10-Q

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


(Mark One)

[X]      QUARTERLY REPORT UNDER SECTION 13 AND 15(d)
         OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2002
                               -------------

                                       OR

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
         THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                       to


Commission File No. 0-16867

                            UNITED TRUST GROUP, INC.
             (Exact name of registrant as specified in its charter)

  ILLINOIS                                     37-1172848
(State or other jurisdiction of                                 (I.R.S. Employer
 incorporation or organization)                              Identification No.)


                             5250 SOUTH SIXTH STREET
                                  P.O. BOX 5147
                              SPRINGFIELD, IL 62705
               (Address of principal executive offices) (Zip Code)


Registrant's telephone number, including area code: (217) 241-6300



     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]


The number of shares  outstanding of the registrant's  common stock as of August
1, 2002, was 3,489,929.






                    UNITED TRUST GROUP, INC. AND SUBSIDIARIES
                                 (The "Company")



                                TABLE OF CONTENTS

Part 1.   Financial Information................................................3


   ITEM 1.  FINANCIAL STATEMENTS...............................................3

     Consolidated Balance Sheets as of June 30, 2002 and December 31, 2001.....3

     Consolidated  Statements of  Operations  for the three and
     six months ended June 30, 2002 and 2001...................................4

     Consolidated  Statement  of  Changes  in  Shareholders'
     Equity for the six months ended June 30, 2002.............................5

     Consolidated  Statements  of Cash Flows for the six  months
     ended June 30, 2002 and 2001..............................................6

     Notes to Consolidated Financial Statements................................7

   ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
            RESULTS OF OPERATIONS.............................................14

   ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........18

PART II.   OTHER INFORMATION..................................................19


   ITEM 1.  LEGAL PROCEEDINGS.................................................19

   ITEM 2.  CHANGE IN SECURITIES..............................................19

   ITEM 3.  DEFAULTS UPON SENIOR SECURITIES...................................19

   ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...............19

   ITEM 5.  OTHER INFORMATION.................................................19

   ITEM 6.  EXHIBITS..........................................................19


SIGNATURES....................................................................21





                          PART 1. FINANCIAL INFORMATION
                          Item 1. Financial Statements

                            UNITED TRUST GROUP, INC.
                                AND SUBSIDIARIES

                     Consolidated Balance Sheets (Unaudited)
- -------------------------------------------------------------------------------------------------------------------------


                                                                            June 30,           December 31,
     ASSETS                                                                   2002                2001 *
                                                                        ------------------   ------------------

Investments:
Fixed maturities at amortized cost
    (market $70,854,992 and $77,725,410)                             $         68,311,514 $         75,005,395
Investments held for sale:
Fixed maturities, at market
    (cost $105,030,168 and $97,584,094)                                       107,335,329           98,628,440
Equity securities, at market
    (cost $4,122,887 and $3,937,812)                                            4,942,004            3,852,716
Mortgage loans on real estate at amortized cost                                24,347,747           23,386,895
Investment real estate, at cost,
   net of accumulated depreciation                                             17,600,947           18,226,451
Policy loans                                                                   13,638,718           13,608,456
Short-term investments                                                            480,513              581,382
                                                                        ------------------   ------------------

                                                                              236,656,772          233,289,735

Cash and cash equivalents                                                      11,788,043           15,477,348
Accrued investment income                                                       2,836,973            3,002,860
Reinsurance receivables:
  Future policy benefits                                                       33,374,123           33,776,688
  Policy claims and other benefits                                              3,821,278            4,042,779
Cost of insurance acquired                                                     24,485,419           33,666,336
Deferred policy acquisition costs                                               2,733,703            3,107,919
Costs in excess of net assets purchased,
  net of accumulated amortization                                                       0              345,779
Property and equipment,
   net of accumulated depreciation                                              2,325,621            2,459,117
Income taxes receivable, current                                                  218,972              215,865
Other assets                                                                    2,730,238              139,245
                                                                        ------------------   ------------------

     Total assets                                                    $        320,971,142 $        329,523,671
                                                                        ==================   ==================


             LIABILITIES AND SHAREHOLDERS' EQUITY

Policy liabilities and accruals:
  Future policy benefits                                             $        235,605,188 $        236,449,241
  Policy claims and benefits payable                                            2,515,669            2,781,920
  Other policyholder funds                                                      1,228,717            1,255,990
  Dividend and endowment accumulations                                         12,725,453           13,055,024
Income taxes payable:
  Deferred                                                                     11,575,092           13,569,523
Notes payable                                                                   4,260,359            4,400,670
Other liabilities                                                               6,349,776            5,465,896
                                                                        ------------------   ------------------

     Total liabilities                                                        274,260,254          276,978,264
                                                                        ------------------   ------------------

Minority interests in consolidated subsidiaries                                         0            7,771,793
                                                                        ------------------   ------------------


Shareholders' equity:
Common stock - no par value, stated value $.02 per share
  Authorized 7,000,000 shares - 3,492,644 and 3,549,791 shares issued
  after deducting treasury shares of 132,383 and 75,236                            69,853               70,996
Additional paid-in capital                                                     42,377,761           42,789,636
Retained earnings                                                               2,203,951            1,004,238
Accumulated other comprehensive income                                          2,059,323              908,744
                                                                        ------------------   ------------------

     Total shareholders' equity                                                46,710,888           44,773,614
                                                                        ------------------   ------------------

     Total liabilities and shareholders' equity                      $        320,971,142 $        329,523,671
                                                                        ==================   ==================


* Balance sheet audited at 12/31/01.






                            UNITED TRUST GROUP, INC.
                                AND SUBSIDIARIES

                Consolidated Statements of Operations (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------------------


                                                             Three Months Ended                       Six Months Ended
                                                        June 30,            June 30,            June 30,            June 30,
                                                          2002                2001                2002                2001
                                                     ----------------   -----------------   -----------------   -----------------

Revenues:

Premiums and policy fees                          $        4,955,669 $         5,499,579 $         9,949,896 $        10,833,322
Reinsurance premiums and policy fees                        (567,385)           (730,771)         (1,284,751)         (1,510,063)
Net investment income                                      3,287,608           3,931,677           6,595,086           7,946,102
Realized investment gains, net                                 6,731             243,163              11,427              12,594
Other income                                                 216,352              61,703             420,358             151,631
                                                     ----------------   -----------------   -----------------   -----------------

                                                           7,898,975           9,005,351          15,692,016          17,433,586

Benefits and other expenses:

  Benefits, claims and settlement expenses:
    Life                                                   5,082,676           5,346,928          10,411,490          10,323,613
    Reinsurance benefits and claims                       (1,033,159)           (711,403)         (2,059,992)         (1,305,682)
    Annuity                                                  305,121             293,203             573,796             567,254
    Dividends to policyholders                               255,361             264,582             519,811             545,850
Commissions and amortization of deferred
  policy acquisition costs                                   193,590             222,912             496,111             753,355
Amortization of cost of insurance acquired                   385,098             398,898             771,195             797,870
Operating expenses                                         1,649,134           1,768,758           3,179,567           3,282,873
Interest expense                                              61,394              97,806             133,604             136,420
                                                     ----------------   -----------------   -----------------   -----------------

                                                           6,899,215           7,681,684          14,025,582          15,101,553

Income before income taxes, minority interest
  and equity in earnings of investees                        999,760           1,323,667           1,666,434           2,332,033

Income tax expense                                          (119,226)           (112,269)           (203,106)           (703,442)
Minority interest in income of
  consolidated subsidiaries                                 (157,855)           (236,106)           (263,615)           (309,441)

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

Net income                                        $          722,679 $           975,292 $         1,199,713 $         1,319,150
                                                     ================   =================   =================   =================


Basic earnings per share from continuing
   operations and net income                      $             0.21 $              0.27 $              0.34 $              0.34
                                                     ================   =================   =================   =================


Diluted earnings per share from continuing
  operations and net income                       $             0.21 $              0.27 $              0.34 $              0.34
                                                     ================   =================   =================   =================

Basic weighted average shares outstanding                  3,500,212           3,647,828           3,514,246           3,909,991
                                                     ================   =================   =================   =================


Diluted weighted average shares outstanding                3,500,212           3,647,828           3,514,246           3,909,991
                                                     ================   =================   =================   =================



                            UNITED TRUST GROUP, INC.
                                AND SUBSIDIARIES
            Consolidated Statement of Changes in Shareholders' Equity
               For the six months ended June 30, 2002 (Unaudited)
- ------------------------------------------------------------------------------------------------------------------------


Common stock
  Balance, beginning of year                                 $            70,996
  Issued during year                                                           0
  Purchase treasury shares                                                (1,143)
                                                               ------------------

  Balance, end of period                                                  69,853
                                                               ------------------


Additional paid-in capital
  Balance, beginning of year                                          42,789,636
  Issued during year                                                           0
  Purchase treasury shares                                              (411,875)
                                                               ------------------

  Balance, end of period                                              42,377,761
                                                               ------------------


Retained earnings
  Balance, beginning of year                                           1,004,238
  Net income                                                           1,199,713       $         1,199,713
                                                               ------------------        ------------------

  Balance, end of period                                               2,203,951
                                                               ------------------


Accumulated other comprehensive income
  Balance, beginning of year                                             908,744
  Other comprehensive income
     Unrealized holding gain on securities
          net of minority interest and
          reclassification adjustment                                  1,150,579                 1,150,579
                                                               ------------------        ------------------

  Comprehensive income                                                                 $         2,350,292
                                                                                         ==================

  Balance, end of period                                               2,059,323
                                                               ------------------


Total shareholders' equity, end of period                    $        46,710,888
                                                               ==================






                            UNITED TRUST GROUP, INC.
                                AND SUBSIDIARIES

                Consolidated Statements of Cash Flows (Unaudited)
- ------------------------------------------------------------------------------------------------------------

                                                                                   Six Months Ended
                                                                               June 30,         June 30,
                                                                                 2002             2001
                                                                            ---------------   --------------

Increase (decrease) in cash and cash equivalents
Cash flows from operating activities:
  Net income                                                             $       1,199,713 $      1,319,150
  Adjustments to reconcile net income to net cash provided by
    (used in) operating activities:
      Amortization/accretion of fixed maturities                                   192,955           39,442
      Realized investment gains, net of losses                                     (11,427)         (12,594)
      Policy acquisition costs deferred                                            (43,000)         (99,000)
      Amortization of deferred policy acquisition costs                            417,216          563,289
      Amortization of cost of insurance acquired                                   771,195          797,870
      Amortization of costs in excess of net
        assets purchased                                                                 0           45,000
      Depreciation                                                                 293,227          196,467
      Minority interest                                                            263,615          309,441
      Change in accrued investment income                                          165,887          144,871
      Change in reinsurance receivables                                            624,066          489,389
      Change in policy liabilities and accruals                                 (1,280,403)      (1,181,770)
      Charges for mortality and administration of
        universal life and annuity products                                     (4,412,958)      (4,788,391)
      Interest credited to account balances                                      2,803,906        2,992,195
      Change in income taxes payable                                               178,053          739,561
      Change in other assets and liabilities, net                               (1,189,807)        (983,461)
                                                                            ---------------   --------------

Net cash provided by (used in) operating activities                                (27,762)         571,459

Cash flows from investing activities:
  Proceeds from investments sold and matured:
    Fixed maturities held for sale                                               8,770,000       11,750,000
    Fixed maturities matured                                                    13,248,311       24,409,028
    Equity securities                                                                    0        1,240,967
    Mortgage loans                                                               3,390,918        8,332,743
    Real estate                                                                    613,473          860,362
    Policy loans                                                                 1,365,716        1,653,223
    Short-term                                                                     100,869        2,054,528
                                                                            ---------------   --------------

  Total proceeds from investments sold and matured                              27,489,287       50,300,851
  Cost of investments acquired:
    Fixed maturities held for sale                                             (21,753,580)     (39,140,907)
    Fixed maturities                                                            (3,053,805)        (801,481)
    Equity securities                                                             (185,075)         (91,925)
    Mortgage loans                                                              (4,351,770)      (6,341,425)
    Real estate                                                                   (127,386)        (244,745)
    Policy loans                                                                (1,395,977)      (1,282,560)
    Short-term                                                                           0       (1,122,131)
                                                                            ---------------   --------------

  Total cost of investments acquired                                           (30,867,593)     (49,025,174)
  Purchase of property and equipment                                               (14,965)         (60,627)
  Sale of property and equipment                                                         0          201,064
                                                                            ---------------   --------------

Net cash provided by (used in) investing activities                             (3,393,271)       1,416,114

Cash flows from financing activities:
  Policyholder contract deposits                                                 5,286,775        5,944,290
  Policyholder contract withdrawals                                             (3,864,468)      (5,116,607)
  Purchase of stock of affiliates                                                        0          (21,600)
  Proceeds from line of credit                                                   1,350,000                0
  Purchase of treasury stock                                                      (413,018)      (1,046,833)
  Payments from FCC merger                                                      (1,137,250)               0
  Payments of principal on notes payable                                        (1,490,311)               0
                                                                            ---------------   --------------

Net cash used in financing activities                                             (268,272)        (240,750)
                                                                            ---------------   --------------


Net increase (decrease) in cash and cash equivalents                            (3,689,305)       1,746,823
Cash and cash equivalents at beginning of period                                15,477,348       15,065,076
                                                                            ---------------   --------------

Cash and cash equivalents at end of period                               $      11,788,043 $     16,811,899
                                                                            ===============   ==============





                    UNITED TRUST GROUP, INC. AND SUBSIDIARIES

                   Notes to Consolidated Financial Statements


1        Basis of Presentation

The accompanying  consolidated financial statements have been prepared by United
Trust Group, Inc. ("UTG") and its consolidated subsidiaries ("Company") pursuant
to the rules and regulations of the Securities and Exchange Commission. Although
the Company  believes  the  disclosures  are  adequate  to make the  information
presented not be misleading,  it is suggested that these consolidated  financial
statements be read in conjunction with the consolidated financial statements and
the notes thereto  presented in the  Company's  Annual Report on Form 10-K filed
with the  Securities  and Exchange  Commission  for the year ended  December 31,
2001.

The  information  furnished  reflects,  in  the  opinion  of  the  Company,  all
adjustments (which include only normal and recurring  accruals)  necessary for a
fair  presentation  of the  results of  operations  for the  periods  presented.
Operating  results  for  interim  periods  are  not  necessarily  indicative  of
operating  results  to be  expected  for  the  year or of the  Company's  future
financial condition.

At June 30, 2002, consolidated  subsidiaries of United Trust Group, Inc. were as
depicted on the following  organizational chart. In addition,  this document may
at times refer to Jesse Correll and his  affiliated  entities who own a majority
of UTG's  outstanding  common stock.  See note 9 to the  consolidated  financial
statements regarding the June 12, 2002 merger of First Commonwealth  Corporation
("FCC") into UTG.

2.       INVESTMENTS

At June 30, 2002 and December 31, 2001,  fixed  maturities and fixed  maturities
held for  sale  represented  74% of  total  invested  assets,  respectively.  As
prescribed by the various state insurance  department  statutes and regulations,
the  insurance  companies'  investment  portfolio  is required to be invested in
investment grade securities to provide ample protection for  policyholders.  The
Company does not invest in so-called "junk bonds" or similar investments.  As of
June 30 2002, the carrying  value of fixed maturity  securities in default as to
principal or interest was  immaterial in the context of  consolidated  assets or
shareholders' equity. The investments held for sale are carried at market value,
with  changes in market  value  directly  charged to  shareholders'  equity.  To
provide additional flexibility and liquidity, the Company has categorized almost
all fixed maturity investments acquired since 2000 as available for sale.


3.       NOTES PAYABLE

At June  30,  2002 and  December  31,  2001,  the  Company  had  $4,260,359  and
$4,400,670 in long-term debt outstanding, respectively. The debt is comprised of
the following components:

                                             6/30/2002       12/31/2001
                                           -------------   -------------
Subordinated 20 yr. Notes               $       401,562 $       514,674
Other notes payable                           3,108,797       3,885,996
Line of credit                                  750,000               0
                                           -------------   -------------
                                        $     4,260,359 $     4,400,670
                                           =============   =============


A.  Subordinated debt

The subordinated debt was incurred June 16, 1992 as a part of the acquisition of
the now dissolved Commonwealth Industries Corporation. These notes bear interest
at the variable rate of 1% under prime per annum (paid  quarterly).  At June 30,
2002 the 1% under prime variable rate was 3.75%. In May 2002 a principal payment
of $113,112 was made on the subordinated debt.  Subsequent to June 30, 2002, the
balance of the subordinated  debt was retired with a $401,562  principal payment
made on July 9, 2002.

B.   Other notes payable

The other notes payable were incurred in April 2001 to facilitate the repurchase
of common stock owned  primarily by James E.  Melville and Larry E. Ryherd,  two
former officers and directors of UTG, and members of their respective  families.
These notes bear  interest  at the fixed rate of 7% per annum  (paid  quarterly)
with  payments of principal to be made in five equal  annual  installments,  the
first principal  payment of which, in the amount of $777,199,  was made on March
31, 2002.

The collective  scheduled principal  reductions on these notes for the next five
years is as follows:

                         Year                     Amount
                       --------                -----------

                         2002                  $         0
                         2003                      777,199
                         2004                      777,199
                         2005                      777,199
                         2006                      777,200






C.   Lines of Credit

On November  15, 2001,  UTG was  extended a  $3,300,000  line of credit from the
First National Bank of the  Cumberlands  located in Livingston,  Tennessee.  The
First National Bank of the  Cumberlands is owned by Millard V. Oakley,  who is a
Director of UTG. The line of credit will expire one-year from the date of issue.
The interest rate on the line of credit is variable and indexed to be the lowest
of the U.S.  prime rates as  published  in the money  section of the Wall Street
Journal,  with any interest rate  adjustments  to be made  monthly.  At June 30,
2002, the Company had  outstanding  borrowings of $750,000  attributable to this
line of credit. Subsequent to June 30, 2002, an additional draw was taken in the
amount  of  $250,000.  The  draws  on this  line of  credit  are  being  used to
facilitate  the payments due to the former  shareholders  of FCC as a result of,
the June 12, 2002 merger of FCC with and into UTG, as further  described in note
9 to the consolidated financial statements.

On  April  1,  2002,  UTG was  extended  a  $5,000,000  line of  credit  from an
unaffiliated  third party,  Southwest Bank of St. Louis. The line of credit will
expire one-year from the date of issue.  The line was sought to provide UTG with
additional  liquidity  for current  operations  and the growth of its  business.
Borrowings  under the line of credit will bear  interest at the rate of 0.25% in
excess of Southwest  Bank of St. Louis' prime rate. As collateral  for any draws
under the line of credit, the former FCC, which has now merged into UTG, pledged
100% of the common stock of its insurance  subsidiary  UG. At June 30, 2002, UTG
had no borrowings  attributable  to this line of credit.  Subsequent to June 30,
2002, a draw was taken in the amount of $400,000 to facilitate the repurchase of
UTG common stock as it becomes available,  as further described in note 4 to the
consolidated financial statements.

Borrowings made on the aforementioned  lines of credit are expected to be repaid
before  year-end  2002,  using a  proposed  dividend  payment  to UTG  from  its
insurance subsidiary UG.


4.       CAPITAL STOCK TRANSACTIONS

A.   Stock Repurchase Program

On June 5, 2001, the board of directors of UTG  authorized  the repurchase  from
time to time in the open market or in privately negotiated transactions of up to
$1 million of UTG's common stock.  Repurchased  shares under the program will be
available for future issuance for general corporate  purposes.  Through July 31,
2002, UTG has spent  $561,673 in the  acquisition of 79,931 shares of its common
stock under this program.


B.   Earnings Per Share Calculations

Earnings per share are based on the  weighted  average  number of common  shares
outstanding  during each  period,  retroactively  adjusted to give effect to all
stock splits, in accordance with Statement of Financial Accounting Standards No.
128. At June 30, 2002 and June 30, 2001 diluted earnings per share were the same
as  basic  earnings  per  share  since  the  UTG  had  no  dilutive  instruments
outstanding.

C.       Officer and Director Stock Purchase Program

On March 26, 2002, the Board of Directors of UTG adopted,  and on June 11, 2002,
the  shareholders  of UTG approved,  the United Trust Group,  Inc.  Employee and
Director Stock  Purchase  Plan.  The plan's purpose is to provide  employees and
directors of UTG and its  subsidiaries an opportunity to invest in shares of UTG
common stock.  The plan will be  administered  by the Board of Directors of UTG,
and is expected to begin in the third quarter of 2002.

A total of  400,000  shares of common  stock  may be  purchased  under the plan,
subject to appropriate  adjustment for stock dividends,  stock splits or similar
recapitalizations  resulting  in a  change  in  shares  of UTG.  The plan is not
intended to qualify as an "employee  stock  purchase  plan" under Section 423 of
the Internal Revenue Code.


5.   COMMITMENTS AND CONTINGENCIES

The insurance  industry has  experienced  a number of civil jury verdicts  which
have been  returned  against life and health  insurers in the  jurisdictions  in
which the Company does business involving the insurers' sales practices, alleged
agent misconduct,  failure to properly supervise agents, and other matters. Some
of the lawsuits have resulted in the award of substantial  judgments against the
insurer,  including material amounts of punitive damages. In some states, juries
have substantial discretion in awarding punitive damages in these circumstances.
The  Company  cannot  predict  the effect  that these  lawsuits  may have on the
Company in the future.

