<PAGE>

                                                                 Exhibit 3(a)(3)

                              UTILICORP UNITD INC.
                           CERTIFICATE OF DESIGNATION
                                     OF THE
              $1.775 SERIES CUMULATIVE CONVERTIBLE PREFERENCE STOCK

                                WITHOUT PAR VALUE

                     Pursuant to Section 151 of the General
                    Corporation Law of the State of Delaware

                  The following resolutions were duly adopted by the Board of
Directors of UtiliCorp United Inc., a Delaware corporation (the "CORPORATION"),
pursuant to the provisions of Section 151 of the General Corporation Law of the
State of Delaware (the "GCL"), on December 27, 1988, by unanimous written
consent of the Board of Directors of the Corporation (the "BOARD OF DIRECTORS"),
without a meeting, pursuant to Section 141(f) of the GCL:

                  WHEREAS, the Board of Directors is authorized, within the
limitations and restrictions stated in the Certificate of Incorporation of the
Corporation, to fix by resolution or resolutions the designation of each series
of the preference stock, without par value, of the Corporation and the powers,
preferences and relative participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including, without limiting
the generality of the foregoing, such provisions as may be desired concerning
voting, redemption, dividends, dissolution or the distribution of assets,
conversion or exchange, and such other subjects or matters as may be fixed by
resolution or resolutions of the Board of Directors under the General
Corporation Law of Delaware; and

                  WHEREAS, it is the desire of the Board of Directors, pursuant
to its authority as aforesaid, to authorize and fix the terms of a series of
such preference stock and the number of shares constituting such series:

                  NOW, THEREFORE, BE IT RESOLVED:

                  1. DESIGNATION. The designation of this series of four million
one hundred thousand (4,100,000) shares of preference stock created by this
resolution is the "$1.775 Series Cumulative Convertible Preference Stock"
(hereinafter, this "SERIES").

                  2. DIVIDENDS. The holders of this Series shall be entitled to
receive an annual cash dividend of $1.775 per share, and no more, when and as
declared by the Board of Directors out of funds legally available therefor,
payable quarterly on the first day of each March, June, September and December,
commencing on the first such date which is more than fifteen calendar days after
the date of original issuance of the first share of this Series, to holders of
record on the respective dates fixed for that purpose by the Board of Directors
not less than ten nor more than sixty days in advance of payment of each
dividend.


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                                       2


                  Dividends on shares of this Series shall be cumulative from
and after the date of original issuance thereof, whether or not on any scheduled
dividend payment date there shall be funds legally available for the payment of
dividends.

                  So long as any shares of this Series are outstanding, the
Corporation shall not pay or declare or set aside for payment any dividend
payable in cash, evidences of indebtedness, assets or property other than cash,
or capital stock of the Corporation ranking equally with or junior to this
Series in respect of dividends, or make any other distribution on any preferred
stock or common stock or any other class or series of stock of the Corporation
ranking equally with or junior to this Series in respect of dividends, unless
the Corporation has paid, or at the same time pays or provides for the payment
of, all accrued and unpaid dividends on this Series; PROVIDED, HOWEVER, that the
Corporation may pay less than all accrued and unpaid dividends on any class or
series of stock ranking equally with this Series in respect of dividends if such
payment is made ratably in accordance with the respective accrued and unpaid
dividends on this Series and such class or series of stock ranking equally with
this Series in respect of dividends.

                  Subject to Section 10 hereof, this Series shall not rank
junior as to dividends to any other class or series of stock of the Corporation.
This Series shall rank equally as to dividends with all shares of the
Corporation" $2.4375 Series preference stock, without par value (the "$2.4375
SERIES PREFERENCE STOCK"), its $2.6125 Series preference stock, without par
value (the "$2.6125 SERIES PREFERENCE STOCK"), and any other class or series of
stock of the Corporation which is by its terms expressly made equal as to
dividends to this Series. This Series shall rank senior as to dividends to the
Corporation's common stock, par value $1 per share (the "COMMON STOCK"), its
Class A common stock, par value $1 per share (the "CLASS A COMMON STOCK"), and
any other class or series of stock of the Corporation which is not by its terms
expressly made equal as to dividends to this Series.

                  The amount of dividends "accrued" on any share of stock of
this Series at any scheduled dividend payment date shall be deemed to be the
amount of any unpaid dividends accumulated thereon to and including such
dividend payment date, whether or not earned or declared, and the amount of
dividends "accrued" on any share of stock of this Series at any date other than
a scheduled dividend payment date shall be calculated as the amount of any
unpaid dividends accumulated thereon to and including the last preceding
dividend payment date, whether or not earned or declared, plus an amount
calculated on the basis of the annual dividend rate of $1.775 for the period
after such last preceding dividend payment date to and including the date as of
which the calculation is made, based on the actual number of days elapsed.

