COSTILLA ENERGY INC, SC 13D/A, 1998-11-03

COSTILLA ENERGY INC
SC 13D/A, 1998-11-03
CRUDE PETROLEUM & NATURAL GAS

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<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 13D

Under the Securities Exchange Act of 1934
(AMENDMENT NO. 2)

COSTILLA ENERGY, INC.
(Name of Issuer)

COMMON STOCK, $.10 PAR VALUE
(Title of Class of Securities)

22161G103
(CUSIP Number)

CADELL S. LIEDTKE
MICHAEL J. GRELLA
HENRY G. MUSSELMAN
400 WEST ILLINOIS, SUITE 1000
MIDLAND, TEXAS 79701
(915) 682-3092
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)

OCTOBER 23, 1998
(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box _____.

Check the following box if a fee is being paid with the statement_____. (A fee
is not required only if the reporting person:(1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7).

NOTE: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.

*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).

<PAGE> 2
SCHEDULE 13D

CUSIP NO. 22161G103 PAGE 2 OF 12 PAGES

- --------------------------------------------------------------------------------

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Cadell S. Liedtke
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY

- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*

WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION

Texas
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 2,716,060
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 60,000
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER

2,716,060
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER

60,000
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

2,776,060
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

28.9%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*

IN
- --------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.

<PAGE> 3
SCHEDULE 13D

CUSIP NO. 22161G103 PAGE 3 OF 12 PAGES

- --------------------------------------------------------------------------------

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Mitchell J. Grella
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY

- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*

WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION

Texas
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 1,683,710
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 100,100
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER

1,683,710
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER

100,100
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

1,783,810
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

18.6%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*

<PAGE> 4
SCHEDULE 13D

CUSIP NO. 22161G103 PAGE 4 OF 12 PAGES

- --------------------------------------------------------------------------------

1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON

Henry G. Musselman
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY

- --------------------------------------------------------------------------------
4 SOURCE OF FUNDS*

WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) OR 2(e) [ ]

- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION

Texas
- --------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES 620,000
BENEFICIALLY -----------------------------------------------------------------
OWNED BY 8 SHARED VOTING POWER
EACH
REPORTING 22,650
PERSON -----------------------------------------------------------------
WITH 9 SOLE DISPOSITIVE POWER

620,000
-----------------------------------------------------------------
10 SHARED DISPOSITIVE POWER

22,650
- --------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

642,650
- --------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]

- --------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

6.7%
- --------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*

<PAGE> 5

This Amendment No. 2 to Schedule 13D (this "Amendment") is being filed
by Cadell S. Liedtke ("Liedtke"), Michael J. Grella ("Grella") and Henry G.
Musselman ("Musselman") (collectively, the "Reporting Persons") to reflect a
change in the beneficial ownership of each of the Reporting Persons of the
Common Stock, $0.10 par value (the "Common Stock"), of Costilla Energy, Inc.
(the "Company") from such beneficial ownership reflected in the Schedule 13D
filed by the Reporting Persons on October 18, 1996, as amended by Amendment No.
1 to Schedule 13D filed by the Reporting Persons on November 15, 1996
(collectively, the "Original 13D").

Only those items of Schedule 13D, or portions thereof, being amended
are included in this Amendment. Except as expressly amended and modified by this
Amendment, the Original 13D remains unchanged and in full force and effect.

ITEM 2. IDENTITY AND BACKGROUND

The Reporting Persons now hold the following positions with the
Company: Liedtke is a director and Chairman of the Board; Grella is a director
and President and Chief Executive Officer; and Musselman is a director and
Executive Vice President and Chief Operating Officer.

ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

Through October 23, 1998, the Reporting Persons have acquired
beneficial ownership of shares of Common Stock as described below.

Liedtke has acquired beneficial ownership of a total of 473,500 shares
of Common Stock since the filing of the Original 13D, all of which has been
acquired in purchases on the public market within sixty (60) days of the date of
this Amendment (see Item 5(c) hereof), for a total purchase price of
approximately $2.8 million, including purchases of 75,000 shares on October 22,
1998 and 312,000 shares on October 23, 1998 which resulted in increases of his
percentage beneficial ownership of more than one percent (1%). Grella, directly
or indirectly through the Grella Family Charitable Foundation (the "Grella
Foundation"), has acquired beneficial ownership of a total of 433,450 shares of
Common Stock since the filing of the Original 13D through purchases on the
public market throughout that period for a total purchase price of approximately
$5.4 million which resulted in increases of his percentage beneficial ownership
of more than one percent (1%) in each of March 1997, October 1997 and August
1998, including purchases during the past sixty (60) days which are more fully
described under Item 5(c) hereof. Musselman, directly or indirectly through his
spouse as custodian for their children under the Texas Uniform Transfers to
Minors Act (the "Musselman Children"), has acquired beneficial ownership of a
total of 31,650 shares of Common Stock since the filing of the Original 13D in
purchases on the public market for a total purchase price of approximately
$300,000, three of which have occurred within the past sixty (60) days and are
more fully described under Item 5(c) hereof. The changes in beneficial ownership
resulting from these purchases have been (or, in the case of October 1998
transactions, will be) reported by each Reporting Person in the month

page 5 of 12

<PAGE> 6

following any such change by the filing of a Form 4 under Section 16(a) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

Each of the Reporting Persons and the Grella Foundation financed all of
the above described purchases of shares of Common Stock (other than
approximately $75,000 of Grella's purchases and $20,000 of Musselman's purchases
which were paid with personal funds) under brokerage account arrangements that
each Reporting Person and the Grella Foundation has with Prudential Securities
Incorporated ("Prudential") pursuant to a Command Account Margin Agreement (the
"Account Agreement"). The Marion and Cadell S. Liedtke Family Charitable
Foundation (the "Liedtke Foundation") and the Musselman Family Charitable
Foundation (the "Musselman Foundation", and collectively with the Liedtke
Foundation and Grella Foundation, the "Foundations"), through which Liedtke and
Musselman beneficially own shares previously acquired by them and donated to
their respective Foundations, have also entered into Account Agreements with
Prudential. The form of Account Agreement entered into between Prudential and
each of the Reporting Persons and each of the Foundations is substantially
similar in all material respects (other than the name of the accountholder, the
date of execution, and other details), and a copy of the form of the Account
Agreement is attached hereto as Exhibit 7.1 and incorporated herein by reference
for a description of the terms of the financing arrangements pursuant to which
each of the Reporting Persons and the Grella Foundation has borrowed funds for
the purchases of Common Stock described above. To further secure borrowings
under the Account Agreement of each of the Reporting Persons, each Reporting
Person has entered into a Pledge Agreement with Prudential whereby the Reporting
Person has pledged certain of the shares of Common Stock originally acquired by
each such Reporting Person as described in the Original 13D. The Pledge
Agreements entered into by the Reporting Persons are substantially similar in
all material respects (other than the name of the pledgor, the date of
execution, the number of shares pledged and other details), and a copy of the
form of Pledge Agreement is attached hereto as Exhibit 7.8 and incorporated
herein by reference for description of the terms of the pledge of shares of
Common Stock by each Reporting Person.

ITEM 4. PURPOSE OF TRANSACTION

Prior to acquisitions described herein, the Reporting Persons already
owned in excess of 40% of the outstanding shares of Common Stock. The purpose
of these acquisitions was for the personal investment of each Reporting
Person.

The Reporting Persons may be granted shares of Common Stock and options
to acquire additional shares of Common Stock through certain stock option and
compensation plans which have been adopted by the Issuer, copies of which are
attached as Exhibits 7.2 and 7.3 to the Original 13D. No such shares or options
have been granted at this time.

From time to time in the future, each of the Reporting Persons, and
their respective affiliates, may acquire, by purchase or otherwise, shares of
Common Stock. While no details of

page 6 of 12

<PAGE> 7

any such purchases (such as the number of shares to be purchased, price to be
paid, or timing of purchases) have been established, such purchases may be
financed pursuant to the brokerage account arrangements described in Item 4.

ITEM 5. INTEREST IN SECURITIES OF ISSUER

(a) As of October 23, 1998, the number of shares of Common Stock, and
the percentage of the total issued and outstanding Common Stock (9,610,615
shares) beneficially owned by each of the Reporting Persons is as follows:
Liedtke, 2,776,060 (28.9%); Grella, 1,783,810 (18.6%); and Musselman, 642,650
(6.7%). Collectively, the Reporting Persons beneficially own 5,202,520 shares of
Common Stock, constituting 54.1% of the outstanding Common Stock as of October
23, 1998. The increases in percentage ownership of the Reporting Persons are
attributable to the combined effect of the acquisition of shares of Common Stock
by the Reporting Persons described in this Amendment and the Company's
repurchase of a total of approximately 1,000,000 shares of Common Stock through
stock repurchase programs in both 1997 and 1998 which resulted in a decrease in
the number of shares of Common Stock outstanding.

