<PAGE>

                                                                     EXHIBIT 3.1


                            ARTICLES OF INCORPORATION
                                       OF
                       FIRST COMMUNITY CAPITAL CORPORATION

     The undersigned, a natural person of the age of eighteen years or more,
acting as sole incorporator of a corporation under the provisions of the Texas
Business Corporation Act, adopts the following Articles of Incorporation:

                                   ARTICLE 1.

     The name of the Corporation is First Community Capital Corporation.

                                   ARTICLE 2.

     The period of duration of the Corporation is perpetual.

                                   ARTICLE 3.

     The purpose for which the Corporation is organized is the transaction of
any or all lawful business.

                                   ARTICLE 4.

     Section 4.1 Authorized Shares. The aggregate number of shares which the
Corporation shall have authority to issue is 5,000,000 shares of common stock of
the par value of One Cent ($0.01) each.

     Section 4.2 Denial of Preemptive Rights. No shareholder or other person
shall have any preemptive right whatsoever to acquire additional, unissued or
treasury shares of the Corporation, or securities of the Corporation convertible
into or carrying a right to subscribe to or acquire shares, or any other
securities or property whatsoever.

     Section 4.3    Cumulative Voting.

     (1) At each election of directors, every shareholder entitled to vote at
such election has the right:

          a.  To vote the number of voting shares owned by him for as many
     persons as there are directors to be elected (and for whose election he has
     a right to vote); or

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          b. to cumulate his votes by giving one (1) candidate as many votes as
     the number of such directors multiplied by the number of his shares shall
     equal, or by distributing such votes on the same principle among any number
     of such candidates.

     (2) A shareholder who intends to cumulate his votes shall give written
notice of such intention to the secretary of the Corporation on or before the
day preceding the election at which such shareholder intends to cumulate his
votes.

     (3) All shareholders entitled to vote cumulatively may cumulate their votes
if any shareholder gives such notice.

                                   ARTICLE 5.

     The Corporation will not commence business until it has received for the
issuance of its shares consideration of the value of at least $1,000.

                                   ARTICLE 6.

     Without necessity for action by its shareholders, the Corporation may
purchase, directly or indirectly, its own shares to the extent of the aggregate
of unrestricted capital surplus available therefor and unrestricted reduction
surplus available therefor.

                                   ARTICLE 7.

     Section 7.1. Voting Requirement. Except to the extent otherwise required by
law, the vote or concurrence of the holders of a majority of the shares of the
Corporation entitled to vote and represented in person or by proxy at a meeting
of the shareholders at which a quorum is present shall be the act of the
shareholders.

     Section 7.2.   Quorum Requirement.  The holders of at least a majority of
the shares of the Corporation entitled to vote, represented in person or by
proxy, shall constitute a quorum at any meeting of shareholders of the
Corporation.

     Section 7.3. Interested Transactions. An otherwise valid contract or other
transaction between the Corporation and one or more of its directors, officers
or securityholders or between the Corporation and another corporation,
partnership, joint venture, trust or other entity of which one or more of the
Corporation's directors, officers or securityholders are members, officers,
securityholders, directors or employees or in which they are otherwise
interested, directly or indirectly, shall be valid notwithstanding whether such
director, officer or securityholder is present at or participates in the meeting
of the Board of Directors or committee thereof which authorizes the


                                       2

<PAGE>



contract or other transaction, or solely because his or their votes are counted
for such purpose, if any one of the following is satisfied: (A) the material
facts as to his relationship or interest and as to the contract or other
transaction are known or disclosed to the Board of Directors or committee
thereof, and such board or committee in good faith authorizes the contract or
other transaction by the affirmative vote of a majority of the disinterested
directors even though the disinterested directors be less than a quorum; or (B)
the material facts as to his relationship or interest and as to the contract or
other transaction are known or disclosed to the shareholders entitled to vote
thereon, and the contract or other transaction is approved in good faith by vote
of the shareholders; or (C) the contract or other transaction is fair as to the
Corporation as of the time it is authorized, approved or ratified by the Board
of Directors, a committee thereof or the shareholders.


                                   ARTICLE 8.

     Section 8.1. Indemnification. As provided by Article 2.02-1 of the Texas
Business Corporation Act, the Corporation, by action of its Board of Directors,
(A) may indemnify any director, officer, employee or agent of the Corporation,
and nominees and designees who are not or were not officers, employees, or
agents of the Corporation but who are or were serving at the request of the
Corporation as a director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another enterprise or employee benefit
plan as and to the fullest extent permitted by law and (B) shall indemnify such
persons as and to the extent required by law.

