EXHIBIT 3.1

 

                      RESTATED ARTICLES OF INCORPORATION

 

                      OF CASCADE NATURAL GAS CORPORATION

 

 

    We, the undersigned, RALPH E. BOYD and LARRY C. ROSOK, President and

Secretary respectively, of Cascade Natural Gas Corporation do hereby on behalf

of said Corporation restate in a single document the entire text of its

Articles of Incorporation, as previously amended, supplemented or restated to

the date hereof:

 

                                   ARTICLE I

 

The name of this Corporation shall be Cascade Natural Gas Corporation.

 

                                  ARTICLE II

 

The objects and purposes for which this Corporation is formed are and shall be

as follows:

 

1.  To manufacture, produce, buy, sell, transport and in all other respects

dispose of and deal in all forms and types of natural and/or manufactured gas,

oil, petroleum and all forms and types of residual products thereof; supply

natural and/or manufactured gas and/or related petroleum products for lights,

heating, power and all other domestic and industrial uses, and to furnish the

same to public or private consumers both within and without the State of

Washington; to construct pipelines for the transportation of natural and/or

manufactured gas and other petroleum products and to buy, operate, lease and

sell the same; to acquire, construct, erect, lay down, maintain, enlarge,

alter, work and use all lands, buildings, easements, pipelines, machinery,

plants, stocks, motors, fittings, meters, other apparatus materials and things

and to supply all materials, products and things that may be necessary,

incident or convenient in connection with the production, transportation, use,

storage, regulation, measurement, supply and distribution of any of the

products of the Company; to engage in the transportation of natural and/or

manufactured gas, oil, petroleum and related products, either produced by this

Corporation or other persons or corporations by means of pipelines, railroads,

boats, barges, or other conveyances and to lease or sublease all or any part

thereof to or from other persons or corporations for the like purpose; to

acquire by purchase or otherwise, or by the right of exercise of eminent

domain, rights-of-way for natural and/or manufactured gas or other petroleum

products pipelines and to construct and maintain such pipelines for the

carriage and transportation of such products on its own behalf and hire; to

buy, acquire, sell, retain, deal in or otherwise dispose of, natural gas and

other petroleum properties and interest and any right, title or interest

therein; to carry on such other business pertaining to natural and

manufactured gas, oil, petroleum and similar products as may be found

necessary or desirable or such as is generally engaged in by a corporation of

this kind and to do all other acts and things required to be done in

connection therewith, either within or without the State of Washington, U.S.A.

 

2.  To manufacture, purchase or otherwise acquire, own, mortgage, pledge,

sell, assign and transfer, or otherwise dispose of, to invest, trade, deal in

and deal with, goods, wares and merchandise and real and personal property of

every class and description.

 

3.  To acquire by purchase, assignment or otherwise, letters patent of the

United States and the Territorial and other rights and licenses which may be

of value or advantage in the carrying out of the above mentioned objects, and

to dispose of the same by sale, license, assignment or otherwise.

 

4.  To acquire, and pay for in cash, stock or bonds of this Corporation, or

otherwise, the good will, rights, assets and property, and to undertake or

assume the whole or any part of the obligations or liabilities of any person,

firm, association or corporation.

 

5.  To guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge or

otherwise dispose of shares of the capital stock of, or any bonds, securities

or evidence of indebtedness created by any other corporation or corporations

organized under the laws of this State, or any other state, country, nation or

government, and while the owner thereof to exercise all rights, powers and

privileges of ownership.

 

6.  To issue bonds, debentures, or obligations of this Corporation from time

to time, for any of the objects or purposes of the Corporation, and to secure

the same by mortgage, pledge, deed of trust, or otherwise.

 

7.  To have one or more officers; to carry on all or any of its operations

and business and without restriction or limit as to amount, to purchase or

otherwise acquire, own, hold, mortgage, sell, convey or otherwise dispose of

real and personal property of every class and description, in any of the

states, districts, territories or colonies of the United States, and in any

and all foreign countries, subject to the laws of such states, district,

territory, colony or country.

 

8.  To carry on in general any other business in connection with the

foregoing, whether manufacturing or otherwise, and to have and exercise all

the powers conferred by the laws of Washington upon corporations and to do any

or all of the things thereinbefore set forth to the same extent as natural

persons might or could do.

