<PAGE>
 
                                  EXHIBIT 3.2



                              AMENDED AND RESTATED

                                     BYLAWS

                                       OF

                                  DYNEGY INC.

                             A DELAWARE CORPORATION



                                        
<PAGE>
 
                               TABLE OF CONTENTS
 
ARTICLE ONE: OFFICES
 
   1.1   Registered Office and Agent.........................    1
   1.2   Other Offices.......................................    1
 
ARTICLE TWO: MEETINGS OF STOCKHOLDERS
 
   2.1   Annual Meeting......................................    1
   2.2   Special Meeting.....................................    1
   2.3   Place of Meetings...................................    1
   2.4   Notice..............................................    2
   2.5   Voting List.........................................    2
   2.6   Quorum..............................................    2
   2.7   Required Vote; Withdrawal of Quorum.................    3
   2.8   Method of Voting; Proxies...........................    3
   2.9   Record Date.........................................    3
  2.10   Conduct of Meeting..................................    4
  2.11   Inspectors..........................................    4
 
ARTICLE THREE: DIRECTORS
 
   3.1   Management..........................................    4
   3.2   Number; Term; Advisory Director.....................    4
   3.3   Removal; Vacancies..................................    5
   3.4   Meetings of Directors...............................    5
   3.5   First Meeting.......................................    5
   3.6   Election of Officers................................    5
   3.7   Regular Meetings....................................    5
   3.8   Special Meetings....................................    5
   3.9   Notice..............................................    6
  3.10   Quorum; Vote Required; Actions Requiring Approval...    6
  3.11   Procedure...........................................    9
  3.12   Presumption of Assent...............................    9
  3.13   Compensation........................................    9
  3.14   Interested Directors................................    9
 
ARTICLE FOUR: COMMITTEES
 
   4.1   Executive Committee.................................   10
   4.2   Other Committees....................................   10
   4.3   Number; Qualification; Term.........................   10
   4.4   Authority...........................................   10
<PAGE>
 
   4.5   Committee Changes...................................   10
   4.6   Alternate Members of Committees.....................   10
   4.7   Regular Meetings....................................   10
   4.8   Special Meetings....................................   10
   4.9   Quorum; Majority Vote...............................   11
  4.10   Minutes.............................................   11
  4.11   Compensation........................................   11
  4.12   Responsibility......................................   11
 
ARTICLE FIVE: NOTICE
 
   5.1   Method..............................................   11
   5.2   Waiver..............................................   12
 
ARTICLE SIX: OFFICERS
 
   6.1   Number; Titles; Term of Office......................   12
   6.2   Removal.............................................   12
   6.3   Vacancies...........................................   12
   6.4   Authority...........................................   12
   6.5   Compensation........................................   12
   6.6   Chairman of the Board...............................   13
   6.7   President...........................................   13
   6.8   Vice Presidents.....................................   13
   6.9   Treasurer...........................................   13
  6.10   Assistant Treasurers................................   13
  6.11   Secretary...........................................   13
  6.12   Assistant Secretaries...............................   14
 
ARTICLE SEVEN: CERTIFICATES AND STOCKHOLDERS
 
   7.1   Certificates for Shares.............................   14
   7.2   Replacement of Lost or Destroyed Certificates.......   14
   7.3   Transfer of Shares..................................   14
   7.4   Registered Stockholders.............................   15
   7.5   Regulations.........................................   15
   7.6   Legends.............................................   15
 
ARTICLE EIGHT: MISCELLANEOUS PROVISIONS
 
   8.1   Reserves............................................   15
   8.2   Books and Records...................................   15
   8.3   Fiscal year.........................................   15
   8.4   Seal................................................   15
   8.5   Resignations........................................   15

                                       ii
<PAGE>
 
   8.6   Securities of Other Corporations....................   16
   8.7   Telephone Meetings..................................   16
   8.8   Invalid Provisions..................................   16
   8.9   Mortgages, etc......................................   16
  8.10   Headings............................................   16
  8.11   References..........................................   16
  8.12   Amendments..........................................   16

                                      iii
<PAGE>
 
                          AMENDED AND RESTATED BYLAWS
                                       OF
                                  DYNEGY INC.

                             A DELAWARE CORPORATION

                                    PREAMBLE


                                  ARTICLE ONE
                                    OFFICES

  1.1  REGISTERED OFFICE AND AGENT.  The registered office and registered agent
of the Corporation shall be as designated from time to time by the appropriate
filing by the Corporation in the office of the Secretary of State of the State
of Delaware.

  1.2  OTHER OFFICES.  The Corporation may also have offices at such other
places, both within and without the State of Delaware, as the Board of Directors
may from time to time determine or as the business of the Corporation may
require.

                                  ARTICLE TWO
                            MEETINGS OF STOCKHOLDERS

  2.1  ANNUAL MEETING.  An annual meeting of stockholders of the Corporation
shall be held each calendar year on such date and at such time as shall be
designated from time to time by the Board of Directors and stated in the notice
of the meeting or in a duly executed waiver of notice of such meeting.  At such
meeting, the stockholders shall elect directors and transact such other business
as may be properly brought before the meeting.

