EXHIBIT 4.1

                                     BYLAWS

                                       OF

                        PINNACLE WEST CAPITAL CORPORATION
                       (AMENDED AS OF SEPTEMBER 18, 2002)

                            I. REFERENCES; SENIORITY

     1.01. REFERENCES.  Any reference herein made to law will be deemed to refer
to the law of the  State of  Arizona,  including  any  applicable  provision  or
provisions of Chapters 1-17 and Chapter 23 of Title 10, Arizona Revised Statutes
(or its successor), as at any given time in effect. Any reference herein made to
the Articles will be deemed to refer to the  applicable  provision or provisions
of the Articles of Incorporation of the Company,  and all amendments thereto, as
at any  given  time  on file  with  the  Arizona  Corporation  Commission  (this
reference  to that  Commission  being  intended to include any  successor to the
incorporating  and related  functions  being performed by that Commission at the
date of the initial adoption of these Bylaws).

     1.02. SENIORITY. Except as indicated in Part X of these Bylaws, the law and
the Articles (in that order of  precedence)  will in all respects be  considered
senior and superior to these Bylaws,  with any  inconsistency  to be resolved in
favor of the law and the Articles (in that order of precedence),  and with these
Bylaws to be deemed  automatically  amended from time to time to  eliminate  any
such inconsistency which may then exist.

     1.03.  SHAREHOLDERS  OF RECORD.  Except as  otherwise  required  by law and
subject to any procedure  established by the Company pursuant to Arizona Revised
Statutes  Section  10-723  (or any  comparable  successor  provision),  the word
"SHAREHOLDER"  as used herein shall mean one who is a holder of record of shares
in the Company.

                            II. SHAREHOLDERS MEETINGS

     2.01. ANNUAL MEETINGS.  An annual meeting of shareholders shall be held for
the election of directors at such date, time and place, either within or without
the  State of  Arizona,  as may be  designated  by  resolution  of the  Board of
Directors from time to time. Any other proper  business may be transacted at the
annual  meeting.  A special  meeting may be called and held in lieu of an annual
meeting  pursuant  to the  provisions  of  Section  2.02  below,  and  the  same
proceedings (including the election of directors) may be conducted thereat as at
a regular  meeting.  Any  director  elected  at any annual  meeting,  or special
meeting in lieu of an annual meeting, will continue in office until the election
of his or her successor,  subject to his or her (a) earlier resignation pursuant
to Section 6.01 below,  (b) removal pursuant to Section 3.13 below, or (c) death
or disqualification.

     2.02.  SPECIAL  MEETINGS.  Except as  otherwise  required  by law,  special
meetings of the  shareholders  may be held  whenever and wherever  called by the
Chairman of the Board,  the President,  or a majority of the Board of Directors,
but such  special  meetings  may not be called by any other  person or  persons.
Business  transacted at any special meeting of shareholders  shall be limited to
the purposes stated in the notice.
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     2.03.  NOTICE.  Notice of any meeting of the shareholders  will be given as
provided by law to each  shareholder  entitled to vote at such  meeting  and, if
required by law, to each other  shareholder of the Company.  Any such notice may
be waived as provided by law.

     2.04.  RIGHT TO VOTE.  For each meeting of the  shareholders,  the Board of
Directors  will fix in advance a record  date as  contemplated  by law,  and the
shares of stock and the shareholders  "ENTITLED TO VOTE" (as that or any similar
term is herein used) at any meeting of the shareholders will be determined as of
the applicable record date. The Secretary (or in his or her absence an Assistant
Secretary)  will see to the making and production of any record of  shareholders
entitled to vote or otherwise  entitled to notice of shareholders  meetings,  in
either case which is required by law.  Any voting  entitlement  may be exercised
through  proxy,  or in such other  manner as  specifically  provided  by law, in
accordance  with the  applicable  law.  In the event of  contest,  the burden of
proving  the  validity of any  undated or  irrevocable  proxy will rest with the
person  seeking to  exercise  the same.  A  telegram,  cablegram,  or  facsimile
appearing  to have  been  transmitted  by a  shareholder  (or by his or her duly
authorized attorney-in-fact) or other means of voting by telephone or electronic
transmission  may be accepted as a  sufficiently  written and executed  proxy if
otherwise permitted by law.

     2.05. NOTICE OF SHAREHOLDER BUSINESS AND NOMINATIONS.

          (a)  Annual Meetings of  Shareholders.  (1) Nominations of persons for
               election  to the  Board  of  Directors  of the  Company  and  the
               proposal of business to be considered by the  shareholders may be
               made at an annual  meeting of  shareholders  only (i) pursuant to
               the Company's notice of meeting (or any supplement thereto), (ii)
               by or at the  direction of the Board of Directors or (iii) by any
               shareholder  of the Company who was a shareholder at the time the
               respective  notice provided for in this Section 2.05 is delivered
               to the  Secretary of the Company,  who is entitled to vote at the
               meeting and who complies with the notice  procedures set forth in
               this Section 2.05.

               (2)  For  nominations  or other  business to be properly  brought
               before an annual  meeting  by a  shareholder  pursuant  to clause
               (iii) of paragraph  (a)(1) of this Section 2.05, the  shareholder
               must have given timely notice thereof in writing to the Secretary
               of the  Company  and any such  proposed  business  other than the
               nominations  of persons for  election  to the Board of  Directors
               must  constitute a proper matter for  shareholder  action.  To be
               timely, a shareholder  notice shall be delivered to the Secretary
               at the principal  executive offices of the Company not later than
               the close of business  (a) with respect to business to be brought
               before the meeting,  on the ninetieth day or not earlier than the
               close of business on the one hundred  twentieth  day prior to the
               first   anniversary  of  the  preceding   year's  annual  meeting
               (provided, however, that in the event that the date of the annual
               meeting  has been  changed  by more  than  thirty  days from such
               anniversary  date, notice by the shareholder must be so delivered
               not later than the close of business  on the tenth day  following
               the day on which public  announcement of the date of such meeting
               was  mailed  or public disclosure of the annual meeting was made,

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               whichever  first occurs),  and (b) with respect to nominations of
               persons to be elected to the Board of Directors,  the one-hundred
               and  eightieth  day prior to the date of the meeting at which the
               election is to occur.  In no event shall the public  announcement
               of an adjournment or postponement of an annual meeting commence a
               new time  period (or extend any time  period) for the giving of a
               shareholder's  notice  as  described  above.  Such  shareholder's
               notice  shall  set  forth:   (a)  as  to  each  person  whom  the
               shareholder proposes to nominate for election as a director,  all
               information  relating  to  such  person  that is  required  to be
               disclosed in  solicitations  of proxies for election of directors
               in an election contest,  or is otherwise  required,  in each case
               pursuant to Regulation 14A under the  Securities  Exchange Act of
               1934, as amended (the "EXCHANGE ACT"), and Rule 14a-11 thereunder
               (and such  person's  written  consent to being named in the proxy
               statement  as a nominee and to serving as a director if elected);
               (b) as to any other  business  that the  shareholder  proposes to
               bring before the  meeting,  a brief  description  of the business
               desired  to be  brought  before  the  meeting,  the  text  of the
               proposal  or  business  (including  the  text of any  resolutions
               proposed for  consideration  and, in the event that such business
               includes  a  proposal  to amend the  Bylaws of the  Company,  the
               language for the proposed amendment),  the reasons for conducting
               such business at the meeting,  and any material  interest in such
               business of such shareholder and the beneficial owner, if any, on
               whose behalf the proposal is made; and (c) as to the  shareholder
               giving the  notice and the  beneficial  owner,  if any,  on whose
               behalf  the  nomination  or  proposal  is made,  (i) the name and
               address  of such  shareholder,  as they  appear on the  Company's
               books, and of such beneficial owner, (ii) the class and number of
               shares  of  capital   stock  of  the   Company   that  are  owned
               beneficially   and  of  record  by  such   shareholder  and  such
               beneficial owner, (iii) a representation  that the shareholder is
               a holder of record of stock of the  Company  entitled  to vote at
               such  meeting  and intends to appear in person or by proxy at the
               meeting  to  propose  such  business  or  nomination,  and (iv) a
               representation  whether the shareholder or the beneficial  owner,
               if any, intends or is part of a group that intends (a) to deliver
               a proxy statement and/or form of proxy to holders of at least the
               percentage of the Company's outstanding capital stock required to
               approve or adopt the  proposal  or elect the  nominee  and/or (b)
               otherwise to solicit proxies from shareholders in support of such
               proposal or  nomination.  The  Company  may require any  proposed
               nominee to furnish such other  information  as it may  reasonably
               require to determine the eligibility of such proposed  nominee to
               serve as a director of the Company.

          (b)  Special  Meetings of  Shareholders.  Only such business  shall be
               conducted at a special meeting of shareholders as shall have been
               brought  before the meeting  pursuant to the Company's  notice of
               meeting.