(b) Each of the Reporting Persons has the sole power to vote or to
direct the vote and the sole power to dispose or direct the disposition of all
of the shares of Common Stock attributed to each such Reporting Person in
paragraph (1) of this Item 5, except for (i) 1,650 shares held by the Musselman
Children with respect to which Musselman shares voting and dispositive power,
and (ii) shares held by the Reporting Person's respective Foundations, as
follows: Liedtke Foundation, 60,000 shares; Grella Foundation, 100,100 shares;
and Musselman Foundation, 21,000 shares. Each Reporting Person is a director of
his respective Foundation and shares voting and dispositive power over the
shares of Common Stock owned by the Foundation with the other directors of the
Foundation.

(c) The Reporting Persons have acquired beneficial ownership of shares
of Common Stock during the sixty (60) days prior to the date hereof in the
following transactions, each of which was a purchase through a broker on the
public market:

<TABLE>
<CAPTION>
Name Date Number of Shares Price per Share
- ---- ---- ---------------- ---------------
<S> <C> <C> <C>
Liedtke 08/31/98 1,000 $6 31/32
Liedtke 08/31/98 4,000 $6 23/32
Liedtke 08/31/98 1,000 $6 27/32
Grella 09/03/98 100 $6 3/4
Liedtke 09/04/98 1,000 $6 9/16
Liedtke 09/04/98 1,000 $6 19/32
Liedtke 09/04/98 1,000 $7 3/32
Grella 09/04/98 100 $7
</TABLE>

page 7 of 12

<PAGE> 8

<TABLE>
<S> <C> <C> <C>
Grella 09/16/98 200 $8
Grella 09/16/98 100 $7 7/8
Grella 09/18/98 100 $7 1/2
Grella 09/21/98 100 $7 1/2
Grella 09/22/98 100 $7 1/2
Grella 09/23/98 100 $7 1/2
Grella 09/24/98 100 $7 1/2
Liedtke 09/25/98 2,000 $7 15/32
Liedtke 09/25/98 500 $7 19/32
Grella 09/25/98 100 $7 1/2
Liedtke 09/28/98 5,000 $7 19/32
Liedtke 09/29/98 5,000 $7 19/32
Liedtke 10/02/98 1,000 $7 15/32
Liedtke 10/02/98 1,200 $7 7/32
Liedtke 10/02/98 2,800 $7 23/32
Liedtke 10/02/98 2,500 $7 19/32
Musselman Children 10/02/98 50 $7 1/8
Musselman Children 10/02/98 50 $7 1/8
Musselman Children 10/02/98 50 $7 1/8
Liedtke 10/05/98 1,500 $7 19/32
Grella Foundation 10/07/98 5,000 $7 15/32
Grella Foundation 10/07/98 5,000 $7 15/32
Grella Foundation 10/08/98 5,000 $7 15/32
Grella Foundation 10/08/98 1,500 $7 15/32
Grella Foundation 10/09/98 1,000 $7 11/32
Grella Foundation 10/09/98 3,000 $7 15/32
Grella Foundation 10/09/98 500 $7 15/32
Grella Foundation 10/12/98 500 $7 15/64
Grella Foundation 10/12/98 500 $7 11/32
Liedtke 10/14/98 2,000 $7 5/64
Liedtke 10/14/98 3,000 $7 5/64
Liedtke 10/14/98 2,000 $6 27/32
Liedtke 10/14/98 10,000 $6 31/32
Liedtke 10/14/98 8,000 $7 3/32
Liedtke 10/14/98 2,000 $7 5/64
Liedtke 10/16/98 1,000 $7 5/64
Liedtke 10/19/98 1,000 $7 1/64
Liedtke 10/19/98 1,000 $7 5/64
</TABLE>

page 8 of 12

<PAGE> 9

<TABLE>
<S> <C> <C> <C>
Liedtke 10/20/98 1,500 $6 31/32
Liedtke 10/21/98 500 $7 3/32
Liedtke 10/22/98 75,000 $6 1/8
Liedtke 10/22/98 2,500 $6 7/16
Liedtke 10/22/98 1,500 $6 53/64
Liedtke 10/22/98 300 $6 53/64
Liedtke 10/22/98 4,700 $6 61/64
Liedtke 10/22/98 5,000 $6 61/64
Liedtke 10/23/98 312,000 $5 9/16
Liedtke 10/23/98 1,500 $6 15/32
Liedtke 10/23/98 2,500 $6 37/64
Liedtke 10/23/98 2,500 $6 37/64
Liedtke 10/23/98 1,000 $6 21/32
Liedtke 10/23/98 2,500 $6 43/64
</TABLE>

(d) None.

(e) Not applicable.

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS
WITH RESPECT TO SECURITIES OF THE ISSUER.

Each of the Reporting Persons and each of the Foundations has entered
into an Account Agreement with Prudential covering securities held in the
accounts subject to those agreements, including, but not limited to, shares of
Common Stock. The form of Account Agreement attached hereto as Exhibit 7.1 is
incorporated herein by reference for a description of the terms of the
arrangements between Prudential and each of the Reporting Persons and each of
the Foundations with respect to the Company's Common Stock. Each of the
Reporting Persons has also entered into a Pledge Agreement with Prudential
pursuant to which the Reporting Person pledges certain shares of Common Stock
owned by the Reporting Person in an account at Prudential. The form of Pledge
Agreement attached hereto as Exhibit 7.8 is incorporated herein by reference for
a description of the terms of the pledge of such shares of Common Stock by each
Reporting Person, including rights of the pledgee to vote and dispose of such
shares.

The organizational documents of each of the Foundations provide that
each such Foundation is to receive and administer property which shall be used
exclusively for the performance of charitable activities within the meaning of
Section 501(c)(3) of the Internal Revenue Code and Section 11.18(c) of the Texas
Tax Code. Copies of the Articles of Incorporation of the Foundations are
attached hereto as Exhibit 7.12 and incorporated herein by reference for a
description of the restrictions and limitations imposed on each Foundation and
its assets. The shares of Common Stock held by each Foundation are subject to
the limitations and

page 9 of 12

<PAGE> 10

restrictions placed on property held by the Foundation. Each Reporting Person is
a director of the respective Foundation bearing his name.

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.

<TABLE>
<S> <C>
*7.1 Form of Command Account Margin Agreement with Prudential Securities
Incorporated.

**7.2 Command Account Margin Agreements between Cadell S. Liedtke and
Prudential Securities Incorporated dated November 6, 1996 and April
10, 1997 (substantially similar in all material respects to Exhibit
7.1 other than the name of the accountholder and the date of the
Agreement).

**7.3 Command Account Margin Agreements between Michael J. Grella and
Prudential Securities Incorporated dated September 26, 1996 and April
10, 1997 (substantially similar in all material respects to Exhibit
7.1 other than the name of the accountholder and the date of the
Agreement).

**7.4 Command Account Margin Agreements between Henry G. Musselman and
Prudential Securities Incorporated dated October 8, 1996 and April
10, 1997 (substantially similar in all material respects to Exhibit
7.1 other than the name of the accountholder and the date of the
Agreement).

**7.5 Command Account Margin Agreement between Marion and Cadell S. Liedtke
Family Charitable Foundation and Prudential Securities Incorporated
dated August 13, 1997 (substantially similar in all material respects
to Exhibit 7.1 other than the name of the accountholder and the date
of the Agreement).

**7.6 Command Account Margin Agreement between Grella Family Charitable
Foundation and Prudential Securities Incorporated dated August 13,
1997 (substantially similar in all material respects to Exhibit 7.1
other than the name of the accountholder and the date of the
Agreement).

**7.7 Command Account Margin Agreement between Musselman Family Charitable
Foundation and Prudential Securities Incorporated dated July 1, 1997
(substantially similar in all material respects to Exhibit 7.1 other
than the name of the accountholder and the date of the Agreement).

*7.8 Form of Pledge Agreement between each Reporting Person and Prudential
Securities Incorporated.

**7.9 Pledge Agreement between Cadell S. Liedtke and Prudential Securities
Incorporated dated March 24, 1998, pledging 2,227,560 shares of
Common Stock
</TABLE>

page 10 of 12

<PAGE> 11

<TABLE>
<S> <C>
(substantially similar in all material respects to Exhibit 7.8 other
than the name of the pledgor, the date of the Agreement and the number
of shares being pledged).

**7.10 Pledge Agreement between Michael J. Grella and Prudential Securities
Incorporated dated April 7, 1998, pledging 1,671,060 shares of Common
Stock (substantially similar in all material respects to Exhibit 7.8
other than the name of the pledgor, the date of the Agreement and the
number of shares being pledged).

**7.11 Pledge Agreement between Henry G. Musselman and Prudential
Securities Incorporated dated March 23, 1998, pledging 530,000 shares
of Common Stock (substantially similar in all material respects to
Exhibit 7.8 other than the name of the pledgor, the date of the
Agreement and the number of shares being pledged).

