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                                                                     Exhibit 3.1

                                     FORM OF
                          CERTIFICATE OF INCORPORATION
                                       OF
                       PEGASUS COMMUNICATIONS CORPORATION

         FIRST: The name of the Corporation is Pegasus Communications
Corporation (the "Corporation").

         SECOND: The address of the Corporation's registered office in the State
of Delaware is 103 Springer Building, 3411 Silverside Road, Wilmington,
Delaware, 19810. The name of the Corporation's registered agent at such address
is Organization Services, Inc., in the County of New Castle.

         THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.

         FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is 500,000,000 shares, divided into 250,000,000 shares
of Class A Common Stock, par value $0.01 per share, 30,000,000 shares of Class B
Common Stock, par value $0.01 per share, 200,000,000 shares of Non-Voting Common
Stock, par value $0.01 per share, and 20,000,000 shares of Preferred Stock, par
value $0.01 per share.

         Effective at 11:59 p.m. on December 31, 2002, each share of Class A
Common Stock of the Corporation, par value $0.01 per share, issued and
outstanding immediately prior thereto (the "Class A Common Stock") shall
automatically and without action on the part of the holder thereof be combined
into one-tenth of one share of Class A Common Stock, and each share of Class B
Common Stock of the Corporation, par value $0.01 per share, issued and
outstanding immediately prior thereto (the "Class B Common Stock") shall
automatically and without action on the part of the holder thereof be combined
into one-tenth of one share of Class B Common Stock, subject in both cases to
treatment of fractional share interests as described below. Each holder of
record (a "Holder") of a certificate or certificates which immediately prior to
the Effective Time represented outstanding shares of Class A Common Stock or
Class B Common Stock (the "Old Certificates", whether one or more) shall be
entitled to receive, upon surrender for cancellation of such Old Certificates to
the transfer agent designated by the Corporation, a certificate or certificates
(the "New Certificates", whether one or more) representing the number of shares
of Class A Common Stock or Class B Common Stock into which the shares formerly
represented by such Old Certificates so surrendered are combined under the terms
hereof. From and after the Effective Time, and until surrendered as provided
above, each Old Certificate shall represent the shares of Class A Common Stock
or Class B Common Stock into which the shares evidenced thereby immediately
before the Effective Time are combined under the terms hereof. In the event that
the aggregate number of shares of Class A Common Stock or Class B Common Stock
to be evidenced by a New Certificate issuable to a Holder would include a
fraction, the Corporation will, in lieu of the issuance of a New Certificate
evidencing fractional shares of Class A Common Stock or Class B Common Stock,
increase all fractional shares of Class A Common Stock or Class B Common Stock
to be evidenced by such New Certificate to the next higher whole number of
shares of Class A Common Stock or Class B Common Stock; but if more than one Old
Certificate shall be surrendered for the account of the same Holder, the number
of full shares of Class A Common Stock or Class B Common Stock for which New
Certificates shall be issued to such Holder shall be computed on the basis of
the aggregate number of shares represented by the Old Certificates so
surrendered.

         No stockholder shall have any preemptive right to subscribe to or
purchase any issue of stock or other securities of the Corporation, or any
treasury stock or other treasury securities.

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         The powers, designations, preferences and relative, participating,
optional or other special rights of each class of stock or series thereof and
the qualifications, limitations or restrictions of such preferences and/or
rights are as follows:

         I. PREFERRED STOCK

         1. General. The Board of Directors shall have authority, by resolution,
to divide any or all of the shares of Preferred Stock into, and to authorize the
issue of, one or more series, and with respect to each such series to establish
and, prior to the issue thereof, to fix and determine:

            (a) a distinguishing designation for such series and the number of
shares comprised by such series, which number may (except as otherwise provided
by the Board of Directors in creating such series) be increased or decreased
from time to time (but not below the number of shares then outstanding) by
action of the Board of Directors;

            (b) the rate and times at which and the other conditions on which
dividends, if any, on the shares may be declared and paid or set aside for
payment; whether the shares shall be entitled to any participating or other
dividends in addition to dividends at the rate so determined and, if so, on what
terms; and whether dividends shall be cumulative and, if so, from what date or
dates and on what terms;

            (c) whether or not the shares shall have voting rights, in addition
to the voting rights provided by law and, if so, the terms and conditions
thereof;

            (d) whether the shares shall be convertible or exchangeable, at the
option of either the holder or the Corporation or upon the happening of a
specified event, and, if so, the terms and conditions of such conversion or
exchange, including provisions for any adjustment of the conversion or exchange
rate;

