**EXHIBIT 3.2a**

 

**AMENDED AND RESTATED****BYLAWSOFCAP ROCK ENERGY CORPORATION**

 

**ARTICLE I**

 

**Offices**

 

**1.1  Principal Office.**The principal office of the Corporation shall be in the City of Midland Texas.

 

**1.2  Registered Office.**The registered office of the Corporation required by the Texas BusinessCorporation Act, as amended from time to time (the “TBCA”), to be maintained inthe State of Texas, may be, but need not be, identical with the principaloffice, and the address of the registered office may be changed from time totime by the Board of Directors of the Corporation (the “Board”).

 

**1.3  Other Offices.**TheCorporation may also have offices at such other places, both within and withoutthe State of Texas, as the Board may from time to time determine or the businessof the Corporation may require.

 

**ARTICLE II**

 

**Meetings of Shareholders**

 

**2.1  Place of Meetings.**The Board may designate any place, either within or without the State of Texas,as the place of meeting for any annual meeting or for any special meeting calledby the Board. A waiver of notice signed by all shareholders entitled to vote ata meeting may designate any place, either within or without the State of Texas,as the place for the holding of such meeting. If no designation is made, or ifa special meeting be otherwise called, the place of meeting shall be theprincipal office of the Corporation.

 

**2.2  Annual Meeting.** Theannual meeting of shareholders commencing with the year 2002 shall be held atsuch time, on such day and at such place as may be designated by the Board, atwhich time the shareholders shall elect a Board and transact such otherbusiness as may properly be brought before the meeting.

 

**2.3  Special Meetings. **Special meetings of the shareholders,for any purposes or purposes, may be called by the Chairman of the Board, ifone shall be elected, or, in the event of his absence or unavailability, thePresident. Unless otherwise prescribed by statute or by the

 

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Articles of Incorporation, specialmeetings may not be called by any other person or persons. No business may betransacted at any special meeting of shareholders other than such business asmay be designated in the notice calling such meeting.

 

**2.4  Notice of Meetings.**(a)Written or printed notice of all meetings of shareholders stating the place,day and hour thereof, and in the case of a special meeting the purpose orpurposes for which the meeting is called, shall be personally delivered ormailed, not less than ten (10) days nor more than sixty-five (65) days prior tothe date of the meeting, to each shareholder entitled to vote at such meeting.If mailed, the notice shall be deemed delivered when deposited in the UnitedStates mail addressed to the shareholder at his address as it appears on theshare transfer records of the Corporation, with postage thereon prepaid.Delivery of any such notice to any officer of a corporation or association, orto any member of a partnership, shall constitute delivery of such notice tosuch corporation, association or partnership.

 

(b)                                 Anynotice required to be given to any shareholder, under any provision of the TBCAor the Articles or Bylaws of the Corporation, need not be given to theshareholder if (i) notice of two consecutive annual meetings and all notices ofmeetings held during the period between those annual meetings, if any, or (ii)all (but in no event less than two) payments (if sent by first class mail) ofdistributions of interest on securities during a 12-month period have been mailedto that person, addressed at his address as shown on the share transfer recordsof the Corporation, and have been returned undeliverable. Any action or meetingtaken or held without notice to such a person shall have the same force andeffect as if the notice had been duly given and, if the action taken by theCorporation is reflected in any articles or document filed with the Secretaryof State of the State of Texas, those articles or that document may state thatnotice was duly given to all persons to whom notice was required to be given.If such person delivers to the Corporation a written notice setting forth histhen current address, the requirement that notice be given to that person shallbe reinstated.

 

**2.5 Business at the Meeting.**  (a)  At an annual or special meeting of theshareholders, only such business shall be conducted as shall have been properlybrought before the meeting. To be properly brought before an annual or specialmeeting of shareholders, business must be (1) specified in the notice ofmeeting (or any supplement thereto) given by or at the direction of the Boardof Directors, (2) otherwise properly brought before the meeting by or at thedirection of the Board of Directors or (3) otherwise properly brought beforethe meeting by any shareholder of the corporation who is entitled to vote atsuch meeting, who is a shareholder of record at the time of giving of thenotice provided for in these Bylaws and who complies with the notice proceduresset forth in these Bylaws.

 

(b) In additionto any other applicable requirements, and subject to any limitations onbusiness which may be proposed or transacted at such meeting, including,without limitation, Article II, Section 2.3 of these Bylaws, for business to beproperly brought before an annual or special meeting by a shareholder pursuantto clause (3) of paragraph (a) above, the shareholder must have given timelynotice thereof in writing to the Secretary of the corporation. To be timelywith respect to an annual meeting of shareholders, a shareholder’s notice mustbe received at the principal executive offices of the corporation not less thanone hundred twenty (120) days nor

 

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more than one hundred eighty(180) days prior to the date of the annual meeting; provided, however, that inthe event that the first public disclosure (whether by mailing of a notice toshareholders or the exchange on which the common stock of the corporation islisted or to the American Stock Exchange, by press release or otherwise) of thedate of the annual meeting is made less than sixty (60) days prior to the dateof the meeting, notice by a shareholder will be timely if received not laterthan the close of business on the tenth (10) day following the day on whichsuch public disclosure is first made. To be timely with respect to a specialmeeting of shareholders, a shareholder’s notice must be received at theprincipal executive offices of the corporation not later than the close ofbusiness on the tenth (10th) day following the day on which the first publicdisclosure (whether by mailing of a notice to stockholders or the exchange onwhich the stock of the corporation is listed or to the American Stock Exchange,by press release or otherwise), of the date of the special meeting ismade.  Notwithstanding anything in thesebylaws to the contrary, no business proposed by a shareholder shall beconducted at a shareholders meeting, annual or special, unless brought beforethe meeting in accordance with the procedures set forth in this Section2.5.  The Chairman of the meeting shall,if the facts warrant, determine and declare to the meeting that business wasnot properly brought before the meeting and in accordance with the provisionsof these bylaws, and if the Chairman should so determine, the Chairman shall sodeclare to the meeting and any such business not properly brought before themeeting shall not be transaction.

 

(c) Ashareholder’s notice to the Secretary shall set forth as to each matter theshareholder proposes to bring before the meeting (1) a reasonably detaileddescription of the business desired to be brought before the meeting and thereasons for conducting such business at the meeting, (2) the name and address,as they appear on the corporation’s books, of the shareholder proposing suchbusiness, and the name and address of the beneficial owner, if any, on whosebehalf the proposal is made, (3) the class and number of shares of thecorporation which are owned beneficially and of record by such shareholder ofrecord and by the beneficial owner, if any, on whose behalf the proposal ismade, (4) any material interest of such shareholder of record and thebeneficial owner, if any, on whose behalf the proposal is made in suchbusiness, and (5) such other information relating to the shareholder or thebusiness proposed to be brought before the meeting as is required to bedisclosed under the rules of the Securities and Exchange Commission governingthe solicitation of proxies whether or not such proxies are in fact solicitedby the shareholder. Notwithstanding anything in these Bylaws to the contrary,no business shall be conducted at an annual or special meeting of shareholdersexcept in accordance with the procedures set forth in this Article II Section2.5 (or to the extent applicable, Article II, Section 2.12); provided, however,that nothing in this Article II, Section 2.5 shall be deemed to precludediscussion by any shareholder of any business properly bought before the annualor special meeting of shareholders in accordance with said procedures.

 

(d) Thechairman of the meeting shall, if the facts warrant, determine and declare tothe meeting that business was not properly brought before the meeting inaccordance with the procedures prescribed by these Bylaws, and if he should sodetermine, he shall so declare to the meeting and any such business notproperly brought before the meeting shall not be transacted. Notwithstandingthe foregoing provisions of these Bylaws, a shareholder shall also comply with

 

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all applicable requirements ofthe Securities Exchange Act of 1934**,**as amended, and the rules and regulationsthereunder with respect to the matters set forth in this Article II, Section2.5.

 

(e)Notwithstanding anything in this Section 2.5, or these Bylaws, should an annualor special meeting be convened and subsequently adjourned, no business may bebrought before any reconvened annual or special meeting that was not, pursuantto these Bylaws, properly brought before the annual or special meeting that waspreviously adjourned.

 

**2.6  Voting Lists.**Theofficer or agent having charge of the share transfer records of the Corporationshall make, at least ten (10) days before each meeting of the shareholders, acomplete list of shareholders entitled to vote at such meeting or anyadjournment thereof, arranged in alphabetical order, with the address of eachand the number of shares held by each, which list, for a period of ten (10)days prior to such meeting, shall be kept on file at the registered office orprincipal place of business of the Corporation and shall be subject toinspection by any shareholder at any time during usual business hours. Suchlist shall also be produced and kept open at the time and place of the meetingand shall be subject to the inspection of any shareholder for the duration ofthe meeting. The original share transfer records shall be prima facie evidenceas to who are the shareholders entitled to examine such list or share transferrecords or to vote at any meeting of shareholders.