                  3. LIQUIDATION RIGHTS. In the event of the voluntary or
involuntary liquidation, dissolution or winding up of the Corporation
("LIQUIDATION"), the holders of this Series shall be entitled to have paid to
them out of the assets of the Corporation, before any distribution is made to or
set apart for the holders of any shares of Common Stick or Class A Common Stock
of the Corporation, or of any other class or series of stock of the Corporation
ranking junior to this Series in respect of distribution of assets upon
Liquidation, an amount equal to $20.00 per share, plus an amount in cash equal
to all dividends (whether or not earned or declared) on such shares accrued and
unpaid thereon to the date of final distribution. After payment in cash to
holders of


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                                       3


this Series of the full preferential amount as aforesaid, holders of this Series
shall, as such, have no right or claim to any of the remaining assets of the
Corporation.

                  If upon any Liquidation the assets of the Corporation or
proceeds thereof distributable among the holders of shares of this Series and of
any class or series of stock of the Corporation ranking equally with this Series
as to distribution of assets upon Liquidation shall be insufficient to pay in
full the preferential amounts payable to such holders, then such assets or the
proceeds thereof shall be distributed among such holders ratably in accordance
with the respective amounts that would be payable on such shares if all amounts
payable thereon were paid in full.

                  Subject to Section 10 hereof, this Series shall not rank
junior as to distribution of assets upon Liquidation to any other class or
series of stock of the Corporation. This Series shall rank equally as to
distribution of assets upon Liquidation with all shares of $2.4375 Series
Preference Stock, $2.6125 Series Preference Stock and any other class or series
of stock of the Corporation which by its terms is expressly made equal as to
distribution of assets upon Liquidation to this Series. This Series shall rank
senior as to distribution of assets upon Liquidation to all shares of Common
Stock, Class A Common Stock and any other class or series of stock of the
Corporation which is not by its terms expressly made equal as to distribution of
assets upon Liquidation to this Series.

                  For purposes of this Section 3, neither (i) the acquisition by
any person of more than 50% of the Common Stock, nor (ii) the consolidation or
merger of the Corporation with or into any other corporation or the
consolidation or merger of any other corporation with or into the Corporation,
nor (iii) the sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
and assets of the Corporation, shall be deemed to be a Liquidation.

                  4. REDEMPTION AT OPTION OF CORPORATION; SINKING FUND. Except
as provided in paragraph (b) of this Section 4 and in Section 6 hereof, the
shares of this Series shall not be redeemable before the fifth anniversary of
the date of original issuance of the first share of this Series and thereafter
will be redeemable at the option of the Corporation, by vote of the Board of
Directors, in whole or in part at any time and from time to time at (x) the
redemption price per share set forth below for the date fixed for redemption
(for purposes of this Section 4 and Section 5 hereof, such date, together with
any date upon which any redemptions are made pursuant to the sinking fund
provided for in paragraph (b) of this Section 4, is hereinafter called the
"REDEMPTION DATE") for such shares:

    Redemption Date
 During 12-month Period
 Beginning on the Fifth
Anniversary of Original                                               Redemption


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                                       4


<TABLE>
<CAPTION>

  Issuance of the Shares                                                             Price
  ----------------------                                                             -----

<S>                                                                                  <C>
         1994                                                                        $21.60
         1995                                                                        $21.03
         1996                                                                        $20.53
         1997 (and thereafter)                                                       $20.00

</TABLE>

plus (y) in each case a sum equal to all dividends on such shares accrued and
unpaid thereon to the Redemption Date.

                  (a) On the fifth anniversary of the date of original issuance
of the first share of this Series and on each anniversary thereafter so long as
any shares of this Series remain outstanding, the Corporation will redeem
pursuant to a mandatory sinking fund at a price of $20.00 per share plus a sum
equal to all dividends accrued and unpaid thereon to the Redemption Date a
number of shares of this Series equal to 1/6 of the original number of shares of
this Series (adjusted to give effect to any stock splits of or stock dividends
on the shares of this Series) or, if fewer than 1/6 of such number of shares are
then outstanding, the number of shares then outstanding. The Corporation may
apply to its mandatory sinking fund obligation any shares of this Series owned
by it and any shares of this Series previously redeemed by it (otherwise than
through the operation of the mandatory sinking fund) which have not been
previously credited against a mandatory sinking fund obligation. The
Corporation's obligation to make redemptions pursuant to the mandatory sinking
fund shall be cumulative.

                  5. PROCEDURE FOR REDEMPTION PURSUANT TO SECTION 4.

                  (a) In the event that fewer than all of the outstanding shares
of this Series are to be redeemed at any one time pursuant to Section 4 hereof,
the number of shares to be redeemed shall be determined by the Board of
Directors and the shares to be redeemed shall be selected pro rata or by lot as
may be determined by the Board of Directors or by such other method as may be
approved by the Board of Directors to conform to any rule or regulation of the
New York Stock Exchange or any other stock exchange upon which the shares of
this Series may at the time be listed.