Under the insurance guaranty fund laws in most states, insurance companies doing
business in a  participating  state can be assessed up to prescribed  limits for
policyholder  losses  incurred  by  insolvent  or  failed  insurance  companies.
Although the Company cannot predict the amount of any future  assessments,  most
insurance guaranty fund laws currently provide that an assessment may be excused
or deferred if it would  threaten an  insurer's  financial  strength.  Mandatory
assessments may be partially recovered through a reduction in future premium tax
in some states. The Company does not believe such assessments will be materially
different from amounts already provided for in the financial statements,  though
the  amount of any future  assessments  cannot be  predicted  with any degree of
certainty.

The  State of  Florida  began an  investigation  of  industrial  life  insurance
policies in the fall of 1999 regarding policies with race-based  premiums.  This
investigation  has  quickly  spread to other  states and to other types of small
face amount  policies  and was expanded to consider the fairness of premiums for
all small policies  including  policies which did not have race-based  premiums.
The NAIC  historically  has defined a "small  face amount  policy" as one with a
face  amount of  $15,000  or less.  Under  current  reviews,  some  states  have
increased  this  amount  to  policies  of  $25,000  or less.  These  states  are
attempting  to force  insurers  to  refund  "excess  premiums"  to  insureds  or
beneficiaries of insureds based on a prior settlement.  The Company's  insurance
subsidiaries have no race-based premium products, but do have policies with face
amounts under the above-scrutinized limitations. The outcome of this issue could
be dramatic on the insurance  industry as a whole as well as the Company itself.
The Company  will  continue  to monitor  developments  regarding  this matter to
determine to what extent, if any, the Company may be exposed.

On November 20, 1998, First Southern Funding  ("FSF"),  an entity  controlled by
UTG's Chairman and Chief Executive Officer, Jesse T. Correll, and certain of its
affiliates  acquired  929,904 shares of common stock of UTG from UTG and certain
UTG shareholders.  As consideration for the shares, FSF paid UTG $10,999,995 and
certain  shareholders of UTG $999,990 in cash. Included in the stock acquisition
agreement is an earnings  covenant whereby UTG warrants UTG and its subsidiaries
and affiliates will have future earnings of at least $30,000,000 for a five-year
period beginning  January 1, 1998. Such earnings are computed based on statutory
results excluding inter-company  activities such as inter-company dividends plus
realized  and  unrealized  gains and losses on real estate,  mortgage  loans and
unaffiliated  common stocks. At the end of the covenant period, an adjustment is
to be made equal to the  difference  between the then market value and statutory
carrying  value of real estate still owned that existed at the  beginning of the
covenant period.  Should UTG not meet the covenant  requirements,  any shortfall
will first be reduced by the  actual  average  tax rate for UTG for the  period,
then will be further reduced by one-half of the percentage, if any, representing
UTG's ownership  percentage of the insurance company  subsidiaries.  This result
will then be reduced by $250,000.  The  remaining  amount will be paid by UTG in
the form of UTG common stock valued at $15.00 per share with a maximum number of
shares to be issued of 500,000, though there is no limit on the number of shares
that can be  transferred  to the extent that there are legal fees,  settlements,
damage payments or other losses as a result of certain legal actions taken.  The
price and number of shares shall be adjusted for any  applicable  stock  splits,
stock  dividends or other  recapitalizations.  At June 30, 2002, the Company had
total  earnings  of  $16,512,582  applicable  to this  covenant.  With less than
one-year  remaining on the covenant,  it appears  highly  unlikely that UTG will
meet  the  earnings  requirements,  resulting  in UTG  being  required  to issue
additional  shares  to  FSF or  its  assigns.  Combining  current  results  with
management's  expectation for the remainder of 2002, it appears probable at this
time that UTG will be required to issue  500,000  shares of its common  stock at
December 31, 2002 to satisfy this covenant.

On June 10, 2002 UTG and Fiserv Life Insurance Solutions ("Fiserv LIS") of Cedar
Rapids,  Iowa formed an  alliance  between  their  respective  organizations  to
provide third party administration (TPA) services to insurance companies seeking
business  process  outsourcing  solutions.  (See  note  11 to  the  consolidated
financial  statements).  In connection with this alliance UTG paid a license fee
to use "ID3" which is a software  system  owned by Fiserv LIS to  administer  an
array of life,  health and  annuity  products  in the  insurance  industry.  UTG
additionally  contracted  with Fiserv LIS to provide  datacenter  operations for
business  administered  by UTG on the "ID3"  system.  UTG intends to convert its
existing  business  to  "ID3"  as soon as  practical.  UTG  has  committed  to a
five-year  contract regarding the maintenance and data center operations through
Fiserv LIS. UTG projects these costs to be approximately  $420,000 per year once
fully converted to the "ID3" system.

David A. Morlan,  individually and on behalf of all others similarly situated v.
Universal  Guaranty  Life Ins.,  United Trust  Assurance  Co.,  United  Security
Assurance  Co.,  United Trust Group,  Inc. and First  Commonwealth  Corporation,
(U.S. Court of Appeals for the Seventh Circuit, Appeal No. 01-3795)


As  previously  reported in UTG's Annual Report on Form 10-K for the fiscal year
ended  December  31, 2001 and  Quarterly  Report on Form 10-Q for the  quarterly
period ended March 31, 2002,  on April 26, 1999,  the above lawsuit was filed by
David  Morlan and Louis  Black in the  Southern  District  of  Illinois  against
Universal  Guaranty Life  Insurance  Company  ("UG") and United Trust  Assurance
Company  ("UTAC")  (merged  into UG in 1992).  After the lawsuit was filed,  the
plaintiffs,  who were former insurance agents, amended their complaint,  dropped
Louis  Black  as a  plaintiff,  and  added  United  Security  Assurance  Company
("USAC"), UTG and FCC as defendants.  The plaintiffs are alleging that they were
employees  of  UG,  UTAC  or  USAC  rather  than  independent  contractors.  The
plaintiffs  are seeking  class action  status and have asked to recover  various
employee benefits,  costs and attorneys' fees, as well as monetary damages based
on the defendants' alleged failure to withhold certain taxes.

On September 18, 2001, the case was dismissed  without  prejudice because Morlan
lacked standing to pursue the claims against defendants. The plaintiffs appealed
the  dismissal of the case to the United States Court of Appeals for the Seventh
Circuit.  Subsequent to the end of this reporting  period,  on July 26, 2002 the
Seventh Circuit ruled in favor of the plaintiffs and directed the district court
to  reinstate  the class  action.  The  Company is  petitioning  the court for a
rehearing on this appeal.

In addition to the appeal,  a second action was filed  entitled;  Julie Barrette
Ahrens, David Dzuiban,  William Milam, Dennis Schneiderman,  individually and on
behalf of all others similarly  situated v Universal Guaranty Life, United Trust
Assurance Company,  United Security  Assurance Company,  (United States District
Court for the Southern District of Illinois.; Case No: 01-4314-JPG).


The Company continues to believe that it has meritorious  grounds to defend both
the original and related lawsuit, and it intends to defend the cases vigorously.
It believes that the defense and ultimate  resolution of these  lawsuits  should
not have a material  adverse effect upon the business,  results of operations or
financial condition of the Company.  Nevertheless,  if the plaintiffs'  lawsuits
were to be successful,  it is likely that such resolution  would have a material
adverse  effect on the Company's  business,  results of operations and financial
condition.  At June 30, 2002,  the Company  maintains a liability of $250,906 to
cover estimated legal costs associated with the defense of this matter.

UTG and its  subsidiaries  are named as  defendants in a number of general legal
actions arising as a part of the ordinary course of business relating  primarily
to claims made under insurance  policies.  Those actions have been considered in
establishing  the Company's  liabilities.  Management is of the opinion that the
settlement  of those  actions  will not have a  material  adverse  effect on the
Company's financial position or results of operations.

6.       Other Cash Flow Disclosure

On a cash basis,  the Company paid  $132,318  and  $136,850 in interest  expense
during the first six months of 2002 and 2001,  respectively.  The  Company  paid
$15,290  and  $22,013 in federal  income tax during the first six months of 2002
and 2001,  respectively.  At June 30, 2002, the Company sold $1,850,000 in fixed
maturity  investments  for  which  the  cash  had not  yet  been  received.  The
receivable  for these  securities is included in the line item "Other assets" on
the consolidated balance sheet.

7.     CONCENTRATION OF CREDIT RISK

The Company maintains cash balances in financial  institutions that at times may
exceed federally  insured limits.  The Company  maintains its primary  operating
cash accounts with First  Southern  National  Bank, an affiliate of UTG, and its
largest  shareholder,  Chairman  and  CEO,  Jesse  Correll.  The  Company  holds
approximately  $5,000,000  for which there are no pledges or guarantees  outside
FDIC  insurance  limits.  The  Company  has not  experienced  any losses in such
accounts and believes it is not exposed to any  significant  credit risk on cash
and cash equivalents.

8.     COMPREHENSIVE INCOME


                                                                                   Tax
                                                           Before-Tax           (Expense)           Net of Tax
       June 30, 2002                                         Amount             or Benefit            Amount
       ----------------------------------------------    ----------------    -----------------    ---------------

       Unrealized holding gains during
            period                                    $        1,771,811  $         (620,134)  $       1,151,677
       Less: reclassification adjustment
            for gains realized in net income                     (1,689)                  591            (1,098)
                                                         ----------------    -----------------    ---------------

       Net unrealized gains                                                         (619,543)
                                                               1,770,122                               1,150,579
                                                         ----------------    -----------------    ---------------

       Other comprehensive income                     $        1,770,122  $         (619,543)  $       1,150,579
                                                         ================    =================    ===============



9.     MERGER OF UNITED TRUST GROUP, INC. AND FIRST COMMONWEALTH CORPORATION

On May 21, 2002, at a special meeting of shareholders,  the shareholders of FCC,
then an 82%  owned  subsidiary  of  UTG,  voted  on and  approved  that  certain
Agreement and Plan of Reorganization  and related Plan of Merger,  each dated as
of June 5, 2001,  between UTG, and FCC (collectively,  the "Merger  Agreement"),
and the merger  contemplated  thereby in which FCC would be merged with and into
UTG, with UTG being the surviving  corporation of the merger.  The merger became
effective on June 12, 2002.  Pursuant to the terms and  conditions of the Merger
Agreement,  each share of FCC stock  outstanding  at the  effective  time of the
merger  (other  than  shares held by UTG or shares held in treasury by FCC or by
one of its subsidiaries) was at such time automatically converted into the right
to receive $250 in cash per share.

In the merger, UTG acquired the remaining common shares  (approximately  18%) of
FCC that UTG did not own prior to the effective time of the merger.

The purchase price in the merger is comprised of the following components:

         Investments                                       $         41,475,198
         Cash and cash equivalents                                    2,020,960
         Accrued investment income                                      493,609
         Reinsurance receivables                                      6,784,813
         Cost of insurance acquired                                  (1,371,740)
         Property and equipment                                         424,217
         Other assets                                                   314,974
                                                              ------------------
         Total assets                                                50,142,031

         Policy liabilities and accruals                            (45,981,006)
         Income taxes payable - current and deferred                  1,063,735
         Notes payable                                               (1,958,373)
         Other liabilities                                             (786,387)
                                                              ------------------
         Net purchase price                                $          2,480,000
                                                              ==================

The following table summarizes  certain  unaudited  operating  results of UTG as
though the merger  transaction had taken place at the beginning of the reporting
periods ending on June 30, 2002 and December 31, 2001, respectively.

                                                        June 30, 2002           December 31, 2001
                                                     --------------------      --------------------
         Total revenues                           $           15,656,056    $          33,329,372
         Total benefits and other expenses        $           14,025,582    $          28,912,280
         Operating income                         $            1,630,474    $           4,417,092
         Net Income                               $            1,164,053    $           3,274,486
         Basic earnings per share                 $                 0.33    $                0.86
         Diluted earnings per share               $                 0.33    $                0.86


10.    PROPOSED CHARTER SALES OF SUBSIDIARIES

The Charter of APPL is  currently  being  marketed  for sale  through an outside
broker.   The  Company  intends  to  proceed  with  an  assumption   reinsurance
transaction whereby all of the policies in force of APPL would be assumed by UG,
an Ohio domiciled  company.  As a precursor,  to a possible sale of its Charter,
APPL was  redomesticated  from the State of West  Virginia to the State of Ohio,
effective June 1, 2002. The foregoing potential  transactions will be subject to
any required regulatory approvals and clearances.

The Charter of ABE, is also currently being marketed for sale through an outside
broker.  Should the charter be sold,  the Company  would like to proceed with an
assumption reinsurance  transaction whereby most or all of the policies in force
of ABE  would  be  assumed  by UG.  The  management  of ABE  and UG have no time
constraints or necessity for completion of this transaction.  Should a buyer for
the ABE Charter be located,  the  transaction  would be subject to any  required
regulatory approvals and clearances.


11.      UTG ALLIANCE WITH FISERV LIS

On June 10, 2002 UTG and Fiserv LIS formed an alliance  between their respective
organizations to provide third party  administration (TPA) services to insurance
companies  seeking business process  outsourcing  solutions.  Fiserv LIS will be
responsible  for the marketing and sales  function for the alliance,  as well as
providing  the  operations  processing  service  for  UTG.  UTG will  staff  the
administration  effort.  To facilitate  the  alliance,  UTG plans to convert its
existing  business and TPA clients to "ID3",  a software  system owned by Fiserv
LIS to administer an array of life, health and annuity products in the insurance
industry.  Fiserv  LIS is a unit of  Fiserv,  Inc.  (Nasdaq:  FISV)  which is an
independent, full-service provider of integrated data processing and information
management  systems to the  financial  industry,  headquartered  in  Brookfield,
Wisconsin.

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
     OF OPERATIONS

The purpose of this section is to discuss and analyze the Company's consolidated
results of operations,  financial condition and liquidity and capital resources.
This analysis  should be read in  conjunction  with the  consolidated  financial
statements and related notes that appear  elsewhere in this report.  The Company
reports  financial results on a consolidated  basis. The consolidated  financial
statements include the accounts of UTG and its subsidiaries at June 30, 2002.

Cautionary Statement Regarding Forward-Looking Statements
- ---------------------------------------------------------

Any  forward-looking  statement contained herein or in any other oral or written
statement  by the Company or any of its  officers,  directors  or  employees  is
qualified by the fact that actual  results of the Company may differ  materially
from any such  statement due to the  following  important  factors,  among other
risks and uncertainties inherent in the Company's business:

1.   Prevailing  interest  rate  levels,  which may  affect  the  ability of the
     Company to sell its products, the market value of the Company's investments
     and the lapse  ratio of the  Company's  policies,  notwithstanding  product
     design features intended to enhance persistency of the Company's products.

2.   Changes in the federal income tax laws and regulations which may affect the
     relative tax advantages of the Company's products.

3.   Changes in the regulation of financial  services,  including bank sales and
     underwriting  of  insurance  products,  which may  affect  the  competitive
     environment for the Company's products.

4.   Other factors affecting the performance of the Company,  including, but not
     limited  to,  market  conduct  claims,   insurance  industry  insolvencies,
     insurance   regulatory   initiatives   and   developments,   stock   market
     performance,  an unfavorable outcome in pending litigation,  and investment
     performance.


Results of Operations
- ---------------------

(a)  Revenues

Premiums and policy fee revenues,  net of reinsurance  premiums and policy fees,
decreased 7% when  comparing  the first six months of 2002 to the same period in
2001, and decreased 8% for the second quarter comparison.  The Company currently
writes little new business.  A majority of the new business currently written is
universal  life  insurance.  Collected  premiums on universal  life and interest
sensitive  products is not  reflected  in premiums and policy  revenues  because
accounting  principles  generally  accepted  in the  United  States  of  America
requires  that  premiums  collected  on these  types of  products  be treated as
deposit liabilities rather than revenue.  Unless the Company acquires a block of
in-force  business or  significantly  increases  its  marketing  of  traditional
business,  management  expects  premium revenue to continue to decline at a rate
consistent with prior experience.

During 2001,  the Company  implemented  a  conservation  effort in an attempt to
improve  the  persistency  rate of Company  policies.  Several  of the  customer
service  representatives  of the Company have become licensed  insurance agents,
allowing them to offer other products within the Company's portfolio to existing
customers.  Additionally,  stronger  efforts have been made in policy  retention
through more personal  contact with the customer  including  telephone  calls to
discuss  alternatives  and reasons for a customer's  request to surrender  their
policy.  Previously,  the Company's  agency force was primarily  responsible for
conservation  efforts.  With the decline in the number of agents,  the Company's
ability  to  reach  these  customers  diminished,  making  conservation  efforts
difficult.  The  conservation  efforts  described  above are relatively new, but
early results are generally positive.  Management will continue to monitor these
efforts and make  adjustments as seen  appropriate to enhance the future success
of the program.  The Company is currently  exploring the  introduction  of a new
product to be specifically used by the licensed customer service representatives
as an alternative for the customer in the conservation  efforts. The new product
has yet to be marketed as of June 30, 2002.  Introduction and the success of the
new product will depend on the product  competitiveness  and profitability.  Net
investment  income  decreased 17% when comparing the first six months of 2002 to
the same period in 2001,  and decreased 16% for the second  quarter  comparison.
The national prime rate ranged from a high of 9.50% to a low of 6.75% during the
first six  months of 2001,  and was 4.75%  during  the first six months of 2002.
This resulted in lower  earnings on short-term  funds as well as on  longer-term
investments acquired.

The Company's  investments are generally  managed to match related insurance and
policyholder liabilities.  The comparison of investment return with insurance or
investment  product crediting rates establishes an interest spread.  The Company
monitors  investment  yields, and when necessary adjusts credited interest rates
on its insurance products to preserve targeted interest spreads, ranging from 1%
to 2%. It is expected that monitoring of the interest spreads by management will
provide the necessary  margin to adequately  provide for associated costs on the
insurance  policies  the  Company  currently  has in force and will write in the
future.  At the  March  2001  Board of  Directors  meeting,  the  Boards  of the
insurance  subsidiaries lowered crediting rates one-half percent on all products
that could be lowered.  With this reduction,  the vast majority of the Company's
rate-adjustable products are now at their guaranteed minimum rates, and as such,
cannot be lowered any further.  These  adjustments were in response to continued
declines in interest rates in the  marketplace.  Policy interest  crediting rate
changes  become  effective  on an  individual  policy  basis on the next  policy
anniversary.  All of the  Company's  rate-adjustable  products  are now at their
guaranteed  minimum  rates.  The  guaranteed  minimum  crediting  rates on these
products range from 3% to 5.5%.

The Company had realized  investment gains of $11,427 in the first six months of
2002 compared to net realized investment gains of $12,594 for the same period in
2001.  The realized gains in 2002 consist of a $6,078 gain on bonds and a $5,349
gain on common stocks. Several significant items comprised the net realized gain
in 2001. Net realized gains of $210,587 were  attributable to real estate sales,
primarily  properties  formerly owned by APPL in West Virginia,  with offsetting
net realized  losses on bonds of $58,820,  common stocks of $62,140 and the sale
of certain  mortgage  loans of $77,033.  A quarterly  comparison  shows realized
investment  gains of $6,731 for the  quarterly  period ended June 30, 2002,  and
$243,163  for the same period in 2001.  The large net  realized  gain during the
second quarter of 2001 is  attributable  to the Company's sale of certain common
stock  holdings.  It should be noted that the Company sold a significant  common
stock holding at a realized loss of approximately  $330,000 in the first quarter
of 2001 which  resulted in the  subsequent net realized loss in common stock for
the first six months of 2001.

On June 1, 2001,  the Company began  performing  administrative  work as a third
party  administrator  ("TPA") for an unaffiliated  life insurance  company.  The
business  being  administered  is a  closed  block  with  approximately  260,000
policies,  a majority of which are paid up. The Company  receives  monthly  fees
based on policy in force counts and certain other  activity  indicators  such as
number of premium  collections  performed.  During the first six months of 2002,
and during the  second  quarter of 2002,  the  Company  received  $231,535,  and
$106,900 for this work, respectively.  These TPA revenue fees are included in the
line item "other income" on the Company's consolidated statements of operations.
The Company intends to pursue other TPA  arrangements,  and has recently entered
into an alliance with Fiserv Life Insurance  Solutions  (Fiserv LIS), to provide
TPA  services  to  insurance  companies  seeking  business  process  outsourcing
solutions.  Fiserv LIS will be responsible  for the marketing and sales function
for the alliance, as well as providing the datacenter operations. UTG will staff
the  administration  effort.  Although  still in its  early  stages,  management
believes  this  alliance  with  Fiserv LIS  positions  the  Company to  generate
additional  revenues  by  utilizing  the  Company's  strengths,  current  excess
capacity, and efficient, customer oriented, administrative services.

(b)  Expenses

Benefits, claims and settlement expenses net of reinsurance benefits and claims,
decreased  7% in the first six  months of 2002  compared  to the same  period in
2001, and decreased 11% for the second quarter comparison.  Death benefit claims
were  approximately  $154,000 and $165,000  less in the first six months of 2002
and for the second  quarter  of 2002 as  compared  to the same  periods in 2001,
respectively. Although death claims were less than the prior periods, there were
a few high face amount death claims in 2002, which the Company had reinsured, to
limit any potential liability in excess of $125,000 per life. Consequently,  the
reinsurance benefits and claims received,  increased accordingly.  Policy claims
vary  from  year to year and  therefore,  fluctuations  in  mortality  are to be
expected and are not considered unusual by management.  The reserve decreases on
interest  sensitive  business  in  force  is due to the  reduction  of  interest
crediting  rates and  decrease in death  benefit  claims.  Reserves  continue to
increase on in-force policies as the age of the insureds increases.

Commissions and amortization of deferred policy  acquisition costs decreased 34%
for the first sixth  months of 2002  compared  to the same  period in 2001,  and
decreased 13% for the second quarter comparison.  The most significant factor in
the decrease is attributable to the Company paying fewer commissions,  since the
company  writes  very  little new  business  and  renewal  premiums  on existing
business continue to decline.  Another factor of the decrease is attributable to
normal  amortization of the deferred policy acquisition costs asset. The Company
does review the  recoverability  of the asset based on current  trends and known
events compared to the  assumptions  used in the  establishment  of the original
asset. No impairments were recorded in either of the periods reported.