*7.12 Articles of Incorporation of each of the Marion and Cadell S. Liedtke
Family Charitable Foundation, the Grella Family Charitable Foundation
and the Musselman Family Charitable Foundation.

***7.13 Joint Filing Agreement dated October 15, 1996 by and among Cadell
S. Liedtke, Michael J. Grella and Henry G. Musselman (filed as Exhibit
7.4 to the Original 13D).
</TABLE>

- --------------------------------
* Filed herewith
** Not filed
*** Previously filed as indicated

page 11 of 12

<PAGE> 12

SIGNATURE

After reasonable inquiry and to the best knowledge and belief of each of
the undersigned, each of the undersigned certifies that the information set
forth in this statement is true, complete and correct.

October 23, 1998 /s/ CADELL S. LIEDTKE
- ---------------- --------------------------------
Date Cadell S. Liedtke

October 23, 1998 /s/ MICHAEL J. GRELLA
- ---------------- --------------------------------
Date Michael J. Grella

October 23, 1998 /s/ HENRY G. MUSSELMAN
- ---------------- --------------------------------
Date Henry G. Musselman

page 12 of 12

<PAGE> 13

EXHIBIT INDEX

<TABLE>
<S> <C>
*7.1 Form of Command Account Margin Agreement with Prudential Securities
Incorporated.

**7.2 Command Account Margin Agreements between Cadell S. Liedtke and
Prudential Securities Incorporated dated November 6, 1996 and
April 10, 1997 (substantially similar in all material respects to
Exhibit 7.1 other than the name of the accountholder and the date
of the Agreement).

**7.3 Command Account Margin Agreements between Michael J. Grella and
Prudential Securities Incorporated dated September 26, 1996 and
April 10, 1997 (substantially similar in all material respects to
Exhibit 7.1 other than the name of the accountholder and the date
of the Agreement).

**7.4 Command Account Margin Agreements between Henry G. Musselman and
Prudential Securities Incorporated dated October 8, 1996 and April
10, 1997 (substantially similar in all material respects to
Exhibit 7.1 other than the name of the accountholder and the date
of the Agreement).

**7.5 Command Account Margin Agreement between Marion and Cadell S.
Liedtke Family Charitable Foundation and Prudential Securities
Incorporated dated August 13, 1997 (substantially similar in all
material respects to Exhibit 7.1 other than the name of the
accountholder and the date of the Agreement).

**7.6 Command Account Margin Agreement between Grella Family Charitable
Foundation and Prudential Securities Incorporated dated August 13,
1997 (substantially similar in all material respects to Exhibit
7.1 other than the name of the accountholder and the date of the
Agreement).

**7.7 Command Account Margin Agreement between Musselman Family
Charitable Foundation and Prudential Securities Incorporated dated
July 1, 1997 (substantially similar in all material respects to
Exhibit 7.1 other than the name of the accountholder and the date
of the Agreement).

*7.8 Form of Pledge Agreement between each Reporting Person and Prudential
Securities Incorporated.

**7.9 Pledge Agreement between Cadell S. Liedtke and Prudential
Securities Incorporated dated March 24, 1998, pledging 2,227,560
shares of Common Stock (substantially similar in all material
respects to Exhibit 7.8 other than the name of the pledgor, the
date of the Agreement and the number of shares being pledged).
</TABLE>

<PAGE> 14

<TABLE>
<S> <C>
**7.10 Pledge Agreement between Michael J. Grella and Prudential
Securities Incorporated dated April 7, 1998, pledging 1,671,060
shares of Common Stock (substantially similar in all material
respects to Exhibit 7.8 other than the name of the pledgor, the
date of the Agreement and the number of shares being pledged).

**7.11 Pledge Agreement between Henry G. Musselman and Prudential
Securities Incorporated dated March 23, 1998, pledging 530,000
shares of Common Stock (substantially similar in all material
respects to Exhibit 7.8 other than the name of the pledgor, the
date of the Agreement and the number of shares being pledged).

*7.12 Articles of Incorporation of each of the Marion and Cadell S.
Liedtke Family Charitable Foundation, the Grella Family
Charitable Foundation and the Musselman Family Charitable
Foundation.

***7.13 Joint Filing Agreement dated October 15, 1996 by and among
Cadell S. Liedtke, Michael J. Grella and Henry G. Musselman
(filed as Exhibit 7.4 to the Original 13D).
</TABLE>

- ---------------------------------
* Filed herewith
** Not filed
*** Previously filed as indicated

<PAGE> 1

EXHIBIT 7.1

COMMAND ACCOUNT MARGIN AGREEMENT

GENERAL INFORMATION ABOUT MARGIN

A PRUDENTIAL SECURITIES INCORPORATED MARGIN ACCOUNT ALLOWS AN INVESTOR
TO BORROW AGAINST THE VALUE OF THE ELIGIBLE SECURITIES IN THE ACCOUNT. A
TRADITIONAL USE OF MARGIN IS TO PURCHASE OR SELL SECURITIES. MARGIN MAINTENANCE
REFERS TO THE AMOUNT OF MARKET VALUE THAT AN INVESTOR IS REQUIRED TO MAINTAIN IN
HIS ACCOUNT. IF THE VALUE OF THE SECURITIES IN AN INVESTOR'S ACCOUNT FALLS BELOW
THE MARGIN MAINTENANCE REQUIREMENT AN INVESTOR IS SUBJECT TO A "MARGIN
MAINTENANCE CALL," FROM PRUDENTIAL SECURITIES INCORPORATED. A MAINTENANCE CALL
FROM PRUDENTIAL SECURITIES INCORPORATED ASKS THAT THE INVESTOR REPAY ALL OR PART
OF THE INVESTOR'S DEBT IN CASH, OR DEPOSIT OR SELL A SUFFICIENT AMOUNT OF
SECURITIES TO COVER THE MARGIN MAINTENANCE REQUIRED, WHICH SALE COULD RESULT IN
A SUBSTANTIAL REALIZED LOSS TO THE INVESTOR. AN INVESTOR ENTERING INTO A MARGIN
AGREEMENT AUTHORIZES PRUDENTIAL SECURITIES INCORPORATED TO LEND SECURITIES THAT
PRUDENTIAL SECURITIES INCORPORATED MAY BE CARRYING ON MARGIN FOR THE INVESTOR.
IN SOME INSTANCES SUCH LOANS MAY LIMIT AN INVESTOR'S ABILITY TO EXERCISE VOTING
RIGHTS IN THE SECURITIES.

1. COMMAND ACCOUNT. I/we ("Client") hereby request that Prudential Securities
Incorporated ("Prudential Securities") accept a Prudential Securities COMMAND
Account ("COMMAND Account") application in Client's name as appears below. This
Agreement sets forth the terms and conditions that govern the COMMAND Account to
be provided to the Client, and in consideration of Prudential Securities
accepting such COMMAND Account, Client hereby agrees to abide by all such terms
and conditions, as of the date of execution.

THE VISA/CHECK ACCOUNT Client understands that, under the terms of this
agreement, a COMMAND Account consists of a Prudential Securities margin account
(the "Securities Account") which is linked to a choice of either an investment
fund ("COMMAND Fund") or to the COMMAND Insured Income AccountSM ("CMIIA") as
described in the COMMAND Program Description (the COMMAND Fund and the CMIIA
together shall be known as Primary Investment Vehicle), plus a Visa(R) Gold Gard
Account ("Visa Card Account") and COMMAND Checks ("Checks") provided by The
Prudential Bank ("PB")*, with which Prudential Securities maintains an
agreement. Under the terms of the Agreement between PB and Prudential
Securities, the Visa Card Account may be opened, one or more Visa Gold Cards
(the "Card") may be issued, and Checks may be provided for use in the COMMAND
Account. The Visa Card Account and Checks shall be referred to as "Visa/Check
Account."

TENANCY BY THE ENTIRETY ACCOUNTS For Tenancy by the Entirety Accounts, Clients
specifically authorize each other to use the COMMAND Account to buy and sell
securities, write checks and use the Visa Gold Card or otherwise use the assets
of the COMMAND Account without the prior approval of the other.

FEES Client understands that Prudential Securities will charge the Client an
annual fee for services provided hereunder by debiting Client's COMMAND Account.
Such fee is paid in advance and set forth in the COMMAND Program Description,
the receipt of which Client hereby acknowledges. Client will be informed of any
fee changes in advance. Should Client's COMMAND Account be terminated for any
reason, Client will not receive a refund of any portion of that annual fee.

SPECIAL ACCOUNTS Prudential Securities, in its discretion, may modify the
conditions of the COMMAND program for special accounts and limited categories of
clients.

