AMENDED AND RESTATED

                            ARTICLES OF INCORPORATION

                                       OF

                                 UGI CORPORATION

 

                                   ARTICLE I.

                                      NAME

 

                         The name of the Corporation is:

 

                                 UGI CORPORATION

 

                                   ARTICLE II.

                                     ADDRESS

 

         The address of the registered office of the Corporation in this

Commonwealth is:

 

                              460 North Gulph Road

             King of Prussia, Montgomery County, Pennsylvania 19406

 

                                  ARTICLE III.

                                     PURPOSE

 

         The purpose or purposes for which the corporation is incorporated under

the Business Corporation Law of 1988 are to engage in, and do any lawful act

concerning, any or all lawful business for which corporations may be

incorporated under said Business Corporation Law, including, but not limited to

manufacturing, processing, owning, using and dealing in personal property of

every class and description, engaging in research and development, the

furnishing of services, and acquiring, owning, using and disposing of real

property of every nature whatsoever.

 

                                   ARTICLE IV.

                                  CAPITAL STOCK

 

         The aggregate number of shares which the Corporation shall have the

authority to issue is 110,001,000 shares, divided into 100,000,000 shares of

Common Stock, without par value (hereinafter called the "Common Stock"), 1,000

shares of Restructuring Stock, without par value (hereinafter called the

"Restructuring Stock"), 5,000,000 shares of Series Preference Stock, without par

value (hereinafter called the "Preference Stock"), and 5,000,000 shares of

Series Preferred

 

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Stock, without par value (hereinafter called the "Preferred Stock") (the

Restructuring Stock, the Preference Stock and the Preferred Stock are

hereinafter collectively called the "Senior Stock"). The board of directors

shall have the full authority permitted by law to determine the voting rights,

if any, and designations, preferences, limitations, and special rights of any

class or any series of any class of the Preference Stock or of the Preferred

Stock that may be desired.

 

                                     PART 1

                                 PREFERRED STOCK

                                   (Reserved)

 

                                     PART 2

                                PREFERENCE STOCK

 

                                   Division A

                      General Terms of the Preference Stock

 

         The following provisions in this Division A (hereinafter referred to as

the "General Terms of the Preference Stock") shall apply to the First Series

Preference Stock and, if and to the extent expressly incorporated by reference

in a resolution or resolutions of the Board of Directors or any committee

thereof establishing and designating any other series of the Preference Stock,

to any other Preference Stock hereafter issued by the Corporation. The

Preference Stock shall be considered "Junior Stock" as that term may be defined

in the terms of any series of the Preferred Stock. (The resolution or

resolutions of the Board of Directors or any committee thereof establishing and

designating any series of the Preference Stock is hereinafter referred to as the

"Board Resolution," except that in the case of the First Series Preference Stock

the term Board Resolution shall mean the special terms of the First Series

Preference Stock set forth in Division B of these articles of incorporation.)

 

         Section 201. General. Except as otherwise provided in a Board

Resolution, all Preference Stock of all series shall be identical to each other.

In case with respect to the Preference Stock of all series which rank equally as

to payment of dividends and distributions upon liquidation, the stated dividends

or the amounts payable upon liquidation established by a Board Resolution, or

both, are not paid in full, all Preference

 

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Stock of such series shall participate ratably in the payment of dividends,

including accumulations, if any, in accordance with the sums which would be

payable thereon if all dividends thereon were declared and paid in full, and, in

any distribution of assets other than by way of dividends, in accordance with

the sums which would be payable on such distribution if all sums payable thereon

to holders of such series of Preference Stock were discharged in full.

 

         Section 202. Dividends.