(c)  Net income

The  Company  had a net  income of  $1,199,713  in the first six  months of 2002
compared to net income of $1,319,150  for the same period in 2001 and net income
of $722,679 in the second quarter of 2002 as compared to $975,292 for the second
quarter of 2001.  The  decrease  in net income can be  attributed  to  declining
premium revenues and a significant  decrease in net investment  income which was
partially  offset by a collective net decrease in expenses the most  significant
of which was the offset to net claim expenses.

Financial Condition
- -------------------

Total shareholders' equity increased  approximately  $1,900,000 at June 30, 2002
compared to December 31, 2001.  The increase was  attributable  to net income of
approximately  $1,200,000 and unrealized  gains on investments of  approximately
$1,100,000,  partially offset by the effect of purchasing  treasury shares which
amounted to approximately $400,000.

Investments represent approximately 74% and 71% of total assets at June 30, 2002
and December 31, 2001,  respectively.  Accordingly,  investments are the largest
asset group of the Company.  The Company's insurance  subsidiaries are regulated
by insurance  statutes and  regulations as to the type of investments  that they
are  permitted to make and the amount of funds that may be used for any one type
of investment.  In light of these statutes and regulations,  the majority of the
Company's   investment   portfolio  is  invested  in  high  quality,   low  risk
investments.

The Company does not own any "junk bonds" or similar investments. As of June 30,
2002, the carrying value of fixed maturity securities in default as to principal
or  interest  was   immaterial  in  the  context  of   consolidated   assets  or
shareholders'  equity of the Company.  The Company has identified  securities it
may sell and classified them as "investments  held for sale".  Investments  held
for sale are carried at market, with changes in market value charged directly to
shareholders'  equity.  To provide  additional  flexibility  and liquidity,  the
Company has  categorized  almost all fixed maturity  investments  acquired since
2000 as available for sale.

Liquidity and Capital Resources
- -------------------------------

The  Company  has  three  principal  needs for cash - the  insurance  companies'
contractual obligations to policyholders,  the payment of operating expenses and
the servicing of its long-term debt.  Cash and cash  equivalents as a percentage
of total assets were  approximately  4% and 5% as of June 30, 2002, and December
31, 2001,  respectively.  Fixed  maturities  as a percentage  of total  invested
assets were approximately 74% as of June 30, 2002 and December 31, 2001.

Future policy  benefits are  primarily  long-term in nature and  therefore,  the
Company's  investments are predominantly in long-term fixed maturity investments
such as bonds and mortgage loans which provide  sufficient return to cover these
obligations. The Company has the ability and intent to hold these investments to
maturity;  consequently,  the Company's investment in long-term fixed maturities
held to  maturity is reported in the  financial  statements  at their  amortized
cost. The investments held for sale are carried at market value, with changes in
market value directly charged to  shareholders'  equity.  To provide  additional
flexibility and liquidity, the Company has categorized almost all fixed maturity
investments acquired since 2000 as available for sale.

Many of the Company's  products  contain  surrender  charges and other  features
which  reward  persistency  and  penalize the early  withdrawal  of funds.  With
respect to such products,  surrender  charges are generally  sufficient to cover
the Company's  unamortized deferred policy acquisition costs with respect to the
policy being surrendered.

Net cash provided by (used in) operating  activities  was $(27,762) and $571,459
for the six month periods ending June 30, 2002 and June 30, 2001,  respectively.
The net cash provided by operating  activities  plus net  policyholder  contract
deposits after the payment of policyholder  withdrawals  equaled  $1,394,545 for
the  first  six  months  of 2002 and  $1,399,142  for the same  period  in 2001.
Management  utilizes  this  measurement  of cash  flows as an  indicator  of the
performance of the Company's insurance  operations,  since reporting regulations
require cash inflows and outflows from universal  life insurance  products to be
shown as financing activities when reporting on cash flows.

Net cash  provided  by (used  in)  investing  activities  was  $(3,393,271)  and
$1,416,114,  for the six month  periods  ending June 30, 2002 and June 30, 2001,
respectively.  The  most  significant  aspect  of cash  provided  by  (used  in)
investing  activities  are the fixed  maturity  transactions.  Fixed  maturities
account for 80% and 81% of the total cost of  investments  acquired in the first
six months of 2002 and for the same  period in 2001,  respectively.  The Company
has not  directed  its  investable  funds to  so-called  "junk bonds" or similar
investments.

Net  cash  provided  by  (used  in)  financing  activities  was  $(268,272)  and
$(240,750)  for the six month  periods  ending June 30, 2002 and June 30,  2001,
respectively.  Policyholder  contract  deposits  decreased  11% in the first six
months  of 2002  compared  to the same  period  in 2001.  Policyholder  contract
withdrawals  decreased  25% in the first six months of 2002 of 2002  compared to
the same  period in 2001.  In  addition,  as of June 30,  2002,  the Company had
purchased  $413,018 in treasury stock under its stock  repurchase  program,  and
paid former FCC shareholders  $1,137,250  pursuant to the merger of FCC with and
into UTG on June 12, 2002.

At June 30,  2002,  the  Company had a total of  $4,260,359  in  long-term  debt
outstanding.  $3,108,797  is debt  relating to the April 2001 purchase by UTG of
the common stock owned  primarily by James E. Melville and Larry E. Ryherd,  two
former  officers and directors of the Company,  and members of their  respective
families.  Future principal  payments of $777,199 are due annually over the next
four years at an interest rate of 7% per annum  (annual  payments due April 12).
Other debt of $401,562 bears interest at a floating rate of 1% below prime (paid
quarterly) with no principal payments due until its maturity in 2012. Subsequent
to June 30, 2002, this debt was retired with a $401,562  principal  payment made
on July 9, 2002. As of June 30, 2002 the Company had borrowings of $750,000 on a
line of credit from the First  National  Bank of the  Cumberlands  at a floating
rate equal to prime which is currently  4.75%.  Subsequent  to June 30, 2002, an
additional  draw was taken in the amount of $250,000.  The draws on this line of
credit are being used to facilitate the payment due to former FCC  shareholders,
following  the June 12, 2002 merger of FCC with and into UTG. The amount of such
payments was just slightly  over  $1,000,000 as of July 31, 2002. As of June 30,
2002 the Company had no outstanding borrowings  attributable to a line of credit
from Southwest Bank of St. Louis. Borrowings under this line of credit will bear
interest at the rate of .25% in excess of  Southwest  Bank of St.  Louis'  prime
rate. Subsequent to June 30, 2002, a draw was taken in the amount of $400,000 to
facilitate  the  repurchase  of shares of UTG common  stock  under  UTG's  stock
repurchase program, as such shares become available. Management believes overall
sources of cash available are more than adequate to service the Company's  debt.
These sources  include current cash balances of UTG,  expected future  operating
cashflows and repayment of affiliate receivables held by UTG. Borrowings made on
the  aforementioned  lines of credit are  expected to be repaid using a proposed
dividend payment to UTG from the Company's insurance subsidiary UG.

UTG is a holding  company  and pays the  operating  expenses  for itself and its
subsidiaries.  Funds  required  to meet its  expenses,  are  primarily  provided
through the receipt of management fees from its subsidiaries.  At June 30, 2002,
substantially all of the consolidated shareholders' equity represents net assets
of its  subsidiaries  and  receivables  from  its  subsidiaries.  The  Company's
insurance  subsidiaries have maintained  adequate  statutory capital and surplus
and have not used surplus relief or financial reinsurance, which have come under
scrutiny by many state insurance  departments.  The payment of cash dividends to
shareholders is not legally restricted.  However, the state insurance department
regulates  insurance  company dividend  payments where the company is domiciled.
UTG is the parent of UG.  UG's dividend limitations are described below.

Ohio  domiciled   insurance  companies  such  as  UG  require  five  days  prior
notification  to the  insurance  commissioner  for the  payment  of an  ordinary
dividend.  Ordinary  dividends  are  defined  as the  greater  of: a) prior year
statutory  earnings or b) 10% of  statutory  capital and  surplus.  For the year
ended December 31, 2001, UG had a statutory gain from  operations of $2,212,215.
At  December  31,  2001,  UG's  statutory   capital  and  surplus   amounted  to
$16,105,265.  Extraordinary  dividends  (amounts in excess of ordinary  dividend
limitations)  require prior approval of the insurance  commissioner  and are not
restricted to a specific  calculation.  UG paid an ordinary dividend of $800,000
to UTG through the former FCC in April 2002.

Management   believes  the  overall  sources  of  liquidity  available  will  be
sufficient to satisfy the Company's financial obligations.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risk relates,  broadly, to changes in the value of financial  instruments
that arise from adverse  movements in interest rates,  equity prices and foreign
exchange rates. The Company is exposed principally to changes in interest rates,
which affect the market  prices of its fixed  maturities  available for sale and
its variable rate debt outstanding.  The Company's exposure to equity prices and
foreign currency exchange rates is immaterial.  The information  presented below
is in U.S. dollars, the Company's reporting currency.

Interest rate risk

The Company could  experience  economic  losses if it were required to liquidate
fixed  income  securities  available  for sale during  periods of rising  and/or
volatile  interest  rates.  The Company  attempts to  mitigate  its  exposure to
adverse  interest rate  movements  through a staggering of the maturities of its
fixed maturity  investments  and through  maintaining  cash and other short term
investments  to  assure  sufficient  liquidity  to meet its  obligations  and to
address reinvestment risk considerations.

Tabular presentation

The following table provides information about the Company's long term debt that
is sensitive to changes in interest  rates.  The table  presents  principal cash
flows and related weighted  average  interest rates by expected  maturity dates.
The Company  has no  derivative  financial  instruments  or  interest  rate swap
contracts.



- ------------------------------------------------------------------------------------------------------------------
                                  June 30, 2002
- ------------------------------------------------------------------------------------------------------------------
                             Expected maturity date
- ------------------------------------------------------------------------------------------------------------------
                      2002       2003       2004       2005       2006      Thereafter      Total      Fair value
- ------------------ ---------- ---------- ---------- ---------- ---------- ------------- ------------ -------------
Long term debt
- ------------------ ---------- ---------- ---------- ---------- ---------- ------------- ------------ -------------
  Fixed rate               0    777,199    777,199    777,199    777,200             0    3,108,797     3,250,204
- ------------------ ---------- ---------- ---------- ---------- ---------- ------------- ------------ -------------
  Avg. int. rate           0       7.0%       7.0%       7.0%       7.0%             0         7.0%
- ------------------ ---------- ---------- ---------- ---------- ---------- ------------- ------------ -------------
  Variable rate      750,000          0          0          0          0       401,562    1,151,562     1,093,486
- ------------------ ---------- ---------- ---------- ---------- ---------- ------------- ------------ -------------
  Avg. int. rate       4.75%          0          0          0          0         3.75%        4.40%
- ------------------ ---------- ---------- ---------- ---------- ---------- ------------- ------------ -------------




                           PART II. OTHER INFORMATION.

ITEM 1.  LEGAL PROCEEDINGS.

See the  Morlan  and  related  case  discussion  in  note 5 to the  consolidated
financial statements, which is incorporated herein by reference.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

At the Annual  Meeting of  Shareholders  held on June 11,  2002,  the  following
matters were submitted to the shareholders of UTG and voted on as indicated:

1.   To elect  nine  directors  to serve for a term of one year and until  their
     successors are elected and qualified:

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


         DIRECTOR                  FOR            WITHHELD         AGAINST

- --------------------------- --------------- ---------------- ---------------
John S. Albin                    2,556,428           22,977             366
- --------------------------- --------------- ---------------- ---------------
Randall L. Attkisson             2,555,578           22,977           1,216
- --------------------------- --------------- ---------------- ---------------
Jesse T. Correll                 2,556,010           22,977             784
- --------------------------- --------------- ---------------- ---------------
Ward F. Correll                  2,556,550           22,977             244
- --------------------------- --------------- ---------------- ---------------
Thomas F. Darden                 2,556,062           22,977             732
- --------------------------- --------------- ---------------- ---------------
Millard V. Oakley                2,556,508           22,977             286
- --------------------------- --------------- ---------------- ---------------
William W. Perry                 2,556,122           22,977             672
- --------------------------- --------------- ---------------- ---------------
James P. Rousey                  2,555,578           22,977           1,216
- --------------------------- --------------- ---------------- ---------------
Robert W. Teater                 2,556,232           22,977             562
- --------------------------- --------------- ---------------- ---------------

2.       To approve and adopt the UTG Employee and Director Stock Purchase Plan:

                  For                2,387,828
                  Against               55,296
                  Abstain               27,085

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A)      EXHIBITS

Exhibit Number             Description

3.1  Articles of Incorporation of UTG and all amendments thereto.

3.2  Bylaws of UTG and all amendments thereto.

4.1  UTG's Agreement pursuant to Item  601(b)(4)(iii)(A)  of Regulation S-K with
     respect to long-term debt instruments.

10.1 United  Trust  Group,  Inc.  Employee  and  Director  Stock  Purchase  Plan
     (incorporated  by reference to Appendix A to the Definitive Proxy statement
     on Schedule 14A filed by UTG on May 9, 2002) (Commission No. 000-16867).

99.1 Certificate of Jesse T. Correll,  Chief  Executive  Officer and Chairman of
     the Board of UTG, as required pursuant to 18 U.S.C. Section 1350

99.2 Certificate of Theodore C. Miller,  Chief  Financial  Officer,  Senior Vice
     President and Corporate Secretary of UTG, as required pursuant to 18 U.S.C.
     Section 1350


(B)      REPORTS ON FORM 8-K

On May 22, 2002,  UTG filed a report dated May 21, 2002 on Form 8-K under item 5
"Other Events",  relating to the proposed merger of FCC with and into UTG, which
the respective shareholders of FCC voted on and approved on May 21, 2002.

On June 10, 2002,  UTG filed a report dated June 10, 2002 on Form 8-K under item
9 "Regulation FD Disclosure" announcing the formation of an alliance with FISERV
LIS to provide business process outsourcing.

On June 13, 2002,  UTG filed a report dated June 12, 2002 on Form 8-K under item
5 "Other  Events and  Regulation  FD  Disclosure"  relating to the press release
announcing that the merger of FCC with and into UTG became effective on June 12,
2002.


ITEMS 2, 3, AND 5 ARE NOT APPLICABLE AND HAVE BEEN OMITTED



                                   SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                            UNITED TRUST GROUP, INC.
                            ------------------------
                                  (Registrant)










Date:   August 12, 2002                   By  /s/ Randall L. Attkisson

                                              Randall L. Attkisson
                                              President, Chief Operating Officer
                                                 and Director








Date:   August 12, 2002                   By  /s/ Theodore C. Miller

                                              Theodore C. Miller
                                              Senior Vice President
                                                 and Chief Financial Officer

EX-99.2A

                                                                     EXHIBIT 3.1
                             File Number 5367-825-4

                                STATE OF ILLINOIS
                                    OFFICE OF
                             THE SECRETARY OF STATE


                              [LOGO WITH AN EAGLE]

         To all to whom these presents shall come Greeting:

     WHEREAS, ARTICLES OF INCORPORATION OF UNITED TRUST, INC. INCORPORATED UNDER
THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED IN THE OFFICE OF THE SECRETARY
OF STATE AS PROVIDED BY THE BUSINESS CORPORATION ACT OF ILLINOIS,  IN FORCE JULY
1, A.D. 1984.

     Now Therefore, I, Jim Edgar, Secretary of State of the State of Illinois by
virtue of the powers vested in me by law, do hereby issue this  certificate  and
attach hereto a copy of the Application of the aforesaid corporation.

In   Testimony  Whereof,  I hereto set my hand and cause to be affixed the Great
     Seal of the State of Illinois at the City of Springfield,  this 14th day of
     December  A.D.  1984 and of the  Independence  of the United States the two
     hundred and 9th. (SEAL)

                            /s/ Jim Edgar
                   SECRETARY OF STATE


                                    JIM EDGAR
                               SECRETARY OF STATE
                                STATE OF ILLINOIS

                            ARTICLES OF INCORPORATION

Pursuant  to the  provisions  of "The  Business  Corporation  Act of 1983",  the
undersigned   incorporator(s)   hereby   adopt   the   following   Articles   of
Incorporation.

ARTICLE ONE    The name of the corporation is United Trust, Inc.


ARTICLE TWO    The  name  and  address  of the  initial  registered  agent  and its
     registered office are:

          Registered Agent    Richard          Evan          Hart

                             First Name     Middle Name     Last Name

          Registered Office   800 Illinois Building, 6th and Adams Streets

                      Number Street Suite # (A P.O. Box alone is not acceptable)

                           Springfield 62701 Sangamon

                            City    Zip Code   County

ARTICLE THREE  The purpose or purposes  for which the  corporation  is organized
     are:


     The transaction of any and all lawful businesses for which corporations may
be incorporated  under the Business  Corporation Act of Illinois,  including but
not limited to the purchase and acquisition of other companies which are engaged
in the fields of  insurance  and finance and the conduct of the  business of the
companies  so acquired in  accordance  with the  Insurance  Laws of the State of
Illinois and the  organization  and control of a life  insurance  subsidiary  or
subsidiaries in accordance with the Insurance Laws of the State of Illinois.

ARTICLE FOUR   Paragraph 1: The authorized shares shall be:

          Class          *Par Value per share        Number of shares authorized

          Common         No par value                        10,000,000
          Preferred      $2.00                                1,500,000

          Paragraph   2:   The   preferences,    qualifications,    limitations,
          restrictions  and the  special  or  relative  rights in respect of the
          shares of each class are:

               If not  sufficient  space to cover  this  point,  add one or more
               sheets of this size.

                            See attached Exhibit "A"

ARTICLE FIVE   The number of shares to be issued initially, and the consideration
     to be received by the corporation therefor, are:

                   *Par Value       Number of shares         Consideration to be
          Class    per share        proposed to be issued    received therefor
          Common   No par value     4,825,000                $193,000.00
                                                    TOTAL    $193,000.00

*A declaration  as to a "par value" is optional.  This space may be marked "n/a"
when no reference to a par value is desired.


ARTICLE SIX    OPTIONAL

               The  number  of  directors  constituting  the  initial  board  of
          directors  of the  corporation  is  ____________,  and the  names  and
          addresses of the persons who are to serve as directors until the first
          annual meeting of  shareholders  or until their  successors be elected
          and qualify are:

                  Name                   Residential Address




ARTICLE SEVEN  OPTIONAL

               (a) It is estimated that the value of all property to be owned by
               the corporation for the following year wherever  located will be:
               $

               (b) It is estimated  that the value of the property to be located
               within the State of Illinois during the following year will be: $

               (c) It is estimated  that the gross amount of business which will
               be transacted by the  corporation  during the following year will
               be: $

               (d) It is estimated  that the gross amount of business which will
               be  transacted  from  places of business in the State of Illinois
               during the following year will be: $

ARTICLE EIGHT  OTHER PROVISIONS

               Attach a separate  sheet of this size for any other  provision to
          be  included  in the  Articles  of  Incorporation,  e.g.,  authorizing
          pre-emptive  rights;  denying cumulative voting;  regulating  internal
          affairs;  voting majority  requirements;  fixing a duration other than
          perpetual; etc.

                        NAME & ADDRESSES OF INCORPORATORS

     The  undersigned  incorporator(s)  hereby  declare(s),  under  penalties of
perjury, that the statements made in the foregoing Articles of Incorporation are
true.

Dated             12-12             , 1984

           Signatures and Names                  Post Office Address

     1.    /s/ Larry E. Ryherd              1.   1703 Seven Pines Road
                     Signature                                     Street
           Larry E. Ryherd                       Springfield,  Illinois    62704
           Name (please print)                   City/Town      State       Zip

     2.                                     2.
                     Signature                                     Street


           Name (please print)                   City/Town      State       Zip

     3.                                     3.
                     Signature                                     Street


           Name (please print)                   City/Town      State       Zip

(Signatures  must be in ink on original  document.  Carbon copy, xerox or rubber
stamp signatures may only be used on conformed copies)

NOTE: If a corporation acts as incorporator, the name of the corporation and the
state  of  incorporation  shall  be  shown  and the  execution  shall  be by its
President or  Vice-President  and verified by him, and attested by its Secretary
or as Assistant Secretary.



                                   EXHIBIT "A"

                            ARTICLES OF INCORPORATION

                               UNITED TRUST, INC.
                                  ARTICLE FOUR
                                   Paragraph 2

Paragraph 2: The preferences, qualifications,  limitations, restrictions and the
special or relative rights in respect of the shares of each class are:

                         Common Stock, without par value
                                ("Common Stock")

     The  holders  of shares  of  Common  Stock  shall  have such  rights as are
provided  by law and shall be  entitled  to one vote for each such share held by
them; subject, however, to the applicable express terms of the Preferred Stock.

                  9% Noncumulative, Convertible Preferred Stock
                            par value $2.00 per share
                               ("Preferred Stock")

     (a)  Dividends.  The  holders of the  Preferred  Stock shall be entitled to
          receive,  if, when and as declared  by the Board of  Directors  of the
          Corporation out of funds legally  available  therefor,  cash dividends
          upon each share held at the rate of, but not exceeding,  9% of the par
          value thereof for each fiscal year of the Corporation in preference to
          and in priority  over  dividends  (other than stock  dividends) on all
          other  classes  of stock of the  Corporation.  Such  dividends  on the
          Preferred Stock shall be  noncumulative  from the date upon which such
          shares of Preferred Stock were originally issued.


