RESTATED ARTICLES OF INCORPORATION

 

                                       OF

 

                                TRICO BANCSHARES

 

 

Richard P. Smith and Thomas Reddish do hereby certify that:

 

         1.    They are the President and Chief Financial Officer, respectively,

               of   TriCo    Bancshares,    a   California    Corporation   (the

               "Corporation").

 

         2.    The Articles of  Incorporation  of the  Corporation as amended to

               the date of this  Certificate are and restated in full to read as

               set forth in the attached Exhibit,  which is incorporated  herein

               by reference, as if in full.

 

         3.    The foregoing  Restated Articles of Incorporation  have been duly

               approved by the board of directors.

 

         4.    The foregoing  Restated Articles of Incorporation do not alter or

               amend  in any  respect  the  Articles  of  Incorporation  of this

               corporation  and,  pursuant  to  Section  910 of  the  California

               Corporations  Code,  may be  approved  by the Board of  Directors

               along and do not required the approval of the outstanding shares.

 

We further  declare  under  penalty  of  perjury  under the laws of the State of

California  that the matters set forth in this  Certificate are true and correct

of our own knowledge.

 

 

Date:  March 9, 2009              /s/ Richard P. Smith

                                  --------------------------------------

                                  Richard P. Smith, President

 

 

 

                                  /s/ Thomas Reddish

                                  --------------------------------------

                                  Thomas Reddish, Chief Financial Officer

 

 

 

 

                       RESTATED ARTICLES OF INCORPORATION

 

                                       OF

 

                                TRICO BANCSHARES

 

 

                                     FIRST

 

     The name of this Corporation is TriCo Bancshares.

 

                                     SECOND

 

     The purpose of this  Corporation is to engage in any lawful act or activity

for which a corporation  may be organized  under the General  Corporation Law of

California  other than the banking  business,  the trust company business or the

practice  of a  profession  permitted  to  be  incorporated  by  the  California

Corporations Code.

 

                                     THIRD

 

          3.1 The  Corporation  is  authorized  to issue two  classes  of shares

     designated "Preferred Stock" and "Common Stock,"  respectively.  The number

     of shares  of  Preferred  Stock  authorized  to be  issued  is one  million

     (1,000,000),  and the  number of shares of Common  Stock  authorized  to be

     issued is fifty million (50,000,000).

 

          3.2 The  Preferred  Stock may be divided into such number of series as

     the Board of Directors may determine.  The Board of Directors is authorized

     to determine and alter the rights, preferences, privileges and restrictions

     granted to or imposed upon any wholly unissued  series of Preferred  Stock,

     and to fix the  number of shares of any series of  Preferred  Stock and the

     designation of any such series of Preferred  Stock. The Board of Directors,

     within the limits and restrictions  stated in any resolution or resolutions

     of  the  Board  of  Directors   originally  fixing  the  number  of  shares

     constituting any series, may increase or decrease (but not below the number

     of shares of such  series  then  outstanding)  the  number of shares of any

     series subsequent to the issue of shares of that series.

 

          3.3 Series A Preferred Stock.

              -------------------------

               The rights,  preferences and privileges of the Series A Preferred

      Stock of the Corporation are as set forth in this Section 3.3.

 

               3.3.1 Designation and Amount.

                     ----------------------

               Thirty  Thousand  Six  Hundred  (30,600)  of  the  shares  of the

          Preferred Stock of the  Corporation are designated  Series A Preferred

          Stock (hereinafter referred to as "Series A Stock").

 

               3.3.2 Dividends.

                     ---------

               (a) The  holders of shares of Series A Stock shall be entitled to

          receive cash dividends, when and as declared by the Board of Directors

          out of funds legally available for the purpose, from the date of issue

          of such shares to and including August 31, 1985, and for each Dividend

          Period  commencing  on the first day of each  month in each year after

          August 31, 1985 and ending on and including the day next preceding the

          first day of the next month (such  period  ending  August 31, 1985 and

          each of such other periods herein referred to in this Section 3.3 as a

          "Dividend Period"),  at an annual rate of $11.00 per share. The amount

          of dividend per share  payable for the portion of the Dividend  Period

          from the date of  original  issue of a share of  Series A Stock to and

          including  August 31, 1985 and for any other  Dividend  Period more or

          less than a full  Dividend  Period shall be computed on the basis of a

          360-day  year of twelve  30-day  months and the actual  number of days

          elapsed in the period for which  payable.  The amount of dividend  per

          share payable for each full Dividend  Period  commencing  after August

          31, 1985 shall be computed by dividing  the annual  dividend  rate for

          each Dividend Period by twelve. Dividends shall be payable when and as

          declared by the Board of  Directors,  out of funds  legally  available

          therefor,  to holders of record on such respective dates not exceeding

          15 days preceding the payment date thereof as may be determined by the

          Board of  Directors  in advance of such  payment  date.  Dividends  on

          account of arrears for any past  Dividend  Periods may be declared and

          paid at any time,  without  reference to any regular  dividend payment

          date,  to  holders  of  record  on such  date  not  exceeding  15 days

          preceding  the  payment  date  thereof as may be fixed by the Board of

          Directors. No dividends shall be declared on any other series or class

          or classes  of  Preferred  Stock  ranking on a parity (as that term is

          defined in Section  3.3.5(d))  with the Series A Stock as to dividends

          in respect of any Dividend  Period  unless there shall  likewise be or

          have  keen  declared  on all  shares  of  Series  A Stock  at the time

          outstanding like dividends for all Dividend Periods coinciding with or

          ending  before such  Dividend  Period,  ratably in  proportion  to the

          respective  dividend rates fixed for all such other series or class or

          classes of Preferred Stock and the Series A Stock.  Dividends shall be

          cumulative  and will  accrue on each  share of Series A Stock from the

          date of original  issuance  thereof.  No interest,  or sum of money in

          lieu of interest,  shall be payable in respect of any dividend payment

          or payments which may be in arrears.

 

               (b) If  dividends  at the  rate  per  share  set  out in  Section

          3.3.2(a) for any Dividend Period shall not have been declared and paid

          or set apart for payment on all  outstanding  shares of Series A Stock

          for such Dividend Period and all preceding  Dividend  Periods from and

          after the date of issue thereof,  then, until the aggregate deficiency

          shall be  declared  and  fully  paid or set  apart  for  payment,  the

          Corporation  shall not (i) declare or pay or set apart for payment any

          dividends  or make any other  distribution  on the Common Stock of the

          Corporation  or any other  capital  stock of the  Corporation  ranking

          junior to the Series A Stock with  respect to the payment of dividends

          or distribution of assets on liquidation, dissolution or winding up of

          the  Corporation  (which for all purposes shall mean any  liquidation,

          dissolution  or winding up of the  Corporation,  whether  voluntary or

          involuntary)  (the  Common  Stock and such other  stock  being  herein

          referred  to in  this  Section  3.3 as  "Junior  Stock"),  other  than

          dividends or distributions paid in shares of, or options,  warrants or

          rights to subscribe for or purchase  shares of, Junior Stock,  or (ii)

          make any  payment  on  account of the  purchase,  redemption  or other

          retirement of any Junior Stock.

 

               3.3.3 Liquidation  Preference.

                     -----------------------

          Upon  the  voluntary  or  involuntary   liquidation,   winding  up  or

          dissolution  of  the  Corporation,  out of the  assets  available  for

          distribution  to  shareholders  the holders of Series A Stock shall be

          entitled to receive, in preference to any payment on the Junior Stock,

          an amount  equal to $100.00  per share plus  cumulative  dividends  as

          provided in Section 3.3.2 above accrued and unpaid to the date payment

          is made  available  to the Series A Stock and no more.  Subject to the

          rights of the  holders  of shares of any series or class or classes of

          stock  ranking  on a parity  with or prior to the  Series A Stock upon

          liquidation,  dissolution  or winding up, after the full  preferential

          liquidation  amount has been paid to, or determined and set apart for,

          the Series A Stock,  the remaining  assets shall be paid to the Junior

          Stock.  If upon any  liquidation,  dissolution  or  winding  up of the

          Corporation,  the  assets of the  Corporation,  or  proceeds  thereof,

          distributable  among the  holders  of the shares of the Series A Stock

          shall be insufficient to pay in full the preferential amount aforesaid

          and liquidating  payments on any other Preferred Stock ranking,  as to

          liquidation,  dissolution or winding up, on a parity with the Series A

          Stock, then such assets, or the proceeds thereof, shall be distributed

          among the  shareholders of Series A Stock and any such other Preferred

          Stock ratably in accordance with the respective amounts which would be

          payable on such shares of Series A Stock and any such other  Preferred

          Stock  if  all  amounts   payable   thereon   were  paid  in  full.  A

          reorganization shall not be considered to be a liquidation, winding up

          or  dissolution  within the meaning of this Section  3.3.3 and in such

          event the Series A Stock shall be entitled only to the rights provided

          in the plan of reorganization and Chapters 12 and 13 of the California

          General Corporation Law and elsewhere in the Corporation's Articles of

          Incorporation.

