<PAGE>   1

                              AMENDED AND RESTATED
                           ARTICLES OF INCORPORATION
                                       OF
                            BLACKHAWK BANCORP, INC.


     The following amended and restated articles of incorporation, duly adopted
pursuant to the authority and provisions of Chapter 180 of the Wisconsin
Statutes, supersede and take the place of the heretofore existing articles of
incorporation of this corporation and any Amendments thereto:


                                  ARTICLE I

                                     NAME

     The name of the Corporation is:  Blackhawk Bancorp, Inc.


                                   ARTICLE II

                                    PURPOSES

     The Corporation may engage in any lawful activity within the purposes for
which corporations may be organized under the Wisconsin Business Corporation
Law; provided, however, that the Corporation shall not engage in any activities
prohibited by the United States Bank Holding Company Act of 1956.


                                  ARTICLE III

                                 CAPITAL STOCK

3.1 AUTHORIZED SHARES.

     The aggregate number of shares which the Corporation shall have authority
to issue is Eleven Million (11,000,000) shares, consisting of Ten Million
(10,000,000) shares designated as "Common Stock," $0.01 par value per share,
and One Million (1,000,000) shares designated as "Preferred Stock," $0.01 par
value per share.

3.2 DIRECTORS' AUTHORITY TO ESTABLISH SERIES OF PREFERRED STOCK.

     The Preferred Stock may be issued in series from time to time, with such
designations, preferences and other rights, qualifications, limitations or
restrictions thereof as shall be stated and expressed in a resolution providing
for the issuance of each series (herein called the "Resolution") which shall be
adopted by the Board of Directors as provided by the Wisconsin Business
Corporation Law and not inconsistent with the provisions hereof.  Without
limiting such authority, each series shall have such (a) rate of dividends; (b)
price at and terms and conditions on which shares may be redeemed; (c) amount
payable upon shares in the event of voluntary or involuntary liquidation; (d)
sinking fund provisions for the redemption or purchase of shares; (e) terms and
conditions on which shares may be converted, if the shares of any series are
issued with the privilege of conversion; and (f) voting rights, if any,
including designation of the class of any directors to be elected solely by the
preferred shareholders, subject to the requirement of Section 5.2 hereof that
each class shall be as nearly equal in number as possible, as shall be stated
or expressed in the Resolution providing for the issuance thereof.

     Except as to the matters expressly set forth above in this Section 3.2,
all series of the Preferred Stock of the Corporation shall have the same
preferences, limitations and relative rights and shall rank equally, share
ratably and be identical in all respects as to all matters.  All shares of any
one series of Preferred Stock shall be alike in every particular.

     Shares of Preferred Stock which have been redeemed or purchased or retired
through the operation of a purchase, retirement or sinking fund or which have
been converted into shares of any other class or classes of stock of the
Corporation shall be restored to the status of authorized but unissued shares
of Preferred Stock and may be reissued.

3.3 DIVIDENDS AND DISTRIBUTIONS ON PREFERRED STOCK.




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     The holders of each series of Preferred Stock shall be entitled to receive
dividends at such rate, upon such conditions and at such times as shall be
stated in the Resolution.

     Dividends shall accrue on Preferred Stock from such date, not earlier than
the date of issue, as is provided in the Resolution, shall be without priority
as between series, shall be paid out of unreserved and unrestricted earned
surplus of the Corporation, except as otherwise provided by law, in each fiscal
year as declared at any time by the Board of Directors at the rate fixed in the
Resolution and shall be paid or set apart before any dividends or other
distributions, other than dividends payable in Common Stock, shall be paid or
set apart for Common Stock.  Dividends on the Preferred Stock shall be
cumulative, so if at any time the full amount of dividends accrued in arrears
on the Preferred Stock shall not be paid, the deficiency shall be payable
before any dividends or other distributions shall be paid or set apart on the
Common Stock, and before any sums shall be paid or set apart for the redemption
of less than all of the Preferred Stock then outstanding.  Any dividends paid
upon the Preferred Stock in an amount less than full cumulative dividends
accrued and in arrears upon all Preferred Stock outstanding shall, if more than
one series be outstanding, be distributable among the different series in
proportion to the aggregate amounts which would be distributed to the Preferred
Stock of each series if full cumulative dividends were declared and paid
thereon.  Whenever all dividends accrued and in arrears on Preferred Stock
shall have been declared and shall have been paid or set apart, the Board of
Directors may declare dividends on Common Stock out of the remaining net
earnings of the Corporation, or out of surplus applicable to the payment of
such dividends.

