**Exhibit3.2**

 

**SIXTH RESTATEDBYLAWS OFSTEWART & STEVENSON SERVICES, INC.**

**Effective April 11, 2000**

 

**ARTICLE I**

 

***Offices***

 

***Section 1.1. Offices. ***Theprincipal business office of the Corporation shall be at Houston, Texas or atsuch other location within the State of Texas as the Board of Directors may,from time to time, establish by resolution. The Corporation may have such other business offices within or withoutthe State of Texas as the Board of Directors may from time to time establish orthe business of the Corporation may require.

 

**ARTICLE II**

 

***Capital Stock***

 

***Section 2.1. Certificates Representing Shares.***  Certificates representing shares of stock ofthe Corporation shall be consecutively numbered and in such form or forms ascomply with the requirements of law and the Restated Articles of Incorporationand as the Board of Directors shall approve. Such certificates shall be signed by the President or a Vice President,and the Secretary or an Assistant Secretary of the Corporation, and may besealed with the seal of the Corporation or a facsimile thereof.  The signatures of the President or VicePresident and the Secretary or Assistant Secretary may be facsimiles, engravedor printed, if the certificate is countersigned by a transfer agent, orregistered by a registrar, other than the Corporation itself or an employee ofthe Corporation.  In case any officer orofficers who have signed or whose facsimile signature or signatures have beenplaced upon such certificate shall have ceased to be such officer or officersbefore such certificate is issued, it may be adopted and issued by theCorporation with the same effect as if he or they had not ceased to be suchofficer or officers as of the date of its issuance, and the issuance anddelivery thereof by the Corporation shall constitute adoption thereof by theCorporation.

 

***Section 2.2. Stock Certificate Register and Shareholders of Record.***  The Secretary of the Corporation shall keepat the registered office of the Corporation, or cause a duly appointed transferagent or registrar to keep at its principal office, a share register showingthe names of the shareholders and their addresses, the number of shares held byeach, the number and date of issue of all certificates representing shares ofthe Corporation, the number and date of cancellation of every certificatesurrendered for cancellation and whether such certificates originated fromoriginal issue or transfer.  Suchinformation may be kept in any medium capable of reproducing the information inclearly legible form and shall be the official list of shareholders of recordof the Corporation for all purposes. The Corporation shall be entitled to treat the holder of

 

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record of any shares ofthe Corporation as the owner thereof for all purposes, and shall not be boundto recognize any equitable or other claim to, or interest in, such shares orany rights deriving from such shares on the part of any other person, including(but without limitation) a purchaser, assignee, or transferee, unless and untilsuch other person becomes the holder of record of such shares, whether or notthe Corporation shall have either actual or constructive notice of the interestof such other person.

 

***Section 2.3. Transfer of Stock.***  The shares represented by any share certificates of theCorporation are transferable only on the stock certificate register of theCorporation by the holder of record thereof in person or by a duly authorizedattorney or legal representative upon surrender of the certificate for suchshares properly endorsed or assigned.

 

***Section 2.4. Transfer Agent and Registrar.***  The Board of Directors may appoint one ormore transfer agents or registrars of the shares, or both, and may require allshare certificates to bear the signature of a transfer agent or registrar orboth.

 

***Section 2.5. Lost, Stolen or Destroyed Certificates.***  The Corporation may issue a new certificatefor shares of stock in the place of any certificate theretofore issued andalleged to have been lost, stolen or destroyed, but the Board of Directors mayrequire the owner of such lost, stolen or destroyed certificate, or his legalrepresentative, to furnish an affidavit as to such loss, theft, or destructionand to give a bond in such form and substance, and with such surety orsureties, with fixed or open penalty, as it may direct, to indemnify theCorporation, and the transfer agents and registrars, if any, against any claimthat may be made on account of the alleged loss, theft or destruction of suchcertificate.  Any such new certificateshall be plainly marked “Duplicate” on its face.

 

**ARTICLE III**

# ** **

***The Shareholders***

 

***Section 3.1. Annual Meetings.*** An annual meeting of the shareholders, for the election of directors tosucceed those whose terms expire and for the transaction of such other businessas may properly come before the meeting, shall be held at such place, within orwithout the State of Texas, as may be designated by the Board of Directors orofficer calling the meeting at 10:00 in the morning of the second Tuesday inJune, or on such other date and time as the Board of Directors or officercalling such meeting shall fix and set forth in the notice of the meeting.  At the annual meeting of the shareholders,only such business shall be conducted as shall have been properly brought beforethe annual meeting.  To be properlybrought before the annual meeting of shareholders, business must be (i)specified in the notice of meeting (or any supplement thereto) given by or atthe direction of the Board of Directors, (ii) otherwise properly brought beforethe meeting by or at the direction of the Board of Directors, or (iii)otherwise properly brought before the meeting by a shareholder of theCorporation who is a shareholder of record at the time of giving of noticeprovided for in this Section 3.1, who shall be entitled to vote at suchmeeting and who complies with the notice procedures set forth in this Section

 

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3.1.  For business to be properly brought beforean annual meeting by a shareholder, the shareholder, in addition to any otherapplicable requirements, must have given timely notice thereof in writing tothe Secretary of the Corporation.  To betimely, a shareholder’s notice must be delivered to or mailed and received atthe principal executive offices of the Corporation not less than ninety (90)days prior to the anniversary date of the immediately preceding annual meetingof shareholders of the Corporation.  Ashareholder’s notice to the Secretary shall set forth as to each matter theshareholder proposes to bring before the annual meeting: (a) a briefdescription of the business desired to be brought before the annual meeting andthe reasons for conducting such business at the annual meeting, (b) the nameand address, as they appear on the Corporation’s books, of the shareholderproposing such business, (c) the class and number of shares of voting stock ofthe Corporation which are beneficially owned by the shareholder, (d) arepresentation that the shareholder intends to appear in person or by proxy atthe meeting to bring the proposed business before the annual meeting, and (e) adescription of any material interest of the shareholder in such business.  Notwithstanding anything in these Bylaws tothe contrary, no business shall be conducted at an annual meeting except inaccordance with the procedures set forth in this Section 3.1.  The presiding officer of an annual meetingshall, if the facts warrant, determine and declare to the meeting that businesswas not properly brought before the meeting in accordance with the provisionsof this Section 3.1, and if he should so determine, he shall so declare tothe meeting and any such business not properly brought before the meeting shallnot be transacted.

