Three Months Ended

March 31,

INTEREST AND DIVIDEND INCOME

2005

2004

Loans

$ 5,835,527

$ 6,008,939

Securities

2,591,141

3,227,377

Federal funds sold

156,864

35,592

Interest-bearing deposits

7,464

1,161

Total interest and dividend income

8,590,996

9,273,069

INTEREST EXPENSE

Deposits

1,649,153

1,721,219

Borrowed funds

269,601

272,359

Securities sold under agreements to repurchase

671,235

816 706

Total interest expense

2,589,989

2,810,284

Net interest income

6,001,007

6,462,785

Provision for loan losses

325,000

500,000

Net interest income after provision for loan losses

5,676,007

5,962,785

Other operating income:

Trust & investment services income

1,137,229

1,140,840

Service charges on deposit accounts

863,579

1,049,919

Net gain on securities transactions

-

218,961

Credit card merchant earnings

340,368

310,342

Other

607,059

513,929

Total other operating income

2,948,235

3,233,991

Other operating expenses:

Salaries and wages

2,444,873

2,297,726

Pension and other employee benefits

739,572

748,724

Net occupancy expenses

640,544

575,442

Furniture and equipment expenses

486,867

474,820

Amortization of intangible assets

99,430

99,430

Other

2,022,169

1,903,969

Total other operating expenses

6,433,455

6,100,111

Income before income tax expense

2,190,787

3,096,665

Income tax expense

610,931

932,434

Net income

$ 1,579,856

$ 2,164,231

Weighted average shares outstanding

3,718,341

3,798,596

Basic Earnings per share

$0.42

$0.57

Common Stock

Capital Surplus

Retained Earnings

Treasury Stock

Accumulated Other Comprehensive Income

Total

Balances at December 31, 2003

$ 43,001

$22,506,573

$64,750,787

$(13,071,791))

$ 5,764,302

$79,992,872

Comprehensive Income:

Net income

-

-

2,164,231

-

-

2,164,231

Other comprehensive income

-

-

-

-

1,498,232

1,498,232

Total comprehensive income

3,662,463

Restricted stock units for directors' deferred compensation plan

- -

35,883

-

-

-

35,883

Cash dividends declared ($.23 per share)

- -

- -

(856,680)

- -

- -

(856,680)

Purchase of 11,896 shares of treasury stock

-

-

-

(413,202)

-

(413,202)

Balances at March 31, 2004

$ 43,001

22,542,456

66,058,338

(13,484,993)

7,262,534

82,421,336

Balances at December 31, 2004

$ 43,001

22,657,816

70,050,443

(15,520,347)

4,965,559

82,196,472

Comprehensive Income:

Net income

-

-

1,579,856

-

-

1,579,856

Other comprehensive loss

-

-

-

-

(2,168,304)

(2,168,304)

Total comprehensive loss

(588,448)

Restricted stock units for directors' deferred compensation plan

- -

40,334

-

-

-

40,334

Cash dividends declared ($.24 per share)

- -

- -

(873,612)

- -

- -

(873,612)

deferred compensation plan

-

(166,887)

-

-

-

(166,887)

Treasury stock

-

-

-

206,402

-

206,402

Purchase of 25,318 shares of treasury stock

-

-

-

(816,496)

-

(816,496)

Balances at March 31, 2005

$ 43,001

$22,531,263

$70,756,687

$(16,130,441))

$ 2,797,255

$79,997,765

March 31, 2005

December 31, 2004

Residential mortgages

$ 88,364,296

$ 87,883,357

Commercial mortgages

42,533,307

44,653,989

Commercial, financial and agricultural

131,890,030

118,933,635

Consumer loans

128,671,970

130,037,018

$391,459,603

$381,507,999

(dollars in thousands)

March 31, 2005

December 31, 2004

Non-accrual loans

$ 10,119

$ 10,507

Troubled debt restructurings

-

-

Accruing loans past due 90 days or more

174

258

Total non-performing loans

$ 10,293

$ 10,765

Other real estate owned

23

104

Total non-performing assets

$ 10,316

$ 10,869

(dollars in thousands)

Three Months Ended March 31

2005

2004

Balance at beginning of period

$ 9,983

$ 9,848

Charge-offs:

Commercial, financial and agricultural

-

-

Commercial mortgages

-

-

Residential mortgages

(2)