3.4 RIGHTS OF HOLDERS OF PREFERRED STOCK ON LIQUIDATION DISSOLUTION, OR WINDING
UP.

     In the event of liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary, the holders of Preferred Stock
shall be entitled to receive in full the fixed voluntary liquidation amount
thereof, plus accrued dividends thereon, all as provided in the Resolution,
before any amount shall be paid to the holders of Common Stock.  The holders of
all series of Preferred Stock shall be entitled to receive all such amounts out
of the assets of the Corporation whether from capital, surplus or earnings.
For such purpose, "accrued dividends" means, in respect of each share of
Preferred Stock, an amount equal to the fixed dividend rate per annum for each
share (without interest thereon) from the date from which cumulative dividends
commenced to accrue in respect of such share to the date as of which the
computation is to be made, less the aggregate amount (without interest) of all
dividends paid thereon or declared and set aside for payment in respect
thereof, whether or not any such dividends shall have been earned.  If, upon
any such voluntary or involuntary liquidation, the assets of the Corporation
distributable as aforesaid among the holders of the Preferred Stock shall be
insufficient to permit payment to them of the full preferential amounts
aforesaid, then the entire assets of the Corporation available for distribution
to shareholders shall be distributed ratably among the holders of Preferred
Stock in proportion to the full preferential amounts to which they are
respectively entitled.

     The holders of Preferred Stock shall not otherwise be entitled to
participate in any distribution of assets of the Corporation, which shall be
divided and distributed among the holders of Common Stock according to their
respective rights and preferences.  No consolidation or merger of the
Corporation with or into another corporation or corporations and no sale by the
Corporation of all or substantially all of its assets shall be deemed a
liquidation, dissolution, or winding up of the Corporation within the meaning
of this Section 3.4.

3.5 AMENDMENTS AFFECTING PREFERRED STOCK.

     Without the affirmative vote of the holders of at least a majority of the
shares of the then outstanding Preferred Stock, regardless of series, the
Corporation may not (a) change the provisions of these Articles of
Incorporation so as to alter materially any existing provisions of such
Preferred Stock, (b) create any class of stock having any rights or preferences
prior or superior to or on a parity with the Preferred Stock, or (c) increase
the number of authorized shares of Preferred Stock.


                                   ARTICLE IV

                               PREEMPTIVE RIGHTS

     No holder of any stock of the Corporation shall have any preemptive right
to purchase, subscribe for, or otherwise acquire any shares of stock of the
Corporation of any class now or hereafter authorized, or any securities
exchangeable for or convertible into such shares.


                                   ARTICLE V

                                   DIRECTORS



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5.1 NUMBER.

     The business, property and affairs of the Corporation shall be managed by,
or under the direction of, its Board of Directors.  The number of directors of
the Corporation (exclusive of directors (the "Preferred Stock Directors") who
may be elected by a separate vote of the holders of then outstanding shares of
any class or series of Preferred Stock) shall be fixed from time to time by the
Bylaws of the Corporation, but shall in no event be less than three.

5.2 CLASSES OF DIRECTORS.

     The Board of Directors shall be divided into three classes, as nearly
equal in number as possible.  At the first annual meeting of shareholders, one
class shall be elected to hold office for a term expiring at the 1992 annual
meeting, one class shall be elected to hold office for a term expiring at the
1993 annual meeting and one class shall be elected to hold office for a term
expiring at the 1994 annual meeting.  At each annual meeting of shareholders of
the Corporation, the date of which shall be fixed by or pursuant to the Bylaws
of the Corporation, the successors of the class of directors whose term shall
expire at that meeting shall be elected to hold office for a term expiring at
the annual meeting of shareholders held in the third year following their year
of election.  Each director shall hold office until his successor shall have
been duly elected and qualified.  The election of directors need not be by
ballot unless the Bylaws so provide.  No decrease in the number of directors
shall shorten the term of any incumbent director.