 

         (a) The holders of the Preference Stock of each series shall be

entitled, subject to any preference of the Preferred Stock with respect to

dividends, to receive and the Corporation shall be obliged to pay, but only when

and as declared by its Board of Directors and only out of funds legally

available for the payment of such distributions under 15 Pa.C.S. Section 1551

(relating to distributions to shareholders) or any corresponding superseding

provision of law, cash dividends at such rate or rates per share per annum for

each particular series as shall have been fixed by the Board of Directors in the

Board Resolution for such series, and no more, payable quarterly on the first

day of each January, April, July and October. Such dividends on the Preference

Stock shall be cumulative from the dates as follows: (a) in the case of shares

issued prior to the record date for the initial dividend on shares of the series

of which such shares shall constitute a part, then from the date fixed for such

purpose by the Board of Directors in the Board Resolution; (b) if issued during

the period commencing immediately after the record date for a dividend on shares

of such series and terminating at the close of the payment date for such

dividend, then from such dividend payment date; and (c) otherwise from the

dividend payment date next preceding the date of issue of such shares, except

that in the event dividends on all outstanding Preference Stock for all past

quarterly dividend periods shall not have been paid and full dividends thereon

for the then current dividend period not declared and a sum sufficient for the

payment thereof set apart, then such dividends shall be cumulative from the most

recent date when all such dividends have been so paid, declared and set aside.

 

         (b) Subject to the provisions hereinafter contained in Section 206,

funds legally available for distribution to shareholders under 15 Pa.C.S.

Section 1551 or under any corresponding superseding provision of law after

dividends on all outstanding Preference Stock for all past quarterly periods

shall have been paid and full dividends thereon for the then current dividend

 

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period declared and a sum sufficient for the payment thereof set apart may be

paid to the holders of the Common Stock and other shares ranking junior to the

Preference Stock with respect to the payment of dividends.

 

             Section 203. Redemption.

 

         (a) The Corporation, at the option of its Board of Directors, may

redeem all or any of the outstanding Preference Stock or all or any shares of

any series thereof at any time or from time to time, upon payment in cash in

respect of the shares so redeemed at the price fixed by the Board of Directors

in the Board Resolution in respect of the series of which such shares shall

constitute a part, plus an amount equal to all accumulated and unpaid dividends

thereon to the date of redemption, whether or not such dividends shall have been

earned or declared (such price, together with an amount equal to all such

accumulated and unpaid dividends, being hereinafter called the "redemption

price"). Any such redemption shall be in such amount, at such place, and in such

manner, as the Board of Directors may determine. In the case of a redemption of

less than all the outstanding Preference Stock of any series, the particular

shares to be so redeemed shall be by lot or by such other equitable method as

the Board of Directors shall determine.

 

         (b) Not less than 15 days nor more than 90 days prior to the date fixed

for such redemption, notice of redemption shall be published once in a newspaper

of general circulation published in the Borough of Manhattan, New York, New

York, and written notice thereof shall be mailed by the Corporation to the

several holders of record of the Preference Stock to be so redeemed, at their

respective addresses as the same appear upon the books of the Corporation.

 

         (c) From and after the date fixed in any such notice as the date of

redemption (unless default shall be made by the corporation in providing moneys

at the time and place specified for the payment of the redemption price pursuant

to said notice), all dividends on the Preference Stock thereby called for

redemption shall cease to accrue and all rights of the holders thereof as

shareholders in the Corporation, except the right to receive the redemption

price, without interest, shall cease and terminate, and such Preference Stock

shall not be deemed outstanding for any purpose.

 

         (d) The Corporation may, however, give or irrevocably authorize the

"Depositary" (as hereinafter defined) forthwith to

 

                                      -4-

 

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give written notice (in the same manner as the notice of redemption is required

to be given as provided in subsection (b)) to the holders of all the Preference

Stock selected for redemption that the redemption price has been or will on a

date specified be deposited with a designated bank or trust company, having an

office in New York, New York or Philadelphia, Pennsylvania and having capital

and surplus of not less than $10,000,000 (the "Depositary"), in trust for the

account of the holders of such Preference Stock and that such holders may

receive in cash the redemption price of such Preference Stock from the

Depositary on or after the date of such deposit upon the surrender of their

share certificates without awaiting the date fixed for redemption. In such

event, if the redemption price shall have been so deposited by the Corporation

with the Depositary, all rights of the holders of the shares called for

redemption, as shareholders of the Corporation, except the right to receive the

redemption price, without interest, from the Depositary, shall cease and

terminate upon the date of such deposit or the date of the giving of such notice

or authority, whichever be later, and such Preference Stock shall thereafter not

be deemed to be outstanding for any purpose; provided, however, that conversion

rights, if any, of shares called for redemption shall terminate at the close of

business on the business day next preceding the date fixed for redemption. Any

moneys so deposited which shall remain unclaimed by the holders of such

Preference Stock at the end of five years after the date so fixed for redemption

shall be paid by the Depositary to the Corporation, after which the holders of

such Preference Stock shall look only to the Corporation for payment of the

redemption price thereof.