-

Consumer loans

(109)

(157)

Total

(111)

(157)

Recoveries:

Commercial, financial and agricultural

4

14

Commercial mortgages

-

-

Residential mortgages

-

-

Consumer loans

47

63

Total

51

77

Net charge-offs

(60)

(80)

Provision charged to operations

325

500

Balance at end of period

$ 10,248

$ 10,268

Three Months Ended
March 31, 2005

Three Months Ended
March 31, 2004

Assets

Average
Balance

Interest

Yield/
Rate

Average Balance

Interest

Yield/
Rate

Earning assets:

Loans

$391,137

$5,836

6.05%

$387,943

$6,009

6.23%

Taxable securities

214,809

2,337

4.41%

266,722

2,968

4.48%

Tax-exempt securities

29,273

254

3.52%

30,008

259

3.47%

Federal funds sold

26,576

157

2.40%

15,263

36

0.95%

Interest-bearing deposits

1,348

7

2.11%

591

1

0.68%

Total earning assets

663,143

8,591

5.25%

700,527

9,273

5.32%

Non-earning assets:

Cash and due from banks

23,045

23,190

Premises and equipment, net

17,079

17,346

Other assets

16,044

15,224

Allowance for loan losses

(10,122)

(10,074)

AFS valuation allowance

7,869

10,442

Total

$717,058

$756,655

Liabilities and Shareholders' Equity

Interest-bearing liabilities:

Now and super now deposits

42,651

36

0.34%

45,518

42

0.37%

Savings and insured money market deposits

170,440

346

0.82%

186,298

352

0.76%

Time deposits

186,701

1,267

2.75%

201,346

1,327

2.65%

Federal Home Loan Bank advances and securities sold under agreements to repurchase

99,408

941

3.84%

112,549

1,089

3.89%

Total interest-bearing liabilities

499,200

2,590

2.10%

545,711

2,810

2.07%

Non-interest-bearing liabilities:

Demand deposits

129,268

119,945

Other liabilities

6,366

9,914

Total liabilities

634,834

675,570

Shareholders' equity

82,224

81,085

Total

$717,058

$756,655

Net interest income

$6,001

$6,463

Net interest rate spread

3.15%

3.25%

Net interest margin

3.67%

3.71%

Three-Months Ended March 31, 2005 Compared to Three Months Ended March 2004

Increase (Decrease) Due to (1)

Volume

Rate

Net

Interest and dividends earned on:

Loans

$ 38

(211)

(173)

Taxable securities

(588)

(43)

(631)

Tax-exempt securities

(8)

3

(5)

Federal funds sold

39

82

121

Interest-bearing deposits

2

4

6

Total earning assets

$(517)

(165)

(682)

Interest paid on:

Demand deposits

(3)

(3)

(6)

Savings and insured money market deposits

(33)

27

(6)

Time deposits

(105)

45

(60)

Federal Home Loan Bank advances and securities sold under agreements to repurchase

(132)

(16)

(148)

Total interest-bearing liabilities

$(273)

53

(220)

Net interest income

$(244)

(218)

(462)

PART II.

OTHER INFORMATION

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

(e)

Issuer Purchases of Equity Securities

Period

Total shares purchased

Average price paid per share

Total number of shares purchased as part of publicly announced plan

Maximum number (or approximate dollar value) of shares that may yet be purchased under the plan

1/1/05-1/31/05

6,150

$32.50

6,150

165,050

2/1/05-2/28/05

9,216

$32.28

9,216

155,834

3/1/05-3/31/05

9,952

$32.07

9,952

145,882

Quarter ended 3/31/05

25,318

$32.25

25,318

Of the above, 7,500 shares were open-market transactions and the remaining 17,818 shares were direct transactions. On November 17, 2004, the Corporation announced that its Board of Directors authorized the repurchase of up to 180,000 shares, or approximately 5% of its outstanding common shares, either through open market or privately negotiated transactions over a two-year period.

Item 5.

Other Information

On February 28, 2005, William C. Ughetta retired from the Corporation's Board of Directors (in accordance with the Corporation's By-Laws, which requires Board members to retire when they reach age 72.) Mr. Ughetta's retirement created a vacancy on the Board and, as a result, the Board amended the Corporation's By-Laws on March 16, 2005, to reduce the number of directors constituting the entire Board from fourteen to thirteen.