 

9.  The foregoing clauses shall be construed both as objects and powers, and

it is specifically provided that the foregoing enumeration of specific powers

shall not be held to limit or restrict in any manner the powers of this

Corporation.

 

                                  ARTICLE III

 

The time of the existence of this Corporation shall be perpetual.

 

                                  ARTICLE IV

 

The office and principal place of business of this Corporation shall be

222 Fairview Avenue North, Seattle, King County, Washington 98109.

 

                                   ARTICLE V

 

The capital of this Corporation shall consist of a total of sixteen million

ninety-six thousand five hundred sixty, (16,096,560) shares, divided into

ninety six thousand five hundred sixty (96,560) shares of 55 cents Cumulative

Preferred Stock, without nominal or par value (hereinafter referred to as

"Preferred Stock"), one million (1,000,000) shares of Preferred Stock, with a

par value of $1.00 per share (hereinafter referred to as the "$1.00 Preferred

Stock"), and fifteen million (15,000,000) shares of Common Voting Stock with a

par value of $1.00 per share (hereinafter referred to as "Common Stock").

 

The designations, preferences, privileges, voting power, restrictions, and

qualifications of shares of each class of stock are as follows:

 

1.  The 55 cent Preferred Stock consists of -0- shares of Series A, 31,500

shares of Series B and 65,060 shares of Series C.  All shares of all series of

55 cent Preferred Stock are alike in every particular, except as to the dates

from which dividends commenced to accrue and the commencement of the period

for establishment of sinking funds for redemption of shares, and all shares of

55 cent Preferred Stock are of equal rank and have the same powers,

preferences and rights, and are subject to the same qualifications,

limitations and restrictions, without distinction between the shares of

different series thereof.

 

2.  The holders of the 55 cent Preferred Stock shall be entitled to receive,

when and as declared by the Board of Directors, dividends from the surplus or

net profits of the Corporation at the rate of 55 cents per annum and no more,

payable quarterly on the first days of February, May, August, and November.

Such dividends shall be paid to or set apart for the holders of 55 cent

Preferred Stock before any Common Stock of the Corporation or any other class

of securities of the Corporation junior to the 55 cent Preferred Stock as to

dividends or assets ("Other Securities") shall be purchased, retired, or

otherwise acquired for valuable consideration by the Corporation or any

dividends shall be paid upon, or set apart for any of the Common Stock or

Other Securities of the Corporation, and shall be cumulative, so that if in

any quarterly dividend period, the dividend installment computed at the rate

of 55 cents per share per annum shall not have been paid upon or set apart for

the 55 cent Preferred Stock, the deficiency (without interest) shall be fully

paid or set apart for payment before any Common Stock or Other Securities of

the Corporation shall be purchased, retired, or otherwise acquired for

valuable consideration by the Corporation or any dividends shall be paid upon,

or set apart for the Common Stock or Other Securities.

 

3.  In the event of voluntary liquidation, dissolution, or winding up of the

Corporation, the holders of the 55 cent Preferred Stock shall be entitled,

after the debts of the Corporation shall have been paid, to receive out of the

assets remaining, the then current redemption or call price per share thereof,

determined in accordance with the provisions hereinbelow concerning optional

redemption of 55 cent Preferred Stock, together with all dividends thereon

accrued or in arrears, whether or not earned or declared, before any payment

is made or assets set apart for the payment to the holders of the Common Stock

or Other Securities, and shall be entitled to no further payments or

distribution.  In the event of the involuntary liquidation, dissolution, or

winding up of the Corporation, the holders of the 55 cent Preferred Stock

shall be entitled, after the debts of the Corporation shall have been paid, to

receive out of the assets remaining, $10.00 per share, together with all

dividends thereon accrued or in arrears, whether or not earned or declared,

before any payment is made or assets set apart for payment to the holders of

the Common Stock or Other Securities, and shall be entitled to no further

payments or distribution.  If the assets remaining after payment of the

corporate debts be insufficient to pay the full amounts as hereinabove

provided, such assets as remain shall be divided among the holders of 55 cent

Preferred Stock in proportion to the number of shares of 55 cent Preferred

Stock held.