5.3 FILLING OF VACANCIES.

     Except as otherwise provided by law and subject to the rights of the
holders of any class or series of Preferred Stock then outstanding, newly
created directorships resulting from any increase in the authorized number of
directors or any vacancies in the Board of Directors from death, resignation,
retirement, disqualification, removal from office or other cause shall be
filled solely by the Board of Directors, acting by the affirmative vote of not
less than a majority of the directors then in office, even though less than a
quorum of the Board of Directors.  Subject to the requirement of Section 5.2
hereof that each class of directors be as nearly equal in number as possible,
the Board of Directors shall designate the class of each director elected to
fill a vacancy on the Board resulting from an increase in the authorized number
of directors.  Any director elected pursuant to this Section 5.3 shall hold
office until the next election of the class for which such director shall have
been chosen and until his successor shall be elected and qualified.  Except as
otherwise provided by law, the shareholders of the Corporation shall have no
right to fill any vacancies, whether resulting from an increase in the
authorized number of directors or otherwise.

5.4 REMOVAL OF DIRECTORS.

     Subject to the rights of holders of any class or series of Preferred Stock
then outstanding, any director or the entire Board of Directors of the
Corporation may be removed only for cause and only by affirmative vote of (a)
the Board of Directors, acting by not less than a majority of the directorships
or (b) the holders of 80% of the combined voting power of the then outstanding
shares of the stock of all classes and series of the Corporation entitled to
vote generally in the election of directors (the "Voting Stock") voting
together as a single class.  For the purpose of this Section 5.4, (y) "cause"
shall exist only if a director (1) has been convicted of a felony in a final
adjudication or (2) has been adjudged in a final adjudication to have willfully
engaged in gross misconduct materially an demonstrably injurious to the
Corporation and (z) "final adjudication" shall mean a judgment by a court of
competent jurisdiction which becomes final (1) after completion of all
proceedings for direct review or (2) after expiration of the time to obtain
initial or further direct review, no such review having been taken.

5.5 AMENDMENT OF BYLAWS.

     Notwithstanding any other provisions in these Articles of Incorporation or
the Bylaws of the Corporation (and notwithstanding the fact that a lesser
percentage may be expressly permitted by law or the Bylaws of the Corporation),
the Bylaws of the Corporation may be adopted, repealed or amended only upon the
affirmative vote of (a) the holders of 80% of the combined voting power of the
then outstanding shares of Voting Stock, voting together as a single class or
(b) the Board of Directors acting by not less than a majority of the entire
Board of Directors.


                                   ARTICLE VI

                   ACQUISITION AND DISPOSITION OF OWN SHARES

     The Corporation shall have the right to purchase, take, receive or
otherwise acquire, hold, own, pledge, transfer, or otherwise dispose of its own
shares; provided that no such acquisition, directly or indirectly, of its own
shares for a consideration other than its own shares of equal or subordinate
rank shall be made unless:

     (a) At the time of such acquisition the Corporation is not and would not
thereby be rendered insolvent;



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<PAGE>   4

and

     (b) The net assets of the Corporation remaining after such acquisition
would not be less than the aggregate preferential amount payable in the event
of voluntary liquidation to the holders of shares having preferential rights to
the assets of the Corporation in the event of liquidation.


                                  ARTICLE VII

                               SHAREHOLDER ACTION

7.1 MEETING REQUIREMENT.

     Any action required or permitted to be taken by the shareholders of the
Corporation must be effected at a duly called annual or special meeting of
shareholders of the Corporation and may not be effected by any consent in
writing by less than all shareholders of the Corporation entitled to vote
thereon.  Except as otherwise required by law and subject to the rights of the
holders of any class or series of Preferred Stock then outstanding, special
meetings of the shareholders may be called only by the Board of Directors
acting by not less than a majority of the entire Board of Directors or as
otherwise provided in the Bylaws.  Notice of any special meeting of
shareholders shall be given as provided in the Bylaws.

7.2 NOTICE OF PROPOSED SHAREHOLDER ACTIONS.

     Advance notice of nominations for the election of directors or any other
action proposed to be taken at an annual or special shareholders' meeting shall
be given in the manner and to the extent provided in the Bylaws of the
Corporation.