  2.2  SPECIAL MEETING.  A special meeting of the stockholders may be called by
the Board of Directors pursuant to a resolution adopted by a majority of the
directors, by the Chairman of the Board, by the President or by any holder or
holders of record of at least ten percent of the outstanding shares of capital
stock of the Corporation then entitled to vote on any matter for which the
respective special meeting is being called (considered for this purpose as one
class).  Subject to applicable law, a special meeting shall be held on such date
and at such time as shall be designated by the person(s) calling the meeting and
stated in the notice of the meeting or in a duly executed waiver of notice of
such meeting.  Only such business shall be transacted at a special meeting as
may be stated or indicated in the notice of such meeting given in accordance
with these Bylaws or in a duly executed waiver of notice of such meeting.

  2.3  PLACE OF MEETINGS.  An annual meeting of stockholders may be held at any
place within or without the State of Delaware designated by the Board of
Directors.  A special meeting of stockholders may be held at any place within or
without the State of Delaware designated in the notice of the meeting or a duly
executed waiver of notice of such meeting.  Meetings of 
<PAGE>
 
stockholders shall be held at the principal office of the Corporation unless
another place is designated for meetings in the manner provided herein.

  2.4  NOTICE.  A written or printed notice stating the place, day and time of
each meeting of the stockholders and, in the case of a special meeting, the
purpose or purposes for which the meeting is called shall be delivered not less
than ten nor more than sixty days before the date of the meeting, either
personally or by mail, by or at the direction of the Chairman of the Board, the
President, the Secretary or the officer or person(s) calling the meeting, to
each stockholder of record entitled to vote at such meeting.  If such notice is
to be sent by mail, it shall be directed to such stockholder at such
stockholder's address as it appears on the records of the Corporation, unless
such stockholder shall have filed with the Secretary of the Corporation a
written request that notices to such stockholder be mailed to some other
address, in which case it shall be directed to such stockholder at such other
address.  Notice of any meeting of stockholders shall not be required to be
given to any stockholder who shall attend such meeting in person or by proxy and
shall not, at the beginning of such meeting, object to the transaction of any
business because the meeting is not lawfully called or convened or who shall,
either before or after the meeting, submit a signed waiver of notice, in person
or by proxy.

  2.5  VOTING LIST.  At least ten days before each meeting of stockholders, the
Secretary or other officer of the Corporation who has charge of the
Corporation's stock ledger, either directly or through another officer appointed
by such officer or through a transfer agent appointed by the Board of Directors,
shall prepare a complete list of stockholders entitled to vote thereat, arranged
in alphabetical order and showing the address of each stockholder and number of
shares of capital stock registered in the name of each stockholder.  For a
period of ten days prior to such meeting, such list shall be kept on file at a
place within the city where the meeting is to be held, which place shall be
specified in the notice of meeting or a duly executed waiver of notice of such
meeting or, if not so specified, at the place where the meeting is to be held
and shall be open to examination by any stockholder during ordinary business
hours.  Such list shall be produced at such meeting and kept at the meeting at
all times during such meeting and may be inspected by any stockholder who is
present.

  2.6  QUORUM.  The holders of a majority of the voting power of the outstanding
shares of capital stock entitled to vote on a matter, present in person or by
proxy, shall constitute a quorum at any meeting of stockholders, except as
otherwise provided by law, the certificate of incorporation of the Corporation,
these Bylaws, any rule or regulation applicable to the Corporation or of any
applicable national securities exchange.  If a quorum shall not be present, in
person or by proxy, at any meeting of stockholders, the stockholders entitled to
vote thereat who are present, in person or by proxy (or, if no stockholder
entitled to vote is present, any officer of the Corporation), may adjourn the
meeting from time to time without notice other than announcement at the meeting
(unless the Board of Directors, after such adjournment, fixes a new record date
for the adjourned meeting), until a quorum shall be present, in person or by
proxy.  At any adjourned meeting at which a quorum shall be present, in person
or by proxy, any business may be transacted which may have been transacted at
the original meeting had a quorum been present; provided that, if the
adjournment is for more than thirty days or if after the 

                                       2
<PAGE>
 
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the adjourned meeting.

  2.7  REQUIRED VOTE; WITHDRAWAL OF QUORUM.  When a quorum is present at any
meeting, the vote of the holders of at least a majority of the voting power of
the outstanding shares of capital stock entitled to vote thereat who are
present, in person or by proxy, shall decide any questions brought before such
meeting, unless the question is one on which, by express provision of law, the
certificate of incorporation of the Corporation, these Bylaws, any rule or
regulation applicable to the Corporation or of any applicable national
securities exchange, a different vote is required, in which cases such express
provision shall govern and control the decisions of such question.  The
stockholders present at a duly constituted meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough shares of
capital stock to leave less than a quorum.

  2.8  METHOD OF VOTING; PROXIES.  Except as otherwise provided in the
certificate of incorporation of the Corporation or bylaw, each outstanding share
of capital stock, regardless of class, shall be entitled to one vote on each
matter submitted m a vote at a meeting of stockholders.  Elections of directors
need not be by written ballot.  At any meeting of stockholders, every
stockholder having the right to vote may vote either in person or by proxy
executed in writing by the stockholder or by such stockholder's duly authorized
attorney-in-fact.  Each such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting.  No proxy shall be valid after
three years from the date of its execution, unless otherwise provided in the
proxy.  If no date is stated in a proxy, such proxy shall be presumed to have
been executed on the date of the meeting at which it is to be voted.  Each proxy
shall be revocable unless expressly provided therein to be irrevocable and
coupled with an interest sufficient in law to support an irrevocable power or
unless otherwise made irrevocable by law.

