<PAGE>

                                                                     EXHIBIT 3.2

                            Restated Bylaws
                                   of
                     Cascade Natural Gas Corporation

                           ARTICLE I -- OFFICES

Sec. 1.   The principal office shall be in the City of Seattle, County of 
King, State of Washington.

Sec. 2.   The corporation may also have offices at such other places as the 
board of directors may from time to time appoint or the business of the 
corporation may require.

                            ARTICLE II -- SEAL

Sec. 1.   The corporation seal shall have inscribed thereon the name of the 
corporation, the year of its organization and the words, "Corporate Seal, 
Washington." Said seal may be used by causing it or a facsimile thereof to be 
impressed or affixed or reproduced or otherwise.

                    ARTICLE III -- SHAREHOLDERS' MEETINGS

Sec. 1.   Meetings of the shareholders may be held within or without the 
State of Washington. The annual meeting of shareholders shall be held at a 
place and time on a day designated by the board of directors not less than 
sixty days nor more than one hundred eighty days after October 1 of each 
year, when they shall elect by a plurality vote, by ballot, a board of 
directors, and transact such other business as may properly be brought before 
the meeting. In the election of directors, every shareholder of record shall 
have the right to multiply the number of votes to which he or she may be 
entitled by the number of directors to be elected, and he or she may cast all 
such votes for one candidate or distribute them among any two or more 
candidates.

Sec. 2.   The holders of a majority of the stock issued and outstanding and 
entitled to vote thereat, present in person, or represented by proxy, shall 
be requisite to, and shall constitute, a quorum at all meetings of the 
shareholders for the transaction of business, except as otherwise provided by 
law, by the Articles of Incorporation or by these bylaws. If, however, such 
majority shall not be present or represented at any meeting of the 
shareholders, the shareholders entitled to vote thereat, present in person or 
by proxy, shall have power to adjourn the meeting from time to time, without 
notice other than announcement at the meeting, until the requisite amount of 
voting stock shall be present, except that any meeting at which directors are 
to be elected shall be adjourned only from day to day until such directors 
have been elected. At such adjourned meeting at which the requisite amount of 
voting stock shall be represented, any business may be transacted which might 
have been transacted at the meeting as originally notified.

Sec. 3.   The shareholders present at a duly organized meeting can continue 
to do business until adjournment, notwithstanding the withdrawal of enough 
shareholders to leave less than a quorum.

Sec. 4.   At each meeting of the shareholders every shareholder having the 
right to vote shall be entitled to vote in person, or by proxy appointed by 
an instrument in writing subscribed by such shareholder and bearing a date 
not more than eleven months prior to said meeting, unless said instrument 
provides for a longer period, not exceeding three years (unless said proxy is 
coupled with an interest). The revocation of a proxy shall not be effective 
until notice thereof has been given to the secretary. Each shareholder shall 
have one vote for each share of capital stock registered in his or her name 
on the books of the corporation. The vote for directors, and, upon the demand 
of any shareholder, the vote upon any question before the meeting, shall be 
by ballot. All elections shall be had and all questions decided by a 
plurality vote except where a greater vote is required by law.

Sec. 5.   A complete list of the shareholders entitled to vote at the ensuing 
election, arranged in alphabetical order, with the residence of each, and the 
number of voting shares held by each, shall be prepared by the secretary and 
filed in the registered office of the corporation, at least ten days before 
every election, and shall at all times during the usual hours for business, 
and during the whole time of said election, be open to the examination of any 
shareholder.

Sec. 6.   Special meetings of the shareholders, for any purpose or purposes, 
unless otherwise prescribed by 

                                    12

<PAGE>

statute, may be called at any time by the chairman of the board, president, 
secretary or board of directors. If more than eighteen months are allowed to 
elapse without the annual shareholders' meeting being held, any shareholder 
may call such meeting to be held at the registered office of the corporation. 
At any time, upon written request of any director, or of any shareholder or 
shareholders holding in the aggregate one-fifth of the voting power of all 
shareholders, it shall be the duty of the secretary to call a special meeting 
of shareholders to be held at the registered office at such time as the 
secretary may fix, not less than ten nor more than thirty-five days after the 
receipt of said request, and if the secretary shall neglect or refuse to 
issue such call, the director or shareholder or shareholders making the 
request may do so. Such request shall state the purpose or purposes of the 
proposed meeting.