 

**2.7  Quorum.**A quorumshall be present at a meeting of shareholders if the holders of at least 331/3% of the shares entitled to vote are represented at the meeting in person orby proxy, unless otherwise provided by the Articles. Unless otherwise providedin the Articles or these Bylaws, once a quorum is present at a meeting ofshareholders, the shareholders represented in person or by proxy at the meetingmay conduct such business as may be properly brought before the meeting untilit is adjourned, and the subsequent withdrawal from the meeting of anyshareholder or the refusal of any shareholder represented in person or by proxyto vote shall not affect the presence of a quorum at the meeting. Unlessotherwise provided in the Articles or these Bylaws, the shareholdersrepresented in person or by proxy at a meeting of shareholders at which aquorum is not present may adjourn the meeting until such time and to such placeas may be determined by a vote of the holders of a majority of the sharesrepresented in person or by proxy at that meeting.

 

**2.8  Organization.**(a)The Chairman of the Board, if one shall be elected, shall preside at allmeetings of the shareholders. In the absence of the Chairman of the Board orshould one not be elected, the President or, in his absence, a Vice Presidentshall preside. In the absence of all of these officers, any shareholder or theduly appointed proxy of any shareholder may call the meeting to order and achairman shall be elected from among the shareholders present.

 

(b) TheSecretary of the Corporation shall act as secretary at all meetings of theshareholders. In his absence an Assistant Secretary shall so act and in theabsence of all of these officers the presiding officer may appoint any personto act as secretary of the meeting.

 

**2.9  Proxies.**(a) At anymeeting of the shareholders every shareholder entitled to vote at such meetingshall be entitled to vote in person or by proxy executed in writing by such

 

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shareholder or by his dulyauthorized attorney-in-fact. A telegram, telex, cablegram or similartransmission by the shareholder, or a photographic, photostatic, facsimile orsimilar reproduction of a writing executed by the shareholder, shall be treatedas an execution in writing for purposes of this Section. Proxies shall be filedwith the Secretary immediately after the meeting has been called to order.

 

(b)                                 Noproxy shall be valid after eleven (11) months from the date of its executionunless such proxy otherwise provides.

 

(c)                                  Eachproxy shall be revocable before it has been voted unless the proxy formconspicuously states that the proxy is irrevocable and the proxy is coupledwith an interest, including the appointment as proxy of (i) a pledgee, (ii) aperson who purchased or agreed to purchase, or owns or holds an option topurchase, the shares, (iii) a creditor of the Corporation who extended itcredit under terms requiring the appointment, (iv) an employee of the Corporationwhose employment contract requires the appointment or (v) a party to a votingagreement created under the TBCA.****An irrevocable proxy, if notedconspicuously on the certificate representing the shares that are subject tothe irrevocable proxy, shall be recognized as against the holder of the sharesor any successor or transferee of the shares. A revocable proxy shall be deemedto have been revoked if the Secretary of the Corporation shall have received ator before the meeting instructions of revocation or a proxy bearing a laterdate, which instructions or proxy shall have been duly executed and dated inwriting by the shareholder.

 

(d)                                 Inthe event that any instrument in writing shall designate two (2) or morepersons to act as proxies, a majority of such persons present at the meetingor, if only one shall be present, then that one, shall have and may exerciseall of the powers conferred by such written instrument upon all the persons sodesignated unless the instrument shall otherwise provide.

 

**2.10  Voting of Shares.**Exceptas otherwise provided by the TBCA, the Articles and subject to Section 7.5 ofthese Bylaws, each shareholder shall be entitled at each meeting ofshareholders to one (1) vote on each matter submitted to a vote at such meetingfor each share having voting rights registered in his name on the sharetransfer records of the Corporation. When a quorum is present at any meeting ofshareholders (and notwithstanding the subsequent withdrawal of enoughshareholders to leave less than a quorum present) and except as otherwiseprovided in the TBCA or the Articles, (a) with respect to any matter other thanthe election of directors, the affirmative vote of the holders of a majority ofthe shares entitled to vote on that matter and represented in person or byproxy at the meeting shall be the act of the shareholders and (b) directorsshall be elected by a plurality of the votes cast by the holders of sharesentitled to vote in the election of directors at the meeting of shareholders.

 

**2.11  Voting of Shares by Certain Holders.**(a)Shares standing in the name of another corporation may be voted by suchofficer, agent or proxy as the bylaws of such corporation may authorize or, inthe absence of such authorization, as the board of directors of suchcorporation may determine.

 

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(b)                                 Sharesheld by an administrator, executor, guardian or conservator may be voted by himso long as such shares forming a part of an estate are in the possession andform a part of the estate being served by him, either in person or by proxy,without a transfer of such shares into his name. Shares standing in the name ofa trustee may be voted by him, either in person or by proxy, but no trusteeshall be entitled to vote shares held by him without a transfer of such sharesinto his name as trustee.

 

(c) Sharesstanding in the name of a receiver may be voted by such receiver, and sharesheld by or under the control of a receiver may be voted by such receiverwithout the transfer thereof into his name if authority to do so be containedin an appropriate order of the court by which such receiver was appointed.

 

(d) Ashareholder whose shares are pledged shall be entitled to vote such sharesuntil the shares have been transferred into the name of the pledgee, andthereafter the pledgee shall be entitled to vote the shares so transferred.

 

(e) Shares ofthe Corporation’s stock (i) owned by the Corporation itself, (ii) owned byanother corporation, the majority of the voting stock of which is owned orcontrolled by the Corporation, or (iii) held by the Corporation in a fiduciarycapacity shall not be voted, directly or indirectly, at any meeting, and shallnot be counted in determining the total number of outstanding shares at any giventime.

 

**2.12  Director Nominations**.  (a) Subject to Article III, Section 3.5 ofthese Bylaws, only persons who are nominated in accordance with the proceduresset forth in these Bylaws shall be eligible to serve as directors. Nominationsof persons for election to the Board of Directors of the corporation may bemade at a meeting of shareholders (1) by or at the direction of the Board ofDirectors or by any nominating committee or person appointed by the Board ofDirectors and (2) by any shareholder of the corporation entitled to vote forthe election of directors at the meeting, who is a shareholder of record at thetime of giving the notice provided for in these Bylaws and who complies withthe notice procedures set forth in these Bylaws.

 

(b) In additionto any other applicable requirements, and subject to any limitations onbusiness which may be proposed or transacted at such meeting, including,without limitation, Article II, Section 2.3 of these Bylaws, nominations fordirectors, other than nominations made by or at the direction of the Board ofDirectors or by any nominating committee or person appointed by the Board ofDirectors, shall be made pursuant to timely notice in writing to the Secretaryof the corporation. To be timely with respect to an annual meeting ofshareholders, a shareholder’s notice must be received at the principalexecutive offices of the corporation not less than sixty (60) days nor morethan one hundred twenty days (120) prior to the date of the annual meeting ofshareholders; provided, however, that in the event that the first publicdisclosure (whether by mailing of a notice to shareholders or the exchange onwhich the common stock of the corporation is listed or to the American StockExchange, by press release or otherwise) of the date of the annual meeting ofthe shareholders is made less than sixty-five (65) days prior to the date ofsuch meeting, notice by a shareholder will be timely if received at theprincipal executive offices of the corporation not later than the close ofbusiness on the tenth (10) day following the

 

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day on which such publicdisclosure is first made. To be timely with respect to a special meeting ofshareholders at which directors are to be elected, a shareholder’s notice mustbe received at the principal executive offices of the corporation not laterthan the close of business on the tenth (10th) day following the day on whichthe first public disclosure (whether by mailing of a notice to shareholders orthe exchange on which the common stock of the corporation is listed or to theAmerican Stock Exchange, by press release or otherwise) of the date of thespecial meeting is made.

 

(c) Ashareholder’s notice of a director nominee shall set forth (1) as to eachperson whom the stockholder proposes to nominate for election or re-election asa director, (a) the name, age, business address and residence address of theperson; (b) the principal occupation or employment of the person; (c) the classand number of shares of capital stock of the corporation which are beneficiallyowned by the person; and (d) such other information relating to the person, aswould be required under the rules of the Securities and Exchange Commission ina proxy statement soliciting proxies for the election of such person whether ornot such proxies are in fact solicited for the election of such person; and (2)as to the shareholder giving the notice (a) the name and address, as theyappear on the corporation’s stock register, of the shareholder; (b) the classand number of shares of capital stock of the corporation which are beneficiallyowned by the shareholder; and (c) such other information relating to theshareholder or the nomination as is required to be disclosed under the rules ofthe Securities and Exchange Commission governing the solicitation of proxieswhether or not such proxies are in fact solicited by the shareholder. Suchnotice must also include a signed consent of each such nominee to serve as adirector of the corporation, if elected or re-elected. The corporation mayrequire any proposed nominee to furnish such other information as mayreasonably be required by the corporation to determine the eligibility forelection of such nominee as a director of the corporation. The chairman of themeeting shall, if the facts warrant, determine and declare to the meeting thata director nomination was not made in accordance with the foregoing procedure,and if he should so determine, the defective nomination shall be disregarded.

