**EXHIBIT 3.1.2**

** **

** **

** **

** **

**ARTICLES OF INCORPORATIONOF**

** TEXAS-NEW MEXICO POWERCOMPANY, INC.**

** AS AMENDED THROUGH JULY 7,2005**

----

** **

**Office of the Secretary ofState**

** CERTIFICATE OF AMENDMENT**

**OF**

** TEXAS-NEW MEXICO POWERCOMPANY**

**19241500 **

Theundersigned, as Secretary of State of Texas, hereby certifies that the attachedArticles of amendment for the above named entity have been received in thisoffice and have been found to conform to law.

ACCORDINGLYthe undersigned, as Secretary of State, and by virtue of the authority vestedin the Secretary by law hereby issues this Certificate of Amendment.

Dated: 07/07/2005Effective: 07/07/2005
| /s/  Roger Williams              |
|----------------------------------|
|     Roger Williams     |
|     Secretary of State |

**  **

** **

----

** **

**ARTICLES OF AMENDMENT TOARTICLES OF INCORPORATIONOFTEXAS-NEW MEXICO POWER COMPANY**

Pursuantto the provisions of Article 4.04 of the Texas Business Corporation Act, Texas‐NewMexico Power Company adopts the following Articles of Amendment to its Articlesof Incorporation:

**ARTICLEONE**

Thename of the corporation is Texas-New Mexico Power Company.

**ARTICLETWO**

Thefollowing amendments to the Articles of Incorporation was adopted by theshareholders of the corporation on June 6, 2005.

**A.     Article Three**is amended so that it readsin its entirety as follows:

Thepurpose or purposes for which the Corporation is organized are to transact anyand all lawful business for which corporations may be organized under the TexasBusiness Corporation Act.

**B.     Article Ten** is deleted in itsentirety.

**C.     Article Eleven** is redesignated as ArticleTen.

**ARTICLE THREE**

Thenumber of shares of the corporation outstanding at the time of adoption was10,705 shares of common stock.

**ARTICLEFOUR**

Thenumber of shares that voted for the amendment was 10,705; and the number ofshares that voted against the amendment was zero.

----

IN WITNESS WHEREOF, the undersigned has executedthese Articles of Amendment as of this 5th day of July, 2005.

TEXAS-NEWMEXICO POWER COMPANY

By: /s/ Terry R. Horn              Name:  Terry R. HornTitle:     Vice President, Secretary and  Treasurer

----

**ARTICLES OF AMENDMENT TO ARTICLES OFINCORPORATIONOFTEXAS-NEW MEXICOPOWER COMPANY**

** **

                        Pursuantto the provisions of Article 4.04 of the Texas Business Corporation Act,Texas-New Mexico Power Company adopts the following Articles of Amendment toits Articles of Incorporation: 

## ARTICLE ONE

                        The nameof the corporation is Texas-New Mexico Power Company.  

ARTICLE TWO

                        The following amendment to theArticles of Incorporation was adopted by the shareholders of the corporation onAugust 7, 2001:  

A.      **Article Three, Section One, Subparagraph 1.12** is amended so thatit reads in its entirety as follows:  

1.12 not enter into any guaranty, or otherwisebecome liable for, or pledge its assets to secure, the liabilities, debts orobligations of any Person, other than guaranties of liabilities, debts orobligations of affiliates into which the Corporation separates its businessactivities pursuant to the requirements of the laws of any state in which theCorporation operates as an electric utility, including, without limitation, theunbundling provisions of Chapter 39 of the Texas Utilities Code. 

**ARTICLE THREE**

                        Thenumber of shares of the corporation outstanding at the time of adoption was10,705 shares of common stock. 

ARTICLE FOUR

The number ofshares that voted for the amendment was 10,705; and the number of shares thatvoted against the amendment was zero.  

IN WITNESS WHEREOF, the undersigned has executed these Articles ofAmendment as of this **16th** day of **August**, 2001.

TEXAS-NEW MEXICO POWER COMPANY

 

By: __/s/ Paul W. Talbot__________        Name: Paul W. Talbot        Title: Secretary

----

**ARTICLES OF AMENDMENT TO ARTICLES OFINCORPORATIONOFTEXAS-NEW MEXICOPOWER COMPANY**

** **

                        Pursuantto the provisions of Article 4.04 of the Texas Business Corporation Act,Texas-New Mexico Power Company adopts the following Articles of Amendment toits Articles of Incorporation: 

## ARTICLE ONE

                        The nameof the corporation is Texas-New Mexico Power Company.  

**ARTICLETWO**

                        The following amendments to theArticles of Incorporation was adopted by the shareholders of the corporation onApril 23, 2001:  

B.      **Article Four , Section 2** is amended so that it reads in itsentirety as follows:  

2.01.         Sharesof Preferred Stock may be issued from time to time in one or more series, eachof which is to have a distinctive serial designation as determined in theresolution or resolutions of the Board of Directors providing for the issuanceof such Preferred Stock from time to time.

2.02.    Each series of Preferred Stock:

(a)        may havesuch number of shares;

(b)        may havesuch voting powers or may be without voting powers;

(c)        may besubject to redemption at such time or times and at such price;

(d)        may beentitled to receive dividends (which may be cumulative or noncumulative) atsuch rate or rates, on such conditions, from such date or dates, and at suchtimes, and payable in preference to, or in such relation to, the dividendspayable on any other class or classes or series of stock;

(e)        may havesuch rights upon the dissolution of, or upon any distribution of the assets of,the Corporation; 

(f)         may be madeconvertible into, or exchangeable for, shares of any other class or classes, orof any other series of the same class or of any other class or classes, ofstock of the Corporation at such price or prices or at such rates of exchange,and with adjustments;

----

 

(g)        may beentitled to the benefit of a sinking fund or purchase fund to be applied to thepurchase or redemption of shares of such series in such amount or amounts;

(h)        may beentitled to the benefit of conditions and restrictions upon the creation ofindebtedness of the Corporation or any subsidiary, upon the issuance of anyadditional stock (including additional shares of such series or of any otherseries) and upon the payment of dividends or the making of other distributionson, and the purchase, redemption or other acquisition by the Corporation ofstock of any class or series; and

(i)         may havesuch other relative, participating, optional or other special rights, andqualifications, limitations or restrictions thereof;

as in each suchinstance is stated in the resolution or resolutions of the Board of Directorsproviding for the issuance of such Preferred Stock.  Except where otherwise setforth in such resolution or resolutions the number of shares comprising suchseries may be increased or decreased (but not below the number of shares thenoutstanding) from time to time by like action of the Board of Directors.  Theforegoing enumeration of the designations, preferences, limitations andrelative rights which may be fixed with respect to shares of Preferred Stock ismerely illustrative of the power of the Board of Directors.  The authority ofthe Board of Directors to fix such designations, preferences, limitations andrelative rights shall be with the maximum authority permissible pursuant toArticle 2.13 of the TBCA, as it may be amended from time to time.

2.03.         Sharesof any series of Preferred Stock that have been redeemed (whether through theoperation of a sinking fund or otherwise) or purchased by the Corporation, orwhich, if convertible or exchangeable, have been converted into or exchangedfor shares of stock of any other series, class or classes will have the statusof authorized but unissued shares of Preferred Stock and may be reissued as apart of the series of which they were originally a part or may be reclassifiedand reissued as part of a new series of Preferred Stock created by resolutionor resolutions of the Board of Directors or as part of any other series ofPreferred Stock, all subject to the conditions or restrictions on issuance setforth in the resolution or resolutions adopted by the Board of Directorsproviding for the issuance of any series of Preferred Stock and to any filingrequired by law.