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          (c)  General.  (1) Only such persons who are  nominated in  accordance
               with the  procedures  set  forth in this  Section  2.05  shall be
               eligible  to be  elected  at an  annual  or  special  meeting  of
               shareholders  of the Company to serve as directors  and only such
               business shall be conducted at a meeting of shareholders as shall
               have been  brought  before  the  meeting in  accordance  with the
               procedures  set forth in this Section  2.05.  Except as otherwise
               provided by law, the Chairman of the meeting shall have the power
               and duty (a) to determine  whether a  nomination  or any business
               proposed to be brought  before the meeting was made or  proposed,
               as the case may be, in accordance  with the  procedures set forth
               in this  Section  2.05  (including  whether  the  shareholder  or
               beneficial  owner,  if any,  on whose  behalf the  nomination  or
               proposal is made solicited (or is part of a group that solicited)
               or did not so solicit,  as the case may be, proxies in support of
               such  shareholder's  nominee or proposal in compliance  with such
               shareholder's  representation as required by clause (a)(2)(c)(iv)
               of this  Section  2.05)  and (b) if any  proposed  nomination  or
               business was not made or proposed in compliance with this Section
               2.05, to declare that such  nomination  shall be  disregarded  or
               that such proposed business shall not be transacted.

               (2)  For purposes of this  Section  2.05,  "PUBLIC  ANNOUNCEMENT"
               shall mean  disclosure  in a press  release  reported  by the Dow
               Jones News Service,  Associated Press or comparable national news
               service or in a document  publicly  filed by the Company with the
               Securities and Exchange  Commission pursuant to Section 13, 14 or
               15(d) of the Exchange Act.

               (3)  Notwithstanding  the  foregoing  provisions  of this Section
               2.05,  a  shareholder  shall  also  comply  with  all  applicable
               requirements  of the Exchange  Act and the rules and  regulations
               thereunder  with respect to the matters set forth in this Section
               2.05.  Nothing in this Section 2.05 shall be deemed to affect any
               rights (a) of shareholders  to request  inclusion of proposals in
               the  Company's  proxy  statement  pursuant  to Rule  14a-8 of the
               Exchange  Act or (b) of the  holders of any  series of  Preferred
               Stock to elect directors pursuant to any applicable provisions of
               the Articles.

     2.06. RIGHT TO ATTEND.  Except only to the extent of persons  designated by
the Board of  Directors  or the Chairman of the meeting to assist in the conduct
of the  meeting (as  referred to in Sections  2.08 and 2.09 below) and except as
otherwise  permitted  by the Board or such  Chairman,  the  persons  entitled to
attend any meeting of shareholders may be confined to (i) shareholders  entitled
to vote  thereat  and other  shareholders  entitled to notice of the meeting and
(ii) the persons upon whom  proxies  valid for purposes of the meeting have been
conferred or their duly appointed  substitutes  (if the related proxies confer a
power of substitution);  provided,  however,  that the Board of Directors or the
Chairman of the  meeting  may  establish  rules  limiting  the number of persons
referred  to in  clause  (ii) as being  entitled  to  attend  on  behalf  of any
shareholder so as to preclude such an excessively  large  representation of such
shareholder  at the meeting as, in the  judgment of the Board or such  Chairman,
would be unfair to other  shareholders  represented  at the meeting or be unduly
disruptive  of the orderly  conduct of business at such  meeting  (whether  such

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representation would result from fragmentation of the aggregate number of shares
held by such shareholder for the purpose of conferring proxies,  from the naming
of an excessively  large proxy delegation by such shareholder or from employment
of any other  device).  A person  otherwise  entitled to attend any such meeting
will cease to be so entitled if, in the judgment of the Chairman of the meeting,
such person engages thereat in disorderly conduct impeding the proper conduct of
the meeting in the interests of all shareholders as a group.

     2.07.  QUORUM.  Except as otherwise  provided by law, the Articles or these
Bylaws,  at each meeting of  shareholders  the presence in person or by proxy of
the holders of a majority  in voting  power of the  outstanding  shares of stock
entitled to vote at the meeting shall be necessary and  sufficient to constitute
a quorum.

     2.08.  ELECTION  INSPECTORS.  The Board of  Directors,  in  advance  of any
shareholders  meeting may appoint an election  inspector or inspectors to act at
such  meeting  (and  any  adjournment  thereof).  If an  election  inspector  or
inspectors  are not so  appointed,  the Chairman of the meeting may or, upon the
request  of  any  person  entitled  to  vote  at the  meeting  will,  make  such
appointment.  If any person appointed as an inspector fails to appear or to act,
a substitute may be appointed by the Chairman of the meeting. If appointed,  the
election  inspector or inspectors (acting through a majority of them if there be
more  than  one)  will   determine  the  number  of  shares   outstanding,   the
authenticity,  validity  and  effect of  proxies,  the  credentials  of  persons
purporting to be  shareholders  or persons named or referred to in proxies,  and
the number of shares  represented  at the  meeting in person and by proxy;  they
will  receive and count  votes,  ballots and  consents  and announce the results
thereof; they will hear and determine all challenges and questions pertaining to
proxies and  voting;  and, in  general,  they will  perform  such acts as may be
proper  to  conduct   elections  and  voting  with  complete   fairness  to  all
shareholders. No such election inspector need be a shareholder of the Company.

     2.09.  ORGANIZATION AND CONDUCT OF MEETINGS. Each shareholders meeting will
be called to order and thereafter  chaired by the Chairman of the Board if there
then is one;  or,  if not,  or if the  Chairman  of the  Board is  absent  or so
requests,  then by the  President;  or if both the Chairman of the Board and the
President  are  unavailable,  then by such other  officer of the Company or such
shareholder as may be appointed by the Board of Directors.  The Secretary (or in
his or her absence an Assistant  Secretary) of the Company will act as secretary
of  each  shareholders  meeting;  if  neither  the  Secretary  nor an  Assistant
Secretary is in  attendance,  the Chairman of the meeting may appoint any person
(whether a  shareholder  or not) to act as secretary  thereat.  After  calling a
meeting to order,  the  Chairman  thereof may require  the  registration  of all
shareholders  intending to vote in person,  and the filing of all proxies,  with
the election inspector or inspectors, if one or more have been appointed (or, if
not,  with the  secretary of the  meeting).  After the  announced  time for such
filing of proxies has ended,  no further  proxies or changes,  substitutions  or
revocations  of proxies will be  accepted.  If  directors  are to be elected,  a
tabulation of the proxies so filed will, if any person  entitled to vote in such
election so requests, be announced at the meeting (or adjournment thereof) prior
to the closing of the election polls.

     Absent a showing of bad faith on his or her part, the Chairman of a meeting
will,  among other  things,  have  absolute  authority to determine the order of
business to be conducted at such meeting and to establish rules for, and appoint

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personnel to assist in,  preserving  the orderly  conduct of the business of the
meeting  (including  any informal,  or question and answer,  portions  thereof).
Rules,  regulations  or  procedures  regarding  the conduct of the business of a
meeting, whether adopted by the Board of Directors or prescribed by the Chairman
of the  meeting,  may  include,  without  limitation,  the  following:  (i)  the
establishment of an agenda or order of business for the meeting;  (ii) rules and
procedures for maintaining order at the meeting and the safety of those present;
(iii)   limitations  on  attendance  at  or  participation  in  the  meeting  to
shareholders  of record of the Company,  their duly  authorized and  constituted
proxies  (subject to Section  2.06) or such other persons as the Chairman of the
meeting shall  determine;  (iv)  restrictions  on entry to the meeting after the
time  fixed  for the  commencement  thereof;  and (v)  limitations  on the  time
allotted to  questions  or comments  by  participants.  Unless and to the extent
determined by the Board of Directors or the Chairman of the meeting, meetings of
shareholders  shall not be required to be held in  accordance  with the rules of
parliamentary   procedure.  Any  informational  or  other  informal  session  of
shareholders conducted under the auspices of the Company after the conclusion of
or otherwise in conjunction with any formal business meeting of the shareholders
will be chaired by the same  person  who  chairs  the  formal  meeting,  and the
foregoing  authority  on his or her part  will  extend  to the  conduct  of such
informal session.

     2.10.  VOTING.  The number of shares  voted on any matter  submitted to the
shareholders  which is required to constitute  their action  thereon or approval
thereof will be determined in accordance with applicable law, the Articles,  and
these Bylaws, if applicable.  No ballot or change of vote will be accepted after
the polls have been declared  closed  following the ending of the announced time
for voting.

     2.11.  SHAREHOLDER  APPROVAL OR  RATIFICATION.  The Board of Directors  may
submit any contract or act for approval or ratification at any duly  constituted
meeting of the shareholders,  the notice of which either includes mention of the
proposed  submittal  or is waived as provided in Section  2.03 above.  Except as
otherwise  required by law (e.g.,  Arizona Revised Statutes Section 10-863),  if
any  contract or act so  submitted  is approved or ratified by a majority of the
votes cast thereon at such  meeting,  the same will be valid and as binding upon
the Company and all of its  shareholders as it would be if approved and ratified
by each and every shareholder of the Company.