                  (i) The Corporation shall cause a notice to be mailed,
first-class postage prepaid, at least 30 days, but not more than 90 days, prior
to the Redemption Date, to each holder of record of shares of this Series to
redeemed; if less than all of the shares owned by such holder are then to be
redeemed, the notice shall also specify the number of shares thereof which are
to be redeemed and the number of certificates representing such shares. Such
notice shall be mailed to such record holders at their respective addresses as
they shall appear upon the books of the Corporation and shall set forth the
Redemption Date, the redemption price per share and the place or places for
surrender of certificates for shares to be redeemed.

                  (ii)Any notice which is mailed by the Corporation as provided
in this Section 5 shall be conclusively presumed to have been duly given,
whether or not the shareholder receives such notice; and failure to give such
notice by m ail, or any defect in such notice, to the holders


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                                       5


of any shares designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of this Series. On or after
the Redemption Date specified in such notice, each holder of the shares called
for redemption shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the redemption price. In case fewer than all of
the shares represented by any certificate are redeemed, a new certificate
representing the unredeemed shares shall be issued to the surrendering holder at
the expense of the Corporation. If on the Redemption Date specified in such
notice there shall have been deposited with a bank or trust company (the
"DEPOSITARY") designed by the Board of Directors and located in the City of
Kansas City, Missouri, the City of Chicago, Illinois, or the City of New York,
New York, having a combined capital and surplus of at least $50,000,000, in
trust for the account of the holders of the shares of this Series so called for
redemption, funds in an amount equal to the aggregate amount payable upon
redemption of the shares to be redeemed, together with irrevocable written
instructions and authority to the Depositary to redeem such shares on and after
such Redemption Date immediately upon the endorsement and surrender of the
certificates therefor, then, notwithstanding that the certificates evidencing
any such shares shall not have been surrendered, the dividends with respect to
the shares so called shall cease to accrue after the Redemption Date, the shares
with respect to which such deposit shall have been made shall no longer be
deemed to be outstanding, the holders thereof shall cease to be stockholders of
the Corporation, and all rights with respect to such shares shall forthwith
terminate except only the right to receive from the Depositary forthwith from
and after the date of such deposit the amount payable upon redemption of the
shares to be redeemed, without interest.

                  (b) Any interest accrued on funds so deposited with the
Depositary shall belong to the Corporation and shall be paid to it from time to
time. All funds deposited in accordance with this Section 5 which shall remain
unclaimed by the holders of shares called for redemption at the end of six years
after the Redemption Date shall be, if requested by the Board of Directors,
returned by the Depositary to the Corporation, after which the holders of such
shares shall look only to the Corporation for the payment of such unclaimed
amounts, without interest.

                  (c) If any dividend or sinking fund payment on this Series is
in arrears, no purchase or redemption shall be made of any shares of any class
or series of stock of the Corporation ranking equally with or junior to this
Series as to dividends or the distribution of assets upon Liquidation.

                  6. REDEMPTION AT OPTION OF HOLDERS. At any time (i) any person
or entity becomes the beneficial owner of more than 50% of the Common Stock or
(ii) the Corporation is a party to a business combination, including a merger or
consolidation or the sale, conveyance, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of its
property and assets, and as a result of such acquisition of shares of the Common
Stock or any such business combination, shares of this Series thereafter are not
convertible into common stock of the Corporation or of the ultimate parent of
the Corporation which common stock is traded on the New York Stock Exchange,
American Stock Exchange or the NASDAQ System of the National Association of
Securities Dealers, Inc., each holder of record of shares of this Series shall
have the option to require the Corporation to redeem the


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                                       6


shares of this Series owned by such holder, in whole or in part, at $20.00 per
share plus accrued and unpaid dividends through the redemption date.

                  7. PROCEDURE FOR REDEMPTION PURSUANT TO SECTION 6.

                  (a) In the event of any acquisition described in clause (i) of
Section 6 hereof, the Corporation shall, on the date which is 45 days after the
date of such acquisition, upon the written demand of any record holder of shares
of this Series which so requests, redeem the shares of this Series owned by such
holder at a price per share equal to $20.00 plus accrued and unpaid dividends
through the redemption date. Within 5 days after the Corporation has knowledge
that such acquisition has occurred, it shall mail, first-class postage prepaid,
to each record holder of shares of this Series a form of written demand to be
used by such holder to exercise his right of redemption (a "DEMAND FORM") and a
notice which shall disclose the occurrence of the acquisition and the right of
such holder to require the Corporation to redeem such shares. Such notice shall
be mailed to such record holders at their respective addresses as they shall
appear on the books of the Corporation and shall set forth the redemption date,
the redemption price per share, the place or places for surrender of
certificates for shares to be redeemed, the date by which such holder must
notify the Corporation if it elects to require the Corporation to make such
redemption (which shall not be less than 30 days after the date of such notice),
and that each holder may elect to have his shares redeemed in whole or in part.