 

4.  The Corporation may, at any time and from time to time, at the option of

the Board of Directors, unless prevented from doing so by law or by applicable

restrictive provisions herein, or in any mortgage or deed of trust or loan

agreement of the Corporation, redeem the whole or any part of the outstanding

55 cent Preferred Stock on any dividend payment date after the issuance

thereof, upon not less than 30 days' previous notice to the holders of record

of the 55 cent Preferred Stock to be redeemed, at a redemption or call price

for each share thereof equal to the sum of Ten Dollars ($10.00) plus all

dividends accrued or in arrears thereon, plus a premium of Ten Cents (.10) per

share as to shares of Series C.  No premium shall be payable on redemption

with respect to redemption of shares of Series A or shares of Series B, at any

time, or with respect to shares of Series C redeemed after June 25, 1994;

provided, however, that if such redemption is effected with funds set apart

for the 55 cent Preferred Stock redemption sinking fund as provided herein,

then the same may be effected at a price per share equal to the sum of Ten

Dollars ($10.00) plus all dividends accrued or in arrears thereon and without

the payment of any premium.  If less than all the shares of 55 cent Preferred

Stock are to be redeemed, the shares to be redeemed shall be selected in such

manner as the Board of Directors may determine.  No shares of 55 cent

Preferred Stock shall be purchased, redeemed, or otherwise acquired for a

valuable consideration unless full cumulative dividends on the 55 cent

Preferred Stock for all past quarterly dividend periods shall have been paid,

or declared and a sum sufficient for the payment thereof set apart.  The

holders of shares of 55 cent Preferred Stock called for redemption shall not,

from and after the date fixed in such notice for the redemption of such stock,

possess or exercise any rights as stockholders of the Corporation except the

right to receive from the Corporation the redemption price of such shares

together with all unpaid accrued dividends thereon, without interest, upon the

surrender thereof, unless default shall be made by the Corporation in

providing funds at the time and place specified in such notice for payment of

the redemption price.

 

5.  While any shares of 55 cent Preferred Stock remain outstanding, within

each twelve (12) month period ending November 1, the Corporation, unless

prevented from doing so by law or by applicable restrictive provisions herein

or in any mortgage or deed of trust or loan agreement of the Corporation,

shall establish a sinking fund out of surplus or may establish a sinking fund

out of capital, and shall acquire therewith, either by the redemption thereof

or by the purchase thereof in such manner as the Board of Directors may

determine from time to time at not exceeding the sinking fund redemption price

thereof, and shall retire not less than the lesser of 17,948 shares of Series

A, 10,500 shares of Series B, and 14,500 shares of Series C or all remaining

shares of each series, respectively, of 55 cent Preferred Stock.

 

Provided, however, that if the Corporation shall be prevented by law or by

applicable restrictive provisions herein, or in any mortgage or deed of trust

or loan agreement of the Corporation, or for any other reason, from acquiring

during any twelve (12) month period the number of shares of 55 cent Preferred

Stock which, in the absence of such restriction it would be required to

acquire during such period, the aggregate deficit shall be made good in the

first succeeding twelve (12) month period in which the Corporation shall not

be prevented by such restrictions from retiring shares of 55 cent Preferred

Stock.  Any shares of 55 cent Preferred Stock which in any such twelve (12)

month period are redeemed by the Corporation at the optional redemption price

hereinabove set forth, or are purchased by the Corporation but not applied to

meet the Corporation's sinking fund obligation for such twelve month periods

may be credited on the amount required to be acquired in any one or more of

the next following twelve (12) month periods which the Corporation may

designate.  Shares of 55 cent Preferred Stock of the Corporation redeemed or

purchased shall not be reissued.  So long as any share of 55 cent Preferred

Stock shall remain outstanding, no dividends, whether in cash, stock, or

otherwise, shall be paid or declared or any distribution be made with respect

to the Common Stock or Other Securities, nor shall any Common Stock or Other

Securities be purchased, retired or otherwise acquired for a valuable

consideration by the Corporation unless on or before the preceding November 1,

the Corporation shall have acquired the number of shares of 55 cent Preferred

Stock required to have been acquired by such date.