                                  ARTICLE VIII

                 LIMITATION ON BENEFICIAL OWNERSHIP APPLICABLE
                                 FOR FIVE YEARS

     Notwithstanding anything contained in these Articles of Incorporation or
the Corporation's Bylaws to the contrary, for a period of five years from the
date of completion of the acquisition by this Corporation of all of the issued
and outstanding common stock of Blackhawk State Bank, no person shall directly
or indirectly offer to acquire or acquire the beneficial ownership of more than
10% of any class of an equity security of this Corporation.  This limitation
shall not apply to the purchase of shares by underwriters in connection with a
public offering, or to the acquisition of up to 25% of any class of stock of
the Corporation by a tax-qualified employee stock benefit plan made available
by the Corporation or a subsidiary.  In the event shares are acquired in
violation of this Article VIII, all shares beneficially owned by any person in
excess of the 10% limitation set forth in the foregoing shall be considered
"excess shares" and shall not be counted as shares entitled to vote and shall
not be voted by any person or counted as voting shares in connection with any
matters submitted to the shareholders for a vote; provided that, the Board of
Directors may, by the affirmative vote of two-thirds of the disinterested
directors, re-instate voting rights on such excess shares.

     For purposes of this Article VIII, the following definitions apply:

     (a) The term "person" includes an individual, group acting in concert,
corporation, partnership, association, joint venture, pool, joint stock
company, trust, unincorporated organization or similar company, syndicate or
any other group formed for the purpose of acquiring, holding or disposing of
the equity securities of the Corporation.

     (b) The term "offer" includes every offer to buy or otherwise acquire,
solicitation of an offer to sell, tender offer for, or request or invitation
for tenders of, a security or interest in a security for value.

     (c) The term "acquire" includes every type of acquisition, whether
effected by purchase, exchange, operation of law or otherwise.

     (d) The term "acting in concert" means (1) knowing participation in a
joint activity or conscious parallel action towards a common goal whether or
not pursuant to an express agreement, or (2) a combination or pooling of voting
or other interest in the securities of an issuer for a common purpose pursuant
to any contract, understanding, relationship, agreement or other arrangements,
whether written or otherwise.

     (e) The term "disinterested director" shall mean any member of the Board
of Directors of the Corporation who is unaffiliated with, and not a nominee of,
any person who acquired more than 10% of any class of an equity security of
this




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Corporation in violation of this Article VIII, and was a member of the
Board of Directors prior to the time that such person acquired such interest,
and any successor of a disinterested director who is unaffiliated with, and not
a nominee of, such person and who is recommended t succeed a disinterested
director by a majority of disinterested directors then on the Board of
Directors.


                                   ARTICLE IX

                 STOCKHOLDER VOTE REQUIRED FOR CERTAIN ACTIONS


9.1     CERTAIN DEFINITIONS

9.1-1.  For purposes of this Article IX, the following terms shall have the
indicated meanings:

     (a) an "Interested Stockholder" is any person (other than the Corporation
or any Subsidiary) who or which:  (i) is the beneficial owner, directly or
indirectly, of 10 percent or more of the voting power of the outstanding Voting
Stock; (ii) is an Affiliate of the Corporation and at any time within the
two-year period immediately prior to the date in question was the beneficial
owner, directly or indirectly, of 10% or more of the voting power of the then
outstanding Voting Stock; or (iii) is an assignee of or has otherwise succeeded
to any shares of Voting Stock which were at any time within the two year period
immediately prior to the date in question beneficially owned by any Interested
Stockholder, if such assignment or succession shall have occurred in the course
of a transaction or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933;

     (b) any specified person shall be deemed to be a "beneficial owner" of any
Voting Stock:  (i) which such specified person or any of its Affiliates or
Associates (as such terms are hereinafter defined) beneficially owns, directly
or indirectly; or (ii) which such specified person or any of its Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights,
exchange rights, warrants or options, or otherwise, or (B) the right to vote or
to direct the vote of pursuant to any agreement, arrangement or understanding;
or (iii) which are beneficially owned, directly or indirectly (including shares
deemed owned through application of clauses (i) and (ii) above), by any other
person with which such specified person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any Voting Stock;

     (c) a "Subsidiary" is any corporation of which a majority of any class of
equity security is owned,
directly or indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Interested Stockholder set forth in Section
9.1-1(a) and the definition of "Associate" in Section 9.1-1(f), the term
"Subsidiary" shall mean only a corporation of which a majority of each class of
equity security is owned, directly or indirectly, by the Corporation;