                  (i) The Corporation also shall deposit in trust funds
sufficient to redeem on the redemption date all of the shares of this Series
outstanding on the date of delivery by the Corporation of the notice referred to
in clause (a)(i) above. Each record holder of shares of this Series which elects
to require the Corporation to redeem on the redemption date some or all of the
shares of this Series which such holder owns shall deliver to the Corporation on
or after the redemption date, a completed Demand Form and the certificate or
certificates relating to the shares of this Series to be redeemed.

                  (b) In the event of any business combination described in
clause (ii) of Section 6 hereof, the Corporation shall, immediately prior to the
effectiveness of such business combination, upon the written demand of any
record holder of shares of this Series which so requests, redeem the shares of
this Series owned by each such holder at a price per share equal to $20.00 plus
accrued and unpaid dividends through such redemption date. Not less than 35 days
prior to any such business combination the Corporation shall mail, first-class
postage prepaid, to each record holder of shares of this Series a Demand Form, a
notice of guaranteed delivery and a notice which shall disclose such business
combination and the right of such holder to require the Corporation to redeem
such shares. Such notice shall be mailed to such record holders at their
respective addresses as they shall appear on the books of the Corporation and
shall set forth the redemption date, the redemption price per share, the place
or places for surrender of certificates for shares, the date by which such
holder must notify the Corporation if it elects to require the Corporation to
make such redemption (which shall not be less than 30 days after the date of
such notice), and that each holder may elect to have his shares redeemed in
whole or in part.


<PAGE>
                                       7


                  (i) Not later than the effectiveness of such business
combination, the Corporation also shall deposit in trust funds sufficient to
redeem on the redemption date all of the shares of this Series outstanding on
the date of delivery by the Corporation of the notice referred to in clause
(b)(i) above. Each record holder of shares of this Series which elects to
require the Corporation to redeem on the redemption date some or all of the
shares of this Series which such holder owns shall deliver to the Corporation on
or after the redemption date a completed Demand Form and the certificate or
certificates relating to the shares of this Series to be redeemed or a duly
executed notice of guaranteed delivery (guaranteed by a member firm of a
registered national securities exchange, a member of the National Association of
Securities Dealers, Inc., or by a commercial bank or trust company having an
office or correspondent in the United States). Each election by a holder
pursuant to this Section 7(b) shall become irrevocable upon the effectiveness of
the business combination.

                  (c) If at any time the Corporation does not pay amounts
sufficient to redeem all shares of this Series required to be redeemed by the
Corporation pursuant to Section 6 hereof then such funds which are paid shall be
applied to redeem such shares on a pro rata basis.

                  (d) Any notice which is mailed by the Corporation as provided
in this Section 7 shall be conclusively presumed to have been duly given,
whether or not the shareholder receives such notice; and failure to give such
notice by mail, or any defect in such notice, to the holders of any shares
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of this Series. On or after the redemption
date specified in such notice, each holder of shares which has duly notified the
Corporation of its election to redeem its shares (each, a "SURRENDERING
STOCKHOLDER") shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the redemption price. In case fewer than all of
the shares represented by any certificate are redeemed, a new certificate
representing the unredeemed shares shall be issued to the surrendering
stockholder at the expense of the Corporation. If on the date fixed for
redemption under any provision of this Section 7 there shall have been deposited
with any Depositary designated by the Board of Directors, in trust for the
account of the surrendering stockholders, funds in an amount equal to the
aggregate amount payable upon redemption of all shares to be surrendered by
surrendering stockholders, together with irrevocable written instructions and
authority to the Depositary to redeem such shares on or after such redemption
date immediately upon the endorsement and surrender of the certificates
therefor, then, notwithstanding that the certificates evidencing any such shares
shall not have been surrendered, the dividends with respect to all shares to be
surrendered by surrendering stockholders shall cease to accrue after the date
fixed for redemption, such shares shall no longer be deemed outstanding,
surrendering stockholders shall cease to be stockholders of the Corporation, and
all rights whatsoever with respect to such shares to be redeemed shall terminate
except only the right to receive from the Depositary forthwith from and after
the date of such deposit the amount payable upon redemption of the shares to be
redeemed, without interest.

                  (b) Any interest accrued on funds so deposited with the
Depositary shall belong to the Corporation and shall be paid to it from time to
time. All funds deposited in accordance with this Section 7 which shall remain
unclaimed by the surrendering stockholders at the end of six


<PAGE>
                                       8


years after the applicable redemption date shall be, if requested by the Board
of Directors, returned by the Depositary to the Corporation, after which the
surrendering stockholders shall look only to the Corporation for the payment of
such unclaimed amounts, without interest.