 

               3.3.4 Redemption.

                     ----------

               (a) The  Series A Stock is subject  to  redemption,  out of funds

          legally available therefor, in whole, or from time to time in part, at

          the option of the board of directors of the Corporation at or any time

          after July 1, 1988 or prior  thereto  upon the  approval of at least a

          majority of the  outstanding  shares of Series A Stock. If only a part

          of the  Series  A Stock is to be  redeemed,  the  redemption  shall be

          carried out pro rata (as nearly as may be). The redemption price shall

          be $100.00 per share plus cumulative  dividends as provided in Section

          3.3.2  above  accrued  and  unpaid to the date  fixed  for  redemption

          (herein called the "redemption price"). In the case of a redemption of

          less than all of the  Series A Stock at anytime  outstanding,  no such

          shares may be redeemed  until all dividends  accrued and unpaid on all

          Series A Stock then outstanding, other than the shares to be redeemed,

          shall have been paid or declared and the full amount thereof set apart

          for payment.

 

               (b) The Corporation  shall mail a notice of  redemption  to each

          holder of record of shares to be redeemed  addressed  to the holder at

          the address of such holder  appearing on the books of the  Corporation

          or given by the holder to the  Corporation  for the purpose of notice,

          or if no such  address  appears  or is given at the  place  where  the

          principal executive office of the Corporation is located,  not earlier

          than 60 nor later than 20 days  before the date fixed for  redemption.

          The notice of redemption  shall include (i) the class of shares or the

          part of a class of  shares  to be  redeemed,  (ii) the date  fixed for

          redemption, (iii) the redemption price and (iv) the place at which the

          shareholders may obtain payment of the redemption price upon surrender

          of their share certificates.  If funds are available on the date fixed

          for the  redemption,  then whether or not the share  certificates  are

          surrendered for payment of the redemption  price,  the shares shall no

          longer  be  outstanding  and the  holders  thereof  shall  cease to be

          shareholders of the Corporation with respect to the shares redeemed on

          and after the date fixed for  redemption and shall be entitled only to

          receive the  redemption  price without  interest upon surrender of the

          share  certificate.  If less than all the  shares  represented  by one

          share  certificate are to be redeemed,  the Corporation  shall issue a

          new share certificate for the shares not redeemed.

 

               (c) The  Corporation  shall  also  cause a copy of the  notice of

          redemption  to be published in a newspaper of general  circulation  in

          the county in which the principal  executive office of the Corporation

          is  located  at least once a week for two  successive  weeks,  in each

          instance on any day of the week,  commencing  not earlier  than 60 nor

          later  than 20 days  before  the date  fixed  for  redemption.  If the

          Corporation  publishes  the notice of  redemption  as provided in this

          paragraph  (c),  the  failure of the  Corporation  to comply  with the

          provision  for mailing of notice of  redemption in paragraph (b) shall

          not invalidate the redemption of the shares.

 

               (d) If,  on or  prior  to any  date  fixed  for  redemption,  the

          Corporation  deposits  with any bank or trust  company  in this  state

          (which may be an affiliate of the  Corporation)  as a trust fund a sum

          sufficient to redeem,  on the date fixed for redemption  thereof,  the

          shares  called  for  redemption,  with  irrevocable  instructions  and

          authority  to the bank or trust  company  to  publish  the  notice  of

          redemption  thereof (or to complete such  publication  if  theretofore

          commenced)  and to pay, on and after the date fixed for  redemption or

          prior thereto,  the redemption price of the shares to their respective

          holders  upon  surrender  of their share  certificates,  then from and

          after the date of the  deposit  (although  prior to the date fixed for

          redemption)  the shares so called shall be redeemed  and  dividends on

          those   shares  shall  cease  to  accrue  after  the  date  fixed  for

          redemption. The deposit shall constitute full payment of the shares to

          their  holders  and from and after the date of the  deposit the shares

          shall no longer be outstanding  and the holders thereof shall cease to

          be  shareholders  with respect to such shares and shall have no rights

          with  respect  thereto  except the right to  receive  from the bank or

          trust company  payment of the  redemption  price of the shares without

          interest,  upon surrender of their certificates therefor. Any interest

          accrued on such funds  shall be paid to the  Corporation  from time to

          time. If less than all the shares represented by one share certificate

          are  to  be  redeemed,   the  Corporation  shall  issue  a  new  share

          certificate for the shares not redeemed.  After two years, the bank or

          trust company shall return to the Corporation  funds deposited and not

          claimed and  thereafter the holder of a share  certificate  for shares

          redeemed shall look to the Corporation for payment.

 

               3.3.5  Voting Rights.

                      -------------

               (a)  Except  as  hereinafter  in  this  Section  3.3.5  expressly

          provided  for and as  otherwise  required  by the laws of the State of

          California,  the Series A Stock shall have no voting rights.  If there

          is a  default  in  whole  or in  part  in the  payment  of 24 or  more

          cumulative  monthly  dividends,  whether  or not  consecutive,  on the

          Series A Stock as provided for in Section 3.3.2 above,  the holders of

          the outstanding Series A Stock shall have the right, voting separately

          as a class with  holders of shares of any one or more other  series of

          Preferred  Stock ranking on a parity with the Series A Stock either as

          to  dividends  or  the   distribution  of  assets  upon   liquidation,

          dissolution  or winding up and upon which like voting rights have been

          conferred and are exercisable,  to elect two of the authorized  number

          of  members  of the  Board  of  Directors  of the  Corporation  at the

          Corporation's  next annual meeting of  shareholders.  At elections for

          such directors, each holder of Series A Stock shall be entitled to one

          vote for each share held (the holders of shares of any other series of

          Preferred Stock ranking on such a parity and having like voting rights

          being entitled to such number of votes, if any, for each share of such

          stock  held as may be granted  to them).  The right of the  holders of

          Series A Stock,  voting  separately as a class, to elect (either alone

          or together with the holders of shares of any one or more other series

          of  Preferred  Stock  ranking on such a parity and having  like voting

          rights)  members  of the  Board of  Directors  of the  Corporation  as

          aforesaid shall continue until such time as all dividends  accumulated

          on the  Series A Stock  shall  have been  fully  paid or set apart for

          payment, at which time such right shall terminate, except as herein or

          by law expressly  provided,  subject to revesting in the event of each

          and every subsequent  default of the character above  mentioned.  Upon

          any termination of the right of the holders of the Series A Stock as a

          class to vote for directors as herein provided,  the term of office of

          all  directors  then in office  elected  by the  Series A Stock  shall

          terminate  immediately.  Any  director  who shall have been so elected

          pursuant to this paragraph may be removed at any time,  either with or

          without cause, and any vacancy thereby created may be filled,  only by

          the  affirmative  vote  of  the  holders  of  Series  A  Stock  voting

          separately  as a class  (either  alone or together with the holders of

          shares of any one or more other series of Preferred  Stock  ranking on

          such a parity and having  like  voting  rights).  If the office of any

          director  elected by the  holders of Series A Stock  voting as a class

          becomes  vacant  for any  reason  other than  removal  from  office as

          aforesaid,  the  remaining  director may choose a successor  who shall

          hold office for the  unexpired  term in respect of which such  vacancy

          occurred.

 

               (b) So long as any shares of Series A Stock  remain  outstanding,

          the  consent of the  holders  of at least a majority  of the shares of

          Series A Stock  outstanding at the time (voting  separately as a class

          together with all other series of Preferred  Stock ranking on a parity

          with the Series A Stock either as to dividends or the  distribution of

          assets upon liquidation, dissolution or winding up and upon which like

          voting  rights  have  been  conferred  and are  exercisable)  shall be

          necessary  to  permit,  effect  or  validate  any  one or  more of the

          following:

 

                    (i) the  authorization,  creation or issuance of a new class

               or series of shares  having  rights,  preferences  or  privileges

               prior (as that term is defined in Section 3.3.5(d)) to the shares

               of  the  Series  A  Stock,  or any  increase  in  the  number  of

               authorized   shares  of  any  class  or  series  having   rights,

               preferences or privileges  prior to the shares of Series A Stock;

               or

 

                    (ii) the amendment, alteration or repeal, whether by merger,

               consolidation  or  otherwise,  of any of  the  provisions  of the

               Articles  of  Incorporation   of  the  Corporation   which  would

               materially and adversely affect any right, preference,  privilege

               or voting power of the Series A Stock or of the holders  thereof,

               provided,  however that any increase in the amount of  authorized

               Common Stock or  authorized  Preferred  Stock or the creation and

               issuance of other series of Common Stock or Preferred  Stock,  in

               each case  ranking  on a parity  with or  junior to the  Series A

               Stock  with  respect  to  the  payment  of   dividends   and  the

               distribution of assets upon  liquidation,  dissolution or winding

               up, shall not be deemed to materially  and adversely  affect such

               rights, preferences, privileges or voting powers.

 

               (c) The  foregoing  voting  provisions  shall not apply if, at or

          prior to the time when the act with  respect  to which such vote would

          otherwise be required  shall be effected,  all  outstanding  shares of

          Series A Stock shall have been redeemed or called for  redemption  and

          sufficient  funds  shall have been  deposited  in trust to effect such

          redemption.