     (d) a "person" is any individual, firm, corporation or other entity;

     (e) an "Affiliate" of any specified person is any person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, the specified person;

     (f) an "Associate" of a specified person is (i) any corporation or
organization (other than the Corporation or a Subsidiary) of which such
specified person is an officer or partner or is, directly or indirectly, the
beneficial owner of 10 percent or more of any class of equity securities, (ii)
any trust or other estate in which such specified person has a substantial
beneficial interest or as to which such specified person serves as trustee or
in a similar fiduciary capacity, and (iii) any relative or spouse of such
specified person, or any relative of such spouse, who has the same home as such
person or who is a director or officer of the Corporation or a Subsidiary;

     (g) The "Requisite Vote" shall mean the affirmative vote of the holders of
either (i) 66 2/3% of the voting power of Voting Stock owned by persons other
than any Interested Stockholder, or (ii) such lesser percentage of the voting
power of the Voting Stock owned by such other persons as makes such "Requisite
Vote" equal to 80% of the voting power of all of the Voting Stock; such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or in any
agreement with any national securities exchange or otherwise;

     (h) a "Continuing Director" means any member of the Board of Directors of
the Corporation (the "Board") who is not affiliated with the Interested
Stockholder and was a member of the Board prior to the time that the Interested
Stockholder became an Interested Stockholder, and any successor of a Continuing
Director who is not affiliated with the Interested Stockholder and is
recommended to succeed a Continuing Director by a majority of Continuing
Directors then on the Board;

     (i) the term "Business Combination" shall mean any transaction or action
which is referred to in any one



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or more of subsections (a) through (e) of Section 9.2;

     (j) "Voting Stock" shall mean outstanding shares of capital stock of the
Corporation entitled to vote for the election of directors, considered as one
class (it being understood that each share of Voting Stock shall have the
number of votes granted to it by law or these Articles of Incorporation or the
Bylaws);

     (k) "Fair Market Value" means:  (i) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date in
question of a share of such stock on the Composite Tape for New York Stock
Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape,
on the New York Stock Exchange, or if such stock is not listed on such
Exchange, or the principal United States securities exchange registered under
the Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing bid quotation
with respect to a share of such stock during the 30-day period preceding the
date in question on the National Corporation of Securities Dealers, Inc.
Automated Quotation System or any system then in use, or if no such quotations
are available, the fair market value on the date in question of a share of such
stock as determined by the Board in good faith; and (ii) in the case of
property other than cash or stock, the fair market value of such property on
the date in question as determined by the Board in good faith;

     (l) "Institutional Voting Stock" shall mean any class of Voting Stock
which was issued to and continues to be held solely by one or more insurance
companies, pension funds, commercial banks, savings banks or similar financial
institutions or institutional investors;

     (m) in the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash to be received" as used in
subsection (b) (i) and (ii) of Section 9.3-1 shall include the shares of common
stock and/or the shares of any other class of outstanding Voting Shares
retained by the holders of such shares.

9.1-2. For purposes of determining whether a person is an Interested
Stockholder pursuant to Section 9.1-1(a), the number of shares of Voting Stock
deemed to be outstanding shall include shares deemed owned through
application of Section 9.1-1(b) above, but shall not include any other shares
of Voting Stock which may be issuable pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, warrants or options, or
otherwise.

9.1-3. The directors of the Corporation shall have the power and duty to
determine for purposes of this Section and Section 9.2 and 9.3, on the basis of
information known to them after reasonable inquiry, (a) whether a person is an
Interested Stockholder, (b) the number of shares of Voting Stock beneficially
owned by any person, (c) whether a person is an Affiliate or Associate of
another, (d) whether a class of Voting Stock is Institutional Voting Stock, and
(e) whether the assets which are the subject of any Business Combination have,
or the consideration to be received for the issuance or transfer of securities
by the Corporation or any Subsidiary in any Business Combination has, an
aggregate Fair Market Value of $1,000,000 or more.