 

6.  Except as otherwise provided herein or as otherwise made mandatory by

law, the holders of the 55 cent Preferred Stock shall have no right to vote

for the election of directors or for any other purpose and shall not be

entitled receive notice of any meeting of stockholders and all voting rights

shall be vested exclusively in the holders of the Common Stock and, to the

extent applicable, holders of Other Securities.  If and whenever six full

quarterly dividends on 55 cent Preferred Stock shall be unpaid, then the

holders of the 55 cent Preferred Stock shall be entitled, voting separately as

a class and to the exclusion of the holders of the Common Stock and Other

Securities, to vote for the election of three of the directors of the

Corporation until all arrears and dividends on the 55 cent Preferred Stock

shall have been paid in full, and thereupon the voting right for the election

of three directors shall be divested from the holders of the 55 cent Preferred

Stock and revested in the holders of the Common Stock and, to the extent

applicable, holders of Other Securities, subject to revesting in the event of

each and every other subsequent such default.  While any 55 cent Preferred

Stock is outstanding, the Corporation, without first obtaining the consent, by

the affirmative vote at a meeting called for that purpose, of the holders of

at least two thirds of the total number of shares of 55 cent Preferred Stock

then outstanding, shall not:

 

    a.    Increase the authorized number of shares of 55 cent Preferred Stock

    or authorize or issue any stock having priority or preference over, or

    ranking on a parity with, the 55 cent Preferred Stock as to dividends or

    assets; or

 

    b.    Amend the provisions hereof so as to affect adversely any of the

    preferences or other rights hereby given to the 55 cent Preferred Stock;

    or

 

    c.    Merge or consolidate with or into any other corporation or

    corporations or sell or transfer all or substantially all of its assets

    as an entity.

 

7.  After full cumulative dividends have been paid or declared and set apart

for payment upon issued and outstanding 55 cent Preferred Stock, as

hereinabove provided, and after the provisions herein or as established by the

Board of Directors with respect to any sinking fund for redemption of 55 cent

Preferred Stock have been complied with, holders of the Common Stock or Other

Securities shall be entitled to receive such further dividends as may from

time to time be declared by the Board of Directors of the Corporation out of

any remaining surplus or net profits.  The term "full cumulative dividend"

whenever used in this article with reference to the 55 cent Preferred Stock of

any series shall be deemed to mean (whether or not in any dividend period or

any part thereof in respect of which such term is used there shall have been

surplus or net profits of the Corporation legally available for the payment of

such dividends) that amount which shall be equal to cumulative dividends at

the prescribed rate to date from the date of cumulation for such series

(including an amount equal to a dividend at such rate for the elapsed portion

of the current dividend period) less, in each case, the amount of all

cumulative dividends paid or deemed paid, upon the 55 cent Preferred Stock.

The term "date of cumulation" as used in this article with respect to 55 cent

Preferred Stock of any series means the date on which the dividend period

during which shares of 55 cent Preferred Stock of such series are first issued

shall begin or the date on which such shares are first issued when such issue

is made on a date on which a dividend period begins.

 

8.  A consolidation, reorganization, or merger of the Corporation with any

other corporation or corporations shall not be considered a dissolution,

liquidation, or winding up of the Corporation within the meaning of such terms

as used herein.

 

9.  The $1.00 Preferred Stock may be issued from time to time in one or more

series in any manner permitted by law and the provisions of these Restated

Articles of Incorporation of the Corporation, as determined from time to time

by the Board of Directors and stated in the resolution or resolutions

providing for the issuance thereof, prior to the issuance of any shares

thereof.  The Board of Directors shall have the authority to fix and

determine, subject to the provisions of this Article V, the rights and

preferences of the shares of any series so established.  Unless otherwise

provided in the resolution or resolutions establishing a series of shares of

$1.00 Preferred Stock, prior to the issue of any shares of a series so

established or to be established, the Board of Directors may, by resolution,

amend the relative rights and preferences of the shares of such series, and

after the issue of shares of a series whose number has been designated by the

Board of Directors, the resolution or resolutions establishing the series may

be amended by the Board of Directors to decrease (but not below the number of

shares of such series then outstanding) the number of shares of that series.