 

               (d) Any class or  classes  of stock of the  Corporation  shall be

          deemed to rank:

 

                    (i)  prior to the  Series A Stock as to  dividends  or as to

               distribution of assets upon  liquidation,  dissolution or winding

               up if the  holders of such class shall be entitled to the receipt

               of  dividends  or  of  amounts  distributable  upon  liquidation,

               dissolution  or winding up, as the case may be, in  preference or

               priority to the holders of Series A Stock; and

 

                    (ii) on a parity with the Series A Stock as to  dividends or

               as to  distribution  of assets upon  liquidation,  dissolution or

               winding up, whether or not the dividend rates,  dividend  payment

               dates or redemption or  liquidation  prices per share thereof are

               different from those of the Series A Stock if the holders of such

               class of stock and of the Series A Stock shall be entitled to the

               receipt   of   dividends   or  of  amounts   distributable   upon

               liquidation,  dissolution  or winding  up, as the case may be, in

               proportion  to their  respective  dividend  rates or  liquidation

               prices, without preference or priority one over the other.

 

          3.4 Series B Preferred Stock.

              ------------------------

          The rights, preferences and privileges of the Series B Preferred Stock

     of the Corporation are as set forth in this Section 3.4.

 

               3.4.1  Designation  and  Amount.

                      ------------------------

          Eight  Thousand  (8,000) of the shares of the  Preferred  Stock of the

          Corporation  are  designated  Series B  Preferred  Stock  (hereinafter

          referred to as "Series B Stock").

 

               3.4.2 Dividends.

                     ---------

               (a) The  holders of shares of Series B Stock shall be entitled to

          receive cash dividends, when and as declared by the Board of Directors

          out of funds legally available for the purpose, from the date of issue

          of such  shares  to and  including  November  30,  1988,  and for each

          Dividend Period commencing on the first day of each month in each year

          after  November  30,  1988 and  ending on and  including  the day next

          preceding the first day of the next month (such period ending November

          30,  1988 and each of such other  periods  herein  referred to in this

          Section 3.4 as a "Dividend  Period"),  at an annual rate of $52.50 per

          share. The amount of dividend per share payable for the portion of the

          Dividend Period from the date of original issue of a share of Series B

          Stock to and  including  November 30, 1988 and for any other  Dividend

          Period more or less than a full  Dividend  Period shall be computed on

          the basis of a 360-day  year of twelve  30-day  months  and the actual

          number of days elapsed in the period for which payable.  The amount of

          dividend per share  payable for each full Dividend  Period  commencing

          after  November  30, 1988 shall be  computed  by  dividing  the annual

          dividend rate for each Dividend  Period by twelve.  Dividends shall be

          payable when and as declared by the Board of  Directors,  out of funds

          legally  available  therefor,  to holders of record on such respective

          dates not exceeding 15 days  preceding the payment date thereof as may

          be  determined  by the Board of  Directors  in advance of such payment

          date.  Dividends on account of arrears for any past  Dividend  Periods

          may be declared and paid at any time, without reference to any regular

          dividend payment date, to holders of record on such date not exceeding

          15 days  preceding  the  payment  date  thereof as may be fixed by the

          Board of Directors. No dividends shall be declared on any other series

          or class or classes of  Preferred  Stock  ranking on a parity (as that

          term is  defined in  Section  3.4.5(d))  with the Series B Stock as to

          dividends  in  respect  of any  Dividend  Period  unless  there  shall

          likewise  be or have been  declared on all shares of Series B Stock at

          the  time   outstanding   like  dividends  for  all  Dividend  Periods

          coinciding  with or ending  before such  Dividend  Period,  ratably in

          proportion to the  respective  dividend rates fixed for all such other

          series or class or classes of Preferred  Stock and the Series B Stock.

          Dividends  shall be cumulative and will accrue on each share of Series

          B Stock from the date of original  issuance thereof.  No interest,  or

          sum of money in lieu of  interest,  shall be payable in respect of any

          dividend payment or payments which may be in arrears.

 

               (b) If  dividends  at the  rate  per  share  set  out in  Section

          3.4.2(a) for any Dividend Period shall not have been declared and paid

          or set apart for payment on all  outstanding  shares of Series B Stock

          for such Dividend Period and all preceding  Dividend  Periods from and

          after the date of issue thereof,  then, until the aggregate deficiency

          shall be  declared  and  fully  paid or set  apart  for  payment,  the

          Corporation  shall not (i) declare or pay or set apart for payment any

          dividends  or make any other  distribution  on the Common Stock of the

          Corporation  or any other  capital  stock of the  Corporation  ranking

          junior to the Series B Stock with  respect to the payment of dividends

          or distribution of assets on liquidation, dissolution or winding up of

          the  Corporation  (which for all purposes shall mean any  liquidation,

          dissolution  or winding up of the  Corporation,  whether  voluntary or

          involuntary)  (the  Common  Stock and such other  stock  being  herein

          referred  to in  this  Section  3.4 as  "Junior  Stock"),  other  than

          dividend or distributions  paid in shares of, or options,  warrants or

          rights to subscribe for or purchase  shares of, Junior Stock,  or (ii)

          make any  payment  on  account of the  purchase,  redemption  or other

          retirement of any Junior Stock.

 

               3.4.3 Liquidation Preference.

                     ----------------------

          Upon  the  voluntary  or  involuntary   liquidation,   winding  up  or

          dissolution  of  the  Corporation,  out of the  assets  available  for

          distribution  to  shareholders  the holders of Series B Stock shall be

          entitled to receive, in preference to any payment on the Junior Stock,

          an amount  equal to $500.00  per share plus  cumulative  dividends  as

          provided in Section 3.4.2 above accrued and unpaid to the date payment

          is made  available  to the Series B Stock and no more.  Subject to the

          rights of the  holders  of shares of any series or class or classes of

          stock  ranking  on a parity  with or prior to the  Series B Stock upon

          liquidation,  dissolution  or winding up, after the full  preferential

          liquidation  amount has been paid to, or determined and set apart for,

          the Series B Stock,  the remaining  assets shall be paid to the Junior

          Stock.  If upon any  liquidation,  dissolution  or  winding  up of the

          Corporation,  the  assets of the  Corporation,  or  proceeds  thereof,

          distributable  among the  holders  of the shares of the Series B Stock

          shall be insufficient to pay in full the preferential amount aforesaid

          and liquidating  payments on any other Preferred Stock ranking,  as to

          liquidation,  dissolution or winding up, on a parity with the Series B

          Stock, then such assets, or the proceeds thereof, shall be distributed

          among the  shareholders of Series B Stock and any such other Preferred

          Stock ratably in accordance with the respective amounts which would be

          payable on such shares of Series B Stock and any such other  Preferred

          Stock  if  all  amounts   payable   thereon   were  paid  in  full.  A

          reorganization shall not be considered to be a liquidation, winding up

          or  dissolution  within the meaning of this Section  3.4.3 and in such

          event the Series B Stock shall be entitled only to the rights provided

          in the plan of reorganization and Chapters 12 and 13 of the California

          General Corporation Law and elsewhere in the Corporation's Articles of

          Incorporation.

 

               3.4.4 Redemption.

                     -----------

               (a) The  Series B Stock is subject  to  redemption,  out of funds

          legally available therefor, in whole, or from time to time in part, at

          the option of the board of directors of the Corporation at or any time

          after August 1, 1995 or prior  thereto upon the approval of at least a

          majority of the  outstanding  shares of Series B Stock. If only a part

          of the  Series  B Stock is to be  redeemed,  the  redemption  shall be

          carried out pro rata (as nearly as may be). The redemption price shall

          be $500.00 per share plus cumulative  dividends as provided in Section

          3.4.2  above  accrued  and  unpaid to the date  fixed  for  redemption

          (herein called the "redemption price"). In the case of a redemption of

          less than all of the  Series B Stock at anytime  outstanding,  no such

          shares may be redeemed  until all dividends  accrued and unpaid on all

          Series B Stock then outstanding, other than the shares to be redeemed,

          shall have been paid or declared and the full amount thereof set apart

          for payment.

 

               (b) The  Corporation  shall mail a notice of  redemption  to each

          holder of record of shares to be redeemed  addressed  to the holder at

          the address of such holder  appearing on the books of the  Corporation

          or given by the holder to the  Corporation  for the purpose of notice,

          or if no such  address  appears  or is given at the  place  where  the

          principal executive office of the Corporation is located,  not earlier

          than 60 nor later than 20 days  before the date fixed for  redemption.

          The notice of redemption  shall include (i) the class of shares or the

          part of a class of  shares  to be  redeemed,  (ii) the date  fixed for

          redemption, (iii) the redemption price and (iv) the place at which the

          shareholders may obtain payment of the redemption price upon surrender

          of their share certificates.  If funds are available on the date fixed

          for the  redemption,  then whether or not the share  certificates  are

          surrendered for payment of the redemption  price,  the shares shall no

          longer  be  outstanding  and the  holders  thereof  shall  cease to be

          shareholders of the Corporation with respect to the shares redeemed on

          and after the date fixed for  redemption and shall be entitled only to

          receive the  redemption  price without  interest upon surrender of the

          share  certificate.  If less than all the  shares  represented  by one

          share  certificate are to be redeemed,  the Corporation  shall issue a

          new share certificate for the shares not redeemed.