     9.2 Requisite Vote Required.

9.2-1. In addition to any affirmative vote required by law or these articles of
incorporation or the bylaws, and except as otherwise provided in Section 9.3,
the "Requisite Vote" shall be required for the following transactions or
actions:

     (a) any merger or consolidation of the Corporation or any Subsidiary with,
or any absorption by the Corporation of, or of the Corporation by, (i) any
Interested Stockholder, or (ii) any other corporation (whether or not itself an
Interested Stockholder) which is, or after such merger, absorption or
consolidation would be, an Affiliate of an Interested Stockholder;

     (b) any sale, lease, transfer, exchange, mortgage, pledge or other
disposition (in one transaction or a series of transactions) to or with any
Interested Stockholder or any Affiliate of any Interested Stockholder of any
assets of the Corporation or any Subsidiary having an aggregate Fair Market
Value of $1,000,000 or more;

     (c) the issuance or transfer by the Corporation or any Subsidiary (in one
transaction or a series of transactions) of any voting securities of the
Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value of $1,000,000
or more;

     (d) the adoption of any plan or proposal for the dissolution or
liquidation of the Corporation proposed by or on behalf of an Interested
Stockholder or any Affiliate of any Interested Stockholder; or

     (e) any reclassification of securities of the Corporation (including any
reverse stock split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any other
transaction (whether or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or




                                    - 53 -
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indirectly, of increasing the proportionate share of the outstanding shares of
any class of equity or convertible securities of the Corporation or any
Subsidiary which is directly or indirectly owned by any Interested Stockholder
or any Affiliate of any Interested Stockholder.

     9.3 Exceptions to Requisite Vote Requirement.

9.3-1. The provisions of Section 9.2 of these Articles of Incorporation shall
not be applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by law and
any other provision of these Articles of Incorporation or the Bylaws, if all
the conditions specified in either of the following subsections (a) or (b) are
met:

     (a) the Business Combination has been approved by a majority of the
Continuing Directors; provided, however, that if the Interested Stockholder
removes Continuing Directors prior to obtaining approval of the Business
Combination by a majority of the Continuing Directors, the Requisite Vote will
be required, notwithstanding such approval by the Continuing Directors; or

     (b) all of the following conditions shall have been satisfied:

     (i) The aggregate amount of the cash and the Fair Market Value as of the
date of the consummation of the Business Combination of consideration other
than cash to be received per share by holders of the common stock of the
Corporation ("Common Stock") in such Business Combination shall be at least
equal to the highest of the following:

     (A) (if applicable) the highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Stockholder for any shares of Common Stock acquired by it (1) within
the two-year period immediately prior to the first public announcement of the
proposal of the Business Combination (the "Announcement Date") or (2) in the
transaction in which it became an Interested Stockholder, whichever is higher;

     (B) the Fair Market Value per share of Common Stock on the Announcement
Date or on the date on which the Interested Stockholder became an Interested
Stockholder (such latter date is referred to in this Section as the
"Determination Date"), whichever is higher;

     (C) (if applicable) the price per share equal to the Fair Market Value per
share of Common Stock determined pursuant to subsection (i)(B) above,
multiplied by the ratio of (1) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Stockholder for any shares of Common Stock acquired by it within the
two-year period immediately prior to the Announcement Date to (2) the Fair
Market Value per share of Common Stock on the first day in such two-year period
upon which the Interested Stockholder acquired any shares of Common Stock; and

     (D) the amount of shareholders' equity in respect of each outstanding
share of Common Stock as determined in accordance with generally accepted
accounting principles and as reflected in any published report by the
Corporation as at the end of the fiscal year quarter ending immediately
preceding the Announcement Date.

     (ii) The aggregate amount of the cash and the Fair Market Value as of the
date of the consummation of the Business Combination of consideration other
than cash to be received per share by holders of shares of any other class of
outstanding Voting Stock (other than Institutional Voting Stock) shall be at
least equal to the highest of the following (it being intended that the
requirements of this subsection (b)(ii) shall be required to be met with
respect to every class of outstanding Voting Stock (other than Institutional
Voting Stock), whether or not the Interested Stockholder has previously
acquired any shares of a particular class of Voting Stock):

     (A) (if applicable) the highest per share price (including any brokerage
commissions, transfer taxes and soliciting dealers' fees) paid by the
Interested Stockholder for any shares of such class of Voting Stock acquired by
it (1) within the two year period immediately prior to the Announcement Date or
(2) in the transaction in which it became an Interested Stockholder, whichever
is higher;

     (B) (if applicable) the highest preferential amount per share to which the
holders of shares of such class of Voting Stock are entitled in the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation;