 

         (e) Unless otherwise provided by resolution of the Board of Directors,

all Preference Stock so redeemed by the Corporation shall be canceled and

restored to the status of authorized but unissued Preference Stock without

series designation.

 

         Section 204. Liquidation.

 

         (a) On any voluntary or involuntary liquidation (which shall include

dissolution and winding up) of the Corporation, before any payment or

distribution shall be made to the holders of any Common Stock or shares of any

other class which, with respect to distributions upon liquidation, shall rank

junior to the Preference Stock, the holders of the Preference Stock, subject to

any preference of the Preferred Stock, shall be entitled to be paid the amount

or amounts fixed therefor by the

 

                                      -5-

 

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Board of Directors in the Board Resolution in respect of each outstanding series

of Preference Stock, which stated amounts may vary as between voluntary and

involuntary liquidation distributions, plus in each case an amount equal to all

accumulated and unpaid dividends thereon to the date of such payment, whether or

not such dividends shall have been earned or declared.

 

         (b) After such payment shall have been made in full to the holders of

Preference Stock, they shall be entitled to no further payment or distribution.

 

         (c) Neither a consolidation or merger of the Corporation with or into

any other corporation, nor a merger of any other corporation into the

Corporation, nor a division or a reorganization of the Corporation, nor a share

exchange to which the Corporation is a party, nor the purchase or redemption of

all or part of the outstanding shares of any class or classes of the

Corporation, nor a sale, lease, conveyance or other disposition of all or any

part of its assets shall be considered a liquidation of the Corporation within

the meaning of this Section 204.

 

                  Section 205. Voting Rights.

 

         (a) Except as herein expressly provided to the contrary or in the Board

Resolution or as otherwise required by law, the holders of the Preference Stock

shall have no right to vote at, or to participate in, any meeting of

shareholders of the Corporation, or to receive any notice of such meeting.

 

         (b) In the event that dividends upon any of the Preference Stock shall

be in arrears to an amount equal to six full quarterly dividends thereon, the

holders of the Preference Stock as to which dividends are so in arrears, subject

to the terms of the Preferred Stock, shall become entitled to the extent

hereinafter provided to vote noncumulatively at all elections of directors of

the Corporation, and to receive notice of all shareholders meetings to be held

for such purpose. At such meetings the holders of such Preference Stock, voting

separately as a class, shall be entitled to elect two members of the Board of

Directors of the Corporation; and all other directors of the Corporation shall

be elected by the other shareholders of the Corporation entitled to vote in the

election of directors. Such voting rights of the holders of such Preference

Stock shall continue until all accumulated and unpaid dividends thereon shall

have been paid, whereupon all such voting rights of the

 

                                      -6-

 

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holders of such Preference Stock shall cease, subject to being again revived

from time to time upon the reoccurrence of the conditions above described as

giving rise thereto.

 

         (c) At any time after the accrual of voting rights to the holders of

such Preference Stock in accordance with subsection (b), a special meeting of

the holders of such Preference Stock, for the purpose of the initial exercise of

such voting rights, shall be held, upon 30 days' notice, upon call by the

Secretary of the Corporation at the written request of the holders of not less

than 10% of such Preference Stock at the time outstanding, or, if the Secretary

shall fail or neglect to call such meeting within 30 days after receipt of such

request, then upon call by the holders of not less than 10% of such Preference

Stock at the time outstanding. The terms of office, as directors, of all persons

who may be directors of the Corporation, except those directors, if any, elected

by the holders of the Preferred Stock as a class, shall terminate upon the

election of directors by the holders of the Preference Stock. The holders of the

Common Stock, subject to the terms of the Preferred Stock, shall have the right

to elect the remaining directors of the Corporation.