 

               (c) The  Corporation  shall  also  cause a copy of the  notice of

          redemption  to be published in a newspaper of general  circulation  in

          the county in which the principal  executive office of the Corporation

          is  located  at least once a week for two  successive  weeks,  in each

          instance on any day of the week,  commencing  not earlier  than 60 nor

          later  than 20 days  before  the date  fixed  for  redemption.  If the

          Corporation  publishes  the notice of  redemption  as provided in this

          paragraph  (c),  the  failure of the  Corporation  to comply  with the

          provision  for mailing of notice of  redemption in paragraph (b) shall

          not invalidate the redemption of the shares.

 

               (d) If,  on or  prior  to any  date  fixed  for  redemption,  the

          Corporation  deposits  with any bank or trust  company  in this  state

          (which may be an affiliate of the  Corporation)  as a trust fund a sum

          sufficient to redeem,  on the date fixed for redemption  thereof,  the

          shares  called  for  redemption,  with  irrevocable  instructions  and

          authority  to the bank or trust  company  to  publish  the  notice  of

          redemption  thereof (or to complete such  publication  if  theretofore

          commenced)  and to pay, on and after the date fixed for  redemption or

          prior thereto,  the redemption price of the shares to their respective

          holders  upon  surrender  of their share  certificates,  then from and

          after the date of the  deposit  (although  prior to the date fixed for

          redemption)  the shares so called shall be redeemed  and  dividends on

          those   shares  shall  cease  to  accrue  after  the  date  fixed  for

          redemption. The deposit shall constitute full payment of the shares to

          their  holders  and from and after the date of the  deposit the shares

          shall no longer be outstanding  and the holders thereof shall cease to

          be  shareholders  with respect to such shares and shall have no rights

          with  respect  thereto  except the right to  receive  from the bank or

          trust company  payment of the  redemption  price of the shares without

          interest,  upon surrender of their certificates therefor. Any interest

          accrued on such funds  shall be paid to the  Corporation  from time to

          time. If less than all the shares represented by one share certificate

          are  to  be  redeemed,   the  Corporation  shall  issue  a  new  share

          certificate for the shares not redeemed.  After two years, the bank or

          trust company shall return to the Corporation  funds deposited and not

          claimed and  thereafter the holder of a share  certificate  for shares

          redeemed shall look to the Corporation for payment.

 

               3.4.5 Voting Rights.

                     --------------

               (a)  Except  as  hereinafter  in  this  Section  3.4.5  expressly

          provided  for and as  otherwise  required  by the laws of the State of

          California,  the Series B Stock shall have no voting rights.  If there

          is a  default  in  whole  or in  part  in the  payment  of 24 or  more

          cumulative  monthly  dividends,  whether  or not  consecutive,  on the

          Series B Stock as provided for in Section 3.4.2 above,  the holders of

          the outstanding Series B Stock shall have the right, voting separately

          as a class with  holders of shares of any one or more other  series of

          Preferred  Stock ranking on a parity with the Series B Stock either as

          to  dividends  or  the   distribution  of  assets  upon   liquidation,

          dissolution  or winding up and upon which like voting rights have been

          conferred and are exercisable,  to elect two of the authorized  number

          of  members  of the  Board  of  Directors  of the  Corporation  at the

          Corporation's  next annual meeting of  shareholders.  At elections for

          such directors, each holder of Series B Stock shall be entitled to one

          vote for each share held (the holders of shares of any other series of

          Preferred Stock ranking on such a parity and having like voting rights

          being entitled to such number of votes, if any, for each share of such

          stock  held as may be granted  to them).  The right of the  holders of

          Series B Stock,  voting  separately as a class, to elect (either alone

          or together with the holders of shares of any one or more other series

          of  Preferred  Stock  ranking on such a parity and having  like voting

          rights)  members  of the  Board of  Directors  of the  Corporation  as

          aforesaid shall continue until such time as all dividends  accumulated

          on the  Series B Stock  shall  have been  fully  paid or set apart for

          payment, at which time such right shall terminate, except as herein or

          by law expressly  provided,  subject to revesting in the event of each

          and every subsequent  default of the character above  mentioned.  Upon

          any termination of the right of the holders of the Series B Stock as a

          class to vote for directors as herein provided,  the term of office of

          all  directors  then in office  elected  by the  Series B Stock  shall

          terminate  immediately.  Any  director  who shall have been so elected

          pursuant to this paragraph may be removed at any time,  either with or

          without cause, and any vacancy thereby created may be filled,  only by

          the  affirmative  vote  of  the  holders  of  Series  B  Stock  voting

          separately  as a class  (either  alone or together with the holders of

          shares of any one or more other series of Preferred  Stock  ranking on

          such a parity and having  like  voting  rights).  If the office of any

          director  elected by the  holders of Series B Stock  voting as a class

          becomes  vacant  for any  reason  other than  removal  from  office as

          aforesaid,  the  remaining  director may choose a successor  who shall

          hold office for the  unexpired  term in respect of which such  vacancy

          occurred.

 

               (b) So long as any shares of Series B Stock  remain  outstanding,

          the  consent of the  holders  of at least a majority  of the shares of

          Series B Stock  outstanding at the time (voting  separately as a class

          together with all other series of Preferred  Stock ranking on a parity

          with the Series B Stock either as to dividends or the  distribution of

          assets upon liquidation, dissolution or winding up and upon which like

          voting  rights  have  been  conferred  and are  exercisable)  shall be

          necessary  to  permit,  effect  or  validate  any  one or  more of the

          following:

 

                    (i) the  authorization,  creation or issuance of a new class

               or series of shares  having  rights,  preferences  or  privileges

               prior (as that term is defined in Section 3.4.5(d)) to the shares

               of  the  Series  B  Stock,  or any  increase  in  the  number  of

               authorized   shares  of  any  class  or  series  having   rights,

               preferences or privileges  prior to the shares of Series B Stock;

               or

 

                    (ii) the amendment, alteration or repeal, whether by merger,

               consolidation  or  otherwise,  of any of  the  provisions  of the

               Articles  of  Incorporation   of  the  Corporation   which  would

               materially and adversely affect any right, preference,  privilege

               or voting power of the Series B Stock or of the holders  thereof,

               provided,  however that any increase in the amount of  authorized

               Common Stock or  authorized  Preferred  Stock or the creation and

               issuance of other series of Common Stock or Preferred  Stock,  in

               each case  ranking  on a parity  with or  junior to the  Series B

               Stock  with  respect  to  the  payment  of   dividends   and  the

               distribution of assets upon  liquidation,  dissolution or winding

               up, shall not be deemed to materially  and adversely  affect such

               rights, preferences, privileges or voting powers.

 

               (c) The  foregoing  voting  provisions  shall not apply if, at or

          prior to the time when the act with  respect  to which such vote would

          otherwise be required  shall be effected,  all  outstanding  shares of

          Series B Stock shall have been redeemed or called for  redemption  and

          sufficient  funds  shall have been  deposited  in trust to effect such

          redemption.

 

               (d) Any class or  classes  of stock of the  Corporation  shall be

          deemed to rank:

 

                    (i)  prior to the  Series B Stock as to  dividends  or as to

               distribution of assets upon  liquidation,  dissolution or winding

               up if the  holders of such class shall be entitled to the receipt

               of  dividends  or  of  amounts  distributable  upon  liquidation,

               dissolution  or winding up, as the case may be, in  preference or

               priority to the holders of Series B Stock; and

 

                    (ii) on a parity with the Series B Stock as to  dividends or

               as to  distribution  of assets upon  liquidation,  dissolution or

               winding up, whether or not the dividend rates,  dividend  payment

               dates or redemption or  liquidation  prices per share thereof are

               different  from  those of the Series B Stock,  if the  holders of

               such class of stock and of the Series B Stock  shall be  entitled

               to the  receipt of  dividends  or of amounts  distributable  upon

               liquidation,  dissolution  or winding  up, as the case may be, in

               proportion  to their  respective  dividend  rates or  liquidation

               prices, without preference or priority one over the other.

 

               3.4.6 Series A Preferred Stock.

                     ------------------------

               For purposes of the foregoing provisions,  the Series A Preferred

          Stock of the Corporation  shall be deemed to rank on a parity with the

          Series B Stock for purposes of Sections 3.4.2, 3.4.3 and 3.4.5 hereof.

 

          3.5 Series C Preferred Stock.

              ------------------------

     The rights,  preferences  and privileges of the Series C Preferred Stock of

the Corporation are as set forth in this Section 3.5.

 

               3.5.1 Designation and Amount.

                     -----------------------

               Seventeen  Thousand (17,000) of the shares of the Preferred Stock

          of  the   Corporation   are  designated   Series  C  Preferred   Stock

          (hereinafter referred to as "Series C Stock").