2.04.    (a) Exceptas otherwise provided by law or by the resolutions of the Board of Directorsproviding for the issuance of any series of Preferred Stock, Common Stock willhave the exclusive right to vote for the election of directors and for all otherpurposes.  Each holder of Common Stock will be entitled to one vote for eachshare held.

(b)        Subject toall of the rights of Preferred Stock or any series thereof, the holders ofCommon Stock will be entitled to receive, when, as and if declared by the Boardof Directors, out of funds legally available therefor, dividends payable incash, in stock or otherwise.

----

 

(c)        Upon anyliquidation, dissolution or winding‐up of the Corporation, whethervoluntary or involuntary, and subject to the rights of the holders of PreferredStock, the remaining net assets of the Corporation will be distributed pro ratato the holders of Common Stock in accordance with their respective rights andinterests.

2.05.         Allshares of Common Stock or Preferred Stock of the Corporation, including,without limitation, shares issued as a stock dividend, shall, when the fulllawful consideration fixed by the Board of Directors has been paid, or when soissued as a stock dividend, be deemed fully paid and not liable to any furthercall or assessment thereon, and the holders of such shares shall not be liablefor any further payment thereon.  Any of the unissued shares of capital stockof the Corporation may be issued from time to time in such amount and manner,including, without limitation, in distribution as stock dividends, and for suchlawful consideration as the Board of Directors may determine.

**ARTICLE THREE**

                        Thenumber of shares of the corporation outstanding and entitled to vote at thetime of adoption was 10,705 shares of common stock.  The number of sharesentitled to vote on the amendment was 10,705 shares of common stock. 

**ARTICLE FOUR**

The number ofshares that voted for the amendment was 10,705; and the number of shares thatvoted against the amendment was zero.  

IN WITNESS WHEREOF, the undersigned has executed these Articles ofAmendment as of this 23rd day of April, 2001.

 

**TEXAS-NEW MEXICO POWER COMPANY**

 

 

By: __/s/ Paul W. Talbot___________        Name: Paul W. Talbot        Title: Secretary

----

**AMENDED AND RESTATEDARTICLES OFINCORPORATIONOFTEXAS-NEW MEXICOPOWER COMPANY **

## ARTICLE I

** **

                        Pursuantto the provisions of Article 4.07 of the Texas Business Corporation Act,Texas-New Mexico Power Company adopts the following Amended and RestatedArticles of Incorporation which accurately copy the Articles of Incorporationand all amendments thereto that are in effect to date and as further amended bysuch Restated Articles of Incorporation as hereinafter set forth and whichcontain no other change in any provision hereof.

## ARTICLE II

                        TheArticles of Incorporation of the corporation are hereby amended by theseAmended and Restated Articles of Incorporation as follows:  (a) current ARTICLEONE, TWO, THREE, FOUR, FIVE, SIX, SEVEN, EIGHT and NINE are redesignated as ARTICLEONE, TWO, THREE, FOUR, FIVE, SIX, SEVEN, EIGHT and NINE, respectively ofARTICLE V below and (b) ARTICLE TEN and ARTICLE ELEVEN of ARTICLE V is herebyadded to the Articles of Incorporation.

 

**ARTICLEIII**

                        Eachamendment made by the Amended and Restated Articles of Incorporation has beeneffected in conformity with the provisions of the Texas Business CorporationAct and each such amendment made was duly adopted on April 6, 2000, by theshareholders of the corporation.

 

**ARTICLEIV**

                        Thenumber of shares of the corporation outstanding was 10,705 shares of commonstock, 8,390 shares of Series B Preferred Stock and 6,950 shares of Series CPreferred Stock and the number of shares entitled to vote on the restatedarticles of incorporation as so amended was 10,705 shares of common stock.  Allof the shareholders of the common stock of the corporation have signed awritten consent to the adoption of such restated articles of incorporation asso amended pursuant to Article 9.10 of the Texas Business Corporation Act.

----

**ARTICLEV**

**                       **Thearticles of incorporation and all amendments and supplements thereto are herebysuperseded by the following restated articles of incorporation which accuratelycopy the entire text thereof and as amended as above set forth:

**ArticleOne**

            The name of the corporation is **TEXAS-NEWMEXICO POWER COMPANY**. 

**Article Two**

            The period of its duration is perpetual. 

##### Article Three 

     **SECTION1 - PURPOSE; OPERATION AS A STAND-ALONE ENTITY**

            The purpose forwhich the corporation is organized is the transaction of any or all lawfulbusiness for which corporations may be incorporated under the Texas BusinessCorporation Act, provided that, to ensure the separateness of the corporation,the corporation will:

1.01.                maintain accurate and appropriate detailed books, financial records andaccounts, including checking and other bank accounts and custodian and othersecurities safekeeping accounts, that are separate and distinct from those ofany other Person;

1.02.           maintain its books, financial records and accounts (includinginter-entity transaction accounts) in a manner so that it will not be difficultor costly to segregate, ascertain or otherwise identify its assets andliabilities;

1.03.           not commingle any of its assets, funds, liabilities or businessfunctions with the assets, funds, liabilities or business functions of anyother Person;

1.04.           observe all appropriate corporate procedures and formalities;

1.05.           not merge or consolidate with any other Person (other than for financialreporting purposes);

1.06.           cause all material transactions and agreements between it and any one ormore of its Affiliates (including transactions and agreements pursuant to whichthe assets or property of one is used or to be used by the other) to be enteredinto in the names of the Persons that are parties to the transaction oragreement and to be formally documented in writing;

1.07.           conduct transactions with third parties in its name and as a Person thatis separate and distinct from its Affiliates;

1.08.           pay its own liabilities, expenses and losses only from its own assets;

----

 

1.09.           compensate all consultants, independent contractors and agents from itsown funds for services provided to it by such consultants, independentcontractors and agents;

1.10.                to the extent that it and its Affiliates jointly contract or do businesswith vendors or service providers or share overhead expenses, allocate fairly,appropriately non-arbitrarily the costs and expenses incurred in so doingbetween or among such Persons, with the result that each such Person bears itsfair share of all such costs and expenses;

1.11.          to the extent that it contracts or does business with vendors or serviceproviders where the goods or services are wholly or partially for the benefitof its Affiliates, allocate fairly, appropriately and non-arbitrarily the costsincurred in so doing to the Person for whose benefit the goods or services areprovided, with the result that each such Person bears its fair share of allsuch costs;

1.12.          not enter into any guaranty, or otherwise become liable for, or pledgeits assets to secure, the liabilities, debts or obligations of any otherPerson;

1.13.          hold itself out as separate and distinct from any other Person and shallnot identify itself as a division or department of any other Person;

1.14.          ensure that decisions with respect to its business and daily operations shallbe independently made (although the individual making any particular decisionmay also be an employee, officer or director of any one or more of itsAffiliates) and shall not be dictated by its Affiliates;

1.15.          to the extent that it occupies any premises in the same location orshares the use of equipment with its Affiliates, allocate fairly, appropriatelyand non-arbitrarily any rent and overhead expenses among and between suchPersons with the result that each bears its fair share of all such rent and expenses;