     (b)  Voting Rights.  Cumulative voting rights of all shareholders  shall be
          eliminated  in  all  circumstances.   The  Preferred  Stock  shall  be
          nonvoting, except as required by law.

     (b)  Liquidation.  In the event of any liquidation,  dissolution or winding
          up of the affairs of the  Corporation,  the  holders of the  Preferred
          Stock  shall  be  entitled  to  receive  out  of  the  assets  of  the
          Corporation, whether from capital, surplus or earnings, and before any
          distribution  shall be made to the holders of any other class of stock
          of the  Corporation,  the sum of Ten  Dollars  ($10.00)  for each such
          share of Preferred Stock so held, together with an amount equal to any
          unpaid  dividends,  accumulated  or  accrued  thereon  to the  date of
          dissolution,   which  have  been  earned  and  declared,  but  without
          interest,  and no more.  In case  the net  assets  of the  Corporation
          legally available therefor are insufficient to permit the payment upon
          all  outstanding  shares of Preferred  Stock to the full  preferential
          amount to which they are respectively  entitled,  then such net assets
          shall be distributed  ratably to all  outstanding  shares of Preferred
          Stock in  proportion  to the full  preferential  amount to which  each
          share is entitled.  After payment to holders of Preferred Stock of the
          full preferential amounts as aforesaid, holders of the Preferred Stock
          as such shall have no right or claim to any of the remaining assets of
          the  Corporation.

     Consolidation  or  merger  of  the  Corporation  with  or  into  any  other
corporation, or the sale of all or substantially all of its assets, shall not be
deemed to be a liquidation,  dissolution or winding up of the Corporation within
the meaning of this paragraph (c).

     (c)  Conversion.  The  Preferred  Stock  may,  at the  option of the holder
          thereof, be converted into shares of Common Stock,  without par value,
          of the Corporation upon the following terms:

          (1)  Each holder of the Preferred  Stock may so convert said Preferred
               Stock within a period of six (6) months following the termination
               of the initial public offering of securities of the  Corporation,
               such time period for  conversion  being referred to herein as the
               "Conversion Period." The Corporation,  at its option expressed by
               resolution of its Board of Directors,  may extend the  Conversion
               Period as the Board in its discretion may deem advisable.

          (2)  Any holder of any shares of Preferred  Stock  desiring to convert
               said shares as herein  provided,  shall,  during said  Conversion
               Period,  deliver,  duly  endorsed in blank,  the  certificate  or
               certificates  representing  the  shares  to be  converted  to the
               Secretary of the  Corporation at the  Corporation's  home office,
               and at the same time  notify the  Secretary  in writing  over his
               signature  that he desires to convert  his shares  into shares of
               Common Stock,  without par value, of the Corporation  pursuant to
               these provisions.

          (3)  Upon receipt by the  Secretary of a certificate  or  certificates
               representing  shares of Preferred  Stock of the Corporation and a
               notice that the holder  thereof  desires to convert the same, the
               Corporation  shall forthwith cause to be issued to the holders of
               the Preferred Stock  surrendering  same, two (2) shares of Common
               Stock,  without par value,  of the  Corporation for each share of
               Preferred Stock surrendered,  or if the corporation has had a two
               for one stock split of the Common Shares outstanding prior to any
               Preferred Stock being  surrendered for conversion the Corporation
               shall  forthwith  cause  to be  issued  to the  holders  of  such
               Preferred  Stock  surrendering  same,  four (4)  shares of Common
               Stock  without par value,  of the  corporation  for each share of
               Preferred Stock  surrendered,  and shall deliver to such holder a
               certificate  in due form for such shares of Common Stock  without
               par value.

          (4)  Shares of Preferred Stock converted hereunder shall revert to the
               status of unissued shares and shall not be reissued.

          (5)  The Corporation  shall set aside and reserve a sufficient  number
               of shares of Common Stock, without par value, to be issued in the
               event holders of the Preferred  Stock exercise  their  conversion
               rights.

     (d)  Redemption.  The Corporation at its option  expressed by resolution of
          its Board of  Directors,  may call and redeem all or from time to time
          any part of the shares of Preferred  Stock not converted by the end of
          the Conversion  Period, by payment of the call and redemption price of
          $10.00 per share.

     Notice of each such  redemption of shares of Preferred Stock shall be given
by the Corporation by mailing by certified mail, postage prepaid, a copy thereof
at least thirty (30) days prior to the redemption  date to the holders of record
of  Preferred  Stock  so to be  redeemed  at  their  respective  addresses  then
appearing on the books of the  Corporation.  If less than all of the outstanding
shares of Preferred Stock are to be redeemed, the shares to be redeemed shall be
chosen by lot or pro rata, as the Board of Directors may determine.

          All shares of Preferred  Stock which shall have been redeemed shall be
     retired and not reissued.

     (e)  Pre-Emptive  Rights. No shareholder of this Corporation shall have any
          pre-emptive  or  preferential  right to purchase or  subscribe  to any
          shares  of any  class  of this  Corporation,  now or  hereafter  to be
          authorized,  or any  notes,  debentures,  bonds  or  other  securities
          convertible into or carrying options or warrants to purchase shares of
          any class,  now, or  hereafter  to be  authorized,  whether or not the
          issue of any such notes, debentures,  bonds or other securities, would
          adversely  affect the dividend or voting  rights of such  shareholder,
          other  than such  rights,  if any,  as the Board of  Directors  in its
          discretion from time to time may grant, and at such price as the Board
          of Directors in its discretion may fix; and the Board of Directors may
          issue  shares  of  any  class  of  this  Corporation,  or  any  notes,
          debentures,  bonds or other  securities  convertible  into or carrying
          options or warrants to purchase shares of any class,  without offering
          any such  shares or  securities,  either  in whole or in part,  to the
          existing shareholders of any class.


     (g)  Transfer  Limitations.  The promoters or organizers of the Corporation
          may  not  sell  any of  their  shares  of the  corporation  (1)  until
          $1,000,000 of annual premium income has been attained by a corporation
          yet to be  formed  which  will be a  wholly  owned  subsidiary  of the
          corporation,  whose  purpose will be to sell life  insurance,  and (2)
          until one year after the release of their shares from escrow.


                             File Number 5367-825-4

                               STATE OF ILLINOIIS
                                    OFFICE OF
                             THE SECRETARY OF STATE

                              [LOGO WITH AN EAGLE]

     Whereas, ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF

                               UNITED TRUST, INC.

INCORPORATED  UNDER THE LAWS OF THE  STATE OF  ILLINOIS  HAVE BEEN  FILED IN THE
OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE BUSINESS  CORPORATION ACT OF
ILLINOIS, IN FORCE JULY 1, A.D. 1984.

Now  Therefore,  I, Jim Edgar,  Secretary of State of the State of Illinois,  by
virtue of the powers vested in me by law, do hereby issue this  certificate  and
attach hereto a copy of the Application of the aforesaid corporation.

     IN   TESTIMONY  WHEREOF,  I hereto set my hand and cause to be affixed  the
          Great Seal of the State of Illinois, at the City of Springfield,  this
          20th day of November A.D. 1987 and of the  Independence  of the United
          States the two hundred and 12th.

     (SEAL)
                                                   /s/ Jim Edgar
                                                       SECRETARY OF STATE


                             File Number 5367-825-4

                                    JIM EDGAR
                               SECRETARY OF STATE
                                STATE OF ILLINOIS

                              ARTICLES OF AMENDMENT

Pursuant  to the  provisions  of "The  Business  Corporation  Act of 1983",  the
undersigned  corporation  hereby  adopts  these  Articles  of  Amendment  to its
Articles of Incorporation.

ARTICLE ONE    The name of the corporation is United Trust, Inc.

                                                                        (Note 1)

ARTICLE TWO    The following amendment of the Articles of Incorporation was adopted

     on September 1, 1987 in the manner indicated below. ("X" one box only.)

     |_|  By a majority of the  incorporators,  provided no directors were named
          in the articles of  incorporation  and no directors have been elected;
          or by a majority of the board of directors, in accordance with Section
          10.10,  the  corporation  having  issued  no  shares as of the time of
          adoption of this amendment;

                                                                        (Note 2)

     |X|  By a majority of the board of directors,  in  accordance  with Section
          10.15,  shares  having  been issued but  shareholder  action not being
          required  for  the  adoption  of the  amendment;

                                                                        (Note 3)

     |_|  By the shareholders, in accordance with Section 10.20, a resolution of
          the board of directors  having been duly adopted and  submitted to the
          shareholders. At a meeting of shareholders,  not less than the minimum
          number  of  votes   required  by  statute  and  by  the   articles  of
          incorporation were voted in favor of the amendment;

                                                                        (Note 4)

     |_|  By the  shareholders,  in accordance  with Sections  10.20 and 7.10, a
          resolution  of the board of  directors  having  been duly  adopted and
          submitted to the shareholders. A consent in writing has been signed by
          shareholders having not less than the minimum number of votes required
          by statute and by the articles of incorporation. Shareholders who have
          not  consented in writing have been given  notice in  accordance  with
          Section 7.10;

                                                                        (Note 4)

     |_|  By the  shareholders,  in accordance  with Sections  10.20 and 7.10, a
          resolution  of the  board of  directors  have been  duly  adopted  and
          submitted to the shareholders. A consent in writing has been signed by
          all the shareholders entitled to vote on this amendment.

                                                                        (Note 4)

                               (INSERT AMENDMENT)

(Any  article  being  amended  is  required  to be set  forth in its  entirety.)
(Suggested  language for an amendment to change the corporate name is: RESOLVED,
that the Articles of Incorporation be amended to read as follows:)

---------------------------------------------------------------------------------------------------------------------------------------
                                   (NEW NAME)
                 All changes other than name, include on page 2
                                     (over)


                                     Page 2

                                   Resolution

                    Resolved,  that the Articles of  Incorporation be amended so
               that  the  aggregate   number  of  shares  of  common  stock  the
               Corporation is authorized to issue is increased  from  10,000,000
               to 20,000,000.


                                     Page 3

ARTICLE THREE  The manner in which any exchange, reclassification or cancellation

     of issued shares,  or a reduction of the number of authorized shares of any
     class  below the number of issued  shares of that  class,  provided  for or
     effected by this amendment,  is as follows: (If not applicable,  insert "No
     change")

                                    No Change

ARTICLE FOUR   (a) The  manner in which  said  amendment  effects a change in the

     amount of  paid-in  capital  (Paid-in  capital  replaces  the terms  Stated
     Capital and Paid in Surplus and is equal to the total of these accounts) is
     as follows: (If not applicable, insert "No change")

                                    No Change

               (b)  The amount of paid-in capital (Paid in Capital  replaces the
                    terms Stated Capital and Pain in Surplus and is equal to the
                    total of these  accounts) as changed by this amendment is as
                    follows: (If not applicable, insert "No change")

                                    No Change

                                         Before Amendment  After Amendment

               Paid-in Capital           $_______________  $______________


                       (Complete either Item 1 or 2 below)

(1)  The  undersigned  corporation has caused these articles to be signed by its
     duly authorized officers,  each of whom affirm, under penalties of perjury,
     that the facts stated herein are true.

Dated    November 20th, 1987                      United Trust, Inc.
                                                  (Exact Name of Corporation)

attested by       /s/ Thomas F. Morrow            by       /s/ Larry E. Ryherd
(Signature of Secretary or Assistant Secretary)  (Signature of President or Vice President)

         Thomas F. Morrow, Secretary              Larry E. Ryherd, President
         (Type or Print Name and Title)           (Type or Print Name and Title)

(2)  If amendment is authorized by the  incorporators,  the  incorporators  must
     sign below.

                                       OR

If amendment is authorized  by the  directors and there are no officers,  then a
majority of the  directors or such  directors as may be designated by the board,
must sign below

The  undersigned  affirms,  under  penalties  of perjury,  that the facts stated
herein are true.

Dated __________________, 19 ______

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

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

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

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


                                     Page 4

                             NOTES AND INSTRUCTIONS

NOTE 1: State the true exact  corporate name as it appears on the records of the
     office of the Secretary of State, BEFORE any amendments herein reported.

NOTE 2:  Incorporators  are permitted to adopt amendments ONLY before any shares
     have been issued and before any  directors  have been named or elected.  (ss.
     10.10)

NOTE 3: Directors may adopt amendments without shareholder  approval in only six
     instances, as follows:

     (a)  to remove the names and  addresses of directors  named in the articles
          of incorporation;

     (b)  to remove the name and  address of the  initial  registered  agent and
          registered  office,  provided a  statement  pursuant toss.5.10 is also
          filed;

     (c)  to split the issued  whole shares and  unissued  authorized  shares by
          multiplying  them by a whole number,  so long as no class or series is
          adversely affected thereby;

     (d)  to change the corporation name by substituting the word "corporation",
          "incorporated",  "company",  "limited",  or the abbreviation  "corp.",
          "inc.",  "co.",  or "ltd." for a similar word or  abbreviation  in the
          name or by adding a geographical attribution to the name;

     (e)  to  reduce  the   authorized   shares  of  any  class  pursuant  to  a
          cancellation statement filed in accordance withss.9.05;

     (f)  to  restate  the  articles  of  incorporation  as  currently  amended.
          (ss.10.15)

NOTE 4: All amendments not adopted underss.10.10 orss.10.15 require (1) that the
     board of directors adopt a resolution  setting forth the proposed amendment
     and (2) that the shareholders approve the amendment.

     Shareholder approval may be (1) by vote at a shareholders'  meeting (either
     annual or special) or (2) by consent, in writing, without a meeting.

     To be adopted,  the amendment must receive the affirmative  vote or consent
     of the holders of at least 2/3 of the  outstanding  shares entitled to vote
     on the  amendment  (but if class voting  applies,  then also at least a 2/3
     vote within each class is required).

     The articles of  incorporation  may supercede the 2/3 vote  requirement  by
     specifying any smaller or larger vote  requirement not less than a majority
     of the  outstanding  shares  entitled  to vote and not less than a majority
     within each class when class voting applies. (ss.10.20)

NOTE 5: When shareholder  approval is by written consent,  all shareholders must
     be given  notice  of the  proposed  amendment  at least 5 days  before  the
     consent is signed.  If the amendment is adopted,  shareholders who have not
     signed  the  consent  must  be  promptly  notified  of the  passage  of the
     amendment. (ss.ss.7.10 & 10.20)



                             File Number 5367-825-4

                                STATE OF ILLINOIS
                                    OFFICE OF
                             THE SECRETARY OF STATE


                              [LOGO WITH AN EAGLE]

     WHEREAS,  ARTICLES OF AMENDMENT TO THE ARTICLES OF  INCORPORATION OF UNITED
TRUST, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED
IN THE OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE BUSINESS  CORPORATION
ACT OF ILLINOIS, IN FORCE JULY 1, A.D. 1984.

     Now  Therefore,  I,  George  H.  Ryan,  Secretary  of State of the State of
Illinois  by virtue of the  powers  vested in me by law,  do hereby  issue  this
certificate  and  attach  hereto  a copy  of the  Application  of the  aforesaid
corporation.

In   Testimony  Whereof,  I hereto set my hand and cause to be affixed the Great
     Seal of the State of Illinois at the City of  Springfield,  this 6th day of
     December  A.D.  1991 and of the  Independence  of the United States the two
     hundred and 16th.

     (SEAL)

                                                     /s/ George H. Ryan
                                                     SECRETARY OF STATE


                              ARTICLES OF AMENDMENT
                       TO THE ARTICLES OF INCORPORATION OF
                            UNITED TRUST GROUP, INC.


1. CORPORATE NAME:             UNITED TRUST, INC.

2. MANNER OF ADOPTION OF AMENDMENT:

     The following  amendment of the Articles of Incorporation was adopted April
     9 , 1991 in the manner indicated below. ("X" one box only)

     |_|  By a majority of the  incorporators,  provided no directors were named
          in the articles of  incorporation  and no directors have been elected;
          or by a majority of the board of directors, in accordance with Section
          10.10,  the  corporation  having  issued  no  shares as of the time of
          adoption of this amendment;

                                                                        (Note 2)

     |_|  By a majority of the board of directors,  in  accordance  with Section
          10.15,  shares  having  been issued but  shareholder  action not being
          required for the adoption of the amendment;

                                                                        (Note 3)

     |X|  By the shareholders, in accordance with Section 10.20, a resolution of
          the board of directors  having been duly adopted and  submitted to the
          shareholders. At a meeting of shareholders,  not less than the minimum
          number  of  votes   required  by  statute  and  by  the   articles  of
          incorporation were voted in favor of the amendment;

                                                                        (Note 4)

     |_|  By the  shareholders,  in accordance  with Sections  10.20 and 7.10, a
          resolution  of the board of  directors  having  been duly  adopted and
          submitted to the shareholders. A consent in writing has been signed by
          shareholders having not less than the minimum number of votes required
          by statute and by the articles of incorporation. Shareholders who have
          not  consented in writing have been given  notice in  accordance  with
          Section 7.10;

                                                                        (Note 4)

     |_|  By the  shareholders,  in accordance  with Sections  10.20 and 7.10, a
          resolution  of the board of  directors  having  been duly  adopted and
          submitted to the shareholders. A consent in writing has been signed by
          all the shareholders entitled to vote on this amendment.

                                                                        (Note 4)


                               (INSERT AMENDMENT)

(Any  article  being  amended  is  required  to be set  forth in its  entirety.)
(Suggested  language for an amendment to change the corporate  name is RESOLVED,
that the Articles of Incorporation be amended to read as follows:)

---------------------------------------------------------------------------------------------------------------------------------------
                                   (NEW NAME)





                 All changes other than name, include on page 2

                                     (over)



                                   Resolution

                    Resolved,  that the  Articles  of  Incorporation  of  United
               Trust,  Inc. be amended so that the aggregate number of shares of
               common stock the  Corporation is authorized to issue is increased
               from 20,000,000 to 25,000,000.

3.   The  manner in which any  exchange,  reclassification  or  cancellation  of
     issued  shares,  or a reduction of the number of  authorized  shares of any
     class  below the number of issued  shares of that  class,  provided  for or
     effected by this amendment,  is as follows: (If not applicable,  insert "No
     change")

                                    No Change

4.   (a) The  manner in which said  amendment  effects a change in the amount of
     paid-in  capital  (Paid-in  capital  replaces the terms Stated  Capital and
     Paid-in Surplus and is equal to the total of these accounts) is as follows:
     (If not applicable, insert "No change")

                                    No Change

     (b)  The amount of paid-in  capital  (Paid in  Capital  replaces  the terms
          Stated  Capital and Pain in Surplus and is equal to the total of these
          accounts)  as  changed  by  this  amendment  is as  follows:  (If  not
          applicable, insert "No change")

                                    No Change

                                             Before Amendment  After Amendment

                   Paid-in Capital           $_______________  $______________


                       (Complete either Item 5 or 6 below)

5.   The  undersigned  corporation has caused these articles to be signed by its
     duly authorized officers,  each of whom affirm, under penalties of perjury,
     that the facts stated herein are true.

Dated November 25, 1991                                   United Trust, Inc.
                                                     (Exact Name of Corporation)

attested by /s/ Thomas F. Morrow                  by /s/ Thomas F. Morrow
(Signature of Secretary or Assistant Secretary)   (Signature of President or Vice President)

         Thomas F. Morrow, Secretary              Thomas F. Morrow, President
         (Type or Print Name and Title)           (Type or Print Name and Title)

6.   If amendment is authorized by the  incorporators,  the  incorporators  must
     sign below.

                                       OR

If amendment is authorized  by the  directors and there are no officers,  then a
majority of the  directors or such  directors as may be designated by the board,
must sign below.

The  undersigned  affirms,  under  penalties  of perjury,  that the facts stated
herein are true.

Dated __________________, 19 ______

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

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

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

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



                                STATE OF ILLINOIS
                                    OFFICE OF
                             THE SECRETARY OF STATE


                              [LOGO WITH AN EAGLE]

     WHEREAS,  ARTICLES OF AMENDMENT TO THE ARTICLES OF  INCORPORATION OF UNITED
TRUST, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED
IN THE OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE BUSINESS  CORPORATION
ACT OF ILLINOIS, IN FORCE JULY 1, A.D. 1984.

     Now  Therefore,  I,  George  H.  Ryan,  Secretary  of State of the State of
Illinois by virtue of the powers vested in me by law,
do hereby issue this certificate and attach hereto a copy of the Application of the aforesaid corporation.

     In   Testimony  Whereof,  I hereto set my hand and cause to be affixed  the
          Great Seal of the State of Illinois at the City of  Springfield,  this
          30th day of March  A.D.  1993 and of the  Independence  of the  United
          States the two hundred and 17th.

         (SEAL)

                                                     /s/ George H. Ryan
                                                     SECRETARY OF STATE


                              ARTICLES OF AMENDMENT
                       TO THE ARTICLES OF INCORPORATION OF
                            UNITED TRUST GROUP, INC.


1. CORPORATE NAME:             United Trust, Inc.

2. MANNER OF ADOPTION OF AMENDMENT:

     The following  amendment of the Articles of Incorporation was adopted March
     17 , 1993 in the manner indicated below. ("X" one box only)

          |_|  By a majority of the  incorporators,  provided no directors  were
               named in the articles of incorporation and no directors have been
               elected;  or  by  a  majority  of  the  board  of  directors,  in
               accordance with Section 10.10,  the corporation  having issued no
               shares as of the time of adoption of this amendment;

                                                                        (Note 2)

          |_|  By a  majority  of the board of  directors,  in  accordance  with
               Section 10.15,  shares having been issued but shareholder  action
               not being required for the adoption of the amendment;

                                                                        (Note 3)

          |X|  By  the  shareholders,   in  accordance  with  Section  10.20,  a
               resolution of the board of directors having been duly adopted and
               submitted to the shareholders. At a meeting of shareholders,  not
               less than the minimum  number of votes required by statute and by
               the  articles  of  incorporation  were  voted  in  favor  of  the
               amendment;

                                                                        (Note 4)

          |_|  By the shareholders,  in accordance with Sections 10.20 and 7.10,
               a resolution  of the board of directors  having been duly adopted
               and submitted to the shareholders.  A consent in writing has been
               signed by shareholders having not less than the minimum number of
               votes  required by statute and by the articles of  incorporation.
               Shareholders  who have not  consented  in writing have been given
               notice in accordance with Section 7.10;

                                                                        (Note 4)

          |_|  By the shareholders,  in accordance with Sections 10.20 and 7.10,
               a resolution  of the board of directors  having been duly adopted
               and submitted to the shareholders.  A consent in writing has been
               signed  by  all  the  shareholders   entitled  to  vote  on  this
               amendment.