     2.12.  CONTROL  SHARE ACT. The  provisions of Section  10-2721  through and
including Section 10-2727 of the Arizona Revised Statutes shall not apply to the
Company.

     2.13.  ADJOURNMENTS.  Any meeting of shareholders,  annual or special,  may
adjourn  from time to time to  reconvene  at the same or some other  place,  and
notice  need not be given of any such  adjourned  meeting  if the time and place
thereof are announced at the meeting at which the  adjournment is taken.  At the
adjourned  meeting the Company may transact  any  business  that might have been
transacted  at the original  meeting.  If the  adjournment  is for more than one
hundred and twenty days, or if after the  adjournment a new record date is fixed
for the adjourned  meeting,  notice of the  adjourned  meeting shall be given to
each shareholder of record entitled to vote at the meeting.

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                             III. BOARD OF DIRECTORS

     3.01.  MEMBERSHIP.  The Board of Directors of the corporation shall consist
of not less then  nine (9) nor more than  twenty-one  (21)  shareholders  of the
Company  or of any parent  corporation  thereof  (except  that it shall not be a
requirement  that any member of the initial  Board of Directors be a shareholder
of the Company or of any parent corporation thereof),  and shall be divided into
three classes in the manner  provided in the Articles  (Art.  Fifth).  The Board
will have the  exclusive  power to  increase  or  decrease  its size within such
limits.  Any  vacancy  occurring  in the  Board,  whether  by  reason  of death,
resignation,  disqualification  or otherwise,  may be filled by the directors as
contemplated  by law and as  provided in the  Articles  (Art.  Fifth).  Any such
increase  in the size of the  Board,  and the  filling  of any  vacancy  created
thereby,  will require action by a majority of the whole membership of the Board
as comprised immediately before such increase.

     3.02.  QUALIFICATIONS.  In order to qualify as a director, a person must be
the owner of one or more  shares of the  capital  stock of the Company or of any
parent  corporation  thereof  at the  time of  assuming  office  (except  as may
otherwise  be  provided  in these  Bylaws  or in the  Articles)  and for so long
thereafter as such person remains in office. A person will cease to qualify as a
director if he or she (i) is in good faith determined by a majority of the other
directors  then in office to be  physically  or mentally  incapable of competent
performance  as a  director  for  a  period,  starting  with  inception  of  the
incapacity, that has extended or is likely to extend for more than six months or
(ii) has  failed to attend  six  successive  regular  meetings  of the Board (as
determined in accordance  with Section 3.03 below) unless and to the extent such
failure is waived by a majority of the other directors then in office;  however,
disqualification  pursuant  to  clause  (i) or (ii) of this  sentence  will  not
preclude the subsequent  election or appointment of such person as a director by
the  shareholders  or the  Board  if a  majority  of  the  directors  in  office
immediately  prior to the  submission of such person for election or appointment
shall determine that his or her prior  incapacity or principal  reason for prior
non-attendance  no longer  exists.  A person will not  qualify  for  election or
appointment as a director,  whether  initially or on re-election  and whether by
the  shareholders  at their  annual  meeting  or by the  Board of  Directors  as
contemplated  in Section 3.01 above, if such person's 70th birthday occurs on or
has occurred  before the date of such election,  appointment or  re-election.  A
person who has been a full-time  employee of the Company  within  twelve  months
prior to the date of any election will not qualify for election as a director on
that date unless he or she then  remains a full-time  employee of the Company or
unless the Board of  Directors  specifically  authorizes  the  election  of such
person  (but it is not  intended  that  any  such  authorization  will  extend a
person's service on the Board beyond the age limitation set out in the preceding
sentence). A person who has qualified by age or employment status for his or her
most recent election as a director may serve  throughout the term for which such
person was elected,  notwithstanding  the occurrence of his or her 70th birthday
or  cessation of full-time  employment  by the Company  between the date of such
election and the end of such term,  subject,  however,  to his or her  otherwise
remaining qualified for such office.

     3.03. REGULAR MEETINGS.  A regular annual meeting of the directors is to be
held as soon as practicable  after the  adjournment of each annual  shareholders
meeting either at the place of the  shareholders  meeting or at such other place
as the directors  elected at the shareholders  meeting may have been informed of
at or before the time of their election. Regular meetings, other than the annual

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ones,  may be held at such  intervals  at such  places  and at such times as the
Board of Directors may provide.

     3.04.  SPECIAL MEETINGS.  Special meetings of the Board of Directors may be
held  whenever  and  wherever  called  for by the  Chairman  of the  Board,  the
President  or the number of  directors  which would be required to  constitute a
quorum.

     3.05.  NOTICE.  No notice need be given of regular meetings of the Board of
Directors.  Notice of the time and place (but not necessarily the purpose or all
of the purposes) of any special meeting will be given to each director in person
or  by  telephone,  or  via  mail,  telegram,  facsimile,  or  other  electronic
transmission addressed in the manner appearing on the Company's records.  Notice
to any director of any such special meeting will be deemed given sufficiently in
advance when (i) if given by mail,  the same is  deposited in the United  States
mail at least four days before the meeting date, with postage  thereon  prepaid,
(ii) if given by telegram,  the same is delivered  to the  telegraph  office for
fast transmittal at least 48 hours prior to the convening of the meeting,  (iii)
if given by facsimile or other electronic transmission,  the same is received by
the  director or an adult  member of his or her office  staff or  household,  at
least 24 hours prior to the  convening  of the  meeting,  or (iv) if  personally
delivered or given by telephone, the same is handed, or the substance thereof is
communicated  over the telephone to the director or to an adult member of his or
her office staff or  household,  at least 24 hours prior to the convening of the
meeting.  Any such notice may be waived as provided by law. No call or notice of
a meeting of  directors  will be  necessary  if each of them  waives the same in
writing or by attendance.  Any meeting,  once properly called and noticed (or as
to which call and notice have been waived as aforesaid) and at which a quorum is
formed,  may be  adjourned  to another  time and place by a majority of those in
attendance.

     3.06.  QUORUM;  VOTING.  A quorum for the  transaction  of  business at any
meeting or  adjourned  meeting of the  directors  will  consist of a majority of
those then in office. Any matter submitted to a meeting of the directors will be
resolved by a majority of the votes cast thereon,  except as otherwise  required
by these Bylaws  (ss.ss.  3.01 and 3.02 above and ss. 3.07 below),  by law or by
any applicable  Article.  However, in case of an equality of votes, the Chairman
of the meeting will have a second or deciding  vote.  Where action by a majority
of the whole  membership is required,  such requirement will be deemed to relate
to a majority  of the  directors  in office at the time the action is taken.  In
computing any such majority, whether for purposes of determining the presence of
a quorum  or the  adequacy  of the vote on any  proposed  action,  any  unfilled
vacancies at the time  existing in the  membership of the Board will be excluded
from the computation.

     3.07.  EXECUTIVE  COMMITTEE.  The Board of  Directors  may,  by  resolution
adopted by a majority of the whole  Board,  name three or more of its members as
an Executive Committee.  Such Executive Committee will have and may exercise the
powers of the Board of Directors in the  management  of the business and affairs
of the Company  while the Board is not in session,  except only as  precluded by
law or where  action  other than by a majority  of the votes cast is required by
these Bylaws, or the law (all as referred to in Section 3.06 above), and subject
to such limitations as may be included in any applicable  resolution passed by a
majority of the whole  membership of the Board. A majority of those named to the
Executive Committee will constitute a quorum.

                                       -8-
<PAGE>
     3.08.  OTHER  COMMITTEES.  The Board of Directors may designate one or more
additional committees, each committee to consist of one or more of the directors
of the Company.  The Board of Directors may  designate one or more  directors as
alternate  members of any committee,  who may replace any absent or disqualified
member at any  meeting  of the  committee.  Any such  committee,  to the  extent
permitted by law and to the extent  provided in the  resolution  of the Board of
Directors, shall have and may exercise all the powers and authority of the Board
of Directors in the  management of the business and affairs of the Company,  and
may  authorize  the seal of the  Company to be  affixed  to all papers  that may
require it.

     3.09.  COMMITTEE  FUNCTIONING.   Notice  requirements  and  related  waiver
provisions for meetings of the Executive  Committee and other  committees of the
Board will be the same as those set forth in Section  3.05 above for meetings of
the Board of Directors. Except as provided in the next two succeeding sentences,
a majority of those named to the Executive  Committee or any other  committee of
the Board will  constitute a quorum at any meeting  thereof  (with the effect of
departure of committee  members from a meeting and the computation of a majority
of committee members to be in accordance with the applicable policies of Section
3.06 above), and any matter submitted to a meeting of any such committee will be
resolved by a majority of the votes cast thereon.  No  distinction  will be made
among  ex-officio or other members of any such  committee for quorum,  voting or
other  purposes,  except that the  membership  of any committee  (including  the
Executive  Committee),  in  performing  any  function  vested  in it  as  herein
contemplated,  may be deemed to exclude any officer or employee of the  Company,
in either case, or other person having a direct or indirect personal interest in
any proposed  exercise of such  function,  whose  exclusion  for that purpose is
deemed  appropriate  by a  majority  of the  other  members  of  such  committee
proposing to perform such function.  All committees are to keep regular  minutes
of the transactions of their meetings.