 

Notwithstanding theforegoing provisions of this Section 3.1, a shareholder shall also complywith all applicable requirements of the Securities Exchange Act of 1934, asamended, and the rules and regulations thereunder with respect to the mattersset forth in this Section 3.1.

 

***Section 3.2. Special Meetings.*** Except as otherwise provided by law or by the Restated Articles ofIncorporation, special meetings of the shareholders may be called by theChairman of the Board, the President, the Board of Directors, or the holders ofnot less than one-tenth of all the shares having voting power at such meeting,and shall be held at the principal office of the Corporation, at such time asis stated in the notice calling such meeting, or at such other place as theperson or body calling such meeting may determine and state in such notice.

 

***Section 3.3. Notice of Meetings - Waiver.***  Written, electronic or printed notice,stating the place, day and hour of any meeting and, in case of a specialshareholders’ meeting, the purpose or purposes for which the meeting is called,shall be delivered not less than ten (10) nor more than fifty (50) days beforethe date of the meeting by or at the direction of the Chairman of the Board,the President, or the officer, body or person calling the meeting, to each shareholderof record entitled to vote at such meeting. Notice shall be delivered personally, by mail or, subject to receipt bythe Corporation of written authorization, electronic transmission.  If delivered personally, such notice shallbe deemed delivered when actually received by the shareholder.  If delivered by mail, such notice shall bedeemed delivered when deposited in the United Sates mail addressed to

 

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the shareholder at hisaddress as it appears on the stock certificate register of the Corporation,with postage thereon prepaid.  Ifdelivered by electronic transmission, such notice shall be deemed deliveredwhen the notice or the location from which the notice can be retrieved orotherwise viewed is sent to the electronic mail address specified by eachshareholder that authorized electronic transmission.  Such further or earlier notice shall be given as may be requiredby law.  Waiver by a shareholder ofnotice in writing of a shareholders’ meeting, signed by him, whether before orafter the time stated therein, shall be equivalent to the giving of suchnotice.  No notice shall be necessaryfor any adjourned meeting.

 

***Section 3.4. Closing of Stock Certificate Register and Fixing Record Date. ***For the purpose ofdetermining shareholders entitled to notice of or to vote at any meeting ofshareholders or any adjournment thereof, or entitled to receive payment of anydividend or in order to make a determination of shareholders for any otherproper purpose, the Board of Directors of the Corporation may provide that thestock certificate register shall be closed for a stated period but not toexceed, in any case, fifty (50) days. If the stock certificate register shall be closed for the purpose ofdetermining shareholders entitled to notice of or to vote at a meeting ofshareholders, such registers shall be closed for at least ten (10) daysimmediately preceding such meeting.  Inlieu of closing the stock certificate register, the Board of Directors may fixin advance a date as the record date for any such determination ofshareholders, such date in any case to be not more than fifty (50) days and, incase of a meeting of shareholders, not less than ten (10) days prior to thedate on which the particular action, requiring such determination ofshareholders, is to be taken.  If thestock certificate register is not closed and no record date is fixed for thedetermination of shareholders entitled to notice of or to vote at a meeting ofshareholders, or shareholders entitled to receive payment of a dividend, thedate on which notice of the meeting is mailed or the date on which theresolution of the Board of Directors declaring such dividend is adopted, as thecase may be, shall be the record date for such determination ofshareholders.  When a determination ofshareholders entitled to vote at any meeting of shareholders has been made, asprovided in this Section, such determination shall apply to any adjournmentthereof except where the determination has been made through the closing of thestock certificate register and the stated period of closing has expired.

 

***Section 3.5. Voting List.*** The officer or agent having charge of the stock certificate register forshares of the Corporation shall make, at least ten (10) days before suchmeeting of shareholders, a complete list of the shareholders entitled to voteat such meeting or any adjournment thereof, arranged in alphabetical order,with the address of and the number of shares held by each, which list, for a periodof ten (10) days prior to such meeting, shall be kept on file at the registeredoffice of the Corporation and shall be subject to inspection by any shareholderat any time during the usual business hours. Such list shall also be produced and kept open at the time and place ofthe meeting and shall be subject to the inspection of any shareholder duringthe whole time of the meeting.  Failureto comply with this Section shall not effect the validity of any actiontaken at such meeting.

 

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***Section 3.6. Quorum and Officers.***  Except as otherwise provided by law, by the Restated Articles ofIncorporation or by these Bylaws, the holders of a majority of the sharesentitled to vote, represented in person or by proxy, shall constitute a quorumat a meeting of shareholders, but the shareholders present at any meeting,although less than a quorum, may from time to time adjourn the meeting to someother day and hour, without notice other than announcement at the meeting.  The vote of the holders of a majority of theshares entitled to vote and thus represented at a meeting at which a quorum ispresent shall be the act of the shareholders’ meeting, unless the vote of agreater number is required by law, the Restated Articles of Incorporation orthese Bylaws.  The Chairman of theBoard, or in his absence, the President, shall preside at and the Secretary, orin his absence, any Assistant Secretary shall keep the records of each meetingof shareholders, and in the absence of all such officers, their respectiveduties shall be performed by persons appointed by the meeting.

 

***Section 3.7. Proxies.***  Ashareholder may vote either in person or by proxy executed in writing by theshareholder, or by his duly authorized attorney-in-fact.  Proxies shall be dated but need not besealed, witnessed or acknowledged.  Noproxy shall be valid after eleven (11) months from the date of its executionunless otherwise provided in the proxy. Each proxy shall be revocable unless provided expressly therein to beirrevocable, and unless otherwise made irrevocable by law.  Proxies shall be filed with the Secretary ofthe Corporation before or at the time of the meeting.

 

***Section 3.8. Balloting.*** Upon the demand of any shareholder, the vote upon any question beforethe meeting shall be by ballot.  At eachmeeting inspectors of election may be appointed by the presiding officer of themeeting, and at any meeting for the election of directors, inspectors shall beso appointed on the demand of any shareholder present or represented by proxyand entitled to vote at the election of directors.  No director or candidate for the office of directors shall beappointed as such inspector.