                                                                        (Note 4)

When amendment  effects a name change,  insert the new corporate name below. Use
Page 2 for all other amendments.

Article 1:  The name of the corporation is:

---------------------------------------------------------------------------------------------------------------------------------------
                                   (NEW NAME)







                 All changes other than name, include on page 2
                                     (over)


                                Text of Amendment

     (Any article being amended is required to be set forth in its entirety)



                         See Exhibit A attached hereto.

3.   The  manner in which any  exchange,  reclassification  or  cancellation  of
     issued  shares,  or a reduction of the number of  authorized  shares of any
     class  below the number of issued  shares of that  class,  provided  for or
     effected by this amendment,  is as follows: (If not applicable,  insert "No
     change")

                                    No Change

4.   (a) The  manner in which said  amendment  effects a change in the amount of
     paid-in  capital  (Paid-in  capital  replaces the terms Stated  Capital and
     Paid-in Surplus and is equal to the total of these accounts) is as follows:
     (If not applicable, insert "No change")

                                    No Change

     (b) The  amount of paid-in  capital  (Paid in  Capital  replaces  the terms
     Stated  Capital  and Pain in  Surplus  and is  equal to the  total of these
     accounts) as changed by this amendment is as follows:  (If not  applicable,
     insert "No change")

                                    No Change

                                              Before Amendment  After Amendment

                    Paid-in Capital           $_______________  $______________

                   (Complete either Item 5 or 6 below)

5.   The  undersigned  corporation has caused these articles to be signed by its
     duly authorized officers,  each of whom affirm, under penalties of perjury,
     that the facts stated herein are true.

Dated   March     , 1993                                   United Trust, Inc.
                                                     (Exact Name of Corporation)

attested by  /s/ George E. Francis                by  /s/ Larry E. Ryherd
(Signature of Secretary or Assistant Secretary)   (Signature of President or Vice President)

         George E. Francis, Secretary             Larry E. Ryherd, President
         (Type or Print Name and Title)           (Type or Print Name and Title)

6.   If amendment is authorized by the  incorporators,  the  incorporators  must
     sign below.

                                       OR

If amendment is authorized  by the  directors and there are no officers,  then a
majority of the  directors or such  directors as may be designated by the board,
must sign belowl

The  undersigned  affirms,  under  penalties  of perjury,  that the facts stated
herein are true.

Dated __________________, 19 ______
- ---------------------------------           ------------------------------

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

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

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


                                    EXHIBIT A

                              PROPOSED AMENDMENT TO
                            ARTICLES OF INCORPORATION


     On October  30,  1992,  the Board of  Directors  found  that the  following
proposed  amendment to the Articles of Incorporation was in the best interest of
the Company and directed that it be submitted to the shareholders:

     RESOLVED,  that the  Articles of  Incorporation  of United  Trust,  Inc. be
     amended as follows:

     1.   Article FOUR of the Articles of  Incorporation  of United Trust,  Inc.
          shall be deleted and in its place the following shall be substituted:

                                  ARTICLE FOUR

Paragraph 1: The aggregate  number of shares which the corporation is authorized
to issue is 35,150,000 divided into two classes.  The designation of each class,
the number of shares of each class,  and the par value, if any, of the shares of
each class,  or a  statement  that the shares of any class are without par value
are as follows:

                                                       Par value per share or
             Series               Number of            statement that shares are
Class        (if any)             shares               without par value

Common       None                 35,000,000           Without par value

Preferred    To be fixed             150,000           $100
             by the Board
             of Directors

Paragraph 2: The preferences, qualifications,  limitations, restrictions and the
special or relative rights in respect of the shares of each class are:

Common       None

Preferred    The Preferred  Stock is senior to the Common Stock and the Common
             Stock is subject to the rights and preferences of the Preferred Stock.

Paragraph 3: PREFERRED STOCK. The Preferred Stock is senior to the Common Stock,
and the Common Stock is subject to the rights and  preferences  of the Preferred
Stock as hereinafter set forth.


Series - The  Preferred  Stock  may be  issued  from time to time in one or more
series in any manner  permitted by law, as  determined  from time to time by the
Board of Directors and stated in the resolution or resolutions providing for the
issuance of such stock  adopted by the Board of Directors  pursuant to authority
hereby vested in it, each series to be  appropriately  designated,  prior to the
issuance of any shares thereof,  by some  distinguishing  letter or number.  All
shares of each  series of  Preferred  Stock  shall be alike in every  particular
(except as to the dates from which  dividends  shall  commence to  accrue).  All
shares  of  Preferred  Stock  shall be of equal  rank and have the same  powers,
preferences  and  rights,  and  shall be  subject  to the  same  qualifications,
limitations,  and  restrictions,  without  distinction  between  the  shares  of
different  series thereof,  except only in regard to the following  particulars,
which may be different in different series:

     (a)  the annual rate or rates of dividends payable on shares of such series
          and the dates from which such dividends shall commence to accrue;

     (b)  the amount or amounts payable upon  redemption  thereof and the manner
          in which the same may be redeemed;

     (c)  the amount or amounts payable to holders thereof upon any voluntary or
          involuntary   liquidation,   dissolution,   or   winding   up  of  the
          corporation;

     (d)  the  provisions  relative  to a sinking  fund,  if any,  with  respect
          thereto;

     (e)  the terms and rates of conversion or exchange thereof,  if convertible
          or exchangeable; and

     (f)  the provisions as to voting rights, if any;

provided that if the stated dividends and amounts payable on liquidation are not
paid in full,  the  shares of all  series of the  Preferred  Stock  shall  share
ratably  in  the  payment  of  dividends  including  accumulation,  if  any,  in
accordance  with the sums which would be payable on such shares if all dividends
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 were discharged in full.

The  designation of each  particular  series of Preferred Stock and its terms in
respect of the foregoing  particulars shall be fixed and determined by the Board
of Directors  in any manner  permitted  by law and stated in the  resolution  or
resolutions  providing  for the  issuance of such stock  adopted by the Board of
Directors  pursuant to authority  hereby vested in it, before any shares of such
series are  issued,  and shall be set forth in full or  summarized  on the stock
certificates  for such  series.  The  Board of  Directors  may from time to time
increase the number of shares of any series of Preferred  Stock already  created
by providing that any unissued shares of Preferred  Stock shall  constitute part
of such series, or may decrease (but not below the number of shares thereof then
outstanding)  the  number of shares of any  series of  Preferred  Stock  already
created by providing that any unissued shares previously assigned to such series
shall no  longer  constitute  part  thereof.  The Board of  Directors  is hereby
empowered to classify or reclassify  any unissued  Preferred  Stock by fixing or
altering the terms thereof in respect of the above-mentioned  particulars and by
assigning  the same to an  existing  or newly  created  series from time to time
before the issuance of such stock.

Dividends - The holders of  Preferred  Stock of each series shall be entitled to
receive,  out of any  funds  legally  available  for the  purpose,  when  and as
declared  by the Board of  Directors,  cash  dividends  thereon at such rate per
annum as shall be fixed by resolution of the Board of Directors for such series,
and no more,  payable as determined by the Board of Directors in the  resolution
creating such series.  Such dividends shall be cumulative or non-cumulative,  as
determined  by the Board of  Directors in fixing the rights and  preferences  of
such  series,  and if  cumulative  shall be  deemed  to  accrue  from day to day
regardless  of whether or not earned or declared,  and shall  commence to accrue
with respect to each share of Preferred  Stock from such date or dates as may be
fixed by the Board of Directors prior to the issue thereof.

In no event, so long as any Preferred Stock shall remain outstanding,  shall any
dividend  whatsoever  (other than a dividend  payable in shares of stock ranking
junior to the  Preferred  Stock as to the  dividends  and assets) be declared or
paid upon,  nor shall any  distribution  be made or  ordered in respect  of, the
Common Stock or any class of stock ranking  junior to the Preferred  Stock as to
dividends or assets,  nor shall any moneys (other than the net proceeds received
from the sale of stock ranking junior to the Preferred Stock as to dividends and
assets) be set aside for or applied to the  purchase  or  redemption  (through a
sinking  fund or  otherwise)  or shares of Common Stock or of any other class of
stock ranking junior to the Preferred Stock as to dividends or assets, unless

     (i) all  dividends on the  Preferred  Stock of all series for past dividend
periods shall have been paid and the full dividend on all outstanding  shares of
Preferred  Stock of all series for the then current  dividend  period shall have
been paid or declared and set apart for payment; and

     (ii) the corporation shall have set aside all amounts, if any,  theretofore
required to be set aside as and for sinking  funds,  if any,  for the  Preferred
Stock of all series for the then  current  year,  and all  defaults,  if any, in
complying with any such sinking fund  requirements  in respect of previous years
shall have been made good.

Redemption - The  corporation,  at the option of the Board of Directors,  may at
any time  redeem  the  whole,  or from time to time may  redeem  any part of any
series of Preferred Stock by paying therefor in cash the amount which shall have
been  determined by the Board of  Directors,  in the  resolution or  resolutions
authorizing  such series,  to be payable upon the  redemption  of such shares at
such time.  Redemption  may be made of the whole or any part of the  outstanding
shares of any one or more series,  in the  discretion of the Board of Directors;
if the  redemption  be a part of a  series,  the  shares to be  redeemed  may be
selected by lot,  or all of the shares of such series may be redeemed  pro rata,
in such manner as may be prescribed by resolutions of the Board of Directors.

Subject to the foregoing provisions and to any qualifications,  limitations,  or
restrictions applicable to any particular series of Preferred Stock which may be
stated in the  resolution  or  resolutions  providing  for the  issuance of such
series,  the Board of Directors  shall have  authority to prescribe from time to
time the manner in which any series of Preferred Stock shall be redeemed.

Liquidation  -  Upon  any   liquidation,   dissolution  or  winding  up  of  the
corporation,  whether  voluntary or  involuntary,  the  Preferred  Stock of each
series shall be entitled,  before any  distribution  shall be made to the Common
Stock or to any  other  class  of  stock  junior  to the  Preferred  Stock as to
dividends or assets to be paid the full preferential amount or amounts fixed the
Board of Directors for such series as herein authorized, but the Preferred Stock
shall not be entitled to any further  payment and any remaining net assets shall
be distributed  ratably to the holders of the outstanding  Common Stock. If upon
such  liquidation,  dissolution  or  winding  up  of  the  corporation,  whether
voluntary  or  involuntary,   the  net  assets  of  the  corporation   shall  be
insufficient to permit the payment to the holders of all  outstanding  shares of
Preferred Stock of all series of the full preferential amounts to which they are
respectively  entitled,  then the entire net assets of the corporation  shall be
distributed  ratably to the holders of all outstanding shares of Preferred Stock
in  proportion  to the full  preferential  amount to which  each  such  share is
entitled.  Neither a consolidation  nor a merger of the corporation with or into
any corporation or corporations nor the sale of all or substantially  all of the
assets of the  corporation  shall be deemed to be a liquidation,  dissolution or
winding up within the meaning of this clause.

Voting - The holders of the Preferred  Stock of each series shall be entitled to
such  voting  rights,  if any, as shall be fixed by  resolution  of the Board of
Directors in creating such series. If so provided in the resolution creating any
series of Preferred Stock, the shares of such series may be nonvoting.

Conversion or Exchange - Any series of Preferred  Stock may be made  convertible
into, or exchangeable for, at the option of either the holder or the corporation
or upon the happening of a specified event, shares of any other class or classes
or any other  series of the same or any other  class or  classes of stock of the
corporation,  at such price or prices or at such rate or rates of  exchange  and
with  such  adjustments  as shall be  stated in the  resolution  or  resolutions
providing for the issuance of such stock adopted by the Board of Directors.

Paragraph 4: COMMON STOCK.  The holders of the Common Stock shall be entitled to
receive such  dividends as the Board of Directors may declare from time to time,
provided  that any and all preferred  dividends on the  Preferred  Stock for the
then current  quarter  have been  theretofore  set aside or paid,  and all prior
quarterly  dividends  on the  Preferred  Stock have been paid in full.  Upon the
liquidation of the  corporation,  the holders of the Common Stock shall receive,
share and share alike, all of the net assets of the corporation  remaining after
the payment of the liquidation  preference payable with respect to the Preferred
Stock.  The Common Stock shall not be subject to redemption or retirement.  Each
holder of the Common  Stock shall be entitled to one vote for each share of such
stock standing in his name on the books of the  corporation.  The holders of the
Common  Stock  shall  not have  cumulative  voting  rights  in the  election  of
directors.

Paragraph 5: NO PRE-EMPTIVE  RIGHTS.  No stockholder of the  corporation  shall,
because  of his  ownership  of  stock,  have a  pre-emptive  or  other  right to
purchase,  subscribe for or take any part of any stock or any part of the notes,
debentures,  bonds, or other securities  convertible into or carrying options or
warrants to purchase stock of the corporation. Any part of the capital stock and
any part of the notes, debentures, bonds or other securities convertible into or
carrying the Articles of Incorporation or any amendment thereto, may at any time
be  issued,  optioned  for  sale,  and sold or  disposed  of by the  corporation
pursuant to  resolutions of its Board of Directors to such persons and upon such
terms as may to such Board seem  proper  without  first  offering  such stock or
securities or any part thereof to existing stockholders.




                             File Number 5367-825-4

                                STATE OF ILLINOIS
                                    OFFICE OF
                             THE SECRETARY OF STATE




     WHEREAS,  ARTICLES OF MERGER OF UNITED TRUST, INC.  INCORPORATED  UNDER THE
LAWS OF THE STATE OF ILLINOIS  HAVE BEEN FILED IN THE OFFICE OF THE SECRETARY OF
STATE AS PROVIDED BY THE BUSINESS CORPORATION ACT OF ILLINOIS,  IN FORCE JULY 1,
A.D. 1984.

     Now Therefore,  I, Jesse White, Secretary of State of the State of Illinois
by virtue of the powers  vested in me by law, do hereby  issue this  certificate
and attach hereto a copy of the Application of the aforesaid corporation.

     In   Testimony  Whereof,  I hereto set my hand and cause to be affixed  the
          Great Seal of the State of Illinois at the City of  Springfield,  this
          28th day of July  A.D.  1999  and of the  Independence  of the  United
          States the two hundred and 24th.

         (SEAL)

                                                     /s/ Jesse White
                                                     SECRETARY OF STATE


                               ARTICLES OF MERGER
                            CONSOLIDATION OR EXCHANGE


Names of the corporation  proposing to merge,  and the state or country of their
incorporation:

      Name of Corporation         State or Country           Corporation
                                  of Incorporation           File Number

      United Trust, Inc.          Illinois                            5367-825-4

      United Income, Inc.         Ohio                                711653
---------------------------------------------------------------------------------------------------------------------------------------


The laws of the state or country under which each  corporation  is  incorporated
permits        such       merger,        consolidation        or       exchange.

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

3.   (a) Name of the surviving corporation:   United Trust, Inc.

     (b) it shall be governed by the laws of:   Illinois

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

 If not sufficient space to cover this point, add one or more sheets of this size.

Plan of merger is as follows:

         See attached:





Please note that pursuant to the Agreement  and Plan of  Reorganization  and the
Articles of Merger and  simultaneous  to the merger of United Income,  Inc. into
United Trust, Inc. (the surviving  Illinois  company) that United Trust,  Inc.'s
name was changed to United Trust Group, Inc.



5.   Plan of  merger  was  approved  as to each  corporation  not  organized  in
     Illinois,  in  compliance  with the  laws of the  state  under  which it is
     organized, and as to each Illinois corporation, as follows:

          (The following  items are not applicable to mergers underss.11.30 - 90%
          owned subsidiary provisions. See Article 7.)

         (Only "X" one box for each Illinois corporation)

                  By the shareholders, a
                  resolution of the board of
                  directors having been duly        By written consent of the
                  adopted and submitted to a        shareholders having not less
                  vote at a meeting of share-       than the minimum number of
                  holders.  Not less than the       votes required by statute and      By written consent
                  minimum number of votes           by the articles of incorporation.  of ALL the share-
                  required by statute and by        Shareholders who have not          holders entitled to
                  the articles of incorporation     consented in writing have          vote on the action,
                  voted in favor of the action      been given notice in accord-       in accordance with
                  taken.            (ss.11.20)        ance withss.7.10   (ss.11.20)       ss.7.10 andss.11.20
Name of
Corporation

United Trust, Inc.         |X|                                |_|                                |_|
- ------------               |-|                                |-|                                |-|
- ------------               |-|                                |-|                                |-|
- ------------               |-|                                |-|                                |-|
- ------------               |-|                                |-|                                |-|
---------------------------------------------------------------------------------------------------------------------------------------


6.   (Not applicable if surviving,  new or acquiring  corporation is an Illinois
     corporation)

     It is agreed that,  upon and after the issuance of a certificate of merger,
     consolidation  or  exchange  by the  Secretary  of  State  of the  State of
     Illinois:

     a.   The surviving, new or acquiring corporation may be served with process
          in the State of Illinois in any proceeding for the  enforcement of any
          obligation of any corporation organized under the laws of the State of
          Illinois which is a party to the merger, consolidation or exchange and
          in any  proceeding  for the  enforcement of the rights of a dissenting
          shareholder of any such  corporation  organized  under the laws of the
          State of Illinois against the surviving, new or acquiring corporation.

     b.   The Secretary of State of the State of Illinois shall be and hereby is
          irrevocably appointed as the agent of the surviving,  new or acquiring
          corporation to accept service of process in any such proceedings, and

     c.   The surviving,  new, or acquiring corporation will promptly pay to the
          dissenting shareholders of any corporation organized under the laws of
          the State of Illinois which is a party to the merger, consolidation or
          exchange the amount, if any, to which they shall be entitled under the
          provisions of "The Business  Corporation  Act of 1983" of the State of
          Illinois  with  respect  to the  rights  of  dissenting  shareholders.
          -------------------------------------------------------------------------------------------------------------------------------------


7.   (Complete  this  item if  reporting  a  merger  underss.11.30  - 90%  owned
     subsidiary provisions.)

     a.   The  number  of  outstanding  shares  of each  class  of each  merging
          subsidiary  corporation  and the  number of such  shares of each class
          owned  immediately  prior to the adoption of the plan of merger by the
          parent corporation, are:

                          Total Number of Shares    Number of Shares of Each Class
                               Outstanding           Owned Immediately Prior to
Name of Corporation           of Each Class        Merger by the Parent Corporation

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

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

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

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

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

     b.   (Not applicable to 100% owned subsidiaries) The date of mailing a copy
          of the plan of  merger  and  notice  of the  right to  dissent  to the
          shareholders  of each merging  subsidiary  corporation  was  ________,
          ----.

          Was  written  consent  for the merger or written  waiver of the 30-day
          period by the holders of all the outstanding  shares of all subsidiary
          corporations received? |_|yes |_|no

          (If the answer is "No," the duplicate copies of the Articles of Merger
          may not be  delivered  to the  Secretary  of State until after 30 days
          following  the  mailing  of a copy of the  plan of  merger  and of the
          notice of the right to dissent  to the  shareholders  of each  merging
          subsidiary corporation.)

          8.   The  undersigned  corporations  have caused these  articles to be
               signed by their duly authorized  officers,  each of whom affirms,
               under  penalties  of perjury,  that the facts  stated  herein are
               true. (All signatures must be in BLACK INK.)

       Dated        July 26,        1999                    United Trust, Inc.
       (Month & Day)              (Year)           (Exact Name of Corporation)

       attested by  /s/ Patricia G. Fowler_         by  /s/ George E. Francis
       (Signature of Assistant Secretary)           (Signature of Vice President)

               Patricia G. Fowler                   George E. Francis
               (Type or Print Name and Title)       (Type or Print Name and Title)

       Dated        July 26,        1999                    United Income, Inc.
       (Month & Day)              (Year)            (Exact Name of Corporation)

       attested by  /s/ Patricia G. Fowler_         by  /s/ George E. Francis
         (Signature of Assistant Secretary)         (Signature of Vice President)

               Patricia G. Fowler                   George E. Francis
               (Type or Print Name and Title)       (Type or Print Name and Title)

       Dated               ,
       (Month & Day)              (Year)            (Exact Name of Corporation)

       attested by                                  by
      ((Signature of Assistant Secretary)           (Signature of Vice President)


               (Type or Print Name and Title)       (Type or Print Name and Title)





                                                                       Exhibit A
                                                           To Agreement and Plan
                                                               Of Reorganization

                        AGREEMENT AND ARTICLES OF MERGER

                                     Merging

                               UNITED INCOME, INC.

                       a corporation of the State of Ohio

                                  With and Into

                               UNITED TRUST, INC.

                     a corporation of the State of Illinois

     Agreement  and  Articles  of Merger,  dated July 26,  1999,  by and between
United Trust, Inc., an Illinois  corporation ("UTI") and United Income, Inc., an
Ohio corporation ("UII"), said corporations being together hereinafter sometimes
referred to as the "constituent Corporations".