     3.10.  ACTION BY  TELEPHONE  OR  CONSENT.  Any  meeting of the Board or any
committee thereof may be held by conference telephone or similar  communications
equipment as permitted by law, in which case any required notice of such meeting
may generally describe the arrangements  (rather than the place) for the holding
thereof,  and all other provisions herein contained or referred to will apply to
such meeting as though it were  physically  held at a single  place.  Action may
also be taken by the Board or any  committee  thereof  without a meeting  if the
members thereof consent in writing thereto as contemplated by law.

     3.11.  PRESUMPTION OF ASSENT. A director of the Company who is present at a
meeting of the Board of Directors,  or of any committee when corporate action is
taken is deemed to have  assented  to the  action  taken  unless  either (i) the
director  objects at the beginning of the meeting or promptly on the  director's
arrival  to  holding  it or  transacting  business  at  the  meeting;  (ii)  the
director's dissent or abstention from the action taken is entered in the minutes
of the meeting;  or (iii) the director delivers written notice of the director's
dissent  or  abstention  to the  presiding  officer  of the  meeting  before its
adjournment  or to the Company  before 5:00 P.M. on the next  business day after
the meeting.  The right of dissent or  abstention is not available to a director
who votes in favor of the action taken.

     3.12.  COMPENSATION.  By resolution of the Board, the directors may be paid
their expenses, if any, of attendance at each meeting of the Board of Directors,
or of any  committee,  and may be paid a fixed sum for  attendance  at each such
meeting  and/or a stated  salary as a  director  or  committee  member.  No such

                                       -9-
<PAGE>
payment  will  preclude  any  director  from  serving  the  Company in any other
capacity and receiving compensation therefor.

     3.13. REMOVAL. Any director or the entire Board of Directors may be removed
with or without cause, only at a special meeting of shareholders called for that
purpose,  by the affirmative vote of sixty-six and two-thirds  percent (66 2/3%)
of the  issued and  outstanding  shares of stock  then  entitled  to vote on the
election of directors, except that if less than the entire Board of Directors is
to be removed,  no one of the directors may be removed if the votes cast against
the  director's  removal  would be  sufficient  to elect  the  director  if then
cumulatively  voted at an  election  for the  class of  directors  of which  the
director is a part.

                             IV. OFFICERS - GENERAL

     4.01. ELECTIONS AND APPOINTMENTS. The directors may elect or appoint one or
more of the  officers  of the  Company  contemplated  in Part V below.  Any such
election or  appointment  will regularly take place at the annual meeting of the
directors,  but  elections of officers  may be held at any other  meeting of the
Board.  A person  elected or appointed to any office will  continue to hold that
office until the election or  appointment  of his or her  successor,  subject to
action earlier taken pursuant to Section 4.04 or 6.01 below. Any person may hold
more than one office.

     4.02. ADDITIONAL APPOINTMENTS.  In addition to the officers contemplated in
Part V below, the Board of Directors may create other corporate  positions,  and
appoint  persons  thereto,  with such authority to perform such duties as may be
prescribed  from time to time by the Board of Directors,  by the President or by
the superior officer of any person so appointed. Notwithstanding such additional
appointments, only those persons whose offices are described in Part V are to be
considered an officer of the Company unless the resolution or other Board action
appointing such person  expressly states that such person is to be considered an
officer of the  Company.  Each of such persons (in the order  designated  by the
Board or the  superior  officer of such  person)  will be vested with all of the
powers and charged with all of the duties of his or her superior  officer in the
event of such superior officer's absence or disability.

     4.03. BONDS AND OTHER REQUIREMENTS.  The Board of Directors may require any
officer or other appointee to give bond to the Company (with sufficient  surety,
and conditioned upon the faithful performance of the duties of his or her office
or position)  and to comply with such other  conditions as may from time to time
be required of him or her by the Board.

     4.04.  REMOVAL  OR  DELEGATION.  Provided  that a  majority  of  the  whole
membership  thereof  concurs  therein,  the Board of  Directors  may  remove any
officer  of the  Company as  provided  by law and  declare  his or her office or
offices  vacant or abolished or, in the case of the absence or disability of any
officer or for any other reason considered sufficient,  may temporarily delegate
his or her powers and duties to any other  officer or to any  director.  Similar
action may be taken by the Board of Directors in regard to appointees designated
pursuant to Section 4.02 above.

     4.05.  SALARIES.  Officer  salaries  may from  time to time be fixed by the
Board of Directors or (except as to his or her own) be left to the discretion of
the Chief Executive Officer or the President.  No officer will be prevented from

                                      -10-
<PAGE>
receiving  a salary by reason of the fact that he or she is also a  director  of
the Company.

                   V. SPECIFIC OFFICERS, FUNCTIONS AND POWERS

     5.01. CHAIRMAN OF THE BOARD. The Board of Directors may elect a Chairman to
serve as a  general  executive  officer  of the  Company  and,  if  specifically
designated as such by the Board, as the Chief Executive  Officer of the Company.
If elected,  the Chairman  will preside at all meetings of the  directors and be
vested  with such  other  powers  and  duties as the Board may from time to time
delegate to him or her.

     5.02.  CHIEF  EXECUTIVE  OFFICER.  Subject  to the  control of the Board of
Directors exercised as hereinafter provided,  the Chief Executive Officer of the
Company will  supervise  its business and affairs and the  performance  of their
respective duties by all other officers,  by appointees  designated  pursuant to
Section  4.02  above,  and by such  additional  appointees  to  such  additional
positions  (corporate,  divisional or otherwise) as the Chief Executive  Officer
may designate,  with authority on his or her part to delegate the foregoing duty
of supervision to such extent and to such person or persons as may be determined
by the Chief Executive Officer.  Except as otherwise indicated from time to time
by  resolution  of the Board of  Directors,  its  management of the business and
affairs  of the  Company  will be  implemented  through  the office of the Chief
Executive Officer.

     5.03.  PRESIDENT AND VICE  PRESIDENTS.  Unless specified to the contrary by
resolution of the Board of Directors,  the President will be the Chief Executive
Officer of the Company. In addition to the supervisory functions above set forth
on the part of the Chief  Executive  Officer  or in lieu  thereof  if a contrary
specification is made by the Board relative to the Chief Executive Officer,  the
President  will be vested with such powers and duties as the Board may from time
to time  designate.  Vice Presidents may be elected by the Board of Directors to
perform  such  duties  as may be  designated  by the  Board  or be  assigned  or
delegated to them by their respective superior officers.  The Board may identify
(i) one or more Vice  Presidents as "Executive" or "Senior" Vice  Presidents and
(ii) the President or any Vice President as "General Manager" of the Company and
the title of any Vice  President  may  include  words  indicative  of his or her
particular area of responsibility and authority. Vice Presidents will succeed to
the responsibilities and authority of the President,  in the event of his or her
absence or disability,  in the order consistent with their respective  titles or
regular duties or as specifically designated by the Board of Directors.

     5.04.  TREASURER AND  SECRETARY.  The  Treasurer  and  Secretary  each will
perform all such duties normally  associated with his or her office  (including,
in the case of the  Secretary,  the  giving of notice  and the  preparation  and
retention  of minutes of  corporate  proceedings  and the  custody of  corporate
records and the seal of the Company) as are not assigned to a Vice  President of
the Company,  along with such other duties as may be  designated by the Board or
be assigned or  delegated to them by their  respective  superior  officers.  The
Board may appoint one or more  Assistant  Treasurers  or Assistant  Secretaries,
each of whom (in the order designated by the Board or their respective  superior
officers)  will be vested  with all of the  powers and  charged  with all of the
duties of the  Treasurer or the  Secretary  (as the case may be) in the event of
his or her absence or disability.

                                      -11-
<PAGE>
     5.05. SPECIFIC POWERS.  Except as may otherwise be specifically provided in
a resolution of the Board of Directors,  any of the officers referred to in this
Part V will be a proper  officer to  authenticate  records of the Company and to
sign on  behalf  of the  Company  any deed,  bill of sale,  assignment,  option,
mortgage, pledge, note, bond, debenture, evidence of indebtedness,  application,
consent  (to service of process or  otherwise),  agreement,  indenture  or other
instrument  of  importance  to the Company.  Any such officer may  represent the
Company at any  meeting  of the  shareholders  or  members  of any  corporation,
association,  partnership,  joint  venture or other entity in which this Company
then has an interest, and may vote such interest in person or by proxy appointed
by him or her, provided that the Board of Directors may from time to time confer
the foregoing authority upon any other person or persons.