     Expenses incurred by any person who may be indemnified by the Corporation
under the preceding paragraph in defending any pending, threatened or completed
action, suit or proceeding, whether civil, criminal, administrative, arbitrative
or investigative, any appeal in such action, suit or proceeding and any inquiry
or investigation that could lead to such an action, suit or proceeding, may be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding as authorized by the Board of Directors in the specific case, in
the manner and to the extent permitted by law.

     Section 8.2. Insurance. The Corporation may purchase and maintain insurance
or another arrangement on behalf of any person who is or was a director,
officer, employee, or agent of the Corporation, or who is or was serving at the
request of the Corporation as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship, trust,
employee benefit plan, or other enterprise, against any liability asserted
against him and incurred by him in such a capacity or arising out of his status
as such a person, whether or not the Corporation would have the power to
indemnify him against that liability under the Indemnification Article.

     Section 8.3. Non-Exclusivity. The provisions of Sections 8.1 and 8.2 of
this Article 8 shall not be deemed exclusive of any other rights to which any
such director, officer or other person may



                                       3

<PAGE>



be entitled under any other agreement, pursuant to a vote of directors or any
committee thereof or a vote of shareholders, as a matter of law or otherwise,
either as to action in his official capacity or as to action in another capacity
while holding such office, and shall continue as to a person who has ceased to
be a director or officer and shall inure to the benefit of the heirs, executors
and administrators of such a person. No person shall be entitled to
indemnification pursuant to this Article 8 in relation to any matter as to which
indemnification shall not be permitted by law.

                                   ARTICLE 9.

     In performing his duties, a director of the Corporation shall be entitled
to rely on information, opinions, reports or statements, including financial
statements and other financial data, in each case prepared or presented by (A)
one or more officers or employees of the Corporation whom the director
reasonably believes to be reliable and competent in the matters presented, (B)
counsel, public accountants or other persons as to matters which the director
reasonably believes to be within such person's professional or expert
competence, or (C) a committee of the Board of Directors upon which he does not
serve, duly designated in accordance with a provision of the by-laws, as to
matters within its designated authority, which committee the director deems to
merit confidence, but he shall not be considered to be acting in good faith if
he has knowledge concerning the matter in question that would cause such
reliance to be unwarranted. A person who so performs his duties shall have no

liability to the Corporation (whether asserted directly or derivatively) by
reason of being or having been a director of the Corporation.

     No director of the Corporation shall be liable to the Corporation or its
stockholders for monetary damages for an act or omission in the director's
capacity as a director, except to the extent that the foregoing exemption from
liability is not permitted under the applicable provision of the Texas
Miscellaneous Corporation Laws Act (or any successor or replacement statute) as
the same now exists or may hereafter be amended. Any repeal or modification of
the foregoing sentence shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or modification.

                                   ARTICLE 10.

     The address of the initial registered office of the Corporation is 14200
Gulf Freeway, Houston, Texas 77034, and the name of the initial registered agent
of the Corporation at such address is Nigel J. Harrison.



                                       4

<PAGE>


                                   ARTICLE 11.

     The initial Board of Directors shall consist of one (1) member who shall
serve as director until the first annual meeting of shareholders or until his
successor(s) shall have been elected and qualified, and whose name and address
is as follows:

          Name                           Address
          ----                           -------
          Nigel J. Harrison              14200 Gulf Freeway
                                         Houston, Texas  77034

                                   ARTICLE 12.

     The name and address of the incorporator of the Corporation is as follows:

          Name                           Address
          ----                           -------
          Waverly Vest                   711 Louisiana, Suite 2900
                                         Houston, Texas  77002


     IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of January,
2001.

                                      /s/ Waverly Vest
                                  --------------------
                                       Waverly Vest

Sworn to on January 11, 2001, by the above named incorporator.

                                  /s/ Gwendolyn L. Gates
                                ------------------------
                                Notary Public in and for the State of Texas


[SEAL]                        Print Name:  Gwendolyn L. Gates
                                         --------------------
                              My Commission Expires:  October 3, 2004
                                                    -----------------

                                       5

<PAGE>



                       AMENDMENT TO ARTICLE 4, SECTION 4.1

     Section 4.1  Authorized Shares.  The aggregate number of shares of stock of
all classes which the Corporation shall have authority to issue is seven million
(7,000,000) shares, of which two million (2,000,000) shall be shares designated
preferred stock of the par value of $0.01 each (hereinafter sometimes called
"Preferred Stock") and five million (5,000,000) shall be shares designated
common stock of the par value of $0.01 each (hereinafter sometimes called
"Common Stock").  The preferences, limitations and relative rights in respect of
the shares of each class of stock are as follows:

     (1) Preferred Stock.  The board of directors of the Corporation shall have
the authority to establish series of unissued shares of Preferred Stock by
fixing and determining the designations, preferences, limitations and relative
rights, including voting rights, of any series of Preferred Stock so
established.