 

         (d) So long as the holders of such Preference Stock are entitled

hereunder to voting rights, any vacancy in the Board of Directors caused by the

death or resignation of any director elected by the holders of such Preference

Stock, shall, until the next meeting of shareholders for the election of

directors, in each case be filled by the remaining director elected by the

holders of such Preference Stock. In the event of simultaneous vacancies among

directors elected by the holders of Preference Stock, an election, pursuant to

the provisions of this section.

 

         (e) Upon termination of the voting rights of the holders of such

Preference Stock, the terms of office of all persons who shall have been elected

directors of the Corporation by vote of the holders of such Preference Stock or

by a director elected by such holders shall forthwith terminate, and any

vacancies resulting from such termination shall be filled by the vote of a

majority of the remaining directors.

 

         Section 206. Restriction on Dividends and Purchase of Stock.

 

         (a) So long as any Preference Stock of any series shall remain

outstanding, no dividend (other than dividends payable in Common Stock or other

shares of the Corporation of a class ranking junior to the Preference Stock of

such series with

 

                                      -7-

 

<PAGE>

 

respect to dividends and distributions upon liquidation) shall be paid on Common

Stock or shares of any other class which, with respect to payment of dividends

or distributions upon liquidation, shall rank junior to the Preference Stock of

such series ("junior shares"), nor shall any junior shares be purchased,

retired, or otherwise acquired by the Corporation, other than by exchange

therefor of junior shares or out of the proceeds of a substantially concurrent

sale of junior shares unless:

 

                  (i) all dividends on all outstanding Preference Stock of such

         series for all past quarterly dividend periods shall have been paid and

         full dividends thereon for the then current quarterly dividend period

         declared and a sum sufficient for the payment thereof set apart; and

 

                  (ii) the Corporation shall not be in arrears in respect of any

         sinking fund obligation or obligation of a similar nature with respect

         to Preference Stock of such series or any other series ranking equally

         therewith with respect to payment of dividends or distributions upon

         liquidation.

 

         (b) So long as any Preference Stock of any series shall remain

outstanding, unless:

 

                  (i) all dividends on all outstanding Preference Stock of such

         series for all past quarterly dividend periods shall have been paid and

         full dividends thereon for the then current quarterly dividend period

         declared and a sum sufficient for the payment thereof set apart; and

 

                  (ii) the Corporation shall not be in arrears in respect of any

         sinking fund obligation or obligation of a similar nature in respect of

         Preference Stock of such series or any other series ranking equally

         therewith with respect to payment of dividends and distribution upon

         liquidation;

 

none of the Preference Stock of such series, nor any parity shares, as

hereinafter defined, shall be purchased, retired or otherwise acquired by the

Corporation (except by redemption of all shares of such series and all parity

shares then outstanding, or except in accordance with a purchase or exchange

offer made to holders of all shares of such series and all parity shares

outstanding which, considering the annual dividend rates and other relative

rights and preferences of such shares, in the opinion of the Board of Directors

(whose determination

 

                                      -8-

 

<PAGE>

 

shall be conclusive) will result in fair and equitable treatment among all such

shares). "Parity shares" as used herein means shares (including shares of

Preference Stock of other series) ranking equally with the Preference Stock of

such series with respect to payment of dividends and distributions upon

liquidation.

 

         Section 207. Corporate Action Requiring Consent of Preference Stock.

 

         (a) Without the consent of the holders of at least a majority of the

Preference Stock at the time outstanding, given in person or by proxy, either in

writing according to law or at a meeting of shareholders called for the purpose,

the Corporation shall not;

 

                  (i) authorize any new class of shares, or an increase in the

         authorized amount of any class of shares, which shall rank equally with

         the Preference Stock with respect to payment of dividends or

         distributions upon liquidation, except that if shares of such class

         would rank equally to one or more but not all of the several series of

         the Preference Stock at the time outstanding, the consent of the

         holders of a majority of the shares of all series with respect to which

         shares of such class would rank equally shall be required in lieu of

         the consent of holders of all Preference Stock;

 

                  (ii) increase the authorized Preference Stock to an amount in

         excess of 5,000,000; or

 

                  (iii) merge into or consolidate with any other corporation or

         corporations, become a party to a share exchange or division, or sell,

         lease or otherwise dispose of all or substantially all of its assets,

         unless such merger, consolidation, share exchange, division, sale,

         lease or other disposition shall have been ordered, permitted or

         approved by the Securities and Exchange Commission under the provisions

         of the Public Utility Holding Company Act of 1935 as now in effect or

         as hereafter amended or by any successor commission.