1.16.          cause its representatives and agents to hold themselves out to thirdparties as being its representatives or agents, as the case may be, and conductits business using separate business cards, letterhead, purchase orders,invoices, checks and the like bearing its own name, it being understood that itneed not have its own dedicated employees;

1.17.          to the extent that it share the same officers or other employees withits Affiliates, allocate fairly, appropriately and non-arbitrarily the salariesof and expenses related to providing other benefits to such officers and otheremployees between or among such Persons, with the result that each such Personwill bear its fair share of the salary and benefit costs associated with allsuch common or shared officers or other employees;

1.18.          maintain separate annual financial statements prepared in accordancewith generally accepted accounting principles, consistently applied], showingits assets and liabilities separate and distinct from those of any otherPerson;

1.19.          pay or bear the cost of the preparation of its financial statements, andhave such financial statements audited by an independent certified publicaccounting firm;

1.20.          to the extent its financial statements are to be consolidated with thefinancial statements of any other Person, cause to be included in suchconsolidated financial 

----

statements a narrative description of its separateassets, liabilities, business functions, operations and existence to ensurethat such separate assets, liabilities, business functions, operations andexistence are readily distinguishable by any Person receiving or relying upon acopy of such consolidated financial statements;

1.21.          not hold out its credit as being available to satisfy the debts orobligations of any other Person;

1.22.          correct any known misunderstanding regarding its separate identity;

1.23.          not make any loans to any Person or buy or hold any indebtedness orother obligations issued by any other Person (except for cash and cashequivalents);

1.24.          hold all of its assets in its own name; and

1.25.          maintain an arm's-length relationship with its Affiliates and enter intotransactions with Affiliates only on a commercially reasonably basis.

#### SECTION 2 - DEFINITIONS  

2.01.                The term "**Affiliate**" shall mean any other persondirectly or indirectly controlling, controlled by, or under common controlwith, that person; for purposes of this definition, "**control**"(including, with correlative meanings, the terms "**controlling**,""**controlled by**" and "**under common control with**"),as applied to any person, means the possession, directly or indirectly, of thepower to direct or cause the direction of the management and policies of thatperson, whether through the ownership of voting securities, by contract orotherwise.

2.02.          The term "**Person**" shall include individuals,corporations, partnerships, trusts, other entities and groups (which term shallinclude a "group" as such term is defined in Section 13(d)(3) of theExchange Act).

**Article Four**

            Thetotal number of shares of Capital Stock which the corporation is authorized toissue is thirteen million (13,000,000), of which Capital Stock twelve million(12,000,000) shares of the par value of Ten Dollars ($10.00) per share shall beCommon Stock and of which one million (1,000,000) shares of the par value ofOne Hundred Dollars ($100.00) per share shall be Preferred Stock.

            Thedesignations, preferences, limitations and relative rights in respect of theshares of each class of Capital Stock of the corporation, and the authoritygranted to the Board of Directors to fix by resolution or resolutions anythereof which shall not be fixed herein, are as follows:

###### SECTION 1 - DEFINITIONS

            1.01.    Theterm "**Preferred Stock**" shall mean all or any shares of anyseries of Preferred Stock described in Section (2) of this Article Four.

            1.02.    Theterm "**Parity Stock**" shall mean stock of any class other thanthe Preferred Stock with respect to which dividends and amounts payable uponany liquidation, dissolution or winding up of the corporation shall be payableon a parity with 

----

and in proportion to the respective amounts payable in respectof the Preferred Stock, notwithstanding that such Parity Stock may have otherterms and provisions varying from those of the Preferred Stock.

            1.03.    Theterm "**Junior Stock**" shall mean the Common Stock and stock ofany other class ranking junior to the Preferred Stock and Parity Stock inrespect of dividends and amounts payable upon any liquidation, dissolution orwinding up of the corporation.

            1.04.    Theterm "**accrued dividends**" shall mean, in respect of each shareof stock, that amount which shall be equal to simple interest upon the parvalue at the annual dividend rate fixed for such share and no more, from andincluding the date upon which dividends on such share became cumulative and (i)up to but not including the date fixed for payment in liquidation, dissolutionor winding up or for redemption, or (ii) up to and including the last day ofany period for which such accrued dividends are to be determined, less theaggregate amount of all dividends theretofore paid or declared and set apartfor payment thereon. Computation of accrued dividends in respect of any portionof a quarterly dividend period shall be by the 360-day method of computinginterest.

            1.05.    Theterm "**gross income available for payment of interest charges**"shall mean the total operating revenues and other income net of thecorporation, less all proper deductions for operating expenses, taxes(including income, excess profits and other taxes based on or measured byincome or undistributed earnings or income), and other appropriate items,including provision for maintenance, and provision for retirements,depreciation and obsolescence (but in no event less than the minimum provisionsrequired by the terms of any indenture or agreement securing any outstandingindebtedness of the corporation), but excluding any charges on account ofinterest on indebtedness outstanding and any credits or charges foramortization of debt premium, discount and expense, all to be determined inaccordance with sound accounting practice. In determining such "gross incomeavailable for payment of interest charges," no deduction, credit oradjustment shall be made on account of (1) profits or losses from sales ofproperty carried in plant or investment accounts of the corporation, or from thereacquisition of any securities of the corporation, or (2) charges for theelimination or amortization of utility plant adjustment or acquisition accountsor other intangibles; and income, excess profits and other taxes based on ormeasured by income or undistributed earnings or income shall be appropriatelyadjusted to reflect the effect of the exclusion of such items.

            1.06.    Theterm "**net income of the corporation available for dividends**"shall mean the "gross income available for payment of interest charges,"as defined and determined above under Section 1.05, less the sum of charges forinterest on indebtedness and less charges or plus credits for amortization ofdebt premium, discount and expense, and other appropriate items, determined inaccordance with sound accounting practice.

            Indetermining "**net income of the corporation available for dividends**"no deduction, credit or adjustment shall be made on account of (1) expenses inconnection with the issuance (except charges or credits for amortization ofdebt premium, discount and expense), redemption or retirement of any securitiesissued by the corporation, including any amount paid in excess of the principalamount or par or stated value of

 

----

 securities redeemed or retired, or, in theevent such redemption or retirement is effected with the proceeds of the saleof other securities of the corporation, interest or dividends on the securitiesredeemed or retired from the date on which the funds required for suchredemption or retirement are deposited in trust for such purpose to date ofredemption or retirement, (2) profits or losses from the sales of propertycarried in plant or investment accounts of the corporation, or from thereacquisition of any securities of the corporation, (3) charges for the eliminationor amortization of utility plant adjustment or acquisition accounts or otherintangibles, or (4) any earned surplus adjustment (including tax adjustments)applicable to any period of this corporation's predecessor corporation,Community Public Service Company, a Delaware corporation, prior to January 1,1963; and income, excess profits and other taxes based on or measured by incomeor undistributed earnings or income shall be appropriately adjusted to reflectthe effect of the exclusion of such items.

            1.07.    Theterm "**net income of the corporation available for dividends on JuniorStock**" shall mean "net income of the corporation available fordividends," as defined above, less all accrued dividends and all dividendspaid on outstanding Preferred Stock and Parity Stock and on any class of stockranking as to dividends prior to such Preferred Stock or Parity Stock.