     (2) Common Stock.  Subject to the prior and superior rights of the
Preferred Stock, if any, such dividends (payable in cash, stock or otherwise) as
may be determined by the board of directors of the Corporation may be declared
and paid on the Common Stock from time to time out of any funds legally
available therefor.  The holders of the Common Stock, together with the holders
of any series of Preferred Stock so empowered, shall possess voting power for
the election of directors and for all other purposes, subject to such
limitations as may be imposed by law, by any provision of these Articles of
Incorporation, or by the terms of any series of Preferred Stock.  In the
exercise of its voting power, the Common Stock shall be entitled to one vote for
each share held.  Subject to the full satisfaction of the prior and superior
rights of the Preferred Stock, if any, in the event of any liquidation,
dissolution, or winding up of the affairs of the Corporation, the remaining
assets and funds of the Corporation shall be distributed among the holders of
the Common Stock according to their respective shares.

                      AMENDMENT TO ARTICLE 4, SECTION 4.3

     Section 4.3  Cumulative Voting.  Cumulative Voting shall not be permitted.

                                        6

<PAGE>

                             AMENDMENT TO ARTICLE 8

     Section 8.1. Indemnification. As permitted by Section G of Article 2.02-1
of the Texas Business Corporation Act or any successor statute (the
"Indemnification Article"), the Corporation hereby:

     (A) makes mandatory the indemnification permitted under Section B of the
Indemnification Article as contemplated by Section G thereof;

     (B) makes mandatory its payment or reimbursement of the reasonable expenses
incurred by a former or present director who was, is, or is threatened to be
made a named defendant or respondent in a proceeding upon such director's
compliance with the requirements of Section K of the Indemnification Article;
and

     (C) extends the mandatory indemnification referred to in Section 8.1(a)
above and the mandatory payment or reimbursement of expenses referred to in
Section 8.1(b) above (i) to all former or present officers of the Corporation
and (ii) to all persons who are or were serving at the request of the
Corporation as a director, officer, partner, trustee, employee, agent or similar
functionary of another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or other enterprise,
to the same extent that the Corporation is obligated to indemnify and pay or
reimburse expenses to directors.

     Section 8.2. Nonexclusivity. The indemnification provided by this Article
shall not be deemed exclusive of any other rights to which any such director,
officer or other person may be entitled under any bylaw, agreement,
authorization of shareholders or disinterested directors or otherwise, both as
to action in such person's official capacity and as to action in another
capacity while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee or agent and shall enure to the
benefit of such person's heirs and legal representatives.

     Section 8.3. Insurance. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee, or agent of the Corporation or who is or was serving at the request of
the Corporation as a director, officer, partner, venturer, proprietor, trustee,
employee, agent or similar functionary of another business, foreign, domestic or
non-profit corporation, partnership, joint venture, sole proprietorship, trust
or other enterprise or employee benefit plan, against any liability asserted
against such person and incurred by such person in such a capacity or arising
out of such person's status as such a person, whether or not the Corporation
would have the power to indemnify such person against that liability under the
provisions of this Article or the Texas Business Corporation Act.

     Section 8.4.  Witnesses.  Notwithstanding any other provision of this
Article, the Corporation shall pay or reimburse expenses incurred by any
director, officer, employee or agent in connection with such person's appearance
as a witness or other participation in a proceeding at a time when such person
is not a named defendant or respondent in such proceeding.

                                        7

<PAGE>

                            STATEMENT OF RESOLUTIONS
                          ESTABLISHING SERIES OF SHARES



TO THE SECRETARY OF STATE
OF THE STATE OF TEXAS:

         Pursuant to the provisions of Article 2.13 of the Texas Business
Corporation Act, the undersigned corporation submits the following statement for
the purpose of establishing and designating a series of shares and fixing and
determining the relative rights and preferences thereof:

         1. The name of the corporation is First Community Capital Corporation.

         2. The resolutions attached hereto as Exhibit A, establishing and
designating a series of shares and fixing and determining the relative rights
and preferences thereof, were duly adopted by the board of directors of the
corporation on May 10, 2002. Such resolutions were duly adopted by all necessary
action on the part of the corporation.