 

***Section 3.9. Voting Rights; Voting for Directors.***  Each outstanding share of common stock shallbe entitled to one (1) vote upon each matter submitted to a vote at a meetingof shareholders.  No shareholder shallhave the right to cumulate his votes for the election of directors, but eachshare shall be entitled to one vote in the election of each director.

 

***Section 3.10 Nominations for Election as a Director.***  Only persons who are nominated in accordancewith the procedures set forth in these Bylaws and qualify for nominationpursuant to Section 4.1 shall be eligible for election by shareholders as,and to serve as, directors.  Nominationsof persons for election to the Board of Directors of the Corporation may bemade at a meeting of shareholders (a) by or at the direction of the Board ofDirectors or a duly constituted committee thereof or (b) by any shareholder ofthe Corporation who is a shareholder of record at the time of giving of noticeprovided for in this Section 3.10, who shall be entitled to vote for theelection of directors at the meeting and who complies with the noticeprocedures set forth in this Section 3.10.  Such nominations, other than those made by or at the direction ofthe Board of Directors, shall be made pursuant to timely notice in writing tothe Secretary of

 

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the Corporation.  To be timely, a shareholder’s notice shallbe delivered to or mailed and received at the principal executive offices ofthe Corporation (i) with respect to an election to be held at the annual meetingof the shareholders of the Corporation, not less than ninety (90) days prior tothe anniversary date of the immediately preceding annual meeting ofshareholders of the Corporation, and (ii) with respect to an election to beheld at a special meeting of shareholders of the Corporation for the electionof directors not later than the close of business on the tenth (10th) dayfollowing the day on which notice of the date of the special meeting was mailedto shareholders of the Corporation as provided in Section 3.3 or public disclosureof the date of the special meeting was made, whichever first occurs.  Such shareholder’s notice to the Secretaryshall set forth (x) as to each person whom the shareholder proposes to nominatefor election or re-election as a director, all information relating to suchperson that is required to be disclosed in solicitations of proxies forelection of directors, or is otherwise required, pursuant to Regulation 14Aunder the Securities Exchange Act of 1934, as amended (including such person’swritten consent to being named in the proxy statement as a nominee and to serveas a director if elected), and (y) as to the shareholder giving the notice (i)the name and address, as they appear on the Corporation’s books, of suchshareholder and (ii) the class and number of shares of voting stock of theCorporation which are beneficially owned by such shareholder.  At the request of the Board of Directors,any person nominated by the Board of Directors for election as a director shallfurnish to the Secretary of the Corporation that information required to be setforth in a shareholder’s notice of nomination which pertains to thenominee.  In the event that a person isvalidly designated as a nominee to the Board of Directors in accordance withthe procedures set forth in this Section 3.10 and shall thereafter becomeunable or unwilling to stand for election to the Board of Directors, the Boardof Directors or the shareholder who proposed such nominee, as the case may be,may designate a substitute nominee. Other than directors chosen pursuant to the provisions ofSection 4.3, no person shall be eligible to serve as a director of theCorporation unless nominated in accordance with the procedures set forth inthis Section 3.10.  The presidingofficer of the meeting of shareholders shall, if the facts warrant, determineand declare to the meeting that a nomination was not made in accordance withthe procedures prescribed by these Bylaws, and if he should so determine, heshall so declare to the meeting and the defective nomination shall bedisregarded.  Notwithstanding theforegoing provisions of this Section 3.10, a shareholder shall also complywith all applicable requirements of the Securities Exchange Act of 1934, asamended, and the rules and regulations thereunder with respect to the mattersset forth in this Section 3.10.

 

**ARTICLE IV**

 

***The Board of Directors***

 

***Section 4.1. Number and Qualifications****.*  The business and affairs of the Corporation shall be managed andcontrolled by the Board of Directors, and subject to any restrictions imposedby law, by the Restated Articles of Incorporation, or by these Bylaws, theBoard of Directors may exercise all the powers of the Corporation.  The

 

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Board of Directors shallconsist of eleven (11) members.  Thenumber thereof may be increased or decreased from time to time by amendment tothese Bylaws, but no decrease shall have the effect of shortening the term ofany incumbent director.  Directors neednot be residents of Texas and need not be shareholders.  Directors shall retire as of the date of theannual meeting of shareholders first occurring following the Director’s 73rdbirthday; provided, that any Director who was originally elected on or beforeJune 19, 1981 shall not be required to retire until the date of the annualmeeting of shareholders first occurring following such Director’s 75thbirthday. No person shall be qualified for election or re-election as adirector of the Corporation if he is an incumbent director and has attendedfewer than fifty (50%) percent of the meetings of the Board of Directors heldduring any fiscal year commencing after January 31, 1981, which suchincumbent was entitled to attend as a director.

 

***Section 4.2. Classification and Term****.*  The Board of Directors shall be divided into three classes, eachclass consisting as nearly as possible of one-third (1/3) of the number ofdirectors that make up the full Board of Directors.  At each annual meeting of shareholders, the number of directorsequal to the number of the class whose term expires at the time of such meetingshall be elected to hold office until the third succeeding annual meeting ofshareholders.

 

***Section 4.3. Vacancies.*** Any vacancy on the Board of Directors may be filled by the vote of amajority of the remaining directors though less than a quorum of the Board ofDirectors; provided, that the Board of Directors may not fill more than two (2)vacancies caused by an increase in the number of directors during any periodbetween two (2) successive annual meetings of shareholders.  A director elected to fill a vacancy shallhold office for the unexpired portion of his predecessor’s term if such vacancywas created by the death, resignation, disqualification or removal of adirector or until the next annual meeting of shareholders if such vacancy wascreated by an increase in the size of the Board of Directors.

 

***Section 4.4. Place of Meeting.*** Meetings of the Board of Directors may be held either within or withoutthe State of Texas, at whatsoever place is specified by the officer or directorcalling the meeting.  In the absence ofother designation, the meeting shall be held at the principal business officeof the Corporation.

 

***Section 4.5. Regular Meetings.*** The Board of Directors shall hold no fewer than four (4) regularmeetings in each fiscal year.  One suchregular meeting (the “Annual Meeting of Directors”) shall be held immediatelyfollowing the annual meeting of shareholders, at the place of such shareholdermeeting, and the other regular meetings shall be held at such times and placesas the Board of Directors shall establish by resolution at the regular meetingfollowing the annual meeting of shareholders. No notice of any kind of such regular meetings shall be necessary toeither old or new members of the Board of Directors.

