part have been purchased by the Fund.


     4. If the party of the second part,  or his/her  heirs or legatees,  offers
any or all of  his/her  shares for sale  other  than as herein  specified,  this
agreement shall become null and void.

     5. This agreement shall be binding upon the heirs and legatees of the party
of the second part.

     6. Nothing  herein  contained  shall diminish the right of the party of the
second  part to  exchange  Class A stock  for  Class B stock of the  Corporation
pursuant to Paragraph 2(b) of Section IX of the By-laws.

     7. The  provisions of Paragraph 7(b) of Section IX of the By-laws shall not
apply to the party of the second part, or his/her heirs or legatees,  so long as
this agreement is in force and effect.

2. The Corporation shall, on and after January 1, 1998, offer to all officer and
employee holders of Class A stock the option to execute the following agreement:

     Agreement between The Bureau of National Affairs,  Inc., party of the first
part,  and  _____________,  holder of one or more shares of the Class A stock of
The Bureau of National Affairs, Inc., party of the second part:

     In  consideration  of mutual  advantages  accruing  therefrom,  the parties
hereby covenant and agree as follows:

                                       54

<PAGE>112

     1. The party of the second part will,  within not more than one (1) year of
his or her separation  from employment by The Bureau of National  Affairs,  Inc.
(herein called the  Corporation) or by a subsidiary  eighty (80) percent or more
of  whose  stock is owned by the  Corporation,  offer  all  Class A stock of the
Corporation  held by him or her to be  purchased  under the Stock  Purchase  and
Transfer  Plan set up pursuant  to Section X of the By-laws of the  Corporation.
Such  offer or offers  may be made at any time  within the said one (1) year for
any part or all of the Class A stock so held.

     2. In the event  that the Stock  Purchase  Fund,  provided  for in the said
Plan, is unable to purchase any or all of the shares  offered,  the party of the
second part may, at that time, at his or her option,  accept  Supplemental Bids,
if any,  registered with the Trustee of the Plan. If such  Supplemental Bids are
not  accepted,  the party of the  second  part may  retain his or her shares for
later offers through the Stock Purchase and Transfer Plan,  including acceptance
of Supplemental Bids.

     3.  If at  the  end  of  one  (1)  year  after  termination  of  his or her
employment,  the party of the second part still retains any Class A stock of the
Corporation,  she or he shall offer it forthwith for purchase  through the Stock
Purchase  Fund.  If the Stock  Purchase Fund is unable to purchase any or all of
the shares so  offered,  the  Trustee of the Plan shall so notify her or him and
she or he may  thereafter  retain such shares as have not been  purchased or may
dispose of them by accepting  Supplemental  Bids.  Upon receipt of  notification
from the Trustee that the Fund is able to purchase any part or all of the shares
then held,  the party of the second part shall,  within sixty (60) days from the
mailing of such  notification,  which  shall state the number of shares the Fund
can  purchase  from the  stockholder,  present  such  shares to the  Trustee for
purchase by the Fund. A like  procedure  shall be followed until all shares held
by the party of the second part have been purchased by the Fund.

                                       55

<PAGE>113

     4. If the party of the second part,  or his/her  heirs or legatees,  offers
any or all of  his/her  shares for sale  other  than as herein  specified,  this
agreement shall become null and void.

     5. This agreement shall be binding upon the heirs and legatees of the party
of the second part.

     6. Nothing  herein  contained  shall diminish the right of the party of the
second  part to  exchange  Class A stock  for  Class B stock of the  Corporation
pursuant to Paragraph 2(b) of Section IX of the by-laws.

     7. The  provisions of Paragraph 7(b) of Section IX of the by-laws shall not
apply to the party of the second part, or his/her heirs or legatees,  so long as
this agreement is in force and effect.


                      SECTION XII - BOOKS AND ACCOUNTS<F38>

1.  Place

     The books,  accounts,  and records of the Corporation  shall be kept at the
main office of the Corporation in the City of Washington,  District of Columbia,
or at such other place or places  within or without the State of Delaware as may
from time to time be designated by resolution of the Board of Directors, but the
original or duplicate stock ledger shall be kept at the principal  office of the
Corporation in Wilmington, Delaware.

2.  Inspection

     The directors  shall  determine from time to time under what conditions and
regulations the accounts and books of the Corporation,  or any of them, shall be
open to the  inspection  of  stockholders,  subject to the rights of  inspection
granted to stockholders by law.

                                       56

<PAGE>114

                           SECTION XIII - CHECKS<F39>

     All  checks,  drafts,  orders for the  payment  of money,  and notes of the
Corporation  shall  be  signed  by such  officer  or  officers  as the  Board of
Directors may from time to time designate.


                     SECTION XIV - DIVIDENDS; RESERVES<F40>

1.  Dividends

     Dividends  may be  declared  by the Board of  Directors  at any  regular or
special meeting.  The holders of Class A stock, Class B stock, and Class C stock
shall  be  entitled  to  participate  ratably,  share  for  share,  and  without
preference of any class over the others in all dividends when and as declared by
the Board of Directors.<F206>

2.  Reserves

     Before  declaration  of any dividend or any  distribution  of profits,  the
Board of  Directors  may set  aside  from  time to time out of the  funds of the
Corporation  available  for  dividends  such  sum or  sums as the  Board  in its
discretion  may think proper as a reserve fund for any proper  purpose,  and the
Board may alter or abolish any such reserve or reserves.


                       SECTION XV - DEFINITIONS<F41><F147>

     Except  as  the  context  may  otherwise  require,   the  unqualified  word
"stockholder"  as used in these  By-Laws shall mean the holders of Class A <F66>
stock of the  Corporation and shall not include holders of Class B<F72> stock or
Class C<F207> stock of the Corporation.

                                       57

<PAGE>115

     As used in Sections IX, X and XI of these  By-Laws,  the terms  "separation
from  employment",  "dismissal"  and other terms of like import do not include a
lay-off of less than ninety (90) days' duration.<F148>


                           SECTION XVI - NOTICES<F42>

1.  Form

     Whenever  under the  provisions of these  By-Laws  notice is required to be
given to any  stockholder,  director,  or officer,  it shall not be construed to
require  personal  notice,  but such notice may be given in writing by mail,  by
depositing  the same in the post  office or  letter-box  in a  postpaid,  sealed
wrapper, addressed to such stockholder,  director, or officer at such address as
appears  for him on the  books of the  Corporation,  or in  default  of any such
address,  to the  stockholder,  director,  or officer at his last known place of
address  or at the  general  post  office  in the City of  Wilmington,  State of
Delaware;  and any such notice  shall be deemed to be given at the time that the
same shall be thus mailed.

2.  Waiver

     Any  stockholder,  director,  or officer  may waive in  writing  any notice
required  to be given  under  these  By-Laws,  whether  before or after the time
stated herein.


                         SECTION XVII - AMENDMENTS<F43>

     These By-Laws may be  supplemented,  amended,  altered,  or repealed by the
affirmative  vote  of  the  holders  of a  majority  of  the  stock  issued  and
outstanding  and  entitled  to  vote  thereat  at  any  regular  meeting  of the
stockholders,  or at any special  meeting of the  stockholders  if notice of the
proposed  action in respect of the  By-Laws  be  contained  in the notice of the
meeting;  or by the  affirmative  vote  of a  majority  of the  whole  Board  of
Directors at a regular meeting.

                                       58

<PAGE>116

<TABLE>
<S>         <C>
                                    FOOTNOTES
<FN>


Footnote  1 <F1>

         As  amended  1/3/48 by  directors'  resolution.  Previously,  agent was
Delaware Charter Company and address was 927 Market Street.

Footnote  2 <F2>

     Originally  read:  "An annual  meeting of  stockholders  shall be held at 2
o'clock  p.m.  on the first  Saturday  in  December,"  etc.  Amended  12/6/47 by
stockholders'  resolution to read: "at 2 o'clock p.m. on the second  Saturday of
May", etc. Further amended 5/13/50 by stockholders' resolution to read as shown.

Footnote  3 <F3>

     Words "in accordance with the provisions for cumulative voting contained in
Article  V of the  Certificate  of  Incorporation,"  originally  appearing  here
stricken 3/27/48 by stockholders' resolution.

Footnote  4 <F4>

     Words  ":  Provided,  That  cumulative  voting  shall be in  effect  at all
elections  for  directors,  as  prescribed  by Article V of the  Certificate  of
Incorporation"  originally  appearing  here  stricken  3/27/48 by  stockholders'
resolution.

Footnote  5 <F5>

     Words "and subject to the provisions for cumulative  voting in Article V of
the Certificate of Incorporation," originally appearing here stricken 3/27/48 by
stockholders' resolution.

                                       59

<PAGE>117

Footnote  6 <F6>

     Words  "subscribed by him" inserted,  and word "and"  substituted for comma
preceding "the number of shares", 10/18/47 by directors' resolution.

     Words  ",  and an oath or  affirmation  before  a  notary  public  or other
official  authorized  to  administer  oaths that the said ballot is the true and
voluntary act and deed of the  stockholder"  originally  appearing here stricken
10/18/47 by director's resolution.

Footnote  7 <F7>

     Sub-paragraph (e) inserted 10/18/47 by Board resolution.

Footnote  8 <F8>

     The "(a)"  immediately  following title of Paragraph 8 and the words "to be
filled" at the annual meeting" inserted 10/18/47 by Board resolution.

Footnote  9 <F9>

     Sub-paragraph (b) as amended 10/18/47 by Board resolution. Originally read,
without paragraph  identification,  as follows: "Any stockholder or stockholders
owning  at least  five (5) per cent of the  outstanding  shares  of stock of the
Corporation  may submit  additional  nominations to the Nominating  Committee no
less than twenty-five (25) days prior to the annual meeting, and such additional
names  together  with the list of  original  nominations  shall be placed upon a
final list of  nominations  to be mailed to  stockholders  not less than fifteen
(15) days prior to such meeting."

Footnote  10 <F10>

     Sub-paragraph (c) inserted 10/18/47 by Board resolution.

Footnote 11 <F11>

     Entire Section  amended 7/7/50 by Board  resolution to read as shown except
as to subsequent changes noted by the indicated footnotes.

         Original Section stated below.

     In the first line of Paragraph 4 of original Section,  words "sub-paragraph
(a) and (b)" substituted for "sub-paragraph (b)" 4/2/49 by Board resolution.

                                       60

<PAGE>118

     In  sub-paragraph  (a) of Paragraph 5 of original  Section,  sentence added
4/2/49 by Board  resolution as follows:  If the Board of Directors  rejects such
tender  in  whole  or in part,  the  shares  may be  transferred  to any  person
whatsoever,  subject to the continuing  right of the Corporation to purchase any
or all of said shares at any time,  upon demand by the Board of Directors and at
the  applicable  price per  share  specified  in  Paragraph  6 of this  Section,
determined as of the date of demand."

     Section IX originally read as follows:

     "1. Eligible Stockholders

         (a) The capital stock of the  Corporation,  consisting of 30,000 shares
of common  stock  without  par value,  shall be issued  only to persons  who are
employees  or  officers  of  the   Corporation,   and  who  possess  such  other
qualifications  as the Board of Directors  shall from time to time  prescribe by
resolution.

         "(b) Except as provided  in  Sections V and VIII of these  By-Laws,  in
respect of the qualification of directors, President and one Vice-President,  no
officer or  employee  of the  Corporation  shall be  obligated  or  required  to
subscribe  for or own any  stock of the  Corporation;  and the  subscription  or
failure to subscribe for any shares of stock of the Corporation  shall in no way
affect or prejudice the  position,  status,  tenure,  continued  employment,  or
advancement of any officer or employee.

    "2. Form of Certificate

     The   certificates   of  stock  of  the   Corporation   shall  be  numbered
consecutively  and shall be entered in the books of the  Corporation as they are
issued.  Each  certificate  shall  exhibit the  holder's  name and the number of
shares of stock represented  thereby,  and shall be signed by the President or a
Vice-President,  and by either  the  Secretary,  the  Treasurer,  the  Assistant
Secretary or the Assistant Treasurer.

    "3. Consideration for Stock

     The stock of this Corporation shall be issued for money only, at such price
as the Board of Directors may from time to time prescribe by resolution.

    "4. Transfer of Stock

         (a) Except as  provided  in  sub-paragraph  (b) of  Paragraph 5 of this
Section,  no shares of stock may be transferred  or pledged  without the written
consent or  authorization of the Board of Directors or of such officer as may be
designated by it to grant such consent or authorization.

                                       61

<PAGE>119

         "(b) All transfers of stock of the  Corporation  shall be made upon its
books by the person  named in the  certificate  or by his  lawfully  constituted
representative, and upon surrender of the certificate for cancellation.

         "(c) The Corporation shall be entitled to treat the holder of record of
any share or shares of stock as the  holder  in fact  thereof,  and  accordingly
shall not be bound to recognize  any equitable or other claims to or interest in
such shares on the part of any person,  whether or not it shall have  express or
other notice thereof, save as expressly provided by the laws of Delaware.