                         VI. RESIGNATIONS AND VACANCIES

     6.01.  RESIGNATIONS.  Any director,  committee member or officer may resign
from his or her office at any time by written  notice as specified in accordance
with Arizona Revised  Statutes  Sections 10-807 and 10-843.  The acceptance of a
resignation will not be required to make it effective.

     6.02. VACANCIES. If the office of any director, committee member or officer
becomes  vacant by reason of his or her  death,  resignation,  disqualification,
removal or  otherwise,  the Board of  Directors  may choose a successor  to hold
office for the unexpired term.

                      VII. INDEMNIFICATION AND RATIFICATION

     7.01.  INDEMNIFICATION.  In order to induce qualified  persons to serve the
Company (and any other corporation,  joint venture, partnership,  trust or other
enterprise at the request of the Company) as directors and officers, the Company
shall indemnify any and all of its directors and officers,  or former  directors
and officers to the fullest  extent  permitted by applicable law as it presently
exists or may hereafter be amended.

     7.02.  RATIFICATION;  SPECIAL  COMMITTEE.  Any  transaction  involving  the
Company, any of its subsidiary  corporations or any of its directors,  officers,
employees  or agents  which at any time is  questioned  in any manner or context
(including a shareholders  derivative suit), on the ground of lack of authority,
conflict  of  interest,   misleading  or  omitted  statement  of  fact  or  law,
nondisclosure,  miscomputation,  improper principles or practices of accounting,
inadequate records,  defective or irregular execution or any similar ground, may
be investigated  and/or ratified (before or after judgment),  or an election may
be made not to  institute  or  pursue a claim or legal  proceedings  on  account
thereof or to accept or approve a negotiated  settlement  with  respect  thereto
(before  or  after  the  institution  of  legal  proceedings),  by the  Board of
Directors  or  by  a  special   committee  thereof  comprised  of  one  or  more
disinterested   directors  (that  is,  a  director  or  directors  who  did  not
participate  in  the  questioned   transaction  with  actual  knowledge  of  the
questioned aspect or aspects  thereof).  Such a special committee may be validly
formed and fully  empowered to act, in  accordance  with the purposes and duties
assigned  thereto,  by  resolution  or  resolutions  of the Board of  Directors,
notwithstanding  (i) the inclusion of Board members who are not disinterested as
aforesaid  among those who form a quorum at the meeting or meetings at which one
or more members of such special  committee are elected or appointed to the Board
or to such special  committee or at which such committee is formed or empowered,

                                      -12-
<PAGE>
or their inclusion among the directors who vote upon or otherwise participate in
taking any of the foregoing  actions,  or (ii) the taking of any of such actions
by the disinterested  members of the Board (or a majority of such members) whose
number is not  sufficient to constitute a quorum or a majority of the membership
of the full Board.  Any such special  committee so comprised  will,  to the full
extent  consistent  with its purposes and duties as expressed in such resolution
or  resolutions,  have all of the authority and powers of the full Board and its
Executive  Committee  (the  same as  though it were the full  Board  and/or  its
Executive  Committee in carrying out such purposes and duties) and will function
in accordance with Section 3.09 above. No other provisions of these Bylaws which
may at any time appear to conflict with any provisions of this Section 7.02, and
no defect or  irregularity  in the  formation,  empowering or functioning of any
such special committee,  will serve to impede, impair or bring into question any
action taken or  purported to be taken by such  committee or the validity of any
such action.  Any  ratification  of a transaction  pursuant to this Section 7.02
will  have the  same  force  and  effect  as if the  transaction  has been  duly
authorized originally. Any such ratification,  and any election made pursuant to
this Section 7.02 with respect to claims, legal proceedings or settlements, will
be binding upon the Company and its  shareholders  and will  constitute a bar to
any  claim or the  execution  of any  judgment  in  respect  of the  transaction
involved in such ratification or election.

                                   VIII. SEAL

     8.01. FORM THEREOF. The seal of the Company will have inscribed thereon the
name of the  Company,  the  state  and year of its  incorporation  and the words
"SEAL".

                             IX. STOCK CERTIFICATES

     9.01. FORM THEREOF. Each certificate representing stock of the Company will
be in such form  conforming  to law as may from time to time be  approved by the
Board of Directors,  and will bear the manual  facsimile  signatures and seal of
the Company as required or permitted by law.

     9.02. OWNERSHIP. The Company will be entitled to treat the registered owner
of any share as the absolute owner thereof and accordingly, will not be bound to
recognize  any  beneficial,  equitable  or other claim to, or interest  in, such
share on the part of any other  person,  whether or not it has  notice  thereof,
except as may  expressly be provided by Chapter 8 of Title 47,  Arizona  Revised
Statutes (or its successor), as at the time in effect, or other applicable law.

     9.03. TRANSFERS. Transfer of stock will be made on the books of the Company
only upon surrender of the certificate therefor, duly endorsed by an appropriate
person,  with  such  assurance  of  the  genuineness  and  effectiveness  of the
endorsement  as the Company may  require,  all as  contemplated  by Chapter 8 of
Title 47, Arizona Revised Statutes (or its successor), as at the time in effect,
and/or upon  submission  of any  affidavit,  other  document or notice which the
Company considers necessary.

     9.04. LOST CERTIFICATES.  In the event of the loss, theft or destruction of
any  certificate  representing  capital stock of this  Company,  the Company may
issue (or,  in the case of any such stock as to which a  transfer  agent  and/or
registrar have been appointed,  may direct such transfer agent and/or  registrar
to  countersign,  register and issue) a replacement  certificate in lieu of that

                                      -13-
<PAGE>
alleged to be lost,  stolen or destroyed,  and cause the same to be delivered to
the owner of the stock represented  thereby,  provided that the owner shall have
submitted such evidence showing the  circumstances of the alleged loss, theft or
destruction,  and  his  or  her  ownership  of the  certificate  as the  Company
considers  satisfactory,  together  with any other  factors  which  the  Company
considers  pertinent,  and further  provided that an indemnity  agreement and/or
indemnity bond shall have been provided in form and amount  satisfactory  to the
Company and to its transfer agent and/or registrar, if applicable.

                               X. EMERGENCY BYLAWS

     10.01.  EMERGENCY CONDITIONS.  The emergency Bylaws provided in this Part X
will be as  effective  in the event of an  emergency  as  prescribed  in Arizona
Revised  Statutes  Section  10-207.D.  To the extent not  inconsistent  with the
provisions  of this Part X,  these  Bylaws  will  remain in effect  during  such
emergency  and upon its  termination  these  emergency  Bylaws  will cease to be
operative.

     10.02. BOARD MEETINGS. During any such emergency, a meeting of the Board of
Directors or any of its  committees  may be called by any officer or director of
the  Company.  Notice of the time and place of the meeting  will be given by the
person  calling  the same to those of the  directors  whom it may be feasible to
reach by any available means of communication. Such notice will be given so much
in advance of the meeting as circumstances  permit in the judgment of the person
calling  the same.  At any  Board or  committee  meeting  held  during  any such
emergency,  a quorum will consist of a majority of those who could reasonably be
expected  to attend the  meeting if they were  willing to do so, but in no event
more than a majority of those to whom notice of such meeting is required to have
been given as above provided.

     10.03. CERTAIN ACTIONS. The Board of Directors, either before or during any
such emergency,  may provide and from time to time modify lines of succession in
the  event  that  during  such an  emergency  any or all  officers,  appointees,
employees  or agents of the Company  are for any reason  rendered  incapable  of
discharging their duties. The Board, either before or during any such emergency,
may,  effective in the  emergency,  change the head office or designate  several
alternative head offices of the Company, or authorize the officers to do so.

     10.04. LIABILITY. No director, officer, appointee, employee or agent acting
in  accordance  with these  emergency  Bylaws will be liable  except for willful
misconduct.

     10.05.  MODIFICATIONS.  These emergency Bylaws will be subject to repeal or
change by further action of the Board of Directors, but no such repeal or change
will modify the  provisions  of Section 10.04 with respect to action taken prior
to the time of such repeal or change.  Any amendment of these  emergency  Bylaws
may make any further or different provisions that may be practical and necessary
for the circumstances of the emergency.

                                  XI. DIVIDENDS

     11.01. DECLARATION.  Subject to such restrictions or requirements as may be
imposed by law or the Company's Articles or as may otherwise be binding upon the
Company, the Board of Directors may from time to time declare dividends on stock
of the Company outstanding on the dates of record fixed by the Board, to be paid

                                      -14-
<PAGE>
in cash,  in  property  or in  shares  of the  Company's  stock on or as of such
payment or distribution dates as the Board may prescribe.