Prudential Securities investment advisory clients that participate in a
Prudential Securities sponsored managed account program ("Advisory clients") and
Employee Benefit Plan clients on whose behalf Prudential Securities files Form
1099-R with the Internal Revenue Service will not receive the features
referenced in Section 3, below.

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*The Prudential Bank means either the Prudential Bank & Trust Company
or The Prudential Savings Bank F.S.B., each of which is a subsidiary of the
Prudential Insurance Company of America.

<PAGE> 2

2. THE SECURITIES ACCOUNT.

PRIMARY FUND AND AUTOMATIC DAILY SWEEP Client may use Client's Securities
Account to purchase and sell securities, including options, on margin or
otherwise. Concurrent with the opening of Client's COMMAND Account, Client will
choose one of the COMMAND Funds or CMIIA as Client's Primary Investment Vehicle.
Free credit cash balances in Client's Securities Account of $1 or more will be
automatically invested or deposited, on a daily basis, in the Primary Investment
Vehicle by means of a purchase order submitted to the Primary Fund or a deposit
into CMIIA by Prudential Securities, in accordance with the terms of the COMMAND
Fund's prospectus or the Program Description. In addition, Client may make
manual purchases of shares of another Money Fund ("Secondary Money Fund") or
manual deposits into CMIIA as a Secondary Investment Vehicle. The purchase price
for shares of the COMMAND Funds will be the net asset value per share next
determined after receipt by a COMMAND Fund of a purchase order. Ordinarily,
Prudential Securities may place a purchase order to the COMMAND Funds for shares
or make a deposit to the CMIIA on Client's behalf to enable Client to purchase
COMMAND Fund shares and earn COMMAND Fund dividends or earn CMIIA interest prior
to final collection of deposits received to Client's Securities Account.
However, in certain situations a purchase order or deposit entered until free
credit cash balances or cash in the form of Federal Funds becomes available to
Prudential Securities. Prudential Securities may reasonably withhold access to
the funds so advanced until Prudential Securities is satisfied that any and all
deposits to Client's Securities Account have been collected.

DIVIDENDS/INTEREST The COMMAND Funds expect to declare dividends daily, as
earned, on shares of a COMMAND Fund and will reinvest daily any such dividends
in COMMAND Fund shares. Dividends will be credited directly to Clients' COMMAND
Account on a monthly basis. Client understands that an investment in shares of
the COMMAND Funds is not equivalent to a bank deposit. As with any investment in
securities, the value of Client's investment may fluctuate. The shares of
beneficial interest of the COMMAND Funds are maintained on the register of the
COMMAND Fund. Certificates are not physically issued.

SECURITIES PROTECTION Securities in Clients' Account are protected by the
Securities Investor Protection Corporation and additional similar protection is
provided through insurance purchased by Prudential Securities. CMIIA balances
and interest are insured through the depository institutions Federal Deposit
Insurance Corporation coverage.

REDEEMING SHARES FROM PRIMARY INVESTMENT VEHICLE Shares and cash comprising
Client's Primary Investment Vehicle will be redeemed (at net asset value) or
withdrawn, automatically, to satisfy debit balances in Client's Securities
Account. Next, shares and cash comprising Client's Secondary Investment Vehicle
will be redeemed (at net asset value) or withdrawn, automatically, to satisfy
debit balances in Client's Securities Account. Thereafter, Client's shares in
other money market funds managed by Prudential Investment Fund Management LLC
("Prudential Money Funds") or balances in other insured income accounts will be
redeemed at their net asset value or withdrawn, automatically, to satisfy debit
balances in Client's Securities Account. If Client is eligible and elects the
Monthly Automatic Payout feature, and/or the Cash Transfer Service feature, then
the liquidation sequence set forth below in Section 3 will be applicable. No
fee, commission or other charge will be made with respect to the purchase or
redemption of COMMAND Fund or Prudential Money Fund shares or deposit to and
withdrawal from CMIIA or other insured income accounts. Affiliates of Prudential
Securities receive fees in connection with the operation of the COMMAND Funds.
Administration, distribution and advisory fees will be paid by the COMMAND Funds
as set forth in the COMMAND Fund prospectus. Client acknowledges receipt of the
COMMAND Fund prospectus, which more fully describe the COMMAND Funds and the
COMMAND Program Description, which describes the CMIIA.

3. THE PB VISA/CHECK ACCOUNT. Client hereby applies to PB for a Visa/Check
Account and may request that Checks be provided and, if applicable, that one or
more Visa Gold Cards ("Card") be issued for use with Client's Visa/Check
Account. If a Card is issued, Client requests that a Personal Identification
Number ("PIN") be issued as well so that Client may access Client's COMMAND
Account through the Visa and/or Plus Automated Teller Machine ("ATM") Network.
Client understands that Client's application for a Visa/Check Account is
accepted by PB when a Card and PIN are issued to Client or Checks are provided,
and is subject to applicable rules and regulations of Visa USA Inc. and Visa
International. Client agrees that by signing, using, or permitting another to
use the Checks, Card or PIN, Client will be bound by the following terms and
conditions. Client will surrender any unused Checks and Card(s) and discontinue
utilization of Client's Visa/Check Account immediately upon request of PB or
Prudential Securities. Client understands that PB will open Client's Visa/Check
Account in the name supplied to it by Prudential Securities, that

<PAGE> 3

information concerning transactions in Client's Visa/Check Account or the status
of such account will be furnished to Client by Prudential Securities, and that
billing error disputes or inquiries are to be directed to Prudential Securities.

AUTHORIZATION LIMIT Client may write Checks on the Visa/Check Account with PB,
and/or may utilize the Visa Card. The Visa Card may be used by Client to make
purchases of merchandise and services, to obtain cash advances (which a bank may
limit to $5,000 or less per account per day), and to obtain cash through the
Visa and/or Plus(R) ATM Network (which is limited to 5 withdrawals per day and a
maximum total withdrawal of $1,000 per day; some institutions may have a lower
limit). The aggregate amount available for such purposes (the "Authorization
Limit") will be the total of (i) the uninvested free credit cash balance, if
any, in the Securities Account pending investment in shares of the Primary Fund
or deposit into CMIIA; (ii) the net asset value of Client's shares in the
Primary Fund and Secondary Fund, the balance in CMIIA, the net asset value of
Client's shares in Prudential Money Funds and balances in other insured income
accounts, if any; and (iii) where applicable, the available margin loan value of
any securities in Client's Securities Account. PB will notify Prudential
Securities daily as to the amount of all Card purchases, cash advances and Check
usage in Client's Visa/Check Account received and paid by PB, and Prudential
Securities will promptly make payment to PB on Client's behalf for all Card
purchases, cash advance and Check usage posted to Client's Visa/Check Account.
Client understands that Client's Authorization Limit is instantaneously reduced
(by the amount of all Card purchases, cash advance and Check usage) at the time
PB is notified of any such use of the Card. However, Prudential Securities will
not debit Client's Securities Account until the twenty-fifth day of each month
or the prior business day if the twenty-fifth falls on a weekend or holiday for
all Card purchases. Pending delayed debiting of Card purchases, Client may
continue to trade securities in Client's Securities Account. However, Client may
not dispose of assets in Client's COMMAND Account or any other account Client
may have with Prudential Securities if such disposal will negatively affect
Client's obligation to pay Prudential Securities for Card purchases. Shares in
the COMMAND Funds, balances in CMIIA, shares in Prudential Money Funds or
balances in other insured income accounts are not redeemed or withdrawn until
Prudential Securities is notified of the Check or cash advance charge or until
the monthly debit to Client's Securities Account for Card purchases is made.
Prudential Securities will make payment to PB to the extent that sufficient
funds may be provided first, from the free credit cash balance, if any, held in
the Securities Account; and second, from the proceeds of redemption of Client's
shares in the COMMAND Funds, or withdrawal of balance in CMIIA, or from the
proceeds of redemption of Client's shares in the Prudential Money Funds or
withdrawal of balances in other insured income accounts; and third, if
applicable, should such sources prove insufficient, from margin loans made by
Prudential Securities fro Client's Securities Account within the available
margin loan value of the securities in the account. If Prudential Securities
does advance such monies, such amount will be a loan by Prudential Securities to
Client and will be secured by securities in any Prudential Securities account in
which Client may have an interest. All Visa/Check Account transactions within
Client's Authorization Limit will be paid to PB by Prudential Securities from
and through Client's Securities Account, as provided by this Agreement and
hereby authorized by Client. Since the amount so available is dependent upon the
status of clearance of checks deposited by Client to the Securities Account as
well as securities prices and the status of transactions in the Securities
Account and the Visa/Check Account, it will fluctuate from day to day.