    "5. Purchase of Stock by Corporation

         (a) Any stockholder may at any time, by written notice to the Secretary
of the  Corporation,  tender  any or all of his  shares to the  Corporation  for
purchase  by it. The Board of  Directors  may accept or reject such  tender,  in
whole or in  part;  and if it  accepts  the  tender  or any  part  thereof,  the
Corporation  shall  purchase the shares so accepted at the price provided for in
Paragraph 6 of this Section.  Where shares are tendered by several stockholders,
the Board of Directors  may accept all or any part  thereof as it deems  proper,
either in the chronological order of tender, or according to a percentage of all
shares tendered, or by any combination of these methods, in its discretion.

         "(b) In the event of the resignation, retirement, dismissal or death of
any officer or employee of the Corporation who owns any shares of stock thereof,
the Corporation  shall have the exclusive right for a period of ninety (90) days
from the  occurrence of the said event to purchase any or all of the shares held
by such  person.  If the Board of  Directors  elects to  exercise  such right of
purchase,  it shall so notify the  stockholder  or his  personal  representative
within said  period of ninety  (90) days,  and within not more than one (1) year
after such exercise of its right to purchase the Corporation  shall pay the said
stockholder or his  representative  the applicable  price per share specified in
Paragraph 6 of this Section,  determined as of the date of such  separation  and
with interest at the rate of six percentum  (6%) per annum from the date of such
purchase until the date of payment.  Upon the exercise by the Corporation of its
right to purchase any such of stock, the said stockholder or his  representative
shall have no further rights, privileges, or powers in respect of such stock. If
payment of the purchase price for such shares is not made by the  Corporation at
the time of such  purchase,  the  Corporation  shall  within a  reasonable  time
thereafter  issue  to the  stockholder  or his  representative  a note or  other
evidence  of  indebtedness  fixing  the  amount  to be paid  by the  Corporation
pursuant to Paragraph 6 of this Section and bearing  interest at the rate of six
percentum  (6%) per annum from the date of purchase  to the date of payment.  If
the Board of Directors  elects not to exercise such right of purchase within the
said period of ninety (90) days, the shares may be retained by or transferred

                                       62

<PAGE>120

to any person whatsoever,  subject to the continuing right of the Corporation to
purchase  all or any of said  shares at any time,  no matter by whom such shares
are held, upon demand by the Board of Directors and at the applicable  price per
share  specified in Paragraph 6 of this  Section,  determined  as of the date of
demand.

    "6. Purchase Price

     The  price to be paid by the  Corporation  for any  shares  acquired  by it
pursuant to a tender under  sub-paragraph (a) of Paragraph 5 of this Section, or
pursuant  to notice or demand  under  sub-paragraph  (b) of  Paragraph 5 of this
Section shall be as follows:

         (a) During the period from January 1, 1947 to December  31,  1947,  the
original issuance price of such shares.

         (b) During the period from January 1, 1948 to December  31,  1950,  the
book value per outstanding share for the next preceding  calendar year, as deter
mined by independent auditors.

         (c) From and after  January  1, 1951,  the book  value per  outstanding
share  for the next  preceding  calendar  year,  as  determined  by  independent
auditors:  PROVIDED,  That if the book value of all  outstanding  shares,  as so
determined,  exceeds ten times the average  annual net earnings,  if any, of the
Corporation  (after taxes,  including income taxes) for the next preceding three
calendar years, as determined by independent  auditors,  then the price shall be
the average of such two figures  (book value and ten times average net earnings)
per outstanding share.

    "7. Lost Certificate

     If a certificate of stock of the Corporation be lost or destroyed,  another
certificate of the same tenor and for the same number of shares may be issued in
its  stead,  upon  proof  of  such  loss or  destruction  and  the  giving  of a
satisfactory  bond  of  indemnity  in an  amount  sufficient  to  indemnify  the
Corporation against any claim:  Provided,  That the Board of Directors may waive
the requirement of a bond if in its judgment it is proper to do so."

Footnote  12 <F12>

     Words "or to a trustee  designated or appointed under a stock bonus plan of
the Corporation"  inserted by directors'  resolution of 11/3/51. For language in
effect prior to 7/7/50, see footnote 11.

                                       63

<PAGE>121

Footnote  13 <F13>

     Words "to heirs,  legatees or beneficiaries  upon the death of employees or
officers"  substituted  for "to heirs or legatees of  employees  or officers who
die" by  directors'  resolution  of 11/3/51.  For  language  in effect  prior to
7/7/50, see footnote 11.

Footnote  14 <F14>

     Words  "Provided,  That the said sixty * * * of the  Corporation"  added by
directors'  resolution of 11/3/51.  For language in effect prior to 7/7/50,  see
footnote 11.

Footnote  15 <F15>

     Words "except as issued pursuant to the provisions of a stock bonus plan of
the  Corporation"  added by directors'  resolution  of 11/3/51.  For language in
effect prior to 7/7/50, see footnote 11.

Footnote  16 <F16>

     Words  "and  in  Sections  X and  XI"  inserted  12/1/51  by  stockholders'
resolution.

Footnote  17 <F17>

     Words "in the event * * * the  Corporation  shall be" substituted for words
"at any time upon the  demand  of the  Board of  Directors  and at"  12/1/51  by
stockholders' resolution.

Footnote  18 <F18>

     Words "presentation for transfer"  substituted for word "demand" 12/1/51 by
stockholders' resolution.

Footnote  19 <F19>

     Designation "(i)" added by directors' resolution of 11/3/51.

Footnote  20 <F20>

     Words  "or  (ii)  the  distribution  of  shares  of  common  stock  of  the
Corporation by a trustee under any stock bonus plan of the Corporation" added by
directors' resolution of 11/3/51.

Footnote  21 <F21>

     Words "and to the  provisions  of Section X and Section XI of the  By-Laws"
inserted 12/1/51 by stockholders' resolution.

                                       64

<PAGE>122

Footnote  22 <F22>

     Word "such" substituted for "the said" by directors' resolution of 11/3/51.

Footnote  23 <F23>

     Words  "such  common  stock  so owned or so  distributed"  substituted  for
"shares of such common stock held by such person" by  directors'  resolution  of
11/3/51.

Footnote  24 <F24>

     Words "or the  distributee  under a stock  bonus  plan of the  Corporation"
inserted by directors' resolution of 11/3/51.

Footnote  25 <F25>

     Words  "or the said  distributee"  inserted  by  directors'  resolution  of
11/3/51.

Footnote  26 <F26>

     Words "or such distribution" inserted by directors' resolution of 11/3/51.

Footnote  27 <F27>

     Words  "or the said  distributee"  inserted  by  directors'  resolution  of
11/3/51.

Footnote 28 <F28>

     Words "or the distributee" inserted by directors' resolution of 11/3/51.

Footnote 29 <F29>

     Words "in the event * * * the  Corporation  shall be" substituted for words
"at any time,  upon the  demand of the Board of  Directors  and at"  12/1/51  by
stockholders' resolution.

Footnote  30 <F30>

     Words   "determined  as  of  the  date  of  demand"   deleted   12/1/51  by
stockholders' resolution.

Footnote  31 <F31>

     Comma  substituted  for  period  and  words  "determined  as of the date of
presentation for transfer" added 12/8/51 by directors' resolution.

                                       65

<PAGE>123

Footnote  32 <F32>

     Words "at the close of" substituted for word "for" 12/1/51 by stockholders'
resolution.

Footnote  33 <F33>

     Words "per  outstanding  share"  substituted  for words "of all outstanding
shares" 12/1/51 by stockholders' resolution.

Footnote  34 <F34>

     Words "per outstanding share" added 12/1/51 by stockholders' resolution.

Footnote  35 <F35>

     Words  "except as the Board * * * of the  Corporation"  added by directors'
resolution of 11/3/51.

Footnote  36 <F36>

     New Section X, titled Distribution and Marketing of Stock, added 12/1/51 by
stockholders' resolution.

Footnote  37 <F37>

     New Section XI, titled Optional  Agreements for Transfer of Common Stock on
Termination of Employment, added 12/1/51 by stockholders' resolution.

Footnote  38 <F38>

     Renumbered  as  shown  12/1/51  by  stockholders'  resolution.   Originally
numbered X.

Footnote  39 <F39>

     Renumbered  as  shown  12/1/51  by  stockholders'  resolution.   Originally
numbered XI.

Footnote  40 <F40>

     Renumbered  as  shown  12/1/51  by  stockholders'  resolution.   Originally
numbered XII. Entire Section amended 7/7/50 by Board resolution to read as shown
in footnote 73. It originally read:

                                       66

<PAGE>124

     "1. Declaration

     Dividends upon the stock of the Corporation may be declared by the Board of
Directors at any regular or special meeting.

    2. Reserves

     Before  declaration  of any dividend or any  distribution  of profits,  the
Board of  Directors  may set  aside  from  time to time out of the  funds of the
Corporation  available  for  dividends  such  sum or  sums as the  Board  in its
discretion may think proper as a reserve fund for any proper  purposes,  and the
Board may alter or abolish any such reserve or reserves."

Footnote  41 <F41>

     Section  inserted  7/7/50  by  Board  resolution,   as  new  Section  XIII.
Renumbered as shown 12/1/51 by stockholders' resolution.

Footnote  42 <F42>

     Renumbered  as  shown  12/1/51  by  stockholders'  resolution.   Originally
numbered XIII; then renumbered XIV 7/7/50 by director's resolution.

Footnote  43 <F43>

     Renumbered  as  shown  12/1/51  by  stockholders'  resolution.   Originally
numbered XIV; then renumbered XV 7/7/50 by director's resolution.

Footnote  44 <F44>

     Subdivision  (i) as  amended  9/21/52  by Board  resolution,  except  as to
subsequent change noted by the indicated  footnote.  Originally read as follows:
"(i) Limitations on Amount. Deductions from salary for such purpose shall be not
in excess of ten  ($10.00)  dollars  and not less than one  ($1.00)  dollar  per
week."

Footnote  45 <F45>

     Subdivision (ii) as amended 4/3/54 by Board resolution.  Originally read as
follows:  "(ii) When Deductions Begin.  Deductions from payroll for the purposes
of this  sub-paragraph  shall  begin  with  salary for the first full pay period
after receipt of the authorization."

                                       67

<PAGE>125


Footnote  46 <F46>

     Second sentence of subdivision (iii) as amended 4/3/54 by Board resolution.
Originally  read as follows:  "Such notice shall take effect with salary for the
first full payroll period after submission of notice."

Footnote  47 <F47>

     Second sentence of subdivision (iv) as amended 4/3/54 by Board  resolution.
Originally  read as follows:  "Such notice shall take effect with salary for the
first full payroll period after submission of notice."

Footnote  48 <F48>

     First sentence of sub-paragraph  (j) as amended 4/3/54 by Board resolution.
Originally  read as follows:  "Eligible  employees may at any time submit to the
Trustee "offers to buy" shares of the common stock of the Corporation."

Footnote  49 <F49>

     Subdivision (v) as amended 4/3/54 by Board  resolution.  Originally read as
follows:  "(v)  Withdrawal  or Decrease  in Amount.  Any person who has filed an
'offer to buy'  may,  on one  week's  written  notice,  withdraw  such  offer or
decrease the amount thereof."

Footnote  50 <F50>

     Sub-paragraph (b) as amended 3/5/55 by Board resolution. Previously read as
follows  (as amended  10/18/47 by Board  resolution):  "(b) Any  stockholder  or
stockholders  owning  at least  five (5) per cent of the  outstanding  shares of
stock of the  Corporation  may submit  additional  nominations to the Nominating
Committee not less than twenty-five (25) days prior to such annual meeting."<F9>

Footnote  51 <F51>

     Sub-paragraph (c) inserted 6/10/55 by Board resolution.

Footnote  52 <F52>

     Sub-paragraph (v) inserted 6/10/55 by Board resolution.

Footnote  53 <F53>

     Paragraph 4(a) inserted 6/10/55 by Board resolution.

                                       68

<PAGE>126

Footnote  54 <F54>

     Subdivision  (iv) as  amended  8/8/55  by Board  resolution,  except  as to
subsequent change noted by the indicated  footnote.  Originally read as follows:
"(iv) Limitation on Amount.  'Offers to buy' may be satisfied by the Trustee, if
stock is  available,  for each eligible  employee in any calendar  year, up to a
total of 100  shares:  Provided,  however,  that shares  made  available  to the
Trustee from unissued or treasury stock may not be sold to any one individual in
excess of 50 shares in any period of six months."

Footnote  55 <F55>

     Words  "entitled to vote  thereat"  inserted by  directors'  resolution  of
12/6/58.

Footnote  56 <F56>

     Words "Class A" inserted by directors' resolution of 12/6/58.