                  8. CONVERSION RIGHTS. The holders of shares of this Series
shall have the right, at their option, to convert shares of this Series into
shares of Common Stock at any time on and subject to the following terms and
conditions:

                  (a) The shares of this Series shall be convertible at the
         office of any transfer agent for this Series, and at such other office
         or offices, if any, as the Board of Directors may designate, into fully
         paid and non-assessable shares (calculated as to each conversion to the
         nearest 1/100th of a share) of Common Stock, at the conversion price,
         determined as hereinafter provided, in effect at the time of
         conversion, each share of this Series being taken at $20.00 for the
         purpose of such conversion. The price at which shares of Common Stock
         shall be delivered upon conversion (the "CONVERSION PRICE") shall be
         initially an amount per share of Common Stock equal to (i) the average
         of the daily Closing Prices (as defined below) for the ten consecutive
         Trading Dates (as defined below) immediately preceding the Effective
         Date (as defined below), MULTIPLIED BY (ii) 1.15. The conversion price
         shall be adjusted as provided in paragraph (d) below.

                  (b) In order to convert shares of this Series into Common
         Stock the holder thereof shall surrender at any office hereinabove
         mentioned the certificate or certificates therefor, duly endorsed to
         the Corporation or in blank, and give written notice to the Corporation
         at said office that such holder elects to convert such shares. No
         payment or adjustment shall be made upon any conversion on account of
         any dividends accrued on the shares of this Series surrendered for
         conversion or on account of any dividends on the Common Stock issued
         upon such conversion. Shares of this Series shall be deemed to have
         been converted immediately prior to the close of business on the day of
         the surrender of such shares for conversion in accordance with the
         foregoing provisions (the "CONVERSION DATE"), and the person or persons
         entitled to receive the Common Stock issuable upon such conversion
         shall be treated for all purposes as the record holder or holders of
         such Common Stock at such time. As promptly as practicable on or after
         the conversion date, the Corporation shall issue and shall deliver at
         said office a certificate or certificates for the number of full shares
         of Common Stock issuable upon such conversion, together with a cash
         payment in lieu of any fraction of any share, as hereinafter provided,
         to the person or persons entitled to receive the same. In case shares
         of this Series are called for redemption or required to be redeemed,
         the right to convert such shares shall cease and terminate at the close
         of business on the applicable redemption date, unless default shall be
         made in payment of the amount payable upon redemption of the shares to
         be redeemed.

                  (c) No fractional shares of Common Stock shall be issued upon
         conversion of shares of this Series, but, in lieu of any fraction of a
         share of Common Stock which would otherwise be issuable in respect of
         the aggregate number of shares of this Series surrendered for
         conversion at one time by the same holder, the Corporation shall pay in


<PAGE>
                                       9


         cash as an adjustment of such fraction an amount equal to the same
         fraction of the Closing Price on the date on which such shares of this
         Series were duly surrendered for conversion, or, if such date is not a
         Trading Date, on the next Trading Date.

                  (d) The conversion price shall be adjusted from time to time
as follows:

                           (1) In case the Corporation shall (i) pay a dividend
                  or make a distribution on its outstanding shares of Common
                  Stock in Common Stock, (ii) subdivide or split its outstanding
                  shares of Common Stock into a larger number of shares by
                  reclassification or otherwise, (iii) combine its outstanding
                  shares of Common Stock into a smaller number of shares by
                  reclassification or otherwise, or (iv) issue any shares by
                  reclassification of its shares of Common Stock or otherwise,
                  the conversion price in effect at the time of the record date
                  for such dividend or distribution or the effective date of
                  such subdivision, combination or reclassification shall be
                  adjusted so that the holder of any shares of this Series
                  surrendered for conversion after such time shall be entitled
                  to receive the number of shares of Common Stock which he would
                  have owned or been entitled to receive had such shares of this
                  Series been converted immediately prior to such time.

                           (2) In case the Corporation shall issue rights or
                  warrants to holders of its Common Stock entitling them to
                  subscribe for or purchase shares of Common Stock at a price
                  per share less than the current market price per share
                  (determined as provided in clause (4) below) on the record
                  date mentioned below, the conversion price shall be adjusted
                  upon the exercise of such warrants or rights (such adjustment
                  to be computed as of the close of business on the last Trading
                  Date of each week) so that the same shall equal the price
                  determined by multiplying the conversion price then in effect
                  by a fraction, of which the numerator shall be the number of
                  shares of Common Stock then outstanding plus the number of
                  shares of Common Stock which the aggregate exercise price of
                  such warrants or rights exercised would purchase at such
                  current market price and of which the denominator shall be the
                  number of shares of Common Stock then outstanding plus the
                  number of additional shares of Common Stock issued upon the
                  exercise of such warrants or rights. Such adjustment shall
                  become effective at the opening of business on the business
                  day next following the computation thereof.