                           XII. BUSINESS COMBINATIONS

     12.01. DEFINITIONS. In these Bylaws, the following definitions shall apply:

          1.   "Affiliate" means a person that directly or indirectly  controls,
               is  controlled  by, or is under  common  control with a specified
               person.

          2.   "Announcement  date,"  when  used in  reference  to any  business
               combination,  means the date of the first public  announcement of
               the final, definitive proposal for the business combination.

          3.   "Associate,"  when  used to  indicate  a  relationship  with  any
               person, means any of the following:

               (a)  Any  corporation or  organization  of which the person is an
                    officer,   director,  or  partnership  or  is,  directly  or
                    indirectly,  the  beneficial  owner of ten percent  (10%) or
                    more of any class or series  of shares  entitled  to vote or
                    other equity interest;

               (b)  Any trust or estate in which the  person  has a  substantial
                    beneficial  interest  or as to which  the  person  serves as
                    trustee or personal representative or in a similar fiduciary
                    capacity; or

               (c)  Any relative or spouse of the person, or any relative of the
                    spouse, residing in the home of the person.

          4.   "Beneficial  owner,"  when used with  respect  to shares or other
               securities,  includes  any person  who,  directly  or  indirectly
               through any agreement, arrangement, relationship,  understanding,
               or otherwise,  whether or not in writing, has or shares the power
               to vote,  or direct the voting of the shares or securities or has
               or shares the power to dispose  of or direct the  disposition  of
               the shares or securities, except that:

               (a)  A person is not  deemed  the  beneficial  owner of shares or
                    securities  tendered  pursuant to a tender or exchange offer
                    made by the  person  or any of the  person's  affiliates  or
                    associates  until  the  tendered  shares or  securities  are
                    accepted for purchase or exchange; and

               (b)  A person is not  deemed  the  beneficial  owner of shares or
                    securities with respect to which the person has the power to
                    vote or direct the voting  arising  solely  from a revocable
                    proxy given in response to a proxy solicitation  required to
                    be made and made in accordance with the applicable rules and
                    regulations  under the  Securities  Exchange Act of 1934, as
                    amended,  and is not  then  reportable  under  that act on a
                    Schedule 13D or comparable report.

                                      -15-
<PAGE>
          5.   "Beneficial  ownership"  includes the right to acquire  shares or
               securities through the exercise of options,  warrants, or rights,
               the  conversion of  convertible  securities,  or  otherwise.  The
               shares or securities subject to the options, warrants, rights, or
               conversion   privileges  held  by  a  person  are  deemed  to  be
               outstanding  for the  purpose  of  computing  the  percentage  of
               outstanding  shares or securities of the class or series owned by
               the person but are not deemed to be  outstanding  for the purpose
               of computing  the  percentage of the class or series owned by any
               other person.  A person is deemed the beneficial  owner of shares
               and securities  beneficially owned by the spouse of the person or
               any  relative  of the spouse  residing in the home of the person,
               any trust or estate in which the person owns ten percent (10%) or
               more of the total  beneficial  interest  or serves as  trustee or
               personal  representative,  any corporation or entity in which the
               person  owns  ten  percent  (10%) or more of the  equity  and any
               affiliate of the person.

          6.   "Business combination," when used in reference to the Company and
               any  interested  shareholder  of the  Company,  means  any of the
               following:

               (a)  Any merger or consolidation of the Company or any subsidiary
                    of the Company with either:

                    (i)   The interested shareholder; or

                    (ii)  Any other domestic or foreign corporation,  whether or
                          not itself an interested  shareholder  of the Company,
                          that is, or after the merger would be, an affiliate or
                          associate of the interested  shareholder,  except that
                          the  foregoing  does  not  include  the  merger  of  a
                          wholly-owned   subsidiary  of  the  Company  into  the
                          Company  or the  merger  of two or  more  wholly-owned
                          subsidiaries of the Company.

               (b)  Any exchange,  pursuant to a plan of exchange under the laws
                    of the State of Arizona or a comparable statute of any other
                    state or  jurisdiction,  of  shares  of the  Company  or any
                    subsidiary of the Company for shares of either:

                    (i)   The interested shareholder; or

                    (ii)  Any other domestic or foreign corporation,  whether or
                          not itself an interested  shareholder  of the Company,
                          that is, or after the exchange  would be, an affiliate
                          or associate of the interested shareholder.

               (c)  Any sale, lease, exchange,  mortgage,  pledge,  transfer, or
                    other  disposition,  in a single  transaction or a series of
                    transactions,  to or with the interested  shareholder or any
                    affiliate  or associate of the  interested  shareholder,  of

                                      -16-
<PAGE>
                    assets of the  Company or any  subsidiary  of the Company to
                    which any of the following applies:

                    (i)   Has an  aggregate  market  value  equal to ten percent
                          (10%) or more of the aggregate market value of all the
                          assets,  determined on a  consolidated  basis,  of the
                          Company.

                    (ii)  Has an  aggregate  market  value  equal to ten percent
                          (10%) or more of the aggregate market value of all the
                          outstanding shares of the Company.

                    (iii) Represents  ten  percent  (10%) or more of the earning
                          power  or net  income,  determined  on a  consolidated
                          basis, of the Company.

               (d)  The issuance or transfer by the Company or any subsidiary of
                    the  Company,  in  a  single  transaction  or  a  series  of
                    transactions, of any shares of the Company or any subsidiary
                    of the Company that have an aggregate  market value equal to
                    five percent (5%) or more of the  aggregate  market value of
                    all the outstanding  shares of the Company to the interested
                    shareholder  or any affiliate or associate of the interested
                    shareholder,  except pursuant to the exercise of warrants or
                    rights  to  purchase   shares   offered  or  a  dividend  or
                    distribution  paid or made pro rata to all  shareholders  of
                    the Company.

               (e)  The adoption of any plan or proposal for the  liquidation or
                    dissolution of the Company,  or any  reincorporation  of the
                    Company in another  state or  jurisdiction,  proposed by, on
                    behalf of, or pursuant  to any  agreement,  arrangement,  or
                    understanding,   whether  or  not  in   writing,   with  the
                    interested  shareholder or any affiliate or associate of the
                    interested shareholder.

               (f)  Any  reclassification  of  securities,  including  any share
                    dividend   or  split,   reverse   share   split,   or  other
                    distribution    of   shares   in    respect    of    shares,
                    recapitalization of the Company,  merger or consolidation of
                    the Company with any  subsidiary of the Company  exchange of
                    shares of the Company with any  subsidiary of the Company or
                    other transaction,  whether or not with or into or otherwise
                    involving the interested shareholder, proposed by, on behalf
                    of,  or  pursuant   to  any   agreement,   arrangement,   or
                    understanding,   whether  or  not  in   writing,   with  the
                    interested  shareholder or any affiliate or associate of the
                    interested  shareholder  that has the  effect,  directly  or
                    indirectly,  of increasing  the  proportionate  share of the
                    outstanding shares of any class or series of shares entitled
                    to  vote,  or  securities  that  are   exchangeable  for  or
                    convertible  into or that  carry a right to  acquire  shares
                    entitled to vote,  of the Company or any  subsidiary  of the

                                      -17-
<PAGE>
                    Company  that  is,  directly  or  indirectly,  owned  by the
                    interested  shareholder or any affiliate or associate of the
                    interested  shareholder,  except as a result  of  immaterial
                    changes due to fractional share adjustments.

               (g)  Any receipt by the  interested  shareholder or any affiliate
                    or associate of the  interested  shareholder of the benefit,
                    directly  or  indirectly,   except   proportionately   as  a
                    shareholder  of  the  Company,   of  any  loans,   advances,
                    guarantees,  pledges,  or other financial  assistance or any
                    tax credits or other tax  advantages  provided by or through
                    the Company or any  subsidiary  of the  Company  (other than
                    expense  account  advances  made in the  ordinary  course of
                    business).

          7.   "Consummation  date," with respect to any  business  combination,
               means the date of consummation of the business combination or, in
               the case of a business combination as to which a shareholder vote
               is taken, the later of:

               (i)  The business day before the vote; or

               (ii) Twenty  (20) days  before  the date of  consummation  of the
                    business combination.

          8.   "Control,"  "controlling,"   "controlled  by"  or  "under  common
               control with" means the  possession,  directly or indirectly,  of
               the power to direct or cause the direction of the  management and
               policies of a person,  whether  through the  ownership  of voting
               securities,  by contract,  or  otherwise.  A person's  beneficial
               ownership of ten percent (10%) or more of the voting power of the
               Company's  outstanding shares entitled to vote in the election of
               directors  creates a  presumption  that the person has control of
               the Company.  A person is not  considered  to have control of the
               Company if the person holds voting  power,  in good faith and not
               for the purpose of  avoiding  any  provision  of law as an agent,
               bank,  broker,  nominee,  custodian,  or trustee  for one or more
               beneficial  owners  who do not  individually  or as a group  have
               control of the Company.