  2.9  RECORD DATE.  For the purposes of determining stockholders entitled (a)
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, (b) to receive payment of any dividend or other distribution or
allotment of any rights or (c) to exercise any rights in respect of any change,
conversion or exchange of stock or for the purpose of any other lawful action,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted by
the Board of Directors, for any such determination of stockholders, such date in
any case to be not more than sixty days and not less than ten days prior to such
meeting nor more than sixty days prior to any other action.  If no record date
is fixed:

          (i) The record date for determining stockholders entitled to notice of
     or to vote at a meeting of stockholders shall be at the close of business
     on the day next preceding the day on which notice is given or, if notice is
     waived, at the close of business on the day next preceding the day on which
     the meeting is held.

          (ii) The record date for determining stockholders for any other
     purpose shall be at the close of business on the day on which the Board of
     Directors adopts the resolution relating thereto.

                                       3
<PAGE>
 
A determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.

  2.10 CONDUCT OF MEETING.  The Chairman of the Board, if such office has been
filled and, if not or if the Chairman of the Board is absent or otherwise unable
to act, the President shall chair all meetings of stockholders.  The Secretary
shall keep the records of each meeting of stockholders.  In the absence or
inability to act of any such officer, such officer's duties shall be performed
by the officer given the authority to act for such absent or non-acting officer
under these Bylaws or some person appointed by the meeting.

  2.11 INSPECTORS.  The Board of Directors may, in advance of any meeting of
stockholders, appoint one or more inspectors to act at such meeting or any
adjournment thereof.  If any of the inspectors so appointed shall fail to appear
or act, the Chairman of the meeting shall or if inspectors shall not have been
appointed, the Chairman of the meeting may, appoint one or more inspectors.
Each inspector, before entering upon the discharge of his or her duties, shall
take and sign an oath faithfully to execute the duties of inspector at such
meeting with strict impartiality and according to the best of his or her
ability.  The inspectors shall determine the number of shares of capital stock
of the Corporation outstanding and the voting power of each, the number of
shares represented at the meeting, the existence of a quorum and the validity
and effect of proxies and shall receive votes, ballots or consents, hear and
determine all challenges and questions arising in connection with the right to
vote, count and tabulate all votes, ballots or consents, determine the results
and certify their determination of the number of shares represented at the
meeting and their count of all votes and ballots and do such acts as are proper
to conduct the election or vote with fairness to all stockholders.  On request
of the Chairman of the meeting, the inspectors shall make a report in writing of
any challenge, request or matter determined by them and shall execute a
certificate of any fact found by them.  No director or candidate for the office
of director shall act as an inspector of an election of directors.  No director
or candidate for the office of director shall act as an inspector of an election
of directors.  Inspectors need not be stockholders.

                                 ARTICLE THREE
                                   DIRECTORS

  3.1  MANAGEMENT.  The business and property of the Corporation shall be
managed by the Board of Directors.  Subject to the restrictions imposed by law,
the certificate of incorporation of the Corporation or these Bylaws, the Board
of Directors may exercise all the powers of the Corporation.

  3.2  NUMBER; TERM; ADVISORY DIRECTOR.  The number of directors constituting
the Board of Directors shall be thirteen.  Each director shall hold office until
the next annual meeting of stockholders following his or her election and until
his or her successor shall have been duly elected and qualified or until his or
her earlier death, resignation or removal.  In addition to the thirteen
directors who shall be elected by the stockholders of the Corporation, the Board
of Directors may also designate, by resolution of the Board, an advisory
director who shall be 

                                       4
<PAGE>
 
entitled to attend all meetings of the Board, but shall not be entitled to vote
on any matters before the Board. Except as set forth in this Section 3.2, the
advisory director shall have no rights as a director either under the
certificate of incorporation of the Corporation, these Bylaws, Delaware law or
any other agreement to which the Corporation is a party. Notwithstanding the
foregoing, an advisory director shall be entitled to receive compensation for
his or her services as a director in the same amount and manner that such
director would be entitled to receive compensation as an employee director or
non-employee director, as the case may be, if such director were elected by the
stockholders of the Corporation.

  3.3  REMOVAL; VACANCIES.  Any or all directors may be removed, with or without
cause, upon the affirmative vote or consent of the holders of a majority of the
voting power of the outstanding shares of each class of capital stock then
entitled to vote in person or by proxy at an election of such directors.  Any
vacancies occurring on the Board of Directors caused by death, resignation,
retirement, disqualification, removal or other termination from office of any
director may be filled by the vote of at least eleven directors then in office
or by the affirmative vote, at any annual meeting or any special meeting of the
stockholders called for the purpose of filling such directorship or
directorships, of the holders of a majority of the outstanding shares of each
class of capital stock then entitled to vote in person or by proxy at an
election of such directors.  Each successor director so chosen shall hold office
for the unexpired term of his or her predecessor in office.

  3.4  MEETINGS OF DIRECTORS.  The directors may hold their meetings and may
have an office and keep the records of the Corporation, except as otherwise
provided by law, in such place or places within or without the State of Delaware
as the Board of Directors may from time to time determine or as shall be
specified in the notice of such meeting or duly executed waiver of notice of
such meeting.

  3.5  FIRST MEETING.  Each newly elected Board of Directors may hold its first
meeting for the purpose of organization and the transaction of business, if a
quorum is present, immediately after and at the same place as the annual meeting
of stockholders and no notice of such meeting shall be necessary.