                           (3) In case the Corporation shall distribute to
                  holders of its Common Stock evidences of its indebtedness or
                  assets (excluding any cash or stock dividends or distributions
                  and dividends referred to in clause (1) above) or rights or
                  warrants to subscribe for or purchase securities of the
                  Corporation or any of its subsidiaries (other than shares of
                  Common Stock referred to in clause (2) above), then in each
                  such case the conversion price shall be adjusted so that the
                  same shall equal the price determined by multiplying the
                  conversion price in effect immediately prior to the date of
                  such distribution by a fraction of which the


<PAGE>
                                       10


                  numerator shall be the current market price per share
                  (determined as provided in clause (4) below) of the Common
                  Stock on the record date mentioned below less the then fair
                  market value (as determined by the Board of Directors, whose
                  determination shall be conclusive) of the portion of the
                  assets or evidences of indebtedness or rights or warrants so
                  distributed applicable to one share of Common Stock, and the
                  denominator shall be such current market price per share of
                  the Common Stock. Such adjustment shall become effective on
                  the opening of business on the business day next following the
                  record date for the determination of stockholders entitled to
                  receive such distribution.

                           (4) For the purpose of any computation under clause
                  (1), (2) or (3) above, the current market price per share of
                  Common Stock on any date shall be deemed to be the average of
                  the daily Closing Prices for the thirty consecutive Trading
                  Dates commencing not more than forty-five Trading Dates before
                  the day in question, such thirty consecutive Trading Date
                  period to be specified by the Board of Directors prior to the
                  commencement of forty-five Trading Dates before the day in
                  question or, in the event the Board of Directors fails to
                  specify such thirty consecutive Trading Dates, such thirty
                  consecutive Trading Dates shall be deemed to have commenced on
                  the fortieth Trading Date before the day in question.

                           (5) No adjustment in the conversion price pursuant to
                  this Section 8 shall be required unless (i) such adjustment
                  would require an increase or decrease of at least 1% in such
                  price; PROVIDED that any adjustment which by reason of this
                  paragraph (d)(5) is not required to be made shall be carried
                  forward and taken into account in any subsequent adjustment
                  and will be made not more than three years after the time it
                  would have been made but for the provisions of this paragraph
                  (d)(5); PROVIDED, FURTHER, that, at the time of any
                  adjustment, such adjustment shall include all adjustments to
                  the date thereof then being carried forward. All calculations
                  under this Section 8 shall be made to the nearest 1/100 of a
                  cent or to the nearest 1/100 of a share, as the case may be.

                  (e) In addition to the option of each holder of shares of this
         Series to require the Corporation to redeem such shares pursuant to
         Section 6 hereof, in case of any consolidation or merger of the
         Corporation with or into another corporation or in the case of any sale
         or conveyance to another corporation (in each case, other than a
         wholly-owned subsidiary of the Corporation) of all or substantially all
         of the property and assets of the Corporation, the holder of a share of
         this Series shall have the right thereafter, so long as the conversion
         right hereunder shall exist, to convert such share into the kind and
         amount of shares of stock and other securities and properties
         receivable upon such consolidation, merger, sale or conveyance by a
         holder of the number of shares of Common Stock into which such share of
         this Series might have been converted immediately prior to such
         consolidation, merger, sale or conveyance and shall have no other
         conversion rights with regard to such share of this Series. In the
         event of such a consolidation, merger, sale or conveyance, effective
         provision shall be made in the


<PAGE>
                                       11


         certificate of incorporation of the resulting or surviving corporation
         or otherwise for the protection of the conversion rights of the shares
         of this Series which shall be applicable, as nearly as reasonably may
         be, to any such other shares of stock and other securities and property
         deliverable upon conversion of shares of this Series. In case
         securities or properties other than Common Stock shall be issuable or
         deliverable upon conversion as aforesaid, then all references in this
         Section 8 shall be deemed to apply, so far as appropriate and as nearly
         as may be, to such other securities or properties.

                  (f) Whenever the conversion price is adjusted as herein
provided:

                           (1) the Corporation shall compute the adjusted
                  conversion price in accordance with this Section 8 and shall
                  prepare a certificate signed by the President or one of the
                  Vice Presidents and the Treasurer or one of the Assistant
                  Treasurers of the Corporation setting forth the adjusted
                  conversion price, and such certificate shall forthwith be
                  filed with the transfer agent or agents for this Series; and

                           (2) a notice stating that the conversion price has
                  been adjusted and setting forth the adjusted conversion price
                  shall, as promptly as practicable, be mailed to the holders of
                  record of the outstanding shares of this Series.