Footnote  57 <F57>

     Paragraph 1 as amended by directors' resolution of 12/6/58. Originally read
as follows:  "1.  Eligibility.  - No person  shall be elected or  appointed as a
director  unless he is a stockholder  of the  Corporation,  and any director who
ceases to hold any shares of stock of the  Corporation  shall be disqualified to
exercise  any of the  powers or duties of  director  and shall be deemed to have
resigned from such office."

Footnote  58 <F58>

     Words  "other than the  President"  inserted by  directors'  resolution  of
12/6/58.

Footnote  59 <F59>

     Last sentence of  sub-paragraph  (a) inserted by  directors'  resolution of
12/6/58.

Footnote  60 <F60>

     Paragraph 1 as amended by directors' resolution of 12/6/58. Previously read
as follows:  "1. Amount. - The total authorized capital stock of the Corporation
consists of 45,000 shares divided into 30,000 shares of common stock without par
value and 15,000  shares of  preferred  stock  having a par share of ten dollars
($10.00) per share and without voting rights.

Footnote  61 <F61>

     Paragraph 2 as amended by directors'  resolution  of 12/6/58,  except as to
subsequent change indicated in sub-paragraph (a)(i). Previously read as follows:

                                       69

<PAGE>127

    "2. Eligible Stockholders

         "(a) Common stock

              (i) The shares of common stock shall be issued only to persons who
are  employees  or  officers  of the  Corporation  and who  possess  such  other
qualifications  as the Board of Directors  shall from time to time  prescribe by
resolution,  or to a trustee designated or appointed under a stock bonus plan of
the Corporation.<F12>

              "(ii) Except as provided in Sections V and VIII of these  By-Laws,
in respect of qualifications of directors, President and one Vice- President, no
officer or  employee  of the  Corporation  shall be  obligated  or  required  to
subscribe  for or own any  stock of the  Corporation;  and the  subscription  or
failure to subscribe for any shares of stock of the Corporation  shall in no way
affect or prejudice the  position,  statue,  tenure,  continued  employment,  or
advancement of any officer or employee.<F138>

         "(b) Preferred stock

              (i) The shares of preferred stock shall be issued only in exchange
for  common  stock to  employees  or  officers  of the  Corporation  upon  their
retirement because of age or disability, and to heirs, legatees or beneficiaries
upon the  death of  employees  or  officers<F13>  while  in the  service  of the
Corporation.

              "(ii) No person shall be obligated or required to accept preferred
stock in exchange for common stock.  Any person  qualified  under sub- paragraph
(b)(i) above to receive  preferred stock in exchange for common stock who elects
to  exercise  such  right of  exchange  shall so  notify  the  Secretary  of the
Corporation  in writing within sixty (60) days after the occurrence of the event
which gave rise to such right:  Provided,  That the said sixty (60) days' period
for  notification  shall  begin  to run upon  distribution  with  respect  to an
exchange  involving common stock distributed to a qualified person under a stock
bonus plan of the Corporation.<F14>"

Footnote 62 <F62>

     Paragraph 3 as amended by directors' resolution of 12/6/58. Previously read
as  follows:  "3.  Consideration  for Common  Stock.  - The common  stock of the
corporation  shall be  issued  for  money  only,  at such  price as the Board of
Directors  may from  time to time  prescribe  by  resolution,  except  as issued
pursuant to the provisions of a stock bonus plan of the Corporation.<F15>

                                       70

<PAGE>128

Footnote  63 <F63>

     Paragraph 4 as amended by directors'  resolution  of 12/6/58,  except as to
subsequent changes noted by the indicated footnotes. Originally read as follows:
"4.  Rate of Exchange  of  Preferred  Stock for Common  Stock.  The  exchange of
preferred  stock for common stock shall be at the rate of one share of preferred
stock for each ten dollars  ($10.00)  of the then  current  repurchase  price of
common stock so exchanged, as specified in Paragraph 9 of this Section."

Footnote  64 <F64>

     Words  "sub-paragraphs (a) and (b) of" deleted by directors'  resolution of
12/6/58.

Footnote  65 <F65>

     Words "Class A and Class B"  substituted  for word  "common" by  directors'
resolution of 12/6/58.

Footnote  66 <F66>

     Words "Class A" substituted  for word "common" by directors'  resolution of
12/6/58.

Footnote  67 <F67>

     Sub-paragraph (d) inserted by directors' resolution of 12/6/58.

Footnote  68  <F68>

     Paragraph 8 as amended by directors' resolution of 12/6/58. Originally read
as  follows:  "8.  Redemption  of  Preferred  Stock  by the  Corporation.  - The
Corporation  shall  have the right at any time to redeem  all or any part of the
outstanding  shares  of  preferred  stock of the  Corporation.  If the  Board of
Directors  elects to exercise the right to redeem less than all such outstanding
shares,  the  Corporation  shall  redeem a pro rata  number of shares  from each
holder of preferred  stock,  but no  fractional  shares  shall be redeemed.  The
Corporation  shall make  payment for the shares  redeemed at the price per share
provided for in sub-paragraph (b) of Paragraph 9 of this Section."

Footnote  69 <F69>

     Sub-paragraph   (b)  as  amended  by  directors'   resolution  of  12/6/58.
Originally read as follows:  "(b) Preferred  Stock.  The price to be paid by the
Corporation  for any shares of preferred stock acquired by it pursuant to notice
or demand under Paragraph 8 of this Section shall be ten dollars and fifty cents
($10.50) per share."

                                       71

<PAGE>129

Footnote  70 <F70>

     Words "the common stock or the preferred" deleted by directors'  resolution
of 12/6/58.

Footnote  71 <F71>

     Paragraph 11 as amended by  directors'  resolution  of 12/6/58.  Originally
read as follows:  "11.  Dissolution or Distribution of Assets. - In the event of
dissolution  of, or any  distribution  of the assets of,  the  Corporation,  the
holders of the  preferred  stock shall be entitled to be paid the full par value
of ten dollars ($10.00) per share before any amount shall be paid to the holders
of the common stock."

Footnote  72 <F72>

     Words "Class B" substituted for word  "preferred" by directors'  resolution
of 12/6/58.

Footnote  73 <F73>

     Paragraph 1 as amended by directors' resolution of 12/6/58. Originally read
as follows: "1. Dividends. - Dividends may be declared by the Board of Directors
at any  regular  or  special  meeting.  The  registered  owner of each  share of
preferred  stock shall be entitled to receive  dividends as declared at the rate
of seven  percentum  (7%) per  annum,  payable  quarterly  on the first  days of
January, April, July, and October of each year. No dividend shall be paid on the
common stock unless (a) dividends on the preferred  stock have been declared and
paid  for  the  preceding  four  quarters,  and  (b) if any  quarterly  dividend
installment  on the preferred  stock  thereafter  remains  undeclared and unpaid
since the issuance thereof,  a dividend is  simultaneously  declared and paid on
the  preferred  stock in an amount per share equal to the amount of the dividend
paid  on the  common  stock,  up to the  amount  of the  undeclared  and  unpaid
dividends on the preferred stock. Subject to the foregoing, the registered owner
of each share of common  stock shall be entitled to dividends as declared by the
Board of Directors."

Footnote  74 <F74>

     As amended 2/7/59 by directors' resolution. Previously read as follows: "1.
Delaware  Office.  - The  principal  office of the  Corporation  in the State of
Delaware  shall be at 927 Market Street in the City of Wilmington  and County of
New Castle;  and the resident agent in charge  thereof shall be the  Corporation
Guarantee and Trust Company, 927 Market Street, Wilmington, Delaware   1  "

Footnote  75 <F75>

     Paragraph 1 as amended by directors' resolution of 3/7/59.  Previously read
as  follows:  "1.  Amount.  - The total  number  of  shares  of stock  which the
Corporation  is  authorized to issue is thirty- five  thousand  (35,000)  shares
divided into two classes:  one class  designated  as Class A common shares shall
consist  of thirty thousand (30,000) shares  without  par value and  with voting

                                       72

<PAGE>130

rights, and the other class designated as Class B common shares shall consist of
five thousand (5,000) shares without par value and without voting rights.<F60>

Footnote  76 <F76>

     Paragraph 2(a)(i) as amended by directors' resolution of 3/7/59. Previously
read as  follows:  "(i) The shares of Class A stock  shall be issued in place of
and upon  surrender of  certificates  for an equal  number of  previously-issued
shares of capital  stock of the  Corporation  having no par  value;  or shall be
issued only to persons who are officers or employees of the  Corporation and who
possess such other  qualifications  as the Board of Directors shall from time to
time prescribe by  resolution,  or to trustees  designated or appointed  under a
stock bonus plan of the Corporation."

Footnote  77 <F77>

     "eight hundred (800)" substituted for figure "200" by directors' resolution
of 3/7/59.

Footnote  78 <F78>

     "two  thousand   (2,000)"   substituted  for  figure  "500"  by  directors'
resolution of 3/7/59.

Footnote  79 <F79>

     "two hundred (200)"  substituted for "fifty (50)" by directors'  resolution
of 3/7/59.

Footnote  80 <F80>

     Figure "70" substituted for figure "30" by directors' resolution of 3/7/59.

Footnote  81 <F81>

     Words "two times" substituted for word "one-half" by directors'  resolution
of 3/7/59.

Footnote  82 <F82>

     Last sentence of  subdivision  (iv)  inserted by  directors'  resolution of
3/7/59.

Footnote  83 <F83>

     "Two hundred (200)" substituted for figure "50" by directors' resolution of
3/7/59.

Footnote  84 <F84>

     "Twenty  (20)"  substituted  for word  "ten" by  directors'  resolution  of
3/7/59.

                                       73

<PAGE>131

Footnote  85 <F85>

     Words "and the Chairman of the Board," inserted by directors' resolution of
12/5/59.

Footnote  86 <F86>

     Words "a Chairman  of the Board,"  inserted  by  directors'  resolution  of
12/5/59.

Footnote  87 <F87>

     Words "Chairman of the Board and the President may be the same person, the"
inserted by directors' resolution of 12/5/59.

Footnote  88 <F88>

     Words  "Chairman  of the Board,  a" inserted by  directors'  resolution  of
12/5/59.

Footnote  89 <F89>

     Paragraph 2 inserted by directors' resolution of 12/5/59.

Footnote  90 <F90>

     Renumbered  as  shown  by  directors'  resolution  of  12/5/59.  Previously
numbered 2.

Footnote  91 <F91>

     Words  "preside at all  meetings of the  stockholders  and  directors;  to"
deleted by directors' resolution of 12/5/59.

Footnote  92 <F92>

     Renumbered  as  shown  by  directors'  resolution  of  4/17/64.  Originally
numbered 3; then renumbered 4 by directors' resolution of 12/5/59.

Footnote  93 <F93>

     Renumbered  as  shown  by  directors'  resolution  of  4/17/64.  Originally
numbered 4; then renumbered 5 by directors' resolution of 12/5/59.

Footnote  94 <F94>

     Renumbered  as  shown  by  directors'  resolution  of  4/17/64.  Originally
numbered 5; then renumbered 6 by directors' resolution of 12/5/59.

                                       74

<PAGE>132

Footnote  95 <F95>

     Renumbered  as  shown  by  directors'  resolution  of  4/17/64.  Originally
numbered 6; then renumbered 7 by directors' resolution of 12/5/59.

Footnote  96 <F96>

     Renumbered  as  shown  by  directors'  resolution  of  6/11/75.  Originally
numbered 7;  renumbered 8 by directors'  resolution of 12/5/59;  renumbered 9 by
directors' resolution of 4/17/64.

Footnote  97 <F97>

     Designation "(a)" added by directors' resolution of 2/9/63.

Footnote  98 <F98>

     Sub-paragraph (b) inserted by directors' resolution of 2/9/63.

Footnote  99 <F99>

     Words "the  Chairman of the Board,"  inserted by  directors'  resolution of
4/17/64.

Footnote  100 <F100>

     Words "The  Chairman of the Board,"  inserted by  directors'  resolution of
4/17/64.

Footnote  101 <F101>

     Last sentence of  sub-paragraph  (b) inserted by  directors'  resolution of
4/17/64.

Footnote  102 <F102>

     Paragraph 2 as amended by directors' resolution of 4/17/64. Originally read
as follows:

"2.  Chairman of the Board

     The Chairman of the Board shall preside at all meetings of the stockholders
and the Board of Directors, and shall perform such other functions and duties as
may be prescribed by the Board of Directors. In the absence of disability of the
Chairman of the Board,  or when such office is vacant,  the foregoing  functions
shall be performed by the President.<F89>"

                                       75

<PAGE>133

Footnote  103 <F103>

     Paragraph 3 as amended by directors' resolution of 4/17/64. Previously read
as follows:

"3.<F90> President

     (a) The President shall be the Chief Executive  Officer of the Corporation.
It shall be his duty to<F91> have general and active  management of the business
of the  Corporation;  and to see that all orders and resolutions of the Board of
Directors are carried into effect.