 

         (b) Without the consent of the holders of at least two- thirds of the

Preference Stock outstanding, given in person or by proxy, either in writing

according to law or at a meeting of shareholders called for the purpose, the

Corporation shall not:

 

                                      -9-

 

<PAGE>

 

                  (i) authorize any new class of shares, or an increase in the

         authorized amount of any class of shares, which will rank prior to the

         Preference Stock with respect to payment of dividends or distributions

         upon liquidation; or

 

                  (ii) adopt or effect any amendment to its articles of

         incorporation that would adversely affect the rights or preferences of

         the Preference Stock (except as may be expressly permitted under

         subsection (a) of this Section 207 with the consent of the holders of a

         majority of the Preference Stock), except that if any such amendment

         shall adversely affect the rights or preferences of one or more, but

         not all, of the several series of Preference Stock at the time

         outstanding, the consent of the holders of at least two-thirds of the

         shares of all series adversely affected, similarly given, shall be

         required in lieu of the consent of the holders of two-thirds of the

         Preference Stock.

 

         (c) The provisions of this section shall not prevent the Board of

Directors from establishing and designating, without a vote of the holders of

the Preference Stock, one or more series of the Preference Stock which shall

rank prior to shares of other series of the Preference Stock with respect to

payment of dividends or distributions upon liquidations.

 

                                   Division B

                 Special Terms of First Series Preference Stock.

 

         The first series of the Preference Stock shall consist of 1,000,000

shares and shall be designated as First Series Preference Stock.

 

         Section 221. Dividends and Distributions.

 

         (a) The quarterly dividend rate of the shares of First Series

Preference Stock shall be the greater of (x) $50.00 or (y) subject to the

provision for adjustment hereinafter set forth 200 times the aggregate per share

amount of all cash dividends, and 200 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

(the "Quarterly Dividend Payment Date"), or, with respect to the first Quarterly

Dividend Payment Date, since the first issuance

 

                                      -10-

 

<PAGE>

 

of any share or fraction of a share of First Series Preference Stock. In the

event the Corporation shall at any time:

 

                  (i) declare any dividend on Common Stock payable in shares of

         Common Stock;

 

                  (ii) subdivide the outstanding Common Stock;

 

                  (iii) combine the outstanding Common Stock into a smaller

         number of shares; or

 

                  (iv) issue any shares of its capital stock in a

         reclassification of the outstanding Common Stock;

 

then in each such case the amounts to which holders of shares of First Series

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

and clause (y) of the preceding sentence shall be adjusted by multiplying each

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

First Series Preference Stock as provided in subsection (a) immediately after it

declares a dividend or distribution on the Common Stock (other than a dividend

payable in shares of Common Stock), except 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 $50 per share on the First Series

Preference Stock shall nevertheless be payable on such subsequent Quarterly

Dividend Payment Date.

 

         Section 222. Voting Rights. The holders of shares of First Series

Preference Stock shall have the following voting rights:

 

         (a) Subject to the provision for adjustment hereinafter set forth, each

share of First Series Preference Stock shall entitle the holder thereof to 200

votes on all matters submitted to a vote of the shareholders of the Corporation.

In the event the Corporation shall at any time:

 

                  (i) declare any dividend on Common Stock payable in shares of

         Common Stock;

 

                                      -11-

 

<PAGE>

 

                  (ii) subdivide the outstanding Common Stock;

 

                  (iii) combine the outstanding Common Stock into a smaller

         number of shares; or

 

                  (iv) issue any shares of its capital stock in a

         reclassification of the outstanding Common Stock;

 

then in each such case the number of votes per share to which holders of shares

of First Series Preference Stock were entitled immediately prior to such event

shall be adjusted by multiplying such number 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) Except as otherwise provided in this section or by law, the holders

of shares of First Series Preference Stock and the holders of shares of Common

Stock shall vote together as one class on all matters submitted to a vote of

shareholders of the Corporation.