            1.08The term "**sound accounting practice**" shall mean recognized principles ofaccounting practice followed by electric utility companies or required by anyapplicable rules, regulations or orders of any public regulatory authorityhaving Jurisdiction over the accounts of the corporation, provided that thecorporation may, at the time, contest or controvert in good faith the validityor applicability to the corporation of any such rule, regulation or order andthereby suspend the effect thereof until such contest or controversy has beenterminated.

----

###### SECTION 2 - PREFERRED STOCK

            2.01.    **Issue in Series**. The shares ofPreferred Stock may be divided and issued from time to time in one or moreseries, with such distinguishing characteristics, including designations,preferences, limitations and relative rights, as are hereinafter provided inthis Article Four and otherwise as permitted by law. All shares of PreferredStock of any particular series shall be identical except as to the date ordates from which dividends thereon shall become cumulative as provided inSection 2.02. The authorized but unissued shares of Preferred Stock may bedivided by number from time to time into and issued in designated series, andthe shares of each series of Preferred Stock so designated shall provide fordividends at such rates, and shall be subject to redemption at such price orprices and at such time or times, as shall be provided in the resolution orresolutions of the Board of Directors providing for the issuance of such stock,full authority for such purpose being granted to and vested in the Board ofDirectors. The resolution or resolutions of the Board of Directors of thecorporation dividing the number of shares of authorized but unissued PreferredStock, and designating the series and fixing the relative rights andpreferences thereof shall (a) designate the series to which Preferred Stockshall belong and fix the number of shares thereof, (b) fix the dividend ratetherefor and fix the date from which dividends on the shares of such seriesinitially issued shall be cumulative, (c) state at what times the PreferredStock of such series shall be redeemable and the redemption price or pricespayable thereon in the event of redemption; and may, in a manner notinconsistent with the provisions of this Article Four and insofar as permittedby applicable provisions of law, (i) provide for a sinking fund for thepurchase or redemption or a purchase fund for the purchase of shares of suchseries and the terms and provisions governing the operation of any such fund,(ii) impose conditions or restrictions upon the creation of indebtedness of thecorporation or upon the issue of additional Preferred Stock or other stockranking equally therewith or prior thereto as to dividends or assets, (iii)impose conditions or restrictions upon the payment of dividends upon, or themaking of other distributions to, or the acquisition of, Junior Stock, (iv)grant to the holders of the Preferred Stock of such series the right to convertsuch stock into shares of Junior Stock, and (v) grant such other special rightsto, or impose other conditions or restrictions upon, the holders of shares of suchseries as the Board of Directors may determine; the term "fixed for suchseries" and similar terms shall mean stated and expressed in this ArticleFour, or in any amendment to these Restated Articles of Incorporation, or in aresolution or resolutions adopted by the Board of Directors providing for theissue of Preferred Stock of the series referred to.

            2.02.    **Dividends**.Out of the assets of the corporation legally available for dividends theholders of the Preferred Stock shall be entitled to receive, but only when andas declared by the Board of Directors, dividends at the rate per annum fixedfor each series and no more. Dividends declared shall be payable quarterly onMarch 15, June 15, September 15 and December 15 in each year, to Preferredstockholders of record on such date, not more than fifty (50) days and not lessthan ten (10) days prior to each such payment date, as may be determined by theBoard of Directors. Dividends on the shares of Preferred Stock of any seriesinitially issued shall be cumulative from and including a date fixed for suchseries at the time of the initial establishment or designation of a series andon any additional shares of the same series from and including the first day ofthe quarterly dividend period in which such additional shares shall be issued.

----

            Each share of Preferred Stock shall rank on aparity with each other share of Preferred Stock, irrespective of series, withrespect to dividends at the respective rates fixed for such series, and nodividends shall be paid or declared on the Preferred Stock of any series orParity Stock unless at the same time a dividend in like proportion, ratably, tothe accrued dividends on the Preferred Stock of each series outstanding shallbe paid or declared and set apart for payment on each series of Preferred Stockthen outstanding. The amount of any deficiency for past dividend periods may bepaid or declared, and set apart at any time without reference to any quarterlydividend payment date. Accrued dividends on Preferred Stock shall not bearinterest.

            2.03.    **LiquidationRights**. In the event of any involuntary liquidation, dissolution orwinding up of the corporation, the holders of each series of Preferred Stockshall be entitled to receive, for each share thereof, the par value thereof,together with accrued dividends, or, in case such liquidation, dissolution orwinding up shall have been voluntary, an amount per share equal to the thenapplicable current redemption price fixed for such series, before anydistribution of the assets shall be made to the holders of shares of any classof Junior Stock; but the holders of Preferred Stock of such series shall beentitled to no further participation in such distribution. In the event thatthe assets of the corporation available for distribution to holders ofPreferred Stock shall not be sufficient to make the full payment hereinrequired, such assets shall be distributed to the holders of the shares ofrespective series of Preferred Stock ratably in proportion to the amountspayable on each share thereof, including accrued dividends. A consolidation ormerger of the corporation or sale, conveyance, exchange or transfer (for cash,shares of stock, securities or other consideration) of all or substantially allof the property or assets of the corporation shall not be deemed a dissolution,liquidation or winding up of the corporation within the meaning of this Section2.03.

            2.04.    **Redemptionand Repurchase Provisions**.

            (A)       PreferredStock of each series shall be subject to redemption, in whole or in part, atthe redemption prices fixed for such series in such amount, at such place andby such method, which, if in part, shall be by lot, as shall from time to timebe determined by resolution of the Board of Directors. Notice of the proposed redemptionof any shares of any series of Preferred Stock shall be given the corporationby mailing a copy of such notice, at least twenty (20) days but not more thanfifty (50) days prior to the date fixed for such redemption, to the holders ofrecord of such shares to be redeemed, at their respective addresses thenappearing on the books of the corporation. On or after the date specified insuch notice, each holder of shares of Preferred Stock called for redemption asaforesaid, shall be entitled to receive therefor the redemption price thereof,upon presentation and surrender at any place designated in such notice of thecertificates for such shares of Preferred Stock held by him. On and after thedate fixed for redemption, if notice is given as aforesaid, and unless defaultis made by the corporation in providing moneys for payment of the redemptionprice, all dividends on the shares called for redemption shall cease to accrue,and on and after such redemption date, unless default be made as aforesaid, oron and after the date of earlier deposit by the corporation with a bank ortrust company doing business in the City of Fort Worth, Texas, or any bank ortrust company in the City of New York, New York, duly 

----

 

           appointed and acting astransfer agent for this corporation in either case having a capital and surplusof at least $3,000,000.00 in trust for the benefit of the holders of the sharesof the Preferred Stock of such series so called for redemption, of all fundsnecessary for redemption as aforesaid (provided in the latter case that thereshall have been mailed as aforesaid to holders of record of shares to beredeemed, a notice of the redemption thereof or that the corporation shall haveexecuted and delivered to the Transfer Agent for the Preferred Stock or to thebank or trust company with which such deposit is made an instrument irrevocablyauthorizing it to mail such notice at the corporation's expense) all rights ofthe holders of the shares called for redemption as stockholders of thecorporation, except only the right to receive the redemption price, shall ceaseand determine. Any funds so deposited which shall remain unclaimed by theholders of such Preferred Stock at the end of six (6) years after theredemption date, together with any interest thereon which shall have beenallowed by the bank or trust company with which such deposit shall have beenmade, shall be paid by it to the corporation, free of any trust, and thereaftersuch holders shall look only to the corporation therefor. Shares of PreferredStock redeemed as aforesaid shall be restored to the status of authorized butunissued shares.