 

               3.5.2 Dividends.

                     ----------

               (a) The  holders of shares of Series C Stock shall be entitled to

          receive cash dividends, when and as declared by the Board of Directors

          out of funds legally available for the purpose, from the date of issue

          of such shares to and  including  the last day of the month  following

          the month in which  such  issuance  occurred  (the  "Initial  Dividend

          Period"),  and for each whole month  thereafter (such Initial Dividend

          Period and each whole, month thereafter shall be herein referred to in

          this Section 3.5 as a "Dividend Period"),  at an annual rate of $13.50

          per share.  The amount of dividend  per share  payable for the Initial

          Dividend  Period and for any other Dividend Period more or less than a

          full month shall be computed on the basis of a 360-day  year of twelve

          30-day  months and the actual number of days elapsed in the period for

          which payable.  The amount of dividend per share payable for each full

          Dividend Period commencing after the Initial Dividend Period, shall be

          computed by dividing the annual dividend rate for each Dividend Period

          by twelve.  Dividends  shall be payable  when and as  declared  by the

          Board  of  Directors,  out of funds  legally  available  therefor,  to

          holders  of record on such  respective  dates  not  exceeding  15 days

          preceding  the payment date thereof as may be  determined by the Board

          of Directors in advance of such payment date.  Dividends on account of

          arrears for any past Dividend  Periods may be declared and paid at any

          time,  without  reference to any regular  dividend  payment  date,  to

          holders of record on such date not  exceeding  15 days  preceding  the

          payment  date  thereof as may be fixed by the Board of  Directors.  No

          dividends shall be declared on any other series or class or classes of

          Preferred  Stock  on a parity  (as that  term is  defined  in  Section

          3.5.5(d))  with the Series C Stock as to  dividends  in respect of any

          Dividend  Period unless there shall  likewise be or have been declared

          on all shares of Series C Stock at the time outstanding like dividends

          for all  Dividend  Periods  coinciding  with  or  ending  before  such

          Dividend  Period,  ratably in  proportion to the  respective  dividend

          rates fixed for all such other series or class or classes of Preferred

          Stock and the Series C Stock.  Dividends  shall be cumulative and will

          accrue  on each  share  of  Series C Stock  from the date of  original

          issuance  thereof.  No interest,  or sum of money in lieu of interest,

          shall be payable in respect of any dividend  payment or payments which

          may be in arrears.

 

               (b) If  dividends  at the  rate  per  share  set  out in  Section

          3.5.2(a) for any Dividend Period shall not have been declared and paid

          or set apart for payment on all  outstanding  shares of Series C Stock

          for such Dividend Period and all preceding  Dividend  Periods from and

          after the date of issue thereof,  then, until the aggregate deficiency

          shall be  declared  and  fully  paid or set  apart  for  payment,  the

          Corporation  shall not (i) declare or pay or set apart for payment any

          dividends  or make any other  distribution  on the Common Stock of the

          Corporation  or any other  capital  stock of the  Corporation  ranking

          junior to the series C Stock with  respect to the payment of dividends

          or distribution of assets on liquidation, dissolution or winding up of

          the  Corporation  (which for all purposes shall mean any  liquidation,

          dissolution  or winding up of the  Corporation,  whether  voluntary or

          involuntary)  (the  Common  Stock and such other  stock  being  herein

          referred  to in  this  Section  3.5 as  "Junior  Stock"),  other  than

          dividends or distributions paid in shares of, or options,  warrants or

          rights to subscribe for or purchase  shares of, Junior Stock,  or (ii)

          make any  payment  on  account of the  purchase,  redemption  or other

          retirement of any Junior Stock.

 

               3.5.3 Liquidation Preference.

                     ----------------------

          Upon  the  voluntary  or  involuntary   liquidation,   winding  up  or

          dissolution  of  the  Corporation,  out of the  assets  available  for

          distribution  to  shareholders  the holders of Series C Stock shall be

          entitled to receive, in preference to any payment on the Junior Stock,

          an amount  equal to $135.00  per share plus  cumulative  dividends  as

          provided in Section 3.5.2 above accrued and unpaid to the date payment

          is made  available  to the Series C Stock and no more.  Subject to the

          rights of the  holders  of shares of any series or class or classes of

          stock  ranking  on a parity  with or prior to the  Series C Stock upon

          liquidation,  dissolution  or winding up, after the full  preferential

          liquidation  amount has been paid to, or determined and set apart for,

          the Series C Stock,  the remaining  assets shall be paid to the Junior

          Stock.  If upon any  liquidation,  dissolution  or  winding  up of the

          Corporation,  the  assets of the  Corporation,  or  proceeds  thereof,

          distributable  among the  holders  of the shares of the Series C Stock

          shall be insufficient to pay in full the preferential amount aforesaid

          and liquidating  payments on any other Preferred Stock ranking,  as to

          liquidation,  dissolution or winding up, on a parity with the Series C

          Stock, then such assets, or the proceeds thereof, shall be distributed

          among the  shareholders of Series C Stock and any such other Preferred

          Stock ratably in accordance with the respective amounts which would be

          payable on such shares of Series C Stock and any such other  Preferred

          Stock  if  all  amounts   payable   thereon   were  paid  in  full.  A

          reorganization shall not be considered to be a liquidation, winding up

          or  dissolution  within the meaning of this Section  3.5.3 and in such

          event the Series C Stock shall be entitled only to the rights provided

          in the plan of reorganization and Chapters 12 and 13 of the California

          General Corporation Law and elsewhere in the Corporation's Articles of

          Incorporation.

 

 

               3.5.4 Redemption.

                     -----------

               (a) The  Series C Stock is subject  to  redemption,  out of funds

          legally available therefor, in whole, or from time to time in part, at

          the option of the board of directors of the Corporation at or any time

          after four years from the date such Series C Stock is issued, or prior

          thereto  upon the  approval of at least a majority of the  outstanding

          shares of Series C Stock.  If only a part of the  Series C Stock is to

          be redeemed,  the redemption  shall be carried out pro rata (as nearly

          as may be).  The  redemption  price  shall be  $135.00  per share plus

          cumulative  dividends as provided in Section  3.5.2 above  accrued and

          unpaid to the date fixed for redemption (herein called the "redemption

          price").  In the case of a redemption of less than all of the Series C

          Stock at anytime outstanding, no such shares may be redeemed until all

          dividends  accrued and unpaid on all Series C Stock then  outstanding,

          other than the shares to be redeemed, shall have been paid or declared

          and the full amount thereof set apart for payment.

 

               (b) The  Corporation  shall mail a notice of  redemption  to each

          holder of record of shares to be redeemed  addressed  to the holder at

          the address of such holder  appearing on the books of the  Corporation

          or given by the holder to the  Corporation  for the purpose of notice,

          or if no such  address  appears  or is  given  at the  place  when the

          principal executive office of the Corporation is located,  not earlier

          than 60 nor later than 20 days  before the date fixed for  redemption.

          The notice of redemption  shall include (i) the class of shares or the

          part of a class of  shares  to be  redeemed,  (ii) the date  fixed for

          redemption, (iii) the redemption price and (iv) the place at which the

          shareholders may obtain payment of the redemption price upon surrender

          of their share certificates.  If funds are available on the date fixed

          for the  redemption,  then whether or not the share  certificates  are

          surrendered for payment of the redemption  price,  the shares shall no

          longer  be  outstanding  and the  holders  thereof  shall  cease to be

          shareholders of the Corporation with respect to the shares redeemed on

          and after the date fixed for  redemption and shall be entitled only to

          receive the  redemption  price without  interest upon surrender of the

          share  certificates.  If less than all the shares  represented  by one

          share  certificate are to be redeemed,  the Corporation  shall issue a

          new share certificate for the shares not redeemed.

 

               (c) The  Corporation  shall  also  cause a copy of the  notice of

          redemption  to be published in a newspaper of general  circulation  in

          the county in which the principal  executive office of the Corporation

          is  located  at least once a week for two  successive  weeks,  in each

          instance on any day of the week,  commencing  not earlier  than 60 nor

          later  than 20 days  before  the date  fixed  for  redemption.  If the

          Corporation  publishes  the notice of  redemption  as provided in this

          paragraph  (c),  the  failure of the  Corporation  to comply  with the

          provision  for mailing of notice of  redemption in paragraph (b) shall

          not invalidate the redemption of the shares.