 

***Section 4.6. Special Meetings.*** Special meetings of the Board of Directors shall be held at any time bycall of the Chairman of the Board, the President (if a director) or by

 

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a majority of thedirectors.  The Secretary or officerperforming his duties shall give notice of special meetings to each director athis usual business or residence address by mailing such notice at least five(5) days or one hundred twenty (120) hours before the meeting or by personallydelivering or, subject to receipt of written authorization, electronicallytransmitting the same at least one (1) day or twenty-four (24) hours before themeeting.  No notice shall be necessaryfor any adjourned meeting.  A waiver ofnotice of any special meeting, in writing, signed by the person or personsentitled to such notice, whether before or after the time stated therein, shallbe equivalent to the giving of such notice. Such notice or waiver thereof need not specify the business to betransacted at, or the purpose of, such meeting.  Attendance of a director at a meeting shall constitute a waiverof notice of such meeting, except where a director attends a meeting for theexpress and announced purpose of objecting to the transaction of any businesson the ground that the meeting is not lawfully called or convened.

 

***Section 4.7. Quorum.*** Seven directors shall constitute a quorum for the transaction ofbusiness.  The act of a majority of thedirectors present at a meeting at which a quorum is in attendance shall be theact of the Board of Directors unless a larger number is required by applicablelaw, the Restated Articles of Incorporation or these Bylaws, but any one ormore directors, although less than a quorum, may adjourn the meeting to someother day or hour.

 

***Section 4.8. Chairman of the Board.***  At each Annual Meeting of Directors, the Board of Directors shallelect from its membership a Chairman of the Board who shall serve in suchcapacity until the next Annual Meeting of Directors or until his death,resignation, disqualification or removal if sooner.  The Chairman of the Board shall preside at all meetings of theBoard of Directors and at all meetings of the shareholders of the Company.

 

***Section 4.9. Procedure at Meetings.***  The Chairman of the Board shall preside at meetings of the Boardof Directors.  In his absence at anymeeting, the President (if a director) shall preside, and in the absence ofboth the Chairman of the Board and the President, a member of the Board ofDirectors selected by the members present shall preside.  The Secretary of the Corporation shall actas secretary at all meetings of the Board, or in his absence the presidingofficer of the meeting may designate any person to act as secretary.  At meetings of the Board of Directors,business shall be transacted in such order as from time to time the Board ofDirectors may determine.

 

***Section 4.10. Presumption of Assent.***  A director of the Corporation who is present at a meeting of theBoard of Directors at which action on any corporate matter is taken shall bepresumed to have assented to the action taken unless his dissent shall beentered in the minutes of the meeting or unless he shall file his writtendissent to such action with the person acting as the secretary of the meetingbefore the adjournment thereof or shall forward such dissent by registered mailto the Secretary of the Corporation immediately after the adjournment of themeeting.  Such right to dissent shall notapply to a director who voted in favor of such action.

 

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***Section 4.11. Compensation.*** Directors as such shall not receive any stated salary for their service,but by resolution of the Board of Directors (a) an annual directors fee and (b)a fixed sum and expenses for attendance, if any, may be allowed to eachdirector who is not an officer or employee of the Corporation for attendance ateach regular or special meeting of the Board of Directors or of any Committeethereof; but nothing herein shall preclude any director from serving theCorporation in any other capacity or receiving compensation therefor.

 

***Section 4.12. Standing Committees.**** *The Board of Directors by resolution adopted by a majority ofthe number of directors fixed by the Bylaws shall designate from their numberan Executive Committee and an Audit Committee.

 

The Executive Committeeshall consist of five (5) persons.  Eachmember shall serve until the next annual meeting of shareholders or until suchdirector’s retirement, removal, disqualification, or death.  The Executive Committee shall meet upon thecall of the chairman of such committee or any two (2) members thereof and shallhave and may exercise all of the authority of the Board of Directors in thebusiness and affairs of the Corporation except (a) the power to authorize orapprove the sale or other transfer of any real property now owned or hereafteracquired by the Corporation; (b) the power to vote, direct the vote or grantproxies relating to any stock owned by the Corporation; (c) the power toauthorize or approve purchases or commitments for goods or services with anaggregate market value in any single transaction or group of relatedtransactions exceeding $5,000,000 except for goods and services purchased inthe ordinary course of business for inventory or pursuant to capitalexpenditure budgets approved by the Board of Directors; (d) the power toauthorize or approve the incurrence or guaranty of indebtedness with an originalprincipal amount in excess of $1,000,000 and a maturity of longer than one (1)year; (e) the power to make loans, guaranties, investments, or othercommitments outside the ordinary course of business in excess of $5,000,000 atany time outstanding to any one person or group of persons; and (f) whereaction of the Board of Directors is specified by the Texas Business CorporationAct or by other applicable  law.

 

The Audit Committee shallconsist of four (4) persons, all of whom shall be independent of management andfree of any relationship that, in the opinion of the Board of Directors, wouldinterfere with the exercise of independent judgment as a committee member.  Each member shall serve until the nextannual meeting of shareholders or until such director’s retirement, removal,disqualification, or death.  The AuditCommittee shall meet no fewer than two (2) times in each fiscal year of theCorporation upon the call of the chairman of such committee or any two (2) membersthereof and shall have and may exercise such responsibilities, authority andpower as the Board of Directors specifies.

 

The designation ofStanding Committees and delegation of authority thereto shall not operate torelieve the Board of Directors, or any member thereof, of any responsibilityimposed upon it or him by law.

 

***Section 4.13. Other Committees of the Board of Directors.***  The Board of Directors, by resolutionadopted by a majority of the number of directors fixed by the

 

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Bylaws, may designatefrom their number such compensation, nominating and other committees as theyshall, from time to time, deem necessary and proper.  Such committees shall be composed of not less than three membersand shall have and exercise such of the Board of Directors’ authority as shallby resolution, be delegated to it.  Thedesignation of such other committees and the delegation of authority theretoshall not operate to relieve the Board of Directors, or any member thereof, ofany responsibility imposed upon it or him by law.