  3.6  ELECTION OF OFFICERS.  At the first meeting of the Board of Directors
after each annual meeting of stockholders at which as quorum shall be present,
the Board of Directors shall elect the officers of the Corporation.

  3.7  REGULAR MEETINGS.  Regular meetings of the Board of Directors shall be
held at such times and places as shall be designated from time to time by
resolution of the Board of Directors.  Notice of such regular meetings shall not
be required.

  3.8  SPECIAL MEETINGS.  Special meetings of the Board of Directors shall be
held whenever called by the Chairman of the Board or any two or more directors.

                                       5
<PAGE>
 
  3.9  NOTICE.  The Secretary shall give notice of each special meeting to each
director at least five business days before the meeting.  Notice of any such
meeting need not be given to any director who, either before or after the
meeting, submits a signed waiver of notice or who shall attend such meeting
without protesting, prior to or at its commencement, the lack of notice to him
or her.  The purpose of any special meeting shall be specified in the notice or
waiver of notice of such meeting.

  3.10 QUORUM; VOTE REQUIRED; ACTIONS REQUIRING APPROVAL.

          (a) Except as provided in Section 3.10(b), at all meetings of the
     Board of Directors, seven directors shall constitute a quorum for the
     transaction of business.  If at any meeting of the Board of Directors there
     is less than a quorum present, a majority of those present or any director
     solely present may adjourn the meeting from time to time without further
     notice.  Unless the act of a greater number is required by law, the
     certificate of incorporation of the Corporation or these Bylaws, the act of
     a majority of the directors present at a meeting at which a quorum is in
     attendance shall be the act of the Board of Directors.

          (b) Notwithstanding anything to the contrary herein (and subject to
     the provisions of Section 4.1 of these Bylaws), the Corporation shall not
     take (or permit to be taken in its capacity as a shareholder or partner or
     otherwise permit any Subsidiary of the Corporation to take) any of the
     following actions unless approved by the affirmative vote of at least
     eleven directors;

               (i) any sale of all or substantially all of the assets of the
          Corporation or any Subsidiary;

               (ii) any merger, consolidation or liquidation of the Corporation
          or any Subsidiary or any purchase or other acquisition of any common
          stock of the Corporation;

               (iii)  adopting any resolution proposing an amendment to the
          certificate of incorporation of the Corporation;

               (iv) the Corporation or any Subsidiary entering into any line of
          business that neither the Corporation nor any Subsidiary is engaged in
          on Effective Time (as such term is defined in that certain Combination
          Agreement and Plan of Merger among the Corporation and certain other
          parties dated as of May 22, 1996);

               (v) the Corporation or any Subsidiary paying any dividend or
          otherwise making any distribution to any person;

               (vi) the Corporation or any Subsidiary issuing any stock or other
          security or ownership interests to any person;

                                       6
<PAGE>
 
               (vii)  the Corporation or any Subsidiary engaging in any oil or
          gas futures activities or other trading activities relating to oil or
          gas pricing, including without limitation, hedging, swaps, options or
          speculation (such activities referred to herein as "trading
          activities"), that, based on the average oil or gas pricing during the
          six months preceding the date of such activity, could result in
          exposure to loss to the Corporation in excess of $10,000,000 as to any
          single transaction, other than trading activities which off-set
          physical transactions and are accounted for as a hedge and in no event
          shall the uncovered portion of the trading activities of the
          Corporation and its Subsidiaries, in the aggregate, result in an
          exposure to loss to the Corporation in excess of $10,000,000;

               (viii)  amending or terminating any contract, commitment or
          employee compensation plan if the execution of or entering into such
          contract, commitment or plan was approved by the Board of Directors
          pursuant to this Section 3.10(b) (or would have been subject to Board
          of Directors approval pursuant to this Section 3.10(b) if this Section
          3.10 had been in effect at the time of execution of or entering into
          such contract, commitment or plan);

               (ix) approving a different method in which the Corporation keeps
          its books;

               (x) the commencement by the Corporation or any Subsidiary of a
          voluntary case or proceeding under any applicable federal or state
          bankruptcy, insolvency, reorganization or other similar law or of any
          other voluntary case or proceeding to be adjudicated a bankrupt or
          insolvent or the consent by it to the entry of a decree or order for
          relief against it in an involuntary case or proceeding under any
          applicable federal or state bankruptcy, insolvency, reorganization or
          other similar law or to the commencement of any bankruptcy or
          insolvency case or proceeding against it or the filing by it of a
          petition or answer or consent seeking reorganization or relief under
          any applicable federal or state law or the consent by it to the filing
          of such petition or to the appointment of or taking possession by a
          custodian, receiver, liquidator, assignee, trustee, sequestrator or
          similar official of any substantial part of its property or the making
          by it of an assignment for the benefit of creditors or the admission
          by it in writing of its inability to pay its debts generally as they
          become due or the taking of action in furtherance of any such action;

               (xi) the Corporation or any Subsidiary taking any action in its
          capacity as a shareholder, partner, member or owner of any interest in
          a person which, if taken by the Corporation itself, would require the
          approval of the Board of Directors pursuant to this Section 3.10(b);

               (xii)  the Corporation or any Subsidiary (a) making or committing
          to make, any payment in excess of $10,000,000 per transaction or
          contract (or series 