CREDIT If Prudential Securities extends credit to Client, interest will be
charged from the day it makes payment to PB on Client's behalf at the same rate
Prudential Securities generally charges for margin loans. Client acknowledges
receipt of Prudential Securities's standard written statement of margin interest
charges and other terms and conditions for margin accounts. Should these sources
prove to be insufficient to satisfy all charges owing in the Visa/Check Account,
PB may advance the balance of funds and will charge interest at a rate to be
determined by PB for the time such Visa/Check Account is overdrawn. Any such
amount, including interest, will be due and payable by Client to PB immediately.

VISA GOLD CARD The Visa Card may be used by Client to make purchases of
merchandise and services, to obtain cash advances, and to obtain cash through
the Visa and/or Plus(R) ATM Network. Whenever Client uses the Card to pay for
merchandise or services, or to obtain a cash advance, Client will be required to
sign a transaction draft as evidence of the transaction, which will be forwarded
through card processing systems to PB for payment. Client's Card transaction
receipts are only available upon individual request. The Card remains the
property of PB and may be canceled by PB at any time without prior notice.

<PAGE> 4

4. VISA SERVICE DISCLAIMER. Client understands that if Client is eligible and
elects to receive a Card, Client will be provided with services and benefits
outlined in the COMMAND Program Description and COMMAND Account Services & Visa
Gold Benefits pamphlet furnished to Client (the "COMMAND Card Services"). Client
acknowledges and agrees that these COMMAND Card Services are provided by Visa
USA's third-party providers, or other service providers, over which Prudential
Securities has no responsibility or control. Therefore, Prudential Securities
expressly disclaims liability, and Client agrees that Prudential Securities
shall have no liability, for any acts, omissions, claims, costs, losses, or
damages arising from or relating to use by Client of the COMMAND Card Services
or Visa USA's agents, employees and third-party providers or other service
providers. In addition, Client understands that Client is responsible for the
cost of certain COMMAND Card Services including, medical, legal transportation
or other travel assistance services or goods provided.

5. LIABILITY. Client acknowledges that the Checks and/or Card(s) or PIN issued
pursuant to this Agreement are for Client's exclusive possession and accordingly
agrees to use reasonable care to safeguard them and limit access to them. Client
agrees to assume liability for all transactions made by Client, or by an
authorized person, through the use of the Checks and/or Card(s) or PIN in
connection with Client's Visa/Check Account. Client also agrees to pay the
reasonable costs and expenses of collection of any unpaid balance due on
Client's COMMAND Account, including, but not limited to, attorneys' fees
involved in such collection, to the extent provided by law. It is understood
that, in the event of any unauthorized use of Client's Checks in connection with
Client's Account, Client's Account will not be credited with interest on these
misused funds for the period prior to reimbursement of these funds to Prudential
Securities by PB.

6. PERIODIC REPORTS AND STATEMENTS. Client understands that each month Client
will receive and review a transaction statement from Prudential Securities,
which will detail: all purchases and cash advances that were made with the Card;
Checks drawn against Client's Visa/Check Account; electronic funds transfers;
securities bought or sold in Client's Securities Account, whether on margin or
on a fully paid basis; margin interest charges, if any; the number of shares of
the COMMAND Funds that were purchased or redeemed for Client; and deposits to
and withdrawals from CMIIA. The amount of the annual fee that Prudential
Securities charges for making the COMMAND Account available and any additional
fees with respect to the operation of Client's Account will be indicated on the
statement. Client authorizes Prudential Securities to act on Client's behalf to
accept reorders for Checks and requests to stop payment on Checks, for which
fees will be charged to Client's COMMAND Account. Fees may also be charged for
Checks processed, as indicated in the prospectuses, and such fees will be
indicated on the statement. If there is no transaction activity in Client's
COMMAND Account, Prudential Securities reserves the right to send only quarterly
transaction statements.

Prudential Securities will not send out confirmations following purchases
and redemptions of shares in the COMMAND Funds or receipts following deposits in
or withdrawals from CMIIA. The statement, however, will describe all such
transactions which took place during the preceding month.

Client agrees to pay interest and service charges upon Client's accounts
monthly at the prevailing rate as determined by Prudential Securities. Client
understands that Client must carefully review the statements promptly after
receipt and notify Prudential Securities of any errors in writing addressed to
the Branch Manager of the Branch Office servicing Client's COMMAND Account
within ten days after transmittal by Prudential Securities of the statement, or
such statements shall be deemed conclusive.

7. TERMINATION OF COMMAND ACCOUNT. Client may terminate Client's COMMAND
Account, including the Securities and Visa/Check Account, by notice at any time.
Client will remain responsible for any charges to Client's Securities Account or
Visa/Check Account whether arising before or after termination. Client
understands that Prudential Securities may by notice terminate Client's COMMAND
Account, including the Securities and Visa/Check Accounts, at any time at its
discretion, including for reasons of Client's insolvency or any breach or
default of this Agreement by Client. If Client's COMMAND Account is terminated
either by Client or Prudential Securities, Client will destroy all unused Checks
and Card(s) or promptly return to Prudential Securities. Client also understands
that upon termination of Client's COMMAND Account, all pending Card purchases
will be paid for by automatic debit of Client's COMMAND Account on the next
business day, and any other Card usage or Checks presented for payment will be
automatically paid from Client's COMMAND Account upon receipt by Prudential
Securities. If Client's COMMAND Account is terminated, Prudential Securities
may, and is hereby authorized to, redeem all shares of the COMMAND Funds owned
by Client in Client's COMMAND Account and to withdraw any balance in CMIIA.
Client agrees to pay Prudential Securities the reasonable costs and expenses of
collection, including but not limited to

<PAGE> 5

attorneys' fees, for any debit balance in Client's Securities Account. The
Prudential Securities may, at its discretion, decline to accept any orders or
deliver out Client's account or require that Client transfer Client's account.
Client understands that if Client does not promptly transfer Client's account
upon Prudential Securities' demand, the Prudential Securities reserves the right
to liquidate positions in Client's account at its discretion.

8. MARGIN MAINTENANCE/LIQUIDATION. Client will maintain such margins, in
Client's margin account, if applicable, as Prudential Securities may in its
discretion require from time to time and will pay on demand any debit balance
owing with respect to any of Client's accounts. Whenever in Prudential
Securities's discretion it may deem it desirable for its protection (and without
the necessity of a margin call), including but not limited to an instance where
a petition in bankruptcy or for the appointment of a receiver is filed by or
against Client, or an attachment is levied against any of Client's accounts, or
in the event of notice of Client's death or incapacity, or in compliance with
the orders of any Exchange, Prudential Securities may, without prior demand,
tender, and without any notice of the time or place of sale, all of which are
expressly waived, sell any or all securities , or commodities or contracts
relating thereto of which Client's Securities Account or any other Prudential
Securities account may be short, in order to close out in whole or in part any
commitment on Client's behalf, and Prudential Securities may place stop orders
with respect to such securities or commodities. Such sale or purchase may be
made at Prudential Securities's discretion on any Exchange or other market where
such business is then transacted, or at public auction or private sale with or
without advertising. Neither any demands, calls, tenders or notices which
Prudential Securities may make or give any one or more instances, nor any prior
course of conduct or dealings between the parties, shall invalidate the
aforesaid waivers on Client's part. Prudential Securities shall have the right
to purchase for Prudential Securities's own account any or all of the aforesaid
property at any such sale, discharged of any right of redemption, which is
hereby waived.

All transactions in any of Client's accounts are to be paid for or required
margin deposited no later than 2:00 p.m. (ET) on the settlement date or at such
earlier time as Prudential Securities shall require.

9. SHORT SALES/DELIVERIES. Client agrees that in giving orders to sell, all
"short" sale orders will be designated as "short" by Client and all long sale
orders will be designated as "long" by Client, and that the designation of a
sell order as "long" is a representation on Client's part that Client owns the
security and, if the security is not in Prudential Securities's possession, that
it is not then possible to deliver the security to Prudential Securities
forthwith, and Client will deliver it on or before the settlement date.

10. SECURITY INTEREST/HYPOTHECATION (PLEDGE). Any and all credit balances,
monies, securities, commodities or contracts relating thereto, and all other
property of whatsoever kind, including but not limited to, property belonging to
Client, owed to Client, or in which Client may have an interest, held by
Prudential Securities or carried for Client's accounts ("Client Property"),
shall be subject to a general lien for the discharge of Client's obligations to
Prudential Securities (including unmatured and contingent obligations) however
arising and without regard to whether or not Prudential Securities has made
advances with respect to such property. The Client Property without notice to
Client may be carried in Prudential Securities's general loans and all
securities may be pledged, repledged, hypothecated or re-hypothecated,
separately or in common with other securities or any other property, for the sum
due to Prudential Securities thereon or for a greater sum and without retaining
in Client's possession and control for delivery a like amount of similar
securities or other property. At any time and from time to time Prudential
Securities may, in its discretion, without notice to Client, apply and/or
transfer the Client Property, freely interchangeable between any accounts or in
any account in which Client may have an interest. Prudential Securities is
specifically authorized to transfer to Client's cash account on the settlement
day following a purchase made in that account, excess funds available in any of
Client's other accounts, including but not limited to any free balances in any
margin account or in any non-regulated commodities account sufficient to make
full payment of this cash purchase. Client agrees that any debit occurring in
Client's Account or in any account in which Client may have an interest may be
transferred by Prudential Securities at its option to Client's margin account.
In return for Prudential Securities's extension or maintenance of credit in
connection with Client's account, Client acknowledges that Prudential Securities
and any succeeding firm are hereby authorized from time to time to lend
separately or together with the property of others, either to Prudential
Securities or to others, any property, together with any attendant rights of
ownership, which Prudential Securities may be carrying for Client on margin. In
connection with such loans, Prudential Securities may receive and retain certain
benefits to which Client is entitled. In certain circumstances, such loan may
limit, in whole or in part, Client's ability to exercise voting rights of the
securities lent. This authorization shall apply to all accounts carried by

<PAGE> 6

Prudential Securities for Client and shall remain in full force until written
notice is received by Prudential Securities at Prudential Securities's principal
office in New York.