Item 6.

Exhibits

The Corporation files herewith the following exhibits:

3.1 By-Laws of the Registrant, as amended to March 16, 2005

31.1 Certification of President and Chief Executive Officer of Chemung Financial Corporation pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2 Certification of Treasurer and Chief Financial Officer of Chemung Financial Corporation pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

32.1 Certification of President and Chief Executive Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 19 U.S.C. 1350.

32.2 Certification of Treasurer and Chief Financial Officer pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and 19 U.S.C. 1350.

DATE:

May 9, 2005

/s/ Jan P. Updegraff

Jan P. Updegraff

President & CEO

DATE:

May 9, 2005

/s/ John R. Battersby Jr.

John R. Battersby Jr.

Treasurer & CFO

CHEMUNG FINANCIAL CORPORATION
BY-LAWS
Amended to March 16, 2005

ARTICLE I

Offices

SECTION 1.

Principal Office

The principal office of the Corporation shall be located in the City of Elmira, County of Chemung and State of New York.

SECTION 2.

Other Offices

The Corporation may also have such other offices, either within or without the State of New York, as the Board of Directors may from time to time determine or the business of the Corporation may require.

ARTICLE II

Shareholders

SECTION 1.

Place of Meetings of Shareholders

Meetings of shareholders may be held at such place, within or without the State of New York, as may be fixed by the Board of Directors.

SECTION 2.

Annual Meeting of Shareholders

A meeting of shareholders shall be held annually on such date and at such place and time as may be fixed by the Board of Directors for the election of directors and the transaction of other business.

SECTION 3.

Special Meetings of Shareholders

Special meetings of the shareholders may be called by the Board of Directors or by the chairman of the board or by the president. Such call shall state the purpose or purposes of the proposed meeting. Business transacted at any special meeting shall be confined to the purpose or purposes for which the meeting is called.

SECTION 4.

Fixing Record Date

The Board of Directors may fix, in advance, a date as the record date for purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or to express consent to or dissent from any proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or the allotment of any rights, or for the purpose of any other action. Such date shall be not more than sixty (60) nor less than ten (10) days before the date of such meeting nor more than 60 days before any other action. If no record date is fixed, the record date for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders shall be at the close of business on the day next preceding the day on which notice is given and for all other purposes shall be at close of business on the day on which the resolution of the Board of Directors relating thereto is adopted.

SECTION 5.

Notice of Meetings of Shareholders

Written notice of every meeting of shareholders shall state the place, date and hour of the meeting and unless it is the annual meeting, indicate that it is being issued by or at the direction of the person or persons calling the meeting. Notice of a special meeting shall also state the purpose or purposes for which the meeting is called. If, at any meeting, action is proposed to be taken which would, if taken, entitle shareholders fulfilling the statutory requirements to receive payment for their shares, the notice of such meeting shall include a statement of that purpose and to that effect. A copy of the notice of any meeting shall be given, personally or by mail, not less than ten (10) nor more than sixty (60) days before the date of the meeting, to each shareholder entitled to vote at such meeting. If mailed, such notice shall be deemed given when deposited in the United States mail, with postage thereon prepaid, directed to the shareholder at the address as it appear s on the record of shareholders or, if the shareholder shall have filed with the secretary of the Corporation a written request that notices be mailed to some other address, then directed to the shareholder at such other address.

SECTION 6.

Adjourned Meetings

When a determination of shareholders entitled to notice of or to vote at any meeting of shareholders has been made, such determination shall apply to any adjournment thereof, unless the Board of Directors fixes a new record date for the adjourned meeting. When a meeting is adjourned to another time or place, it shall not be necessary to give any notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and at the adjourned meeting the corporation may transact any business that might have been transacted on the original date of the meeting. However, if after the adjournment the Board of Directors fixes a new record date for the adjourned meeting, a notice of the adjourned meeting shall be given to each shareholder of record on the new record date entitled to notice.

SECTION 7.

List of Shareholders

A list of shareholders as of the record date, certified by the secretary or by the transfer agent, shall be produced at any meeting of shareholders upon the request thereat or prior thereto of any shareholder. If the right to vote at any meeting is challenged, the inspectors of election, or person presiding thereat, shall require such list of shareholders to be produced as evidence of the right of the persons challenged to vote at such meetings, and all persons who appear from such list to be shareholders entitled to vote thereat may vote at such meeting.