     "(b) He shall execute all contracts,  agreements,  deeds, bonds, mortgages,
and other obligations and instruments in the name of the Corporation; shall keep
in safe custody the deal of the Corporation and, when authorized by the Board of
Directors,  shall  affix the same to any  instrument  requiring  it; and when so
affixed the seal shall be  attested by the  signature  of the  Secretary  or the
Treasurer.

     "(c) He shall  have the  general  supervision  and  direction  of the other
officers  of the  Corporation  and  shall see that  their  duties  are  properly
performed.

     "(d) He shall submit a report of the operations of the  Corporation for the
year to the directors at their meeting next  preceding the annual meeting of the
stock holders and to the stockholders at their annual meeting."

Footnote  104 <F104>

     Paragraph 4 inserted by directors' resolution of 4/17/64.

Footnote  105 <F105>

     Words "both the  President and the Chairman of the Board"  substituted  for
"the President" by directors' resolution of 4/17/64.

Footnote  106 <F106>

     Words ", and shall  perform  such other duties as may be assigned to him by
the Board of Directors or the  President,  under whose  supervision he shall be"
deleted by directors' resolution of 4/17/64.

Footnote  107 <F107>

     Sub-paragraphs (d) and (e) inserted by directors' resolution of 4/17/64.

                                       76

<PAGE>134

Footnote  108 <F108>

     Sub-paragraph   (b)  as  amended  by  directors'   resolution  of  4/17/64.
Originally read as follows:

     "(b) He shall  disburse the funds of the  Corporation  as may be ordered by
the  Board of  Directors  or the  President,  taking  proper  vouchers  for such
disbursements,  and shall render to the  President  and directors at the regular
annual  meeting of  stockholders,  or whenever the  President  or directors  may
require it, an account of all his transactions as Treasurer and of the financial
condition of the  Corporation.  At the regular meeting of the Board of Directors
next preceding the annual  stockholders  meeting,  he shall render a like report
for the preceding year:  PROVIDED,  That in 1947 such report may cover only such
portion of the current year as may be feasible."

Footnote  109 <F109>

     Sentence "He shall  perform such other duties as the Board of Directors may
from time to time  prescribe or require."  deleted by  directors'  resolution of
4/17/64.

Footnote  110 <F110>

     Sub-paragraph (d) inserted by directors' resolution of 4/17/64.

Footnote  111 <F111>

     Numerals "45"  substituted  for numerals  "30" by directors'  resolution of
11/7/64.

Footnote  112 <F112>

     Words "one week" substituted for words "two weeks" by directors' resolution
of 8/4/65.

Footnote  113 <F113>

     Sentence   "In  the  event  that  the  Board   shall   elect  two  or  more
Vice-Presidents,  it  shall  designate  one of them as  Senior  Vice-President."
inserted by directors' resolution of 12/4/65.

Footnote  114 <F114>

     Words "Senior Vice-President" substituted for words "Chairman of the Board"
by directors' resolution of 12/4/65.

Footnote  115 <F115>

     Sub-paragraph (f) inserted by directors' resolution of 12/4/65.

                                       77

<PAGE>135

Footnote  116 <F116>

     Words "Senior  Vice-President"  substituted  for words  "Vice-President  or
Vice-Presidents  (in  the  order  designated  by  the  Board  of  Directors)  by
directors' resolution of 12/4/65.

Footnote  117 <F117>

     Last  sentence  of  Paragraph  5 as amended  by  directors'  resolution  of
12/4/65.  Originally read as follows:  "The  Vice-President  or  Vice-Presidents
shall  also  perform  such  other  duties as may be  prescribed  by the Board of
Directors."

Footnote  118 <F118>

     Words "or the Assistant  Treasurer"  inserted by  directors'  resolution of
12/4/65.

Footnote  119 <F119>

     Phrase ", as the Board may designate" inserted by directors'  resolution of
12/4/65.

Footnote  120 <F120>

     Last  sentence,  previously  designated as  subdivision  (i) made a part of
sub-paragraph  (g), and  subdivision  (ii) deleted by  directors'  resolution of
12/4/65.  Subdivision (ii) read as follows:  "(ii) The dates on which such stock
shall be made available  shall be the effective  dates on which the price of the
stock is set.  Announcement  of the number of shares made available  shall be at
least two weeks in advance of the effective date."

Footnote  121 <F121>

     Paragraph 1 as amended by directors' resolution of 3/4/67.  Originally read
as follows:

"1.      Place of Meeting

     All  meetings  of  stockholders  shall  be held at the main  office  of the
Corporation in the City of Washington, District of Columbia."

Footnote  122 <F122>

     Paragraph 2(b)(i) as amended by directors' resolution of 9/6/67. Previously
read as follows:

              "(i) The shares of Class B stock  shall be issued only in exchange
for  Class A stock  (A) to  officers  and  employees  of the  Corporation  after
retirement  because of age or disability,  or (B) after the death of officers or
employees of the Corporation,  to the estates of such officers or employees,  to
the dependents of such officers or employees, or to persons who are the natural

                                       78

<PAGE>136

objects of the bounty of such officers or employees: Provided, That death occurs
while the  officers or  employees  are in the service of the  Corporation  or on
military  or  disability  leave,  or  within  three  years  less 30  days  after
retirement because of age or disability of officers or employees who executed an
Optional  Agreement  pursuant to the By-Laws of the Corporation for the transfer
of stock upon  termination  of  employment,  or within 60 days after  retirement
because of age or  disability  of officers or employees who did not execute such
an Optional Agreement."

Footnote  123 <F123>

     Paragraph  2(b)(iii)  (A) and (B) as amended by  directors'  resolution  of
9/6/67. Previously read as follows:

              "(A) In the case of an  officer  or  employee  of the  Corporation
entitled to exchange Class A stock for Class B stock upon retirement, and in the
case of anyone  entitled  to  exchange  Class A stock for Class B stock upon the
death of a retired  officer  or  employee,  within  sixty  (60)  days  after the
retirement of the officer or employee, or, in the event such officer or employee
has executed an Optional  Agreement  pursuant to the By-Laws of the  Corporation
for the transfer of stock upon termination of employment, within three (3) years
less thirty (30) days after retirement of the officer or employee;

              "(B) In the case of anyone  entitled to exchange Class A stock for
Class B stock upon the death of an officer or employee of the Corporation  while
in the service of the  Corporation  or on military or disability  leave,  within
sixty (60) days after such death,  or, in the event such officer or employee has
executed an Optional  Agreement  pursuant to the By-Laws of the  Corporation for
the transfer of stock upon  termination  of  employment,  within three (3) years
less thirty (30) days after the death of such officer or employee."

Footnote  124 <F124>

     Words  "ninety  (90) day and one  hundred  and  eighty  (180) day  periods"
substituted  for words  "sixty (60) day  periods" by  directors'  resolution  of
9/6/67.

Footnote  125 <F125>

     Subdivision (iv) inserted by directors' resolution of 9/6/67.

Footnote  126 <F126>

     Paragraph 4 as amended by directors' resolution of 9/6/67.  Previously read
as follows:

                                       79

<PAGE>137

"4. Rate of Exchange of Class B Stock

     The  exchange  of Class A stock for  Class B stock  shall be on a share for
share basis:  Provided,  however,  that after eight hundred (800)<F77> shares of
Class A stock have been  exchanged  for a like number of shares of Class B stock
by (a) any one retired officer or employee of the Corporation, or (b) any or all
persons  who  received  the  Class A stock  from  any one  deceased  officer  or
employee,  such person or persons may  thereafter  have Class B stock  exchanged
only in an amount equal to one-third of the remaining Class A stock held by such
person or persons; and provided, further, that no more than two thousand (2,000)
<F78>  shares of Class B stock shall be issued in exchange  for Class A stock to
any one retired  officer or employee of the Corporation or to any or all persons
who  have  received  the  Class  A  stock  from  any  one  deceased  officer  or
employee.<F63>"

Footnote  127 <F127>

     Words "by written notice sent to the stockholder or his  representative  at
the  address  of the  stockholder  as it  appears  on  the  stock  books  of the
Corporation  and by  written  notice to the  distributee  at his  address  as it
appears on the records of the  Administrative  Committee  established  under the
stock bonus plan" inserted by directors' resolution of 9/6/67.

Footnote  128 <F128>

     First two sentences of Paragraph 8 substituted by directors'  resolution of
9/6/67  for the  following:  "The  Corporation  shall have the right at any time
after the  expiration  of eight (8) years from the date of (a)  retirement of an
officer or employee, or (b) death of an officer or employee while in the service
of the Corporation or on military or disability leave, to redeem from the holder
thereof  all or any part of the  outstanding  shares of Class B stock  issued in
exchange  for  Class A stock  to such  officer  or  employee  or to the  estate,
dependents, or persons who are the natural objects of the bounty of such officer
or employee."

Footnote  129 <F129>

     Paragraph 9(b)(i)(A) and (B) as amended by directors' resolution of 9/6/67.
Previously read as follows:

              "(A) The price in effect for  purchase and sale of shares of Class
A stock of the  Corporation  under the Stock  Purchase and Transfer  Plan of the
Corporation,  if  tender  is made  within  eight  years  after  the  date of the
retirement or death which gave rise to the right to obtain Class B stock, or

              "(B) The price  determined  for the  purchase  of Class A stock in
accordance with the provisions of  sub-paragraph  (a) of Paragraph 9 hereof,  if
tender is made eight or more years after the retirement or death which gave rise
to the right to obtain Class B stock."

                                       80

<PAGE>138

Footnote  130 <F130>

     Paragraph  9(b)(ii)(A)  and (B) as  amended  by  directors'  resolution  of
9/6/67. Previously read as follows:

              "(A) The price in effect  for the  purchase  and sale of shares of
Class A stock of the  Corporation  under the Stock Purchase and Transfer Plan of
the Corporation, if the stock is presented for transfer within eight years after
the retirement or death which gave rise to the right to obtain Class B stock, or

              "(B) The price  determined  for the  purchase  of Class A stock in
accordance with the provisions of  sub-paragraph  (a) of Paragraph 9 hereof,  if
the stock is presented for transfer at eight or more years after the date of the
retirement or death which gave rise to the right to obtain Class B stock.

Footnote  131 <F131>

     Words  "to the time at which the  Corporation  shall  first  have the right
under  Paragraph 8 hereof to redeem such Class B stock from the holder  thereof"
substituted for words "to the expiration of the eight-year period after the date
of the retirement or death which gave rise to the right to obtain Class B stock"
by directors' resolution of 9/6/67.

Footnote  132 <F132>

     Figure  "10"  substituted  for  figure  "20" by  directors'  resolution  of
12/2/67.

Footnote  133 <F133>

     Words and figure "seven hundred thousand  (700,000)"  substituted for words
and figure "one hundred forty  thousand  (140,000)" by directors'  resolution of
1/24/68.

Footnote  134 <F134>

     Words and figure " six hundred  thousand  (600,000)"  substituted for words
and figure "one hundred twenty thousand  (120,000)" by directors'  resolution of
1/24/68.

Footnote  135 <F135>

     Words and figure "one hundred thousand (100,000)" substituted for words and
figure "twenty thousand (20,000)" by directors' resolution of 1/24/68.

                                       81

<PAGE>139

Footnote  136 <F136>

     Paragraph   2(a)(i)  as  amended  by  directors'   resolution  of  1/24/68.
Previously  read as  follows:  "(i) The shares of Class A stock  shall be issued
only to person who are officers or employees of the  Corporation and who possess
such  other  qualifications  as the Board of  Directors  shall from time to time
prescribe by  resolution,  or to trustee  designated or appointed  under a stock
bonus plan of the Corporation.<F76>"

Footnote  137 <F137>

     Words "officers and" inserted by directors' resolution of 1/24/68.

Footnote  138 <F138>

     Words "officer or" inserted by directors' resolution of 1/24/68.

Footnote  139 <F139>

     Proviso as amended by directors' resolution of 1/24/68.  Originally read as
follows: "Provided, however, that the Trustee may designate an agent with powers
to perform his duties  herein  prescribed  by filing with the  Secretary  of the
Corporation a statement delegating such powers."

Footnote  140 <F140>

     Words "officers and employees  eligible to participate  shall be person (1)
who are officers or employees of the Corporation or of a subsidiary  corporation
eighty (80) percent or more of whose stock is owned by the  Corporation  and (2)
who possess such other  qualifications as the Board of Directors shall from time
to  time  prescribe  by  resolution  (all  such  officers  and  employees  being
hereinafter  in  this  Section  X  referred  to as  'officers  and  employees')"
substituted  for words  "employees  eligible to  participate  shall be 'eligible
stockholders' as defined in Section IX, Paragraph  2(a)(i) of these By-Laws " by
directors' resolution of 1/24/68.

Footnote  141 <F141>

     Words  "prior to April 7,  1968,"  inserted  by  directors'  resolution  of
1/24/68.

Footnote  142 <F142>

     Words  "and on and after  April 7,  1968,  be not in  excess of  forty-five
dollars ($45) per week and not less than one dollar  ($1.00) per week"  inserted
by directors' resolution of 1/24/68.