            (e) whether or not the shares shall be redeemable and, if so, the
terms and conditions, if any, upon which they may be redeemed, including the
date or dates or event or events upon or after which they shall be redeemable,
the cash, property or rights (including securities of the Corporation and of a
corporation or corporations other than the Corporation) for which they may be
redeemed, whether they shall be redeemable at the option of the holder or the
Corporation, or both, or upon the happening of a specified event or events and
the amount or rate of cash, property or rights (including securities of the
Corporation and of a corporation or corporations other than the Corporation) per
share payable in case of redemption, which amount may vary under different
conditions and at different redemption dates, including provisions for any
adjustment of the redemption prices or rates;

            (f) whether any shares shall be redeemed through sinking fund
payments and, if so, on what terms;

            (g) the amounts payable upon shares in the event of voluntary or
involuntary liquidation, dissolution, winding up or distribution of the assets
of the Corporation; and

            (h) the subject to the provisions of the next succeeding paragraph
of this Section 1 of Part I, any other relative powers, preferences and rights
and qualifications, limitations and restrictions of such series.


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         In the resolution establishing a new series of Preferred Stock, the
Board of Directors may provide for such additional rights, and with respect to
rights as to dividends, redemption and liquidation, such relative preferences
between shares of different series, as are not inconsistent with the rights of
any outstanding shares of previously established series, and not inconsistent
with any other provision of this Article FOURTH, but in the resolution creating
a new series of Preferred Stock the Board of Directors may provide that such
series shall have a preference over outstanding shares of any previously created
series of Preferred Stock with respect to rights as to dividends, redemption and
liquidation only to the extent that the resolutions of the Board of Directors
authorizing such previously created series expressly so permit.

         All shares of Preferred Stock of all series shall be identical except
as to the above mentioned rights and preferences which the Board of Directors is
authorized as aforesaid to fix and determine. Except to the extent that the
resolution of the Board of Directors establishing a particular series shall
otherwise provide: (i) in case the stated dividends are not paid in full, all
shares of Preferred Stock of all series shall participate ratably in the payment
of dividends, including accumulated but unpaid dividends, in accordance with the
sums which would be payable thereon if all dividends thereon were declared and
paid in full, and (ii) in case amounts payable upon liquidation of all series
are not paid in full, all shares of Preferred Stock of all series having a
liquidation preference on a parity with one another shall participate ratably in
any distribution of assets other than by way of dividends, in accordance with
the sums which would be payable on such distribution if all sums payable thereon
to holders of all shares of Preferred Stock were discharged in full.

         2. Dividends. When and as declared by the Board of Directors, in its
discretion or upon the occurrence of conditions specified in the resolution of
the Board of Directors authorizing a particular series of Preferred Stock
(including, without limitation, the sole specified condition that funds for the
payment of any dividend be legally available for the payment of dividends under
the laws of the State of Delaware as in effect at the time any periodic dividend
is declared or payable, in which event the Board of Directors, in considering
the payment of a dividend on such a series of Preferred Stock, shall not
exercise any element of discretion which it might otherwise exercise in
determining whether a dividend should be declared and paid), the holders of the
shares of Preferred Stock shall be entitled to receive out of any funds of the
Corporation lawfully available for dividends under the laws of the State of
Delaware, dividends at such fixed rate, if any (or, if participating, such
participating rate and such fixed rate, if any), per share for each particular
series, and no more, payable with such frequency and on such dates, and payable
in cash, in property or in rights (including securities of the Corporation or of
one or more corporations or other legal entities other than the Corporation), or
a combination thereof, in each case as the Board of Directors may determine in
fixing and determining the rights and preferences of such series as above
provided. Except to the extent that the resolution of the Board of Directors
establishing a particular series shall provide that dividends on shares of such
series shall not be cumulative or shall otherwise provide, such dividends on the
Preferred Stock shall be cumulative from the dates as follows:

            (a) in the case of shares issued prior to the record date for the
initial dividend on shares of the series of which such shares shall constitute a
part, then from the date of issuance of such shares;

            (b) in the case of shares issued during the period commencing
immediately after the record date for a dividend on shares of such series and
terminating at the close of the payment date for such dividend, then from such
dividend payment date; and

            (c) otherwise, from the dividend payment date next preceding the
date of issuance of such shares.



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         Accrued but undeclared or unpaid dividends on any shares of Preferred
Stock shall not bear interest.

         Further restrictions with respect to dividends and distributions on,
and acquisitions for value of, shares of Preferred Stock and shares of Class A
Common Stock, Class B Common Stock and Non-Voting Common Stock are set forth in
Section 6 of this Part I.