SECTION 8.

Quorum of Shareholders

The holders of a majority of the shares entitled to vote shall constitute a quorum at a meeting of shareholders for the transaction of any business. When a quorum is once present to organize a meeting, it is not broken by the subsequent withdrawal of any shareholders. Despite the absence of a quorum, the shareholders present may adjourn the meeting.

SECTION 9.

Proxies

Every shareholder entitled to vote at a meeting of shareholders or to express consent or dissent without a meeting may authorize another person or persons to act for him or her by proxy. Every proxy must be signed by the shareholder or the shareholder's attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the shareholder executing it, except in those cases where an irrevocable proxy is provided by law.

SECTION 10.

Inspectors at Shareholders Meetings

The Board of Directors, in advance of any shareholders meeting, may appoint one or more inspectors to act at the meeting or any adjournment thereof. If inspectors are not so appointed, the person presiding at a shareholders meeting shall appoint inspectors. If appointed on the request of one or more shareholders, the holders of a majority of shares present and entitled to vote thereat shall determine the number of inspectors to be appointed. In case any person appointed fails to appear or act, the vacancy may be filled by appointment made by the Board of Directors in advance of the meeting or at the meeting by the person presiding thereat. Each inspector, before entering upon the discharge of 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 the inspector's ability. The inspectors shall determine the number of shares outstanding and the voting power of each, the shares r epresented at the meeting, the existence of a quorum, 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 the result, and do such acts as are proper to conduct the election or vote with fairness to all shareholders. On request of the person presiding at the meeting or any shareholder entitled to vote thereat, the inspectors shall make a report in writing of any challenge, question or matter determined by them and execute a certificate of any fact found by them. A report or certificate made by them shall be prima facie evidence of the facts stated and of the vote as certified by them.

SECTION 11.

Qualifications of Voters

Every shareholder of record shall be entitled at every meeting of shareholders to one vote for every share standing in their name on the record of shareholders.

Neither treasury shares nor shares held by another domestic or foreign corporation of any type or kind, if a majority of the shares entitled to vote in the election of directors of such other corporation is held by the Corporation, shall be voted at any meeting or counted in determining the total number of outstanding shares.

Shares held by an administrator, executor, guardian, conservator, committee, or other fiduciary, except a trustee, may be voted by him or her, either in person or by proxy, without transfer of such shares into his or her name. Shares held by a trustee may be voted by the trustee, either in person or by proxy, only after the shares have been transferred into the name of the trust or into the name of a nominee.

Shares held by or under the control of a receiver may be voted by the receiver without the transfer thereof into the receiver's name if authority so to do is contained in an order of the court by which such receiver was appointed.

A shareholder whose shares are pledged shall be entitled to vote such shares until the shares have been transferred into the name of the pledgee, or a nominee of the pledgee.

Shares standing in the name of another domestic or foreign corporation of any type or kind may be voted by such officer, agent or proxy as the By-Laws of such corporation may provide or, in the absence of such provision, as the Board of Directors of such corporation may determine.

SECTION 12.

Vote of Shareholders

Directors shall, except as otherwise required by law, be elected by a plurality of the votes cast at a meeting of shareholders by the holders of shares entitled to vote in the election. Any other corporate action by vote of the shareholders shall, except as otherwise required by law, these By-Laws or the certificate of incorporation, be authorized by a majority of the votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon.

SECTION 13.

Conduct of Shareholders' Meeting

The Officer presiding over the shareholders' meeting may establish such rules and regulations for the conduct of the meeting as the presiding Officer may deem to be reasonably necessary or desirable for the orderly and expeditious conduct of the meeting.

SECTION 14.

Shareholder Proposals

No shareholder shall be entitled to submit a proposal to a meeting of shareholders unless at the time of submitting the proposal, the shareholder shall be a record or beneficial owner of a least 1% or $1,000 in market value of shares entitled to be voted at the meeting, and shall have held such shares for at least one year and shall continue to own such shares through the date on which the meeting is held. A shareholder meeting the above requirements shall deliver to the secretary of the Corporation not later than 120 days prior to the date on which the Corporation's proxy statement was mailed to shareholders in connection with the previous year's annual meeting, the text of any proposal which the shareholder intends to propose at an annual meeting of shareholders and a notice of the intention of the shareholder to present such proposal at the meeting. A proposal to be presented at any meeting of shareholders other than an annual meeting shall be delivered to the secretary a reasonable time before the mailing of the Corporation's proxy material.