 

             Section 223. Liquidation.

 

         (a) Upon any voluntary liquidation, dissolution or winding up of the

Corporation and subject to the distributions to be made with respect to

Preferred or Preference Stock senior to the First Series Preference Stock, no

distribution shall be made to the holders of shares of stock ranking junior

(either as to dividends or upon liquidation, dissolution or winding up) to the

First Series Preference Stock unless, prior thereto, the holders of shares of

First Series Preference Stock shall have received $100 per share, plus an amount

equal to accrued and unpaid dividends and distributions thereon, whether or not

declared, to the date of such payment (the "First Series Liquidation

Preference"). Following the payment of the full amount of the First Series

Liquidation Preference, no additional distributions shall be made to the holders

of shares of First Series Preference Stock unless, prior thereto, the holders of

shares of Common Stock have received an amount per share (the "Common

Adjustment") equal to the quotient obtained by dividing (x) the First Series

Liquidation Preference by (y) 200 (as appropriately adjusted as set forth in

subparagraph (c) below to reflect such events as stock splits, stock dividends

and recapitalizations with respect to the Common Stock) (such number in clause

(y), the "Adjustment Number"). Following the payment of the full

 

                                      -12-

 

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amount of the First Series Liquidation Preference and the Common Adjustment in

respect of all outstanding shares of First Series Preference Stock and Common

Stock, respectively, holders of First Series Preference Stock and holders of

shares of Common Stock shall receive their ratable and proportionate share of

the remaining assets to be distributed in the ratio of the Adjustment Number to

one with respect to such First Series Preference Stock and Common Stock, on a

per share basis, respectively.

 

         (b) In the event, however, that there are not sufficient assets

available to permit payment in full of the First Series Liquidation Preference

and the liquidation preferences of all other series of Preferred or Preference

Stock, if any, which rank on a parity with the First Series Preference Stock,

then such remaining assets shall be distributed ratably to the holders of such

parity shares in proportion to their respective liquidation preferences. In the

event, however, that there are not sufficient assets available to permit payment

in full of the Common Adjustment, then such remaining assets shall be

distributed ratably to the holders of Common Stock.

 

         (c) In the event the Corporation shall at any time:

 

                  (i) declare any dividend on Common Stock payable in shares of

         Common Stock;

 

                  (ii) subdivide the outstanding Common Stock;

 

                  (iii) combine the outstanding Common Stock into a smaller

         number of shares; or

 

                  (iv) issue any shares of its capital stock in reclassification

         of the outstanding Common Stock;

 

then in each such case the Adjustment Number in effect immediately prior to such

event shall be adjusted by multiplying such Adjustment Number 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.

 

         Section 224. Consolidation, Merger, etc. In case the Corporation shall

enter into any consolidation, merger, combination, share exchange, division or

other transaction in which the shares of Common Stock are exchanged for or

changed

 

                                      -13-

 

<PAGE>

 

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

case the shares of First Series Preference Stock shall at the same time be

similarly exchanged or changed in an amount per share (subject to the provision

for adjustment hereinafter set forth) equal to 200 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:

 

                  (i) declare any dividend on Common Stock payable in shares of

         Common Stock;

 

                  (ii) subdivide the outstanding Common Stock;

 

                  (iii) combine the outstanding Common Stock into a smaller

         number of shares; or

 

                  (iv) issue any shares of its capital stock in a

         reclassification of the outstanding 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 First Series Preference 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

were outstanding immediately prior to such event.

 

         Section 225. No Redemption. The shares of First Series Preference Stock

shall not be redeemable.

 

         Section 226. Ranking. The First Series Preference Stock shall rank

junior to all other series of the Senior Stock as to the payment of dividends

and the distribution of assets, unless the terms of any such series shall

provide otherwise.

 

         Section 227. Fractional Shares. First Series Preference 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 First Series Preference Stock.

 

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<PAGE>

 

                                     PART 3

                               RESTRUCTURING STOCK

 

         Section 461. Voting Rights. At all meetings of the shareholders of the

Corporation, the holders of Restructuring Stock shall be entitled to one vote

for each share of Restructuring Stock held by them, respectively, except as

otherwise expressly provided in this article. Except as otherwise provided in

this article or by law, holders of Restructuring Stock and Common Stock, and any

other series of the Senior Stock having voting rights as a single class with the

Common Stock, shall vote together as a single class.