May 10, 2002                      First Community Capital Corporation



                                    By: /s/ Nigel J. Harrison
                                      -----------------------------------------
                                        Nigel J. Harrison
                                        President and Chief Executive Officer

                                        8

<PAGE>

       RESOLVED, that pursuant to the authority expressly granted to the
Corporation's Board of Directors by the Articles of Incorporation of the
Corporation, the directors hereby establish a series of the Corporation's
preferred stock, $0.01 par value per share, and hereby fix the designation, the
number of shares and the relative rights, preferences and limitations thereof as
follows:

       1.     Designation. The designation of the series of preferred stock
created by this resolution shall be 7.0% Series A Mandatory Convertible
Preferred Stock, $0.01 par value per share (hereinafter referred to as the
"Series A Preferred Stock"), and the initial number of shares constituting such
series shall be up to a maximum of 385,000. Such number may be increased or
decreased (but not below the number of shares then outstanding) from time to
time by the Board of Directors. The Series A Preferred Stock shall rank senior
to the common stock of the Corporation, $0.01 par value (the "Common Stock"),
with respect to the payment of dividends and the distribution of assets.

       2.     Dividend Rights.

              (a) The holders of shares of Series A Preferred Stock shall be
       entitled to receive, when, as and if declared by the Board of Directors,
       out of funds legally available therefor, non-cumulative cash dividends,
       at an annual rate of 7.0% per share (calculated as a percentage of the
       $13.00 per share liquidation preference set forth in Section 3 hereof)
       and no more, payable in arrears in semi-annual installments. The Series A
       Preferred Stock shall not participate in dividends with the Common Stock.
       Dividends on the Series A Preferred Stock are non-cumulative. If, prior
       to the expiration of ten days following the end of any fiscal year of the
       Corporation, the Board of Directors of the Corporation fails to declare
       an unpaid dividend payable for any dividend period during such fiscal
       year in respect of the Series A Preferred Stock, then the right of
       holders of the Series A Preferred Stock to receive a dividend in respect
       of such dividend period will be extinguished, and the Corporation will
       have no obligation to pay the dividend accrued for such dividend period
       or to pay any interest thereon, whether or not dividends on the Series A
       Preferred Stock are declared for any future dividend period.

              (b) The Corporation shall not (i) declare, pay or set apart for
       payment any dividends or distributions on any stock ranking as to
       dividends junior to the Series A Preferred Stock (other than dividends
       paid in shares of such junior stock) or (ii) make any purchase or
       redemption of, or any sinking fund payment for the purchase or redemption
       of, any stock ranking as to dividends junior to the Series A Preferred
       Stock (other than a purchase or redemption made by issue or delivery of
       such junior stock) unless all dividends payable on all outstanding shares
       of Series A Preferred Stock for all completed semi-annual periods, that
       have not otherwise been extinguished, shall have been paid in full.

       3.     Liquidation Preference.

              (a) In the event of any liquidation, dissolution or winding up of
       the affairs of the Corporation, whether voluntary or involuntary, the
       holders of Series A Preferred Stock at that time shall be entitled to
       receive out of the assets of the Corporation available

                                        9

<PAGE>

       for distribution to shareholders an amount equal to $13.00 per share plus
       an amount equal to accrued and unpaid dividends thereon, calculated
       pursuant to Section 2 hereof, through and including the date of such
       distribution, and no more, before any distribution shall be made to the
       holders of any class of stock of the Corporation ranking junior to the
       Series A Preferred Stock as to the distribution of assets.

              (b) If the assets of the Corporation available for distribution to
       shareholders upon any liquidation, dissolution or winding up of the
       affairs of the Corporation, whether voluntary or involuntary, are
       insufficient to pay in full the amounts payable with respect to the
       Series A Preferred Stock, the holders of Series A Preferred Stock at that
       time shall share ratably in any distribution of assets of the Corporation
       in proportion to the full respective preferential amounts to which they
       are entitled.

              (c) The merger or consolidation of the Corporation into or with
       any other corporation, the merger or consolidation of any other
       corporation into or with the Corporation or the sale of the assts of the
       Corporation substantially as an entirety shall not be deemed a
       liquidation, dissolution or winding up of the affairs of the Corporation
       within the meaning of this paragraph.

