Summary of GAINSCO INC - Yahoo! Finance

Results of Operations and Financial Condition, Amendments to Articles of Inc. or Byla

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

On November 9, 2009, the Board of Directors of the Corporation amended and restated the Corporation's bylaws (the "Former Bylaws") in their entirety. The Amended and Restated Bylaws (the "Amended Bylaws"), as adopted, will be effective as of January 1, 2010.

The Corporation is a Texas corporation formed under and governed by the Texas Business Corporations Act ("TBCA"). In 2003, the Texas legislature modernized the Texas corporations laws, enacting the Texas Business Organizations Code ("TBOC"), to become effective as of January 1, 2006 for Texas corporations formed after this effective date. A transition period was allowed for corporations, such as the Corporation, formed prior to January 1, 2006, permitting such corporations to remain governed by the TBCA, rather than the new TBOC, until January 1, 2010. On January 1, 2010, the transition provisions of the TBOC provide that the TBOC will apply to all entities formed before January 1, 2006. As a result, the TBOC will become applicable to the Corporation on January 1, 2010, and the Corporation has amended and restated its bylaws to be in compliance with the TBOC. Generally, the Corporation's bylaws were amended and restated to be effective January 1, 2010 to conform to the terminology of the TBOC that varies from terminology used under prior Texas law and implementing changes to make the Corporation's bylaws consistent with the TBOC. While not made in response to changes in the TBOC, the Board of Directors also clarified and modernized language in the Former Bylaws.

In addition, the Board of Directors has revised its advance notice bylaws relating to the nomination of directors for election at meetings of shareholders and matters brought before meetings of shareholders.

A copy of the Amended Bylaws is attached as Exhibit 3.1 hereto and incorporated by reference herein. The following summary of the material changes reflected in the Amended Bylaws is qualified in its entirety by reference to the Amended Bylaws.

Listed below is a summary of the changes that were made in an effort to conform the Amended Bylaws to be in compliance with the TBOC as well as changes made to clarify and modernize particular provisions of the Former Bylaws. Unless otherwise indicated, all section references are to the Amended Bylaws.

• Section 1.01 (Registered Office and Agent) of the Amended Bylaws provides that the Corporation's registered office and name of the Corporation's registered agent shall be stated in documents filed with the Texas Secretary of State in accordance with the TBOC instead of the TBCA.

• Section 2.03(a) (Voting Rights) of the Amended Bylaws provides that each outstanding share, regardless of class, entitled to vote upon a matter submitted to a vote at a meeting of shareholders shall be entitled to one vote on such matter, except to the extent that the voting rights of the shares of any class are limited or denied or are afforded greater or special voting rights, by the Articles of Incorporation or equivalent governing document (the "Articles of Incorporation") or the TBOC. The Former Bylaws provided for both common stock and Series A Convertible Preferred Stock. The

Corporation no longer has Series A Convertible Preferred Stock outstanding, so all references to such stock and "Voting Stock" were removed from the Amended Bylaws.

• Section 2.03(b) (List of Shareholders) of the Amended Bylaws provides that a list of shareholders be prepared not later than the eleventh (11th) day before the date of a shareholder meeting and made available for inspection for ten (10) calendar days preceding an annual meeting, or alternatively, may be kept on a reasonably accessible electronic network if the information required to gain access to the list is provided with the notice of the meeting. The Amended Bylaws also provide that original stock transfer books are prima facie evidence as to who are the shareholders entitled to examine such list or transfer book or to vote at any such meeting of shareholders. The Former Bylaws also provided that a shareholders list be made available for inspection for ten (10) calendar days preceding each shareholders meeting. While the TBCA also permitted the list to be maintained on an electronic network, this provision was not contained in the Former Bylaws.

• Section 2.05 (Notice) of the Amended Bylaws provides that notice of special meetings shall be delivered to shareholders not less than ten
(10) nor more than sixty (60) days before the date of meeting. The Former Bylaws stated that notice had to be delivered not less than ten (10) nor more than fifty (50) days before the date of meeting. This change was made in order to comply with the TBOC. The Amended Bylaws also provide that notice of any meeting of shareholders may be transmitted electronically to shareholders who have consented to this form of transmission of written notice of a shareholders meeting. A similar provision was contained in the TBCA, but was not contained in the Former Bylaws.

• Section 2.06 (Quorum) of the Amended Bylaws provides that once a quorum is present at a meeting of the shareholders, the shareholders represented in person or by proxy at the meeting may conduct such business as may be properly brought before the meeting until it is adjourned, and the subsequent withdrawal from the meeting by any shareholder or the refusal of any shareholder represented in person or by proxy to vote will not affect the presence of a quorum at the meeting. The Former Bylaws contained similar provisions in two different sections. The change was made to make the terminology used in this provision consistent with the TBOC's expression of the rules relating to quorum and place all provisions relating to quorum in one section.