                  (g)      In case:

                           (1) the Corporation shall declare a dividend (or any
                  other distribution) on its Common Stock payable otherwise than
                  in cash out of earned surplus; or

                           (2) the Corporation shall authorize the granting to
                  the holders of its Common Stock of rights to subscribe for or
                  purchase any shares of capital stock of any class or series or
                  of any other rights; or

                           (3) of any reclassification of the capital stock of
                  the Corporation (other than a subdivision or combination of
                  its outstanding shares of Common Stock), or of any
                  consolidation or merger to which the Corporation is a party
                  and for which approval of any stockholders of the Corporation
                  is required, or of the sale or transfer of all or
                  substantially all of the property and assets of the
                  Corporation, or of the voluntary or involuntary dissolution,
                  liquidation or winding up of the Corporation;

         then the Corporation shall cause to be mailed to the transfer agent or
         agents for this Series and to the holders of record of the outstanding
         shares of this Series, at least 20 days (or 10 days in any case
         specified in clause (1) or (2) above) prior to the applicable date
         hereinafter specified, a notice stating (x) the date on which a record
         is to be taken for the purpose of such dividend, distribution or
         rights, or, if a record is not to be taken, the date as of which the
         holders of Common Stock of record to be entitled to such dividend,
         distribution or rights are to be determined, or (y) the date on which
         such reclassification, consolidation, merger, sale, transfer,
         dissolution, liquidation or winding up is expected to


<PAGE>
                                       12


         become effective, and the date as of which it is expected that holders
         of Common Stock of record shall be entitled to exchange their shares of
         Common Stock for securities or other property deliverable upon such
         reclassification, consolidation, merger, sale, transfer, dissolution,
         liquidation or winding up.

                  (h) The Corporation shall at all times reserve and keep
         available, free from preemptive rights, out of its authorized but
         unissued Common Stock, for the purpose of effecting the conversion of
         the shares of this Series, the full number of shares of Common Stock
         then deliverable upon the conversion of all shares of this Series then
         outstanding.

                  (i) The Corporation will pay any and all taxes that may be
         payable in respect of the issuance or delivery of shares of Common
         Stock on conversion of shares of this Series pursuant hereto. The
         Corporation shall not, however, be required to pay any tax which may be
         payable in respect of any transfer involved in the issue and delivery
         of shares of Common Stock in a name other than that in which the shares
         of this Series so converted were registered, and no such issue or
         delivery shall be made unless and until the person requesting such
         issue has paid to the Corporation the amount of any such tax, or has
         established, to the satisfaction of the Corporation, that such tax has
         been paid.

                  (j) For the purpose of this Section 8 the term "Common Stock"
         shall include any stock of any class of the Corporation which has no
         preference in respect of dividends or of amounts payable in the event
         of any voluntary or involuntary liquidation, dissolution or winding up
         of the Corporation, and which is not subject to redemption by the
         Corporation. However, shares issuable on conversion of shares of this
         Series shall include only shares of the class defined as "Common Stock"
         in Section 2 hereof or shares of any class or classes resulting from
         any reclassification or reclassifications thereof and which have no
         preference in respect of dividends or of amounts payable in the event
         of any voluntary or involuntary liquidation, dissolution or winding up
         of the Corporation and which are not subject to redemption by the
         Corporation, PROVIDED that if at any time there shall be more than one
         such resulting class, the shares of each such class then so issuable
         shall be substantially in the proportion which the total number of
         shares of such class resulting from all such reclassifications bear to
         the total number of shares of all such classes resulting from all such
         reclassifications.

                  (k) As used in this Section 8, the term "CLOSING PRICE" on any
         day shall mean the reported last sales price on such day or, in case no
         such sale takes place on such day, the average of the reported closing
         bid and asked prices, in each case on the New York Stock Exchange
         Composite Tape, or, if the Common Stock is not listed or admitted to
         trading on such Exchange, on the principal national securities exchange
         on which the Common Stock is listed or admitted to trading, or, if not
         listed or admitted to trading on any national securities exchange, the
         average of the closing bid and asked prices as furnished by any New
         York Stock Exchange member firm selected from time to time by the Board
         of Directors for that purpose; the term "TRADING DATE" shall mean a
         date on which the New York Stock Exchange (or any successor to such
         Exchange) is open for the transaction of business; and the term
         "EFFECTIVE DATE" shall mean the date upon which the


<PAGE>
                                       13


         merger of Michigan Energy Resources Company, a Michigan corporation,
         with and into the Corporation shall become effective.

                  9. VOTING RIGHTS. (a) Unless and until dividends payable on
any shares of this Series shall be in arrears in an amount equivalent to one and
one-half times the annual dividend, or more, per share, the holders of shares of
this Series shall have no voting power or rights, except as otherwise provided
herein, by the Certificate of Incorporation of the Corporation or by law. If and
when dividends payable on any shares of this Series shall be in arrears in an
amount equivalent to one and one-half times the annual dividend or more, per
share, and thereafter until all dividends on shares of this Series in arrears
shall have been paid, the holders of this Series, together with the holders of
the $2.4375 Series Preference Stock, the $2.6125 Series Preference Stock, and
any other class or series of stock of the Corporation which is by its terms
expressly made equal as to dividends to this Series (for purposes of this
Section 9, this Series, together with all such other classes and series, is
hereinafter collectively referred to as the "PREFERENCE STOCK") voting as a
single class separate from the holders of all other classes of capital stock,
shall be entitled to elect two directors. The terms of office as directors of
all persons who may be directors of the Corporation shall terminate upon the
election of directors by the holders of the Preference Stock. The holders of the
Common Stock shall have the right to elect the remaining directors of the
Corporation. If the holders of the Preference Stock have not exercised their
right to elect directors of the Corporation because of the lack of a quorum
consisting of the holders of a majority of the Preference Stock, then the said
directors shall be elected by the directors whose term of office is thus
terminated, and in that event, such elected directors shall hold office for the
interim period, pending such time as a quorum of the holders of the Preference
Stock shall be present at a meeting held for the election of directors.