 

               (d) If,  on or  prior  to any  date  fixed  for  redemption,  the

          Corporation  deposits  with any bank or trust  company  in this  state

          (which may be an affiliate of the  Corporation)  as a trust fund a sum

          sufficient to redeem,  on the date fixed for redemption  thereof,  the

          shares  called  for  redemption,  with  irrevocable  instructions  and

          authority  to the bank or trust  company  to  publish  the  notice  of

          redemption  thereof (or to complete such  publication  if  theretofore

          commenced)  and to pay, on and after the date fixed for  redemption or

          prior thereto,  the redemption price of the shares to their respective

          holders  upon  surrender  of their share  certificates,  then from and

          after the date of the  deposit  (although  prior to the date fixed for

          redemption)  the shares so called shall be redeemed  and  dividends on

          those   shares  shall  cease  to  accrue  after  the  date  fixed  for

          redemption. The deposit shall constitute full payment of the shares to

          their  holders  and from and after the date of the  deposit the shares

          shall no longer be outstanding  and the holders thereof shall cease to

          be  shareholders  with respect to such shares and shall have no rights

          with  respect  thereto  except the right to  receive  from the bank or

          trust company  payment of the  redemption  price of the shares without

          interest,  upon surrender of their certificates therefor. Any interest

          accrued on such funds  shall be paid to the  Corporation  from time to

          time. If less than all the shares represented by one share certificate

          are  to  be  redeemed,   the  Corporation  shall  issue  a  new  share

          certificate for the shares not redeemed.  After two years, the bank or

          trust company shall return to the Corporation  funds deposited and not

          claimed and  thereafter the holder of a share  certificate  for shares

          redeemed shall look to the Corporation for payment.

 

               3.5.5 Voting Rights.

                     --------------

               (a)  Except  as  hereinafter  in  this  Section  3.5.5  expressly

          provided  for and as  otherwise  required  by the laws of the State of

          California,  the Series C Stock shall have no voting rights.  If there

          is a  default  in  whole  or in  part  in the  payment  of 24 or  more

          cumulative  monthly  dividends,  whether  or not  consecutive,  on the

          Series C Stock as provided for in Section 3.5.2 above,  the holders of

          the outstanding Series C Stock shall have the right, voting separately

          as a class with  holders of shares of any one or more other  series of

          Preferred  Stock ranking on a parity with the Series C Stock either as

          to  dividends  or  the   distribution  of  assets  upon   liquidation,

          dissolution or winding up and upon which like voting rights have been,

          conferred  and are  exercisable,  to elect a majority  of the Board of

          Directors of the Corporation at the Corporation's  next annual meeting

          of  shareholders.  At  elections  for such  directors,  each holder of

          Series C Stock  shall be entitled to one vote for each share held (the

          holders of shares of any other  series of Preferred  Stock  ranking on

          such a parity and having like  voting  rights  being  entitled to such

          number of votes,  if any,  for each share of such stock held as may be

          granted to them).  The right of the holders of Series C Stock,  voting

          separately  as a class,  to elect  (either  alone or together with the

          holders of shares of any one or more other series of  Preferred  Stock

          ranking on such a parity and having like voting rights) members of the

          Board of Directors of the  Corporation  as  aforesaid  shall  continue

          until  such time as all  dividends  accumulated  on the Series C Stock

          shall  have been fully  paid or set apart for  payment,  at which time

          such  right  shall  terminate,  except as  herein or by law  expressly

          provided,  subject  to  reverting  in the  event  of  each  and  every

          subsequent  default  of  the  character  above  mentioned.   Upon  any

          termination  of the right of the  holders  of the  Series C Stock as a

          class to vote for directors as herein provided,  the term of office of

          all  directors  then in office  elected  by the  Series C Stock  shall

          terminate  immediately.  Any  director  who shall have been so elected

          pursuant to this paragraph may be removed at any time,  either with or

          without cause, and any vacancy thereby created may be filled,  only by

          the  affirmative  vote  of  the  holders  of  Series  C  Stock  voting

          separately  as a class  (either  alone or together with the holders of

          shares of any one or more other series of Preferred  Stock  ranking on

          such a parity and having  like  voting  rights).  If the office of any

          director  elected by the  holders of Series C Stock  voting as a class

          becomes  vacant  for any  reason  other than  removal  from  office as

          aforesaid,  the  remaining  director may choose a successor  who shall

          hold office for the  unexpired  term in respect of which such  vacancy

          occurred.

 

               (b) So long as any shares of Series C Stock  remain  outstanding,

          the  consent of the  holders  of at least a majority  of the shares of

          Series C Stock  outstanding at the time (voting  separately as a class

          together with all other series of Preferred  Stock ranking on a parity

          with the Series C Stock either as to dividends or the  distribution of

          assets upon liquidation, dissolution or winding up and upon which like

          voting  rights  have  been  conferred  and are  exercisable)  shall be

          necessary  to  permit,  effect  or  validate  any  one or  more of the

          following:

 

                    (i) the  authorization,  creation or issuance of a new class

               or series of shares  having  rights,  preferences  or  privileges

               prior (as that term is defined in Section 3.5.5(d)) to the shares

               of  the  Series  C  Stock,  or any  increase  in  the  number  of

               authorized   shares  of  any  class  or  series  having   rights,

               preferences or privileges  prior to the shares of Series C Stock;

               or

 

                    (ii) the amendment, alteration or repeal, whether by merger,

               consolidation  or  otherwise,  of any of  the  provisions  of the

               Articles  of  Incorporation   of  the  Corporation   which  would

               materially and adversely affect any right, preference,  privilege

               or voting power of the Series C Stock or of the holders  thereof,

               provided,  however that any increase in the amount of  authorized

               Common Stock or  authorized  Preferred  Stock or the creation and

               issuance of other series of Common Stock or Preferred  Stock,  in

               each case  ranking  on a parity  with or  junior to the  Series C

               Stock  with  respect  to  the  payment  of   dividends   and  the

               distribution of assets upon  liquidation,  dissolution or winding

               up, shall not be deemed to materially  and adversely  affect such

               rights, preferences, privileges or voting powers.

 

               (c) The  foregoing  voting  provisions  shall not apply if, at or

          prior to the time when the act with  respect  to which such vote would

          otherwise be required  shall be effected,  all  outstanding  shares of

          Series C Stock shall have been redeemed or called for  redemption  and

          sufficient  funds  shall have been  deposited  in trust to effect such

          redemption.

 

               (d) Any class or  classes  of stock of the  Corporation  shall be

          deemed to rank:

 

                    (i)  prior to the  Series C Stock as to  dividends  or as to

               distribution of assets upon  liquidation,  dissolution or winding

               up if the  holders of such class shall be entitled to the receipt

               of  dividends  or  of  amounts  distributable  upon  liquidation,

               dissolution  or winding up, as the case may be, in  preference or

               priority to the holders of Series C Stock; and

 

                    (ii) on a parity with the Series C Stock as to  dividends or

               as to  distribution  of assets upon  liquidation,  dissolution or

               winding up, whether or not the dividend rates,  dividend  payment

               dates or redemption or  liquidation  prices per share thereof are

               different  from  those of the Series C Stock,  if the  holders of

               such class of stock and of the Series C Stock  shall be  entitled

               to the  receipt of  dividends  or of amounts  distributable  upon

               liquidation,  dissolution  or winding  up, as the case may be, in

               proportion  to their  respective  dividend  rates or  liquidation

               prices, without preference or priority one over the other.

 

               3.5.6 Series A Preferred Stock and Series B Preferred Stock

                     -----------------------------------------------------

          For purposes of the foregoing provisions, the Series A Preferred Stock

          and the Series B Preferred Stock of the Corporation shall be deemed to

          rank on a parity  with the  Series C Stock for  purposes  of  Sections

          3.5.2, 3.5.3 and 3.5.5 hereof.

 

          3.6 Series AA Preferred Stock.

              -------------------------

          The rights,  preferences  and  privileges  of the Series AA  Preferred

     Stock of the Corporation are as set forth in this Section 3.6.

 

               3.6.1 Designation and Amount.

                     ----------------------

          One Hundred  Fifty  Thousand  (150,000) of the shares of the Preferred

          Stock  of  the   Corporation   are  designated  as  Series  AA  Junior

          Participating  Preferred Stock (the "Series AA Preferred Stock"). Such

          number of shares may be increased or  decreased by  resolution  of the

          Board of Directors;  provided that no decrease shall reduce the number

          of  shares  of Series  AA  Preferred  Stock to a number  less than the

          number of shares then  outstanding  plus the number of shares reserved

          for  issuance  upon the  exercise of  outstanding  options,  rights or

          warrants or upon the conversion of any outstanding  securities  issued

          by the Corporation convertible into Series AA Preferred Stock.