            (B)       Exceptas otherwise herein provided or prohibited by law, the corporation may alsofrom time to time purchase shares of Preferred Stock of any series for anysinking or purchase fund and otherwise at not exceeding the then currentredemption prices applicable to redemptions for the sinking fund for suchseries or otherwise, as the case may be, including accrued dividends thereon tothe date of purchase, plus customary brokerage commissions. Shares of PreferredStock of any series so purchased not used to satisfy sinking or purchase fundobligations may in the discretion of the Board of Directors be reissued orotherwise disposed of from time to time to the extent permitted by law. 

            C)        Ifand so long as there are dividends in arrears on any shares of Preferred Stockof any series or Parity Stock or a default exists in any sinking or purchasefund obligation provided for the benefit of any series of Preferred Stock, thecorporation shall not redeem any shares of any series of Preferred Stock orParity Stock, unless in connection therewith all the outstanding PreferredStock of all series is redeemed, or purchase any shares of any series ofPreferred Stock or Parity Stock unless an offer to purchase on a comparablebasis is made to the holders of all the Preferred Stock then outstanding.

            (D)       Thecorporation will not permit any subsidiary corporation to purchase any sharesof stock of any class of the corporation.

----

            2.05.    **Restrictions on Corporate Action**.

            (A)       So long as any Preferred Stock is outstanding, thecorporation shall not, (1) without the consent (given by vote in person or byproxy at a meeting called for the purpose) of the holders of at least two-thirds,or (2) without the consent (given in writing without a meeting) of all theholders, of the aggregate number of shares of all series of Preferred Stock(treated as one class) then outstanding - 

                        (I)        Create,authorize or increase the authorized amount of any shares of any class of stockother than Preferred Stock, Parity Stock or Junior Stock or any obligation orsecurity convertible into stock other than Preferred Stock, Parity Stock orJunior Stock, or

                        (ii)        Amend,change or repeal any of the express terms of the Preferred Stock outstanding inany manner prejudicial to the holders thereof, except that, if such amendment,change or repeal is prejudicial to the holders of less than all series ofPreferred Stock, the consent of only the holders of two-thirds of the aggregatenumber of shares of the series thereof so affected shall be required, or

                        (iii)       Issueany shares of Preferred Stock in addition to the shares issued or presently tobe issued or issue any Parity Stock unless, after giving effect to the issue ofsuch additional shares,

                                                (a)        thenet income of the corporation available for dividends for the period of twelve(12) consecutive calendar months within the fifteen (15) calendar monthsimmediately preceding the calendar month within which such additional shares ofstock are to be issued shall have been at least two and one-half (21⁄2) times theaggregate annual dividend requirements upon the entire amount to be outstanding(upon the issuance of such additional shares of Preferred Stock or such ParityStock) of' Preferred Stock and Parity Stock and of any stocks of thecorporation of any class ranking as to dividends prior to the Preferred Stockor Parity Stock;

                                                (b)        thegross income available for payment of interest charges for a period of twelve(12) consecutive calendar months within the fifteen (15) calendar monthsimmediately preceding the calendar month within which such additional shares ofstock are to be issued, shall have been at least one and one-half (11⁄2) timesthe sum of (1) the aggregate annual interest charges on all the indebtedness ofthe corporation then outstanding, and (2) the aggregate annual dividendrequirements upon the entire amount to be outstanding of Preferred Stock andParity Stock and of any stocks of the corporation of any class ranking as todividends prior to the Preferred Stock or Parity Stock; and

                                                (c)        theaggregate of the capital of the corporation applicable to all Junior Stock,plus the capital surplus and the earned surplus of the corporation, determinedin accordance with sound accounting practice, shall be not less than theaggregate payable upon 

----

 

                                   involuntary liquidation, dissolution or winding up ofthe corporation to the holders of the entire amount to be outstanding ofPreferred Stock and Parity Stock and of any stocks of the corporation of anyclass ranking as to assets prior to the Preferred Stock.

            In theforegoing computations, there shall be excluded (a) all indebtedness and allshares of stock to be retired in connection with the issue of such additionalshares, and (b) all interest charges on all indebtedness and dividendrequirements on all shares of stock to be retired in connection with the issueof such additional shares. The net earnings of any property acquired by thecorporation during or after the period for which income is computed, or of anyproperty which is to be acquired in connection with the issuance of any suchadditional shares, if capable of being separately determined or estimated, maybe included on a pro forma basis (including a pro forma increase in income,excess profits and other taxes based on or measured by income or undistributedearnings or income) in the foregoing computations; and if within or after theperiod for which income is computed any substantial portion of the propertiesof the corporation shall have been disposed of, the net earnings of suchproperty, if capable of being separately determined or estimated, shall beexcluded on a pro forma basis (including a pro forma decrease in income, excessprofits and other taxes based on or measured by income, or undistributedearnings or income) in the foregoing computations for a period prior to thedate of such disposition.

            (B)       Solong as any Preferred Stock is outstanding, the corporation shall not, (1)without the consent (given by vote in person or proxy at a meeting called forthe purpose) of the holders of a majority or (2) without the consent (given inwriting without a meeting) of all the holders, of the aggregate number ofshares of all series of Preferred Stock (treated as one class) thenoutstanding, issue, assume or create unsecured securities (the words"unsecured securities," as used in this paragraph being deemed tomean notes, debentures or other securities representing unsecured indebtednessother than indebtedness maturing by its terms in one year or less from the dateof its creation and not renewable or extendible at the option of thecorporation for a period of more than one year from the date of its creation)for any purpose, except to refund outstanding unsecured securities of suchcharacter, theretofore issued or assumed, if thereby the aggregate principalamount of such unsecured securities would exceed twenty percent (20%) of thesum of (1) the total principal amount of all bonds or other securitiesrepresenting secured indebtedness of the corporation then to be outstanding,and (2) the capital represented by stocks of the corporation and the earned andcapital surplus of the corporation, determined in accordance with soundaccounting practice; provided, however, that any unsecured securitiestheretofore issued under any authorization of holders of Preferred Stock givenpursuant hereto (and any securities to refund the same) shall not be consideredin determining the amount of other unsecured securities which may be issued,assumed or created within the aforesaid twenty percent (20%) limitation.

----

            (C)       Solong as any Preferred Stock is outstanding, the corporation shall not, (1)without the consent (given by vote in person or by proxy at a meeting calledfor the purpose) of the holders of at least four-fifths, or (2) without theconsent (given in writing without a meeting) of all the holders of theaggregate number of shares of all series of Preferred Stock (treated as oneclass) then outstanding -

                        (I)        mergeor consolidate with or into any other corporation or corporations, providedthat the provisions of this clause (i) shall not apply to a purchase or otheracquisition by the corporation of franchises or assets of another corporationin any manner which does not involve a merger or consolidation; or

                        (ii)        sell,lease or otherwise dispose of all or substantially all of its property.

            Noconsent of the holders of the shares of any series of Preferred Stock inrespect of action hereinabove set forth in subparagraphs (A), (B) or (C) shallbe required if irrevocable provision is contemporaneously made for theredemption of all shares of such series of Preferred Stock at the timeoutstanding, or provision is made that the proposed action shall not be effectiveunless irrevocable provision is made for the prompt purchase, redemption orretirement of all shares of such series of Preferred Stock at the timeoutstanding.