By signing this agreement, Client acknowledges that Client's securities may
be loaned to Prudential Securities or loaned out to others. By signing this
agreement, Client further acknowledges that Client has received a copy of this
agreement.

11. APPLICABLE RULES AND REGULATIONS. The COMMAND Account will be maintained
pursuant to all applicable Federal and State laws, including the rules and
regulations of the Securities and Exchange Commission, the Board of Governors of
the Federal Reserve System, the New York Stock Exchange, Inc., and the national
Association of Securities Dealers, Inc., as well as to the policies of
Prudential Securities. All transactions for Client's COMMAND Account will be
subject to the constitution, rules, regulations, customs and usages, as the same
may be constituted from time to time, of the Exchange or market (and its
clearing house, if any) where executed. No waiver of any provision of this
Agreement shall be deemed a waiver of any other provision, nor a continuing
waiver of the provision or provisions so waived.

If any provision hereof is or at any time should become inconsistent with
any present or future law, rule or regulation of any securities or commodities
exchange or any sovereign government or a regulatory body thereof and if any of
these bodies have jurisdiction over the subject matter of this Agreement, said
provision shall be deemed to be superseded or modified to conform to such law,
rule or regulation, but in all other respects this Agreement shall continue and
remain in full force and effect.

12. PRESUMPTION OF RECEIPT OF COMMUNICATIONS. All notices and other
communications pursuant to this Agreement, including reports, statements and
margin calls, may be sent to Client at Client's address last given to Prudential
Securities, or at such other address as Client may hereafter give Prudential
Securities in writing, or to Prudential Securities, at its Branch Office
servicing Client's Account. All notices and other communications shall be deemed
given, if by personal delivery or facsimile transmission, on the date of such
delivery or, if by mail, on the date of postmark when deposited, prepaid, in a
US Post Office Box.

13. REPRESENTATIONS. Client is of full age and represents that Client is not an
employee of any Exchange or of a Member Firm of any Exchange or the NASD other
than Prudential Securities, and that Client will promptly notify Prudential
Securities in writing if Client becomes so employed. Unless otherwise agreed in
writing, Client agrees to pay commissions, charges, interest and fees at
Prudential Securities' prevailing rates which may be changed from time to time
without notice to the Client, and to pay Prudential Securities' reasonable
attorneys' fees and interest at the highest lawful rate in Prudential Securities
must take legal action to collect any amounts due from Client to Prudential
Securities. Prudential Securities may require Client to prepay for any order.
Client agrees to pay for all transactions no later than settlement date.
Prudential Securities shall have a general lien on all properties Client may
have on deposit with Prudential Securities either singly or jointly with another
or otherwise and may, without notice to Client or Client's successors, at its
discretion, liquidate or transfers any such property in order to satisfy any
indebtedness Client may have to Prudential Securities or to relieve Prudential
Securities of any risk of a deficit existing in any of Client's accounts. Client
shall be liable for any remaining deficiency in any of Client's accounts.
Prudential Securities may conduct all transactions for Client in accordance with
the customs and usages of securities firms and of the various exchanges.

14. ACTS OF GOD. Client understands that Prudential Securities will not be
liable for loss caused directly or indirectly by government restrictions,
exchange or market rulings, suspension of trading, war, strikes, "Acts of God"
or conditions beyond Prudential Securities's control.

15. CAPTIONS. Section captions have been inserted solely for the purpose of
convenience in description and under no circumstances shall be deemed to qualify
any of the rights set forth in the provisions.

16. ARBITRATION/GOVERNING LAW

o Arbitration is final and binding on the parties.

o The parties are waiving their right to seek remedies in court, including
the right to jury trial.

o Pre-arbitration discovery is generally more limited than and different from
court proceedings.

<PAGE> 7

o The arbitrators' award is not required to include factual findings or
legal reasoning and any party's right to appeal or to seek modification
of rulings by the arbitrators is strictly limited.

o The panel of arbitrators will typically include a minority of
arbitrators who were or are affiliated with the securities industry.

I agree that all controversies which may arise between us concerning
any transaction (whether executed or to be executed within or outside of the
United States), my account or this or any other agreement between us, whether
entered into prior, on or subsequent to the date indicted on the signature page,
shall be determined by arbitration. The arbitration may be before either the New
York Stock Exchange, Inc. or the National Association of Securities Dealers,
Inc. or any other self-regulatory organization of which Prudential Securities is
a member, as I may elect and shall be governed by the laws of the State of New
York. If I do not make such election by registered mail addressed to you at your
main office within five (5) days after demand by you that I make such election,
then you may make the election. Any notice in connection with such arbitration
proceeding, may be sent to me by mail, and I hereby waive personal service.
Judgment upon any award rendered by the arbitrators may be entered in any court
having jurisdiction, without notice to me. No person shall bring a putative or
certified class action to arbitration, nor seek to enforce any pre-dispute
arbitration agreement against any person who has initiated in court a putative
class action; or who is a member of a putative class who has not opted out of
the class with respect to any claims encompassed by the putative class action
until: (i) the class certification is denied; or (ii) the class is decertified;
or (iii) the customer is excluded from the class by the court. Such forbearance
to enforce an agreement to arbitrate shall not constitute a waiver of any rights
under this agreement except to the extent stated herein. This Agreement shall be
governed by the laws of the State of New York, and shall inure to the benefit of
Prudential Securities's successors and assigns, and shall be binding on the
undersigned, Client's representatives, attorneys-in-fact, heirs, executors,
administrators and assigns.

17. SIGNATURE. Client hereby consents and agrees to all of the terms and
conditions of the Agreement appearing above and as continued on the reverse
side.

FOR CORPORATE ACCOUNTS ONLY: A resolution of Client's Board of Directors
authorizing the opening of the COMMAND Account must be attached. Client further
warrants to PSI that the officers signing below are authorized and empowered,
for and on behalf of the corporation, pursuant to the resolution of the Board of
Directors of a margin COMMAND Account with PSI with complete and full authority
to act on behalf of the corporation, to receive and distribute funds, write and
sign Checks, and make charges on Client's Visa Card on or against Client's
Corporate COMMAND Account.

THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE ON PAGE 2, IN SECTION
16.

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Account Name (Please Print)

X
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Signature

- ---------------------------------------
Account Name (If Joint Account)

- ---------------------------------------
Signature

<PAGE> 1

EXHIBIT 7.8

PLEDGE AGREEMENT

In consideration of the loan made by Prudential Securities Incorporated
("Pledgee") to the Pledgor in the sum of $(a) _________________ and in
consideration of the Pledgee accepting and carrying for the Pledgor one or more
accounts, it is agreed as follows:

1. A Prudential Securities from of customer agreement between the Pledgor
and Pledgee dated (b) ___________ and executed by the Pledgor is hereby
incorporated by reference as part of this agreement, except that in the
event of conflict the express terms of this agreement shall prevail
over any contrary terms in the customer agreement.

2. The Pledgor agrees to pledge the securities hereinafter mentioned to
the Pledgee as security for the repayment of the aforementioned loan.

3. The Pledgor (herewith delivers) (has already delivered) to the Pledgee
(c) ___________________ shares of stock of (d) ___________________ (the
Issuer") duly endorsed or with (an) executed stock power(s) attached
(the "Securities"). In the event the Securities are currently in the
name of the Pledgor, the Pledgor does hereby appoint the Pledgee his
true and lawful attorney for him and in his name, place and stead to
cause the Securities to be transferred on the books of the said issuer
to the name of the Pledgee.

4. The Pledgor acknowledges and understands that the minimum margin
maintenance imposed by the Pledgee in accordance with the applicable
rules of the New York Stock Exchange for the Securities pledged
pursuant to paragraph 2 is forty percent (40%) and that the Pledgee may
impose higher margin maintenance requirements as the result of the
Pledgee's internal policy or the rules of the New York Stock Exchange
on concentrated positions or for other reasons.