                                       82

<PAGE>140

Footnote  143 <F143>

     Sentence  "Effective  April 7, 1968,  the words and  figures  'twenty  (20)
shares'  wherever they appear in this  subdivision  (vii) shall read 'forty (40)
shares'." inserted by directors' resolution of 1/24/68.

Footnote  144 <F144>

     Words "officer and" inserted by directors' resolution of 1/24/68.

Footnote  145 <F145>

     Words "employee of, and" deleted by directors' resolution of 1/24/68.

Footnote  146 <F146>

     Words  "(herein  called the  Corporation)  or by a  subsidiary  eighty (80)
percent  or more of  whose  stock  is  owned  by the  Corporation"  inserted  by
directors' resolution of 1/24/68.

Footnote  147 <F147>

     Title of Section changed from  "DEFINITION OF STOCKHOLDER" to "DEFINITIONS"
by directors' resolution of 1/24/68.

Footnote  148 <F148>

     Second  paragraph  of Section  XV  inserted  by  directors'  resolution  of
1/24/68.

Footnote  149 <F149>

     Word and number  "thirteen  (13)"  substituted  for word and number "eleven
(11)" by directors' resolution of 2/10/68.

Footnote  150 <F150>

     Words "at the regular annual meeting of stockholders" inserted and sentence
"The first election or elections  shall be held at one or more special  meetings
of  stockholders  until all eleven (11)  directors are elected,  and  thereafter
directors  shall be  elected at the  regular  annual  meeting of  stockholders."
deleted by directors' resolution of 2/10/68.

Footnote  151 <F151>

     Word and number  "twelve (12)"  substituted  for word and number  "thirteen
(13)<F149>" by directors' resolution of 12/7/68.

                                       83

<PAGE>141

Footnote  152 <F152>

     Subdivision (ii) as amended by directors' resolution of 4/5/69.  Previously
read as follows:  "(ii) When Deductions  Begin.  Deductions from payroll for the
purposes of this  sub-paragraph  shall begin with salary for the third full week
after  receipt of the  authorization,  except that at the  beginning  of any six
months'  period of the Plan,  authorized  payroll  deductions  shall  begin with
salary for the first full week of the new six months' period.<F45>"

Footnote  153 <F153>

     Second sentence of subdivision (iii) as amended by directors' resolution of
4/5/69.  Previously read as follows:  "Such notice shall take effect with salary
for the third full week after submission of notice.<F46>"

Footnote  154 <F154>

     Word  "twenty-eight"   substituted  for  word  "fourteenth"  by  directors'
resolution of 4/5/69.

Footnote  155 <F155>

     Subdivision (i) as amended by directors'  resolution of 8/6/69.  Previously
read as follows:

         "(i)  Limitations on Amount

     Deductions   from  salary  for  such  purpose   shall  prior  to  April  7,
1968,<F141>,  be not in excess of two times<F81> the current price per share and
not less than one dollar  ($1.00) per  week<F44> and on and after April 7, 1968,
be not in  excess  of  forty-five  dollars  ($45) per week and not less than one
dollar ($1.00) per week.<F142>"

Footnote  156 <F156>

     Words  "first full pay period"  substituted  for words "third full week" by
directors' resolution of 8/6/69.

Footnote  157 <F157>

     Second sentence of subdivision  (iii) inserted by directors'  resolution of
8/67/69.

Footnote  158 <F158>

     Words "OFFICERS AND" deleted by directors' resolution of 12/17/69.

                                       84

<PAGE>142

Footnote  159 <F159>

     Section VII as amended by  directors'  resolution  of 12/17/69.  Previously
read as follows:

     "Officers other than the President<F58> and the Chairman of the Board,<F85>
directors,  and  members of  committees  shall not receive any salary or fee for
their  services as such,  but by  resolution  of the Board they shall be allowed
reimbursement  for their traveling and other reasonably  necessary  expenses for
attendance  at any regular or special  meeting:  PROVIDED,  That nothing  herein
contained  shall preclude any officer,  director,  or member of a committee from
serving the Corporation in any other capacity upon a compensated basis."

Footnote  160 <F160>

     Words "and a Vice Chairman" inserted by directors' resolution of 12/17/69.

Footnote  161 >F161>

     Words  "Vice  Chairman  of the  Board"  substituted  for word  "either"  by
directors' resolution of 12/17/69.

Footnote  162 <F162>

     Words "and Vice Chairman" inserted by directors' resolution of 12/17/69.

Footnote  163 <F163>

     Words "Vice  Chairman of the Board"  substituted  for word  "President"  by
directors' resolution of 12/17/69.

Footnote  164 <F164>

     Last sentence of  sub-paragraph  (f) inserted by  directors'  resolution of
12/17/69.

Footnote  165 <F165>

     Words  "who  are  on  the  payroll  of  the  Corporation  or of  one of its
subsidiary corporations" inserted by directors' resolution of 1/10/70.

Footnote  166 <F166>

     Words "or of one of its  subsidiary  corporations"  inserted by  directors'
resolution of 2/7/70.

                                       85


<PAGE>143

Footnote  167 <F167>

     Words "and members of committees"  and words "who are on the payroll of the
Corporation or of one of its subsidiary  corporations"  transposed by directors'
resolution of 2/7/70.

Footnote  168 <F168>

     Words and figure "five hundred fifty thousand  (550,000)"  substituted  for
words and figure "six hundred  thousand  (600,000)" by directors'  resolution of
4/18/70.

Footnote  169 <F169>

     Words and figure "one hundred fifty  thousand  (150,000)"  substituted  for
words and figure "one hundred  thousand  (100,000)" by directors'  resolution of
4/18/70.

Footnote  170 <F170>

     Sentence "One nominee shall be neither a stockholder of the Corporation nor
an active or retired  officer or  employee of the  Corporation  or of one of its
subsidiary corporations." inserted by directors' resolution of 6/9/71.

Footnote  171 <F171>

     Paragraph 1 as amended by directors' resolution of 6/9/71.  Previously read
as follows:

         "1. Eligibility

     No person shall be elected or appointed as a director unless he is a holder
of Class A or Class B stock and, in addition, is an active or retired officer or
employee of the Corporation or one of its subsidiary corporations,<F166> and any
director  who ceases to fulfill  these  requirements  shall be  disqualified  to
exercise  any of the  powers or duties of  director  and shall be deemed to have
resigned from such position.<F57>"

Footnote  172 <F172>

     Word and number  "thirteen  (13)"  substituted  for word and number "twelve
(12)<F151>" by directors' resolution of 6/9/71.

Footnote  173 <F173>

     Second sentence of Paragraph 3 inserted by directors' resolution of 6/9/71.

                                       86

<PAGE>144

Footnote  174 <F174>

     First sentence of sub-paragraph (b) as amended by directors'  resolution of
9/8/71.  Originally read as follows: "Regular meetings of the Board of Directors
shall be held on the  first  Saturday  in each  month at the main  office of the
Corporation in Washington,  District of Columbia, and/or at such other times and
places as may be fixed by  resolution  of the Board or by written  waiver of all
its members."

Footnote  175 <F175>

     Words  "one  or  more  Assistant  Treasurers"  substituted  for  words  "an
Assistant Treasurer" by directors' resolution of 1/5/72.

Footnote  176 <F176>

     Words "an" substituted for word "the" by directors' resolution of 1/5/73.

Footnote  177 <F177>

     Words and figure "five hundred  thousand  (500,000)"  substituted for words
and figure "five hundred  fifty  thousand  (550,000)<F134><F168>"  by directors'
resolution of 4/21/73.

Footnote  178 <F178>

     Words and figure "two hundred thousand (200,000)" substituted for words and
figure  "one  hundred  fifty  thousand   (150,000)<F135><F169>"   by  directors'
resolution of 4/21/73.

Footnote  179 <F179>

     Paragraph 1 as amended by directors' resolution of 5/14/75. Previously read
as follows:

         "1. Amount

     The total number of shares of stock which the  Corporation is authorized to
issue is seven hundred thousand (700,000)<F133> shares divided into two classes:
one class  designated  as Class A common  shares  shall  consist of five hundred
thousand  (500,000)<F177>  shares without par value and with voting rights,  and
the other class designated as Class B common shares shall consist of two hundred
thousand  (200,000)<F178>  shares without par value per share and without voting
rights.<F75> "

Footnote  180 <F180>

     Sentence "Effective  September 22, 1975, the words and figures 'two hundred
(200)' wherever they appear in this  subdivision  (bb) shall read 'eight hundred
(800)'." inserted by directors' resolution of 5/14/75.

                                       87

<PAGE>145

Footnote  181 F<181>

     Subdivision (i) as amended by directors' resolution of 5/14/75.  Previously
read as follows:

         "(i) Limitations on Amount

     Deductions from salary for such purchase shall prior to October 5, 1969, be
not in excess of forty-five  dollars ($45) per week and not less than one dollar
($1.00)  per week and on and after  October  5,  1969,  be not in excess of five
times the  current  price per share  and not less than one  dollar  ($1.00)  per
week.<F155>"

Footnote  182 <F182>

     Subdivision (iv) as amended by directors' resolution of 5/14/75. Previously
read as follows:

         "(iv) Limitations on Amount

     'Offers to buy' may be satisfied by the Trustee, if stock is available, for
each eligible officer or<F138> employee without limitation in amount:  Provided,
however,  that shares made  available to the Trustee  from  unissued or treasury
stock may not be sold to any one  individual in excess of that amount  necessary
to permit such individual to purchase a total of two hundred  (200)<F83>  shares
of stock through 'offers to buy' in any period of six months.<F54>

Footnote  183 <F183>

     Subdivision (iv) as amended by directors' resolution of 5/14/75. Previously
read as follows:

         "(vii) Fulfillment

     'Offers to buy shall be  satisfied  in order of priority  based on the date
when the 'offer to buy' is listed according to the following system:

    "When the  Trustee  has  available  shares  for sale to makers of 'offers to
buy,' he shall allot to each 'live' listing number in numerical  sequence twenty
(20)<F84> shares, or the full amount of the 'offer to buy' if the 'offer' is for
fewer than twenty  (20)<F84>  shares,  until all listing  numbers have  received
their  allotments  or until all the  available  shares  have been  allotted.  If
additional  shares for  allotment  remain,  they shall be  allocated in the same
manner,  twenty  (20)<F84> or fewer (if the  unfulfilled  'offer to buy' is less
than twenty  (20))<F84>  shares being  allotted to each number in rotation until
all available  shares are sold.  Effective  April 7, 1968, the words and figures
'twenty (20) shares' wherever they appear in this  subdivision  (vii) shall read
'forty (40) shares'.<F143> After each such allotment the 'live' listing shall be

                                       88

<PAGE>146

reconstituted, beginning with the first 'offer to buy' that was not satisfied in
the  previous   allotment,   and  the  same  procedure  followed  on  subsequent
allotments."

Footnote  184 <F184>

     Paragraph 8 as amended by directors' resolution of 6/11/75. Previously read
as follows:

"8.<F95> Treasurer

     (a) The  Treasurer  shall have custody of the funds and  securities  of the
Corporation,  shall  keep  full  and  accurate  accounts  of  the  receipts  and
disbursements  in books  belonging  to the  Corporation,  and shall  deposit all
monies  and  other  valuable  effects  in the  name  and to  the  credit  of the
Corporation in such depositories as may be designated by the Board of Directors.

     "(b) The Treasurer  shall  disburse the funds of the  Corporation as may be
ordered by the Board of Directors and either the Chief Executive  Officer or the
President,  in relation to their  functions,  taking  proper  vouchers  for such
disbursements,  and  shall  render  to  the  Chief  Executive  Officer  and  the
directors,  whenever they may require it, an account of all his  transactions as
Treasurer and of the financial condition of the Corporation,  and at the meeting
of the Board of Directors next preceding the annual meeting of  stockholders  he
shall make a like report for the preceding fiscal year.<F108>

     "(c) He shall give the  Corporation  a bond,  if  required  to do so by the
Board of Directors,  in such sum and in form and with security  satisfactory  to
the  Board,  for the  faithful  performance  of the duties of his office and the
restoration to the Corporation,  in case of his death, resignation,  retirement,
or removal from office, of all books, papers, vouchers, money and other property
of whatever kind  belonging to the  Corporation  in his  possession or under his
control.<F109>

     "(d) He shall perform such other functions as the Board of Directors or the
Chief Executive Officer may prescribe.<F110>"

Footnote  185 <F185>

     Paragraphs 9 and 10 inserted by directors' resolution of 6/11/75.

Footnote  186 <F186>

     Word "Thursday"  substituted for word "Wednesday" by directors'  resolution
of 9/10/75.

                                       89

<PAGE>147

Footnote  187 <F187>

     Words  and  figure  "one  million  eighty  hundred  thousand   (1,800,000)"
substituted  for  words and  figure  "two  million  (2,000,000)"  by  directors'
resolution of 4/16/77.