                                       7
<PAGE>
 
          of related transactions or contracts), whether as or in connection
          with a capital expenditure, asset purchase, purchase of goods or
          services, investment, rental, settlement, equity contribution, loan,
          guaranty or otherwise, (b) borrowing any amount in excess of
          $10,000,000 per transaction or contract (or series of related
          transactions or contracts), (c) disposing of or otherwise transferring
          any asset (or related assets) whose fair market value exceeds
          $10,000,000 or (d) entering into any contract or transaction (or
          series of contracts or transactions) pursuant to which the Corporation
          or any Subsidiary is to receive more than $10,000,000; provided,
          however, if the amount in question is in excess of $10,000,000 but
          less than $25,000,000, any action referred to in (a), (b), (c) or (d)
          (including any such action that is also subject to Section
          3.10(b)(vii) and any other such action that is also subject to any of
          the other provisions of Section 3.10(b) except for the Corporation
          issuing any stock or other security or ownership interests to any
          person or paying any dividend or otherwise making any distribution to
          any person) need not be approved as aforesaid by the Board of
          Directors if approved by the unanimous vote of the Executive
          Committee;

               (xiii)  any change in the fiscal year of the Corporation;

               (xiv)  the appointment or removal of the Corporation's Chief
          Executive Officer, President, Chief Financial Officer or any Senior
          Vice President;

               (xv) the filling of any vacancy in the Board of Directors of the
          Corporation; and

               (xvi)  the establishment of any committee of the Board of
          Directors of the Corporation.

Notwithstanding the foregoing, if one or more directors give written notice to
the Secretary that such director or directors intend to abstain pursuant to
Section 3.14 of these Bylaws on a matter that is subject to this Section
3.10(b), then in lieu of the approval otherwise required herein such action may
be approved by the affirmative vote of at least such number of directors equal
to eleven less the number of directors that have given such notice.  For
purposes of these Bylaws, "Subsidiary" means (i) any corporation or other entity
a majority of the capital stock of which having ordinary voting power to elect a
majority of the Board of Directors or other persons performing similar functions
is at the time owned, directly or indirectly, with power to vote, by the
Corporation or (ii) a partnership, joint venture or limited liability company in
which the Corporation holds, directly or indirectly, a majority interest with
respect to voting power, rights to receive distributions or report earnings or
capital accounts, provided that none of Novagas Clearinghouse Limited
Partnership, Novagas Clearinghouse Limited, Novagas Clearinghouse Pipelines
Limited Partnership or Novagas Clearinghouse Pipeline Limited shall be deemed to
be a Subsidiary as currently constituted or as changed in connection with the
transactions contemplated by that certain Combination Agreement and Plan of
Merger dated as of May 22, 1996 among NGC Corporation, Chevron U.S.A. Inc. and
Midstream Combination Corp. and shall not be considered a Subsidiary solely by
reason of an increase in the Corporation's equity 

                                       8
<PAGE>
 
interest in any one or more of the foregoing entities from approximately 49% to
approximately 51%.

  3.11 PROCEDURE.  At meetings of the Board of Directors, business shall be
transacted in such order as from time to time the Board of Directors may
determine.  The Chairman of the Board, if such office has been filled and, if
not or if the Chairman of the Board is absent or otherwise unable to act, the
President shall preside at all meetings of the Board of Directors.  In the
absence or inability to act of either such officer, a chairman shall be chosen
by the Board of Directors from among the directors present.  The Secretary of
the Corporation shall act as the secretary of each meeting of the Board of
Directors unless the Board of Directors appoints another person to act as
secretary of the meeting.  The Board of Directors shall keep regular minutes of
its proceedings, which shall be placed in the minute book of the Corporation.

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

  3.13 COMPENSATION.  The Board of Directors shall have the authority to fix the
compensation, including fees and reimbursement of expenses, paid to directors
for attendance at regular or special meetings of the Board of Directors or any
committee thereof; provided, however, that nothing contained herein shall be
construed to preclude any director from serving the Corporation in any other
capacity or receiving compensation therefor.

  3.14 INTERESTED DIRECTORS.  A director who has an interest in a transaction or
matter within the meaning of Section 144 of the Delaware General Corporation Law
(or in which the stockholder that nominated such director pursuant to that
certain Stockholders Agreement dated May 22, 1996 among the Corporation and
certain other persons (the "Stockholders Agreement") has an interest) that is
the subject of review or action by the Board of Directors shall (i) disclose
such interest to the Board of Directors, (ii) abstain from voting with respect
to such transaction or matter and (iii) give written notice to the Secretary of
the Corporation that he or she intends to so abstain.  If one or more directors
give written notice to the Secretary that such director or directors intend to
abstain pursuant to this Section 3.14 with respect to any action by the Board of
Directors, then in lieu of the approval otherwise required under these Bylaws
for such action, such action may be approved by the affirmative vote of at least
the number of directors that would otherwise have been required less the number
of directors that have give a such notice.

                                       9
<PAGE>
 
                                  ARTICLE FOUR
                                   COMMITTEES

  4.1  EXECUTIVE COMMITTEE.  The Board of Directors, acting by resolution
adopted by at least eleven directors, may elect from among its members an
Executive Committee of four members, which committee shall have the authority to
approve actions to the extent specified in Section 3.10(b) of these Bylaws and,
with respect to actions not subject to Section 3.10(b), any other actions that a
majority of the Board of Directors could approve except to the extent restricted
by law or the certificate of incorporation of the Corporation.  In the event of
a vacancy, the Executive Committee shall have no authority to take any action
until such vacancy is filed.

  4.2  OTHER COMMITTEES.  In addition to the Executive Committee, the Board of
Directors may, by resolution adopted by at least eleven directors, designate one
or more committees (an "Additional Committee").