----

            2.06.    **VotingRights**. The holders of Preferred Stock shall not be entitled to voteexcept:

                        (a)        asprovided above under Section 2.05;

                        (b)        asmay from time to time be required by the laws of Texas; and

            (c)        votingseparately as a class for the election of the smallest number of directorsnecessary to constitute a majority of the Board of Directors whenever and asoften as dividends payable on any series of Preferred Stock outstanding shallbe in arrears in an amount equivalent to or exceeding six (6) quarterlydividends, which right may be exercised at any annual meeting and at any specialmeeting of stockholders called for the purpose of electing directors, untilsuch time as arrears in dividends on the Preferred Stock and the currentdividend thereon shall have been paid or declared and a sum sufficient for thepayment thereof set apart, whereupon all voting rights given by this clause (c)shall be divested from the Preferred Stock (subject, however, to being at anytime or from time to time similarly revived and divested).           

            Solong as holders of the Preferred Stock shall have the right to elect directorsunder the terms of the foregoing clause (c), the holders of the Common Stock,voting separately as a class, shall, subject to the voting rights of any otherclass of stock, be entitled to elect the remaining directors.

           Whenever, under the provisions of the foregoing clause (c)the right of holders of the Preferred Stock, if any, to elect directors shallaccrue or shall terminate, the Board of Directors shall, within ten (10) daysafter delivery to the corporation at its principal office of a request orrequests to such effect signed by the holders of at least five percent (5%) ofthe outstanding shares of any class of stock entitled to vote, call a specialmeeting, in accordance with the Bylaws of the corporation, of the holders ofthe class or classes of stock of the corporation entitled to vote, to be heldwithin sixty (60) days from the delivery of such request, for the purpose ofelecting a full Board of Directors to serve until the next annual meeting anduntil their respective successors shall be elected and shall qualify; provided,however, that if the annual meeting of stockholders for the election ofdirectors is to be held within eighty (80) days after the delivery of suchrequest, the Board of Directors need not act thereon. If, at any specialmeeting called as aforesaid or at any annual meeting of stockholders afteraccrual or termination of the right of holders of the Preferred Stock to electdirectors as in the foregoing clause (c) provided, any director shall not bere-elected, his term of office shall end upon the election and qualification ofhis successor, notwithstanding that the term for which such director wasoriginally elected shall not at the time have expired.

           If, during any interval between annual meetings of stockholdersfor the election of directors while holders of the Preferred Stock shall beentitled to elect any director pursuant to the foregoing clause (c), the numberof directors in office who have been elected by the holders of the PreferredStock (voting as a class) or by the holders of the Common Stock (voting as aclass), as the case may be, shall become less than the total number ofdirectors subject to election by holders of shares of such class, whether byreason of the resignation, death or removal of any director or directors, or anincrease in the total number of directors, the vacancy or vacancies shall befilled (1) by the remaining 

----

directors or director, if any, then in office whoeither were or was elected by the votes of shares of such class or succeeded toa vacancy originally filled by the votes of shares of such class or (2) ifthere is no such director remaining in office, at a special meeting of holdersof shares of such class called by the President of the corporation to be heldwithin sixty (60) days after there shall have been delivered to the corporationat its principal office a request or requests signed by the holders of at leastfive percent (5%) of the outstanding shares of such class; provided, however,that such request need not be so acted upon if delivered less than eighty (80)days before the date fixed for the annual meeting of stockholders for theelection of directors. 

            Anydirector may be removed from office for cause by vote of the holders of amajority of the shares of the class of stock which voted for his election (orfor his predecessor in case such director was elected by directors). A specialmeeting of holders of shares of any class may be called by a majority vote ofthe Board of Directors or by the President for the purpose of removing adirector in accordance with the provisions of the preceding sentence, and shallbe called to be held within sixty (60) days after there shall have beendelivered to the corporation at its principal office a request or requests tosuch effect signed by holders of at least five percent (5%) of the outstandingshares of the class entitled to vote with respect to the removal of any suchdirector; provided, however, that such request need not be so acted upon ifdelivered less than eighty (80) days before the date fixed for the annualmeeting of stockholders for the election of directors. 

            Theholders of a majority of the shares of a class of stock entitled under thisSection 2.06 to vote for the election or removal of directors or the filling ofany vacancy however created in the Board of Directors, present in person orrepresented by proxy at a meeting called for the purpose of voting on any suchaction, shall constitute a quorum for such purpose without regard to thepresence or absence at the meeting of the holders of any other class of stocknot entitled under this Section 2.06 to vote in respect thereto. A lesserinterest of the class entitled to vote from time to time may adjourn anymeeting for such purpose, and the same shall be held as adjourned withoutfurther notice. When a quorum is present, the vote of the holders of a majorityof the shares of such quorum shall govern each such election, removal orfilling of a vacancy in respect of which such class is entitled to vote. 

            PreferredStockholders shall not be entitled to receive notice of any meeting of holdersof any class of stock at which they are not entitled to vote. 

            Eachholder of Preferred Stock, as to all matters in respect of which such stock hasvoting power, is entitled to one vote for each share of stock standing in hisname. Cumulative voting shall not be allowed, but each holder of PreferredStock, at any election of directors at which such Preferred Stock has votingpower, shall be entitled to cast that number of votes equal to the number ofshares of Preferred Stock owned by him for as many directors as there are to beelected.

            2.07.    **Restrictionon Dividends**. So long as any shares of Preferred Stock shall beoutstanding, the corporation shall not declare or pay or set apart anydividends on any shares of Junior Stock (other than dividends payable in sharesof Junior Stock), or make any other distribution on shares of Junior Stock, ormake any expenditures for the purchase, redemption or other retirement for aconsideration of shares of Junior Stock

----

(other than in exchange for othershares of Junior Stock),.unless accrued dividends on all shares of all seriesof Preferred Stock outstanding for all past quarterly dividend periods shallhave been paid or declared and set apart and the full dividend for the thencurrent quarterly dividend period shall have been or concurrently shall be paidor declared and set apart, or if the corporation shall be in default of thesinking or purchase fund obligation provided for any series of Preferred Stock.

            2.08.    **RelativeRights and Preferences of Outstanding Series of Preferred Stock**. Therelative rights and preferences of each of the outstanding series of PreferredStock which are not set forth elsewhere in this Article Four are as follows:

         (A)         **4.65%Cumulative Preferred Stock, Series B (8,290 shares), and 4.75% CumulativePreferred Stock, Series C (6,950 shares).**

                        1.         ThePreferred Stock of each of said series shall be designated, respectively,"4.65% Cumulative Preferred Stock, Series B" (herein called"Series B Preferred Stock"), and "4.75% Cumulative PreferredStock, Series C" (herein called "Series C Preferred Stock").