ARTICLE III

Directors

SECTION 1.

Board of Directors

The business of the Corporation shall be managed under the direction of its Board of Directors.

SECTION 2.

Qualifications of Directors

Each director shall be at least 18 years of age and shall automatically cease to be a director on the last day of the month during which he or she attains the age of seventy-two (72) years. Each non-employee director shall directly own within one year following election to the Board of Directors, and at any time thereafter, at least 500 shares of capital stock of the corporation.

SECTION 3.

Number of Directors

The number of directors constituting the entire Board shall be thirteen (13). This number may be increased or decreased from time to time by amendment of these By-Laws, provided, however, that the number may not be decreased to less than three (3). No decrease in the number of directors shall shorten the term of any incumbent director.

SECTION 4.

Election and Term of Directors

The directors shall be classified by the Board of Directors with respect to the time for which they severally hold office, into three classes, as nearly equal in number as possible. One of said classes shall be elected at each annual meeting with the directors of each class to hold office for a term of three (3) years or until their successors are elected and qualified. Newly created directorships resulting from an increase in the number of directors shall be classified by the Board of Directors when the directorship is created.

SECTION 5.

Nominations for Directors

Nominations of directors to be elected at an annual meeting of shareholders may be made by the Board of Directors or a committee of independent directors designated by the Board of Directors or by any shareholder entitled to vote at such meeting. Nominations made by the Board of Directors or its committee shall be made at a meeting of the Board of Directors, or such committee or by written consent of directors in lieu of a meeting, not later than 60 days prior to the date of any meeting of shareholders called for the election of directors. The secretary of the Corporation shall request that each such proposed nominee provide the Corporation with such information concerning himself or herself as is required, under the rules of the Securities and Exchange Commission, to be included in the Corporation's proxy statement soliciting proxies for the nominee's election as a director. Any shareholder who intends to make a nomination at any annual meeting of shareholders shall deliv er to the secretary of the Corporation not later than 120 days prior to the date on which the Corporation's proxy statement was mailed to shareholders in connection with the previous year's annual meeting, or if such nomination is to be made at a meeting of shareholders other than an annual meeting, a reasonable time before the mailing of the Corporation's proxy material, a notice setting forth (i) the name, age, business address and residence address of each nominee proposed in such notice, (ii) the principal occupation or employment of each such nominee, (iii) the number of shares of capital stock of the Corporation which are owned of record and beneficially by each such nominee and (iv) a description of all arrangements or understandings between the shareholder making the nomination and each candidate and any other person or persons (naming such other person or persons) under which such nominations are to be made, (v) detailed biographical data and qualifications of any information regarding the candidate and the corporation within the last three years, and (vi) such other information concerning each such nominee as would be required, under the rules of the Securities and Exchange Commission, in a proxy statement soliciting proxies for the election of such nominees.

A shareholder's recommendation and nomination must include the name and address of the shareholder as they appear on the corporation's books, the number of shares beneficially owned by the shareholder and the date such shares were acquired, any material interest of the shareholder in such nomination and a statement in support of the candidate with references.

Such notice shall include a signed consent of such nominee to serve as a director of the Corporation, if elected. In the event that a person is validly designated as a nominee in accordance with the provisions of this section and shall thereafter become unable or unwilling to stand for election to the Board of Directors, the Board of Directors, it's committee, or the shareholder who proposed such nominee, as the case may be, may designate a substitute nominee. If the secretary of the meeting of shareholders called for the election of directors determines that a nomination was not made in accordance with the foregoing procedures, such nomination shall be void.

SECTION 6.

Vacancies

Vacancies in the Board of Directors, including vacancies resulting from an increase in the number of directors, shall be filled by vote of the remaining members of the Board. A director elected to fill a vacancy in the Board of Directors shall become a member of the same class of directors in which the vacancy existed; but if the vacancy is due to an increase in the number of directors, the new director shall be designated as belonging in Class 1, Class 2 or Class 3 so as to maintain the three classes of directors as nearly equal in number as possible.

SECTION 7.