         3. Redemption of Preferred Stock. Except as otherwise provided in
Section 6 of this Part I, and except to the extent that the resolution of the
Board of Directors establishing a particular series shall provide that shares of
such series (a) shall not be redeemable by the Corporation or (b) shall be
redeemable by the Corporation only after a specified date or period or subject
to any other condition or conditions or (c) shall be redeemable in another
manner, the Corporation may redeem all or any of the outstanding shares of
Preferred Stock, or all or any shares of any series thereof, at any time or from
time to time, upon payment in respect of the shares so redeemed of the amount
payable upon redemption thereof fixed as aforesaid by the Board of Directors in
respect of the series of which such shares shall constitute a part, together in
each case, to the extent that such shares have cumulative dividend rights, with
an amount equal to all accumulated and unpaid dividends accrued thereon to the
date of redemption, whether or not such dividends shall have been earned or
declared (such price, including such amount equal to such accumulated and unpaid
dividends, and whether payable in cash, property or rights or a combination
thereof, as hereinafter provided, being hereinafter called the "redemption
price"). In fixing the redemption price for shares of Preferred Stock of a
particular series as aforesaid, the Board of Directors shall specify whether
such redemption price shall be paid in cash, in property or in rights (including
securities of the Corporation or of one or more legal entities other than the
Corporation), or a combination thereof. If the redemption price of shares of a
particular series may be paid in whole or in part in property or rights, the
resolution fixing the redemption price shall specify the method to be followed
in valuing the property or rights which may be used to make such payment.

         Any redemption by the Corporation shall be in such amount, at such
place and in such manner as the Board of Directors shall determine. Except to
the extent that the resolution of the Board of Directors authorizing a
particular series of Preferred Stock shall otherwise provide, in the case of a
redemption by the Corporation of less than all the outstanding shares of
Preferred Stock of any series, the particular shares to be redeemed shall be
selected by lot in such manner as the Board of Directors shall determine. Unless
otherwise waived in writing by the holder thereof, notice of every redemption
shall be mailed at least 30 days (or such shorter period as shall be specified
in the resolutions of the Board of Directors establishing the particular series)
prior to the date fixed for such redemption to the holders of record of the
shares so to be redeemed at their respective addresses as the same shall appear
on the books of the Corporation.

         From and after the date fixed in any such notice as the date of
redemption by the Corporation, unless default shall be made by the Corporation
in providing the redemption price at the time and place specified for the
payment thereof pursuant to said notice, all dividends on the shares of
Preferred Stock thereby called for redemption shall cease to accrue and all
rights of the holders thereof as stockholders in the Corporation, except the
right to receive the redemption price upon surrender of their share
certificates, shall cease and terminate, and such shares shall not be deemed
outstanding for any purpose.

         The Corporation may, however, give or irrevocably authorize the
Depositary hereinafter mentioned forthwith to give written notice (in the manner
as the notice of redemption is required to be given as aforesaid) to the holders
of all the shares of Preferred Stock selected for redemption by the Corporation
that the redemption price has been or will on a date specified be deposited with
a designated bank, bank and trust company, or private bank, which shall have an
office in Wilmington, Delaware, Philadelphia, Pennsylvania, or New York, New
York, and shall have a capital and surplus of not less than $25,000,000
(hereinafter called the "Depositary"), in trust for the account of the holders



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of such shares of Preferred Stock, and that such holders may receive the
redemption price of such shares of Preferred Stock from such Depositary on or
after the date of such deposit upon the surrender of their share certificates
without awaiting the date fixed for redemption. In such event, if the redemption
price shall have been so deposited by the Corporation with such Depositary, all
rights as stockholders in the Corporation of the holders of the shares so
called, except the right to receive the redemption price from such Depositary
upon such surrender, shall cease and terminate upon the date of such deposit or
the date of the giving of such notice or authority, whichever be later, and such
shares of Preferred Stock shall thereafter not be deemed to be outstanding for
any purpose; but if any shares so called for redemption shall at that time be
convertible, the conversion privilege may be exercised in accordance with its
terms, but not later than the close of business on the day prior to the date
fixed for redemption. Any portion of the redemption price so deposited which
represents the redemption price of convertible shares which are actually
converted shall promptly be repaid by the Depository to the Corporation. Any
remaining portion of the redemption price so deposited which shall remain
unclaimed by the holders of such shares of Preferred Stock at the end of two
years after the date so fixed for redemption shall be paid by such Depositary to
the Corporation, after which the holders of such shares of Preferred Stock shall
look only to the Corporation for payment of the redemption price thereof.

         Shares of Preferred Stock of any series redeemed, purchased or
otherwise acquired may be cancelled by the Board of Directors and thereupon
restored to the status of authorized but unissued shares of Preferred Stock
undesignated as to series.