          9.   "Interested  shareholder,"  when used in reference to the Company
               means any person, other than the Company or any subsidiary of the
               Company, that is either:

               (a)  The beneficial owner, directly or indirectly, of ten percent
                    (10%) or more of the voting power of the outstanding  shares
                    entitled to vote of the Company; or

               (b)  An affiliate or associate of the Company.

                                      -18-
<PAGE>
          10.  "Interested  shares" means the shares of the Company with respect
               to which any of the following  persons may exercise or direct the
               exercise  of voting  power in the  election of  directors  of the
               Company:

               (a)  An interested shareholder;

               (b)  Any officer of the Company; or

               (c)  Any director of the Company.

          11.  "Market  value,"  when used in reference to shares or property of
               the Company, means the following:

               (a)  In the case of shares, the highest closing sale price during
                    the thirty (30) day period immediately preceding the date in
                    question of a share on the composite tape for New York Stock
                    Exchange  listed  shares or, if the shares are not quoted on
                    the  composite  tape or not  listed  on the New  York  Stock
                    Exchange, on the principal United States securities exchange
                    registered  under the  Securities  Exchange Act of 1934,  as
                    amended, on which the share are listed or, if the shares are
                    not listed on any such exchange, on the National Association
                    of Securities  Dealers,  Inc. Automated  Quotations National
                    Market  System  or,  if the  shares  are not  quoted  on the
                    National  Association of Securities Dealers,  Inc. Automated
                    Quotations  National Market System,  the highest closing bid
                    quotation  during the thirty (30) day period  preceding  the
                    date in question of a share on the National  Association  of
                    Securities Dealers,  Inc. Automated Quotations System or any
                    system then in use or, if no such  quotation  is  available,
                    the fair market  value on the date in question of a share as
                    determined  in  good  faith  by the  Board  of the  Company,
                    subject to arbitration.

               (b)  In the case of property other than cash or shares,  the fair
                    market  value of the  property  on the date in  question  as
                    determined  in  good  faith  by the  Board  of the  Company,
                    subject to arbitration.

          12.  "Person"  means any  natural  person,  partnership,  corporation,
               group,  association,  venture,  firm, or other entity (other than
               the  Company,  any  subsidiary  of the  Company,  or a trustee or
               fiduciary  holding  stock for the benefit of the employees of the
               Company  or  its  subsidiaries  or any  one of its  subsidiaries,
               pursuant to one or more employee  benefit plans).  If two or more
               persons act as a partnership, limited partnership,  syndicate, or
               other group pursuant to any agreement, arrangement, relationship,
               understanding,  or otherwise,  whether or not in writing, for the
               purposes of acquiring,  owning,  or voting shares of the Company,
               all members of the partnership,  syndicate,  or other group shall
               be deemed a person.  Person does not  include a licensed  broker,
               dealer,  or  underwriter  that  purchases  shares of the  Company

                                      -19-
<PAGE>
               solely for purposes of resale to the public that is not acting in
               concert with an interested shareholder.

          13.  "Share  acquisition  date,"  with  respect  to any person and the
               Company,  means  the  date  that  the  person  first  becomes  an
               interested shareholder of the Company.

     12.02.  BUSINESS  COMBINATION  WITH  INTERESTED  SHAREHOLDERS;  APPROVED BY
DIRECTORS.

          1.   Except as set forth in these  Bylaws,  the Company may not engage
               in any business  combination or vote, consent or otherwise act to
               authorize a  subsidiary  of the Company to engage in any business
               combination  with  respect to,  proposed  by, or on behalf of, or
               pursuant to any agreement, arrangement or understanding,  whether
               or not in writing, with any interested shareholder of the Company
               or any affiliate or associate of the interested shareholder for a
               period  of three (3) years  after  the  interested  shareholder's
               share acquisition  date,  unless the business  combination or the
               acquisition of shares made by the  interested  shareholder on the
               interested  shareholder's share acquisition date is approved by a
               committee  of the Board of  Directors  of the Company  before the
               interested  shareholder's  share  acquisition date. The committee
               shall be formed in accordance  with  subsection 4 of this Section
               12.02.

          2.   If  a  good  faith  definitive   proposal  regarding  a  business
               combination  is made in writing to the Board of  Directors of the
               Company,  a  committee  of the Board  formed in  accordance  with
               subsection 4 of this Section 12.02 shall consider and take action
               on the proposal  and respond in writing  within  forty-five  (45)
               days after receipt of the proposal by the Company,  setting forth
               its decision regarding the proposal.

          3.   If a good faith definitive  proposal to acquire shares is made in
               writing to the Board of Directors of the Company,  a committee of
               the Board of Directors  formed in accordance with subsection 4 of
               this  Section  12.02  shall  consider  and  take  action  on  the
               proposal.  Unless the committee responds affirmatively in writing
               within  forty-five (45) days after receipt of the proposal by the
               Company,  the committee  shall be considered to have  disapproved
               the share acquisition.

          4.   When a business  combination or acquisition of shares is proposed
               pursuant to this  Section  12.02,  the Board of  Directors  shall
               promptly  form  a  committee  composed  of  all  of  the  Board's
               disinterested  Directors.  The committee shall take action on the
               proposal  by the  affirmative  vote of a simple  majority  of the
               committee members.  The committee is not subject to any direction
               or  control  by  the  Board  with  respect  to  the   committee's
               consideration of or any action concerning a business  combination
               or  acquisition  of shares  pursuant  to this  Section  12.02.  A
               committee formed pursuant to this subsection shall be composed of
               one or more members. Only disinterested  Directors may be members

                                      -20-
<PAGE>
               of a committee  formed pursuant to this subsection.  However,  if
               the Board of Directors has no disinterested  Directors, the Board
               shall select three or more disinterested  persons to be committee
               members. For purposes of this subsection, a Director or person is
               disinterested  if the  Director  or person  is not an  interested
               shareholder  or an  affiliate  thereof  or a  present  or  former
               officer or employee of the Company or an  affiliate  or associate
               of the Company.

     12.03.  Requirements  after  Three  Years.  Except  for the  provisions  of
Sections 12.02 and 12.04, the Company may not engage at any time in any business
combination or vote,  consent, or otherwise act to authorize a subsidiary of the
Company to engage in any business  combination  with respect to, proposed by, on
behalf of, or pursuant to any agreement, arrangement, or understanding,  whether
or not in  writing,  with  an  interested  shareholder  of  the  Company  or any
affiliate  or  associate  of the  interested  shareholder  other than a business
combination meeting all the requirements of this Article XII, the Articles,  and
the requirements specified in any of the following:

          1.   A business  combination  with  respect to which the  consummation
               date is no less than  three  years  after  the share  acquisition
               date,  approved by the Board of Directors  of the Company  before
               the interested  shareholder's  share  acquisition  date, or as to
               which  the   acquisition   of  shares  made  by  the   interested
               shareholder on the interested shareholder's  acquisition date had
               been  approved by the Board of  Directors  before the  interested
               shareholder's share acquisition date.

          2.   A business  combination  approved by the affirmative  vote of the
               holders of a majority of the outstanding  shares entitled to vote
               not beneficially  owned by the interested  shareholder  proposing
               the  business  combination  or any  affiliate or associate of the
               interested  shareholder  proposing the business  combination at a
               meeting called for that purpose no earlier than three years after
               the interested shareholder's share acquisition date.

          3.   A business  combination,  with respect to which the  consummation
               date  is  no  earlier  than  three  years  after  the  interested
               shareholder's  share  acquisition  date,  that  meets  all of the
               following conditions:

               (a)  The aggregate  amount of the cash and the market value as of
                    the consummation date of consideration other than cash to be
                    received per share by holders of  outstanding  common shares
                    of the Company in the business combination is at least equal
                    to the higher of the following:

                    (i)   The  highest  per share  price paid by the  interested
                          shareholder, at a time when the interested shareholder
                          was the beneficial owner,  directly or indirectly,  of
                          five  percent (5%) or more of the  outstanding  shares
                          entitled to vote of the Company, for any common shares
                          of the same class or series  acquired by it within the

                                      -21-
<PAGE>
                          three  (3)  year   period   immediately   before   the
                          announcement   date  with   respect  to  the  business
                          combination  or  within  the  three  (3)  year  period
                          immediately  before,  or in, the  transaction in which
                          the  interested   shareholder   became  an  interested
                          shareholder,  whichever  is  higher,  plus,  in either
                          case,  interest  compounded annually from the earliest
                          date on which the highest per share  acquisition price
                          was paid through the consummation date at the rate for
                          one year United States treasury  obligations from time
                          to time in  effect  less the  aggregate  amount of any
                          cash  dividends  paid,  and the  market  value  of any
                          dividends  paid other than in cash,  per common  share
                          since  the  earliest  date,  up to the  amount  of the
                          interest.