 

               3.6.2  Dividends and Distributions.

                      ----------------------------

               (a)  Subject  to the  rights of the  holders of any shares of any

          series of Series AA  Preferred  stock (or any similar  stock)  ranking

          prior and  superior to the Series AA  Preferred  Stock with respect to

          dividends,  the  holders of shares of Series AA  Preferred  Stock,  in

          preference to the holders of shares of Common Stock,  and of any other

          junior stock,  shall be entitled to receive,  when, as and if declared

          by the  Board of  Directors  out of funds  legally  available  for the

          purpose,  quarterly dividends payable in cash on any regular quarterly

          dividend  payment  date  as  shall  be  established  by the  Board  of

          Directors  (each such date being  referred  to herein as a  "Quarterly

          Dividend  Payment Date"),  commencing on the first Quarterly  Dividend

          Payment  Date after the first  issuance  of a share or  fraction  of a

          share of Series AA Preferred Stock, in an amount per share (rounded to

          the nearest cent) equal to the greater of (a) $1 or (b) subject to the

          provision  for  adjustment   hereinafter  set  forth,  100  times  the

          aggregate  per share amount of all cash  dividends,  and 100 times the

          aggregate per share amount (payable in kind) of all non-cash dividends

          or other  distributions,  other than a  dividend  payable in shares of

          Common  Stock or a  subdivision  of the  outstanding  shares of Common

          Stock (by reclassification or otherwise), declared on the Common Stock

          since the immediately  preceding  Quarterly  Dividend Payment Date or,

          with respect to the first Quarterly  Dividend  Payment Date, since the

          first  issuance  of any  share or  fraction  of a share of  Series  AA

          Preferred Stock. In the event the Corporation  shall at any time after

          July 10,  2001 (the  "Rights  Declaration  Date"),  declare or pay any

          dividend on the Common  Stock  payable in shares of Common  Stock,  or

          effect  a  subdivision  or  combination   or   consolidation   of  the

          outstanding shares of Common Stock (by  reclassification  or otherwise

          than by  payment  of a  dividend  in shares of  Common  Stock)  into a

          greater or lesser number of shares of Common Stock,  then in each such

          case the  amount to which  holders  of  shares of Series AA  Preferred

          Stock were entitled  immediately  prior to such event under clause (b)

          of the preceding sentence shall be adjusted by multiplying such amount

          by a  fraction,  the  numerator  of which is the  number  of shares of

          Common  Stock  outstanding   immediately  after  such  event  and  the

          denominator of which is the number of shares of Common Stock that were

          outstanding immediately prior to such event.

 

               (b) The  Corporation  shall declare a dividend or distribution on

          the  Series  AA  Preferred  Stock  as  provided  in  Section  3.6.2(d)

          immediately after it declares a dividend or distribution on the Common

          Stock  (other  than a  dividend  payable  in shares of Common  Stock);

          provided  that,  in the event no dividend or  distribution  shall have

          been  declared  on the Common  Stock  during the  period  between  any

          Quarterly  Dividend  Payment  Date and the next  subsequent  Quarterly

          Dividend  Payment  Date,  a dividend  of $1 per share on the Series AA

          Preferred  Stock  shall  nevertheless  be payable  on such  subsequent

          Quarterly Dividend Payment Date.

 

               (c)  Dividends  shall  begin  to  accrue  and  be  cumulative  on

          outstanding  shares of Series AA  Preferred  Stock from the  Quarterly

          Dividend Payment Date next preceding the date of issue of such shares,

          unless the date of issue of such  shares is prior to the  record  date

          for the first Quarterly Dividend Payment Date, in which case dividends

          on such  shares  shall  begin to accrue from the date of issue of such

          shares,  or unless the date of issue is a Quarterly  Dividend  Payment

          Date or is a date  after  the  record  date for the  determination  of

          holders of shares of Series AA Preferred  Stock  entitled to receive a

          quarterly dividend and before such Quarterly Dividend Payment Date, in

          either of which  events  such  dividends  shall begin to accrue and be

          cumulative  from such  Quarterly  Dividend  Payment Date.  Accrued but

          unpaid dividends shall not bear interest. Dividends paid on the shares

          of Series AA  Preferred  Stock in an amount less than the total amount

          of such dividends at the time accrued and payable on such shares shall

          be allocated pro rata on a share-by-share  basis among all such shares

          at the time  outstanding.  The Board of Directors  may, in  accordance

          with  applicable  law,  fix a  record  date for the  determination  of

          holders of shares of Series AA  Preferred  Stock  entitled  to receive

          payment of a dividend or distribution  declared thereon,  which record

          date  shall be not more  than such  number  of days  prior to the date

          fixed for the payment thereof as may be allowed by applicable law.

 

               3.6.3    Voting Rights.

                        --------------

          The  holders  of shares of Series AA  Preferred  Stock  shall have the

          following voting rights:

 

               (a) Each share of Series AA  Preferred  Stock  shall  entitle the

          holder thereof to 100 votes on all matters  submitted to a vote of the

          stockholders of the Corporation.

 

               (b) Except as otherwise provided in the Corporation's Articles of

          Incorporation, or by law, the holders of shares of Series AA Preferred

          Stock,  the  holders  of shares of Common  Stock,  and the  holders of

          shares of any other capital stock of the  Corporation  having  general

          voting  rights,  shall  vote  together  as one  class  on all  matters

          submitted to a vote of stockholders of the Corporation.

 

               (c)  Except  as  set  forth  in  the  Corporation's  Articles  of

          Incorporation,  and except as  otherwise  provided by law,  holders of

          Series AA  Preferred  Stock  shall have no special  voting  rights and

          their  consent  shall not be  required  (except to the extent they are

          entitled to vote with holders of Common Stock as set forth herein) for

          taking any corporate action.

 

               3.6.4    Certain Restrictions.

                        ---------------------

               (a)  Whenever   quarterly   dividends   or  other   dividends  or

          distributions  payable on the Series AA Preferred Stock as provided in

          Section  3.6.2 are in  arrears,  thereafter  and until all accrued and

          unpaid dividends and distributions, whether or not declared, on shares

          of Series AA Preferred Stock outstanding shall have been paid in full,

          the Corporation shall not:

 

                    (i)   declare   or  pay   dividends,   or  make  any   other

               distributions,  on any shares of stock ranking  junior (either as

               to dividends or upon  liquidation,  dissolution or winding up) to

               the Series AA Preferred Stock;

 

                    (ii)   declare   or  pay   dividends,   or  make  any  other

               distributions, on any shares of stock ranking on a parity (either

               as to dividends or upon  liquidation,  dissolution or winding up)

               with the Series AA Preferred Stock, except dividends paid ratably

               on the Series AA  Preferred  Stock and all such  parity  stock on

               which  dividends  are payable or in arrears in  proportion to the

               total  amounts to which the  holders of all such  shares are then

               entitled;

 

                    (iii)   redeem  or   purchase  or   otherwise   acquire  for

               consideration  shares of any stock ranking  junior  (either as to

               dividends or upon liquidation,  dissolution or winding up) to the

               Series AA Preferred  Stock,  provided that the Corporation may at

               any time redeem, purchase or otherwise acquire shares of any such

               junior  stock  in  exchange  for  shares  of  any  stock  of  the

               Corporation  ranking  junior  (either  as to  dividends  or  upon

               dissolution,   liquidation  or  winding  up)  to  the  Series  AA

               Preferred Stock; or

 

                    (iv)   redeem  or   purchase   or   otherwise   acquire  for

               consideration  any shares of Series AA  Preferred  Stock,  or any

               shares of stock  ranking on a parity with the Series AA Preferred

               Stock, except in accordance with a purchase offer made in writing

               or by  publication  (as  determined by the Board of Directors) to

               all  holders  of such  shares  upon  such  terms as the  Board of

               Directors,  after consideration of the respective annual dividend

               rates and other relative rights and preferences of the respective

               series and classes,  shall determine in good faith will result in

               fair and  equitable  treatment  among  the  respective  series or

               classes.

 

               (b) The  Corporation  shall  not  permit  any  subsidiary  of the

          Corporation  to purchase or otherwise  acquire for  consideration  any

          shares of stock of the Corporation unless the Corporation could, under

          Section  3.6.4(a),  purchase or otherwise  acquire such shares at such

          time and in such manner.

 

               3.6.5 Reacquired Shares.

                     ------------------

          Any  shares  of Series  AA  Preferred  Stock  purchased  or  otherwise

          acquired by the  Corporation  in any manner  whatsoever  shall  become

          authorized but unissued shares of Series AA Preferred Stock and may be

          reissued as part of a new series of Series AA Preferred  Stock subject

          to the  conditions  and  restrictions  on  issuance  set  forth in the

          Corporation's  Articles  of  Incorporation,   and  by  any  subsequent

          amendments, or as otherwise required by law.

 

               3.6.6 Liquidation, Dissolution or Winding Up.

                     --------------------------------------

          Upon any liquidation, dissolution or winding up of the Corporation, no

          distribution  shall  be made (1) to the  holders  of  shares  of stock

          ranking   junior   (either  as  to  dividends  or  upon   liquidation,

          dissolution  or winding up) to the Series AA Preferred  Stock  unless,

          prior  thereto,  the  holders of shares of Series AA  Preferred  Stock

          shall have received $100.00 per share, plus an amount equal to accrued

          and  unpaid  dividends  and  distributions  thereon,  whether  or  not

          declared,  to the date of such  payment,  provided that the holders of

          shares of Series AA  Preferred  Stock  shall be entitled to receive an

          aggregate  amount per share,  subject to the provision for  adjustment

          hereinafter set forth,  equal to 100 times the aggregate  amount to be

          distributed  per share to holders of shares of Common Stock, or (2) to

          the  holders  of shares of stock  ranking  on a parity  (either  as to

          dividends  or upon  liquidation,  dissolution  or winding up) with the

          Series AA Preferred Stock,  except  distributions  made ratably on the

          Series AA Preferred  Stock and all such parity stock in  proportion to

          the total amounts to which the holders of all such shares are entitled

          upon such  liquidation,  dissolution  or winding  up. In the event the

          Corporation  shall at any  time  after  the  Rights  Declaration  Date

          declare or pay any dividend on the Common  Stock  payable in shares of

          Common Stock, or effect a subdivision or combination or  consolidation

          of the  outstanding  shares of Common  Stock (by  reclassification  or

          otherwise  than by payment of a  dividend  in shares of Common  Stock)

          into a greater  or lesser  number of shares of Common  Stock,  then in

          each such case the  aggregate  amount  to which  holders  of shares of

          Series AA  Preferred  Stock were  entitled  immediately  prior to such

          event  under the  provision  in clause (1) of the  preceding  sentence

          shall be  adjusted  by  multiplying  such  amount by a  fraction,  the

          numerator of which is the number of shares of Common Stock outstanding

          immediately  after  such  event  and the  denominator  of which is the

          number of shares of Common  Stock  that were  outstanding  immediately

          prior to such event.