     (C) the Fair Market Value per share of such class of Voting Stock on the
Announcement Date or on the Determination Date, whichever is higher; and

     (D) (if applicable) the price per share equal to the Fair Market Value per
share of such class of Voting Stock determined pursuant to subsection (ii)(C)
above, multiplied by the ratio of (1) the highest per share price (including
any



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<PAGE>   8

brokerage commissions, transfer taxes and soliciting dealers' fees) paid by
the Interested Stockholder for any shares of such class of Voting  Stock
acquired by it within the two-year period immediately prior to the Announcement
Date to (2) the Fair Market Value per share of such class of Voting Stock on
the first day in such two-year period upon which the Interested Stockholder
acquired any shares of such class of Voting Stock.

     (iii) the consideration to be received by holders of a particular class of
outstanding Voting Stock (including Common Stock) shall be in cash or in the
same form as the Interested Stockholder has previously paid for shares of such
class of Voting Stock.  If the Interested Stockholder has paid for shares of
any class of Voting Stock with varying forms of consideration, the form of
consideration for such class of Voting Stock shall be either cash or the form
used to acquire the largest number of shares of such class of Voting Stock
previously acquired by it.

     (iv) after such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination:

     (A) there shall have been (1) no reduction in the annual rate of dividends
paid on the Common Stock (except as necessary to reflect any subdivision of the
Common Stock), except as may have been approved by a majority
vote of the Continuing Directors, and (2) an increase in such annual rate of
dividends as necessary to reflect any reclassification (including any reverse
stock split), recapitalization, reorganization or any similar transaction which
has the effect of reducing the number of outstanding shares of the Common
Stock, unless the failure so to increase such annual rate is approved by a
majority of the Continuing Directors; and

     (B) such Interested Stockholder shall not have become the beneficial owner
of any additional Voting Shares except as a part of the transaction which
results in such Interested Stockholder becoming an Interested Stockholder.

     (v) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the benefit,
directly or indirectly (except proportionately as a stockholder), of any loans,
advances, guaranties, pledges or other financial assistance or any tax credits
or other tax advantages provided by the Corporation, whether in anticipation of
or in connection with such Business Combination or otherwise.

     (vi) A proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange Act
of 1934 and the rules and regulations thereunder (or any subsequent provisions
replacing such Act, rules or regulations) shall be mailed to all public
stockholders at least thirty (30) days prior to the consummation of such
Business Combination (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent provisions).

9.302. Nothing contained in this Article IX shall be construed to relieve any
Interested Stockholder from any fiduciary obligation imposed by law.


                                   ARTICLE X

                                   AMENDMENTS

     Notwithstanding any other provisions of these Articles of Incorporation
and the Bylaws of the Corporation (and notwithstanding the fact that a lesser
percentage may be expressly permitted by law or the Bylaws of the Corporation):

(a)  The affirmative vote of the holders of 80% of the combined voting power
     of the then outstanding shares of Voting Stock, voting together as a
     single class, shall be required to amend or repeal or adopt any provision
     inconsistent with Articles V, VII, VIII and IX of these Articles of
     Incorporation; provided, however, that any such amendment, repeal or
     adoption that has been recommended to the shareholders by the affirmative
     vote of not less than two-thirds of the Disinterested Directors, as
     defined in Subsection (c) below, shall require only the vote, if any,
     required under the applicable provision of the Wisconsin Business
     Corporation Law.  For purposes of this Subsection (a) of this Article X
     only, if at the time when any such amendment, repeal or adoption is under
     consideration, there is no Interested Shareholder, as defined in
     Subsection (c) below (in which event the definition of Disinterested
     Director would be inapplicable), the Disinterested Directors shall be
     deemed to be those persons who are then members of the Board of Directors
     and who are not then and have not been affiliated with or nominees of any
     person who is or has been an Interested Shareholder.