 

The 7.85% Preferred Stock, $1.00 par value was authorized by the Board of

Directors on December 20, 1991.  The rights and preferences of the 7.85%

Preferred Stock are attached as Exhibit A.

 

The Series Z Junior Participating Preferred Stock, $1.00 par value, was

authorized by the Board of Directors on March 19, 1993.  The rights and

preferences of the Series Z Preferred Stock are attached as Exhibit B.

 

                                  ARTICLE VI

 

The amount of paid-in capital with which this Corporation shall begin to do

business shall be Five Hundred Dollars ($500.00) payable in cash or other

property taken at a fair valuation.

 

                                  ARTICLE VII

 

The directors shall be nine (9) in number, but the number of directors may be

increased to any number not exceeding eleven (11) or decreased to any number

not less than three (3) at any annual meeting of the shareholders, or at any

special meeting of the shareholders called for that purpose, or by a

two-thirds vote of the then directors of the Corporation at any regular

meeting of the directors, or at any special meeting of the directors called

for that purpose.

 

The names and post office addresses of the directors of the Corporation in

office at the time of the adoption of these Restated Articles and on the date

hereof, who shall serve until the 1996 Annual Meeting of Shareholders, and

until their successors are elected and qualify are as follows:

 

          Carl Burnham, Jr.             P.O. Box S

                                        Ontario, Oregon 97914

 

          Melvin C. Clapp               3608 S.W. 328th Street

                                        Federal Way, Washington 98023

 

          David A. Ederer               4919 N.E. Laurel Crest Lane

                                        Seattle, Washington 98105

 

          Howard L. Hubbard             5320 N.W. Edgebrook Place

                                        Portland, Oregon 97229-1974

 

          W. Brian Matsuyama            222 Fairview Avenue No.

                                        Seattle, Washington 98109

 

          Larry L. Pinnt                15306 N.E. 190th

                                        Woodinville, Washington 98072

 

          Brooks G. Ragen               Suite 4300

                                        999 Third Avenue

                                        Seattle, Washington 98104

 

          Andrew V. Smith               1600 Bell Plaza, Room 1802

                                        Seattle, Washington 98191

 

          Mary A. Williams              1234 McGilvra Boulevard E.

                                        Seattle, Washington 98112

 

                                 ARTICLE VIII

 

The Board of Directors of this Corporation shall have the authority to make

and alter By-Laws not inconsistent with the law or with the Articles of

Incorporation and subject to the power of the shareholders to change or repeal

such By-Laws.

 

                                  ARTICLE IX

 

Except as may be otherwise provided by law, or by applicable restrictive

provisions of Article V hereof, as amended, or any mortgage, deed of trust or

loan agreement of the Corporation, the shares of stock of this Corporation,

whether Preferred or Common, may be issued by it from time to time without the

consent of any holder of any share thereof, in such manner, or amount of

shares of each said class of stock, and for such consideration in labor,

services, money or property, as from time to time may be fixed and determined

by the Board of Directors of this Corporation, and, except as so restricted,

the right, power and authority of said Board of Directors from time to time so

to authorize and order the issuance by this Corporation of the said shares of

each class of said stock and such number or amount of shares and for such

consideration in labor, services, money or property as from time to time said

Board of Directors may fix and determine, is hereby absolutely reserved to

said Board of Directors.

 

No holder of shares of the capital stock of any class of this Corporation

shall have any preemptive or preferential right of subscription to any shares

of any class of stock of this Corporation, whether now or hereafter

authorized, or to any obligations convertible into stock of this Corporation,

which may be issued or sold, nor any right of subscription other than such, if

any, as the Board of Directors in its discretion may from time to time

determine and at such price as the Board of Directors from time to time may

fix.

 

Payment or delivery to, or receipt by this Corporation of such consideration

as may be fixed and determined by the Board of Directors for the issuance of

any share or shares of its capital stock, as hereinbefore provided, shall

operate and be construed, deemed and held: (a) to discharge, release and

satisfy fully and absolutely all liability to the Corporation and/or to its

creditors now or at any time hereafter existing, of any subscriber for and/or

holder of any such share or shares so authorized to be issued in any way on

account of, founded upon, or arising out of any subscription for and/or

purchase of, and/or issuance of such share or shares, and (b) to constitute

such share or shares fully paid stock of the Corporation.