Footnote  188 <F188>

     Words and figure "one million (1,000,000)" substituted for words and figure
"eight hundred thousand (800,000)" by directors' resolution of 4/16/77.

Footnote  189 <F189>

     Words  and  figure   "thirty  (30)"   substituted   for  words  and  figure
"twenty-five (25)" by directors' resolution of 1/12/78.

Footnote  190 <F190>

     Sentence "Each  additional  nomination made pursuant to this  sub-paragraph
shall  be  accompanied  by  the  nominee's  written  acceptance  of  his  or her
nomination." inserted by directors' resolution of 1/12/78.

Footnote  191 <F191>

     Words and figure "twenty-two (22)" substituted for word and figure "fifteen
(15)" by directors' resolution of 1/12/78.

Footnote  192 <F192>

     Period  substituted for colon and proviso deleted by directors'  resolution
of 1/12/78.  Proviso read as follows:  "PROVIDED,  however, that each nominee on
such list shall have filed with the Nominating Committee a written acceptance of
his nomination not less than twenty (20) days prior to the meeting;  nominations
which are not so accepted shall be deemed withdrawn.<F10>"

 Footnote  193 <F193>

     Words  "may"  substituted  for word  "shall" by  directors'  resolution  of
11/8/79.

Footnote  194 <F194>

     Sub-paragraph (c) inserted by directors' resolution of 5/8/80.

                                       90

<PAGE>148

Footnote  195 <F195)

     Sub-paragraph  renumbered  as shown by  directors'  resolution  of  5/8/80.
Previously numbered (c).

 Footnote  196 <F196>

     Paragraph 7 inserted by directors' resolution of 6/12/80.

 Footnote  197 <F197>

     Paragraph 8 inserted by directors' resolution of 6/12/80.

Footnote  198 <F198>

     Sub-paragraph   (a)  as  amended  by  directors'   resolution  of  11/6/80.
Previously read as follows:

         "(a)     Operation by Trustee

     The Plan  shall be  operated  in  accordance  with the  provisions  of this
Section  by a  Trustee,  who  shall  be  the  Treasurer  or  an<F176>  Assistant
Treasurer<F118> of the Corporation,  as the Board may designate:<F119> Provided,
however,  that the  Trustee  may  designate  an agent or  agents,  including  an
Assistant  Trustee at the place of  business of a  subsidiary  whose stock is at
least eighty (80) percent owned by the  Corporation,  with powers to perform any
of his duties herein  prescribed by filing with the Secretary of the Corporation
a statement delegating such powers.<F139>"

Footnote  199 <F199>

    Paragraph 1 as amended by directors' resolution of 7/12/84.  Previously read
as follows:

"1. Amount.

     The total number of shares of stock which the  Corporation is authorized to
issue is two million eight hundred thousand  (2,800,000) shares divided into two
classes:  one class  designated  as Class A common  shares shall  consist of one
million eight hundred  thousand  (1,800,000)<F187>  shares without par value and
with voting  rights,  and the other class  designated  as Class B common  shares
shall  consist of one  million  (1,000,000)<F188>  shares  without par value and
without voting rights.<F179>"

                                       91

<PAGE>149

Footnote  200 <F200>

     Subdivision (vii) as amended by directors' resolution of 9/6/84. Previously
read as follows:

         "(vii) Fulfillment

     'Offers to buy' shall be satisfied  in order of priority  based on the date
when the 'offer to buy' is listed according to the following system:

     "When the  Trustee  has  available  shares for sale to makers of 'offers to
buy,' he shall allot to each 'live' listing  number in numerical  sequence forty
(40)  shares,  or the full  amount of the  'offer to buy' if the  'offer' is for
fewer than forty (40)  shares,  until all listing  numbers have  received  their
allotments or until all the available  shares have been allotted.  If additional
shares for allotment remain,  they shall be allocated in the same manner,  forty
(40) or fewer (if the unfulfilled  'offer to buy' is less than forty (40) shares
being allotted to each number in rotation  until all available  shares are sold.
Effective  September 22, 1975,  the word and figures  'forty (40)' wherever they
appear in this  subdivision  (vii) shall read 'one hundred sixty  (160)'.  After
each such  allotment the 'live' listing shall be  reconstituted,  beginning with
the first 'offer to buy' that was not satisfied in the previous  allotment,  and
the same procedure followed on subsequent allotments.<F183>"

Footnote  201 <F201>

     Words "or his designees" inserted by directors' amendment of 2/7/85.

Footnote  202 <F202>

     Word  "forty-two"   substituted  for  word   "twenty-eight"  by  directors'
resolution of 3/7/85.

Footnote  203 <F203>

     Section IX,  Paragraph 1 as amended by  directors'  resolution  of 6/12/86.
Previously read as follows:

"1. Amount

     The total number of shares of stock which the  Corporation is authorized to
issue is three million  (3,000,000)  shares divided into two classes:  one class
designated  as Class A common  shares shall consist of one million eight hundred
thousand  (1,800,000)  shares without par value and with voting rights,  and the
other class designated as Class B common shares shall consist of one million two
hundred (1,200,000) shares without par value and without voting rights.<F199>"

                                       92

<PAGE>150

Footnote  204 <F204>

     Sub-paragraph (c) added by directors' resolution of 6/12/86.

Footnote  205 <F205>

     Comma added after word "stock" and phrase amended by directors'  resolution
of 6/12/86.  Previously read as follows: "and Class B stock shall be entitled to
participate  ratably,  share for share,  and without  preference of either Class
over the other.<F71>

Footnote  206 <F206>

     Comma added after word "stock" and phrase amended by directors'  resolution
of 6/12/86.  Previously read as follows: "and Class B stock shall be entitled to
participate  ratably,  share for share,  and without  preference of either Class
over  the  other  in  all  dividends  when  and as  declared  by  the  Board  of
Directors.<F73>

Footnote  207 <F207>

     The words "or Class C" added by directors' resolution of 6/12/86.

Footnote  208 <F208>

     Section IX,  Paragraph 1 as amended by  directors'  resolution  of 9/10/87.
Previously read as follows:

"1. Amount

     The total number of shares of stock which the  Corporation is authorized to
issue is three million two hundred and fifty thousand (3,250,000) shares divided
into three classes:  one class designated as Class A common shares shall consist
of one million eight hundred thousand  (1,800,000)  shares without par value and
with voting  rights,  another  class  designated  as Class B common shares shall
consist of one million two hundred thousand (1,200,000) shares without par value
and without voting rights, and another class designated as Class C common shares
shall consist of two hundred and fifty  thousand  (250,000)  shares  without par
value and without voting rights.<F203>"

Footnote  209 <F209>

     Section X, Paragraph  2(e)(ii)(bb)  as amended by directors'  resolution of
9/10/87. Previously read as follows:

     "(bb) All other stock offered to the Fund for purchase in the chronological
order in which  such  offers  have been  received  in  writing  by the  Trustee:
PROVIDED,  however,  that,  whenever the Trustee has unsatisfied offers of stock
from two or more stockholders, not more than two hundred (200)<F79> shares

                                       93

<PAGE>151

may be purchased from a stockholder  having a higher  priority until two hundred
(200)<F79>  shares (or all shares offered,  if less than two hundred  (200)<F79>
have  been  purchased  from  each  such  stockholder  having  a lower  priority.
Effective September 22, 1975, the words and figures 'two hundred (200)' wherever
they appear in this  subdivision  (bb) shall read 'eight  hundred  (800)'.<F180>
Where two or more offers of stock are  received  simultaneously  by the Trustee,
the order shall be determined by lot."

Footnote  210 <F210>

     Section  X,  Paragraph  1(i)(i)  as amended  by  directors'  resolution  of
9/10/87. Previously read as follows:

         "(i) Limitation on Amount

     Deductions from salary for such purchase shall prior to September 22, 1975,
be not in excess of five times the current price per share and not less than one
dollar ($1.00) per week and on and after September 20, 1975, be not in excess of
twenty  times the current  price per share and not less than one dollar  ($1.00)
per week.<F181>"

Footnote  211 <F211>

    Section  X,  Paragraph  2(j)(iv)  as  amended by  directors'  resolution  of
9/10/87. Previously read as follows:

         "(iv) Limitation on Amount

     'Offers to buy' may be satisfied by the Trustee, if stock is available, for
each  eligible  officer or  employee  without  limitation  in amount:  Provided,
however,  that shares made  available to the Trustee  from  unissued or treasury
stock prior to September  22,  1975,  may not be sold to any one  individual  in
excess of that amount necessary to permit such individual to purchase a total of
two hundred (200) shares of stock  through  'offers to buy' in any period of six
months;  and provided,  further,  that shares made available to the Trustee from
unissued or treasury  stock on and after  September 22, 1975, may not be sold to
any one individual in excess of that amount  necessary to permit such individual
to purchase a total of eight hundred  (800) shares of stock  through  'offers to
buy' in any period of six months.<F184>"

                                       94

<PAGE>152

Footnote  212 <F212>

     Section X,  Paragraph  2(j)(vii)  as amended by  directors'  resolution  of
9/10/87. Previously read as follows:

         "(vii) Fulfillment

     'Offers to buy shall be  satisfied  in order of priority  based on the date
when the 'offer to buy' is listed according to the following system:

     "When the  Trustee  has  available  shares for sale to makers of 'offers to
buy,' he shall allot to each 'live' listing  number in numerical  sequence forty
(40)  shares,  or the full  amount of the  'offer to buy' if the  'offer' is for
fewer than forty (40)  shares,  until all listing  numbers have  received  their
allotments or until all the available  shares have been allotted.  If additional
shares for allotment remain,  they shall be allocated in the same manner,  forty
(40) or fewer (if the unfulfilled  'offer to buy' is less than forty (40) shares
being allotted to each number in rotation  until all available  shares are sold.
After each such allotment the 'live' listing shall be  reconstituted,  beginning
with the first 'offer to buy' that was not satisfied in the previous  allotment,
and the same procedure followed on subsequent allotments."

Footnote  213 <F213>

     Section V, Paragraph  4(b) as amended by directors'  resolution of 4/15/89.
Previously read as follows:

     "(b) Regular  meetings of the Board of Directors shall be held at 8:30 a.m.
on the first  Thursday after the first Saturday in each month at the main office
of the  Corporation  in Washington,  District of Columbia,  and/or at such other
times and places as may be fixed by resolution of the Board or by written waiver
of all its members. No other notice of any regular meeting shall be required."

Footnote  214 <F214>

     Section V,  Paragraph  3 as amended by  directors'  resolution  of 4/21/90.
Previously read as follows:

"3. Number; Election; Term

     The Board of Directors  shall  consist of thirteen (13 members who shall be
elected  by  the  Class  A  stockholders   at  the  regular  annual  meeting  of
stockholders.  The Board of  Directors  so elected  shall be composed of (i) the
nominee  eligible only under  sub-paragraph  (a) of Paragraph 1 hereof who shall
have received the highest number of votes among the nominees eligible only under
that provision, and (ii) the twelve (12) nominees eligible only under sub-

                                       95

<PAGE>153

paragraph (b) of Paragraph 1 hereof who shall have  received the highest  number
of votes among the nominees  eligible only under that  provision.  Each director
shall hold office until the succeeding  annual  election and until his successor
shall have been elected and shall have duly qualified:  PROVIDED,  That if there
be a vacancy in the Board by reason of death,  resignation,  or otherwise,  such
vacancy  shall be filled  for the  unexpired  term by  majority  vote of all the
remaining directors, although less than a quorum."

Footnote  215 <F215>

     Section V, Paragraph  4(b) as amended by directors'  resolution of 7/12/90.
Previously read as follows:

     "(b) Regular  meetings of the Board of Directors shall be held at 9:00 a.m.
on the Thursday after the first Saturday in each month at the main office of the
Corporation in Washington,  District of Columbia, and/or at such other times and
places as may be fixed by  resolution  of the Board or by written  waiver of all
its members. No other notice of any regular meeting shall be required."

Footnote  216 <F216>

     Section  III,  Paragraph  8(a) as amended by  stockholders'  resolution  of
4/21/90. Previously read as follows:

     "(a)  At  least  forty-five  (45)  days  prior  to any  annual  meeting  of
stockholders  a list of  nominations  for  directors,  prepared by a  Nominating
Committee  to be  appointed  by the Board of  Directors,  shall be mailed by the
Secretary to each Class A stockholder. The Committee shall make at least as many
nominations as there are  directorships to be filled at the annual meeting,  but
may nominate candidates in excess of such number. One nominee shall be neither a
stockholder of the  Corporation  nor an active or retired officer or employee of
the Corporation or of one of its subsidiary  corporations.  Said list shall also
state the  total  number  of  shares  of Class A stock of the  Corporation  then
outstanding."

Footnote  217 <F217>

     Section V, Paragraph 1 as amended by  stockholders'  resolution of 4/21/90.
Previously read as follows:

    "(a) One  person  who is not a  stockholder  of the  Corporation  and not an
active or  retired  officer  or  employee  of the  Corporation  or of one of its
subsidiary corporations shall be elected or appointed as a director.