         4. Liquidation or Dissolution. Except to the extent that the resolution
of the Board of Directors establishing a particular series, shall otherwise
provide with respect to shares of such series, on any voluntary or involuntary
liquidation or dissolution of the Corporation, before any payment or
distribution shall be made to the holders of any Common Stock, the holders of
the shares of Preferred Stock shall be entitled to be paid the amounts, if any,
respectively fixed therefor as aforesaid by the Board of Directors in respect of
each outstanding series of Preferred Stock, together in each case, to the extent
such shares have cumulative dividend rights, with an amount equal to all
accumulated and unpaid dividends thereon to the date of such payment, whether or
not such dividends shall have been earned or declared.

         After such payment shall have been made in full to the holders of
shares of Preferred Stock, they shall be entitled to no further payment or
distribution, and the holders of Class A Common Stock, Class B Common Stock and
Non-Voting Common Stock shall be entitled to share ratably in all remaining
assets of the Corporation.

         A consolidation with or merger with or into any other corporation or
corporations shall not be deemed a liquidation or dissolution of the Corporation
within the meaning of this Section 4 of Part I.

         5. Voting Rights. Except to the extent that the resolution of the Board
of Directors establishing a particular series shall otherwise provide, and
except as otherwise provided herein or by law, at each meeting of stockholders
of the Corporation, each holder of shares of Preferred Stock shall be entitled
to one vote for each such share standing in his or her name on the books of the
Corporation on each matter to come before the meeting.

         The resolution of the Board of Directors establishing a particular
series may confer on holders of the shares of such series, voting separately or
with holders of shares of Preferred Stock of other series, the right to elect a
member or members of the Board of Directors at any time or from time to time.

         6. Restrictions on Dividends and Purchase of Shares of Preferred, Class
A Common Stock, Class B Common Stock and Non-Voting Common Stock.


<PAGE>

            (a) So long as any shares of Preferred Stock shall be outstanding,
no dividend (other than dividends payable in shares of Class A Common Stock,
Class B Common Stock or Non-Voting Common Stock) shall be paid or distribution
shall be made on the shares of Class A Common Stock, Class B Common Stock or
Non-Voting Common Stock, nor shall any shares of Class A Common Stock, Class B
Common Stock or Non-Voting Common Stock be purchased, retired or otherwise
acquired by the Corporation, unless in each such case:

                (1) all accumulated and unpaid dividends, if any, on all
outstanding shares of Preferred Stock for all past dividend periods shall have
been paid and full dividends, if any, on all shares of Preferred Stock for the
then current dividend period declared and a sum sufficient for the payment
thereof set apart; and

                (2) the Corporation shall not be in arrears in respect of any
sinking fund obligation or obligations of a similar nature in respect of any
series of Preferred Stock.

            (b) The resolutions of the Board of Directors establishing a
particular series of Preferred Stock may provide that the payment of any
dividend or the making of any distribution on, or the redemption, purchase or
other acquisition (for sinking fund purposes or otherwise) by the Corporation
of, shares of that series or any other series of Preferred Stock (but, in the
case of any other series established before the series in question, only if the
resolution of the Board of Directors establishing such other series so permits)
shall be conditioned on:

                (1) the payment of all accumulated and unpaid dividends, if any,
on all outstanding shares of Preferred Stock of one or more specified series and
the declaration of full dividends, if any, on all shares of Preferred Stock of
one or more specified series for the then current dividend period and the
setting apart of a sum sufficient for the payments thereof;

                (2) the absence of any arrearage in respect of any sinking fund
obligation or obligations of a similar mature in respect of one or more
specified series of Preferred Stock; or

                (3) any other condition specified in such resolution.

         7. Certain Matters Requiring Consent of Holders of Two-Thirds of
Preferred Stock. So long as any shares of Preferred Stock shall be outstanding,
and subject to the provisions of the last sentence of this Section 7 of Part I,
the Corporation shall not, without the consent of the holders of at least
two-thirds of the shares of Preferred Stock at the time outstanding, voting as a
single class and not separately by series, given in person or by proxy, either
in writing or at a meeting called for the purpose:

            (a) adopt or effect any amendment to the Corporation's Certificate
of Incorporation, including any amendment to the terms of any previously created
series of Preferred Stock, other than an amendment of the nature described under
Section 8 of this Part I, which would adversely affect the powers, preferences
or special rights of the Preferred Stock; but if any such amendment shall
adversely affect the powers, preferences or special rights of one or more, but
not all, of the several series of Preferred Stock at the time outstanding, the
consent of the holders of at least two-thirds of the shares then outstanding of
those series adversely affected, voting together and not by series, shall be
required in lieu of the consent of the holders of two-thirds of the Preferred
Stock; or

            (b) authorize any new class of stock which is senior to the
Preferred Stock with respect to the payment of dividends or distributions on
liquidation or dissolution.