                        2(a).     **SeriesB Preferred Stock**. The fixed dividend rate of the shares of Series BPreferred Stock is 4.65% per share per annum and such dividends are cumulativefrom the date of issue of the shares of such series initially issued and on anyadditional shares of the same series from and including the first day of thequarterly dividend period in which such additional shares shall be issued, withthe first quarterly dividend payable September 15, 1963; the fixed redemptionprices on the shares of such series are $106.50 per share if redeemed prior toSeptember 15, 1966; $105.00 per share if redeemed on September 15, 1966 orthereafter and prior to September 15, 1969; $103.50 per share if redeemed onSeptember 15, 1969 or thereafter and prior to September 15, 1972 ; $102.00 pershare if redeemed on September 15, 1972 or thereafter and prior to September15, 1972 or thereafter and prior to September 15, 1975; $101.00 per share ifredeemed on September 15, 1975 or thereafter and prior to September 15, 1978;and $100.00 per share if redeemed on September 15, 1978 or thereafter; togetherwith all accrued dividends thereon (as such phrase is defined for the purposesof Article Four of the Restated Articles of Incorporation of the corporation).The fixed liquidation price for the shares of such series is One HundredDollars ($100) per share, together with all accrued dividends thereon (as suchphrase is so defined), in the event of involuntary liquidation and theapplicable current redemption price in the event of voluntary liquidation, allas more fully prescribed by the provisions of Paragraph 2.03 of Article Four ofthe Restated Articles of Incorporation of the corporation.

                        2(b).     **SeriesC Preferred Stock**. The fixed dividend rate on the shares of Series CPreferred Stock is 4.75% per share per annum and such dividends are cumulativefrom the date of issue of the shares of such series initially issued and on anyadditional shares of the same series from and including the first day of thequarterly dividend period in which such additional shares shall be issued, withthe first quarterly dividend payable September 15, 1965; the fixed 

----

                       redemptionprices on the shares of such series are $105.75 per share if redeemed prior toSeptember 15, 1968; $104.60 per share if redeemed on September 15, 1968 orthereafter and prior to September 15, 1971; $103.45 per share if redeemed onSeptember 15, 1971 or thereafter and prior to September 15, 1974; $102.30 pershare if redeemed on September 15, 1974 or thereafter and prior to September15, 1977; $101.15 per share if redeemed on September 15, 1977 or thereafter andprior to September 15, 1980; and $100.00 per share if redeemed on September 15,1980 or thereafter; together with all accrued dividends thereon (as such phraseis defined for the purposes of Article Four of the Restated Articles ofIncorporation of the corporation). The fixed liquidation price for the sharesof such series is One Hundred Dollars ($100) per share, together with allaccrued dividends thereon (as such phrase is so defined), in the event ofinvoluntary liquidation and the applicable current redemption price in theevent of voluntary liquidation, all as more fully prescribed by the provisionsof Section 2.03 of Article Four of the Restated Articles of Incorporation ofthe corporation.

                        3.         Thecorporation (unless prevented from so doing by any applicable restriction oflaw) will in each year, so long as any shares of the Series B or Series CPreferred Stock are outstanding, make offers (hereinafter in this Paragraph 3called a Purchase Offer) to the holders of shares of the Series B and/or SeriesC Preferred Stock to purchase on October 1 in each such year, at the prices atwhich the same may be offered to the corporation up to but not exceeding aprice of $100 per share and accrued dividends, a number of shares of saidseries equal to 2% of the maximum number of shares of each of the Series B andSeries C Preferred Stock outstanding at any one time prior to August 15 of suchyear, all as hereinafter provided in this Paragraph 3.

                        TheTransfer Agent for the Series B and Series C Preferred Stock shall, at least 30days prior to October 1 of each such year, mail to the holders of record ofshares of each of the said Series as at the day prior to the mailing date, anotice, in the name of the corporation, that the corporation will on October Iof that year, accept offers to sell the number of shares required to be coveredby the Purchase Offers at the prices at which shares are offered to thecorporation up to but not exceeding a price of $100 per share and accrueddividends thereon.

                        TheTransfer Agent shall on October 1, on behalf of the corporation, accept offersto sell shares of the Series B and Series C Preferred Stock received by it upto the full number of shares covered by the Purchase Offer upon such basis aswill result in the lowest aggregate cost to the corporation. To that end, theTransfer Agent shall accept offers at the same prices on a pro rata basis withrespect to each series, as nearly as may be. In case any person whose offer isaccepted shall thereafter fail to make good such offer, said Transfer Agentshall, to the extent practicable, within 30 days after October 1, accept inlieu thereof, the best offer or offers, if any, theretofore made and nottheretofore accepted.

----

                        Onor prior to October 1 in each year, the corporation shall deposit with saidTransfer Agent cash sufficient to purchase the shares of each of said Series,if any, which have been accepted for purchase pursuant to the Purchase Offermade in such year and thereafter shall deposit any additional funds required tocarry out the Purchase Offer for such year. The Transfer Agent shall return tothe corporation any funds deposited with it and not applied to the purchase ofshares of the Series B or Series C Preferred Stock pursuant to the PurchaseOffer for such year.

                        Ifin any year the full purchase obligation of the corporation shall not have beensatisfied by the making and carrying out of the Purchase Offer, any deficiencyin the satisfaction of such purchase obligation shall be made good, in themanner hereinafter in this paragraph set forth, before any dividends shall bedeclared or paid upon or set apart for any shares of Common Stock or any sharesof any class of stock ranking junior to the Preferred Stock or any sums appliedto the purchase, redemption or other retirement of the Common Stock or anyshares of any class of stock ranking junior to the Preferred Stock. Any suchdeficiency may be made good at any time by the making and carrying out of aSpecial Purchase Offer covering the number of shares of the Series B or SeriesC Preferred Stock as to which such deficiency exists and, to that end, thecorporation shall file with the Transfer Agent a certificate, signed by thePresident or a Vice President, specifying a date, not less than 45 days afterthe date of filing thereof, on which offers to sell shares of the Series B orSeries C Preferred Stock will be accepted. Such Special Purchase Offer shallotherwise be made and carried out on thirty days' notice and in the same manneras hereinabove provided for Purchase Offers to be carried out on October 1.

                        ThePurchase Offer in any year shall be deemed to have been completed and satisfiedif the corporation shall have complied with the provisions of this Paragraph 3notwithstanding that the total number of shares purchased by it shall have beenless than the total number of shares covered by the corporation's PurchaseOffer for that year because too few offers to sell were received by it.

                        Sharesof the Series B and Series C Preferred Stock purchased pursuant to any PurchaseOffer or Special Purchase Offer shall be canceled and shall not be reissued asshares of the same Series.

                        Theprovisions of this Paragraph 3 in so far as the same relate to purchases ofoutstanding shares of each of said Series, are subject to the applicableprovisions of Section (2) of Article Four of the Restated Articles ofIncorporation of the corporation.

                        4.         Theshares of the Series B Preferred Stock and Series C Preferred Stock are notconvertible.    

                        5.         Solong as any shares of the Series B or Series C Preferred Stock shall beoutstanding, the corporation shall not declare or pay or set apart anydividends on any shares of Junior Stock (other than dividends payable in 

----

                       sharesof Junior Stock) or make any other distribution on any shares of Junior Stock,or make any expenditures for the purchase, redemption or other retirement for aconsideration of shares of Junior Stock (other than in exchange for othershares of Junior Stock or from the proceeds of any sale of such stock receivednot more than six (6) months prior to such retirement), if the aggregate amountof all such dividends, distributions and expenditures of the corporation afterDecember 31, 1962, would exceed the aggregate amount of the net income of suchcorporation available for dividends on Junior Stock accumulated after December31, 1962, plus $1,500,000, and then only within the limits set forth in Section3.01 of Article Four of the Restated Articles of Incorporation of thecorporation. For the purposes of this paragraph, references to the"corporation" shall mean both the corporation and its predecessor,Community Public Service Company, a Delaware corporation.