 

(d)Notwithstanding the foregoing provisions of these Bylaws, a shareholder shallalso comply with all applicable requirements of the Securities Exchange Act of1934, as amended, and the rules and regulations thereunder with respect to thematters set forth in this Article II, Section 2.11.

 

**2.13  Election of Directors.**Ateach election for Directors, each shareholder entitled to vote at such electionshall, unless otherwise provided by the Articles or by the TBCA, have the rightto vote the number of shares owned by him for as many persons as there are tobe elected and for whose election he has a right to vote. Unless otherwiseprovided by the Articles, no shareholder shall have the right or be permittedto cumulate his votes on any basis.

 

**2.14  Telephone Meetings.**Shareholders may participate in and hold a meeting of the shareholders by meansof conference telephone or similar communications equipment by means of whichall persons participating in the meeting can hear each other and participationin a meeting pursuant to this Section shall constitute presence in person atsuch meeting, except

 

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where a person participates inthe meeting for the express purpose of objecting to the transaction of anybusiness on the ground that the meeting is not lawfully called or convened.

 

**2.15 Action by Consent.**

 

(a)                                  Anyaction required or permitted to be taken at a meeting of the shareholders maybe taken without a meeting, without prior notice, and without a vote if aconsent or consents in writing setting forth the action so taken, shall besigned by the holders of shares having not less than the minimum number ofvotes necessary to take such action at a meeting at which the holders of allshares entitled to vote on the action were present and voted.  Prompt notice of the taking of any action byshareholders without a meeting by less than unanimous written consent shall begiven to the shareholders who did not consent in writing to the action.

 

(b)                                 Everywritten consent shall bear the date of signature of each shareholder who signsthe consent.  No written consent shallbe effective to take the action that is the subject of the consent unless,within 60 days after the date of the earliest dated consent delivered to the Corporationin accordance with this Section 2.15, the consent or consents signed by theholder or holders of shares having not less than the minimum number of votesthat would be necessary to take the action that is the subject of the consentare delivered to the Corporation by delivery to its registered office, itsprincipal place of business, or an officer or agent of the Corporation havingcustody of the records in which proceedings of meetings of shareholders arerecorded.  Delivery shall be by hand or certifiedor registered mail, return receipt requested. Delivery to the Corporation’s principal place of business shall beaddressed to the president or the chief executive officer of the Corporation.

 

(c)                                  Inthe event of the delivery, in the manner provided by Section 2.15(b), to theCorporation of the requisite written consent or consents to take corporateaction and/or any related revocation or revocations, the corporation shallengage independent inspectors of elections for the purpose of performing promptlya ministerial review of the validity of the consents and revocations.  For the purpose of permitting the inspectorsto perform such review, no action by written consent without a meeting shall beeffective until such date as the independent inspectors certify to theCorporation that the consents delivered to the Corporation in accordance withsection 2.15(b) represent at least the minimum number of votes that would benecessary to take the corporate action. Nothing contained in this Section 2.15(b) shall in any way be construedto suggest or imply that the board of directors or any stockholder shall not beentitled to contest the validity of any consent or revocation thereof, whetherbefore or after such certification by the independent inspectors, or to takeany other action (including, without limitation, the commencement, prosecution,or defense of any litigation with respect thereto, and the seeing of injunctiverelief in such litigation).

 

**2.16****                        FixingRecord Dates for consents to Action. **Inorder that the Corporation may determine the shareholders entitled to consentto corporate action in writing without a meeting of shareholders, the board ofdirectors may fix a record date for the purpose of determining

 

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shareholders entitled toconsent to that action, which record date shall not precede, and shall not bemore than 10 days after, the date upon which the resolution fixing the recorddate is adopted by the board of directors. Any shareholder of record seeking to have the shareholders authorize ortake corporate action by written consent shall, by written notice to thesecretary, request the board of directors to fix a record date.  The board of directors shall promptly, butin all events within 10 days after the date on which such request is received,adopt a resolution fixing the record date. If no record date has been fixed by the board of directors within 10days of receipt of such request, the record date for determining theshareholders entitled to consent to corporate action in writing without ameeting, when no prior action of the board of directors is required by the Act,shall be the first date on which a signed written consent setting forth theaction taken or proposed to be taken is delivered to the Corporation inaccordance with the provisions of Section 2.15.  If no record date shall have been fixed by the board of directorsand prior action of the board of directors is required by the Act, the recorddate for determining shareholders entitled to consent to action in writingwithout a meeting shall be at the close of business on the date on which theboard of directors adopts a resolution taking such prior action.

 

**2.17****                        Conduct ofMeeting.**  The Chairman of the boardof directors, or if there shall be none or in his or her absence, the ViceChairman of the board of directors, or if there be none or in his or herabsence, the highest ranking officer of the Corporation, determined inaccordance with Article VI among a group consisting of the Chief ExecutiveOfficer, President and the Vice Presidents, who is present at the meeting,shall call to order and act as the chair of any meeting of the shareholders ofthe Corporation.  The Secretary of theCorporation shall server as the Secretary of the meeting or, if there shall benone or in his or her absence, the Secretary of the meeting shall be suchperson as the chair of the meeting appoints. The chair of the meeting shall have the right and authority to prescribesuch rules, regulations and procedures and to take or refrain from taking suchactions as, in the judgment of the chair of the meeting, are appropriate forthe conduct of the meeting.  To theextent not prohibited by the Act, such rules, regulations and procedures mayinclude, without limitation, establishment of (a) an agenda or order ofbusiness for the meeting, (b) the method by which business may be proposed andprocedures for determining whether business has been properly (or not properly)introduced before the meeting, (c) procedures for casting and the form ofballots to be used by shareholders in attendance at the meeting and theprocedures to be followed for counting shareholder votes, (d) rules,regulations and procedures for maintaining order at the meeting and the safety ofthose present, (e) limitations on attendance at or participation in the meetingto shareholders of record of the corporation, their duly authorized proxies orsuch other persons as the chair of the meeting shall determine, (f)restrictions on entry to the meeting after the time fixed for commencementthereof and (g) limitations on the time allotted to questions or comments byparticipants.  Any proposed businessproperly before the meeting shall be deemed to be on the agenda.  Unless and to the extent otherwisedetermined by the chair of the meeting, it shall not be necessary to followRobert’s Rules of Order or any other rules of parliamentary procedures at themeeting of shareholders.  Followingcompletion of the business of the meeting as determined by the chair of themeeting, the chair of the meeting shall have the exclusive authority to adjournthe meeting.

 

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**ARTICLE III**

 

**Directors**

 

**3.1**  **Number and Qualification.**The Board shallbe composed of not less than three (3) nor more than twelve (12) members whoshall be elected by the shareholders. Subject to any limitations specified bythe TBCA or in the Articles, the number of Directors may be increased ordecreased by resolution adopted by a majority of the Board. No decrease in thenumber of Directors shall have the effect of shortening the term of anyincumbent Director. Directors need not be residents of the State of Texas orshareholders of the Corporation.

 

**3.2  Election and Term of Office.**(a)** **The Directors shall be elected atthe annual meeting of the shareholders (except as provided in Article III,Section 3.2(b)) by the holders of shares entitled to vote in the election ofDirectors.

 

(b)  There shall be three (3) classes ofdirectors, as nearly equal as possible, with each class of directors to beelected for three (3) year terms.  Thus,the nominees for election to the class of directors whose terms are expiring atan annual meeting of shareholders will be elected for a term expiring at theannual meeting of shareholders held in the third year following the year oftheir election.  If the total number ofdirectors is increased or decreased, however, the Board may adjust the numberof directors in one or more classes, and that adjustment may result in adirector being elected or reelected to a term shorter than three (3)years.  Vacancies and newly-createddirectorships resulting from any increase in the authorized number ofdirectors, and vacancies whether because of death, resignation or any other cause,may be filled by a majority of the directors then in office, though less than aquorum, and the directors so chosen shall hold office until the next annualelection and until their successors are duly elected and shall qualify, unlesssooner displaced.  If any director isappointed by the Board between annual meetings, the shareholders at the nextannual meeting of shareholders following the appointment will vote to elect adirector to complete the unexpired term or to serve a full three (3) year termif the unexpired term ends at that annual meeting.

 

(c)  Unless otherwise providedin the Articles, each Director elected shall hold office until his successorshall be elected and shall qualify, or until his death, resignation or removalin the manner hereinafter provided.

 

**3.3  Resignation.** AnyDirector may resign at any time by giving written notice to the President orSecretary. Such resignation shall take effect at the time specified therein,and unless otherwise specified therein, the acceptance of such resignationshall not be necessary to make it effective.