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         Notwithstanding the foregoing provisions, the resolution of the Board
of Directors creating a particular series may provide that the consent of the
holders of the outstanding shares of such series shall not be required with
respect to some or all of the foregoing matters and, to the extent so provided,
such shares shall not be deemed outstanding for the purpose of applying the
provisions of this Section 7 of Part I.

         8. Certain Matters Requiring Consent of Holders of Majority of All
Outstanding Shares. The Corporation may increase the authorized number of shares
of Preferred Stock, or authorize any new class of stock which is on a parity
with the Preferred Stock with respect to the payment of dividends or
distributions on liquidation or dissolution, by obtaining the affirmative vote,
given in person or by proxy, of the holders of at least a majority of the then
outstanding Class A Common Stock, Class B Common Stock and Preferred Stock,
voting together and not by class.

         II. CLASS A COMMON STOCK, CLASS B COMMON STOCK AND NON-VOTING COMMON
STOCK

         1. Dividends.

            (a) Subject to the rights of the holders of Preferred Stock, and
subject to any other provisions of this Certificate of Incorporation, as amended
from time to time, the holders of Class A Common Stock, the holders of Class B
Common Stock and the holders of Non-Voting Common Stock shall be entitled to
receive such dividends and other distributions in cash or property of the
Corporation, or, subject to subsection (b), securities or obligations of the
Corporation, as may be declared thereon by the Board of Directors from time to
time out of assets or funds of the Corporation legally available therefor; but
except as provided in subsection (b), a dividend may be declared and paid on
shares of either the Class A Common Stock, the Class B Common Stock or the
Non-Voting Common Stock only if an identical dividend shall be simultaneously
declared and paid on each share of each other class.

            (b) In the case of dividends or other distributions payable on the
Class A Common Stock, the Class B Common Stock or the Non-Voting Common Stock,
including distributions pursuant to stock splits or divisions of the Class A
Common Stock, the Class B Common Stock or the Non-Voting Common Stock, (1) only
Class A Common Stock shall be paid or distributed on the Class A Common Stock,
only Class B Common Stock shall be paid or distributed on the Class B Common
Stock, and only Non-Voting Common Stock shall be paid or distributed on the
Non-Voting Common Stock, and (2) any such payment or distribution on any class
may be made only if parallel action is simultaneously taken in respect of each
other class, so that the number of shares of each class outstanding immediately
following such stock dividend, stock split or stock division shall bear the same
relationship to each other as the number of shares of each class outstanding
immediately before such stock dividend, stock split or stock division.

            (c) In the case of any decrease in the number of outstanding shares
of the Class A Common Stock, the Class B Common Stock or the Non-Voting Common
Stock resulting from a combination or consolidation of shares or other capital
reclassification, parallel action shall be simultaneously taken in respect of
each other class so that the number of shares of each class outstanding
immediately following such combination, consolidation or capital
reclassification shall bear the same relationship to each other as the number of
shares of each class outstanding immediately before such combination,
consolidation or capital reclassification.


<PAGE>

         2. Voting.

            (a) At every meeting of stockholders and in respect of each action
by consent in writing of the holders, every holder of Class A Common Stock shall
be entitled to one (1) vote in person or by proxy for each share of Class A
Common Stock standing in his or her name on the transfer books of the
Corporation, and every holder of Class B Common Stock shall be entitled to ten
(10) votes in person or by proxy for each share of Class B Common Stock standing
in his or her name on the transfer books of the Corporation.

            (b) Except as may be otherwise required by law or by Section 2(c) of
this Part II, the holders of Class A Common Stock and Class B Common Stock shall
vote together as a single class, and not separately by designated classes, on
all matters with respect to which a vote of the stockholders of the Corporation
is required or permitted under applicable law, including, without limitation,
any amendment of this Certificate of Incorporation (whether any such amendment
increases or decreases the number of authorized shares of Class A Common Stock,
or otherwise), subject to any voting rights that may be granted to holders of
Preferred Stock.