 

         Section 462. Dividend and Other Distribution Rights. Whenever full

dividends or other distributions on all series of the Preferred Stock and the

Preference Stock at the time outstanding having preferential dividend or other

distribution rights shall have been paid or declared and set apart for payment

or otherwise made, then such dividends (payable in cash or otherwise) or other

distributions, as may be determined by the board of directors may be declared

and paid or otherwise made on the Restructuring Stock, but only out of funds

legally available for the payment of such distributions under 15 Pa.C.S. Section

1551 (relating to distributions to shareholders) or under any corresponding

superseding provision of law.

 

         Section 463. Liquidation Rights. In the event of any liquidation,

dissolution or winding up of the Corporation, after paying or providing for the

payment to the holders of shares of all series of the Preferred Stock and

Preference Stock of the full distributive amounts to which they are respectively

entitled, as provided in this article, the holders of Restructuring Stock shall

be entitled to receive, as a liquidating distribution and in lieu of any other

share in the net assets of the Corporation, all equity securities owned by the

Corporation other than any "voting security" of any "public utility company" or

"holding company," as those terms are then defined in the Public Utility Holding

Company Act of 1935 or any successor statute.

 

         Section 464. Exchange Rights. Upon written notice to the Corporation,

accompanied by a certificate or certificates representing all of the then

outstanding shares of Restructuring Stock, the holders of the Restructuring

Stock shall be entitled to exchange such shares for all equity securities then

owned by

 

                                      -15-

 

<PAGE>

 

the Corporation other than any "voting security" of any "public utility company"

or "holding company," as those terms are then defined in the Public Utility

Holding Company Act of 1935 or any successor statute.

 

         Section 465. Restrictions on Issuance or Transfer. Shares of

Restructuring Stock may be issued or transferred only to a corporation

substantially all of the common or residual securities of which are owned,

directly or indirectly, by the Corporation.

 

                                     PART 4

                                  COMMON STOCK

 

         Section 471. Voting Rights. At all meetings of the shareholders of the

Corporation, the holders of Common Stock shall be entitled to one vote for each

share of Common Stock held by them, respectively, except as otherwise expressly

provided in this article.

 

         Section 472. Dividend and Other Distribution Rights. Whenever full

dividends or other distributions on all series of the Senior Stock at the time

outstanding having preferential dividend or other distribution rights shall have

been paid or declared and set apart for payment or otherwise made, then such

dividends (payable in cash or otherwise) or other distributions, as may be

determined by the board of directors may be declared and paid or otherwise made

on the Common Stock, but only out of funds legally available for the payment of

such distributions under 15 Pa.C.S. Section 1551 (relating to distributions to

shareholders) or under any corresponding superseding provision of law.

 

         Section 473. Liquidation Rights. In the event of any liquidation,

dissolution or winding up of the Corporation, the assets and funds of the

Corporation available for distribution to shareholders, after paying or

providing for the payment to the holders of shares of all series of the Senior

Stock of the full distributive amounts to which they are respectively entitled,

as provided in this article, shall be divided among and paid to the holders of

Common Stock according to their respective shares.

 

                                      -16-

 

<PAGE>

 

                                     PART 5

                                     GENERAL

 

         Section 481. Preemptive Rights. Except as otherwise provided in the

express terms of any class or series of shares, or in any contract, warrant or

other instrument issued by the Corporation, no holder of shares of the

Corporation shall be entitled, as such, as a matter of right to subscribe for or

purchase any part of any issue of shares or other securities of the Corporation,

of any class, series or kind whatsoever, and whether issued for cash, property,

services, by way of dividends, or otherwise.

 

         Section 482. Amendments to Terms of Senior Stock. If and to the extent

provided by the express terms of any series of the Senior Stock, the board of

directors may, without the consent of the holders of the outstanding shares of

such series or of the holders of any other shares of the Corporation (unless

otherwise provided in the express terms of any such other shares), interpret the

provisions of such series to resolve any inconsistency or ambiguity, remedy any

formal defect or make any other change or modification that does not adversely

affect the rights of the existing holders of such series.