  4.3  NUMBER; QUALIFICATION; TERM.  Each Additional Committee shall consist of
one or more directors appointed by resolution adopted by at least eleven
directors.  The number of committee members may be increased or decreased from
time to time by resolution adopted by at least eleven directors.  Each committee
member shall serve as such until the earliest of (i) the expiration of his or
her term as director, (ii) his or her resignation as a committee member or as a
director or (iii) his or her removal as a committee member or as a director.

  4.4  AUTHORITY.  Each Additional Committee, to the extent expressly provided
in the resolution adopted by at least eleven directors establishing such
committee, shall have and may exercise all of the authority of the Board of
Directors in the management of the business and property of the Corporation
except to the extent expressly restricted by such resolution or by law, the
certificate of incorporation of the Corporation or these Bylaws.
Notwithstanding the foregoing, no committee (other than the Executive Committee
as provided in, but only to the extent provided in, Section 3.10(b)) may approve
or authorize the actions specified in Section 3.10(b).

  4.5  COMMITTEE CHANGES.  The Board of Directors by resolution adopted by at
least eleven directors shall have the power at any time to fill vacancies in, to
change the membership of and to discharge any committee.

  4.6  ALTERNATE MEMBERS OF COMMITTEES.  The Board of Directors may designate
one or more directors as alternate members of any committee.

  4.7  REGULAR MEETINGS.  Regular meetings of any committee may be held without
notice at such time and place as may be designated from time m time by the
committee and communicated to all members thereof.

  4.8  SPECIAL MEETINGS.  Special meetings of any committee may be held whenever
called by any committee member.  The committee member calling any special
meeting shall 

                                       10
<PAGE>
 
cause notice of such special meeting, including therein the time and place of
such special meeting, to be given to each committee member at least two days
before such special meeting. The purpose of any special meeting shall be
specified in the notice or waiver of notice of such meeting.

  4.9  QUORUM; MAJORITY VOTE.  At meetings of any committee, a majority of the
number of members designated by the Board of Directors shall constitute a quorum
for the transaction of business; provided, however, that the quorum for the
transaction of business by the Executive Committee shall be all four members
thereof.  If a quorum is not present at a meeting of any committee, a majority
of the members present may adjourn the meeting from time to time, without notice
other than an announcement at the meeting, until a quorum is present.  The act
of a majority of the members present at any meeting at which a quorum is in
attendance shall be the act of a committee, unless the act of a greater number
is required by law the certificate of incorporation of the Corporation or
Section 3.10(b) or any other provision of these Bylaws.

  4.10 MINUTES.  Each committee shall cause minutes of its proceedings to be
prepared and shall report the same to the Board of Directors upon the request of
the Board of Directors.  The minutes of the proceedings of each committee shall
be delivered to the Secretary of the Corporation for placement in the minute
books of the Corporation.

  4.11 COMPENSATION.  Committee members may, by resolution of the Board of
Directors, be allowed a stated salary or a fixed sum and expenses of attendance,
if any, for attending any committee meetings.

  4.12 RESPONSIBILITY.  The designation of any committee and the delegation of
authority to it shall not operate to relieve the Board of Directors or any
director of any responsibility imposed upon it or such director by law.

                                  ARTICLE FIVE
                                     NOTICE

  5.1  METHOD.  Whenever by statute, the certificate of incorporation of the
Corporation or these Bylaws, notice is required to be given to any committee
member, director or stockholder and no provision is made as to how such notice
shall be given, personal notice shall not be required and any such notice may be
given (i) in writing, by mail, postage prepaid, addressed to such committee
member, director or stockholder at his or her address as it appears on the books
or (in the case of a stockholder) the stock transfer records of tae Corporation
or (ii) by any other method permitted by law (including, but not limited to,
overnight courier service, telegram, telex or telefax).  Any notice required or
permitted to be given by mail shall be deemed to be delivered and given at the
time when the same is deposited in the United States mail as aforesaid.  Any
notice required or permitted to be given by overnight courier service shall be
deemed to be delivered and given at the time delivered to such service with all
charges prepaid and addressed as aforesaid.  Any notice required or permitted to
be given by telegram, telex or telefax shall be deemed to be delivered and given
at the time transmitted with all charges prepaid and addressed as aforesaid.

                                       11
<PAGE>
 
  5.2  WAIVER.  Whenever any notice is required to be given to any stockholder,
director or committee member of the Corporation by statute, the certificate of
incorporation of the Corporation or these Bylaws, a waiver thereof in writing
signed by the person or persons entitled to such notice, whether before or after
the time stated therein, shall be equivalent to the giving of such notice.
Attendance of a stockholder, director or committee member at a meeting shall
constitute a waiver of notice of such meeting, except where such person attends
for the express purpose of objecting to the transaction of any business on the
ground that the meeting is not lawfully called or convened.

                                  ARTICLE SIX
                                    OFFICERS

  6.1  NUMBER; TITLES; TERM OF OFFICE.  The officers of the Corporation shall be
a Chairman of the Board, a President, a Secretary and such other officers as the
Board of Directors may from time to time elect or appoint, including one or more
Vice Presidents (with each Vice President to have such descriptive title, if
any, as the Board of Directors shall determine) and a Treasurer.  The Board of
Directors may also from time to time elect or appoint a Chief Executive Officer,
Chief Operating Officer, Chief Financial Officer or Principal Accounting
Officers, each with such powers and duties as may be assigned by the Board of
Directors.  Each officer shall hold office until his or her successor shall have
been duly elected and shall have qualified, until his or her death or until he
or she shall resign or shall have been removed in the manner hereinafter
provided.  Any two or more offices may be held by the same person.  None of the
officers need be a stockholder or a director of the Corporation or a resident of
the State of Delaware, but the Chairman shall be a director.