            (c) Notwithstanding Section 2(b) of this Part II, but subject to any
voting rights that may be granted to holders of Preferred Stock, the following
matters may be authorized only by the vote of the holders of a majority of the
outstanding shares of the Class A Common Stock and a majority of the outstanding
shares of the Class B Common Stock, voting as separate classes:

                (1) the authorization or issuance (other than issuances that
comply with Section 1(b)(2) of this Part II) of additional shares of Class B
Common Stock after the closing date of the Corporation's initial public offering
of shares of Class A Common Stock registered under the Securities Act of 1933;
and

                (2) any amendment to this certificate of incorporation that has
any of the following effects:

                    (i) any decrease in the voting rights per share of the Class
A Common Stock or any increase in the voting rights per share of the Class B
Common Stock;

                    (ii) any increase in the number of shares of Class A Common
Stock into which shares of Class B Common Stock are convertible, as provided
herein;

                    (iii) any relaxation on the restrictions on transfer of the
Class B Common Stock, as provided herein; or

                    (iv) any change in the powers, preferences or special rights
of the Class A Common Stock or the Class B Common Stock adversely affecting the
holders of the Class A Common Stock.

            (d) Except as may otherwise be required by law, the holders of the
Non-Voting Common Stock shall have no voting rights, including, without
limitation, on any amendment to this Certificate of Incorporation (whether any
such amendment increases or decreases the number of authorized shares of
Non-Voting Common Stock, or otherwise). In any case in which the holders of the
Non-Voting Common Stock have voting rights required by law, including, without
limitation, on any amendment of this Certificate of Incorporation, (1) every
holder of Non-Voting Common Stock shall be entitled to one (1) vote in person or
by proxy for each share of Non-Voting Common Stock standing in his or her name
on the transfer books of the Corporation, and (2) the holders of the Non-Voting
Common Stock shall vote together with the holders of the Class A Common Stock
and the Class B Common Stock and not as a separate class unless otherwise
required by law.

<PAGE>

         3. Transfer.

            (a) No person holding shares of Class B Common Stock of record
(hereinafter called "Class B Holder") may transfer, and the Corporation shall
not register the transfer of, such shares of Class B Common Stock, whether by
sale, assignment, gift, bequest, appointment, operation of law or otherwise,
except to a Permitted Transferee. "Permitted Transferee" means:

                (1) Marshall W. Pagon or any immediate family member of his; or

                (2) any trust (including a voting trust), corporation,
partnership or other entity, more than 50% of the voting equity interests of
which are owned directly or indirectly by (or, in the case of a trust not having
voting equity interests, which is more than 50% for the benefit of) and which is
controlled by, one or more persons referred to in Section 3(a)(1) of this Part
II; or

                (3) the estate of any person referred to in Section 3(a)(1) of
this Part II until such time as the property of such estate is distributed in
accordance with his will or applicable law.

         For purposes of the definition of "Permitted Transferee": (1)
"immediate family member" means (i) the spouse or any parent of Marshall W.
Pagon, (ii) any lineal descendant of a parent of Marshall W. Pagon, and (iii)
the spouse of any such lineal descendant (parentage and descent in each case to
include adoptive and step relationships); and (2) control of a trust,
corporation or other entity means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of the
trust, corporation or other entity, whether through the ownership of voting
securities, by agreement or otherwise.

            (b) Notwithstanding anything to the contrary set forth herein, any
Class B Holder may pledge such Holder's shares of Class B Common Stock to a
pledgee pursuant to a bona fide pledge of such shares as collateral security for
indebtedness due to the pledgee, provided that such shares shall not be
transferred to or registered in the name of the pledgee and shall remain subject
to the provisions of this Section 3. In the event of foreclosure or other
similar action by the pledgee, such pledged shares of Class B Common Stock may
be transferred only to a Permitted Transferee or may be converted into shares of
Class A Common Stock, as the pledgee may elect.

            (c) The following events shall result in the conversion of the
applicable shares of Class B Common Stock into shares of Class A Common Stock:

                (1) a Class B Holder shall transfer Class B Common Stock to a
person or entity not a Permitted Transferee;

                (2) a Class B Holder shall transfer to any person or entity not
a Permitted Transferee, including, without limitation, a pledgee, the right to
vote any Class B Common Stock, whether by agreement, voting trust or otherwise;
or

                (3) a trust, corporation, partnership or other entity holding
Class B Common Stock ceases to meet the description contained in Section 3(a)(2)
of this Part II.

         If any of the foregoing events shall occur, all shares of Class B
Common Stock subject to such transfer or then held by such trust, corporation,
partnership or other entity, whichever is applicable, shall, without further act
on anyone's part, be converted into shares of Class A Common Stock effective
upon the date such event occurs, and stock certificates formerly representing
such shares of Class B Common Stock shall thereupon and thereafter be deemed to
represent the like number of shares of Class A Common Stock. The Corporation


<PAGE>


may, in connection with preparing a list of stockholders entitled to vote at any
meeting of stockholders, or as a condition to the transfer or the registration
of shares of Class B Common Stock on the Corporation's books, require the
furnishing of such affidavits, documents or other proof as it deems necessary to
establish that any person is a Permitted Transferee or to ascertain that none of
the events described in this subsection (c) has occurred.