 

**3.4  General Powers.**Thepowers of the Corporation shall be exercised by or under the authority of, andthe property, business and affairs of the Corporation shall be managed underthe direction of, the Board. In addition to the powers and authoritiesexpressly conferred upon them by these Bylaws, the Board may exercise all suchpowers of the Corporation and do all such

 

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lawful acts and things as arenot by law or by the Articles or by these Bylaws directed or required to beexercised or done by the shareholders.

 

**3.5  Compensation.**Directors compensation shall be set by resolution of the Board.  No director shall be precluded from servingthe Corporation in any other capacity or receiving compensation therefore.

 

**3.6 Interested Directors.**  No contract or transaction between the Corporation and one ormore of its directors or officers, or between the Corporation and any othercorporation, partnership, association, or other organization in which one ormore of its directors or officers are directors or officers or have a financialinterest, shall be void or voidable solely for this reason because the directoror officer is present at or participates in the meeting of the board ofdirectors or committee thereof which authorizes the contract or transaction, orsolely because his or their votes are counted for such purpose if:

 

(a)                                  Thematerial facts as to his relationship or interest and as to the contract ortransaction are disclosed or are known to the board of directors or thecommittee, and the board of directors or committee in good faith authorizes thecontract or transaction by the affirmative vote of a majority of thedisinterested directors, even though the disinterested directors be less than aquorum; or

 

(b)                                 Thematerial facts as to his relationship or interest and as to the contract ortransaction are disclosed or are known to shareholders entitled to votethereon, and the contract or transaction is specifically approved in good faithby vote of the shareholders; or

 

(c)                                  Thecontract or transaction is fair as to the Corporation as of the time it isauthorized, approved, or ratified by the board of directors, a committeethereof, or the shareholders.

 

Common or interested directors may be counted in determining thepresence of a quorum at a meeting of the board of directors or of a committeewhich authorizes the contract or transaction.

 

This provision shall not be construed to invalidate a contract ortransaction which would be valid in the absence of this provision or to subjectany director or officer to any liability that he would not be subject to in theabsence of this provision.

 

**ARTICLE IV**

 

**Meetings of the Board**

 

**4.1  Place of Meetings.**TheDirectors of the Corporation may hold their meetings, both regular and special,either within or without the State of Texas. Section 4.2 Annual Meeting. Thefirst meeting of each newly elected Board shall be held immediately followingthe adjournment

 

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of the annual meeting of theshareholders and no notice of such meeting shall be necessary to the newlyelected Directors in order legally to constitute the meeting, provided a quorumshall be present, or they may meet at such time and place as shall be fixed bythe consent in writing of all of the Directors.

 

**4.2**  **Annual Meeting.**The first meeting of eachnewly elected Board shall be held immediately following the adjournment of theannual meeting of the shareholders and no notice of such meeting shall benecessary to the newly elected Directors in order legally to constitute themeeting, provided a quorum shall be present, or they may meet at such time andplace as shall be fixed by the consent in writing of all of the Directors.

 

**4.3** **RegularMeetings.** Regular meetings of the Board, in addition to the annualmeetings referred to in Section 4.2, may be held without notice at such timeand place as shall from time to time be determined by the Board.

 

**4.4  Special Meetings.**Specialmeetings of the Board may be called by the Chairman of the Board, if one shallbe elected, or by the President, if a Chairman of the Board is not elected, onone (1) day’s notice (oral or written) to each Director. Special meetings shallbe called by the President or the Secretary on like notice on the writtenrequest of any Director. Neither the purpose of, nor the business to betransacted at, any special meeting of the Board need be specified in the noticeor waiver of notice of such meeting. Attendance of a Director at a meetingshall constitute a waiver of notice of such meeting except where a Directorattends a meeting for the express purpose of objecting to the transaction ofany business on the grounds that the meeting is not lawfully called orconvened.

 

**4.5  Quorum and Action.**Atall meetings of the Board, the presence of a majority of the number ofDirectors fixed in accordance with Section 3.1 shall be necessary andsufficient to constitute a quorum for the transaction of business and the actof a majority of the Directors at any meeting at which a quorum is presentshall be the act of the Board unless the act of a greater number is required bylaw, the Articles or these Bylaws. If a quorum shall not be present at any meetingof Directors, the Directors present may adjourn the meeting from time to timewithout notice other than announcement at the meeting until a quorum shall bepresent.

 

**4.6  Presumption of Assent to Action.**A Director who is present at a meeting of the Board at which action on anycorporate matter is taken shall be presumed to have assented to the actiontaken unless his dissent shall be entered in the minutes of the meeting orunless he shall file his written dissent to such action with the secretary ofthe meeting before the adjournment thereof or shall forward such dissent byregistered mail to the Secretary of the Corporation immediately after theadjournment of the meeting. Such right to dissent shall not apply to a Directorwho voted in favor of such action.

 

**4.7  Telephone Meetings.**Directors may participate in and hold a meeting of the Board by means ofconference telephone or similar communications equipment by means of which allpersons participating in the meeting can hear each other and participation in ameeting pursuant to this Section shall constitute presence in person at suchmeeting, except where a person

 

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participates in the meeting forthe express purpose of objecting to the transaction of any business on theground that the meeting is not lawfully called or convened.

 

**4.8  Action Without Meeting.**Anyaction required or permitted to be taken at a meeting of the Board, or anycommittee thereof, may be taken without a meeting if a consent in writing,setting forth the action so taken, is signed by all the members of the Board,or committee, as the case may be, and such consent shall have the same forceand effect as a unanimous vote at a meeting.

 

**ARTICLE V**

 

**Committees of the Board**

 

**5.1**  **Membership and Authorities.**The Board, byresolution adopted by a majority of the full Board, may designate from amongits members (a) one (1) or more committees, each of which shall have and mayexercise all of the authority of the Board in the business and affairs of theCorporation, except in those cases where the authority of the Board isspecifically denied to such committee or committees by the TBCA, the Articlesor these Bylaws and (b) one (1) or more Directors as alternate members of anysuch committee, who may, subject to any limitations imposed by the Board,replace absent or disqualified members at any meeting of that committee. Thedesignation of any committee and the delegation thereto of authority shall notoperate to relieve the Board, or any member thereof, of any responsibilityimposed upon it or him by law. The members of each such committee shall serveat the pleasure of the Board. Notwithstanding the foregoing, however, no committee shall have the authorityof the board of directors in reference to:

 

(a)                                  amendingthe articles of incorporation, except that a committee may, to the extentprovided in the resolution designating that committee, exercise the authorityof the board of directors vested in it in accordance with Article 2.13 of the Act;

 

(b)                                 proposinga reduction of the stated capital of the Corporation in the manner permitted byArticle 4.12 of the Act;

 

(c)                                  approvinga plan of merger or share exchange of the Corporation;

 

(d)                                 recommendingto the shareholders the sale, lease, or exchange of all or substantially all ofthe property and assets of the Corporation otherwise than in the usual andregular course of its business;

 

(e)                                  recommendingto the shareholders a voluntary dissolution of the Corporation or a revocationthereof;

 

(f)                                    amending,altering, or repealing these bylaws or adopting new bylaws of the Corporation;

 

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(g)                                 fillingvacancies in the board of directors;

 

(h)                                 fillingvacancies in, or designating alternate members of, any committee;

 

(i)                                     fillingany directorship to be filled by reason of an increase in the number ofdirectors;

 

(j)                                     electingor removing officers of the Corporation or members or alternate members of anycommittee;

 

(k)                                  fixingthe compensation of any member or alternate member of any committee; or

 

(l)                                     alteringor repealing any resolution of the board of directors that by its termsprovides that it shall not be so amendable or repealable.

 

**5.2  Minutes and Rules of Procedure.**Each committee designated by the Board shall keep regular minutes of itsproceedings and report the same to the Board when required. Subject to theprovisions of these Bylaws, the members of any committee may fix suchcommittee’s own rules of procedure.

 

**5.3  Vacancies.**TheBoard shall have the power at any time to fill vacancies in, to change themembership of, or to dissolve, any committee.

 

**5.4  Telephone Meetings.**Members of any committee designated by the Board may participate in or hold ameeting by use of conference telephone or similar communications equipment bymeans of which all persons participating in the meeting can hear each other.Participation in a meeting pursuant to this Section shall constitute presencein person at such meeting, except where a person participates in the meetingfor the express purpose of objecting to the transaction of any business on thegrounds that the meeting is not lawfully called or convened.

 

**5.5  Action Without Meeting.**Anyaction required or permitted to be taken at a meeting of any committee designatedby the Board may be taken without a meeting if a consent in writing, settingforth the action so taken, is signed by all the members of the committee, andsuch consent shall have the same force and effect as a unanimous vote at ameeting.

 

**5.6  RegularMeetings.** Regular meetings of any committee may be held without notice at suchtime and place as may be designated from time to time by the committee andcommunicated to all members thereof.