 

***Section 4.14. Meetings and Reports of the Committees.***  The Committees shall meet from time to timeas set forth in the Bylaws and on call of the Chairman or any two or moremembers thereof.  Notice of each suchmeeting, stating the place, day and hour thereof, shall be served personally oneach member of such Committee, or shall be mailed, delivered, telephoned or,subject to receipt of written authorization, electronically transmitted to hisaddress on the books of the Corporation, at least twenty-four (24) hours beforethe meeting.  No such notice need statethe business proposed to be transacted at the meeting.  No notice of the time or place of any meetingof such Committee need be given to any member thereof who attends in person orwho, in writing executed and filed with the records of the meeting eitherbefore or after the holding thereof, waives such notice.  No notice need be given of an adjournedmeeting of any Committee.  Meetings ofthe Committees may be held at such place or places, either within or outside ofthe State of Texas, as such Committee shall determine, or as may be specifiedor fixed in the respective notices or waivers thereof.  Each Committee may fix its own rules ofprocedure.  They shall keep record of theirproceedings and shall report these proceedings to the Board of Directors at theregular meetings thereof held next after they have been taken.

 

***Section 4.15. Advisory Directors.***  The Board of Directors, by resolution adopted by a majority ofthe number of directors fixed by the Bylaws, may appoint from those persons whohave previously served as a director of the Corporation, such advisorydirectors as the Board of Directors may, from time to time, determine to bedesirable.  Such advisory directors shallbe ex-officio members of the Board of Directors, shall hold office from thedate elected until the next following annual meeting of the Board of Directorsunless sooner removed in the manner provided for the removal of Directors,shall be entitled to receive notice of and to attend all meetings of the Boardof Directors and shall be reimbursed for all out-of-pocket expenses incurred toattend meetings of the Board of Directors. Advisory directors shall not be a member of any committee of the Boardof Directors, vote on any matter brought before the Board of Directors foraction or be counted for the purposes of determining whether a quorumexists.  Failure to notify the advisorydirectors of any meeting shall not render any meeting or any action taken atsuch meeting void.

 

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**ARTICLE V**

 

***Officers***

 

***Section 5.1. Number.*** The officers of the Corporation shall consist of the President,Secretary, Treasurer and Controller; and, in addition, such Vice Presidents,other officers and assistant officers and agents as may be deemed necessary andelected or appointed by the Board of Directors.  The Board of Directors may by resolution designate any officer asthe Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer,or other title.  Any two or more officesmay be held by the same person.

 

***Section 5.2. Election; Term; Qualification.***  Officers shall be chosen by the Board ofDirectors at the Annual Meeting of the Directors and may be chosen at any othermeeting of the Board of Directors.  Eachofficer shall hold office until the next following Annual Meeting of Directors,or until his death, resignation, retirement or removal.

 

***Section 5.3. Removal.*** Any officer or agent elected or appointed by the Board of Directors maybe removed by the Board of Directors at its pleasure, but such removal shall bewithout prejudice to other contract rights, if any, of the person soremoved.  Election or appointment of an officeror agent shall not of itself create any contract rights.

 

***Section 5.4. Retirement.*** No person may serve as an officer of the Corporation after the last dayof the fiscal year in which such officer celebrates his sixty-fifth birthday orsuch later date as is necessary to comply with applicable laws.

 

***Section 5.5. Vacancies.*** Any vacancy in any office for any cause may be filled by the Board ofDirectors at any meeting.

 

***Section 5.6. Duties.*** The officers of the Corporation shall have such powers and duties,except as modified by the Board of Directors, as generally pertain to theiroffices, respectively, as well as such powers and duties as from time to timeshall be conferred by the Board of Directors and by these Bylaws.

 

***Section 5.7. The President.*** The President shall, subject to the control of the Board of Directors,have general supervision and control over all of the business, assets andaffairs of the Corporation.  All otherofficers shall report as directed by the President.  In the absence of the Chairman of the Board, the President shallperform all of the duties of the Chairman of the Board, and when so actingshall have all of the powers of, and be subject to all restrictions upon, theChairman of the Board.

 

***Section 5.8. Secretary.*** The Secretary shall:  (a) keepthe minutes of all meetings of the shareholders, of the Board of Directors, andof all committees of the Board of Directors, in one or more books provided forthat purpose and shall distribute a copy of all such minutes to the members ofthe Board of Directors immediately on receipt thereof, (b) see that all noticesare duly given in accordance with the provisions of these

 

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Bylaws or as required bylaw, (c) be custodian of the corporate records and of the seal of theCorporation and see that the seal of the Corporation is affixed to alldocuments the execution of which on behalf of the Corporation under its seal isduly authorized, (d) have general charge of the stock certificate register,transfer books and stock ledgers, and such other books and papers as the Boardof Directors may direct, of the Corporation, all of which shall, at allreasonable times, be open to the examination of any director, upon applicationat the office of the Corporation during business hours, and (e) in generalperform all duties and exercise all powers incident to the office of theSecretary and such other duties and powers as the Board of Directors or thePresident from time to time may assign to or confer on him.

 

***Section 5.9. Treasurer.*** The Treasurer shall be legal custodian of all monies, notes, securities,and other valuables which may from time to time come into the possession of theCorporation and shall perform such other duties as the Bylaws may require orthe Board of Directors may prescribe. The Treasurer shall have the power and authority to incur or guarantyindebtedness on behalf of the Corporation without the prior approval of theBoard of Directors provided that the original principal amount thereof is lessthan $1,000,000 and the original maturity is less than one year.

 

***Section 5.10. Controller.*** The Controller shall keep complete and accurate books and records ofaccount showing accurately at all times the financial condition of theCorporation.  He shall furnish at meetingsof the Board of Directors, or whenever requested, a statement of the financialcondition of the Corporation, and shall perform such other duties as the Bylawsmay require or the Board of Directors may prescribe.

 

***Section 5.11. The Vice Presidents.***  The Board of Directors may from time to time elect such VicePresidents as the Board of Directors deems appropriate and assign thereto suchgeneral or specific powers, authority and responsibility as the Board ofDirectors deems appropriate.  The Boardof Directors may specify the order in which the Vice Presidents may act in theabsence of the President.  Any actiontaken by a Vice President in the performance of the duties of President shallbe conclusive evidence of the absence of the President.  The Vice Presidents shall perform such otherduties as may, from time to time, be assigned to them by the Board of Directorsor the President.  A Vice President mayalso sign with the Secretary or an Assistant Secretary certificates of stock ofthe Corporation.