Sec. 7.   (a)  Written notice stating the place, day and hour of the meeting 
and, in case of a special meeting, the purpose or purposes for which the 
meeting is called, shall be delivered not less than ten (or in the case of an 
amendment to the Articles of Incorporation, a plan of merger or share 
exchange, a proposed sale, lease exchange, or other disposition of all or 
substantially all of the assets of the corporation other than in the usual or 
regular course of business, or the dissolution of the corporation, twenty) 
nor more than seventy days before the date of the meeting, either personally 
or by mail, by or at the direction of the chairman, the president, the 
secretary, or the officer or persons calling the meeting, to each shareholder 
of record entitled to vote at such meeting. If mailed, such notice shall be 
deemed to be delivered when deposited in the United States mail addressed to 
the shareholder at his or her address as it appears on the stock transfer 
books of the corporation, with postage thereon prepaid.

          (b)  A shareholder may waive any notice required by law or these 
bylaws before or after the date and time of the meeting that is the subject 
of the notice, and such waiver shall be equivalent to giving such notice. 
Waiver of notice of a meeting of shareholders shall be effective upon receipt 
of a written waiver by the corporation.

Sec. 8.   Nominations for the election of directors may be made by the board 
of directors, the nominating committee of the board of directors, or by any 
shareholder entitled to vote in the election of directors. However, any 
shareholder entitled to vote in the election of directors may nominate one or 
more persons for election as directors at a meeting only if written notice of 
the shareholder's intent to make the nomination or nominations has been 
given, either by personal delivery or by United States mail, postage prepaid, 
to the secretary of the corporation not later than (i) with respect to an 
election to be held at an annual meeting of shareholders, on the date 
established for nominations in the proxy statement of the corporation, or if 
no such date is established one hundred twenty days in advance of such 
meeting, and (ii) with respect to an election to be held at a special meeting 
of shareholders for the election of directors, the close of business on the 
seventh day following the date of which notice of such meeting is first 
mailed to the shareholders of the corporation. Each such notice shall set 
forth: (a) the name and address of the shareholder who intends to make the 
nomination and of the person or persons to be nominated; (b) a representation 
that the shareholder is a holder of record of stock of the corporation 
entitled to vote at such meeting and intends to appear in person or by proxy 
at the meeting to nominate the person or persons specified in the notice; (c) 
a description of all arrangements or understandings between the shareholder 
and each nominee and any other person or persons (naming such person or 
persons) pursuant to which the nomination or nominations are to be made by 
the shareholders; (d) such other information regarding each nominee proposed 
by such shareholder as would have been required to be included in a proxy 
statement filed pursuant to the proxy rules of the Securities and Exchange 
Commission had the nominee been nominated, or intended to be nominated, by 
the board of directors or the nominating committee of the board of directors; 
and (e) the written consent of each nominee to serve as a director of the 
corporation if so elected. The chairman of the meeting may refuse to 
acknowledge the nomination of any person not made in compliance with the 
foregoing procedure.

Sec. 9.   Tabulation of votes for election of directors shall be conducted by 
an inspector or judge, who may or may not be a stockholder, appointed by the 
presiding officer of the meeting. The inspector or judge shall certify to the 
returns in writing. No person who is a candidate for the office of director 
shall be an inspector

                                    13

<PAGE>

or judge.

                          ARTICLE IV -- DIRECTORS

Sec. 1.   The property and business of this corporation shall be managed by 
its board of directors, nine in number, but the number of directors may be 
decreased to any number not less than three at any annual meeting of the 
shareholders, or at any special meeting of the shareholders called for that 
purpose, or by a two-thirds vote of the then directors of the company at any 
regular meeting of such directors, or at any special meeting of said 
directors called for that purpose.