5. The Pledgor represents that he obtained the Securities pledged herein
on (e) _____________________ by (indicate when the securities were
acquired, the nature of acquisition and from whom acquired, for
example: on the open market, by exercise of stock option, in a private
transaction from the company, etc.).

6. The Pledgor represents that he fully paid for the Securities pledged
herein on (f) ________________.

7. The Pledgor represents that the combined holdings of he, his spouse, or
any relatives of either living in the Pledgor's household or any trust,
estate, corporation or any other organization in which he or any of the
persons referred to above own ten or more percent, or as to which he or
any such person serves as a trustee, executor, member of the board of
directors or in any similar capacity, totals (g) ______________ shares
of the issuer. In the event the Pledgor is not depositing the total
amount of shares as set forth above the Pledge, Pledgor hereby
represents that said shares are: (indicated the physical location of
said shares in the space provided below, and if any of said shares are
being used as collateral or are otherwise encumbered, please describe
such encumbrance below.) (h)
-------------------------------------------

-----------------------------------------------------------------------

8. The Pledgor further represents that he will not pledge or otherwise
encumber any shares of the Issuer which are not deposited with the
Pledgee without the express prior written consent of the Pledgee during
the term of this pledge.

<PAGE> 2
9. The Pledgor represents that he (has not sold) (has sold (i) __________)
(cross out inapplicable language) shares of the Issuer during the
preceding three months and that to the best of his knowledge the
persons referred to in paragraph 7 above, or anyone deemed to be acting
in concert with him (has not sold) (has sold (j) _______________ (cross
out inapplicable language) shares of the Issuer in the past three
months.

10. The Pledgor represents that neither he nor any of the persons referred
to in paragraph 7 and 9 above will sell, transfer or otherwise dispose
of any shares of the issuer without giving prior written notice to the
Pledgee and that he and/or such persons will give immediate written
notice to the Pledgee in the event that any additional shares of the
issuer are acquired during the term of the pledge.

11. The Pledgor warrants that he is familiar with Rules 144 and 145
promulgated under the Securities Act of 1933.

12. The Pledgor represents that the information furnished above is correct
and understands that the Pledgee is relying upon it in making the
aforementioned loan. The Pledgor further represents that he will
immediately notify the Pledgee in writing of any changes in any of the
information provided herein. In addition, the Pledgor represents that
he will sign an updated Pledge Agreement at the request of the Pledgee,
even though the information provided herein has not changed, in order
to satisfy any routine request, of any entity regulating the Pledgee,
that such updated Pledge Agreement be so executed.

13. The Pledgor hereby indemnifies the Pledgee for any loss it may incur as
a result of making the aforementioned loan.

X
----------------------------------------
Signature of Pledgor

----------------------------------------
Printed Name of Pledgor

----------------------------------------
Account Number of Pledgor

----------------------------------------
Date

<PAGE> 1
EXHIBIT 7.12

ARTICLES OF INCORPORATION
OF
MARION AND CADELL S. LIEDTKE
FAMILY CHARITABLE FOUNDATION

The undersigned natural person over the age of 18, acting as incorporator,
adopts the following Articles of Incorporation of MARION AND CADELL S. LIEDTKE
FAMILY CHARITABLE FOUNDATION:

ARTICLE I
NAME

The name of the Corporation is MARION AND CADELL S. LIEDTKE FAMILY
CHARITABLE FOUNDATION.

ARTICLE II
NONPROFIT CORPORATION

The Corporation is a nonprofit corporation. When it dissolves, all of
its assets will be distributed to the State of Texas or an organization exempt
from taxes under Internal Revenue Code Section 501(c)(3) for one or more
purposes exempt under the Texas franchise tax.

ARTICLE III
DURATION

The Corporation will continue in perpetuity.

ARTICLE IV
PURPOSES

The purposes for organizing the Corporation are to receive and
administer funds which shall be used exclusively for the performance of
charitable activities within the meaning of Internal Revenue Code Section
501(c)(3) and Texas Tax Code Section 11.18(c). Specifically, the Corporation is
organized to engage directly in the support of charitable, religious, literary,
scientific, and educational purposes and to support other qualifying
organizations or entities engaged in charitable, religious, literary,
scientific, or educational purposes, all in compliance with the Corporation's
tax exempt status, the Internal Revenue Code and Texas law.

ARTICLE V
POWERS

Except as these Articles otherwise provide, the Corporation has all the
powers provided in the Texas Non-Profit Corporation Act. Moreover, the
Corporation has all implied powers

<PAGE> 2

necessary and proper to carry out its express powers. The Corporation may
reasonably compensate directors or officers for services rendered to or for the
Corporation in furtherance of one or more of its purposes.

ARTICLE VI
RESTRICTIONS AND REQUIREMENTS

The Corporation may not take any action that would be inconsistent with
the requirements for a tax exemption under Internal Revenue Code Section
501(c)(3) and related regulations, rulings, and procedures. Nor may it take any
action that would be inconsistent with the requirements for receiving
tax-deductible charitable contributions under Internal Revenue Code Section
170(c)(2) and related regulations, rulings, and procedures. Regardless of any
other provision in these Articles of Incorporation or state law, the Corporation
may not:

1. Engage in activities or use its assets in manners that do not
further one or more exempt purposes, as set forth in these Articles and
defined by the Internal Revenue Code and related regulations, rulings,
and procedures, except to an insubstantial degree.

2. Serve a private interest other than one clearly incidental to an
overriding public interest.

3. Devote more than an insubstantial part of its activities to
attempting to influence legislation by propaganda or otherwise, except
as provided by the Internal Revenue Code and related regulations,
rulings, and procedures.

4. Participate in or intervene in any political campaign on behalf
of or in opposition to any candidate for public office. The prohibited
activities include publishing or distributing statements and any other
direct or indirect campaign activities.

5. Have objectives characterizing it as an "action organization" as
defined by the Internal Revenue Code and related regulations, rulings,
and procedures.

6. Distribute its assets on dissolution other than for one or more
exempt purposes. On dissolution, the Corporation's assets will be
distributed to the state government for a public purpose, or to an
organization exempt from taxes under Internal Revenue Code Section
501(c)(3) to be used to accomplish the general purposes for which the
Corporation was organized.

7. Permit any part of the Corporation's net earnings to inure to the
benefit of any director or any private individual.

8. Carry on an unrelated trade or business, except as a secondary
purpose related to the Corporation's primary, exempt purposes.

<PAGE> 3

In addition, the Corporation shall make distributions at such times and
in such manners as to avoid the tax under Internal Revenue Code Section 4942.
Also, the Corporation may not:

1. Engage in any act of self-dealing as defined in Internal Revenue
Code Section 4941(d).

2. Retain excess business holdings as defined in Internal Revenue
Code Section 4943(c).

3. Make any investments that would subject it to the tax described
in Internal Revenue Code Section 4944.

4. Make any taxable expenditures as defined in Internal Revenue Code
Section 4945(e).

ARTICLE VII
MEMBERSHIP

The Corporation will have no members.

ARTICLE VIII
INITIAL REGISTERED OFFICE AND AGENT

The street address of the Corporation's initial registered office is
900 North "F" Street, Midland, Texas 79701. The name of the initial registered
agent at this office is Cadell S. Liedtke.

ARTICLE IX
MANAGING BODY OF CORPORATION

The management of the corporation is vested in its Board of Directors
and such committees of the board that the board may, from time-to-time,
establish. The bylaws will provide the qualifications, manner of selection,
duties, terms, and other matters relating to the Board of Directors.

The initial Board will consist of three (3) persons. The initial Board
will consist of the following persons at the following addresses:

NAME ADDRESS
---- -------

Cadell S. Liedtke 900 North "F" Street
Midland, Texas 79701

<PAGE> 4

Marion Liedtke 900 North "F" Street
Midland, Texas 79701

Leslie J. Liedtke 900 North "F" Street
Midland, Texas 79701

The number of directors may be increased or decreased by amending the
bylaws. The number of directors may not be decreased to fewer than three.

ARTICLE X
LIMITATION ON LIABILITY OF DIRECTORS

A director is not liable to the Corporation for monetary damages for an
act or omission in the director's capacity as director except as otherwise
provided by Texas law.

ARTICLE XI
INDEMNIFICATION

The Corporation may indemnify a person who was, is, or is threatened to
be made a named defendant or respondent in litigation or other proceedings
because the person is or was a director or other person related to the
Corporation as provided by the provisions of the Texas Non-Profit Corporation
Act governing indemnification.

As the bylaws provide, the Board of Directors may define the
requirements and limitations for the Corporation to indemnify directors,
officers, or others related to the Corporation.

ARTICLE XII
CONSTRUCTION

All references in these Articles to statutes, regulations, or other
sources of legal authority refer to the authorities cited, or their successors,
as they may be amended from time to time.