                  (a) If and when all dividends then in arrears on the
         Preference Stock then outstanding shall be paid (and such dividends
         shall be declared and paid out of any funds legally available therefor
         as soon as reasonably practicable), the holds of shares of the
         Preference Stock shall be divested of any special right with respect to
         the election of directors and the voting power of the holders of shares
         of the Preference Stock and the Common Stock shall revert to the status
         existing before the first dividend payment date on which dividends on
         any shares of the Preference Stock were not paid in full, but always
         subject to the same provisions for vesting such special rights in the
         holders of shares of the Preference Stock in case of further like
         arrears in payment of dividends thereon. Upon the termination of any
         such special voting right, the terms of office of all persons who may
         have been elected directors of the Corporation by vote of the holders
         of the Preference Stock, as a class, pursuant to such special voting
         right shall forthwith terminate, and the resulting vacancies shall be
         filled by the vote of a majority of the remaining directors.

                  (b) In case of any vacancy in the office of a director
         occurring among the directors elected by the holders of the Preference
         Stock voting as a single class separate from the holders of all other
         classes of capital stock, the remaining director elected by the holders
         of the Preference Stock may elect a successor to hold office for the
         unexpired term of the director whose place shall be vacant. In the
         event of simultaneous vacancies


<PAGE>
                                       14


         among directors elected by the holders of the Preference Stock,
         pursuant to the provisions of this Section 9, will be held.

                  (c) When ever the right shall have accrued to the holders of
         the Preference Stock to elect directors, voting as a single class,
         separate from the holders of all other classes of capital stock, then
         upon request in writing signed by any holder of the Preference Stock
         entitled to vote, delivered by registered mail or in person to the
         president, a vice president or secretary of the Corporation, it shall
         be the duty of such officer forthwith to cause notice to be given to
         the shareholders entitled to vote at a meeting to be held at such time
         as such officer may fix, not less than ten (10) nor more than sixty
         (60) days after the receipt of such request, for the purpose of
         electing directors. At all meetings of stockholders held for the
         purpose of electing directors during such time as the holders of the
         Preference Stock shall have the special right, voting as a single
         class, separate from the holders of all other classes of capital stock
         to elect directors, the presence in person or by proxy of the holders
         of a majority of the outstanding Preference Stock shall be required to
         constitute a quorum of such class for the election of directors, and
         the presence in person of capital stock outstanding at the time, and
         not entitled to such special right, shall be required to constitute a
         quorum of such other classes for the election of directors.

                  10. RESTRICTIONS ON CERTAIN CORPORATE ACTION.

                  (a) So long as any shares of this Series are outstanding, no
         new class of stock shall be created or authorized which is entitled to
         dividends or shares in distribution of assets on a parity with or in
         priority to this Series, nor shall there be created or authorized any
         securities convertible into shares of any such stock, unless the
         holders of record of not less than two-thirds of the number of shares
         then outstanding of the preference stock, without par value, of the
         Corporation of which this Series forms a part (as a simple class
         separate from the holders of all other classes of stock) shall vote
         therefor in person or by proxy at the meeting of stockholders at which
         the creation of authorization of such new class of stock or such
         convertible securities is considered.

                  (b) So long as any shares of this Series are outstanding, the
         Corporation shall not increase the total authorized amount of the
         preference stock, without par value, of the Corporation of which this
         Series forms a part or any class of stock which is entitled to
         dividends or shares in distribution of assets on a parity with or in
         priority to such preference stock, unless the holders of record of not
         less than a majority of the number of shares of such preference stock
         then outstanding (as a single class separate from the holders of all
         other classes of stock) shall vote therefor in person or by proxy at a
         meeting held pursuant to notice containing a statement of such purpose.

                  11. OTHER RIGHTS. The holders of this Series shall not have
any other preferences or special rights.


<PAGE>
                                       15


         IN WITNESS WHEREOF, the Corporation has caused this certificate to be
made under the seal of the Corporation signed by its President and Secretary,
respectively, this 28th day of December, 1988.

                                                     /s/ Richard C. Green, Jr.
                                                     --------------------------
                                                                      President

                                                     /s/ Roger K. Sallee
                                                     --------------------------
                                                                      Secretary