Sec. 2.   The number of directors of said corporation may likewise be 
increased in the same manner as they may be decreased, from three to not more 
than eleven directors.

Sec. 3.   The directors shall be elected at the annual meeting of the 
shareholders, and each director shall be elected to serve until his or her 
successor shall be elected and shall qualify.

Sec. 4.   The entire board of directors or any individual director may, at 
any special meeting of the shareholders called for that purpose in the manner 
provided by Section 6 of Article III hereof, be removed from office by a vote 
of shareholders holding a majority of the outstanding shares entitled to a 
vote at an election of directors. In case the board or any one or more 
directors be so removed, new directors may be elected at the same meeting. No 
individual director shall be removed in case the votes of a sufficient number 
of shares are cast against the resolution for his or her removal which, if 
cumulatively voted at an election of the whole board, would be sufficient to 
elect one or more directors.

Sec. 5.   In addition to the powers and authorities by these bylaws expressly 
conferred upon them, the board may exercise all such powers of the 
corporation and do all such lawful acts and things as are not by statute or 
by the Articles of Incorporation or by these bylaws directed or required to 
be exercised or done by the shareholders.

Sec. 6.   In addition to reimbursement for reasonable expenses incurred in 
attending meetings or otherwise in connection with attention to the affairs 
of the corporation and in addition to remuneration as a member of any 
committee of the board of directors, each director as such shall be entitled 
to receive such remuneration as may be fixed from time to time by the board 
of directors.

Sec. 7.   (a)  The board of directors shall meet at a time and place, as 
fixed by resolution of the board of directors, on the same date as the annual 
meeting of shareholders of the corporation for the purpose of organization or 
otherwise, and no notice of such meeting shall be necessary to the newly 
elected directors in order legally to constitute a meeting if it is held 
following the adjournment of the annual meeting of shareholders; provided, a 
majority of the whole board shall be present.

          (b)  Regular meetings of the board of directors may be held at such 
place, whether in this state or elsewhere, as a majority of the directors may 
from time to time appoint.

          (c)  Regular meetings of the board of directors may be held without 
notice of the date, time, place, or purpose of the meetings. Special meetings 
of the board of directors must be preceded by at least two days' notice of 
the date, time, and place of the meeting.

          (d)  A director may waive any notice required by law or these 
bylaws before or after the date and time of the meeting that is the subject 
of the notice, and such waiver shall be equivalent to giving such notice. 
Waiver of notice shall be effective upon receipt of a written waiver by the 
corporation.

Sec. 8.   If the office of any director or directors becomes vacant by reason 
of death, resignation, retirement, disqualification, removal from office or 
otherwise, a majority of all of the remaining directors, though less than a 
quorum, shall elect a successor or successors, who shall hold office for the 
unexpired term of his or her predecessor in office and until his or her 
successor is elected by the shareholders who may make such election at the 
next annual meeting of the shareholders, or at any special meeting called for 
that purpose and held prior thereto.

                          ARTICLE V -- OFFICERS

Sec. 1.   The officers of the corporation shall be chosen by the board of 
directors, and shall be a chairman of the board, a president, one or more 
vice presidents, a secretary, a controller, and if appointed, a treasurer, 
one or more assistant secretaries, assistant controllers, and assistant 
treasurers, such assistants to

                                    14

<PAGE>

have such powers and duties of the secretary and treasurer, respectively, as 
shall from time to time be assigned to them by the board of directors.

Sec. 2.   The board of directors, at its first meeting after each annual 
meeting of shareholders, shall choose a chairman of the board from their own 
number, and a president, and one or more vice presidents, a controller, and a 
treasurer who need not be members of the board.

Sec. 3.   The board may appoint such other officers, vice presidents, 
assistant secretaries, assistant treasurers, managers and agents as shall be 
deemed necessary by it, who shall hold their offices for such terms and shall 
exercise such powers and perform such duties as shall be determined from time 
to time by the board.