 

                                   ARTICLE X

 

                       LIMITATION ON DIRECTOR LIABILITY

 

To the fullest extent permitted by Washington law at the time this Article

becomes effective or as may thereafter be in effect, a director of this

Corporation shall not be liable to this Corporation or its shareholders for

the monetary damages for his or her conduct as a director.  Any amendment to

or repeal of this Article X shall not adversely affect any right of a director

of this Corporation hereunder with respect to any acts or omissions of such

director occurring prior to such amendment or repeal.

 

                                  ARTICLE XI

 

                         INDEMNIFICATION OF DIRECTORS

 

To the fullest extent permitted by Washington law at the time this Article

becomes effective or as may be thereafter in effect, this Corporation is

authorized to indemnify any director of this Corporation.  The Board of

Directors shall be entitled to determine the terms of such indemnification,

including advance of expenses, and to give effect thereto through the adoption

of By-Laws, approval of agreements, or by any other manner approved by the

Board of Directors.  Any amendment to or repeal of this Article XI shall not

adversely affect any right of a director of this Corporation hereunder with

respect to any right to indemnification that arises prior to such amendment or

repeal.

<PAGE>

                                  ARTICLE XII

 

                  BUSINESS COMBINATIONS/FAIR PRICE PROVISIONS

 

A.  The following definitions shall apply for purposes of this Article XII:

 

    1.    The terms "Affiliate" and "Associate" shall have the respective

meanings ascribed to such terms in Rule 12b-2 under the Securities Exchange

Act of 1934 and the rules and regulations thereunder (the "Act") (or any

subsequent provisions replacing such Act, rules, or regulations) as in effect

on March 24, 1992 (the term "registrant" in said Rule 12b-2 meaning in this

case the Corporation).

 

    2.    The term "Beneficially Own," when used with respect to a person's

interest in shares of capital stock, shall mean that said person has or shares

(or has the right to acquire under any option, warrant, conversion right or

other right), directly or indirectly, the power to vote, the power to dispose

of, the power to direct the voting or disposition of, or the right to enjoy

the economic benefits of such shares.

 

    3.    The term "Business Combination" shall mean (a) any merger or

consolidation of the Corporation or a Subsidiary of the Corporation with or

into an Interested Shareholder (or an Affiliate or Associate of an Interested

Shareholder) or any merger of an Interested Shareholder (or an Affiliate or

Associate of an Interested Shareholder) into the Corporation or a Subsidiary

of the Corporation, (b) any sale, lease, exchange, transfer, encumbrance or

other disposition of Substantial Assets either of the Corporation (including

without limitation any securities of a Subsidiary) or of a Subsidiary of the

Corporation, to an Interested Shareholder (or an Affiliate or Associate of an

Interested Shareholder), (c) the issuance of any securities of the Corporation

or a Subsidiary of the Corporation to an Interested Shareholder (or an

Affiliate or Associate of an Interested Shareholder), (d) any

reclassification, exchange of shares or other recapitalization that would have

the effect of increasing the proportion of shares of Common Stock or other

capital stock of the Corporation or a Subsidiary of the Corporation

Beneficially Owned by an Interested Shareholder, or (e) any agreement,

contract, or other arrangement providing for any of the foregoing

transactions.

 

    4.    The term "Continuing Director" shall mean a director who was a

member of the Board of Directors of the Corporation immediately prior to the

time that the Interested Shareholder involved in a Business Combination became

an Interested Shareholder and who is not the Interested Shareholder or an

Affiliate or Associate of the Interested Shareholder.