            (d) Shares of Class B Common Stock shall be registered in the names
of a beneficial owner thereof and not in "street" or "nominee" name. For this
purpose, a "beneficial owner" of any shares of Class B Common Stock means a
person or entity that possesses the power, either singly or jointly, to direct
the voting or disposition of such shares. The Corporation shall note on the
certificates for shares of Class B Common Stock the existence of the
restrictions on transfer imposed by this Section 3.

         4. Conversion Rights.

            (a) Subject to the terms and conditions of this Section 4, each
share of Class B Common Stock shall be convertible at any time or from time to
time, at the option of the respective holder thereof, at the office of any
transfer agent for Class B Common Stock, and at such other place or places, if
any, as the Board of Directors may designate, or, if the Board of Directors
shall fail so to designate, at the principal office of the Corporation, into one
(1) fully paid and nonassessable share of Class A Common Stock. Upon conversion,
the Corporation shall make no payment or adjustment on account of dividends
accrued or in arrears on Class B Common Stock surrendered for conversion or on
account of any dividends on the Class A Common Stock issuable on such
conversion. Before any holder of Class B Common Stock shall be entitled to
convert the same into Class A Common Stock, he shall surrender the certificate
or certificates for such Class B Common Stock at the office of said transfer
agent (or other place as provided above), which certificate or certificates, if
the Corporation shall so request, shall be duly endorsed to the Corporation in
blank or be accompanied by proper instruments of transfer to the Corporation in
blank (such endorsements or instruments of transfer to be in form satisfactory
to the Corporation), and shall give written notice to the Corporation at said
office that he elects so to convert said Class B Common Stock in accordance with
the terms of this Section 4 and shall state in writing therein the name or names
in which he wishes the certificate or certificates for Class A Common Stock to
be issued. The Corporation will as soon as practicable after such deposit of a
certificate or certificates for Class B Common Stock, accompanied by the written
notice and the statement above prescribed, issue and deliver at the office of
said transfer agent (or other place as provided above) to the person for whose
account such Class B Common Stock was so surrendered, or to his nominee or
nominees, a certificate or certificates for the number of full shares of Class A
Common Stock to which he or she shall be entitled as aforesaid. Subject to the
provisions of subsection (c) of this Section 4, such conversion shall be deemed
to have been made as of the date of such surrender of the Class B Common Stock
to be converted; and the person or persons entitled to receive the Class A
Common Stock issuable upon conversion of such Class B Common Stock shall be
treated for all purposes as the record holder of holder of such Class A Common
Stock on such date.

            (b) The issuance of certificates for shares of Class A Common Stock
upon conversion of shares of Class B Common Stock shall be made without charge
for any stamp or other similar tax in respect of such issuance. However, if any
such certificate is to be issued in a name other than that of the holder of the
share or shares of Class B Common Stock converted, the person or persons
requesting the issuance thereof shall pay to the Corporation the amount of any
tax which may be payable in respect of any transfer involved in such issuance or
shall establish to the satisfaction of the Corporation that such tax has been
paid.

            (c) The Corporation shall not be required to convert Class B Common
Stock, and no surrender of Class B Common Stock shall be effective for that
purpose, while the stock transfer books of Class A Common Stock or Class B

<PAGE>


Common Stock are closed for any purpose; but the surrender of Class B Common
Stock for conversion during any period while such books are so closed shall
become effective for conversion immediately upon the reopening of such books, as
if the conversion had been made on the date such Class B Common Stock was
surrendered.

            (d) The Corporation covenants that it will at all times reserve and
keep available, solely for the purpose of issuance upon conversion of the
outstanding shares of Class B Common Stock, such number of shares of Class A
Common Stock as shall be issuable upon the conversion of all such outstanding
shares, but nothing contained herein shall be construed to preclude the
Corporation from satisfying its obligations in respect of the conversion of the
outstanding shares of Class B Common Stock by delivery of shares of Class A
Common Stock held in the treasury of the Corporation. The Corporation covenants
that if any shares of Class A Common Stock, required to be reserved for purposes
of conversion hereunder, require registration with or approval of any
governmental authority under any federal or state law before such shares of
Class A Common Stock may be issued upon conversion, the Corporation will use its
best efforts to cause such shares to be duly registered or approved, as the case
may be. The Corporation will endeavor to list the shares of Class A Common Stock
required to be delivered upon conversion prior to such delivery upon each
national securities exchange, if any, upon which the outstanding Class A Common
Stock is listed at the time of such delivery. The Corporation covenants that all
shares of Class A Common Stock which shall be issued upon conversion of the
shares of Class B Common Stock, will, upon issuance, be fully paid and
nonassessable and not entitled to an preemptive rights.