 

***Section 5.12. Assistant Officers.***  Any Assistant Secretary, Assistant Treasurer or AssistantController appointed by the Board of Directors shall have power to perform, andshall perform, all duties incumbent upon the Secretary, the Treasurer or theController of the Corporation, respectively, subject to the general directionof such officers, and shall perform such other duties as the Bylaws may requireor the Board of Directors may prescribe.

 

***Section 5.13. Salaries.*** The salaries or other compensation of the officers shall be fixed fromtime to time by the Board of Directors. No officer shall be prevented from

 

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receiving such salary orother compensation by reason of the fact that he is also a director of theCorporation.

 

***Section 5.14. Bonds of Officers.***  The Board of Directors may secure the fidelity of any or all ofsuch officers by bond or otherwise, in such terms and with such surety orsureties, conditions, penalties or securities as shall be required by the Boardof Directors.

 

***Section 5.15. Delegation.*** The Board of Directors may delegate temporarily the powers and duties ofany officer of the Corporation, in case of his absence or for any other reason,to any other officer, and may authorize the delegation by any officer of theCorporation of any of his powers and duties to any agent or employee subject tothe general supervision of such officer.

 

**ARTICLE VI**

 

***Miscellaneous***

 

***Section 6.1. Contracts.*** The Board of Directors may authorize any officer or officers, agent oragents, of the Corporation to enter into any contract or execute and deliverany instrument in the name of or on behalf of the Corporation, and suchauthority may be general or confined to specific instances; and, unless so authorizedby the Board of Directors or by these Bylaws, no officer, agent or employeeshall have any power or authority to bind the Corporation by any contract orengagement, or to pledge its credit or to render it liable pecuniarily for anypurpose or to any amount.

 

***Section 6.2. Checks, Drafts, etc.***  All checks, drafts, or other orders for the payment of money,notes, or other evidences of indebtedness issued in the name of the Corporationshall be signed by such officers or employees of the Corporation as shall fromtime to time be authorized pursuant to these Bylaws or by resolution of theBoard of Directors.

 

***Section 6.3. Depositories.*** All funds of the Corporation shall be deposited from time to time to thecredit of the Corporation in such banks, trust companies, or other depositoriesas the Board of Directors may from time to time designate, upon such terms andconditions as shall be fixed by the Board of Directors.  The Board of Directors may from time to timeauthorize the opening and keeping with any such depository as it may designateof general and special bank accounts, and may make such special rules andregulations with respect thereto, not inconsistent with the provisions of theseBylaws, as it may deem expedient.

 

***Section 6.4. Endorsement of Stock Certificates.***  Subject to the specific directions of theBoard of Directors, any share or shares of stock issued by any corporation andowned by the Corporation (including reacquired shares of the Corporation) may,for sale or transfer, be endorsed in the name of the Corporation by thePresident or any Vice President, and attested or witnessed by the Secretary orany Assistant Secretary either with or without affixing the corporate seal.

 

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***Section 6.5. Voting of Shares Owned by the Corporation.***  Subject to the direction of the Board ofDirectors, the President, the Secretary and the Treasurer, or any of them,shall have the power and authority on behalf of the Corporation to attend andto vote and to grant proxies to be used at any meeting of shareholders of anycorporation in which the Corporation may hold stock.  The Board of Directors may confer like powers upon any otherperson or persons.

 

***Section 6.6. Corporate Seal.*** The corporate seal shall be in the form of a five pointed starsurrounded by the words “Stewart & Stevenson Services, Inc.,” and suchseal, or a facsimile thereof, may be impressed on, affixed to, or in any mannerreproduced upon, instruments of any nature required to be executed by officersof the Corporation.

 

***Section 6.7. Fiscal Year.*** The fiscal year of the Corporation shall begin on February 1 andend on January 31 of the next following year, or on such other dates asthe Board of Directors at any time shall determine.

 

***Section 6.8. Resignations.*** Any director or officer may resign at any time.  Such resignations shall be made in writingand shall take effect at the time specified therein, or, if no time bespecified, at the time of its receipt by the Chairman of the Board, Presidentor Secretary.  The acceptance of aresignation shall not be necessary to make it effective, unless expressly soprovided in the resignation.

 

***Section 6.9. Indemnification of Officers and Directors.***  The Corporation shall indemnify any personagainst any judgment, penalty, fine, settlement and reasonable expensesincurred by him in connection with any threatened, pending or completed action,suit or proceeding in which such person is or is threatened to be made a partybecause he is or was serving as an officer or director of the Corporation or atthe request of the Corporation as an officer, director, partner, venturer,proprietor, trustee, employee, agent or other functionary of another entity and(i) such person is wholly successful in the defense thereof, or (ii) it isdetermined in the manner required by law that such person conducted himself ingood faith, reasonably believed that his conduct was in the best interest ofthe Corporation and had no reasonable cause to believe that his conduct was unlawful;provided, however, that no person shall be indemnified if such indemnity isprohibited by applicable law.  Any suchindemnification shall be reported in writing to the shareholders of theCorporation on or before the notice or waiver of notice of the nextshareholders’ meeting and in any event within twelve (12) months of theindemnification.  The right ofindemnification under this Section 6.9 shall be in addition to any otherrights to which such persons may be entitled and is intended to provide thebroadest benefits permitted by law.

 

***Section 6.10. Loans to and Guaranties for Officers and Directors.***  The Corporation shall not lend money to orguaranty the indebtedness of any of its officers or directors unless such loanor guaranty is approved by the number of directors equal to a majority of thefull Board of Directors none of whom are then or will become as a result of

 

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such action indebted tothe Corporation and on the express finding by such directors that such loan orguaranty is reasonably expected to directly or indirectly benefit theCorporation.