     Whereas, UTI is a corporation duly organized and existing under the laws of
the State of Illinois and has  authorized  capital stock of 3,500,000  shares of
Common Stock, no par value, of which 2,518,438 shares are issued and outstanding
with 29,260  shares being held in the  treasury and 150,000  shares of Preferred
Stock, par value $100 per share of which no shares are outstanding.

     Whereas, UII is a corporation duly organized and existing under the laws of
the State of Ohio and has authorized capital stock of 2,310,001 shares of Common
Stock, no par value, of which 1,569,509  shares are issued and outstanding  with
177,590 shares being held in the treasury and 150,000 shares of Preferred Stock,
par value $100 per share of which no shares are outstanding.

     Whereas, the Board of Directors of each of the Constituent Corporations has
adopted  resolutions  declaring  advisable  and to  the  best  interests  of the
Constituent  Corporations and their respective  stockholders  that UII be merged
with and into UTI,  and that  simultaneously  UTI will change its name to United
Trust  Group,  Inc.  (the  "Surviving  Corporation"),  under and pursuant to the
Illinois Business  Corporation Act and the Ohio General  Corporation Law, and on
the terms and conditions herein contained (the "Merger").

                                    ARTICLE I

     1.1 UTI and UII agree to effect  the  Merger of UII with and into UTI.  UTI
and UII jointly own 100% of the outstanding capital stock of United Trust Group,
Inc., an Illinois  corporation  ("UTG").  Immediately  following the merger, UTI
will  liquidate  UTG. UTI will change its name to UTG and shall be the Surviving
Corporation  and  shall  continue  to be  governed  by the laws of the  State of
Illinois.  The name of the Surviving  Corporation  shall be "United Trust Group,
Inc." The terms and conditions of the Merger and the manner of carrying the same
into  effect  are  as set  forth  in  this  Agreement  and  Articles  of  Merger
(hereinafter referred to as this "Agreement").

     1.2  The  Certificate  of  Incorporation  of UTI, as in effect  immediately
          prior to the  Effective  Date,  until  further  amended,  shall be and
          constitute  the   Certificate  of   Incorporation   of  the  Surviving
          Corporation,  and an amendment to said  Certificate  of  Incorporation
          shall be effected as a result of the Merger to reflect its name change
          to United Trust Group, Inc.

     1.3  The Bylaws of UTI,  as in effect  immediately  prior to the  Effective
          Date, until further amended, shall be and constitute the Bylaws of the
          Surviving Corporation.



     1.4  The Board of  Directors of UTI shall not be changed as a result of the
          Merger.

     1.5  The officers of UTI shall not be changed as a result of the Merger.

                                   ARTICLE II

     2.1  The existence of UII shall cease on the Effective  Date of the Merger,
          and the existence of UTI shall  continue  unaffected and unimpaired by
          the Merger.  On the Effective  Date of the Merger,  in addition to the
          general powers of corporations, UTI shall enjoy the rights, franchises
          and  privileges  possessed  by each of the  Constituent  Corporations,
          subject to the restrictions,  liabilities,  duties and provisions of a
          corporation organized under the Illinois Business Corporation Act; and
          all the rights,  privileges,  franchises  and  interest of each of the
          Constituent  Corporations,  and all the property,  real,  personal and
          mixed, and all the debts due on whatever account to either of them, as
          well as all stock subscriptions, securities and other things in action
          belonging  to  either  of  them,  shall  be  taken  and  deemed  to be
          transferred  to and  vested  in  the  Surviving  Corporation,  without
          further  act or deed;  and all  claims,  demands,  property  and every
          interest  shall be the property of the Surviving  Corporation  as they
          were of the Constituent Corporation,  shall not be deemed to revert or
          deemed to be in any way impaired by reason of the Merger, but shall be
          vested in the Surviving Corporation; provided, however, that rights of
          creditors  and all liens upon any  property of any of the  Constituent
          Corporations  shall  not in any  manner  be  impaired,  nor  shall any
          liability or  obligation  due or to become due, or any claim or demand
          for any cause  existing  against any such  corporation  be released or
          impaired by such Merger, but the Surviving Corporation shall be deemed
          to have assumed and shall be liable for liabilities and obligations of
          either of the Constituent  Corporations,  in the same manner as if the
          Surviving  Corporations,  in  the  same  manner  as if  the  Surviving
          Corporation had itself incurred such liabilities or obligations.

     2.2  The Surviving  Corporation  may be served with process in the State of
          Ohio in any  proceeding  therein for  enforcement of any obligation of
          UII as well as for  enforcement of any obligation UII or the Surviving
          Corporation  arising from the Merger,  and the  Surviving  Corporation
          does hereby irrevocably  appoint the Secretary of the State of Ohio as
          its  agent to  accept  service  of  process  in any such suit or other
          proceeding.  The  address  to  which a copy of such  process  shall be
          mailed to said agent is c/o United Trust Group, Inc., 5250 South Sixth
          Street  Road,  Springfield,  Illinois  62703,  until  UTG  shall  have
          hereafter  designated in writing to the said agent a different address
          for such  purpose.  Service of such process may be made by  personally
          delivering  to and leaving  with said agent  duplicate  copies of such
          process,  one of  which  copies  the  agent  shall  forthwith  send by
          registered mail to UTG at the above address.

     2.3  The Surviving Corporation will promptly pay to dissenting stockholders
          of UII the  amount,  if any,  to which  they are  entitled  under  the
          relevant provisions of the Ohio General Corporation Law.

     2.4  Subject to the terms and conditions  herein  provided,  this Agreement
          shall  be  certified,   executed  and   acknowledged  to  comply  with
          applicable filing and recording  requirements of the Illinois Business
          Corporation  Act and the Ohio General  Corporation  Law on the closing
          date referred to in Section 6.8 of that certain  Agreement and Plan of
          Reorganization,   dated  March  31,  1998,   between  the  Constituent
          Corporations  (the  "Acquisition   Agreement"),   (the  date  of  such
          certification,  execution and acknowledgement being herein referred to
          as the "Closing  Date").  On the Closing Date or as soon thereafter as
          practicable,   a   certified   Agreement   and   Articles   of  Merger
          incorporating  this  Agreement  shall be filed  pursuant  to  Illinois
          Business Corporation Act and the Ohio General Corporation Law with the
          Secretary  of the  State of  Illinois  and Ohio,  respectively,  and a
          certified copy thereof shall be recorded in the Office of the Recorder
          of  the   appropriate   county  or  counties  in  Illinois  and  Ohio,
          respectively.  This Agreement  shall become  effective in the State of
          Illinois  at the close of  business on the day on which such filing is
          completed,  and shall  become  effective in the State of Ohio upon the
          issuance by the  Secretary  of the State of Ohio of a  Certificate  of
          Merger  (the  latter  of which  dates  is  herein  referred  to as the
          "Effective Date").



                                   ARTICLE III

     3.1  The manner of converting  or exchanging  the shares of UII into shares
          of UTI shall be as hereinafter set forth in this Article III.

     3.2  Each share of UTI Common  Stock  issued  and  outstanding  immediately
          prior  to the  Effective  Date  shall  continue  to be an  issued  and
          outstanding share of UTI, fully paid and non-assessable.

     3.3  Each share of UII Common  Stock  issued  and  outstanding  immediately
          prior to the Effective Date (excluding shares of UII Common Stock held
          by  UII as  treasury  stock,  which  shares  shall  be  cancelled  and
          extinguished  at the Effective Date) and all rights in respect thereof
          shall,  upon the  Effective  Date, by virtue of the Merger and without
          any action on the part of the holder  thereof,  be  exchanged  for and
          converted into one share of UTI Common Stock.

     3.4  Each share of UTI Common  Stock  issued  pursuant to this  Article III
          shall be fully paid and  non-assessable.  From and after the Effective
          Date, each certificate  which  theretofore  represented  shares of UII
          Common  Stock  shall  evidence  ownership  of shares of the UTI Common
          Stock  on the  basis  hereinafter  set  forth,  and the  exchange  and
          conversion  shall be complete  and  effective  on the  Effective  Date
          without  regard to the date or dates on which  outstanding  UII Common
          Stock shall be cancelled.

     3.5  On  the  Effective  Date,  UTI  will  deliver  to the  Exchange  Agent
          certificates  representing  the number of shares of UTI  Common  Stock
          that will be required for delivery to the stockholders of UII pursuant
          to the Merger,  and will take such further  action as may be necessary
          in order that  certificates  for shares of the UTI Common Stock may be
          delivered to the stockholders of UII. Dividends or other distributions
          payable  after the  Effective  Date to holder of record in  respect of
          such shares of the UTI Common  Stock issued in exchange for UII Common
          Stock  shall  not  be  paid  to  holders  thereof  until  certificates
          evidencing  the UII  Common  Stock are  surrendered  for  exchange  as
          aforesaid.

                                   ARTICLE IV

     4.1  The  obligations  of UTI and UII to effect the Merger shall be subject
          to all of the terms and conditions of the Acquisition Agreement.

     4.2  This  Agreement  may be terminated or amended prior to the Filing Date
          in the manner  and upon the  conditions  set forth in the  Acquisition
          Agreement.

     4.3  This Agreement may be executed in any number of counterparts,  each of
          which shall be deemed and  original  but all of which  together  shall
          constitute but one instrument.

     IN WITNESS  WHEREOF,  each of the Constituent  Corporations has caused this
Agreement to be duly executed by its duly authorized officer, attested to by its
Secretary and its corporate seal, all as of the date first above written.


                                                              UNITED TRUST, INC.
ATTEST:

/s/ George E. Francis                                /s/ Larry E. Ryherd
George E. Francis                                    Larry E. Ryherd
Secretary                                            Chief Executive Officer


[CORPORATE SEAL]


                                                             UNITED INCOME, INC.
ATTEST:

/s/ George E. Francis                                /s/ James E. Melville
George E. Francis                                    James E. Melville
Secretary                                            President


[CORPORATE SEAL]



     THE UNDERSIGNED, Chief Executive Officer of United Trust, Inc. who executed
on behalf of said corporation the foregoing Agreement and Articles of Merger, of
which this Certificate is made a part, hereby  acknowledges,  in the name of and
on behalf of said corporation, the foregoing Agreement and Articles of Merger to
be the corporate act of said corporation and further certifies that, to the best
of his  knowledge,  information  and  belief,  the  matters  and facts set forth
therein with respect to the approval thereof are true in all material  respects,
under the penalties of perjury.

                                                         Larry E. Ryherd
                                                         Chief Executive Officer

     THE UNDERSIGNED, President of United Income, Inc. who executed on behalf of
said corporation the foregoing  Agreement and Articles of Merger,  of which this
Certificate is made a part, hereby acknowledges, in the name of and on behalf of
said  corporation,  the  foregoing  Agreement  and  Articles of Merger to be the
corporate act of said corporation and further certifies that, to the best of his
knowledge,  information and belief, the matters and facts set forth therein with
respect to the  approval  thereof are true in all material  respects,  under the
penalties of perjury.

                                                         James E. Melville
                                                         President



                             File Number 5367-825-4

                                STATE OF ILLINOIS
                                    OFFICE OF
                             THE SECRETARY OF STATE




     WHEREAS,  ARTICLES OF AMENDMENT TO THE ARTICLES OF  INCORPORATION OF UNITED
TRUST, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF ILLINOIS HAVE BEEN FILED
IN THE OFFICE OF THE SECRETARY OF STATE AS PROVIDED BY THE BUSINESS  CORPORATION
ACT OF ILLINOIS, IN FORCE JULY 1, A.D. 1984.

     Now Therefore,  I, Jesse White, Secretary of State of the State of Illinois
by virtue of the powers  vested in me by law, do hereby  issue this  certificate
and attach hereto a copy of the Application of the aforesaid corporation.

     In   Testimony  Whereof,  I hereto set my hand and cause to be affixed  the
          Great Seal of the State of Illinois at the City of  Springfield,  this
          28th day of July A.D. 1999 and of the Independent of the United States
          the two hundred and 24th.

         (SEAL)

                                                     /s/ Jesse White
                                                     SECRETARY OF STATE


                              ARTICLES OF AMENDMENT
                       TO THE ARTICLES OF INCORPORATION OF
                            UNITED TRUST GROUP, INC.


CORPORATE NAME:    United Trust Group, Inc.

2.   MANNER OF ADOPTION OF AMENDMENT:

          The following  amendment of the Articles of Incorporation  was adopted
          July 26 , 1999 in the  manner  indicated  below.  ("X"  one box  only)
          (Month & Day) (Year)

          |_|  By a majority of the  incorporators,  provided no directors  were
               named in the articles of incorporation and no directors have been
               elected;

                                                                        (Note 2)

          |_|  By a  majority  of the board of  directors,  in  accordance  with
               Section 10.10, the corporation  having issued no shares as of the
               time of adoption of this amendment;

                                                                        (Note 2)

          |_|  By a  majority  of the board of  directors,  in  accordance  with
               Section 10.15,  shares having been issued but shareholder  action
               not being required for the adoption of the amendment;

                                                                        (Note 3)

          |X|  By  the  shareholders,   in  accordance  with  Section  10.20,  a
               resolution of the board of directors having been duly adopted and
               submitted to the shareholders. At a meeting of shareholders,  not
               less than the minimum  number of votes required by statute and by
               the  articles  of  incorporation  were  voted  in  favor  of  the
               amendment;

                                                                        (Note 4)

          |_|  By the shareholders,  in accordance with Sections 10.20 and 7.10,
               a resolution  of the board of directors  having been duly adopted
               and submitted to the shareholders.  A consent in writing has been
               signed by shareholders having not less than the minimum number of
               votes  required by statute and by the articles of  incorporation.
               Shareholders  who have not  consented  in writing have been given
               notice in accordance with Section 7.10;

                                                                    (Note 4 & 5)

          |_|  By the shareholders,  in accordance with Sections 10.20 and 7.10,
               a resolution  of the board of directors  having been duly adopted
               and submitted to the shareholders.  A consent in writing has been
               signed  by  all  the  shareholders   entitled  to  vote  on  this
               amendment.

                                                                        (Note 5)

3.   TEXT OF AMENDMENT:

     a.   When  amendment  effects a name change,  insert the new corporate name
          below. Use Page 2 for all other amendments.

          Article I: The name of the corporation is:


          --------------------------          --------------------------------
                                                        (NEW NAME)
                 All changes other than name, include on page 2
                                     (over)


                                Text of Amendment

     b.   (If amendment  affects the corporate  purpose,  the amended purpose is
          required to be set forth in its entirety.  If there is not  sufficient
          space to do so, add one or more sheets of this size.)


          See attached Exhibit A.



4.   The  manner,  if not set  forth  in  Article  3b,  in which  any  exchange,
     reclassification  or cancellation  of issued shares,  or a reduction of the
     number of authorized  shares of any class below the number of issued shares
     of that class,  provided for or effected by this amendment,  is as follows:
     (If not applicable, insert "No change")


         No change

5.   (a) The  manner,  if not set forth in Article  3b, in which said  amendment
     effects a change in the amount of paid-in capital (Paid-in capital replaces
     the terms Stated  Capital and Paid-in  Surplus and is equal to the total of
     these accounts) is as follows: (If not applicable, insert "No change")


         No change


     (b)  The amount of paid-in  capital  (Paid-in  Capital  replaces  the terms
          Stated Capital and Paid-in  Surplus and is equal to the total of these
          accounts)  as  changed  by  this  amendment  is as  follows:  (If  not
          applicable, insert "No change")


         No change


                                              Before Amendment   After Amendment

                    Paid-in Capital           $ ___________      $ ___ _________


    (Complete either Item 6 or 7 below. All signatures must be in BLACK INK.)

6.   The  undersigned  corporation has caused this statement to be signed by its
     duly authorized officers, each of whom affirms, under penalties of perjury,
     that the facts stated herein are true.

       Dated        July 26,     1999                   United Trust Group, Inc.
                (Month & Day)   (Year)       (Exact Name of Corporation at date of execution)

       attested by  /s/ Patricia G. Fowler_        by  /s/ George E. Francis
       (Signature of Assistant Secretary)          (Signature of Vice President)

          Patricia G. Fowler                       George E. Francis
          (Type or Print Name and Title)           Type or Print Name and Title)

7.   If amendment is authorized  pursuant to Section 10.10 by the incorporators,
     the incorporators must sign below, and type or print name and title.

                                       OR

If amendment is authorized by the directors  pursuant to Section 10.10 and there
are no officers,  then a majority of the  directors or such  directors as may be
designated by the board, must sign below, and type or print name and title.

The undersigned affirms,  under the penalties of perjury,  that the facts stated
herein are true.

Dated ______________________________ , _________
              (Month and Day)            (Year)


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

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

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

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



                             NOTES AND INSTRUCTIONS

NOTE 1: State the true exact  corporate name as it appears on the records of the
     office of the Secretary of State, BEFORE any amendments herein reported.

NOTE 2:  Incorporators  are permitted to adopt amendments ONLY before any shares
     have been issued and before any  directors  have been named or elected.  (ss.
     10.10)

NOTE 3: Directors may adopt amendments without shareholder  approval in only six
     instances, as follows:

     (g)  to remove the names and  addresses of directors  named in the articles
          of incorporation;

     (h)  to remove the name and  address of the  initial  registered  agent and
          registered  office,  provided a  statement  pursuant toss.5.10 is also
          filed;

     (i)  to split the issued  whole shares and  unissued  authorized  shares by
          multiplying  them by a whole number,  so long as no class or series is
          adversely affected thereby;

     (j)  to change the corporation name by substituting the word "corporation",
          "incorporated",  "company",  "limited",  or the abbreviation  "corp.",
          "inc.",  "co.",  or "ltd." for a similar word or  abbreviation  in the
          name or by adding a geographical attribution to the name;

     (k)  to  reduce  the   authorized   shares  of  any  class  pursuant  to  a
          cancellation statement filed in accordance withss.9.05,

     (l)  to  restate  the  articles  of  incorporation  as  currently  amended.
          (ss.10.15)

NOTE 4: All amendments not adopted underss.10.10 orss.10.15 require (1) that the
     board of directors adopt a resolution  setting forth the proposed amendment
     and (2) that the shareholders approve the amendment.

     Shareholder approval may be (1) by vote at a shareholders'  meeting (either
     annual or special) or (2) by consent, in writing, without a meeting.

     To be adopted,  the amendment must receive the affirmative  vote or consent
     of the holders of at least 2/3 of the  outstanding  shares entitled to vote
     on the  amendment  (but if class voting  applies,  then also at least a 2/3
     vote within each class is required).

     The articles of  incorporation  may supercede the 2/3 vote  requirement  by
     specifying any smaller or larger vote  requirement not less than a majority
     of the  outstanding  shares  entitled  to vote and not less than a majority
     within each class when class voting applies. (ss.10.20)

NOTE 5: When shareholder  approval is by written consent,  all shareholders must
     be given  notice  of the  proposed  amendment  at least 5 days  before  the
     consent is signed.  If the amendment is adopted,  shareholders who have not
     signed  the  consent  must  be  promptly  notified  of the  passage  of the
     amendment. (ss.ss.7.10 & 10.20)



                                    EXHIBIT A

                              PROPOSED AMENDMENT TO
                            ARTICLES OF INCORPORATION


     On July 26,  1999,  the  following  proposed  amendment  to the Articles of
Incorporation, having been duly authorized and adopted by the Board of Directors
of United Trust Group,  Inc.  was  approved and adopted by the  stockholders  of
United Trust Group, Inc. at a Special Meeting of the Shareholders.

     RESOLVED, that the Articles of Incorporation of United Trust Group, Inc. be
amended as follows:

8.   Article FOUR of the Articles of Incorporation  of United Trust Group,  Inc.
     shall be deleted and in its place the following shall be substituted:

                                  ARTICLE FOUR

Paragraph 1: The aggregate  number of shares which the corporation is authorized
to issue is $7,150,000 divided into two classes.  The designation of each class,
the number of shares of each class,  and the par value, if any, of the shares of
each class,  or a  statement  that the shares of any class are without par value
are as follows:

                                                       Par value per share or
             Series                Number of           statement that shares are
Class        (if any)              shares              without par value

Common       None                  7,000,000           Without par value

Preferred    To be fixed             150,000           $100
             by the Board
             of Directors

Paragraph 2: The preferences, qualifications,  limitations, restrictions and the
special or relative rights in respect of the shares of each class are:

Common       None

Preferred    The Preferred  Stock is senior to the Common Stock and the Common
             Stock is subject to the rights and preferences of the Preferred Stock.

                                       A-1


Paragraph 3: PREFERRED STOCK. The Preferred Stock is senior to the Common Stock,
and the Common Stock is subject to the rights and  preferences  of the Preferred
Stock as hereinafter set forth.

Series - The  Preferred  Stock  may be  issued  from time to time in one or more
series in any manner  permitted by law, as  determined  from time to time by the
Board of Directors and stated in the resolution or resolutions providing for the
issuance of such stock  adopted by the Board of Directors  pursuant to authority
hereby vested in it, each series to be  appropriately  designated,  prior to the
issuance of any shares thereof,  by some  distinguishing  letter or number.  All
shares of each  series of  Preferred  Stock  shall be alike in every  particular
(except as to the dates from which  dividends  shall  commence to  accrue).  All
shares  of  Preferred  Stock  shall be of equal  rank and have the same  powers,
preferences  and  rights,  and  shall be  subject  to the  same  qualifications,
limitations,  and  restrictions,  without  distinction  between  the  shares  of
different  series thereof,  except only in regard to the following  particulars,
which may be different in different series:

     (a)  dates from which such dividends shall commence to accrue;

     (b)  the amount or amounts payable upon  redemption  thereof and the manner
          in which the same may be redeemed;

     (c)  the amount or amounts payable to holders thereof upon any voluntary or
          involuntary   liquidation,   dissolution,   or   winding   up  of  the
          corporation;

     (d)  the  provisions  relative  to a sinking  fund,  if any,  with  respect
          thereto;

     (e)  the terms and rates of conversion or exchange thereof,  if convertible
          or exchangeable; and

     (f)  the provisions as to voting rights, if any;

provided that if the stated dividends and amounts payable on liquidation are not
paid in full,  the  shares of all  series of the  Preferred  Stock  shall  share
ratably  in  the  payment  of  dividends  including  accumulation,  if  any,  in
accordance  with the sums which would be payable on such shares if all dividends
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 were discharged in full.