    "(b) Other than the person  elected or  appointed  as  director  pursuant to
sub-paragraph  a) above,  no person  shall be elected or appointed as a director
unless he is a holder of Class A or Class B stock and, in addition, is an active
or retired officer or employee of the Corporation or of one of its

                                       96

<PAGE>154

subsidiary corporations,  and any director elected or appointed pursuant to this
Paragraph  who ceases to fulfill these  requirements  shall be  disqualified  to
exercise  any of the  powers or duties of  director  and shall be deemed to have
resigned from such position."

Footnote  218 <F218>

     Section V, Paragraph 3 as amended by  stockholders'  resolution of 4/21/90.
Previously read as follows:

     "The Board of Directors  shall consist of fifteen (15) members who shall be
elected  by  the  Class  A  stockholders   at  the  regular  annual  meeting  of
stockholders.  The Board of  Directors  so elected  shall be composed of (i) the
nominee  eligible only under  sub-paragraph  (a) of Paragraph 1 hereof who shall
have received the highest number of votes among the nominees eligible only under
that  provision,  and  (ii) the  thirteen  (13)  nominees  eligible  only  under
sub-paragraph  (b) of  Paragraph  1 hereof who shall have  received  the highest
number of votes among the  nominees  eligible  only under that  provision.  Each
director  shall hold office until the succeeding  annual  election and until his
successor shall have been elected and shall have duly qualified:  Provided, That
if there  be a  vacancy  in the  Board  by  reason  of  death,  resignation,  or
otherwise,  such vacancy shall be filled of the unexpired  term by majority vote
of all the remaining directors, although less than a quorum."

Footnote  219 <F219>

     Section IX,  Paragraph 1 as amended by  directors'  resolution of 11/11/93.
Previously read as follows:

     "The total number of shares of stock which the Corporation is authorized to
issue is thirteen million  (13,000,000)  shares divided into three classes:  one
class  designated  as Class A common  shares shall  consist of seven million two
hundred thousand  (7,200,000) shares,  $1.00 par value per share and with voting
rights,  another class designated as Class B common shares shall consist of four
million eight hundred thousand (4,800,000) shares, $1.00 par value per share and
without  voting  rights,  and another class  designated as Class C common shares
shall  consist  of one  million  (1,000,000)  shares,  $1.00 par value per share
without voting rights.<F208>"

Footnote 220 <F220>

     Section  VIII,  Paragraph  1(a),  as amended by  directors'  resolution  of
5/8/97. Previously read as follows:

     "The  officers of the  Corporation  shall be a Chairman and a Vice Chairman
<F160> of the Board,<F86> a President, one or more Vice-Presidents, a Secretary,
and a  Treasurer.  The Chairman of the Board and the  President  may be the same
person, the<F87> Secretary and the Treasurer may be the same person, and a Vice-
President  may  hold  at the  same  time  the  office  of Vice  Chairman  of the
Board,<F161>  Secretary,  or Treasurer.  The Chairman and Vice Chairman<F162> of
the  Board<F100>,  the President,  and one  Vice-President  shall be chosen from
among the directors;  the other officers may, but need not be, chosen from among
the directors.  No person shall be an officer of the Corporation  unless he is a
holder of Class A stock or Class B stock, and any officer who ceases to hold any
shares of stock in the Corporation  shall be disqualified to exercise any of the
powers or  duties of an  officer  and  shall be  deemed  to have  resigned  from
office.<F59>

Footnote 221 <F221>

     Sub-paragraph (d) added by directors' resolution of 10/09/97.

                                       97

<PAGE>155

Footnote 222 <F222>

     Sentence "For purposes of this  Paragraph  6(b) and Article IV, Section 1A,
Paragraph 16 of the Corporation's  Certificate of  Incorporation,  a transfer of
stock  registered  in TOD form that occurs upon the death of the holder  thereof
shall be deemed to be made "by the person  named in the  certificate,"  provided
that the Corporation has received an affidavit of the personal representative of
the deceased  owner's  estate or such other proof of death of the deceased owner
as may be  satisfactory  to the  Secretary  of  the  Corporation."  inserted  by
directors' resolution of 10/09/97.

Footnote 223 <F223>

     Section XI, as amended by  directors'  resolution  of 11/06/97.  Previously
read as follows:

     The Corporation  shall offer to all officer  and<F144>  employee holders of
Class A<F66> stock the option to execute the following agreement:

     Agreement between The Bureau of National Affairs,  Inc., party of the first
part,  and  ________________<F145>,  holder  of one or more  shares of the Class
A<F66> stock of The Bureau of National Affairs, Inc., party of the second part:

     In  consideration  of mutual  advantages  accruing  therefrom,  the parties
hereby covenant and agree as follows:

    1. The party of the second  part will,  within not more than three (3) years
of his  separation  from  employment  by The Bureau of  National  Affairs,  Inc.
(herein called the Corporation) or by a subsidiary eight (80) percent or more of
whose stock is owned by the  Corporation,<F146>  offer all Class A<F66> stock of
the  Corporation  held by him to be  purchased  under  the  Stock  Purchase  and
Transfer  Plan set up pursuant  to Section X of the By-Laws of the  Corporation.
Such offer or offers may be made at any time within the said three (3) years for
any part or all of the Class A<F66> stock so held.

     2. In the event  that the Stock  Purchase  Fund,  provided  for in the said
Plan, is unable to purchase any or all of the shares  offered,  the party of the
second part may, at that time, at his option,  accept Supplemental Bids, if any,
registered  with the  Trustee  of the Plan.  If such  Supplemental  Bids are not
accepted,  the party of the second  part may retain his shares for later  offers
through the Stock Purchase and Transfer,  including  acceptance of  Supplemental
Bids.

     3. If at the end of three (3) years after  termination  of his  employment,
the  party of the  second  part  still  retains  any Class  A<F66>  stock of the
Corporation, he shall offer it forthwith for purchase through the Stock Purchase
Fund. If the Stock  Purchase Fund is unable to purchase any or all of the shares
so offered, the Trustee of the Plan shall so notify him and he may thereafter

                                       98

<PAGE>156

retain  such  shares as have not been  purchased  or he may  dispose  of them by
accepting  Supplemental Bids. Upon receipt of notification from the Trustee that
the Fund is able to purchase any part or all of the shares then held,  the party
of the  second  part  shall,  within  sixty  (60) days from the  mailing of such
notification,  which shall state the number of shares the Fund can purchase from
the stockholder,  present such shares to the Trustee for purchase by the Fund. A
like  procedure  shall be  followed  until all  shares  held by the party of the
second part have been purchased by the Fund.

     4. If the party of the second part, or his heirs or legatees, offers any or
all of his shares for sale other than as herein specified,  this agreement shall
become null and void.

     5. This agreement shall be binding upon the heirs and legatees of the party
of the second part.

     6. Nothing  herein  contained  shall diminish the right of the party of the
second  part to  exchange  Class  A<F66>  stock  for Class  B<F72>  stock of the
Corporation pursuant to Paragraph 2(b) of Section IX of the By-Laws.

     7. The  provisions of Paragraph 7(b) of Section IX of the By-Laws shall not
apply to the party of the second  part,  his heirs,  or legatees so long as this
agreement is in force and effect.

Footnote 224 <F224>

     As  amended  by  directors'   resolution   of  2/11/99,   to  clarify  that
"stockholders" include both record and beneficial owners of Class A shares.

Footnote 225 <F225>

     As amended by directors'  resolution of 2/11/99.  Previously  read,  "Other
than the persons elected or appointed as directors pursuant to subparagraphj (a)
above,  no person  shall be elected or  appointed  as a director  unless he is a
holder of Class A or Class B stock..."

Footnote 226 <F226>

     As amended by directors' resolution of 9/9/99, to eliminate the "unlimited"
offer to buy,  and to  specify  that all offers  become  void at the end of each
current stock plan.

Footnote 227 <F227>

     As amended by directors'  resolution of 11/11/99, to specify that the Audit
Committee  shall  consist of "no fewer than"  three  members  (previously  read,
"three to five  members") and to eliminate the sentence that read, "No member of
the Committee shall serve as chairman for more than two consecutive years."


Footnote 228 <F228>

     As amended by directors' resolution of 11/11/99, to specify that all duties
and functions of the Audit  Committee will be delineated in the Audit  Committee
charter,  and to  eliminate a provision  specifying  how  vacancies on the Audit
Committee will be filled.

Footnote 229 <F229>

    As amended by directors' resolution of 3/9/00, to provide for uncertificated
shares of the Corporation's stock.

Footnote 230 <F230>

    As amended by directors'  resolution of 3/9/00,  to provide for transfers of
uncertificated shares of stock.


Footnote 231 <F231>

    As amended by  directors' resolution of  December 7, 2000.  Previously read,
"Regular  meetings of the  Board of Directors shall  be held at 9:00 a.m. on the
Thursday after the first Saturday in each month except January and August".




                                       99

</FN>
</TABLE>

<PAGE>157

                                      INDEX


Amending bylaws                                   58
Annual Meeting                                     2
Annual Report                                     11
Audit Committee                                   18
Board of Directors,  see Directors
Bonding
- ---Of officers                                  27
Books and accounts                                56
Budget                                            22
Chairman of the Board
- ---In general                                   21
- ---Absence or disability                        22
Checks                                            57
Chief Executive Officer
- ---In general                                   23
- ---Absence or disability                        24
Chief Financial Officer                           26
Class A Stock                                     28
Class B Stock                                     29
Class C Stock                                     31
Committees
- ---Audit                                        18
- ---Executive                                    17
- ---Meetings                                     19
- ---Nominating                                    6
- ---Other                                        19
Compensation
- ---Of directors                                 19
Controller                                        26
Directors, Board of
- ---Committees                                   17
- ---Compensation                                 19
- ---Delegating powers of officers                27
- ---Electing officers                            20
- ---Eligibility                                   8
- ---Nomination of                                 6
- ---Meetings                                     10
- ---Number, election, terms                       9
- ---Outside directors                             8
- ---Powers                                        8
- ---Quorum                                       11
- ---Setting price of stock                       44
- ---Voting for                                    5
Dividends                                         57
Executive Committee                               17
Indemnification                                   11
List of stockholders                               3
Lost stock certificates                           40

<PAGE>158

Meetings
- ---Annual meeting                                2
- ---Board of Directors                           10
- ---Special meeting of stockholders               3
Nominating Committee                               6
Notice
- ---In general                                   58
- ---Board of Directors meetings                  10
- ---Annual meeting                                2
- ---Special meeting of stockholders               2
- ---Waiver                                       58
Offers to buy                                     47
Officers--See also specific offices
- ---Appointment and tenure                       20, 21
- ---Absence or disability                        27
- ---Bonding                                      27
- ---Chairman of the Board                        20, 21
- ---Chief Executive Officer                      21, 23
- ---Chief Financial Officer                      26
- ---Controller                                   26
- ---Delegation of powers                         27
- ---President                                    20, 22
- ---President pro tem                            25
- ---Secretary                                    20, 25
- ---Senior Vice President                        23, 24
- ---Term                                         21
- ---Treasurer                                    20, 26
- ---Vacancy                                      21
- ---Vice Chairman of the Board                   20
- ---Vice Presidents                              20, 24
Outside Directors                                  8
Optional agreements                               52
Payroll deductions                                45
President
- ---In general                                   22
- ---Absence or disability                        23
President pro tem                                 25
Price of stock                                    44
Proxies                                            5
Quorum
- ---at stockholders' meetings                     4
- ---at Board of Directors' meetings              11
Record Date                                        7
Reserves                                          57
Seal                                               1, 25
Secretary                                         20, 25
Senior Vice President                             23, 24
Special  meetings
- ---Of stockholders                               3

<PAGE>159

Stock
- ---Amount                                       27
- ---Certificates
- -----In general                                 33
- -----Lost                                       40
- ---Class A                                      28
- ---Class B                                      29
- ---Class C                                      31
- ---Dividends                                    57
- ---Exchange of A for B                          30, 33
- ---Fractional shares                            40
- ---Price
- -----Purchase of Class A                        34, 37
- -----Purchase of Class B                        38
- -----Set under SPTP                             44
- ---Purchase by corporation                      34
- ---Redemption of Class B stock                  37
- ---Stock Purchase and Transfer Plan             41
- ---Transfer                                     33
Stock Purchase and Transfer Plan
- ---In general                                   41
- ---Availability of treasury or unissued stock   45
- ---Eligibility                                  41
- ---Offers to buy                                47
- ---Payroll deductions                           45
- ---Priorities in purchase and sale of stock     43
- ---Sale of stock to corporation                 51
- ---Supplemental bids                            50
- ---Trustee                                      41
Stockholders
- ---Definition of                                57
- ---Eligibility
- -----Class A                                    28
- -----Class B                                    29
- -----Class C                                    31
- ---List of                                       3
- ---Voting rights                                 4
- ---Record date 7
Supplemental bids                                 50
Transfer on Death                                 32, 34
Treasurer                                         20, 26
Two percent nominations                            6
Vacancy
- ---Board                                        10
- ---Officer                                      21
Vice chairman of the Board                        20
Vice presidents                                   20, 24
Voting
- ----Manner of                                    5


<PAGE>160

                                                                   EXHIBIT 22



                          SUBSIDIARIES OF REGISTRANT


                                 STATE OF
                              INCORPORATION         RELATIONSHIP


BNA International Inc.           Delaware           100% owned by Registrant

BNA Washington Inc.              Delaware           100% owned by Registrant

The McArdle Printing Co., Inc.   Delaware           100% owned by Registrant

Pike & Fischer, Inc.             Delaware           100% owned by Registrant

Tax Management Inc.(a)           Delaware           100% owned by Registrant

BNA Holdings Inc.                Delaware           100% owned by Registrant

Institute of Management
  and Administration, Inc.       New York           100% owned by Registrant

Kennedy Information, Inc.        Delaware           100% owned by Registrant


(a)  Tax Management Inc. owns 100% of TM Holding Company Inc., a
     Delaware corporation.