 

**5.7 Special Meetings.**  Special meetings of any committee may be held whenever called byany committee member.  The committeemember calling any special meeting shall cause notice of such special meeting,including therein the time and place of such special meeting, to be given toeach committee member at least two days before such special meeting.  Neither the

 

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business to be transacted at,nor the purpose of, any special meeting of any committee need be specified inthe notice or waiver of notice of any special meeting.

 

**5.8 Quorum; Majority Vote. **Atmeetings of any committee, a majority of the number of members designated bythe board of directors shall constitute a quorum for the transaction ofbusiness.  If a quorum is not present ata meeting of any committee, a majority of the members present may adjourn themeeting from time to time, without notice other than an announcement at themeeting, until a quorum is present.  Theact of a majority of the members present at any meeting at which a quorum is inattendance shall be the act of a committee, unless the act of a greater numberis required by law, the articles of incorporation, or these bylaws.

 

**5.9 Compensation.** Committee members may, by resolution of the board of directors, beallowed a fixed sum and expenses of attendance, if any, for attending anycommittee meetings or a state salary.

 

**5.10 Responsibility.**  The designation of any committee and the delegation of authorityto it shall not operate to relieve the board of directors or any director of anyresponsibility imposed upon it or such director by law.

 

**ARTICLE VI**

 

**Officers**

 

**6.1  Number.** Theofficers of the Corporation shall be a President and a Secretary. The Board mayalso designate one (1) or more Vice Presidents, a Treasurer, one (1) or moreAssistant Secretaries and one (1) or more Assistant Treasurers. In addition,the Board may designate the Chairman of the Board as an officer of theCorporation.  One (1) person may holdany two (2) or more of these offices.

 

**6.2  Election, Term of Office and Qualification.**The Board shall elect officers, none of whom need be a member of the Board,except for the Chairman of the Board, if one shall be elected, at its firstmeeting after each annual meeting of shareholders. Each officer so electedshall hold office until his successor shall have been duly elected andqualified or until his death, resignation or removal in the manner hereinafterprovided.

 

**6.3  Subordinate Officers.**The Board may appoint such other officers and agents as it shall deem necessarywho shall hold their offices for such terms, have such authority and performsuch duties as the Board may from time to time determine. The Board maydelegate to any committee or officer the power to appoint any such subordinateofficer or agent. No subordinate officer appointed by any committee or superiorofficer as aforesaid shall be considered as an officer of the Corporation, theofficers of the Corporation being limited to the officers elected or appointedas such by the Board.

 

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**6.4  Resignation.**Anyofficer may resign at any time by giving written notice thereof to the Board orto the President or Secretary of the Corporation. Any such resignation shalltake effect at the time specified therein and, unless otherwise specifiedtherein, the acceptance of such resignation shall not be necessary to make iteffective.

 

**6.5  Removal.** Anyofficer elected or appointed by the Board may be removed at any time with orwithout cause by the affirmative vote of a majority of the full Board. Anyother officer may be removed at any time with or without cause by the Board orby any committee or superior officer in whom such power of removal may beconferred by the Board. The removal of any officer shall be without prejudiceto the contract rights, if any, of the person so removed. Election orappointment of an officer or agent shall not of itself create any contractrights.

 

**6.6  Vacancies**. Avacancy in any office shall be filled for the unexpired portion of the term bythe Board, but in case of a vacancy occurring in an office filled by acommittee or superior officer in accordance with the provisions of Section 6.3,such vacancy may be filled by such committee or superior officer.

 

**6.7  Chairman of the Board.**TheChairman of the Board, if one shall be elected and designated by the Board asan officer of the Corporation, shall be the chief executive officer of theCorporation, shall preside at all meetings of the shareholders and Directors,shall be ex officio a member of all standing committees, shall have general andactive management of the business of the Corporation, shall have the generalsupervision and direction of all other officers of the Corporation with fullpower to see that their duties are properly performed and shall see that allorders and resolutions of the Board are carried into effect. He may sign, withany other proper officer, certificates for shares of the Corporation and anydeeds, bonds, mortgages, contracts and other documents which the Board hasauthorized to be executed, except where required by law to be otherwise signedand executed and except where the signing and execution thereof shall beexpressly delegated by the Board or these Bylaws, to some other officer oragent of the Corporation. In addition, the Chairman of the Board shall performwhatever duties and shall exercise all powers that are given to him by theBoard.

 

**6.8  President.**If noChairman of the Board shall be elected and designated by the Board as anofficer of the Corporation, the President shall be the chief executive officerof the Corporation and shall have the powers and duties of the Chairman of theBoard as set forth in Section 6.7. In the absence of the Chairman of the Board,if one shall be elected, the President shall preside at all meetings of theshareholders and Directors. He may sign, with any other proper officer,certificates for shares of the Corporation and any deeds, bonds, mortgages,contracts and other documents which the Board has authorized to be executed,except where required by law to be otherwise signed and executed and exceptwhere the signing and execution thereof shall be expressly delegated by theBoard or these Bylaws to some other officer or agent of the Corporation. Inaddition, the President shall perform whatever duties and shall exercise allthe powers that are given to him by the Board or by the Chairman of the Board,if one shall be elected.

 

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**6.9  The Vice Presidents.**TheVice Presidents shall perform the duties as are given to them by these Bylawsand as may from time to time be assigned to them by the Board, by the Chairmanof the Board, if one shall be elected, or by the President, if a Chairman ofthe Board is not elected, and may sign, with any other proper officer,certificates for shares of the Corporation. At the request of the President, orin his absence or disability, the Vice President designated by the President(or in the absence of such designation, the senior Vice President), shallperform the duties and exercise the powers of the President.

 

**6.10  Secretary.**TheSecretary, when available, shall attend all meetings of the Board and allmeetings of the shareholders and record all votes and the minutes of allproceedings in a book to be kept for that purpose and shall perform like dutiesfor any standing committees when required. He shall give, or cause to be given,notice of all meetings of the shareholders and special meetings of the Board asrequired by law or these Bylaws, be custodian of the corporate records and havegeneral charge of the share transfer records of the Corporation and shallperform such other duties as may be prescribed by the Board, by the Chairman ofthe Board, if one shall be elected, or by the President, if no Chairman of theBoard is elected, under whose supervision he shall be. lie may sign, with anyother proper officer, certificates for shares of the Corporation and shall keepin safe custody the seal of the Corporation, and, when authorized by the Board,affix the same to any instrument requiring it and, when so affixed, it shall beattested by his signature or by the signature of the Treasurer or an AssistantSecretary.

 

**6.11  Assistant Secretaries.**TheAssistant Secretaries shall perform the duties as are given to them by theseBylaws or as may from time to time be assigned to them by the Board or by theSecretary. At the request of the Secretary, or in his absence or disability,the Assistant Secretary designated by the Secretary (or in the absence of suchdesignation the senior Assistant Secretary), shall perform the duties andexercise the powers of the Secretary.

 

**6.12  Treasurer.**TheTreasurer shall have the custody and be responsible for all corporate funds andsecurities and shall keep full and accurate accounts of receipts anddisbursements in books and records of account belonging to the Corporation andshall deposit all monies and other valuable effects in the name and to thecredit of the Corporation in such depositories as may be designated by theBoard. He shall disburse the funds of the Corporation as may be ordered by theBoard, taking proper vouchers for such disbursements, and shall render to theChairman of the Board, if one shall be elected, the President and theDirectors, at the regular meetings of the Board, or whenever they may requireit, an account of all his transactions as Treasurer and of the financialcondition of the Corporation. He may sign, with any other proper officer,certificates for shares of the Corporation.

 

**6.13  Assistant Treasurers.**TheAssistant Treasurers shall perform the duties as are given to them by theseBylaws or as may from time to time be assigned to them by the Board or by theTreasurer. At the request of the Treasurer, or in his absence or disability, theAssistant Treasurer designated by the Treasurer (or in the absence of suchdesignation, the -senior Assistant Treasurer), shall perform the duties andexercise the powers of the Treasurer.

 

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**6.14  Treasurer’s Bond.**Ifrequired by the Board, the Treasurer and any Assistant Treasurer shall give theCorporation a bond in such sum and with such surety or sureties as shall besatisfactory to the Board for the faithful performance of the duties of hisoffice and for the restoration to the Corporation, in case of his death,resignation, retirement or removal from office, of all books and records ofaccount, papers, vouchers, money and other property of whatever kind in hispossession or under his control belonging to the Corporation.

 

**6.15  Salaries.**Thesalary or other compensation of officers shall be fixed from time to time bythe Board. The Board may delegate to any committee or officer the power to fixfrom time to time the salary or other compensation of subordinate officers andagents appointed in accordance with the provisions of Section 6.3.