 

               3.6.7 Consolidation, Merger, Etc.

                     --------------------------

          In case the Corporation  shall enter into any  consolidation,  merger,

          statutory  share exchange,  combination or other  transaction in which

          the shares of Common  Stock are  exchanged  for or changed  into other

          stock or securities,  cash and/or any other property, then in any such

          case each share of Series AA Preferred Stock shall at the same time be

          similarly  exchanged or changed  into an amount per share,  subject to

          the provision for adjustment hereinafter set forth, equal to 100 times

          the  aggregate  amount of stock,  securities,  cash  and/or  any other

          property  (payable  in kind),  as the case may be,  into  which or for

          which each share of Common Stock is changed or exchanged. In the event

          the Corporation  shall at any time after the Rights  Declaration  Date

          declare or pay any dividend on the Common  Stock  payable in shares of

          Common Stock, or effect a subdivision or combination or  consolidation

          of the  outstanding  shares of Common  Stock (by  reclassification  or

          otherwise  than by payment of a  dividend  in shares of Common  Stock)

          into a greater  or lesser  number of shares of Common  Stock,  then in

          each such case the amount  set forth in the  preceding  sentence  with

          respect  to the  exchange  or change of shares of Series AA  Preferred

          Stock shall be adjusted by multiplying such amount by a fraction,  the

          numerator of which is the number of shares of Common Stock outstanding

          immediately  after  such  event  and the  denominator  of which is the

          number  of shares of Common  Stock  that are  outstanding  immediately

          prior to such event.

 

               3.6.8    No Redemption.

                        --------------

          The shares of Series AA Preferred Stock shall not be redeemable.

 

               3.6.9 Rank.

                     -----

          The Series AA Preferred  Stock shall rank, with respect to the payment

          of dividends and the  distribution of assets,  junior to all series of

          any other class of the Corporation's Preferred Stock.

 

               3.6.10 Amendment.

                      ---------

          The Articles of Incorporation of the Corporation  shall not be amended

          in any manner  which  would  materially  alter or change  the  powers,

          preferences or special  rights of the Series AA Preferred  Stock so as

          to affect them adversely  without the affirmative  vote of the holders

          of at  least  two-thirds  of  the  outstanding  shares  of  Series  AA

          Preferred Stock, voting together as a single class.

 

               3.6.11 Fractional Shares.

                      ------------------

          Series AA Preferred  Stock may be issued in fractions of a share which

          shall entitle the holder,  in  proportion to such holder's  fractional

          shares, to exercise voting rights,  receive dividends,  participate in

          distributions  and to have the benefit of all other  rights of holders

          of Series AA Preferred Stock.

 

                                     FOURTH

 

     The  number  of  directors  of this  Corporation  shall be set forth in the

Bylaws of the Corporation as adopted and amended from time to time in the manner

authorized by law.

 

                                     FIFTH

 

     The liability of the  directors of this  Corporation  for monetary  damages

shall be eliminated to the fullest extent  permissible  under California law. No

amendment  or  repeal  of  this  Article  FIFTH  by  the  shareholders  of  this

Corporation shall adversely affect any right or protection of a director of this

Corporation existing at the time of such amendment or repeal.

 

                                     SIXTH

 

     This  Corporation  is authorized to provide  indemnification  of agents (as

defined  in Section  317 of the  California  Corporations  Code)  through  bylaw

provisions,  agreements with such agents, votes of shareholders or disinterested

directors or otherwise,  or any  combination of the foregoing,  in excess of the

indemnification  otherwise  permitted  by Section 317 of the  Corporation  Code,

subject  only to the limits set forth in Section  204 of the  Corporations  Code

with  respect  to  actions  for  breach  of  duty  to the  Corporation  and  its

shareholders.  No amendment or repeal of this Article SIXTH by the  Shareholders

of this Corporation shall adversely affect any Corporation  existing at the time

of such amendment or repeal.

 

                                    SEVENTH

 

          7.1 The Board of Directors, when evaluating any offer of another party

     to (a) make a tender or  exchange  offer for the equity  securities  of the

     Corporation or any subsidiary,  (b) merge or consolidate the Corporation or

     any  subsidiary  with  another  corporation,  or (c)  purchase or otherwise

     acquire  all or  substantially  all  of the  properties  or  assets  of the

     Corporation,  or of any subsidiary,  shall, in connection with the exercise

     of its  judgment  in  determining  what  is in the  best  interests  of the

     Corporation and its  stockholders,  give due  consideration to all relevant

     factors,  including by way of illustration,  but not limitation, any or all

     of the following:

 

               7.1.1  Whether  the  offer  is  acceptable  based  on  historical

          operating  results and the financial  condition of the Corporation and

          its subsidiaries, and its future prospects;

 

               7.1.2  Whether a more  favorable  offer could be obtained for the

          Corporation's  or  its  subsidiaries,  securities  or  assets  in  the

          foreseeable future;

 

               7.1.3 The social,  economic or any other material impact which an

          acquisition   of  the  equity   securities  of  the   Corporation   or

          substantially  all of its  assets  would have upon the  employees  and

          customers of the  Corporation and its  subsidiaries  and the community

          which they serve;

 

               7.1.4 The  reputation  and business  practices of the offeror and

          its  management  and affiliates as they would affect the employees and

          customers of the Corporation and its subsidiaries and the future value

          of the Corporation's stock;

 

               7.1.5 The value of the  securities,  if any, which the offeror is

          offering  in  exchange  for  the  Corporation's  or its  subsidiaries'

          securities  or  assets  based  on an  analysis  of  the  worth  of the

          Corporation  or  of  its  subsidiaries  as  compared  to  the  offeror

          corporation or other entity whose securities are being offered; and

 

               7.1.6 Any antitrust or other legal or regulatory issues raised by

          the offer.

 

          7.2 If the Board of Directors  determines an offer should be rejected,

     it may take any lawful action to accomplish its purpose including,  but not

     limited to, any or all of the following:

 

               7.2.1 Advising shareholders not to accept the offer;

 

               7.2.2 Litigation against the offeror;

 

               7.2.3 Filing  complaints  with any  governmental  and  regulatory

          authorities;

 

               7.2.4 Acquiring the Corporation's securities;

 

               7.2.5  Selling  or  otherwise  issuing  authorized  but  unissued

          securities or treasury stock or granting options with respect thereto;

 

               7.2.6  Acquiring  a  company  to  create  an  antitrust  or other

          regulatory problem for the offeror;

 

               7.2.7 Obtaining a more favorable offer from another individual or

          entity.

 

          7.3  Notwithstanding  the  fact  that  by law or by  agreement  with a

     national  securities  exchange or  otherwise,  no vote,  or lesser vote, of

     shareholders  may be specified or permitted,  the  affirmative  vote of the

     holders of  two-thirds  of the  outstanding  shares of Common  Stock of the

     Corporation  shall be required to approve  any offer  described  in Section

     7.1.

 

     The  provisions  of  Sections  7.1,  7.2  and  7.3  of  these  Articles  of

Incorporation  may be amended only by the affirmative  vote of two-thirds of the

outstanding  shares of Common Stock of the  Corporation,  and by the affirmative

vote  of  two-thirds  of  the  outstanding  shares  of  Preferred  Stock  of the

Corporation, if any.

 

 

 

 

Text of Amendment to Section 15 of Bylaws

 

The first paragraph of Section 15 of the Bylaws is amended to read as follows:

 

         Section 15. Number and Qualification of Directors.

                     -------------------------------------

          The  authorized  number of directors  shall be not less than eight (8)

          nor more than fifteen (15) unless and until changed by an amendment to

          this Section 15 adopted by the shareholders  pursuant to Section 48 of

          these Bylaws. The exact number of directors within said range shall be

          fixed by an  amendment  to this  Section  15  adopted  by the Board of

          Directors;  and  unless  and until so  amended,  the  exact  number of

          directors  is  hereby  fixed  at  twelve  (12).  A  reduction  in  the

          authorized  number of directors shall not remove any director prior to

          the expiration of such director's term of office