<PAGE>161

                      SECURITIES AND EXCHANGE COMMISSION

                            Washington, D.C. 20549

                                   FORM 11-K

(Mark One)
(X)   ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934

For the fiscal year ended December 31, 2000
                                      OR
(  )  TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
      ACT OF 1934

For the transition period from ______________ to ______________________

Commission file number  2-28286, as exhibit 28.2

A.  Full title of the plan and the address of the plan, if different from that
    of the issuer named below:
    THE BNA 401(k) PLAN

B.  Name of issuer of the securities held pursuant to the plan and the address
    of its principal executive office:

     The Bureau of National Affairs, Inc.
     1231 25th Street, N. W.
     Washington, D. C.  20037

    Index to form 11-K:

    Financial Statements -
      Report of Independent Auditors                                   164
      Statements of Net Assets Available for Benefits
        December 31, 2000 and 1999                                     165
      Statements of Changes in Net Assets Available for Benefits-
        Years Ended December 31, 2000, 1999, and 1998                  166
      Notes to Financial Statements - December 31, 2000,
        1999, and 1998                                                 167
      Financial Statement Schedules                                    169


<PAGE>162


                                   SIGNATURE


            Pursuant to the requirements of the Securities Exchange Act of 1934,
            the BNA 401(k) Plan Administrative Committee has duly caused this
            annual report to be signed by the undersigned thereunto duly
            authorized.

            THE BNA 401(k) PLAN


            Date  March 29, 2001
                  --------------
            By    s/G.Christopher Cosby
                  ---------------------
                  G. Christopher Cosby
                  Chairman of the Administrative Committee





<PAGE>163



                               THE BNA 401(k) PLAN

                              Financial Statements

                           December 31, 2000 and 1999

                   (With Independent Auditors' Report Thereon)





<PAGE>164


                          Independent Auditors' Report


The Administrative Committee of
The BNA 401K Plan

We have audited the accompanying statements of net assets available for benefits
of The BNA 401K Plan (the Plan) as of December 31, 2000 and 1999, and the
related statements of changes in net assets available for benefits for each of
the years in the three-year period ended December 31, 2000. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, net assets available for benefits of the Plan as of
December 31, 2000 and 1999, and the changes in net assets available for benefits
for each of the years in the three-year period ended December 31, 2000 in
conformity with accounting principles generally accepted in the United States of
America.

Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental schedules
have been subjected to the auditing procedures applied in the audit of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.



                              s\ KPMG LLP
                              -----------
                               KPMG LLP



Washington, D.C.
February 23, 2001










<PAGE>165

                               THE BNA 401(k) PLAN

                 STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

                           DECEMBER 31, 2000 AND 1999

                                               2000             1999
                                         --------------    -------------
 Investments, at fair value (Note 2):
 BNA Common Stock                         $ 68,978,670     $ 59,251,218
 Mutual Funds                                5,871,235        3,954,433
 Participant notes receivable                  596,303          403,271
 Cash and cash equivalents                     702,961          523,799
                                         -------------     -------------
   Net assets available for benefits      $ 76,149,169     $ 64,132,721
                                         ==============    =============







                 See accompanying notes to financial statements.


<PAGE>166





                               THE BNA 401(k) PLAN

           STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS

                  YEARS ENDED DECEMBER 31, 2000, 1999, AND 1998

                                             2000          1999         1998
                                         -----------   -----------  -----------
Additions to net assets attributed to:
Investment income
  Dividends                              $ 2,368,573   $ 2,062,992  $ 1,731,842
  Interest                                    42,494        20,450       15,957
  Net appreciation (depreciation) in
    fair value of investments (Note 2):
    BNA Common Stock                       8,080,815     7,609,875    6,116,389
    Mutual Funds                            (517,706)      316,574          ---
                                         -----------   -----------   ----------
                                           9,974,176    10,009,891    7,864,188

Contributions by participants (Note 1)
  Salary Reduction                         5,751,202     5,784,213    4,100,333
  Rollovers                                  406,482       977,513          ---
                                         -----------   -----------  -----------
  Total additions                         16,131,860    16,771,617   11,964,521
                                         -----------   -----------  -----------

Deductions from net assets attributed to:
Distributions to participants (Note 1)     4,110,764     3,917,663    3,228,940
Administrative costs (Note 3)                  4,648           489          237
                                         -----------   -----------  -----------
 Total deductions                          4,115,412     3,918,152    3,229,177
                                         -----------   -----------  -----------
   Net increase                           12,016,448    12,853,465    8,735,344

Net assets available for benefits:
   Beginning of year                      64,132,721    51,279,256   42,543,912
                                         -----------   -----------  -----------
   End of year                           $76,149,169   $64,132,721  $51,279,256
                                         ===========   ===========  ===========



                 See accompanying notes to financial statements.

<PAGE>167


                               THE BNA 401(k) PLAN

                          NOTES TO FINANCIAL STATEMENTS

                  YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998



(1)   SUMMARY DESCRIPTION OF PLAN

      The following description of the BNA 401(k) Plan (the "Plan") provides
      only general information. Participants should refer to the Plan agreement
      for a more complete description of the Plan's provisions.

      The Plan is a contributory benefit plan sponsored by The Bureau of
      National Affairs, Inc. (the "Company"), for the benefit of employees of
      the Company and certain of its subsidiaries. The Plan was established in
      1982 with an effective date of January 1, 1983, and is subject to the
      provisions of the Employee Retirement Income Security Act of 1974
      ("ERISA"). The Plan is designed to provide benefits to participants or
      their beneficiaries, and encourages savings through investments in the
      Company's common stock and various other investment options.

      Employees are eligible to participate in the Plan upon completion of
      thirty days of service. To participate, eligible employees authorize the
      Company to contribute, on their behalf, a salary reduction amount that is
      up to 15% of their compensation for the Plan year, subject to certain
      ceiling limitations provided in the Plan, by tax laws, and by ERISA. The
      Plan also accepts rollover contributions from a previous employer for the
      benefit of new participants.

      Two trusts have been established by the Plan, one (the BNA Stock Trust)
      for holding Company stock, and one (the Mutual Fund Trust) for holding all
      other investments. The trusts maintain separate accounts for each
      participant in the Plan. These accounts are credited with the
      participants' contributions and Plan earnings, and may be charged with
      certain administrative expenses. Participants' accounts are fully vested.
      Distributions can be made in the event of retirement, death, qualifying
      hardships, or other severance of service. If, upon terminating employment,
      a participant's account value exceeds $5,000; the participant may opt to
      delay distribution until reaching age 65.

      An administrative committee appointed by the Company's Board of Directors
      acts as administrator of the Plan. An officer of the Company serves as the
      Trustee of the BNA stock trust. Charles Schwab, Inc., is the trustee of
      the Mutual Fund trust.

      The Plan maintains its records and prepares its financial statements on
      the accrual basis of accounting. The preparation of financial statements
      requires the use of estimates.


(2)   INVESTMENTS

      Upon enrollment in the Plan, a participant may direct contributions to any
      of ten investment options. Participants may change their investment
      options as desired. Investment options include the shares of the Company's
      common stock, a stable value fund, and eight mutual funds of registered
      investment companies that invest in various asset mixes of common stocks,
      debt securities, and/or money market securities.

                                                                  (Continued)

<PAGE>168
                               THE BNA 401(k) PLAN

                          NOTES TO FINANCIAL STATEMENTS

                  YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998


      Plan investments are stated at fair value and purchases and sales of
      investments are recorded on a trade-date basis. Shares of registered
      investment companies are valued at quoted market prices which represent
      the net asset value of shares held by the Plan at year-end. Participant
      notes receivable are valued at cost which approximates fair value. The
      fair value of the Company's common stock is set by the Company's Board of
      Directors semiannually for the Stock Purchase and Transfer Plan (SPTP).
      The Plan values its investments in the Company's stock at the price used
      for SPTP market trades. BNA Common Stock represented five percent or more
      of net assets available for Plan benefits as of December 31, 2000 and
      1999.

      The Company's Class A Common Stock, which is voting, may only be purchased
      by employees with a full year of service. Former employees and, in some
      cases, their beneficiaries may hold Class A Common Stock for up to three
      years. The Company's Class B Common Stock is issued to employees in
      exchange for Class A Common Stock upon their retirement. The Company's
      Class C Common Stock is issued in exchange for Class A Common Stock to
      employees of any subsidiary, upon disposition of the subsidiary. The Trust
      may convert Class A Common Stock for cash, or exchange it for Class B or
      Class C Common Stock, if necessary to comply with the above ownership
      restrictions.

      Participants may borrow from their fund accounts a minimum of $1,000 up to
      a maximum of $50,000. Loan terms range from one to five years. The loans
      are secured by the balance in the participant's account and bear interest
      at the Prime rate plus one percent, as determined at the loan's inception.
      Principal and interest is paid through regular payroll deductions. Loans
      and loan repayments are treated as Plan asset transfers, not as
      distributions and contributions.

(3)   ADMINISTRATIVE COSTS

      The Company pays most of the administrative costs of the Plan. Such costs
      are not reflected in the accompanying financial statements.


(4)   INCOME TAXES

      The Plan received its latest favorable determination letter from the
      Internal Revenue Service on January 19, 1996 indicating that the Plan, as
      designed, is qualified under the applicable requirements of the Internal
      Revenue Code and is therefore exempt from federal income taxes. It is the
      intent of the Plan's management that the Plan remain qualified and its
      underlying trust remain tax exempt under the applicable provisions of the
      Internal Revenue Code.

<PAGE>169


                               THE BNA 401(k) PLAN

           Line 27a -- Schedule of Assets Held for Investment Purposes
                                December 31, 2000

                                                                Fair
  $ or Shares      Identity and description of investment      Value
-----------------------------------------------------------  -----------


                   Cash and Cash Equivalents
*     $   673,741  Charles Schwab Stable Value Fund            $673,741
           29,220  Cash                                          29,220
                                                             -----------
                     Total Cash and Cash Equivalents           $702,961
                                                             -----------

*Shares 1,558,840  BNA Common Stock                          68,978,670
                                                             -----------

                   Mutual Funds
 Shares    17,593  Accessor Small Cap Portfolio                 351,157
           13,985  Deutsche International Fund                  353,967
           24,905  PIMCO Total Return Fund                      258,767
           21,856  T Rowe Price Personal Strategy-Balanced      347,953
           31,700  T Rowe Price Personal Strategy-Growth        600,724
            8,926  T Rowe Price Personal Strategy-Income        117,641
           27,224  Torray Fund                                1,083,224
           22,631  Vanguard Index Trust 500 Portfolio         2,757,802
                                                             -----------
                     Total Mutual Funds                       5,871,235
                                                             -----------
                   Participant Notes Receivable
                     (Interest rates from 8.75% to 10.5%)       596,303
                                                             -----------
                   Total Investments                         $76,149,169
                                                             ===========


* Party-in-Interest to the Plan


<PAGE>170



                               THE BNA 401(k) PLAN

                 Line 27d -- Schedule of Reportable Transactions
                        For Year Ended December 31, 2000

                                                           Current
                                                           Value of
 Identity                                                  Asset on
 Of Party  Description    Purchase   Selling    Cost of    Transact-     Net
 Involved  of Asset       Price      Price      Asset      ion  Date     Gain
--------------------------------------------------------------------------------

Bureau of  132,096 Shares $5,579,011    ---    $5,579,011  $5,579,011    ---
National   Common Stock
Affairs,
Inc.

Bureau of  92,518 Shares       --- $3,932,374  $1,994,714  $3,932,374 $1,937,660
National   Common Stock
Affairs,
Inc.













  Note: The items listed above represent transactions or a series of
        transactions, which are in excess of 5% of the market value of Plan
        assets, at January 1, 2000, ($3,206,636) and are reportable under
        Section 2520.103.6 of Chapter XXV of the Department of Labor Employee
        Retirement Income Security Act annual reporting requirements.