 

**ARTICLE VII**

 

**Corporate Shares**

 

**7.1  Share Certificates**.(a) The certificates representing shares of the Corporation shall be in suchform, not inconsistent with statutory provisions and the Articles, as shall beapproved by the Board. The certificates shall be signed by the Chairman of theBoard, if one shall be elected, the President or a Vice President and aSecretary or Assistant Secretary, or such other or additional officers as maybe prescribed from time to time by the Board, and may be sealed with thecorporate seal or a facsimile thereof. The signatures of such officer orofficers upon a certificate may be facsimiles, if the certificate iscountersigned by a transfer agent, or registered by a registrar, either ofwhich is other than the Corporation itself or an employee of the Corporation.In case any officer who has signed or whose facsimile signature has been placedupon a certificate shall have ceased to be such officer before such certificateis issued, it may be issued with the same effect as if he were such officer atthe date of its issuance.

 

(b)  If the Corporation isauthorized to issue shares of more than one (1) class or more than one (1)series of any class, there shall be set forth on the face or back of thecertificate or certificates, which the Corporation shall issue to representshares of such class or series of stock, such legends or statements as may berequired by applicable law or the Articles or as may be approved by the Board.

 

(c)  In the event theCorporation has, by its Articles, limited or denied the preemptive right ofshareholders of any class or series of stock, there shall be set forth on theface or back of the certificate or certificates, which the Corporation shallissue to represent shares of such class or series of stock, such legends orstatements regarding such denial as shall be required by the TBCA or theArticles.

 

(d)  All certificates for eachclass or series of stock shall be consecutively numbered and the name of theperson owning the shares represented thereby, with the number of such sharesand the date of issue, shall be entered on the Corporation’s share transferrecords.

 

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(e)  All certificatessurrendered to the Corporation shall be cancelled, and, except as provided inSection 7.2 with respect to lost, destroyed or mutilated certificates, no newcertificate shall be issued until the’ former certificate for the same numberof shares has been surrendered and cancelled.

 

**7.2  Lost Certificates, etc.**TheBoard may direct a new certificate or certificates to be issued in place of anycertificate or certificates theretofore issued by the Corporation alleged tohave been lost or destroyed, upon the making of an affidavit of that fact bythe person claiming the certificate of stock to be lost or destroyed. Inauthorizing such issue of a new certificate or certificates, the Board may, inits discretion and as a condition precedent to the issue thereof, require theowner of such lost or destroyed certificate or certificates, or his legalrepresentative, to advertise the same in such manner as it shall require and/orindemnify the Corporation as the Board may prescribe.

 

**7.3  Transfer of Shares.**Subjectto any restrictions upon transfer, upon surrender to the Corporation or thetransfer agent of the Corporation of a certificate for shares duly endorsed oraccompanied by proper evidence of succession, assignment or authority to transferand satisfaction of the Corporation that the requested transfer complies withthe provisions of applicable state and federal laws and regulations and anyagreements to which the Corporation is a party, the Corporation shall issue anew certificate to the person entitled thereto, cancel the old certificate andrecord the transaction upon its share transfer records.

 

**7.4  Share Transfer Records; Ownership of Shares.**(a) The Corporation shall keep at its registeredoffice or principal place of business, or at the office of its transfer agentor registrar, a record of the original issuance of shares issued by theCorporation and record of each transfer of those shares that have beenpresented to the Corporation for registration of transfer. Such records shallcontain the names and addresses of all past and current shareholders of theCorporation and the number and class of shares issued by the Corporation heldby each of them. Any share transfer records may be in written form or in anyother form capable of being converted into written form within a reasonabletime. The principal place of business of the Corporation, or the office of itstransfer agent or registrar, may be located outside the State of Texas.

 

(b) The Corporation shall be entitled to treat and recognize the personin whose name shares issued by the Corporation are registered in the sharetransfer records of the Corporation at any particular time (including, withoutlimitation, as of a record date fixed pursuant to Section 7.5) as the owner ofthose shares at that time for the purposes of voting those shares, receivingdistributions thereon or notices in respect thereof, transferring those shares,giving proxies with respect to those shares or otherwise exercising rights,entering into agreements or taking action in respect of those shares and,accordingly, shall not be bound to recognize any equitable or other claim to orinterest in such share or shares on the part of any other person, whether ornot it shall have express or other notice thereof, except as otherwise providedby the laws of the State of Texas.

 

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**7.5  Record Dates.**(a)For the purpose of determining shareholders entitled to notice of or to vote atany meeting of shareholders or any adjournment thereof, or entitled to -receivea distribution by the Corporation (other than a distribution involving apurchase or redemption by the Corporation of its own shares) or a sharedividend, or in order to make a determination of shareholders for any otherproper purpose (other than determining shareholders entitled to consent toaction by shareholders proposed to be taken without a meeting of shareholders),the Board may fix in advance a date as the record date for any suchdetermination of shareholders, such date in any case to be not more than sixty(60) days and, in case of a meeting of shareholders, not less than ten (10)days prior to the date on which the particular action requiring suchdetermination of shareholders is to be taken, and the determination ofshareholders on such record date shall apply with respect to the particularaction requiring the same notwithstanding any transfer of shares on the recordsof the Corporation after such record date. If no record date is fixed for the determinationof shareholders entitled to notice of or to vote at a meeting of shareholders,or shareholders entitled to receive a distribution (other than a distributioninvolving a purchase or redemption by the Corporation of its own shares) or ashare dividend, the date on which notice of the meeting is mailed or the dateon which the resolution of the Board declaring such distribution or sharedividend is adopted, as the case may be, shall be the record date for suchdetermination of shareholders. When a determination of shareholders entitled tovote at any meeting of shareholders has been made as provided in this Section,such determination shall apply to any adjournment thereof.

 

(b) Unless a record date shall have previously been fixed or determinedpursuant to this Section, whenever action by shareholders is proposed to betaken by consent in writing without a meeting of shareholders, the Board mayfix a record date for the purpose of determining shareholders entitled toconsent to that action, which record date shall not precede, and shall not bemore than ten (10) days after, the date upon which the resolution fixing therecord date is adopted by the Board. If no record date has been fixed by theBoard and the prior action of the Board is not required by the TBCA, the recorddate for determining shareholders entitled to consent to action in writingwithout a meeting shall be the first date on which a signed written consentsetting forth the action taken or proposed to be taken is delivered to the Corporationby delivery to its registered office, its principal place of business, or anofficer or agent of the Corporation having custody of the books in whichproceedings of meetings of shareholders are recorded. Delivery shall be by handor by certified or registered mail return receipt requested. Delivery to theCorporation’s principal place of business shall be addressed to the Presidentor the principal executive officer of the Corporation. If no record date shallhave been fixed by the Board and prior action of the Board is required by theTBCA, the record date for determining shareholders entitled to consent toaction in writing without a meeting shall be at the close of business on thedate on which the Board adopts a resolution taking such prior action.

 

(c) Distributions made by the Corporation, including those that werepayable but not paid to a holder of shares, or to his heirs, successors orassigns, and have been held in suspense by the Corporation or were paid anddelivered by it unto an escrow account or to a trustee or custodian, shall bepayable by the Corporation, escrow agent, trustee or custodian to the holder ofthe shares as of the record date determined for that distribution as providedin subsection (a) of this Section, or to his heirs, successors and assigns.

 

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**7.6  Distributions.**TheBoard may, from time to time, declare, and the Corporation may make,distributions on its outstanding shares in the manner and upon the terms andconditions provided by the Articles and by the TBCA.

 

**7.7** **SecuritiesLaws.**Shares of the Corporation which have been issued by theCorporation without registration under the Securities Act of 1933, as amendedfrom time to time, and any other applicable securities laws shall not beoffered for sale, sold, assigned, transferred, pledged or otherwise disposed ofby the holder thereof unless they have been duly registered under theapplicable securities laws or unless the Corporation has previously receivedadvice of counsel for the Corporation to the effect that the proposeddisposition would not be in violation of said laws, and a restrictive legendsubstantially as follows may be placed conspicuously on the certificates forsuch shares, to wit:

 

[FRONT OFCERTIFICATE]

 

**RESTRICTIONS ONTRANSFER OF THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SET FORTH ON THEREVERSE SIDE HEREOF.**

 

[BACK OFCERTIFICATE]

 

**THE SHARESREPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS. ON TRANSFER UNDERTHE SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOTBE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSEDOF UNLESS REGISTERED UNDER THE APPLICABLE ACTS OR UNTIL THE CORPORATION HASRECEIVED ADVICE OF ITS COUNSEL THAT THE SHARES MAY BE TRANSFERRED WITHOUT SUCHREGISTRATION.**

 

**ARTICLE VIII**

 

**Indemnification**

 

**8.1  Definitions.**Inthis Article:

 

(a) *“Indemnitee”*means (i) any present or former Director, advisory director orofficer of the Corporation, (ii) any person who while serving in any of thecapacities referred to in clause (i) hereof served at the Corporation’s requestas a director, officer, partner, venturer, proprietor, trustee, employee, agentor similar functionary of another foreign or domestic corporation, partnership,joint venture, trust, employee benefit plan or other enterprise, and (iii) anyperson nominated or designated by (or pursuant to authority granted by) theBoard or any committee thereof to serve in any of the capacities referred to inclauses (i) or (ii) hereof.