Removal of Directors

Any director, an entire class of directors or the entire Board of Directors may be removed from office, with or without cause, only by the affirmative vote of the holders of at least 75% of the outstanding shares of stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class.

SECTION 8.

Quorum of Directors

One-third (1/3) of the entire Board of Directors or seven directors, whichever number is greater, shall constitute a quorum for the transaction of business or of any specified item of business.

SECTION 9.

Action by the Board of Directors

The vote of the majority of the directors present at a meeting of the Board of Directors at the time of the vote, if a quorum is present at such time, shall, except as otherwise provided by law, these By-Laws or the certificate of incorporation, be the act of the Board of Directors.

SECTION 10.

Written Consent of Directors Without A Meeting

Any action required or permitted to be taken by the Board of Directors or a committee thereof may be taken without a meeting if all members of the Board or the committee consent in writing to the adoption of a resolution authorizing the action. The resolution and the written consents thereto by the members of the Board or committee shall be filed with the minutes of the proceedings of the Board or committee.

SECTION 11.

Place and Time of Meetings of Board of Directors

Meetings of the Board of Directors, regular or special, may be held at any place, within or without the State of New York and at any time, fixed by the Board of Directors or by the person or persons calling the meeting. Such meetings may be held by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time.

SECTION 12.

Notice of Meetings of the Board of Directors

Regular meetings of the Board of Directors may be held without notice if the time and place of such meetings are fixed by the Board of Directors. Special meetings of the Board of Directors shall be held upon notice to the directors and may be called by the chairman of the board, the president, the executive vice president, or any two directors. The notice shall be either verbal or in writing and shall be given not less than twenty-four hours before the meeting to each director. The notice need not specify the purpose of any regular or special meeting of the Board of Directors.

SECTION 13.

Interested Directors

No contract or other transaction between the Corporation and one or more of its directors, or between the Corporation and any other corporation, firm, association or other entity in which one or more of its directors or officers, are directors or have a substantial financial interest, shall be either void or voidable for this reason alone or by reason alone that such director or directors are present at the meeting of the Board, or of a committee composed of independent directors thereof, which approves such contract or transaction or that their votes are counted for such purpose:

1.

If the material facts as to such director's interest in such contract or transaction and as to any such common directorship, officership or financial interest are disclosed in good faith or known to the Board or committee, and the Board or committee approves such contract or transaction by a vote sufficient for such purpose without counting the vote of such interested director or, if the votes of the disinterested directors are insufficient to constitute an act of the Board as defined in Section 9 of this Article, by unanimous vote of the disinterested directors; or

2.

If the material facts as to such director's interest in such contract or transaction and as to any such common directorship, officership or financial interest are disclosed in good faith or known to the shareholders entitled to vote thereon, and such contract or transaction is approved by vote of such shareholders; or

3.

If the contract or transaction is affirmatively established by the party or parities thereto to be fair and reasonable as to the Corporation at the time it was approved by the Board, a committee thereof, or the shareholders.

Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board or committee thereof which approves such contract or transaction.

The Board of Directors shall have authority to fix the compensation of directors for services in any capacity.

A loan shall not be made by the Corporation to any director unless it is authorized by vote of the shareholders. For this purpose, the shares of the director who would be the borrower shall not be shares entitled to vote.

SECTION 14.

Compensation and Reimbursement of Directors

The directors may be paid reasonable compensation for acting as a director and reasonable compensation for their services in attending meetings of the Board and meetings of committees appointed by the Board. No such payment shall preclude any director from serving the Corporation in any other capacity and receiving compensation therefor. The corporation may reimburse directors for expenses related to their duties as a member of the Board.

SECTION 15.

Committees

The Board of Directors, by resolution adopted by a majority of the entire Board, may designate from among its members an executive committee and other committees, each consisting of three or more directors, each of which may exercise such powers as shall be conferred or authorized by the resolution appointing it or as reflected in the committee's charter, except that no such committee shall have authority as to the following matters:

1.

The submission to shareholders of any action that needs shareholders' approval;

2.

The filling of vacancies in the Board of Directors or in any committee;

3.

The fixing of compensation of the directors for serving on the Board of Directors or on any committee;

4.

The amendment or repeal of the By-Laws or the adoption of new By-Laws;

5.

The amendment or repeal of any resolution of the Board of Directors.