                    (ii)  The market value per common share on the  announcement
                          date with  respect to the business  combination  or on
                          the interested  shareholder's  share acquisition date,
                          whichever is higher, plus interest compounded annually
                          from that date  through the  consummation  date at the
                          rate for one year United States  treasury  obligations
                          from time to time in effect less the aggregate  amount
                          of any cash dividends paid and the market value of any
                          dividends  paid other than in cash,  per common  share
                          since that date, up to the amount of the interest.

               (b)  The aggregate  amount of the cash and the market value as of
                    the consummation date of consideration other than cash to be
                    received per share by holders of  outstanding  shares of any
                    class or series of shares,  other than common shares, of the
                    Company in the business combination is at least equal to the
                    highest  of the  following,  whether  or not the  interested
                    shareholder has previously  acquired any shares of the class
                    or series:

                    (i)   The  highest  per share  price paid by the  interested
                          shareholder, at a time when the interested shareholder
                          was the beneficial owner,  directly or indirectly,  of
                          five  percent (5%) or more of the  outstanding  shares
                          entitled to vote of the Company, for any shares of the
                          class or series  acquired  by it within  the three (3)
                          year period  immediately  before the announcement date
                          with respect to the business combination or within the
                          three (3) year period  immediately  before, or in, the
                          transaction in which the interested shareholder became
                          an interested shareholder,  whichever is higher, plus,
                          in either case,  interest compounded annually from the

                                      -22-
<PAGE>
                          earliest   date  on  which  the   highest   per  share
                          acquisition  price was paid  through the  consummation
                          date at the rate for one year United  States  treasury
                          obligations  from  time  to time in  effect  less  the
                          aggregate  amount of any cash  dividends  paid and the
                          market value of any dividends paid other than in cash,
                          per share of the class or series  since such  earliest
                          date, up to the amount of the interest.

                    (ii)  The highest preferential amount per share to which the
                          holders of shares of the class or series are  entitled
                          in   the   event   of   any   voluntary   liquidation,
                          dissolution,  or winding up of the  Company,  plus the
                          aggregate amount of any unpaid  dividends  declared or
                          due  as to  which  the  holders  are  entitled  before
                          payment of  dividends on some other class or series of
                          shares,  unless the aggregate  amount of the dividends
                          is included in the preferential amount.

                    (iii) The  market  value per share of the class or series on
                          the  announcement  date with  respect to the  business
                          combination or on the interested  shareholder's  share
                          acquisition date,  whichever is higher,  plus interest
                          compounded   annually   from  that  date  through  the
                          consummation  date at the  rate  for one  year  United
                          States  treasury  obligations  from  time  to  time in
                          effect less the aggregate amount of any cash dividends
                          paid and the market value of any dividends  paid other
                          than in cash,  per share of the class or series  since
                          that date, up to the amount of the interest.

               (c)  The  consideration to be received by holders of a particular
                    class or  series of  outstanding  shares,  including  common
                    shares,  of the Company in the  business  combination  is in
                    cash or in the same form as the interested  shareholder  has
                    used to acquire the largest number of shares of the class or
                    series  of  shares   previously   acquired  by  it  and  the
                    consideration is distributed promptly.

               (d)  The  holders of all  outstanding  shares of the  Company not
                    beneficially owned by the interested shareholder immediately
                    before the  consummation  date with  respect to the business
                    combination   are   entitled  to  receive  in  the  business

                                      -23-
<PAGE>
                    combination  cash or other  consideration  for the shares in
                    compliance with subdivisions (a), (b) and (c).

               (e)  After the interested  shareholder's  share  acquisition date
                    and  before  the  consummation  date  with  respect  to  the
                    business  combination,  the interested  shareholder  has not
                    become  the  beneficial  owner  of  any  additional   shares
                    entitled to vote of the Company except:

                    (i)   As  part  of  the  transaction  that  resulted  in the
                          interested    shareholder   becoming   an   interested
                          shareholder;

                    (ii)  By  virtue  of  proportionate   share  splits,   share
                          dividends, or other distributions of shares in respect
                          of shares not constituting a business combination;

                    (iii) Through  a  business  combination  meeting  all of the
                          conditions of Section 12.02 and this paragraph; or

                    (iv)  Through purchase by the interested  shareholder at any
                          price that, if the price had been paid in an otherwise
                          permissible business combination the announcement date
                          and  consummation  date of which  were the date of the
                          purchase,  would have  satisfied the  requirements  of
                          subdivisions (a), (b) and (c) of this Section.

     12.04.  APPLICATION.  This  Article  XII  does not  apply  to any  business
combination  of the Company with an  interested  shareholder  of the Company who
became an interested  shareholder  inadvertently,  if the interested shareholder
both:

          1.   As soon as practicable,  divests itself of a sufficient amount of
               the shares  entitled  to vote of the Company so that it no longer
               is the beneficial owner,  directly or indirectly,  of ten percent
               (10%) or more of the  outstanding  shares entitled to vote of the
               Company.

          2.   Would not at any time within the three (3) year period  preceding
               the  announcement  date with respect to the business  combination
               have been an interested  shareholder  except for the  inadvertent
               acquisition.

                      XIII. LIMITATION ON SHARE REPURCHASES

     13.01. LIMITATION ON SHARE REPURCHASES.  The Company shall not, directly or
indirectly,  purchase  or agree to purchase  any shares  entitled to vote from a
person,  or two or more persons who act as a partnership,  limited  partnership,
syndicate or other group pursuant to any agreement,  arrangement,  relationship,
understanding  or  otherwise,  whether  or not in  writing,  for the  purpose of

                                      -24-
<PAGE>
acquiring,  owning or voting  shares of the Company who  beneficially  owns more
than five per cent (5%) of the  voting  stock of the  Company  for more than the
"average market price" of the shares if the shares have been beneficially  owned
by the person or persons for less than three (3) years,  unless the  purchase or
agreement  to  purchase  is  approved  at  a  meeting  of  shareholders  by  the
affirmative  vote of the holders of a majority of the voting  stock  entitled to
vote and not beneficially owned by such person or persons from whom the proposed
repurchase is to be made or the Company makes an offer,  of at least equal value
per share,  to all  holders of shares of such class or series and to all holders
of any class or series into which the shares may be converted.

     13.02.  DEFINITIONS.  For the  purposes of this  Article,  "AVERAGE  MARKET
PRICE"  means the average  closing  sale price  during the thirty  trading  days
immediately  preceding the purchase of the shares in question,  or if the person
or persons have  commenced a tender offer or have announced an intention to seek
control of the Company,  during the thirty trading days preceding the earlier of
the  commencement  of the tender offer or the making of the  announcement,  of a
share on the composite tape for New York Stock Exchange listed shares or, if the
shares are not quoted on the composite  tape or not listed on the New York Stock
Exchange,  on the principal United States securities  exchange  registered under
the Securities  Exchange Act of 1934, as amended, on which the shares are listed
or,  if the  shares  are  not  listed  on any  such  exchange,  on the  National
Association of Securities  Dealers,  Inc. Automated  Quotations  National Market
System  or,  if the  shares  are  not  quoted  on the  National  Association  of
Securities  Dealers,  Inc.  Automated  Quotations  National  Market System,  the
average  closing bid  quotation,  during the thirty  trading days  preceding the
purchase of the shares in questions of a share on the  National  Association  of
Securities Dealers,  Inc. Automated Quotations System or any system then in use,
or if the person or persons have  commenced a tender offer or have  announced an
intention to seek control of the issuing public  corporation,  during the thirty
trading days  preceding the earlier of the  commencement  of the tender offer or
the making of the  announcement,  except that if no quotation  is available  the
average  market  price is the fair  market  value on the date of purchase of the
shares  in  question  of a share as  determined  in good  faith by the  Board of
Directors of the Company.

                                 XIV. AMENDMENTS

     14.01.  AMENDMENT  OF  ARTICLES  AND  BYLAWS.   Notwithstanding  any  other
provision of these Bylaws,  Article  Fifth of the Articles  (Restated As of July
29, 1988) and Sections  2.02,  3.01, and 3.13 and Articles XII, XIII, and XIV of
these  Bylaws  shall  not  be  altered,  amended,  supplemented,   repealed,  or
temporarily or permanently suspended,  in whole or in part, or replacement Bylaw
provisions  adopted  without:  (I) the  affirmative  vote of a  majority  of the
directors then in office;  or (ii) the affirmative vote of seventy-five  percent
(75%)  or  more  of the  outstanding  shares  of the  Company  entitled  to vote
generally.

                                      -25-
<PAGE>
                                   CERTIFICATE


     I, FAYE  WIDENMANN,  Vice  President and Secretary of Pinnacle West Capital
Corporation,  an Arizona corporation,  do HEREBY CERTIFY that the foregoing is a
true and correct copy of the Company's Bylaws, as amended,  and that they are in
full force and effect as of the date hereof.

     IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
corporation this 18th day of September 2002.


                                        FAYE WIDENMANN
                                        ----------------------------------------
                                        FAYE WIDENMANN
                                        Vice President and Secretary

                                      -26-