  6.2  REMOVAL.  Any officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever in its judgment the
best interest of the Corporation will be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself create
contract rights.

  6.3  VACANCIES.  Any vacancy occurring in any office of the Corporation (by
death, resignation, removal or otherwise) may be filled by the Board of
Directors.

  6.4  AUTHORITY.  Officers shall have such authority and perform such duties in
the management of the Corporation as are provided in these Bylaws or as may be
determined by resolution of the Board of Directors not inconsistent with these
Bylaws.

  6.5  COMPENSATION.  The compensation, if any, of officers and agents shall be
fixed from time to time by the Board of Directors or a committee of directors
appointed for such purpose by the Board of Directors; provided, however, that
the Board of Directors may delegate the power to determine the compensation of
any officer and agent (other than the officer to whom such power is delegated)
to the Chairman of the Board or the President.

                                       12
<PAGE>
 
  6.6  CHAIRMAN OF THE BOARD.  The Chairman of the Board shall, subject to the
supervision of the Board of Directors of the Corporation, have the general
management and control of the Corporation.  Such officer shall preside at all
meetings of the stockholders and of the Board of Directors and shall have such
duties as may from time to time be assigned by the Board of Directors.

  6.7  PRESIDENT.  The President shall, subject to the supervision of the Board
of Directors of the Corporation, have general charge, management and control of
the properties and operations of the Corporation in the ordinary course of its
business, with all such powers with respect to such properties and operations as
may be reasonably incident to such responsibilities.  In the absence or
inability to act of the Chairman of the Board, the President shall exercise all
of the powers and discharge all of the duties of the Chairman of the Board.  As
between the Corporation and third parties, any action taken by the President in
the performance of the duties of the Chairman of the Board shall be conclusive
evidence that the Chairman of the Board is absent or unable to act.

  6.8  VICE PRESIDENTS.  Each Vice President shall have such powers and duties
as may be assigned to him or her by the Board of Directors, the Chairman of the
Board or the President and (in order of their seniority as determined by the
Board of Directors or, in the absence of such determination, as determined by
the length of time they have held the office of Vice President) shall exercise
the powers of the President during that officer's absence or inability to act.
As between the Corporation and third parties, any action taken by a Vice
President in the performance of the duties of the President shall be conclusive
evidence of the absence or inability to act of the President at the time such
action was taken.

  6.9  TREASURER.  The Treasurer shall have custody of the Corporation's funds
and securities, shall keep full and accurate account of receipts and
disbursements, shall deposit all monies and valuable effects in the name and to
the credit of the Corporation in such depository or depositories as may be
designated by the Board of Directors and shall perform such other duties as may
be prescribed by the Board of Directors, the Chairman of the Board or the
President.

  6.10 ASSISTANT TREASURER.  Each Assistant Treasurer shall have such powers and
duties as may be assigned to him or her by the Board of Directors, the Chairman
of the Board or the President.  The Assistant Treasurers (in the order of their
seniority as determined by the Board of Directors or, in the absence of such a
determination, as determined by the length of time they have held the office of
Assistant Treasurer) shall exercise the powers of the Treasurer during that
officer's absence or inability to act.

  6.11 SECRETARY.  Except as otherwise provided in these Bylaws, the Secretary
shall keep the minutes of all meetings of the Board of Directors and of the
stockholders in books provided for that purpose and he or she shall attend to
the giving and service of all notices.  The Secretary may sign with the Chairman
of the Board or the President or any other authorized officer of the
Corporation, in the name of the Corporation, all contracts of the Corporation
and 

                                       13
<PAGE>
 
affix the seal of the Corporation thereto.  The Secretary shall have charge
of the certificate books, transfer books and stock papers as the Board of
Directors may direct, all of which shall at all reasonable times be open to
inspection by any officer of the Corporation upon application at the office of
the Corporation during business hours.  The Secretary shall in general perform
all duties incident to the office of the Secretary, subject to the control of
the Board of Directors, the Chairman of the Board and the President.

  6.12 ASSISTANT SECRETARIES.  Each Assistant Secretary shall have such powers
and duties as may be assigned to him or her by the Board of Directors, the
Chairman of the Board or the President.  The Assistant Secretaries (in the order
of their seniority as determined by the Board of Directors or, in the absence of
such a determination, as determined by the length of time they have held the
office of Assistant Secretary) shall exercise the powers of the Secretary during
that officer's absence or inability to act.

                                 ARTICLE SEVEN
                         CERTIFICATES AND STOCKHOLDERS

  7.1  CERTIFICATES FOR SHARES.  Certificates representing shares of stock of
the Corporation shall be in such form as shall be approved by the Board of
Directors.  The certificates shall be signed by the Chairman of the Board or the
President or a Vice President and also by the Secretary or an Assistant
Secretary or by the Treasurer or an Assistant Treasurer.  Any and all signatures
on the certificate may be a facsimile and may be sealed with the seal of the
Corporation or a facsimile thereof.  If any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon, a certificate
has ceased to be such officer, transfer agent or registrar before such
certificate is issued, such certificate may be issued by the Corporation with
the same effect as if he or she were such officer, transfer agent or registrar
at the date of issue.  The certificates shall be consecutively numbered and
shall be entered in the books of the Corporation as they are issued and shall
exhibit the holder's name and the number of shares.