• Section 2.07 (Majority Vote) of the Former Bylaws required the vote of two-thirds (2/3rds) of the shareholders in order for the shareholders to amend certain specifically enumerated bylaws, relating to the number of directors, vacancies on the board, the voting requirement to elect directors, quorum and voting requirements and provisions of the bylaws permitting amendments to be made by the board of directors. The Amended Bylaws eliminated this two-thirds (2/3rds) supermajority vote required for the shareholders to amend the enumerated bylaws, and as a result, the Amended Bylaws now permit the shareholders to amend these bylaws by a majority vote of the shares entitled to vote, present in person or represented at a meeting and voting at the meeting. Correspondingly,
Section 3.09 of the Amended Bylaws also eliminated a two-thirds voting requirement of the board to amend any of these bylaws enumerated in the Former Bylaws, resulting in the ability of the board of directors to amend these bylaws by majority vote of the directors present at a meeting at which a quorum is present. The Former Bylaws were amended in these respects since the board of directors determined that a supermajority vote was no longer appropriate for the shareholders or board to act to amend the enumerated bylaws.

• Section 2.08 (Method of Voting) of the Amended Bylaws was revised to provide that proxies are valid for eleven (11) months from the date of its execution. The Former Bylaws provided that proxies were valid for seven
(7) months. Both the TBOC and the TBCA provide that proxies are valid for eleven (11) months from the date of its execution. This section of the Amended Bylaws was also revised to permit shareholders to submit proxies to vote their shares by electronic and telephonic transmission. A similar provision was contained in the TBCA but was not contained in the Former Bylaws.

• Section 2.09 (Fixing Record Date) of the Amended Bylaws clarifies the language pertaining to fixing the record date. The bylaw provides that for the purpose of determining shareholders entitled to notice, the Board of Directors may fix the record date to be between ten (10) and sixty
(60) days prior to any meeting of shareholders, which is consistent with the TBOC.

• Former Section 2.11 (Order of Business at Meetings) was removed from the Amended Bylaws because such provision is unnecessary.

• The provisions requiring a shareholder to provide the Corporation with advance written notice of nominations of directors by the shareholders of the Corporation or requiring a shareholder to provide advance written notice of business to be conducted at a shareholders meeting were revised and updated in the Amended Bylaws. The following is a general summary of the advance notice bylaw provisions that were revised and updated in the Amended Bylaws and is qualified by reference to the Amended Bylaws.

• Section 2.11 (Nomination of Directors) of the Amended Bylaws provides that only persons who are nominated in accordance with the procedures set forth in Section 2.11 of the Amended Bylaws shall be eligible to serve as directors of the Corporation. Nominations of persons for election to the Board of Directors of the Corporation at an annual meeting or special meeting (but only if the election of directors is a matter specified in the notice of meeting given by or at the direction of the Board of Directors or any other proper person calling the special meeting) may be made (a) by or at the direction of the Board of Directors, including any committee appointed by the Board of Directors, or (b) by any shareholder of the Corporation who is a shareholder of record at the time of giving of notice provided for in
Section 2.11, who shall be entitled to vote for the election of directors at the meeting and who complies with the notice procedures set forth in Section 2.11 of the Amended Bylaws. Such nominations, other than those made by or at the direction of the Board of Directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a shareholder's notice relating to nominations to be made at an annual meeting of shareholders shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than seventy
(70) days nor more than one hundred (100) days prior to the first anniversary of the preceding year's annual meeting of shareholders; provided, however, that in the event that the date of the annual meeting is advanced more than thirty (30) days prior to such anniversary date or delayed more than sixty (60) days after such anniversary date then to be timely such notice must be received by the Corporation on or before the later of (i) seventy (70) days prior to the date of the meeting or (ii) the tenth (10th) day following the day on which public announcement of the date of the meeting was made. To be timely, a shareholder's notice relating to nominations to be made at a special meeting of shareholders shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than seventy (70) days nor more than one hundred (100) days prior to the date of such special meeting, or, if later, the tenth
(10th) day following the day on which public announcement of the date of the special meeting was made. This bylaw also prescribes the content of the information required to be contained in the shareholder's notice, which is intended to provide disclosure regarding the proposed director nominees, persons associated with the proposing shareholder, material arrangements between the proposing shareholder and its director nominees and all arrangements affecting the proposing shareholder's economic interests in the Corporation, including derivative positions and hedging transactions. A nominee is also required to furnish a questionnaire to the Corporation pertaining to the nominee's background and qualifications and background of the shareholder providing such notice and containing certain agreements and representations specified in the bylaw. This advance notice requirement is in addition to, and the shareholder is also required to comply with, all applicable requirements of the Securities Exchange Act of 1934, and the rules and regulations thereunder with respect to the matters set forth in Section 2.11.

• Section 2.12 (Notice of Business) of the Amended Bylaws provides that at any meeting of the shareholders, only such business shall be conducted as shall have been properly brought before the meeting
(a) by or at the direction of the Board of Directors or (b) by any shareholder of the Corporation who is a shareholder of record at the time of giving of the notice provided for in Section 12 of the Amended Bylaws, who shall be entitled to vote at such meeting and who complies with the notice procedures set forth in such bylaw. For business to be properly brought before a shareholder meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder's notice relating to business proposed to be conducted at an annual meeting of shareholders shall be delivered to or mailed and received at the principal executive offices of the Corporation not less than seventy
(70) days nor more than one hundred (100) days prior to the first anniversary of the preceding year's annual meeting of shareholders; provided, however, that in the event that the date of the annual meeting is advanced more than thirty (30) days prior to such . . .