 

    5.    "Fair Market Value" means (a) in the case of cash, the amount of

such cash; (b) in the case of stock, the highest closing sale price during the

30-day period immediately preceding the date in question of a share of such

stock on the composite tape for New York Stock Exchange Listed Stocks, or, if

such stock is not quoted on the composite tape, on the New York Stock

Exchange, or, if such stock is not listed on such Exchange, on the principal

United States securities exchange registered under the Act on which such stock

is listed, or, if such stock is not listed on any such exchange, the highest

closing bid quotation with respect to a share of such stock during the 30-day

period preceding the date in question on the National Association of

Securities Dealers, Inc. Automated Quotations System or any similar system

then in use, or if no quotations are available, the fair market value on the

date in question of a share of such stock as determined by a majority of the

Continuing Directors in good faith; and (c) in the case of property other than

cash or stock, the fair market value of such property on the date in question

as determined in good faith by a majority of the Continuing Directors.

 

    6.    The term "Interested Shareholder" shall mean any person (other than

the Corporation or any Subsidiary and other than any profit-sharing, employee

stock ownership or other employee benefit plan of the Corporation or any

Subsidiary or any trustee of or fiduciary with respect to any such plan when

acting in such capacity) who is or has announced or publicly disclosed a plan

or intention to become the beneficial owner of Common Stock representing ten

percent (10%) or more of the votes entitled to be cast by the holders of all

then outstanding shares of Common Stock.

 

    7.    The term "person" shall mean any individual, firm, company, or

other entity and shall include any group comprised of any person and any other

person with whom such person or any Affiliate or Associate of such person has

any agreement, arrangement, or understanding, directly or indirectly, for the

purpose of acquiring, holding, voting, or disposing of Common Stock.

 

    8.    The term "Subsidiary" means any company of which a majority of any

class of equity security is Beneficially Owned by the Corporation; provided,

however, that for the purposes of the definition of Interested Shareholder set

forth in paragraph 6 of this section A, the term "Subsidiary" shall mean only

a company of which a majority of each class of equity security is Beneficially

Owned by the Corporation.

 

    9.    The term "Substantial Assets" shall mean assets with a Fair Market

Value in excess of five percent (5%) of the total assets of the Corporation as

reported in the consolidated financial statements of the Corporation as of the

end of its most recent fiscal year ending prior to the time the determination

is made.

 

B.  In addition to any vote or approval required by law, any Business

Combination shall require the affirmative vote of the holders of not less than

eighty percent (80%) of the outstanding shares of capital stock of the

Corporation which are not Beneficially Owned by the Interested Shareholder and

its Affiliates or Associates involved in the Business Combination; provided,

however, that such eighty percent (80%) voting requirement shall not apply if:

 

    1.    The Business Combination is a merger, consolidation or exchange of

shares involving the Corporation which provides for the conversion of the

shares of Common Stock of the Corporation into cash, securities or other

property with a Fair Market Value per share of Common Stock not less than the

highest per share consideration (appropriately adjusted for stock splits,

stock dividends and other like charges) paid or given by the Interested

Shareholder and any of its Affiliates or Associates for any of their shares of

Common Stock; or

 

    2.    The Business Combination was approved by the Board of Directors of

the Corporation; provided that a majority of the Board of Directors consisted

of Continuing Directors and at least two-thirds of the Continuing Directors

voted to approve the Business Combination.

 

C.  The provisions set forth in this Article XII may not be repealed or

amended in any respect unless such repeal or amendment is approved by the

affirmative vote of the holders of not less than eighty percent (80%) of the

outstanding shares of capital stock of the Corporation which are not

Beneficially Owned by an Interested Shareholder.

 

Restated Articles of Incorporation of Cascade Natural Gas Corporation, are

herein executed in duplicate by said Corporation, pursuant to the provisions

of RCW 23B.10.070, and correctly set forth without change the corresponding

provisions of the Articles of Incorporation as previously stated and amended

and supersede the original Articles of Incorporation and all amendments to

said Articles of Incorporation of Cascade Natural Gas Corporation.

 

<PAGE>

IN WITNESS WHEREOF, the undersigned officers of Cascade Natural Gas

Corporation have hereby executed in duplicate these Restated Articles of

Incorporation, and have hereunto set their hands this 28th day of March, 1996.

 

 

                                        CASCADE NATURAL GAS CORPORATION

 

 

 

                                        By /s/Ralph E. Boyd

                                           Ralph E. Boyd

                                           President

 

 

                                        By /s/Larry C. Rosok

                                           Larry C. Rosok

                                           Secretary