ARTICLE XIII
ACTION BY WRITTEN CONSENT

Action may be taken by use of signed written consents by the number of
directors whose vote would be necessary to take action at a meeting at which all
such persons entitled to vote were present and voted. Each written consent must
bear the date of signature of each person signing it. A consent signed by fewer
than all of the directors is not effective to take the intended action unless
consents, signed by the required number of persons, are delivered to the
Corporation within 60 days after the date of the earliest-dated consent
delivered to the Corporation. Delivery must be made by hand, or by certified or
registered mail, return receipt requested. The delivery may be made to the
Corporation's registered office, registered agent, or an officer or agent having

<PAGE> 5

custody of books in which the relevant proceedings are recorded. If delivery is
made to the Corporation's principal place of business, the consent must be
addressed to the president or principal executive officer.

The Corporation will give prompt notice of the action taken to persons
who do not sign consents. If the action requires documents to be filed with the
Secretary of State of Texas, the filed documents will state that the
written-consent procedures have been properly followed. A telegram, telex,
cablegram, or similar transmission by a member, director, or committee member,
or photographic, facsimile, or similar reproduction of a signed writing shall be
regarded as being signed by the director.

ARTICLE XVI
INCORPORATORS

The name and street address of the incorporator is Stephen C. Byrd, 500
W. Illinois, Suite 300, Midland, Texas 79701.

I execute these Articles of Incorporation on May 22, 1997.

/s/ Stephen C. Byrd
--------------------------------------
Stephen C. Byrd

<PAGE> 6

ARTICLES OF INCORPORATION
OF
GRELLA FAMILY CHARITABLE FOUNDATION

The undersigned natural person over the age of 18, acting as incorporator,
adopts the following Articles of Incorporation of GRELLA FAMILY CHARITABLE
FOUNDATION:

ARTICLE I
NAME

The name of the Corporation is GRELLA FAMILY CHARITABLE FOUNDATION.

ARTICLE II
NONPROFIT CORPORATION

ARTICLE III
DURATION

The Corporation will continue in perpetuity.

ARTICLE IV
PURPOSES

ARTICLE V
POWERS

Except as these Articles otherwise provide, the Corporation has all the
powers provided in the Texas Non-Profit Corporation Act. Moreover, the
Corporation has all implied powers necessary and proper to carry out its express
powers. The Corporation may reasonably compensate directors or officers for
services rendered to or for the Corporation in furtherance of one or more of its
purposes.

<PAGE> 7

ARTICLE VI
RESTRICTIONS AND REQUIREMENTS

2. Serve a private interest other than one clearly incidental to an
overriding public interest.

5. Have objectives characterizing it as an "action organization" as
defined by the Internal Revenue Code and related regulations, rulings,
and procedures.

7. Permit any part of the Corporation's net earnings to inure to the
benefit of any director or any private individual.

8. Carry on an unrelated trade or business, except as a secondary
purpose related to the Corporation's primary, exempt purposes.

In addition, the Corporation shall make distributions at such times and
in such manners as to avoid the tax under Internal Revenue Code Section 4942.
Also, the Corporation may not:

<PAGE> 8

1. Engage in any act of self-dealing as defined in Internal Revenue
Code Section 4941(d).

2. Retain excess business holdings as defined in Internal Revenue
Code Section 4943(c).

3. Make any investments that would subject it to the tax described
in Internal Revenue Code Section 4944.

4. Make any taxable expenditures as defined in Internal Revenue Code
Section 4945(e).

ARTICLE VII
MEMBERSHIP

The Corporation will have no members.

ARTICLE VIII
INITIAL REGISTERED OFFICE AND AGENT

The street address of the Corporation's initial registered office is
400 W. Illinois, Suite 1000, Midland, Texas 79701. The name of the initial
registered agent at this office is Michael J. Grella.

ARTICLE IX
MANAGING BODY OF CORPORATION

The initial Board will consist of three (3) persons. The initial Board
will consist of the following persons at the following addresses:

NAME ADDRESS
---- -------

Michael J. Grella 400 W. Illinois, Suite 1000
Midland, Texas 79701

<PAGE> 9

Katherine A. Grella 400 W. Illinois, Suite 1000
Midland, Texas 79701

John S. Grella 400 W. Illinois, Suite 1000
Midland, Texas 79701

The number of directors may be increased or decreased by amending the
bylaws. The number of directors may not be decreased to fewer than three.

ARTICLE X
LIMITATION ON LIABILITY OF DIRECTORS

A director is not liable to the Corporation for monetary damages for an
act or omission in the director's capacity as director except as otherwise
provided by Texas law.

ARTICLE XI
INDEMNIFICATION

As the bylaws provide, the Board of Directors may define the
requirements and limitations for the Corporation to indemnify directors,
officers, or others related to the Corporation.

ARTICLE XII
CONSTRUCTION

All references in these Articles to statutes, regulations, or other
sources of legal authority refer to the authorities cited, or their successors,
as they may be amended from time to time.

ARTICLE XIII
ACTION BY WRITTEN CONSENT

<PAGE> 10

ARTICLE XVI
INCORPORATORS

The name and street address of the incorporator is Stephen C. Byrd, 500
W. Illinois, Suite 300, Midland, Texas 79701.

I execute these Articles of Incorporation on May 22, 1997.

/s/ Stephen C. Byrd
--------------------------------------
Stephen C. Byrd

<PAGE> 11

ARTICLES OF INCORPORATION
OF
MUSSELMAN FAMILY CHARITABLE FOUNDATION

The undersigned natural person over the age of 18, acting as incorporator,
adopts the following Articles of Incorporation of MUSSELMAN FAMILY CHARITABLE
FOUNDATION:

ARTICLE I
NAME

The name of the Corporation is MUSSELMAN FAMILY CHARITABLE FOUNDATION.

ARTICLE II
NONPROFIT CORPORATION

ARTICLE III
DURATION

The Corporation will continue in perpetuity.

ARTICLE IV
PURPOSES

ARTICLE V
POWERS

<PAGE> 12

ARTICLE VI
RESTRICTIONS AND REQUIREMENTS

2. Serve a private interest other than one clearly incidental to an
overriding public interest.

5. Have objectives characterizing it as an "action organization" as
defined by the Internal Revenue Code and related regulations, rulings,
and procedures.

7. Permit any part of the Corporation's net earnings to inure to the
benefit of any director or any private individual.

8. Carry on an unrelated trade or business, except as a secondary
purpose related to the Corporation's primary, exempt purposes.

In addition, the Corporation shall make distributions at such times and
in such manners as to avoid the tax under Internal Revenue Code Section 4942.
Also, the Corporation may not:

<PAGE> 13

1. Engage in any act of self-dealing as defined in Internal Revenue
Code Section 4941(d).

2. Retain excess business holdings as defined in Internal Revenue
Code Section 4943(c).

3. Make any investments that would subject it to the tax described
in Internal Revenue Code Section 4944.

4. Make any taxable expenditures as defined in Internal Revenue Code
Section 4945(e).

ARTICLE VII
MEMBERSHIP

The Corporation will have no members.

ARTICLE VIII
INITIAL REGISTERED OFFICE AND AGENT

The street address of the Corporation's initial registered office is #3
Deerfield, Midland, Texas 79705. The name of the initial registered agent at
this office is Henry G. Musselman.

ARTICLE IX
MANAGING BODY OF CORPORATION

The initial Board will consist of three (3) persons. The initial Board
will consist of the following persons at the following addresses:

NAME ADDRESS
---- -------

Henry G. Musselman #3 Deerfield
Midland, Texas 79705

<PAGE> 14

Melinda M. Musselman #3 Deerfield
Midland, Texas 79705

Brian McLaughlin 2311 Seaboard
Midland, Texas 79705

The number of directors may be increased or decreased by amending the
bylaws. The number of directors may not be decreased to fewer than three.

ARTICLE X
LIMITATION ON LIABILITY OF DIRECTORS

A director is not liable to the Corporation for monetary damages for an
act or omission in the director's capacity as director except as otherwise
provided by Texas law.

ARTICLE XI
INDEMNIFICATION

As the bylaws provide, the Board of Directors may define the
requirements and limitations for the Corporation to indemnify directors,
officers, or others related to the Corporation.

ARTICLE XII
CONSTRUCTION

All references in these Articles to statutes, regulations, or other
sources of legal authority refer to the authorities cited, or their successors,
as they may be amended from time to time.

ARTICLE XIII
ACTION BY WRITTEN CONSENT

<PAGE> 15

ARTICLE XVI
INCORPORATORS

The name and street address of the incorporator is Stephen C. Byrd, 500
W. Illinois, Suite 300, Midland, Texas 79701.

I execute these Articles of Incorporation on May 22, 1997.

/s/ Stephen C. Byrd
--------------------------------------
Stephen C. Byrd