In the interim between meetings of the Board of Directors, the executive committee shall have all the authority of the Board of Directors except as otherwise provided by law. Each committee shall serve at the pleasure of the Board. The Board of Directors shall have the power at any time to fill vacancies in, to change the size or membership of, and to discharge any such committee.

A majority of any such committee may determine its action and may fix the time and place of its meetings, unless provided otherwise by the Board of Directors. Each such committee shall keep a written record of its acts and proceedings and shall submit such record to the Board of Directors at each regular meeting thereof and at such other times as requested by the Board of Directors. Failure to submit such record, or failure of the Board to approve any action indicated therein will not, however, invalidate such action to the extent it has been carried out by the corporation prior to the time the record of such action was, or should have been, submitted to the Board of Directors as herein provided.

ARTICLE IV

Officers

SECTION 1.

Number

The Board of Directors may elect a chairman of the board who shall be a member of the Board of Directors and shall elect a president, one or more vice presidents, a secretary and a treasurer, who need not be members of the Board of Directors and such other officers and assistant officers who need not be members of the Board of Directors as the Board of Directors may from time to time deem proper. Any two or more offices may be held by the same person, except the offices of the president and secretary.

SECTION 2.

Election of Term of Office

The officers of the Corporation to be elected or appointed by the Board of Directors shall be elected or appointed annually by the Board of directors at the first meeting of the Board of Directors held after each annual meeting of the shareholders. Subject to the provisions of Section 3 of this Article, each officer shall hold office until the first meeting of the Board of Directors following the next annual meeting of shareholders and until a successor has been elected or appointed and qualified. The election or appointment of an officer shall not of itself create contract rights.

SECTION 3.

Removal

Any officer or agent elected or appointed by the Board of Directors may be removed by the Board of Directors with or without cause, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.

SECTION 4.

New Offices and Vacancies

Newly created offices and vacancy in any office because of death, resignation, removal, disqualification or otherwise, may be filled from time to time by the Board of Directors for the unexpired portion of the term.

SECTION 5.

Chief Executive Officer

The Board of Directors shall appoint either the chairman of the board, if any, or the president the chief executive officer of the Corporation ("the CEO") who, subject to the oversight of the Board of Directors, shall direct and control all the business and affairs of the Corporation.

SECTION 6.

Chairman of the Board

The chairman of the board, if any, and if so designated by the Board of Directors, shall be the Chief Executive Officer of the Corporation and, subject to the oversight of the Board of Directors shall in general perform all duties incident to the office of chief executive officer. The chief executive officer shall, when present, preside at all meetings of the shareholders and of the Board of Directors. The chief executive officer may sign, with the secretary or any other proper officer of the Corporation thereunto authorized by the Board of Directors, certificates representing shares of the Corporation, any deeds, mortgages, bonds, contracts or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Directors or by these By-Laws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed; and shall p erform such other duties as may be prescribed by the Board of Directors from time to time.

SECTION 7.

President

The president shall be the chief operating officer of the Corporation and, subject to the oversight of the Board of Directors and the chairman of the board (if CEO), shall direct the conduct and operation of the business and properties of the Corporation. If so designated by the Board of Directors, the president shall also be the chief executive officer of the Corporation and shall perform all duties incident to that office. The president shall, in the absence of the chairman of the board, preside at all meetings of the shareholders and of the Board of Directors. The president may sign, with the secretary or any other proper officer of the Corporation thereunto authorized by the Board of Directors, certificates representing shares of the Corporation, any deeds, mortgages, bonds, contracts or other instruments which the Board of Directors has authorized to be executed, except in cases where the signing and execution thereof shall be expressly delegated by the Board of Direc tors or by these By-Laws to some other officer or agent of the Corporation, or shall be required by law to be otherwise signed or executed; and shall perform such other duties as may be prescribed by the Board of Directors from time to time.

SECTION 8.

Vice President

In the absence of the chairman of the board and the president, or in the event of their death, or inability to act, the executive vice president (or in the event of the death or inability to act of the executive vice president, the vice president designated by the Board of Directors, if any, or if none, the vice president having the greatest seniority) shall perform the duties of the chairman of the board and the president, and when so acting, shall have the authority of, and be subject to, all the restriction upon the chairman of the board and the president. Any vice president may sign, with the secretary or any other proper officer of the Corporation thereunto authorized by the Board of Directors, certificates representing shares of the Corporation; and shall perform such other duties as from time to time may be assigned by the chairman of the board (if CEO) or by the president or by the Board of Directors.