The  designation of each  particular  series of Preferred Stock and its terms in
respect of the foregoing  particulars shall be fixed and determined by the Board
of Directors  in any manner  permitted  by law and stated in the  resolution  or
resolutions  providing  for the  issuance of such stock  adopted by the Board of
Directors  pursuant to authority  hereby vested in it, before any shares of such
series are issued, and shall be set forth in full or

                                       A-2


summarized on the stock certificates for such series. The Board of Directors may
from time to time increase the number of shares of any series of Preferred Stock
already  created by providing that any unissued  shares of Preferred Stock shall
constitute  part of such series,  or may  decrease  (but not below the number of
shares thereof then outstanding) the number of shares of any series of Preferred
Stock already created by providing that any unissued shares previously  assigned
to such series shall no longer  constitute part thereof.  The Board of Directors
is hereby  empowered to classify or reclassify any unissued  Preferred  Stock by
fixing  or  altering  the  terms  thereof  in  respect  of  the  above-mentioned
particulars  and by assigning  the same to an existing or newly  created  series
from time to time before the issuance of such stock.

Dividends - The holders of  Preferred  Stock of each series shall be entitled to
receive,  out of any  funds  legally  available  for the  purpose,  when  and as
declared  by the Board of  Directors,  cash  dividends  thereon at such rate per
annum as shall be fixed by resolution of the Board of Directors for such series,
and no more,  payable as determined by the Board of Directors in the  resolution
creating such series.  Such dividends shall be cumulative or non-cumulative,  as
determined  by the Board of  Directors in fixing the rights and  preferences  of
such  series,  and if  cumulative  shall be  deemed  to  accrue  from day to day
regardless  of whether or not earned or declared,  and shall  commence to accrue
with respect to each share of Preferred  Stock from such date or dates as may be
fixed by the Board of Directors prior to the issue thereof.

In no event, so long as any Preferred Stock shall remain outstanding,  shall any
dividend  whatsoever  (other than a dividend  payable in shares of stock ranking
junior to the  Preferred  Stock as to the  dividends  and assets) be declared or
paid upon,  nor shall any  distribution  be made or  ordered in respect  of, the
Common Stock or any class of stock ranking  junior to the Preferred  Stock as to
dividends or assets,  nor shall any moneys (other than the net proceeds received
from the sale of stock ranking junior to the Preferred Stock as to dividends and
assets) be set aside for or applied to the  purchase  or  redemption  (through a
sinking  fund or  otherwise)  or shares of Common Stock or of any other class of
stock ranking junior to the Preferred Stock as to dividends or assets, unless

     (i) all  dividends on the  Preferred  Stock of all series for past dividend
periods shall have been paid and the full dividend on all outstanding  shares of
Preferred  Stock of all series for the then current  dividend  period shall have
been paid or declared and set apart for payment; and

     (ii) the corporation shall have set aside all amounts, if any,  theretofore
required to be set aside as and for sinking  funds,  if any,  for the  Preferred
Stock of all series for the then  current  year,  and all  defaults,  if any, in
complying with any such sinking fund  requirements  in respect of previous years
shall have been made good.

                                       A-3



Redemption - The  corporation,  at the option of the Board of Directors,  may at
any time  redeem  the  whole,  or from time to time may  redeem  any part of any
series of Preferred Stock by paying therefor in cash the amount which shall have
been  determined by the Board of  Directors,  in the  resolution or  resolutions
authorizing  such series,  to be payable upon the  redemption  of such shares at
such time.  Redemption  may be made of the whole or any part of the  outstanding
shares of any one or more series,  in the  discretion of the Board of Directors;
if the  redemption  be a part of a  series,  the  shares to be  redeemed  may be
selected by lot,  or all of the shares of such series may be redeemed  pro rate,
in such manner as may be prescribed by resolutions of the Board of Directors.

Subject to the foregoing provisions and to any qualifications,  limitations,  or
restrictions applicable to any particular series of Preferred Stock which may be
stated in the  resolution  or  resolutions  providing  for the  issuance of such
series,  the Board of Directors  shall have  authority to prescribe from time to
time the manner in which any series of Preferred Stock shall be redeemed.

Liquidation  -  Upon  any   liquidation,   dissolution  or  winding  up  of  the
corporation,  whether  voluntary or  involuntary,  the  Preferred  Stock of each
series shall be entitled,  before any  distribution  shall be made to the Common
Stock or to any  other  class  of  stock  junior  to the  Preferred  Stock as to
dividends or assets to be paid the full preferential amount or amounts fixed the
Board of Directors for such series as herein authorized, but the Preferred Stock
shall not be entitled to any further  payment and any remaining net assets shall
be distributed  ratably to the holders of the outstanding  Common Stock. If upon
such  liquidation,  dissolution  or  winding  up  of  the  corporation,  whether
voluntary  or  involuntary,   the  net  assets  of  the  corporation   shall  be
insufficient to permit the payment to the holders of all  outstanding  shares of
Preferred Stock of all series of the full preferential amounts to which they are
respectively  entitled,  then the entire net assets of the corporation  shall be
distributed  ratably to the holders of all outstanding shares of Preferred Stock
in  proportion  to the full  preferential  amount to which  each  such  share is
entitled.  Neither a consolidation  nor a merger of the corporation with or into
any corporation or corporations nor the sale of all or substantially  all of the
assets of the  corporation  shall be deemed to be a liquidation,  dissolution or
winding up within the meaning of this clause.

Voting - The holders of the Preferred  Stock of each series shall be entitled to
such  voting  rights,  if any, as shall be fixed by  resolution  of the Board of
Directors in creating such series. If so provided in the resolution creating any
series of Preferred Stock, the shares of such series may be nonvoting.

Conversion or Exchange - Any series of Preferred  Stock may be made  convertible
into, or exchangeable for, at the option of either the holder or the corporation
or upon the happening of a specified event, shares of any other class or classes
or any other  series of the same or any other  class or  classes of stock of the
corporation, at such price or prices

                                       A-4


or at such  rate or rates of  exchange  and with  such  adjustments  as shall be
stated in the resolution or resolutions providing for the issuance of such stock
adopted by the Board of Directors.

Paragraph 4: COMMON STOCK.  The holders of the Common Stock shall be entitled to
receive such  dividends as the Board of Directors may declare from time to time,
provided  that any and all preferred  dividends on the  Preferred  Stock for the
then current  quarter  have been  theretofore  set aside or paid,  and all prior
quarterly  dividends  on the  Preferred  Stock have been paid in full.  Upon the
liquidation of the  corporation,  the holders of the Common Stock shall receive,
share and share alike, all of the net assets of the corporation  remaining after
the payment of the liquidation  preference payable with respect to the Preferred
Stock.  The Common Stock shall not be subject to redemption or retirement.  Each
holder of the Common  Stock shall be entitled to one vote for each share of such
stock standing in his name on the books of the  corporation.  The holders of the
Common  Stock  shall  not have  cumulative  voting  rights  in the  election  of
directors.

Paragraph 5: NO PRE-EMPTIVE  RIGHTS.  No stockholder of the  corporation  shall,
because  of his  ownership  of  stock,  have a  pre-emptive  or  other  right to
purchase,  subscribe for or take any part of any stock or any part of the notes,
debentures,  bonds, or other securities  convertible into or carrying options or
warrants to purchase stock of the corporation. Any part of the capital stock and
any part of the notes, debentures, bonds or other securities convertible into or
carrying the Articles of Incorporation or any amendment thereto, may at any time
be  issued,  optioned  for  sale,  and sold or  disposed  of by the  corporation
pursuant to  resolutions of its Board of Directors to such persons and upon such
terms as may to such Board seem  proper  without  first  offering  such stock or
securities or any part thereof to existing stockholders.



                                                                     EXHIBIT 3.2

                                     BY-LAWS

                                       OF

                               UNITED TRUST, INC.



                                    ARTICLE I

                                     OFFICES

     The  corporation  shall  continuously  maintain  in the State of Illinois a
registered office and a registered agent whose business office is identical with
such registered office, and may have other offices within or without the state.


                                   ARTICLE II

                                  SHAREHOLDERS

     SECTION 1. ANNUAL MEETING.  An annual meeting of the shareholders  shall be
held on the second Tuesday in April of each year or at such time as the board of
directors  may  designate  for the  purpose of  electing  directors  and for the
transaction  of such other  business as may come before the meeting.  If the day
fixed for the annual  meeting  shall be a legal  holiday,  such meeting shall be
held on the next succeeding business day.

     SECTION 2. SPECIAL  MEETINGS.  Special  meetings of the shareholders may be
called either by the  president,  by the board of directors or by the holders of
not  less  than  one-fifth  of all the  outstanding  shares  of the  corporation
entitled to vote, for the purpose or purposes stated in the call of the meeting.

     SECTION 3. PLACE OF  MEETING.  The board of  directors  may  designate  any
place, as the place of meeting for any annual meeting or for any special meeting
called by the board of  directors.  If no  designation  is made, or if a special
meeting   be   otherwise   called,   the   place   of   meeting   shall   be  at
- --------------------.

     SECTION 4. NOTICE OF MEETINGS.  Written notice stating the place, date, and
hour of the  meeting  and,  in the case of a special  meeting,  the  purpose  or
purposes for which the meeting is called,  shall be  delivered  not less than 10
nor  more  than 60 days  before  the  date of the  meeting,  or in the case of a
merger, consolidation, share exchange, dissolution or sale, lease or exchange of
assets not less than 20 nor more than 60 days  before  the date of the  meeting,
either  personally or by mail, by or at the direction of the  president,  or the
secretary, or the officer or persons calling the meeting, to each shareholder of
record entitled to vote at such meeting.  If mailed, such notice shall be deemed
to be  delivered  when  deposited  in the United  States mail  addressed  to the
shareholder  at  his  or  her  address  as it  appears  on  the  records  of the
corporation,  with  postage  thereon  prepaid.  When a meeting is  adjourned  to
another time or place,  notice need not be given of the adjourned meeting if the
time and place thereof are announced at the meeting at which the  adjournment is
taken.

     SECTION  5.  FIXING OF RECORD  DATE.  For the  purpose of  determining  the
shareholders entitled to notice of or to vote at any meeting of shareholders, or
shareholders  entitled to receive payment of any dividend, or in order to make a
determination  of  shareholders  for any  other  proper  purpose,  the  board of
directors  of the  corporation  may fix in advance a date as the record date for
any such  determination  of  shareholders,  such date in any case to be not more
than 60 days and for a meeting of shareholders, not less than 10 days, or in the
case of a merger, consolidation,  share exchange,  dissolution or sale, lease or
exchange of assets, not less than 20 days before the date of such meeting. If no
record date is fixed for the determination of shareholders entitled to notice of
or to vote at a meeting of  shareholders,  or  shareholders  entitled to receive
payment of a dividend,  the date on which notice of the meeting is mailed or the
date on which the  resolution of the board of directors  declaring such dividend
is adopted,  as the case may be, shall be the record date for such determination
of shareholders.  A determination of shareholders shall apply to any adjournment
of the meeting.

     SECTION 6. VOTING LISTS. The officer or agent having charge of the transfer
book for shares of the corporation  shall make,  within 20 days after the record
date for a meeting of shareholders or 10 days before such meeting,  whichever is
earlier,  a complete list of the shareholders  entitled to vote at such meeting,
arranged  in  alphabetical  order,  with the address of and the number of shares
held by each,  which list, for a period of 10 days prior to such meeting,  shall
be kept on file at the  registered  officer  of the  corporation  and  shall  be
subject to inspection by any  shareholder,  and to copying at the  shareholder's
expense,  at any time  during  usual  business  hours.  Such list  shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any shareholder  during the whole time of the meeting.  The
original  share  ledger or transfer  book,  or a duplicate  thereof kept in this
State, shall be prima facie evidence as to who are the shareholders  entitled to
examine such list or share ledger or transfer  book or to vote at any meeting of
shareholders.


     SECTION 7. QUORUM.  The holders of a majority of the outstanding  shares of
the corporation entitled to vote on a matter, represented in person or by proxy,
shall  constitute  a quorum for  consideration  of such matter at any meeting of
shareholders,  but in no event shall a quorom  consist of less than one-third of
the  outstanding  shares  entitled  so to  vote;  provided  that if less  than a
majority of the outstanding  shares are represented at said meeting,  a majority
of the shares so represented may adjourn the meeting at any time without further
notice.  If a quorum is present,  the  affirmative  vote of the  majority of the
shares  represented at the meeting shall be the act of the shareholders,  unless
the vote of a greater  number or voting by classes is required  by the  Business
Corporation  Act,  the  articles  of  incorporation  or  these  by-laws.  At any
adjourned  meeting  at which a quorum  shall be  present,  any  business  may be
transacted which might have been transacted at the original meeting.  Withdrawal
of shareholders  from any meeting shall not cause failure of a duty  constituted
quorum at that meeting.

     SECTION  8.  PROXIES.  Each  shareholder  may  appoint  a proxy  to vote or
otherwise act for him or her by signing an appointment form and delivering it to
the person so  appointed,  but no such proxy shall be valid after 11 months from
the date of its execution, unless otherwise provided in the proxy.

     SECTION 9. VOTING OF SHARES.  Each outstanding share,  regardless of class,
shall be entitled to one vote in each matter  submitted  to vote at a meeting of
shareholders,  and in all elections for directors,  every shareholder shall have
the right to vote the  number of shares  owned by such  shareholder  for as many
persons as there are  directors  multiplied  by the number of such  shares or to
distribute  such  cumulative  votes  in  any  proportion  among  any  number  of
candidates.  Each  shareholder may vote either in person or by proxy as provided
in SECTION 8 hereof.

     SECTION  10.  VOTING OF  SHARES  BY  CERTAIN  HOLDERS.  Shares  held by the
corporation  in a  fiduciary  capacity  may be voted  and  shall be  counted  in
determining the total number of outstanding shares entitled to vote at any given
time.

     Shares registered in the name of another corporation,  domestic or foreign,
may be  voted  by any  officer,  agent,  proxy  or  other  legal  representative
authorized  to  vote  such  shares  under  the  law  of  incorporation  of  such
corporation.

     Shares  registered  in the name of a  deceased  person,  a minor  ward or a
person  under  legal  disability,  may be  voted  by  his or her  administrator,
executor or court  appointed  guardian,  either in person or by proxy  without a
transfer of such shares into the name of such  administrator,  executor or court
appointed  guardian.  Shares registered in the name of a trustee may be voted by
him or her, either in person or by proxy.


     Shares  registered in the name of a receiver may be voted by such receiver,
and  shares  held by or under the  control  of a  receiver  may be voted by such
receiver without the transfer thereof into his or her name if authority to do so
is contained  in an  appropriate  order of the court by which such  receiver was
appointed.

     A  shareholder  whose  shares are  pledged  shall be  entitled to vote such
shares until the shares have ben transferred  into the name of the pledgee,  and
thereafter the pledgee shall be entitled to vote the shares so transferred.

     Any number of  shareholders  may create a voting  trust for the  purpose of
conferring  upon a trustee or trustees the right to vote or otherwise  represent
their  shares,  for a period not to exceed 10 years,  by entering into a written
voting trust agreement  specifying the terms and conditions of the voting trust,
and by transferring  their shares to such trustee or trustees for the purpose of
the  agreement.  Any such trust  agreement  shall not become  effective  until a
counterpart of the agreement is deposited with the corporation at its registered
office.  The  counterpart  of the voting trust  agreement so deposited  with the
corporation  shall be subject to the same right of  examination by a shareholder
of the  corporation,  in  person or by agent or  attorney,  as are the books and
records of the corporation, and shall be subject to examination by any holder of
a  beneficial  interest  in the  voting  trust,  either in person or by agent or
attorney, at any reasonable time for any proper purpose.

     Shares of its own stock belonging to this  corporation  shall not be voted,
directly or  indirectly,  at any meeting and shall not be counted in determining
the total number of outstanding  shares at any given time, but shares of its own
stock held by it in a  fiduciary  capacity  may be voted and shall be counted in
determining the total number of outstanding shares at any given time.

     SECTION 11. VOTING  RIGHTS.  Cumulative  voting rights of all  shareholders
shall be eliminated in all circumstances.  The preferred stock may be non-voting
except as required by law.

     The  articles  of  incorporation  may be  amended  to  limit  or  eliminate
cumulative voting rights in all or specified circumstances,  or to limit or deny
voting rights or to provide  special voting rights as to any class or classes or
series of shares of the corporation.


     SECTION 12.  INSPECTORS.  At any  meeting of  shareholders,  the  presiding
officer may, or upon the request of any  shareholder,  shall appoint one or more
persons as inspectors for such meeting.

     Such inspectors shall ascertain and report the number of shares represented
at the  meeting,  based upon their  determination  of the validity and effect of
proxies;  count all votes and report the results;  and do such other acts as are
proper to conduct the election and voting with  impartiality and fairness to all
the shareholders.

     Each report of an inspector shall be in writing and singed by him or her or
by a  majority  of them if  there  be more  than one  inspector  acting  at such
meeting. If there is more than one inspector,  the report of a majority shall be
the report of the  inspectors.  The report of the inspector or inspectors on the
number of shares represented at the meeting and the results shall be prima facie
evidence thereof.

     SECTION 13.  INFORMAL  ACTION BY  SHAREHOLDERS.  Any action  required to be
taken at a meeting of the  shareholders,  or any other action which may be taken
at a meeting of the  shareholders,  may be taken without a meeting and without a
vote, if a consent in writing, setting forth the action so taken shall be signed
(a) if 5 days prior notice of the proposed  action is given in writing to all of
the shareholders  entitled to vote with respect to the subject matter hereof, by
the holders of  outstanding  shares  having not less than the minimum  number of
votes that would  necessary  to  authorize  or take such  action at a meeting at
which all shares  entitled to vote thereon were present and voting or (b) by all
of the shareholders entitled to vote with respect to the subject matter thereof.

     Prompt  notice of the taking of the corporate  action  without a meeting by
less  than  unanimous  written  consent  shall  be  given  in  writing  to those
shareholders  who have not  consented  in writing.  In the event that the action
which is consented to is such as would have required the filing of a certificate
under any section of the Business  Corporation Act if such action had been voted
on by the  shareholders at a meeting thereof,  the certificate  filed under such
section  shall  state,  in  lieu  of any  statement  required  by  such  section
concerning  any vote of  shareholders,  that  written  consent has been given in
accordance  with the provisions of SECTION 7.10 of the Business  Corporation Act
and that written notice has been given as provided in such SECTION 7.10.

     SECTION 14. VOTING BY BALLOT. Voting on any question or in any election may
be by voice unless the presiding  officer shall order or any  shareholder  shall
demand that voting be by ballot.




                                   ARTICLE III

                                    DIRECTORS

     SECTION 1. GENERAL POWERS. The business of the corporation shall be managed
by or under the direction of its board of directors.  A majority of the board of
directors  may  establish  reasonable  compensation  for their  services and the
services of other officers, irrespective of any personal interest.

     SECTION 2. NUMBER,  TENURE AND  QUALIFICATIONS.  The number of directors of
the corporation  shall be eleven (11). Each director shall hold office until the
next annual  meeting of  shareholders;  or until his  successor  shall have been
elected  and  qualified.   Directors  need  not  be  residents  of  Illinois  or
shareholders  of the  corporation.  The number of directors  may be increased or
decreased from time to time by the amendment of this section.  No decrease shall
have the effect of shortening the term of any incumbent director.

     SECTION 3. REGULAR  MEETINGS.  A regular  meeting of the board of directors
shall be held  without  other  notice than this  by-law,  immediately  after the
annual  meeting  of  shareholders.  The  board  of  directors  may  provide,  by
resolution,  the time and place  for  holding  of  additional  regular  meetings
without other notice than such resolution.

     SECTION 4. SPECIAL MEETINGS. Special meetings of the board of directors may
be called by or at the request of the president or any two directors. The person
or persons authorized to call special meetings of the board of directors may fix
any place as the place for holding any special meeting of the board of directors
called by them.

     SECTION 5. NOTICE.  Notice of any special  meeting  shall be given at least
two (2) days previous thereto by written notice to each director at his business
address.  If mailed,  such notice shall be deemed to be delivered when deposited
in the United States mail so addressed,  with postage thereon prepaid. If notice
be given by  telegram,  such  notice  shall be deemed to be  delivered  when the
telegram is delivered by the telegram  company.  The attendance of a director at
any meeting shall constitute a waiver of notice of such meeting,  except where a
director  attends  a  meeting  for  the  express  purpose  of  objecting  to the
transaction  of any business  because  sthe  meeting is not  lawfully  called or
convened.  Neither  the  business to be  transacted  at, nor the purpose of, any
regular or special  meeting of the board of  directors  need be specified in the
notice or waiver of notice of such meeting.

     SECTION 6.  QUORUM.  A majority of the number of  directors  fixed by these
by-law shall  constitute a quorum for  transaction of business at any meeting of
the board of directors,  provided that if less than a majority of such number of
directors are present at said meeting,  a majority of the directors  present may
adjourn the meeting at any time without further notice.