 

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(b) “*Official Capacity*” means (i) when used with respect to aDirector, the office of Director of the Corporation, and (ii) when used withrespect to a person other than a Director, the elective or appointive office ofthe Corporation held by such person or the employment or agency relationshipundertaken by such person on behalf of the Corporation, but in each case doesnot include service for any other foreign or domestic corporation or anypartnership, joint venture, sole proprietorship, trust, employee benefit planor other enterprise.

 

*(c) ‘‘Proceeding’’*means any threatened,pending or completed action, suit or proceeding, whether civil, criminal,administrative, arbitrative or investigative, any appeal in such an action,suit or proceeding, and any inquiry or investigation that could lead to such anaction, suit or proceeding.

 

**8.2  Indemnification.**TheCorporation shall indemnify every Indemnitee against all judgments, penalties(including excise and similar taxes), fines, amounts paid in settlement andreasonable expenses actually incurred by the Indemnitee in connection with anyProceeding in which he was, is or is threatened to be named defendant orrespondent, or in which he was or is a witness without being named a defendantor respondent, by reason, in whole or in part, of his serving or having served,or having been nominated or designated to serve, in any of the capacitiesreferred to in Section 8.1, if it is determined in accordance with Section 8.4that the Indemnitee (a) conducted himself in good faith, (b) reasonablybelieved, in the case of conduct in his Official Capacity, that his conduct wasin the Corporation’s best interests and, in all other cases, that his conductwas at least not opposed to the Corporation’s best interests, and (c) in thecase of any criminal proceeding, had no reasonable cause to believe that hisconduct was unlawful; provided, however, that in the event that an Indemniteeis found liable to the Corporation of is found liable on the basis thatpersonal benefit was improperly received by the Indemnitee the indemnification(i) is limited to reasonable expenses actually incurred by the Indemnitee inconnection with the Proceeding and (ii) shall not be made in respect of anyProceeding in which the Indemnitee shall have been found liable for willful orintentional misconduct in the performance of his duty to the Corporation.Except as provided in the immediately preceding proviso to the first sentenceof this Section 8.2, no indemnification shall be made under this Section 8.2 inrespect of any Proceeding in which such Indemnitee shall have been (x) foundliable on the basis that personal benefit was improperly received by him,whether or not the benefit resulted from an action taken in the Indemnitee’sOfficial Capacity, or (y) found liable to the Corporation. The termination ofany Proceeding by judgment, order, settlement or conviction, or on a plea ofnolo contendere or its equivalent, is not of itself determinative that theIndemnitee did not meet the requirements set forth in clauses (a), (b) or (c)in the first sentence of this Section 8.2. An Indemnitee shall be deemed tohave been found liable in respect of any claim, issue or matter only after theIndemnitee shall have been so adjudged by a court of competent jurisdictionafter exhaustion of all appeals therefrom. Reasonable expenses shall, include,without limitation, all court costs and all fees and disbursements of attorneysfor the Indemnitee. The indemnification provided herein shall be applicablewhether or not negligence or gross negligence of the Indemnitee is alleged orproven.

 

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**8.3  Successful Defense.**Withoutlimitation of Section 8.2 and in addition to the indemnification provided forin Section 8.2, the Corporation shall indemnify every Indemnitee againstreasonable expenses incurred by such person in connection with any Proceedingin which he is a witness or a named defendant or respondent because he servedin any of the capacities referred to in Section 8.1, if such person has beenwholly successful, on the merits or otherwise, in defense of the Proceeding.

 

**8.4  Determinations.**Anyindemnification under Section 8.2 (unless ordered by a court of competentjurisdiction) shall be made by the Corporation only upon a determination thatindemnification of the Indemnitee is proper in the circumstances because he hasmet the applicable standard of conduct. Such determination shall be made (a) bythe Board by a majority vote of a quorum consisting of Directors who, at thetime of such vote, are not named defendants or respondents in the Proceeding;(b) if such a quorum cannot be obtained, then by a majority vote of a committeeof the Board, duly designated to act in the matter by a majority vote of allDirectors (in which designation Directors who are named defendants orrespondents in the Proceeding may participate), such committee to consistsolely of two (2) or more Directors who, at the time of the committee vote, arenot named defendants or respondents in the Proceeding; (c) by special legalcounsel selected by the Board or a committee thereof by vote as set forth inclauses (a) or (b) of this Section 8.4 or, if the requisite quorum of all ofthe Directors cannot be obtained therefor and such committee cannot beestablished, by a majority vote of all of the Directors (in which Directors whoare named defendants or respondents in the Proceeding may participate); or (d)by the shareholders in a vote that excludes the shares held by Directors thatare named defendants or respondents in the Proceeding. Determination as toreasonableness of expenses shall be made in the same manner as thedetermination that indemnification is permissible, except that if the determinationthat indemnification is permissible is made by special legal counsel,determination as to reasonableness of expenses must be made in the mannerspecified in clause (c) of the preceding sentence for the selection of speciallegal counsel. In the event a determination is made under this Section 8.4 thatthe Indemnitee has met the applicable standard of conduct as to some mattersbut not as to others, amounts to be indemnified may be reasonably prorated.

 

**8.5  Advancement of Expenses.**Reasonableexpenses (including court costs and attorneys’ fees) incurred by an Indemniteewho was or is a witness or was, is or is threatened to be made a nameddefendant or respondent in a Proceeding shall be paid by the Corporation atreasonable intervals in advance of the final disposition of such Proceeding,and without making the determination specified in Section 8.4, after receipt bythe Corporation of (a) a written affirmation by such Indemnitee of his goodfaith belief that he has met the standard of conduct necessary forindemnification by the Corporation under this Article and (b) a writtenundertaking by or on behalf of such Indemnitee to repay the amount paid orreimbursed by the Corporation if it shall ultimately be determined that he isnot entitled to be indemnified by the Corporation as authorized in thisArticle. Such written undertaking shall be an unlimited obligation of theIndemnitee but need not be secured and it may be accepted without reference tofinancial ability to make repayment. Notwithstanding any other provision ofthis Article, the Corporation may pay or reimburse expenses incurred by anIndemnitee in connection with his appearance as a witness

 

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or other participation in aProceeding at a time when he is not named a defendant or respondent in theProceeding.

 

**8.6  Employee Benefit Plans.**Forpurposes of this Article, the Corporation shall be deemed to have requested anIndemnitee to serve an employee benefit plan whenever the performance by him ofhis duties to the Corporation also imposes duties on, or otherwise involvesservices by him to the plan or participants or beneficiaries of the plan.Excise taxes assessed on an Indemnitee with respect to an employee benefit planpursuant to applicable law shall be deemed fines. Action taken or omitted by anIndemnitee with respect to an employee benefit plan in the performance of hisduties for a purpose reasonably believed by him to be in the interest of theparticipants and beneficiaries of the plan shall be deemed to be for a purposewhich is not opposed to the best interests of the Corporation.

 

**8.7  Other Indemnification and Insurance.**Theindemnification provided by this Article shall (a) not be deemed exclusive of,or to preclude, any other rights to which those seeking indemnification may atany time be entitled under the Corporation’s Articles, any law, agreement orvote of shareholders or disinterested Directors, or otherwise, or under anypolicy or policies of insurance purchased and maintained by the Corporation onbehalf of any Indemnitee, both as to action in his Official Capacity and as toaction in any other capacity, (b) continue as to a person who has ceased to bein the capacity by reason of which he was an Indemnitee with respect to mattersarising during the period he was in such capacity, and (c) inure to the benefitof the heirs, executors and administrators of such a person.

 

**8.8  Notice**. Anyindemnification of or advance of expenses to an Indemnitee in accordance withthis Article shall be reported in writing to the shareholders of theCorporation with or before the notice or waiver of notice of the nextshareholders’ meeting or with or before the next submission to shareholders ofa consent to action without a meeting and, in any case, within the twelve-monthperiod immediately following the date of the indemnification or advance.

 

**8.9  Construction.**Theindemnification provided by this Article shall be subject to all valid andapplicable laws, including, without limitation, Article 2.02-1 of the TBCA,and, in the event this Article or any of the provisions hereof or theindemnification contemplated hereby are found to be inconsistent with orcontrary to any such valid laws, the latter shall be deemed to control and thisArticle shall be regarded as modified accordingly, and, as so modified, tocontinue in full force and effect.