(b)  The affirmative vote of the holders of 80% of the combined voting power
     of the then outstanding shares of Voting Stock, voting together as a
     single class, and the affirmative vote of the majority of the combined
     voting power of the then outstanding shares of Voting Stock held by
     Disinterested Shareholders, as defined



                                    - 55 -
<PAGE>   9

     in Subsection (c) below, voting together as a single class, shall be
     required to amend or repeal or adopt any provision inconsistent with this
     Article X of these Articles of Incorporation; provided, however, that any
     such amendment, repeal or adoption that has been recommended to
     shareholders by the affirmative vote of not less than two-thirds of the
     Disinterested Directors at a time when there is no Interested Shareholder
     shall require only the vote, if any, required under the applicable
     provision of the Wisconsin Business Corporation Law.  For purposes of this
     Subsection (b) of this Article X only, the Disinterested Directors shall
     be deemed to be those persons who are then members of the Board of
     Directors and who are not then and have not been affiliated with or
     nominees of any person who has been an Interested Shareholder.

(c)  For purposes of this Article X, the following terms shall have the
     meanings stated:

             (1)  "Interested Shareholder" shall mean any person
                  (other than the Corporation or any subsidiary) who or which:

     (A)is the beneficial owner, directly or indirectly, of 10% or more of the
combined voting power of the then outstanding shares of Voting Stock; or

     (B)is an Affiliate of the Corporation and at any time within the two-year
period immediately prior to the date in question was the beneficial owner,
directly or indirectly, of 10% or more of the combined voting power of the then
outstanding shares of Voting Stock; or

     (C)is an assignee of or has otherwise succeeded to the beneficial
ownership of any shares of Voting Stock which were at any time within the
two-year period immediately prior to the date in question beneficially owned by
an Interested Shareholder, if such assignment or succession shall have occurred
in the course of a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.

             (2)  "Disinterested Shareholder" shall mean a
                  beneficial owner of the Corporation's Voting Stock who is not
                  an Interested Shareholder or an Affiliate or an Associate, as
                  those terms are defined elsewhere in this Subsection (c), or
                  an Interested Shareholder.

             (3)  A person shall be a "beneficial owner" of any
                  Voting Stock;

     (A) which such person or any of its Affiliates or Associates beneficially
owns directly or indirectly; or

     (B) which such person or any of its Affiliates or Associates has (i) the
right to acquire (whether such right is exercisable immediately or only after
the passage of time), pursuant to any agreement, arrangement or understanding
or upon the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (ii) the right to vote or to direct the vote pursuant
to any agreement, arrangement or understanding; or

     (C) which is beneficially owned, directly or indirectly, by any person
with which such person or any of its Affiliates or Associates has any
agreement, arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of any shares of Voting Stock.

     (4) For the purposes of determining whether a person is an Interested
Shareholder pursuant to paragraph (1) of this Subsection (c), the number of
shares of Voting Stock deemed to be outstanding shall include shares deemed
owned by such person through application of paragraph (3) of this Subsection
(c) but shall not include any other shares of Voting Stock which may be
issuable to other persons pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, exchange rights, warrants
or options, or otherwise.

     (5) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on the date of filing of
these Articles of Incorporation.

     (6) "Disinterested Director" means any member of the Board of Directors of
the Corporation who is unaffiliated with, and not a nominee of, an Interested
Shareholder ans was  a member of the Board of Directors prior to the time that
each Interested Shareholder became an Interested Shareholder, and any successor
of a Disinterested Director who is unaffiliated with, and not a nominee of, an
Interested Shareholder and who is recommended to succeed a Disinterested
Director by a majority of Disinterested Directors then on the Board of
Directors.


                                   ARTICLE XI


                                    - 56 -
<PAGE>   10

                          REGISTERED OFFICE AND AGENT

     The address of the registered office of the Corporation is 400 Broad
Street, City of Beloit, Rock County, Wisconsin 53511 and the name of its
registered agent at such address is James P. Kelley.


                                    * * * *



     The undersigned officers of Blackhawk Bancorp, Inc. hereby certify that
the foregoing amendment and restatement of the Articles of Incorporation of
this Corporation was duly adopted by the sole shareholder of the Corporation on
February 14, 1990.  The number of shares entitled to vote with respect to the
subject matter of said restatement is one.  One vote was voted in favor of the
restatement, and zero votes were voted against the restatement.

     Executed in duplicate this 20th day of February, 1990.



                                                   _____________________________
                                                   Dennis M. Conerton, President



                                                   _____________________________
                                                      James P. Kelley, Secretary


THIS DOCUMENT WAS DRAFTED BY:

Fredrick G. Lautz, Esq.
Quarles & Brady
411 East Wisconsin Avenue
Milwaukee, WI 53202-4497





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