----

**SECTION3 THE COMMON STOCK**

            3.01.    **Dividends**.Out of any assets of the corporation legally available for dividends remainingafter full cumulative dividends upon any shares of Preferred Stock or of anyother class of stock ranking as to dividends ahead of the Common Stock of thecorporation then outstanding shall have been paid or declared and set apart forall past quarterly dividend periods and for the current quarterly dividendperiod, then and not otherwise, dividends may be paid upon the Common Stock tothe exclusion of the Preferred Stock and of any such other class of stock.

            3.02.    **Distributionof Assets**. In the event of any liquidation, dissolution or winding upof the corporation, after there shall have been paid to or set aside for theholders of all series of Preferred Stock and of any other class of stockranking as to assets ahead of the Common Stock the full preferential amounts,including accrued dividends, to which they are respectively entitled, theholders of the Common Stock shall be entitled to receive, pro rata, all theremaining assets of the corporation available for distribution to itsstockholders. The Board of Directors, by vote of a majority of the membersthereof, may distribute in kind to the holders of the Common Stock suchremaining assets of the corporation or may sell, transfer or otherwise disposeof all or any of the remaining property and assets of the corporation to anyother corporation and receive payment therefor wholly or partly in cash and/orin stock and/or in obligations of such corporation, and may sell all or anypart of the consideration received therefor or distribute the same and/or thebalance thereof in kind to the holders of the Common Stock.

            3.03.    **VotingRights**. Subject to the voting rights expressly conferred upon thePreferred Stock by Section (2) of this Article Four and by law and the votingrights of any other class of stock, the holders of the Common Stock shallexclusively possess full voting power for the election of directors and for allother purposes and shall be entitled to one vote for each share of Common Stockheld of record. Cumulative voting shall not be allowed, but each holder of CommonStock, at any election of directors at which such Common Stock has votingpower, shall be entitled to cast that number of votes equal to the number ofshares of Common Stock owned by him for as many directors as there are to beelected.

SECTION 4 - MISCELLANEOUS

            4.01.    **PreemptiveRights**. No holder of stock of any class of the corporation shall haveany right, as such holder, to purchase or subscribe for any stock of any classof the corporation now or hereafter authorized or any securities convertible into,or carrying or evidencing any right or option to purchase, stock of any classnow or hereafter authorized which the corporation may at any time issue, butany and all such stock, securities, rights and/or options may be issued anddisposed of by the Board of Directors to such persons and for such lawfulconsideration and on such terms as the Board of Directors in its discretion maydetermine, without first offering the same or any thereof to the stockholdersof the corporation.

            4.02.    **StockFully Paid**. All shares of capital stock, whether heretofore issued orhereafter issued for a lawful consideration fixed by the Board of Directors,including, without limitation, issuance of stock dividends, shall, when thefull lawfuI consideration

----

fixed by the Board of Directors has been paid, orwhen so issued as a stock dividend, be deemed fully paid stock and not liableto any further call or assessment thereon, and the holders of such shares shallnot be liable for any further payment thereon.

            4.03.    **UnissuedShares**. Any of the unissued shares of capital stock of the corporationmay be issued from time to time in such amount and manner, including, withoutlimitation, in distribution as stock dividends, and for such lawfulconsideration as the Board of Directors may determine.

**Article Five**

            The Bylaws of the corporation may be altered,amended or repealed at any regular or special meeting of the directors at whicha quorum is present by the affirmative vote of a majority of those present atsuch meeting, provided notice of the proposed alteration, amendment or repealis contained in the notice of such meeting.

**Article Six**

            The corporation has heretofore complied withthe requirements of law as to the initial minimum capital requirements withoutwhich it could not commence business under the Texas Business Corporation Act.

**ArticleSeven**

            The postoffice address of its registered office is 4100 International Plaza, P.O. Box2943, Fort Worth, Texas 76113, and the name of its registered agent at suchaddress is M. D. Blanchard.

**Article Eight**

            The number of directors presentlyconstituting the Board of Directors of the corporation is nine, and the namesand addresses of the persons now serving as directors are as follows:
| R. Denny Alexander                              Fort Worth, Texas                                              |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| John A. Fanning                                     Fort Worth, Texas       |
| Sidney M. Gutierrez                               Albuquerque, New Mexico                                 |
| J. R. Holland, Jr.                                      Dallas, Texas  |
| Harris L. Kempner, Jr.                            Galveston, Texas                                                       |
| Kevern R. Joyce                                      Fort Worth, Texas |
| Dr. Carol D. Surles                                 Charleston, Illinois                        |
| Larry G. Wheeler                                    Oakland, California          |
| Dennis H. Withers                                  Mansfield,Texas                              |

**Article Nine**

            To the full extent allowed pursuant to theTexas Miscellaneous Corporation Laws Act as it now exists or as it may beamended or recodified from time to time, directors 

----

shall not be personallyliable to the Corporation or its shareholders for monetary damages for any actor omission in the director's capacity as a director except for liability for:

1.         abreach of the director's duty of loyalty to the corporation or its shareholdersor members;

2.         anact or omission not in good faith or that involves intentional misconduct or aknowing violation of the law;

3.         atransaction from which a director received an improper benefit, whether or notthe benefit resulted from an action taken within the scope of the director'soffice;

4.         anact or omission for which the liability of a director is expressly provided forby statute;

5.         anact related to an unlawful stock repurchase or payment of a dividend.

**ARTICLETEN**

The corporation shall at alltimes have at least one Independent Director, who will be appointed by theshareholders.  To the fullest extent permitted by the Texas BusinessCorporation Act, the Independent Director shall consider only the interests ofthe corporation and its creditors in acting or otherwise voting on any MaterialAction.  For purposes of this provision:  "**Independent Director**"means a natural person who, for the five-year period prior to his or herappointment as Independent Director has not been, and during the continuationof his or her service as Independent Director is not: (i) an employee,director, stockholder, partner or officer of the corporation or any of itsAffiliates (other than his or her service as an Independent Director of thecorporation); (ii) a customer or supplier that derives more than ten percent ofits revenues from the corporation or any of its Affiliates; or (iii) any memberof the immediate family of a person described in (i) or (ii); and "**MaterialAction**" shall mean to amend the Article of Incorporation, consolidateor merge the corporation with or into any Person, or sell all or substantiallyall of the assets of the corporation or to institute proceedings to have thecorporation be adjudicated bankrupt or insolvent, or consent to the institutionof bankruptcy or insolvency proceedings against the corporation or file apetition seeking, or consent to, reorganization or relief with respect to thecorporation under any applicable federal or state law relating to bankruptcy,or consent to the appointment of a receiver, liquidator, assignee, trustee,sequestrator (or other similar official) of the corporation or a substantialpart of its property, or make any assignment for the benefit of creditors ofthe corporation, or admit in writing the corporation's inability to pay itsdebts generally as they become due, or, to the fullest extent permitted by law,take action in furtherance of any such action, or dissolve or liquidate thecorporation.

**ARTICLE ELEVEN**

            The Corporation willnot commence business until it has received for the issuance of its sharesconsideration of the value of not less than One Thousand Dollars ($1,000.00).

----

IN WITNESS WHEREOF, the undersigned has executed these Amended andRestated Articles of Incorporation as of this 7th day of April, 2000.

 

**TEXAS-NEW MEXICO POWER COMPANY**

 

 

By: ___/s/ Paul W. Talbot_______        Name: Paul W. Talbot        Title:  Secretary