 

**ARTICLE VII**

 

***Amendments***

 

***Section 7.1. Amendments.*** The Board of Directors, by the affirmative vote of seven directors mayalter, amend or repeal these Bylaws or adopt new Bylaws.  The shareholders by affirmative vote oftwo-thirds (2/3) of the issued and outstanding shares entitled to vote mayalter, amend or repeal these Bylaws or adopt new Bylaws, without notice at anyregular meeting, or if notice of the proposed amendment be contained in thenotice of any special meeting.

 

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**FIRST AMENDMENT TO THE SIXTH RESTATEDBYLAWSOF STEWART & STEVENSON SERVICES, INC.**

 

Effective as ofApril 28, 2000, Section 4.1 and 4.7 of the Bylaws of Stewart &Stevenson Services, Inc. was amended to read as follows:

 

***Section 4.1. Number and Qualifications****.*  The business and affairs of the Corporation shall be managed andcontrolled by the Board of Directors, and subject to any restrictions imposedby law, by the Restated Articles of Incorporation, or by these Bylaws, theBoard of Directors may exercise all the powers of the Corporation.  The Board of Directors shall consist oftwelve (12) members.  The number thereofmay be increased or decreased from time to time by amendment to these Bylaws,but no decrease shall have the effect of shortening the term of any incumbentdirector.  Directors need not beresidents of Texas and need not be shareholders.  Directors shall retire as of the date of the annual meeting ofshareholders first occurring following the Director’s 73rd birthday;provided, that any Director who was originally elected on or beforeJune 19, 1981 shall not be required to retire until the date of the annualmeeting of shareholders first occurring following such Director’s 75thbirthday. No person shall be qualified for election or re-election as adirector of the Corporation if he is an incumbent director and has attendedfewer than fifty (50%) percent of the meetings of the Board of Directors heldduring any fiscal year commencing after January 31, 1981, which suchincumbent was entitled to attend as a director.

 

***Section 4.7. Quorum.*** Eight directors shall constitute a quorum for the transaction of business.  The act of a majority of the directorspresent at a meeting at which a quorum is in attendance shall be the act of theBoard of Directors unless a larger number is required by applicable law, theRestated Articles of Incorporation or these Bylaws, but any one or moredirectors, although less than a quorum, may adjourn the meeting to some otherday or hour.

 

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**SECOND AMENDMENT TO THE SIXTHRESTATED BYLAWSOF STEWART & STEVENSON SERVICES, INC.**

 

Effective as ofJune 13, 2000, the first sentence in the third paragraph ofSection 4.12 Standing Committees******of the Sixth Restated Bylaws of the Companywas amended to read as follows:

 

“The Audit Committee shall consist of five (5) persons, all of whomshall be independent of management and free of any relationship that, in theopinion of the Board of Directors, would interfere with the exercise ofindependent judgment as a committee member.”

 

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**THIRDAMENDMENT TO THE SIXTH RESTATED BYLAWSOF STEWART & STEVENSON SERVICES, INC.**

 

Effective as ofSeptember 12, 2000, Section 4.1 of the Sixth Restated Bylaws of theCompany is amended to read as follows in its entirety:

 

***Section 4.1. Number and Qualifications. ***Thebusiness and affairs of the Corporation shall be managed and controlled by theBoard of Directors, and subject to any restrictions imposed by law, by theRestated Articles of Incorporation, or by these Bylaws, the Board of Directorsmay exercise all the powers of the Corporation.  The Board of Directors shall consist of thirteen (13) members, *provided, however,*that such number shallbe automatically reduced to twelve (12) upon the retirement, resignation, deathor removal of a director on or after September 12, 2000.  The number thereof may be increased ordecreased from time to time by amendment to these Bylaws, but no decrease shallhave the effect of shortening the term of any incumbent director.  Directors need not be residents of Texas andneed not be shareholders.  Directorsshall retire as of the date of the annual meeting of shareholders firstoccurring following the Director’s 73rd birthday; *provided,*that any Director who wasoriginally elected on or before June 19, 1981 shall not be required toretire until the date of the annual meeting of shareholders first occurringfollowing such Director’s 75th birthday.  No person shall be qualified for election or re-election as adirector of the Corporation if he is an incumbent director and has attendedfewer than fifty percent (50%) of the meetings of the Board of Directors heldduring any fiscal year commencing after January 31, 1981, which suchincumbent was entitled to attend as a director.

 

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**FOURTHAMENDMENT TO THE SIXTH RESTATED BYLAWSOF STEWART & STEVENSON SERVICES, INC.**

 

Effective as ofDecember 11, 2000, Section 5.4 Retirement of the Sixth RestatedBylaws of the Company is deleted.

 

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**FIFTHAMENDMENT TO THE SIXTH RESTATED BYLAWSOF STEWART & STEVENSON SERVICES, INC.**

 

Effective June 12,2001, Section 4.1 Number and Qualifications, Section 4.7 Quorum andthe first sentence in the third paragraph of Section 4.12 StandingCommittees******ofthe Sixth Restated Bylaws of the Company are amended to read as follows intheir entirety:

##  

***Section 4.1. Number and Qualifications****.*  The business and affairs of the Corporation shall be managed andcontrolled by the Board of Directors, and subject to any restrictions imposed bylaw, by the Restated Articles of Incorporation, or by these Bylaws, the Boardof Directors may exercise all the powers of the Corporation.  The Board of Directors shall consist of ten(10) members.  The number thereof may beincreased or decreased from time to time by amendment to these Bylaws, but nodecrease shall have the effect of shortening the term of any incumbentdirector.  Directors need not beresidents of Texas and need not be shareholders.  Directors shall retire as of the date of the annual meeting ofshareholders first occurring following the Director’s 73rdbirthday.  No person shall be qualifiedfor election or re-election as a director of the Corporation if he is anincumbent director and has attended fewer than fifty (50%) percent of themeetings of the Board of Directors held during any fiscal year.

 

***Section 4.7. Quorum.*** Six directors shall constitute a quorum for the transaction ofbusiness.  The act of a majority of thedirectors present at a meeting at which a quorum is in attendance shall be theact of the Board of Directors unless a larger number is required by applicablelaw, the Restated Articles of Incorporation or these Bylaws, but any one ormore directors, although less than a quorum, may adjourn the meeting to someother day or hour.

 

First sentence inthe third paragraph of ***Section 4.12Standing Committes:***

 

The Audit Committee shall consist of not less than three (3) directorswho are qualified and independent of management and free of any relationshipthat, in the opinion of the Board of Directors, would interfere with theexercise of independent judgment as a committee member.