SECTION 9.

Secretary

The secretary shall: 1) keep the minutes of the proceedings of its shareholders, Board of Directors and executive committee and other committees, if any; in one or more books provided for that purpose; 2) see that all notices are duly given in accordance with the provisions of these By-Laws or as required by law; 3) be custodian of the corporate records and of the seal of the Corporation and see that the seal of the Corporation is affixed to all documents and execution of which on behalf of the Corporation under its seal is duly authorized; 4) file each written request by a shareholder that notices be mailed to some address other than this address as it appears on the record of shareholders; 5) sign with the chairman of the board or the president or vice president certificates representing shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors; 6) have general charge of the record of shareholders of the Corporatio n; and 7) in general perform all duties incident to the office of the secretary and such other duties as from time to time may be assigned by the chairman of the board (if CEO) or by the president or by the Board of Directors.

SECTION 10.

Treasurer

If required by the Board of Directors, the treasurer shall give a bond for the faithful discharge of duties in such sum and with such surety of sureties as the Board of Directors shall determine. The Treasurer shall: 1) have charge and custody of and be responsible for all funds and securities of the Corporation, receive and give receipts for moneys due and payable to the Corporation from any source whatsoever, and deposit all such moneys in the name of the Corporation in such banks, trust companies or other depositories as shall be selected in accordance with the provisions of these By-Laws; 2) have charge and custody of and be responsible for the keeping of correct and complete books and records of account of the Corporation; sign with the chairman of the board, or the president, or a vice president, certificates representing shares of the Corporation, the issuance of which shall have been authorized by resolution of the Board of Directors, and; 3) in general perform all of the duties incident to the office of the treasurer and such other duties as from time to time may be assigned by the chairman of the board (if CEO) or by the president or by the Board of Directors.

SECTION 11.

Assistant Secretaries and Assistant Treasurers

The assistant secretaries, when authorized by the Board of Directors, may sign with the chairman of the board or the president or a vice president, certificates representing shares of the Corporation, issuance of which shall have been authorized by a resolution of the Board of Directors. The assistant treasurers shall, if required by the Board of Directors, give bonds for the faithful discharge of their duties in such sums and with such sureties as the Board of Directors shall determine. Assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to them by the secretary or the treasurer, respectively, or by the chairman of the board (if CEO) or the president or the Board of Directors. In the absence of the secretary (or in the event of death, inability or refusal to act, the assistant secretary (or in the event there may be more than one assistant secretary, the assistant secretaries in the order of their appointment or as de termined by the chairman of the board (if CEO) or the president or the Board of Directors), shall perform the duties and exercise the authority of the secretary. In the absence of the treasurer or in the event of death, inability or refusal to act, the assistant treasurer, (or in the event there be more than one assistant treasurer, the assistant treasurers in the order of their appointment or as determined by the chairman of the board (if CEO) or the president or the Board of Directors) shall perform duties and exercise the authority of the treasurer.

SECTION 12.

Auditor

The Auditor shall examine and verify the records of the Corporation and Corporation's subsidiaries and shall report to, and be responsible to, the audit committee of the Board of Directors.

SECTION 13.

Compensation of Officers

The salaries and compensation officers and assistant officers shall be fixed by or in the manner designated by the Board of Directors. No officer shall be prevented from receiving such compensation by reason of the fact that the officer is also a director of the Corporation.

ARTICLE V

Contracts, Checks and Deposits

SECTION 1.

Contracts

The Board of Directors may authorize any officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of or on behalf of the Corporation and such authority may be general or confined to specific instances.

SECTION 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 Corporation shall be signed by such officer or officers, agent or agents of the Corporation, and in such manner as shall from time to time be determined by resolution of the Board of Directors.

SECTION 3.

Deposits

All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may select.

Of Shareholders, Transfer of Shares

SECTION 1.

Issuance of Shares

No shares of any class of the Corporation or any obligations or other securities convertible into or carrying options to purchase any such shares of the Corporation, or any options or rights to purchase any such shares or securities of the Corporation, shall be issued or sold unless such issuance or sale is approved by the affirmative vote of at least 80% of the entire Board of Directors.