Sec. 4.   The board of directors shall by resolution fix the salaries and the 
manner and time of payment thereof of all of the officers of this corporation.

Sec. 5.   Any officer, manager or agent elected or appointed by the board of 
directors may be removed at any time by the affirmative vote of a majority of 
the whole board of directors, whenever in their judgment the best interest of 
the corporation will be served thereby, such removal, however, to be without 
prejudice to the contract rights, if any, of the person so removed.

Sec. 6.   If any office becomes vacant for any reason, the vacancy shall be 
filled by the board of directors.

Sec. 7.   The chairman of the board shall be the chief executive officer of 
the corporation; he or she shall, if present, preside at all meetings of the 
shareholders and directors; he or she shall have general and active 
management of the business of the corporation, under the direction of the 
board of directors, and shall see that all orders and resolutions of the 
board are carried into effect.

Sec. 8.   The president shall, in the absence or disability of the chairman, 
perform the duties and exercise the powers of the chairman, and shall perform 
such other duties as the board of directors shall prescribe.

Sec. 9.   (a)  The secretary shall personally or with the assistance of 
others, prepare and keep minutes of meetings of the board of directors and 
shareholders, authenticate all records of the corporation, attest all 
certificates of stock in the name of the corporation, and keep a record of 
the issuance of certificates of stock and stock transfers. The secretary 
shall give, or cause to be given notice of all meetings of the shareholders 
and of the board of directors, and shall perform such other duties as may be 
prescribed by the board of directors. The secretary shall keep in safe 
custody the seal of the corporation, and affix the same to any instrument 
requiring it.

          (b)  The assistant secretaries, if any, shall, in the absence or 
disability of the secretary, perform the duties and exercise the powers of 
the secretary, and shall perform such other duties as the board of directors 
shall prescribe.

Sec. 10.  In case of the absence of any officer of the corporation, or for 
any reason that the board may deem sufficient, the board of directors may 
delegate, for the time being, the powers or duties, or any of them, of such 
officer to any other officer, or to any director.

                 ARTICLE VI -- CONSIDERATION FOR STOCK

Sec. 1.   (a)  Without the consent of any holder of any share of the capital 
stock of this corporation, the shares of stock of this corporation may be 
issued by it from time to time in such number or amount of shares of said 
stock, and for such consideration in labor or services actually performed for 
the corporation, money or property, as from time to time may be fixed and 
determined by the board of directors of this corporation at any annual 
meeting or any special meeting called for said purpose, and the right, power 
and authority of said board of directors from time to time so to authorize 
and order the issuance by this corporation of the said shares of said stock, 
in such number or amount of shares, and for such consideration in labor or 
services actually performed for the corporation, money or property, as from 
time to time said board may fix and determine, is hereby absolutely reserved 
to said board of directors.

          (b)  Payment or delivery to, or receipt by this corporation of such 
consideration as may be so fixed and determined by its board of directors for 
the issuance of any share or shares of its said stock, as hereinbefore in 
this Section provided, shall operate and be construed, deemed and held:(i) to 
discharge, release and satisfy fully and absolutely, all liability to this 
corporation and/or to its

                                    15

<PAGE>

creditors now or at any time hereafter existing, of any subscriber for, 
and/or holder of any such share or shares so authorized to be issued in any 
way on account of, founded upon, or arising out of any subscription for, 
and/or purchase of, and/or issuance of such share or shares, and(ii) to 
constitute such share or shares fully paid stock of this corporation.

                   ARTICLE VII -- CERTIFICATES OF STOCK

Sec. 1.   The certificates for shares of the common stock and each series of 
preferred stock of the corporation shall be separately numbered and shall be 
entered in the books of the corporation as they are issued. They shall 
exhibit the holder's name and number of shares and shall be signed by the 
president or a vice president and the treasurer or the secretary. Where, 
however, such certificates are countersigned by a transfer agent and 
registered by a registrar, at least one of which shall be other than the 
corporation itself or an employee thereof, the signatures of such officers 
may be facsimile.