            (e) Shares of Class A Common Stock, including shares originally
issued upon conversion of Class B Common Stock, shall not be convertible into
Class B Common Stock or any other class of stock.

         5. Subscription and Related Rights; Mergers and Other Transactions. In
the event that rights to subscribe to Class A Common Stock, options or warrants
to purchase Class A Common Stock, or any securities convertible into Class A
Common Stock are offered or granted to all holders of Class A Common Stock,
Class B Common Stock or Non-Voting Common Stock, parallel action shall be
simultaneously taken in respect of each other class, so that the number of
shares of each class that would be outstanding immediately after the exercise in
full of such rights, options or warrants or the conversion of such convertible
securities shall bear the same relationship to each other as the number of
shares of each class outstanding immediately before the offer or grant of such
rights, options, warrants or convertible securities. Except as provided in the
following sentence, if there should be any merger, consolidation, purchase or
acquisition of property or stock, separation, reorganization or liquidation of
the Corporation, the holders of Class A Common Stock, the holders of Class B
Common Stock and the holders of Non-Voting Common Stock shall receive the shares
of stock, securities or other assets as would be issuable or payable upon such
merger, consolidation, purchase or acquisition of such property or stock,
separation, reorganization or liquidation as if the Class A Common Stock, the
Class B Common Stock and the Non-Voting Common Stock were one and the same class
of stock. Notwithstanding the foregoing, in the event of a merger or
consolidation which, by its terms, contemplates that the holders of Class A
Common Stock, Class B Common Stock and Non-Voting Common Stock will receive, in
exchange for their Class A Common Stock, Class B Common Stock and Non-Voting
Common Stock, capital stock of the surviving corporation, the holders of Class A
Common Stock, Class B Common Stock and Non-Voting Common Stock shall be entitled
(to the extent provided for in the terms of such merger or consolidation) to
receive, in exchange for their Class A Common Stock, Class B Common Stock and
Non-Voting Common Stock, respectively, shares of stock of the surviving
corporation having substantially similar relative designations, preferences,
qualification, privileges, limitations, restrictions (including, without
limitation, restrictions on transferability) in the case of Class B Common
Stock) and rights as the relative designations, preferences, qualifications,
privileges, limitations, restrictions and rights of the Class A Common Stock,
Class B Common Stock and Non-Voting Common Stock.

<PAGE>

         6. Liquidation Rights. In the event of any dissolution, liquidation or
winding up of the affairs of the Corporation, whether voluntary or involuntary,
after payment or provision for payment of the debts and other liabilities of the
Corporation, and after payment in full of amounts, if any, required to be paid
to the holders of shares of stock having preferential liquidation rights,
including without limitation the holders of Preferred Stock, the remaining
assets of the Corporation shall be divided among and distributed ratably to the
holders of Class A Common Stock, Class B Common Stock (including those persons
who shall become holders of Class A Common Stock by reason of converting their
shares of Class B Common Stock) and Non-Voting Common Stock, with no distinction
between the Class A Common Stock, the Class B Common Stock and the Non-Voting
Common Stock. A merger or consolidation of the Corporation with or into any
corporation or other entity or a sale of all or any part of the assets of the
Corporation (which shall not in fact result in the liquidation of the
Corporation and the distribution of its assets to stockholders) shall not be
deemed to be a dissolution, liquidation or winding up of the affairs of the
Corporation within the meaning of this Section 6.

         7. Other Rights. Except as expressly set forth in this Article FOURTH,
each share of Class A Common Stock and Non-Voting Common Stock shall entitle the
holder thereof to rights that are in all respects identical to the rights of a
holder of Class B Common Stock.

         FIFTH: In furtherance and not in limitation of the general powers
conferred by the laws of the State of Delaware, the Board of Directors is
expressly authorized to make, alter or repeal the bylaws of the Corporation,
except as specifically otherwise provided therein.

         SIXTH: A director of the Corporation shall have no personal liability
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director except to the extent that Section 102(b)(7) (or any
successor provision) of the Delaware General Corporation Law, as amended from
time to time, expressly provides that the liability of a director may not be
eliminated or limited. No amendment or repeal of this Article SIXTH shall apply
to or affect the liability or alleged liability of any director of the
Corporation for or in respect of any act or omission of such director occurring
before such amendment or repeal.