 

                                   ARTICLE V.

                                   MANAGEMENT

 

         The following provisions shall govern the management of the business

and affairs of the Corporation and the rights, powers or duties of its security

holders, directors or officers:

 

         Section 501. Transactions with Interested Shareholders. The provisions

of 15 Pa.C.S. Section 2538 shall not be applicable to the Corporation.

 

         Section 502. Number of Directors. The number of directors of the

Corporation constituting the whole board and the number of directors

constituting each class of directors as provided by Section 501 shall be fixed

solely by resolution of the board of directors, except as otherwise provided in

the express terms of any class or series of Senior Stock with respect to the

election of directors upon the occurrence of a default in the payment of

dividends or in the performance of another express requirement of the terms of

such Senior Stock.

 

                                      -17-

 

<PAGE>

 

         Section 503. Straight Voting for Directors. The shareholders of the

Corporation shall not have the right to cumulate their votes for the election of

directors of the Corporation.

 

         Section 504. Adoption of Bylaws. Except as otherwise provided in the

express terms of any series of the Senior Stock:

 

                  (i) The shareholders shall have the power to adopt, amend or

         repeal the bylaws of the Corporation only subject to the procedures and

         restrictions applicable to amendments of these articles of

         incorporation, including any provision of law requiring as a condition

         to adoption by the Corporation that the corporate action be approved

         also by the board of directors of the Corporation, and treating a

         direction by the board that the matter should be submitted to the

         shareholders, or the sufferance by the board that the matter be so

         submitted, as insufficient to satisfy the requirement of independent

         approval by the board of directors.

 

                  (ii) The board of directors of the Corporation shall have the

         full authority conferred by law upon the shareholders of the

         Corporation to adopt, amend or repeal the bylaws of the Corporation,

         including in circumstances otherwise reserved by statute exclusively to

         the shareholders. Any bylaw adopted by the board of directors under

         this paragraph shall be consistent with these articles of

         incorporation.

 

         Section 505. Authorization of Certain Mergers. Except as otherwise

provided in the express terms of any series of the Senior Stock and in addition

to any power otherwise vested by law in the board of directors of the

Corporation to effect (without the approval of the shareholders or any class or

series thereof) a merger of the Corporation with and into another corporation or

other association, the board of directors of the Corporation may authorize and

approve on behalf of the Corporation and its shareholders (without the approval

of the shareholders of the Corporation or any class or series thereof), a merger

of the Corporation with and into another corporation which shall be the

surviving corporation, if:

 

                  (i) The only parties to the merger are the Corporation and the

         surviving corporation.

 

                  (ii) The surviving corporation was, immediately prior to the

         effective date of the merger, a Pennsylvania

 

                                      -18-

 

<PAGE>

 

         corporation controlled directly or indirectly by the Corporation and a

         "public utility company" within the meaning of the Public Utility

         Holding Company Act of 1935 or any successor statute.

 

                  (iii) The plan of merger provides that each share of the

         Corporation outstanding immediately prior to the effective date of the

         merger is to be converted into, except as otherwise agreed by the

         holder thereof, an identical share of the surviving corporation after

         the effective date of the merger, and the holders of all such shares to

         be outstanding immediately after the effective date of the merger

         derived from shares of the Corporation will then be entitled to cast at

         least a majority of the votes entitled to be cast generally for the

         election of directors of the surviving corporation.

 

                  (iv) The additional shares, if any, of the surviving

         corporation to be outstanding immediately after the effective date of

         the merger are shares which the board of directors of the Corporation

         would have been authorized to issue (without the approval of the

         shareholders of the Corporation or any class or series thereof)

         immediately prior to the effective date of the merger.

 

                                   ARTICLE VI.

                                  MISCELLANEOUS

 

         Section 601. Headings. The headings of the various sections of these

articles of incorporation are for convenience of reference only and shall not

affect the interpretation of any of the provisions of these articles.

 

         Section 602. Reserved Power of Amendment. These articles of

incorporation may be amended in the manner and at the time prescribed by

statute, and all rights conferred upon shareholders herein are granted subject

to this reservation.