Sec. 2.   Shares of stock to be transferred may be transferred by endorsement 
of the certificate and its surrender to the secretary for cancellation, 
whereupon the new certificate shall issue to the transferee.

                    ARTICLE VIII -- FIXING RECORD DATE

Sec. 1.   For the purpose of determining shareholders entitled to notice of 
or to vote at any meeting of shareholders or any adjournment thereof, or 
entitled to receive payment of any dividend, the board of directors may fix 
in advance a date as the record date for any such determination of 
shareholders, such date in any case to be not more than seventy days and, in 
case of a meeting of shareholders, not less than ten (or in case of an 
amendment to the Articles of Incorporation, a plan of merger or share 
exchange, a proposed sale, lease, exchange, or other disposition of all or 
substantially all of the assets of the corporation other than in the usual or 
regular course of business, or the dissolution of the corporation, twenty) 
days prior to the date on which the particular action, requiring such 
determination of shareholders, is to be taken.

Sec. 2.   If no record date is fixed for the determination of shareholders 
entitled to notice of or to vote at a meeting of shareholders, or 
shareholders entitled to receive payment of a dividend, the close of business 
on the day before the date on which notice of the meeting is mailed or the 
date on which the resolution of the board of directors declaring such 
dividend is adopted, as the case may be, shall be the record date for such 
determination of shareholders. When a determination of shareholders entitled 
to vote at any meeting of shareholders has been made as provided in this 
Article, such determination shall apply to any adjournment thereof.

                  ARTICLE IX -- REGISTERED STOCKHOLDERS

Sec. 1.   The corporation shall be entitled to treat the holder of record of 
any share or shares of stock as the holder in fact thereof and accordingly 
shall not be bound to recognize any equitable or other claim to or interest 
in such share on the part of any other person, whether or not it shall have 
express or other notice thereof, save as expressly provided by the laws of 
Washington.

                      ARTICLE X -- LOST CERTIFICATES

Sec. 1.   Any person claiming a certificate of stock to be lost or destroyed, 
shall make an affidavit or affirmation of that fact and advertise the same in 
such manner as the board of directors may require, and the board of directors 
may, in its discretion, require the owner of the lost or destroyed 
certificate, or his or her legal representative, to give the corporation a 
bond, in such sum as they may direct, not exceeding double the value of the 
stock, to indemnify the corporation against any claim that may be made 
against it on account of the alleged loss of any such certificate. A new 
certificate of the same tenor and for the same number of shares as the one 
alleged to be lost or destroyed may be issued without requiring any bond, 
when, in the judgment of the directors, it is proper to do so.

          ARTICLE XI -- CORPORATE BOOKS AND RECORDS; INSPECTION

Sec. 1.   The corporation shall keep a copy of the following records at its 
principal office: (a) the Articles of Incorporation or Restated Articles of 
Incorporation and all amendments to them currently in effect; (b) the bylaws 
or restated bylaws, and all amendments to them currently in effect; (c) the 
minutes of all shareholders' meetings, and records of all actions taken by 
shareholders without a meeting, for the past

                                    16

<PAGE>

three years; (d) its financial statements for the past three years, including 
balance sheets showing in reasonable detail the financial condition of the 
corporation as of the close of each fiscal year, and an income statement 
showing the results of its operations during each fiscal year prepared on a 
stated basis explained therein; (e) all written communications to 
shareholders generally within the past three years; (f) a list of the names 
and business addresses of its current directors and officers; (g) its most 
recent annual report delivered to the Secretary of State, and (h) such other 
records as may be required under Washington law.

Sec. 2.   Any shareholder of the corporation may inspect and copy, during 
regular business hours at the corporation's principal office, any of the 
records of the corporation specified in Sec. 1 (a) through (g) of this 
Article, provided the shareholder gives the corporation written notice of the 
shareholder's demand at least five business days before the date on which the 
shareholder wishes to inspect and copy such records.