 

**8.10  Continuing Offer, Reliance, etc.**Theprovisions of this Article (a) are for the benefit of, and may be enforced by,each Indemnitee of the Corporation, the same as if set forth in their entiretyin a written instrument duly executed and delivered by the Corporation and suchIndemnitee and (b) constitute a continuing offer to all present and futureIndemnitees. The Corporation, by its adoption of these Bylaws, (x) acknowledgesand agrees that each Indemnitee of the Corporation has relied upon and willcontinue to rely upon the provisions of this Article in becoming, and servingin any of the capacities referred to in Section 8.1(a) of this Article, (y) waivesreliance upon, and all notices of acceptance of, such provisions by suchIndemnitees and

 

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(z) acknowledges and agreesthat no present or future Indemnitee shall be prejudiced in his right to enforcethe provisions of this Article in accordance with their terms by any act orfailure to act on the part of the Corporation.

 

**8.11  Effect of Amendment.**Noamendment, modification or repeal of this Article or any provision hereof shallin any manner terminate, reduce or impair the right of any past, present orfuture Indemnitees to be indemnified by the Corporation, nor the obligation ofthe Corporation to indemnify any such Indemnitees, under and in accordance withthe provisions of the Article as in effect immediately prior to such amendment,modification or repeal with respect to claims arising from or relating tomatters occurring, in whole or in part, prior to such amendment, modificationor repeal, regardless of when such claims may arise or be asserted.

 

**ARTICLE IX**

 

**General Provisions**

 

**9.1  Waiver of Notice.**(a)Whenever, under the provisions of applicable law or of the Articles or of theseBylaws, any notice is required to be given to any shareholder or Director, awaiver thereof in writing signed by the person or persons entitled to suchnotice, whether before or after the time stated therein, shall be equivalent tothe giving of such notice.

 

(b) Attendanceof a Director at a meeting shall constitute a waiver of notice of such meetingexcept where a Director attends a meeting for the express purpose of objectingto the transaction of any business on the grounds that the meeting is notlawfully called or convened.

 

**9.2  Seal**. If one beadopted, the corporate seal shall have inscribed thereon the name of theCorporation and shall be in such form as may be approved by the Board. Saidseal may be used by causing it or a facsimile of it to be impressed or affixedor in any manner reproduced.

 

**9.3  Fiscal Year.**Thefiscal year of the Corporation shall be fixed by resolution of the Board.

 

**9.4  Checks, Notes, etc**.All checks or demands for money and notes of the Corporation shall be signed bysuch officer or officers or such other person or persons as the Board may fromtime to time designate. The Board may authorize any officer or officers or suchother person or persons to enter into any contract or execute and deliver anyinstrument in the name of and on behalf of the Corporation, and such authoritymay be general or confined to specific instances

 

**9.5  Examination of Books and Records**.Any person who shall have been a shareholder for at least six (6) monthsimmediately preceding his demand, or shall be the holder of at least fivepercent (5%) of all of the outstanding shares of the Corporation, upon writtendemand stating the purpose thereof, shall have the right to examine, in personor by agent, accountant or attorney, at any reasonable time or times, for anyproper purpose, its relevant books and records

 

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of account, minutes and sharetransfer records, and to make extracts therefrom. Subject to the precedingsentence, the Board shall determine from time to time whether, and if allowed,when and under what conditions and regulations the books and records ofaccount, the minutes and share transfer records of the Corporation or any ofthem shall be open to inspection by the shareholders, and the shareholdersrights in this respect are and shall be restricted and limited accordingly.

 

**9.6  Voting Upon Shares Held by the Corporation.**Unlessotherwise ordered by the Board, the Chairman of the Board, if one shall beelected, or the President, if a Chairman of the Board shall not be elected,acting on behalf of the Corporation, shall have full power and authority toattend and to act and to vote at any meeting of shareholders of any corporationin which the Corporation may hold shares and at any such meeting, shall possessand may exercise any and all of the rights and powers incident to the ownershipof such shares which, as the owner thereof, the Corporation might havepossessed and exercised, if present. The Board by resolution from time to timemay confer like powers upon any other person or persons.

 

**9.7  Parliamentary Law. **When not in conflict with these Bylaws,Robert’s Rule of Order, Revised, 75th Anniversary Addition, shallestablish the rule of procedure at all shareholders and director meetings, andthe provisions of that publication are incorporated by reference herein as theruling law for the corporation.

 

**9.8  Dealings by Directors.**  No contract or other transaction between theCorporation and any other corporation, whether or not a majority of the sharesof the capital stock of such other corporation is owned by the Corporation, andno act of the Corporation shall in any way be affected or invalidated by thefact that any of the directors of the Corporation are pecuniary or otherwiseinterested in, or are directors or officers of, such other corporation.  Any director individually, or any firm ofwhich that director may be a member, may be a party to or may be in thepecuniary or otherwise interested in any contract or transaction of theCorporation, provided that the fact that he or his firm have an interest in thetransaction shall be disclosed to a majority of the Board of Directors of theCorporation.  Any director of theCorporation who is also a director or officer of another corporation dealingwith the Corporation, or who has any personal interest in a matter before theBoard of the Corporation, may be counted in determining the existence of aquorum at any meeting of the Board of Directors of the Corporation which shallauthorize any action that may affect that director or that othercorporation.  That director may vote atsuch meeting as if he were not a director or officer of the other corporationor was not personally interested.

 

**9.9  Authority to Sell Corporate Assets. **The Corporation maynot sell, mortgage, lease as Lessor, lease-sell, or otherwise dispose of orencumber any of its properties other than:

 

(a)                                  propertywhich in the judgment of the Board of Directors neither is nor will benecessary nor useful in operating and maintaining the Corporation’s businessand facilities; provided, however, that all sales of such property shall not inany one (1) fiscal year exceed in value forty percent (40%) of the value of allof the property of the Corporation;

 

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(b)                                 servicesof all kinds, including electric energy; and

 

(c)                                  personalproperty acquired for resale;

 

unless such sale, mortgage, lease or other disposition or encumbrancesare authorized by the affirmative vote of at least two-thirds (2/3) of theoutstanding shares of the capital stock of the Corporation at a meeting ofshareholders duly called and held for such purpose; provided, however, thatnotwithstanding anything to the contrary herein contained, the Board ofDirectors, without further authorization of the shareholders, shall have fullpower and authority to borrow money from the United States of America, or fromany agency or instrumentality thereof, and any national financing institution,organized on a cooperative plan for the purpose of financing its member’sprograms, projects and undertakings and in which the Corporation holds membership,or from any other financing or lending institution, and in connection withwhich such borrowing to authorize the making and issuance of bonds, notes orother evidences of indebtedness and , to secure the payment thereof, toauthorize the execution and delivery of a mortgage or mortgages, or a deed ordeeds of trust upon, or the pledging or encumbrancing of any or all of theproperty, assets, rights, privileges, licenses, franchises and permits of theCorporation, wherever situated, and whether acquired or to be acquired, allupon such terms and conditions as the Board of Directors shall determine.

 

**9.10  Employment Restrictions.**  The Corporation shall hire employees withoutdiscrimination as to age, sex, race or creed, and no compulsory retirementrestrictions shall be placed upon any employee.

 

**ARTICLE X**

 

**Amendments**

 

**10.1  Amendment by Board.**TheBoard shall have the power to alter, amend or repeal these Bylaws or adopt newBylaws. The Board may exercise this power at any regular or special meeting atwhich a quorum is present by the affirmative vote of two-thirds (2/3) of theWhole Board (as such term is defined in the Articles of Incorporation of theCorporation), provided notice of the alteration, amendment or repeal iscontained in the notice or waiver of notice of such meeting. Unless theCorporation’s Articles or Bylaws adopted by the shareholders provide otherwiseas to all or some portion of the Bylaws, the Corporation’s shareholders mayalter, amend or repeal these Bylaws or adopt new Bylaws (even though the Bylawsmay also be amended by the Board) at a meeting of shareholders duly called andheld and at which a quorum is present by affirmative vote of at leasttwo-thirds (2/3) of the outstanding shares of the capital stock of the Corporation,provided notice of the alteration, amendment or repeal or the adoption of newBylaws is contained in the notice or waiver of notice of such meeting, andprovided further, that if the proposal to alter, amend or repeal these Bylawsor to adopt new Bylaws is made, directly or indirectly, by or on behalf of anInterested Shareholder (as such term is defined in the Articles ofIncorporation of the Corporation), it must be approved by affirmative vote ofat

 

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least two-thirds (2/3) of theoutstanding shares of the capital stock of the Corporation, excluding sharesheld by the Interested Shareholder.

 

**ARTICLE XI**

 

**Subject to All Laws**

 

**11.1  Subject to All Laws.**Theprovisions of these Bylaws shall be subject to all valid and applicable laws,including, without limitation, the TBCA as now or hereafter amended, and in theevent that any of the provisions of these Bylaws are found to be inconsistentwith or contrary to any such valid laws, the latter shall be deemed to controland these Bylaws shall be deemed modified accordingly, and, as so modified, tocontinue in full force and effect.

 

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