 

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**SIXTHAMENDMENT TO THE SIXTH RESTATED BYLAWSOF STEWART & STEVENSON SERVICES, INC.**

 

RESOLVED, that *Section 4.1 Number and Qualificat*ionsof the Sixth Restated Bylaws of the Company be amended to read in its entiretyas follows:

 

“***Section 4.1. Number and Qualifications****.*  The business and affairs of the Corporation shall be managed andcontrolled by the Board of Directors, and subject to any restrictions imposedby law, by the Restated Articles of Incorporation, or by these Bylaws, theBoard of Directors may exercise all the powers of the Corporation.  The Board of Directors shall consist of ten(10) members.  The number thereof may beincreased or decreased from time to time by amendment to these Bylaws, but nodecrease shall have the effect of shortening the term of any incumbentdirector.  Directors need not beresidents of Texas and need not be shareholders.  Directors who have attained the age of 73 years at the time theirterm expires shall resign on the expiration of their term.  No person shall be qualified for election orre-election as a director of the Corporation if he is an incumbent director andhas attended fewer than fifty (50%) percent of the meetings of the Board ofDirectors held during any fiscal year.”

 

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**SEVENTHAMENDMENT TO THE SIXTH RESTATED BYLAWSOF STEWART & STEVENSON SERVICES, INC.**

 

RESOLVED, that *Section 4.1 Number and Qualificat*ionsof the Sixth Restated Bylaws of the Company be amended to read in its entiretyas follows:

 

“***Section 4.1. Number and Qualifications****.*  The business and affairs of the Corporation shall be managed andcontrolled by the Board of Directors, and subject to any restrictions imposedby law, by the Restated Articles of Incorporation, or by these Bylaws, theBoard of Directors may exercise all the powers of the Corporation.  The Board of Directors shall consist of ten(10) members.  The number thereof may beincreased or decreased from time to time by amendment to these Bylaws, but nodecrease shall have the effect of shortening the term of any incumbentdirector.  Directors need not beresidents of Texas and need not be shareholders.  Directors who have attained the age of 73 years at the time theirterm expires shall resign on the expiration of their term.  No person shall be qualified for re-electionas a director of the Corporation if he is an incumbent director and hasattended fewer than fifty (50%) percent of the meetings of the Board ofDirectors held during any fiscal year.”

 

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**EIGHTHAMENDMENT TO THE SIXTH RESTATED BYLAWSOF STEWART & STEVENSON SERVICES, INC.**

 

## RESOLVED, that *Section 4.1Number and Qualifications, Section 4.7 Quorum* and the thirdparagraph of *Section 4.12 StandingCommittees*of the Sixth Restated Bylaws of the Company are amendedto read as follows in their entirety and *Section 6.10.  Loans to and Guaranties for Officers andDirectors*ishereby deleted.

##  

“*Section 4.1.  Number and Qualifications.*  The business and affairs of the Corporationshall be managed and controlled by the Board of Directors, and subject to anyrestrictions imposed by law, by the Restated Articles of Incorporation, or bythese Bylaws, the Board of Directors may exercise all the powers of theCorporation.  The Board of Directorsshall consist of nine (9) members.  Thenumber thereof may be increased or decreased from time to time by amendment tothese Bylaws, but no decrease shall have the effect of shortening the term ofany incumbent director.  Directors neednot be residents of Texas and need not be shareholders.  Directors who have attained the age of 73years at the time their term expires shall resign on the expiration of theirterm.  No person shall be qualified forre-election as a director of the Corporation if he is an incumbent director andhas attended fewer than fifty (50%) percent of the meetings of the Board ofDirectors held during any fiscal year.

 

*Section 4.7.  Quorum.*  Five directors shall constitute a quorum forthe transaction of business.  The act ofa majority of the directors present at a meeting at which a quorum is inattendance shall be the act of the Board of Directors unless a larger number isrequired by applicable law, the Restated Articles of Incorporation or theseBylaws, but any one or more directors, although less than a quorum, may adjournthe meeting to some other day or hour.”

 

Third paragraph of *Section 4.12Standing Committes:*

 

“The Audit Committee shall consist of not less than three (3) directorswho are qualified and independent of management and free of any relationshipthat, in the opinion of the Board of Directors, would interfere with theexercise of independent judgment as a committee member.  Each member shall serve until the nextannual meeting of shareholders or until such director’s retirement, removal,disqualification, or death.  The AuditCommittee shall meet no fewer than four (4) times in each fiscal year of theCorporation upon the call of the chairman of such committee or any two (2)members thereof and shall have and may exercise such responsibilities,authority and power as the Board of Directors specifies.”

 

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**NINTHAMENDMENT TO THE SIXTH RESTATED BYLAWSOF STEWART & STEVENSON SERVICES, INC.**

 

## RESOLVED, that *Section 4.1 Number and Qualifications* and *Section 4.7Quorum* of the Sixth Restated Bylaws of the Company areamended to read as follows in their entirety:

##  

“*Section 4.1. Number and Qualifications.* The business and affairs of the Corporation shall be managed andcontrolled by the Board of Directors, and subject to any restrictions imposedby law, by the Restated Articles of Incorporation, or by these Bylaws, theBoard of Directors may exercise all the powers of the Corporation.  The Board of Directors shall consist ofeight (8) members.  The number thereofmay be increased or decreased from time to time by amendment to these Bylaws,but no decrease shall have the effect of shortening the term of any incumbentdirector.  Directors need not beresidents of Texas and need not be shareholders.  Directors who have attained the age of 73 years at the time theirterm expires shall resign on the expiration of their term.  No person shall be qualified for re-electionas a director of the Corporation if he is an incumbent director and hasattended fewer than fifty (50%) percent of the meetings of the Board ofDirectors held during any fiscal year.

 

*Section 4.7. Quorum.*  Four directors shall constitute a quorum forthe transaction of business.  The act ofa majority of the directors present at a meeting at which a quorum is inattendance shall be the act of the Board of Directors unless a larger number isrequired by applicable law, the Restated Articles of Incorporation or theseBylaws, but any one or more directors, although less than a quorum, may adjournthe meeting to some other day or hour.”

 

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