       4.     Conversion Rights. The shares of Series A Preferred Stock are
convertible into shares of Common Stock on the following terms and conditions:

              (a) Each share of the Series A Preferred Stock will automatically
       convert into one (1) share of authorized but unissued Common Stock (the
       "Conversion Rate") upon the occurrence of any of the following: (i) any
       transaction, whether by merger, consolidation, asset sale, tender offer,
       reverse stock split, or otherwise, which results in the acquisition of
       beneficial ownership (as such term is defined under the rules and
       regulations promulgated under the Securities Exchange Act of 1934, as
       amended) by any person or entity, or any group of persons or entities
       acting in concert, of 50% or more of the outstanding shares of Common
       Stock of the Corporation; (ii) the sale of all or substantially all of
       the assets of the Corporation; (iii) the capital adequacy guidelines
       published by the Board of Governors of the United States Federal Reserve
       System are changed in any manner which results in the Series A Preferred
       Stock no longer qualifying as Tier 1 Capital under such guidelines; or
       (iv) the passage of five years from the date of issuance of such shares
       of Series A Preferred Stock.

              (b) Each share of Series A Preferred Stock may be converted into
       shares of authorized but unissued Common Stock at the Conversion Rate at
       the option of the holder if the Corporation gives notice of a redemption,
       provided that the holder must surrender the certificates in accordance
       with Section 4(c) prior to the date fixed for redemption.

              (c) Promptly upon the occurrence of any of the events set forth in
       Sections 4(a) or 4(b) above and the surrender of the certificate or
       certificates representing the share or shares of Series A Preferred Stock
       to be converted, the Corporation shall cause to be issued and delivered
       to said holder, registered in such name or names as such holder may
       direct, a certificate or certificates for the number of shares of Common
       Stock issuable upon the conversion of such share or shares. To the extent
       permitted by law, such

                                       10

<PAGE>

       conversion shall be deemed to have been effected as of the close of
       business on the date of conversion at which time the rights of the holder
       of such share or shares as such holder shall cease, and the person or
       persons in whose name or names any certificate or certificates for shares
       of Common Stock shall be issuable upon such conversion shall be deemed to
       have become the holder or holders of record of the shares of Common Stock
       represented thereby.

              (d)    No fractional shares of Common Stock shall be issued upon
       conversion of any shares of Series A Preferred Stock. The Corporation
       shall pay cash for any fractional shares which the Corporation otherwise
       would have been required to issue upon any conversion of such shares. The
       amount of such cash shall be determined in accordance with the market
       value of the Common Stock on the date of such conversion.

              (e)    The market value of the Common Stock shall be determined as
       follows:

                     (i)  If the Common Stock is listed on a national securities
              exchange or admitted to unlisted trading privileges on such
              exchange, or traded or listed for trading on the Nasdaq Stock
              Market, Inc. or other nationally recognized market, the market
              value shall be the last reported sale price of the Common Stock on
              such exchange, system or market on any applicable date (which, in
              the case of determining the market value of fractional shares
              issuable upon conversion, shall be the last business day prior to
              the date of conversion). If no such sale is made on such day, the
              market value shall be the average closing bid and asked prices for
              such day on such exchange, system or market.

                     (ii) If the Common Stock is not so listed, traded or
              admitted to unlisted trading privileges, the market value shall be
              the average closing bid and asked prices reported by the OTC
              Bulletin Board System of the Nasdaq Stock Market, Inc. or the
              National Quotation Bureau, Inc. on any applicable date (which, in
              the case of determining the market value of fractional shares
              issuable upon conversion, shall be the last business day prior to
              the date of conversion). If bid and asked prices are not so
              reported, the market value shall be an amount determined by the
              Corporation's independent certified public accountants or other
              nationally recognized independent certified public accountants or
              professional appraisal firm specified by the Corporation.

              (f)    The Conversion Rate in effect at any time shall be subject
       to adjustment as follows: The Conversion Rate shall be adjusted if the
       Corporation (A) declares or makes a distribution or dividend on its
       Common Stock in shares of its capital stock, (B) subdivides its
       outstanding shares of Common Stock into a greater number of shares, (C)
       combines its outstanding shares of Common Stock into a smaller number of
       shares or (D) issues by reclassification of its shares of Common Stock
       (including any reclassification in connection with a consolidation or
       merger in which the Corporation is the continuing corporation) any shares
       of Common Stock. The Conversion Rate in effect at the time of the record
       date for such dividend or distribution, or the effective date of any
       subdivision, combination or reclassification, shall be adjusted so that
       the holder of any shares of Series A Preferred Stock after such time
       shall be entitled to receive the number

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<PAGE>

         and kind of shares which it would have owned or have been entitled to
         receive if such shares had been converted immediately prior to such
         time. Similar adjustments shall be made successively whenever any event
         listed above shall occur.