Sec. 3.   A shareholder of the corporation is entitled to inspect and copy, 
during regular business hours at a reasonable location specified by the 
corporation, any of the following records of the corporation provided the 
shareholder gives the corporation written notice of the shareholder's demand 
at least five business days before the date on which the shareholder wishes 
to inspect and copy such records and the shareholder's demand is made in good 
faith and for a proper purpose, the shareholder describes with reasonable 
particularity the shareholder's purpose and the records the shareholder 
desires to inspect, and the records are directly connected with the 
shareholder's purpose: (a) excerpts from minutes of any meeting of the board 
of directors, records of any meeting of the board of directors, records of 
any action of a committee of the board of directors while exercising the 
authority of the board of directors, minutes of the shareholders, and records 
of action taken by the shareholders or the board of directors without a 
meeting; (b) accounting records of the corporation; and (c) the record of 
shareholders.

                          ARTICLE XII -- CHECKS

Sec. 1.   All checks or demands for money and notes of the corporation shall 
be signed by such officer or officers as the board of directors may from time 
to time designate.

                        ARTICLE XIII -- FISCAL YEAR

Sec. 1.   The fiscal year shall begin the first day of October in each year.

ARTICLE XIV -- DIVIDENDS

Sec. 1.   Dividends upon the capital stock of the corporation, subject to the 
provisions of the Articles of Incorporation, may be declared by the board of 
directors at any regular or special meeting, pursuant to law. Dividends may 
be paid in cash, in property, or in shares of the capital stock, and shall be 
paid only out of the surplus of the aggregate of the assets of the 
corporation over the aggregate of its liabilities, including in the latter 
the amount of its capital stock.

Sec. 2.   Before payment of any dividend, there may be set aside out of any 
funds of the corporation available for dividends such sum or sums as the 
directors from time to time, in their absolute discretion, think proper as a 
reserve fund to meet contingencies, or for equalizing dividends, or for 
repairing or maintaining any property of the corporation, or for such other 
purpose as the directors shall think conducive to the interests of the 
corporation.

      ARTICLE XV -- REPRESENTATION OF SHARES OF OTHER CORPORATIONS

Sec. 1.   The chairman, the president, and the secretary, or any assistant 
secretary, of the corporation are authorized to vote, represent and exercise 
on behalf of the corporation all rights incident to any and all shares of 
other corporations standing in the name of the corporation. Said authority 
may be exercised by such officers either in person or by proxy or power of 
attorney duly executed by any of said officers.

         ARTICLE XVI -- INDEMNIFICATION OF DIRECTORS AND OFFICERS

Sec. 1.   Each person who was or is made a party or is threatened to be made 
a party to or is involved (including, without limitation, as a witness) in 
any actual or threatened action, suit or proceeding, whether civil, criminal, 
administrative or investigative, formal or informal, by reason of the fact 
that he or she is or was a director or officer of the corporation or, being 
or having been such a director or officer, he or she is or was serving at the 
request of the corporation as a director, officer, employee or agent of 
another

                                    17

<PAGE>

corporation or of a partnership, joint venture, trust or other enterprise, 
including service with respect to employee benefit plans, whether the basis 
of such proceeding is alleged action in an official capacity as a director, 
officer, employee or agent or in any other capacity while serving as a 
director, officer, employee or agent or in any other capacity, shall be 
indemnified and held harmless by the corporation to the full extent permitted 
by applicable law as then in effect, against all expense, liability and loss 
(including, without limitation, attorneys' fees, judgments, fines, ERISA 
excise taxes or penalties and amounts to be paid in settlement) actually or 
reasonably incurred or suffered by such person in connection therewith. Such 
indemnification shall continue as to a person who has ceased to be a 
director, officer, employee or agent and shall inure to the benefit of his or 
her heirs, executors and administrators; provided, however, that no 
indemnification shall be provided under this Article to any such person to 
the extent that such indemnification would not be consistent with the 
Washington Business Corporation Act or other applicable law as then in 
effect; provided further, however, that except as provided in Sec. 2 of this 
Article with respect to proceedings seeking to enforce rights to 
indemnification, this corporation shall indemnify any such person seeking 
indemnification in connection with a proceeding (or part thereof) initiated 
by such person only if such proceeding (or part thereof) was authorized by 
the Board of Directors of this corporation. The right to indemnification 
conferred in this Article shall be a contract right and shall include the 
right to be paid by the corporation the expense incurred in defending any 
such proceeding in advance of its final disposition; provided, however, that 
the payment of such expenses in advance of the final disposition of a 
proceeding shall be made to or on behalf of a director or officer only upon 
delivery to the corporation of an undertaking, by or on behalf of such 
director or officer, to repay all amounts so advanced if it shall ultimately 
be determined that such director or officer is not entitled to be indemnified 
under this Section or otherwise.