     SECTION  7.  MANNER OF ACTING.  The act of the  majority  of the  directors
present at a meeting at which a quorum is present  shall be the act of the board
of directors,  unless the act of a greater number is required by statute,  these
by-laws, or the articles of incorporation.

     SECTION 8.  VACANCIES.  Any vacancy on the board of directors may be filled
by election at the next annual or special meeting of shareholders. A majority of
the board of  directors  may fill any  vacancy  prior to such  annual or special
meeting of shareholders.

     SECTION 9.  RESIGNATION AND REMOVAL OF DIRECTORS.  A director may resign at
any time upon  written  notice  to the board of  directors.  A  director  may be
removed with or without cause,  by a majority of  shareholders  if the notice of
the meeting names the director or directors to be removed at said meeting.

     SECTION 10.  INFORMAL  ACTION BY  DIRECTORS.  The authority of the board of
directors  may be exercised  without a meeting if a consent in writing,  setting
forth the action taken, is signed by all of the directors entitled to vote.

     SECTION 11. COMPENSATION.  The board of directors,  by the affirmative vote
of a majority of  directors  then in office,  and  irrespective  of any personal
interest of any of its members,  shall have  authority  to establish  reasonable
compensation  of all  directors  for services to the  corporation  as directors,
officers or  otherwise  notwithstanding  any director  conflict of interest.  By
resolution of the board of directors,  the directors may be paid their  expense,
if any, of attendance at each meeting of the board.  No such payment  previously
mentioned  in  this  section  shall  preclude  any  director  from  serving  the
corporation in any other capacity and receiving compensation therefor.

     SECTION 12.  PRESUMPTION OF ASSENT.  A director of the  corporation  who is
present at a meeting of the board of directors at which action on any  corporate
matter is taken shall be  conclusively  presumed to have  assented to the action
taken  unless his or her dissent  shall be entered in the minutes of the meeting
or unless he or she shall file his or her  written  dissent to such  action with
the person acting as the secretary of the meeting before the adjournment thereof
or shall forward such dissent by  registered or certified  mail to the secretary
of the corporation  immediately after the adjournment of the meeting. Such right
to dissent shall not apply to a director who voted in favor of such action.


     SECTION 13. COMMITTEES. A majority of the board of directors may create one
or more committees of two or more members to exercise  appropriate  authority of
the board of directors.  A majority of such committee shall  constitute a quorum
for transaction of business. A committee may transact business without a meeting
by unanimous written consent.


                                   ARTICLE IV

                                    OFFICERS

     SECTION 1. NUMBER.  The officers of the  corporation  shall be a president,
one or more vice-presidents,  a treasurer, a secretary,  and such other officers
as may be  elected  or  appointed  by the  board of  directors.  Any two or more
offices may be held by the same person.

     SECTION 2.  ELECTION AND TERM OF OFFICE.  The  officers of the  corporation
shall be elected  annually by the board of directors at the first meeting of the
board of  directors  held after each  annual  meeting  of  shareholders.  If the
election of officers  shall not be held at such meeting,  such election shall be
held as soon thereafter as conveniently  may be.  Vacancies may be filled or new
offices  created  and  filled at any  meeting  of the board of  directors.  Each
officer shall hold office until his  successor  shall have been duly elected and
shall have  qualified  or until his death or until he shall resign or shall have
been removed in the manner  hereinafter  provided.  Election of an officer shall
not of itself create contract rights.

     SECTION  3.  REMOVAL.  Any  officer  elected or  appointed  by the board of
directors may be removed by the board of directors  whenever in its judgment the
best interest of the corporation would be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.

     SECTION 4. PRESIDENT AND CHAIRMAN OF THE BOARD OF DIRECTORS.  The President
and Chairman of the Board of Directors shall be the principal  executive officer
of the  corporation.  Subject  to the  direction  and  control  of the  board of
directors, he/she shall be in charge of the business of the corporation;  he/she
shall see that the  resolutions  and  directions  of the board of directors  are
carried into effect except in those  instances in which that  responsibility  is
specifically  assigned to some other person by the board of  directors;  and, in
general  he/she shall  discharge all duties  incident to the office of president
and such other duties as may be prescribed  by the board of directors  from time
to time. He shall preside at all meetings of the  shareholders  and of the board
of  directors.  Except in those  instances in which the  authority to execute is
expressly  delegated  to  another  officer  or  agent  of the  corporation  or a
different mode of execution is expressly prescribed by the board of directors or
these by-laws,  he may execute for the corporation  certificates for its shares,
and any contracts, deeds, mortgages, bonds, or other instruments which the board
of directors has authorized to be executed, and he may accomplish such execution
either under or without the seal of the corporation  and either  individually or
with the  secretary,  any assistant  secretary,  or any other officer  thereunto
authorized by the board of directors,  according to the requirements of the form
of the instrument.  He may vote all securities which the corporation is entitled
to vote  except  as and to the  extent  such  authority  shall  be  vested  in a
different officer or agent of the corporation by the board of directors.

     SECTION 5. EXECUTIVE  VICE-PRESIDENT.  The executive  vice-president  shall
assist the  president and chairman of the board of directors in the discharge of
his/her  duties as from time to time may be assigned to him/her by the president
and  chairman of the board of  directors  or by the board of  directors.  In the
absence of the president and chairman of the board of directors, or in the event
of his/her  inability  or refusal to act,  the  executive  vice-president  shall
perform the duties of the president and chairman of the board of directors,  and
when  so  acting,  shall  have  all  the  powers  of and be  subject  to all the
restrictions  upon the president and chairman of the board of directors.  Except
in those  instances in which the authority to execute is expressly  delegated to
another  officer or agent of the corporation or a different mode of execution is
expressly  prescribed by the board of directors or these  by-law,  the executive
vice-president  may execute for the corporation  certificates for its shares and
any contracts,  deeds, mortgages,  bonds or other instruments which the board of
directors  has  authorized  to be  executed,  and  he/she  may  accomplish  such
execution  either  under or  without  the  seal of the  corporation  and  either
individually or with the secretary, and assistant secretary, or any other office
thereunto authorized by the board of directors, according to the requirements of
the form of the instrument.

     SECTION 6. THE TREASURER.  The treasurer shall be the principal  accounting
and financial  officer of the  corporation.  He shall: (a) have charge of and be
responsible   for  the   maintenance  of  adequate  books  of  account  for  the
corporation;  (b) have  charge and  custody of all funds and  securities  of the
corporation,  and be responsible  therefor and for the receipt and  disbursement
thereof;  and (c) perform all the duties incident to the office of treasurer and
such other  duties as from time to time may be assigned to him by the  president
or by the  board of  directors.  If  required  by the  board of  directors,  the
treasurer shall give a bond for the faithful discharge of his duties in such sum
and with such surety or sureties as the board of directors may determine.

     SECTION 7. THE SECRETARY.  The secretary  shall:  (a) record the minutes of
the shareholders'  and of the board of directors'  meetings in one or more books
provided for that purpose; (b) see that all notices are duly given in accordance
with the  provisions  of these by-law or as required by law; (c) be custodian of
the corporate records and of the seal of the corporation; (d) keep a register of
the  post-office  address of each  shareholder  which shall be  furnished to the
secretary by such shareholder; (e) sign with the president, or a vice-president,
or  any  other  officer   thereunto   authorized  by  the  board  of  directors,
certificates for shares of the  corporation,  the issue of which shall have been
authorized  by the board of  directors,  and any  contracts,  deeds,  mortgages,
bonds,  or other  instruments  which the board of directors has authorized to be
executed,  according to the  requirements of the form of the instrument,  except
when a different  mode of  execution  is  expressly  prescribed  by the board of
directors or these by-laws;  (f) have general charge of the stock transfer books
of the  corporation;  (g) have authority to certify the by-laws,  resolutions of
the  shareholders  and board of  directors  and  committees  thereof,  and other
documents of the corporation as true and correct copies thereof; and (h) perform
all duties  incident to the office of  secretary  and such other  duties as from
time to time  may be  assigned  to  him/her  by the  president  or the  board of
directors.

     SECTION 8.  ASSISTANT  TREASURER AND ASSISTANT  SECRETARIES.  The assistant
treasurers  and  assistant  secretaries  shall  perform  such duties as shall be
assigned to them by the  treasurer  or the  secretary,  respectively,  or by the
president or the board of directors. The assistant secretaries may sign with the
president, or a vice-president, or any other officer thereunto authorized by the
board of directors,  certificates  for shares of the  corporation,  the issue of
which shall have been  authorized by the board of directors,  and any contracts,
deeds,  mortgages,  bonds, or other instruments which the board of directors has
authorized  to be  executed,  according to the  requirements  of the form of the
instrument, except when a different mode of execution is expressly prescribed by
the  board of  directors  or  these  by-laws.  The  assistant  treasurers  shall
respectively, if required by the board of directors, give bonds for the faithful
discharge  of their  duties in such sums and with such  sureties as the board of
directors shall determine.

     SECTION 9. SALARIES.  The salaries of the officers shall be fixed from time
to time by the  board  of  directors  and no  officer  shall be  prevented  from
receiving  such  salary by reason of the fact that he is also a director  of the
corporation.


                                    ARTICLE V

                      CONTRACTS, LOANS, CHECKS AND DEPOSITS

     SECTION 1.  CONTRACTS.  The board of directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the  corporation,  and such authority
may be general or confined to specific interests.

     SECTION 2. LOANS. No loans shall be contracted on behalf of the corporation
and no evidences of indebtedness  shall be issued in its name unless  authorized
by a resolution of the board of directors.

     SECTION 3. CHECKS,  DRAFTS, ETC. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness is issued in the name
of the corporation, shall be signed by such officer or officers, agent or agents
of the  corporation and in such manner as shall from time to time be determined
by resolution of the board of directors.

     SECTION 4. DEPOSITS.  All funds of the corporation  not otherwise  employed
shall be deposited  from time to time to the credit of the  corporation  in such
banks,  trust  companies or other  depositories  as the board of  directors  may
select.


                                    ARTICLE V

                            SHARES AND THEIR TRANSFER

     SECTION 1. SHARES  REPRESENTED BY CERTIFICATES AND  UNCERTIFICATED  SHARES.
Shares either shall be represented by  certificates  or shall be  uncertificated
shares.

     Certificates  representing shares of the corporation shall be signed by the
appropriate  officers and may be sealed with the seal or a facsimile of the seal
of the  corporation.  If a certificate is  countersigned  by a transfer agent or
registrar,  other than the corporation or its employee, any other signatures may
be  facsimile.  Each  certificate  representing  shares  shall be  consecutively
numbered or otherwise identified, and shall also state the name of the person to
whom issued,  the number and class of shares  (with  designation  of series,  if
any), the date of issue,  and that the corporation is authorized to issue shares
of more than one class or of series within a class,  the certificate  shall also
contain such information or statement as may be required by law.

     Unless prohibited by the articles of incorporation,  the board of directors
may  provide  by  resolution  that  some or all of any class or series of shares
shall be  uncertificated  shares.  Any such resolution shall not apply to shares
represented by a certificate  until the certificate has been  surrendered to the
corporation.  Within a  reasonable  time  after  the  issuance  or  transfer  of
uncertificated shares, the corporation shall send the registered owner thereof a
written notice of all information that would appear on a certificate.  Except as
otherwise  expressly provided by law, the rights and obligations to those of the
holders of  uncertificated  shares shall be identical to those of the holders of
certificates representing shares of the same class and series.

     The name and  address of each  shareholder,  the number and class of shares
held and the date on which the shares were issued  shall be entered on the books
of the  corporation.  The person in whose name shares  stand on the books of the
corporation  shall be deemed the owner  thereof for all  purposes as regards the
corporation.

     SECTION 2. LOST  CERTIFICATES.  If a  certificate  representing  shares has
allegedly  been lost or destroyed the board of directors may in its  discretion,
except as may be required by law,  direct that a new  certificate be issued upon
such indemnification and other reasonable requirements as it may impose.

     SECTION 3. TRANSFER OF SHARES.  Transfer of shares of the corporation shall
be recorded on the books of the corporation. Transfer of shares represented by a
certificate,  except in the case of a lost or  destroyed  certificate,  shall be
made on  surrender  for  cancellation  of the  certificate  for such  shares.  A
certificate  presented  for transfer must be duly  endorsed and  accompanied  by
proper  guaranty  of  signature  and  other  appropriate   assurances  that  the
endorsement is effective.  Transfer of an uncertificated  share shall be made on
receipt by the corporation of an instruction  from the registered owner or other
appropriate  person.  The instruction  shall be in writing or a communication in
such form as may be agreed upon in writing by the corporation.


                                   ARTICLE VII

                                   FISCAL YEAR

 The fiscal year of the corporation shall be fixed by resolution of the board of directors.


                                  ARTICLE VIII

                                  DISTRIBUTIONS

     The  board of  directors  may  authorize,  and the  corporation  may  make,
distributions to its  shareholders,  subject to any restrictions in its articles
of incorporation or provided by law.


                                   ARTICLE IX

                                      SEAL

     The corporate seal shall have inscribed thereon the name of the corporation
and the words "Corporate Seal,  Illinois." The seal may be used by causing it or
a  facsimile  thereof  to be  impressed  or  affixed  or  in  any  other  manner
reproduced,  provided that the affixing of the  corporate  seal to an instrument
shall  not  give the  instrument  additional  force or  effect,  or  change  the
construction thereof, and the use of the corporate seal is not mandatory.


                                    ARTICLE X

                                WAIVER OF NOTICE

     Whenever any notice is required to be given under the  provisions  of these
by-laws or under the  provisions of the articles of  incorporation  or under the
provisions of The Business  Corporation  Act of the State of Illinois,  a waiver
thereof in writing,  signed by the person or persons  entitled  to such  notice,
whether before or after the time stated therein,  shall be deemed  equivalent to
the giving of such notice.  Attendance at any meeting shall constitute waiver of
notice  thereof  unless the person at the meeting  objects to the holding of the
meeting because proper notice was not given.


                                   ARTICLE XI

                          INDEMNIFICATION OF OFFICERS,
                         DIRECTORS, EMPLOYEES AND AGENTS

     SECTION 1. The corporation shall indemnify any person who was or is a party
or is  threatened  to be made a party to any  threatened,  pending or  completed
action,  suit  or  proceeding,   whether  civil,  criminal,   administrative  or
investigative  (other than an action by or in the right of the  corporation)  by
reason of the fact that such person is or was a director,  officer,  employee or
agent of the corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments,  fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such  action,  suit or  proceeding  if he acted in good faith and in a manner he
reasonably  believed  to be in or not  opposed  to  the  best  interests  of the
corporation,  and,  with respect to any criminal  action or  proceeding,  had no
reasonable cause to believe his or her conduct was unlawful.  The termination of
any action, suit or proceedings by judgment or settlement,  conviction or upon a
plea of nolo  contendere  or its  equivalent,  shall not,  of  itself,  create a
presumption  that the person did not act in good faith and in a manner  which he
or she  reasonably  believed to be in or not opposed to the best interest of the
corporation,  and  with  respect  to any  criminal  action  or  proceeding,  had
reasonable cause to believe that his conduct was unlawful.

     SECTION 2. The corporation shall indemnify any person who was or is a party
or is  threatened  to be made a party to any  threatened,  pending or  completed
action or suit by or in the right of the  corporation  to procure a judgment  in
its favor by reason of the fact that such person is or was a director,  officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director,  officer,  employee or agent of another  corporation,
partnership,   joint  venture,   trust  or  other  enterprise  against  expenses
(including  attorneys' fees) actually and reasonably  incurred by such person in
connection  with the defense or  settlement  of such action or suit if he or she
acted in good faith and in a manner he or she  reasonably  believed  to be in or
not  opposed  to the  best  interests  of the  corporation  and  except  that no
indemnification  shall be made in respect  of any  claim,  issue or matter as to
which such  person  shall have been  adjudged  to be liable  for  negligence  or
misconduct in the performance of his duty to the corporation  unless and only to
the  extent  that the  court in which  such  action  or suit was  brought  shall
determine upon  application  that despite the  adjudication  of liability but in
view of all the  circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the court shall deem proper.

     SECTION 3. To the extent that a director,  officer,  employee or agent of a
corporation has been successful,  on the merits or otherwise,  in the defense of
any action, suit or proceeding referred to in sections 1 and 2, or in defense of
any claim,  issue or matter  therein,  such person shall be indemnified  against
expenses  actually  and  reasonably   incurred  by  such  person  in  connection
therewith.

     SECTION 4. Any indemnification  under sections 1 and 2 shall be made by the
corporation  only as authorized in the specific case upon a  determination  that
indemnification  of the  director,  officer,  employee or agent is proper in the
circumstances  because he or she has met the applicable  standard of conduct set
forth in sections 1 and 2. Such determination  shall be made (a) by the board of
directors by a majority  vote of a quorum  consisting  of directors who were not
parties  to such  action,  suit or  proceeding,  or (b) if such a quorum  is not
obtainable,  or, even if  obtainable,  a quorum of  disinterested  directors  so
directs,  by  independent  legal  counsel  in a written  opinion,  or (c) by the
shareholders.

     SECTION 5. Expenses incurred in defending a civil or criminal action,  suit
or proceeding may be paid by the corporation in advance of the final disposition
of such action,  suit or proceeding,  as authorized by the board of directors in
the  specific  case,  upon  receipt  of an  undertaking  by or on  behalf of the
director,  officer,  employee  or agent to repay  such  amount,  unless it shall
ultimately be  determined  that he or she is entitled to be  indemnified  by the
corporation as authorized in this article.

     SECTION 6. The indemnification provided by this article shall not be deemed
exclusive  of any other  rights to which those  seeking  indemnification  may be
entitled  under any by-law,  agreement  vote of  shareholders  or  disinterested
directors or otherwise, both as to action in his or her official capacity and as
to action in another  capacity while holding such office,  and shall continue as
to a person  who has ceased to be a  director,  officer,  employee  or agent and
shall inure to the benefit of the heirs,  executors and administrators of such a
person.

     SECTION  7. The  corporation  shall  have power to  purchase  and  maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the corporation
as a director,  officer, employee or agent of another corporation,  partnership,
joint venture,  trust or other enterprise against any liability asserted against
such person and incurred by such person in any such capacity,  or arising out of
his or her status as such,  whether or not the corporation  would have the power
to indemnify such person  against such  liability  under the provisions of these
sections.

     SECTION 8. If the corporation  has paid indemnity or had advanced  expenses
to a director,  officer,  employee or agent,  the  corporation  shall report the
indemnification  or advance in  writing to the  shareholders  with or before the
notice of the next shareholders' meeting.

     SECTION 9. References to "the  corporation"  shall include,  in addition to
the surviving  corporation,  any merging corporation,  including any corporation
having merged with a merging  corporation,  absorbed in a merger which otherwise
would have  lawfully been entitled to indemnify  its  directors,  officers,  and
employees or agents.

                                   ARTICLE XII

                                   AMENDMENTS

     Unless the power to make, alter, amend or repeal the by-laws is reserved to
the  shareholders  by  the  articles  of  incorporation,   the  by-laws  of  the
corporation may be made, altered, amended or repealed by the shareholders or the
board of directors,  but no by-law adopted by the  shareholders  may be altered,
amended or repealed  by the board of  directors  if the by-laws so provide.  The
by-laws may contain any  provisions  for the  regulation  and  management of the
affairs of the  corporation  not  inconsistent  with the law or the  articles of
incorporation.




                                   CERTIFICATE

     The  undersigned,  the duly  elected and acting  Secretary  of United Trust
Group,  Inc.,  hereby  certifies  that the following  amendment to the Bylaws of
United Trust Group,  Inc. was adopted by resolution of the Board of Directors of
United Trust Group, Inc. on March 26, 2002, and that such resolution  remains in
full force and effect and has not been amended, altered or repealed.

          "WHEREAS,  the UTG Board  desires to amend  Article III,  Section 2 of
     UTG's  Bylaws in order to  establish  a  variable  range for the  number of
     directors of the company.

          NOW  THEREFORE  BE IT RESOLVED,  that  Article  III,  Section 2 of the
     company's  Bylaws, be and hereby is amended and restated in its entirety as
     follows:

          "Section 2. NUMBER, TENURE AND QUALIFICATIONS. The number of directors
     of the corporation shall be no more than eleven (11) nor less than six (6),
     the exact  number of  directors  within such range to be fixed from time to
     time by  resolution  of the board of directors or the  shareholders  of the
     corporation.  No decrease in the number of directors  shall have the effect
     of shortening the term of any incumbent director. Each successor shall have
     been elected and qualified.  Directors need not be residents of Illinois or
     shareholders of the corporation."


Date:  _______________, 2002

                                                   /S/ Theodore C. Miller
                                                   Theodore C. Miller, Secretary

                                                                     Exhibit 4.1
                  Agreement pursuant to Item 601(b)(4)(iii)(A)
                               of Regulation S-K

The  registrant  hereby  undertakes  and agrees to furnish to the Securities and
Exchange  Commission  unpon  request a copy of any  instrument  relating  to, or
defining  the rights of the holders  of, any  long-term  debt of the  registrant
and/or its  subsudiaries,  a copy of which has not been filed in  reliance  upon
Item  601(b)(4)(iii)(A)  of Regulation S-K or which,  although previously filed,
shall have  become  stale in the sense of Item 10(d) of  RegulationS-K  or which
shall have been  deposed of by the  Commission  pursuant  to its Record  Control
Schedule.  This  Agreement  and  undertaking  is intended to be  effective  with
respect to registrant's  long-term debt instruments whether securities have been
issued thereunder or are yet to be issued thereunder.


Dated:   August 12, 2002


                                          By:   /s/ Theodore C. Miller
                                          Theodore C. Miller, Senior Vice President
                                          Corporate Secretary and Chief Financial
                                          Officer