  7.2  REPLACEMENT OF LOST OR DESTROYED CERTIFICATES.  The Board of Directors
may direct a new certificate or certificates to be issued in place of a
certificate or certificates theretofore issued by the Corporation and alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate or certificates representing shares to be lost
or destroyed.  When authorizing such issue of a new certificate or certificates,
the Board of Directors may, in its discretion and as a condition precedent to
the issuance thereof, require the owner of such lost or destroyed certificate or
certificates or such owner's legal representative, to advertise the same in such
a manner as it shall require and/or to give the Corporation a bond with a surety
or sureties satisfactory to the Corporation in such sum as it may direct as
indemnity against any claim or expense resulting from a claim, that be made
against the Corporation with respect to the certificate or certificates alleged
to have been lost or destroyed.

  7.3  TRANSFER OF SHARES.  Shares of stock of the Corporation shall be
transferable only on the books of the Corporation by the holders thereof in
person or by their duly authorized 

                                       14
<PAGE>
 
attorneys or legal representatives. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate representing shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, the Corporation or its transfer agent shall issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.

  7.4  REGISTERED STOCKHOLDERS.  The Corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in fact thereof
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such share or shares on the part of any other person, whether
or not it shall have express or other notice thereof, except as otherwise
provided by law.

  7.5  REGULATIONS.  The Board of Directors shall have the power and authority
to make all such rules and regulations as they may deem expedient concerning the
issue, transfer and registration or the replacement of certificates for shares
of stock of the Corporation.

  7.6  LEGENDS.  The Board of Directors shall have the power and authority to
provide that certificates representing shares of stock bear such legends as the
Board of Directors deems appropriate to assure that the Corporation does not
become liable for violations of federal or state securities laws or other
applicable law.

                                 ARTICLE EIGHT
                            MISCELLANEOUS PROVISIONS

  8.1  RESERVES.   There may be created by the Board of Directors out of funds
of the Corporation legally available therefor such reserve or reserves as the
directors from time to time, in their discretion, consider proper to provide for
contingencies, to equalize dividends or to repair or maintain any property of
the Corporation or for such other purpose as the Board of Directors shall
consider beneficial to the Corporation and the Board of Directors may modify or
abolish any such reserve in the manner in which it was created.

  8.2  BOOKS AND RECORDS.  The Corporation shall keep correct and complete books
and records of account, shall keep minutes of the proceedings of its
stockholders and Board of Directors and shall keep at its registered office or
principal place of business or at the office of its transfer agent or registrar,
a record of its stockholders, giving the names and addresses of all stockholders
and the number and class of the shares held by each.

  8.3  FISCAL YEAR.  The fiscal year of the Corporation shall be fixed by the
Board of Directors.

  8.4  SEAL.  The seal of the Corporation shall be such as from time to time may
be approved by the Board of Directors.

  8.5  RESIGNATIONS.  Any director, committee member or officer may resign by so
stating at any meeting of the Board of Directors or by giving written notice to
the Board of 

                                       15
<PAGE>
 
Directors, the Chairman of the Board, the President or the Secretary. Such
resignation shall take effect at the time specified therein or, if no time is
specified therein, immediately upon its receipt. Unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.

  8.6  SECURITIES OF OTHER CORPORATIONS.  Except as otherwise provided in these
Bylaws or resolution of the Board of Directors, the Chairman of the Board, the
President or any Vice President of the Corporation shall have the power and
authority to transfer, endorse for transfer, vote, consent or take any other
action with respect to any securities of another issuer which may be held or
owned by the Corporation and to make, execute and deliver any waiver, proxy or
consent with respect to any such securities.

  8.7  TELEPHONE MEETINGS.  Members of the Board of Directors and members of a
committee of the Board of Directors may participate in and hold a meeting of the
Board or committee by means of a conference telephone or similar communications
equipment by means of which persons participating in the meeting can hear each
other and participation in a meeting pursuant to this section shall constitute
presence in person at such meeting, except where a person participates in the
meeting for the express purpose of objecting to the transaction of any business
on the ground that the meeting is not lawfully called or convened.

  8.8  INVALID PROVISIONS.  If any part of these Bylaws shall be held invalid or
inoperative for any reason, the remaining parts, so far as it is possible and
reasonable, shall remain valid and operative.

  8.9  MORTGAGES, ETC.  With respect to any deed, deed of trust, mortgage or
other instrument executed by the Corporation through its duly authorized officer
or officers, the attestation to such execution by the Secretary of the
Corporation shall not be necessary to constitute such deed, deed of trust,
mortgage or other instrument a valid and binding obligation against the
Corporation unless the resolutions, if any, of the Board of Directors
authorizing such execution expressly state that such attestation is necessary.

  8.10 HEADINGS.  The headings used in these Bylaws have been inserted for
administrative convenience only and do not constitute matter to be construed in
interpretation.

  8.11 REFERENCES.  Whenever herein the singular number is used, the same shall
include the plural where appropriate and words of gender should include the
other gender where appropriate.

  8.12 AMENDMENTS.  These Bylaws may only be amended or repealed by the
affirmative vote or consent of at least eleven directors of the Corporation or
by the holders of a majority of the outstanding Common Stock.

                                       16