Sec. 2.   If a claim under Sec. 1 of this Article is not paid in full by this 
corporation within sixty days after a written claim has been received by this 
corporation (except in the case of a claim for expenses incurred in defending 
a proceeding in advance of its final disposition, in which case the 
applicable period shall be twenty days) the claimant may at any time 
thereafter bring suit against the corporation to recover the unpaid amount of 
the claim and, to the extent successful in whole or in part, the claimant 
shall be entitled to be paid also the expense of prosecuting such claim. The 
claimant shall be presumed to be entitled to indemnification hereunder upon 
submission of a written claim (and, in an action brought to enforce a claim 
for expenses incurred in defending any proceeding in advance of its final 
disposition, where the required undertaking has been tendered to this 
corporation), and thereafter this corporation shall have the burden of proof 
to overcome the presumption that the claimant is not so entitled. It shall be 
a defense to any such action (other than an action brought to enforce a claim 
for expenses incurred in defending any proceeding in advance of its final 
disposition where the required undertaking, if any is required, has been 
tendered to this corporation) that the claimant has not met the standards of 
conduct which make it permissible hereunder or under the Washington Business 
Corporation Act for this corporation to indemnify the claimant for the amount 
claimed, but the burden of proving such defense shall be on this corporation. 
Neither the failure of this corporation (including its board of directors, 
independent legal counsel, or its shareholders) to have made a determination 
prior to the commencement of such action that indemnification of or 
reimbursement or advancement of expenses to the claimant is proper in the 
circumstances because he or she has met the applicable standard of conduct 
set forth herein or in the Washington Business Corporation Act nor an actual 
determination by this corporation (including its board of directors, 
independent legal counsel, or its shareholders) that the claimant is not 
entitled to indemnification or to the reimbursement or advancement of 
expenses shall be a defense to the action or create a presumption that the 
claimant is not so entitled.

Sec. 3.   The right to indemnification and the payment of expenses incurred 
in defending a proceeding in advance of its final disposition conferred in 
this Article shall not be exclusive of any other right which any person may 
have or hereafter acquire under any statute, provision of the Articles of 
Incorporation, bylaws, agreement, vote of shareholders or disinterested 
directors or otherwise.

Sec. 4.   The corporation may maintain insurance, at its expense, to protect 
itself and any director, officer,

                                     18

<PAGE>

employee or agent of the corporation or another corporation, partnership, 
joint venture, trust or other enterprise against any expense, liability or 
loss, whether or not the corporation would have the power to indemnify such 
person against such expense, liability or loss under the Washington Business 
Corporation Act. The corporation may enter into contracts with any director 
or officer of the corporation in furtherance of the provisions of this 
Article and may create a trust fund, grant a security interest or use other 
means (including, without limitation, a letter of credit) to ensure the 
payment of such amounts as may be necessary to effect indemnification as 
provided in this Article.

Sec. 5.   The corporation may, by action of its board of directors from time 
to time, provide indemnification and pay expenses in advance of the final 
disposition of a proceeding to employees and agents of the corporation with 
the same scope and effect as the provisions of this Article with respect to 
the indemnification and advancement of expenses of directors and officers of 
the corporation or pursuant to rights granted pursuant to, or provided by, 
the Washington Business Corporation Act or otherwise.

                      ARTICLE XVII -- AMENDMENTS

Sec. 1.   These bylaws may be altered or amended by the affirmative vote of a 
majority of the stock issued and outstanding and entitled to vote thereat, at 
any regular or special meeting of the shareholders if notice of the proposed 
alteration or amendment be contained in the notice of the meeting, or by the 
affirmative vote of a majority of the board of directors, subject to the 
power of the shareholders to change or repeal such bylaws.

          ARTICLE XVIII -- MISCELLANEOUS STATUTORY RESTRICTIONS

Sec. 1.   The corporation shall have the right to purchase its own shares to 
the extent of unreserved and unrestricted earned or capital surplus except as 
prohibited by law.

Sec. 2.   No loans shall be made by the corporation to its officers or 
directors unless first approved in the manner required by RCW 23B.08.700 
through .08.730 or other applicable law.

            ARTICLE XIX -- MISCELLANEOUS PROCEDURAL PROVISIONS

Sec. 1.   The rules contained in the most recent edition of Robert's Rules of 
Order, Revised, shall govern all meetings of shareholders and directors where 
those rules are not inconsistent with the Articles of Incorporation, bylaws 
or special rules or order of the corporation.

            ARTICLE XX -- COMMITTEES OF THE BOARD OF DIRECTORS

Sec. 1.   The board of directors may, by resolution or resolutions, passed by 
a majority of the whole board, designate an executive committee of five 
directors. Said committee may meet at stated times, or on notice to all by 
any of their number. During the intervals between meetings of the board such 
committee shall advise with and aid the officers of the corporation in all 
matters concerning its interests and the management of its business, and 
generally perform such other duties and exercise such powers as may be 
directed or delegated by the board of directors from time to time. The board 
may delegate to such committee authority to exercise all the powers of the 
board, except such powers as are denied to committees under RCW 23B.08.250(5) 
as such statute shall be amended from time to time.

Sec. 2.   The board of directors shall designate three of their number who 
are neither officers nor employees of the corporation as an audit committee. 
It shall be the duty of the audit committee to:

          (a)  Review the financial statements with the independent 
accountants prior to recommending approval by the full board.

          (b)  Determine the effectiveness of the audit effort through 
regular meetings with the independent accountants.

          (c)  Determine through discussions with the independent accountants 
that no restrictions were placed on the scope of the examination or on its 
implementation.

          (d)  Inquire into the effectiveness of the corporation's financial 
and accounting functions, organizations, operations and management through 
discussions with the independent accountants, internal auditors and officers 
of the corporation, especially those using the information.

          (e)  Inquire into the effectiveness of the corporation's internal 
auditing methods and procedures.

          (f)  Report to the board of directors on the committee's activities 
and recommendations.

                                    19

<PAGE>

          (g)  Recommend the appointment of independent accountants for the 
ensuing year.

Sec. 3.   The board of directors shall designate three or more of their 
number to serve the corporation as a nominating and compensation committee to:

          (a)  Set criteria for selection of potential members of the board 
of directors.

          (b)  Consider and recommend nominees for election to the board of 
directors and make such other recommendations relating to nomination for 
election to the board as the committee deems appropriate.

          (c)  Consider nominees for election to the board of directors 
timely recommended by shareholders of the corporation and consider the 
recommendation of the Chairman.

          (d) Consider the recommendation of the Chairman and evaluate and 
recommend to the board of directors compensation levels for all officers.

          (e)  Evaluate and recommend to the board of directors appropriate 
board and committee fees.

Sec. 4.   The board of directors, by resolution adopted by a majority of the 
full board of directors, may designate one or more additional committees of 
the board of directors which shall have two or more members and which shall 
have such duties and exercise such powers as may be directed or delegated by 
the board of directors from time to time. Vacancies in the membership of any 
committee shall be filled by the board of directors. Each committee shall 
keep regular minutes of its proceedings and report the same to the board of 
directors when required.


                                    20