               (g) The Corporation shall at all times reserve and keep available
         out of its authorized Common Stock, free from preemptive rights, such
         shares of Common Stock as shall be issuable upon conversion of the
         Series A Preferred Stock. All shares of Common Stock which shall be so
         issuable shall, when issued, be duly and validly issued shares of the
         Corporation's authorized Common Stock and shall be fully paid and
         nonassessable, free of all liens and charges and not subject to
         preemptive rights.

         5.    Voting Rights. Except as required by law or provided herein, the
holders of Series A Preferred Stock shall have no right or power to vote with
respect to any matter.

         6.    Reacquired Shares. Shares of Series A Preferred Stock converted,
redeemed, or otherwise purchased or acquired by the Corporation shall be
restored to the status of authorized but unissued shares of the Corporation's
preferred stock without designation as to series.

         7.    No Sinking Fund. Shares of a Series A Preferred Stock are not
subject to the operation of a sinking fund.

         8.    Tier 1 Capital. The Series A Preferred Stock shall at all times
constitute Tier 1 Capital of the Corporation within the meaning of all
regulations now in effect applicable to bank holding companies promulgated by
the Board of Governors of the Federal Reserve System and any other applicable
regulatory agency or authority. Accordingly, if any provision hereof would
result in the failure of the Series A Preferred Stock to constitute Tier 1
Capital within the meaning of any such regulations, such provision shall be void
and of no further force or effect.

         9.    Redemption.

               (a) All or any part of the Series A Preferred Stock may be
         redeemed at any time or times at the option of the Corporation, by
         resolution of the Board of Directors, in accordance with the terms and
         conditions of this section and after any required regulatory approvals.
         The Corporation may redeem shares of any one or more series without
         redeeming shares of any other series. If less than all the shares of
         any series are to be redeemed, the shares of the series to be redeemed
         shall be selected ratably or by lot or by any other equitable method
         determined by the Board of Directors.

               (b) The Corporation shall not be obligated to redeem any Series A
         Preferred Stock.

               (c) Notice shall be given to the holders of shares to be
         redeemed, either personally or by mail, not less than twenty nor more
         than sixty days before the date fixed for redemption.

               (d) Holders of redeemed shares of Series A Preferred Stock shall
         be paid in cash the amount equal to the liquidation preference provided
         herein and no more.

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<PAGE>

                           On or before the date fixed for redemption, the
         Corporation may provide for payment of a sum sufficient to redeem the
         shares called for redemption either (a) by setting aside the sum,
         separate from its other funds, in trust for the benefit of the holders
         of the shares to be redeemed, or (b) by depositing such sum in a bank
         or trust company (either one in Texas having capital and surplus of at
         least $10,000,000 according to its latest statement of condition, or
         one anywhere in the United States duly appointed and acting as transfer
         agent of the Corporation) as a trust fund, with irrevocable
         instructions and authority to the bank or trust company to give or
         complete the notice of redemption and to pay to the holders of the
         shares to be redeemed, on or after the date fixed for redemption, the
         redemption price on surrender of their respective share certificates.
         The holders of shares to be redeemed may be evidenced by a list
         certified by the Corporation (by its president or vice president and by
         its secretary or an assistant secretary) or by its transfer agent. If
         the Corporation so provides for payment, then from and after the date
         fixed for redemption (a) the shares shall be deemed to be redeemed, (b)
         such setting aside or deposit shall be deemed to constitute full
         payment for the shares, (c) the shares shall no longer be deemed to be
         outstanding, (d) the holders thereof shall cease to be shareholders
         with respect to such shares and (e) the holders shall have no right
         with respect thereto except for the right to receive (without interest)
         their proportionate shares of the funds so set aside or deposited upon
         surrender of their respective certificates, and any right to convert
         such shares which may exist. Any interest accrued on funds so set aside
         or deposited shall belong to the Corporation. If the holders of the
         shares do not, within six years after such deposit, claim any amount so
         deposited for redemption thereof, the bank or trust company shall upon
         demand pay over to the Corporation the balance of the funds so
         deposited, and the bank or trust company shall thereupon be relieved of
         all responsibility to such holders.

         10. Changes in Terms and Provisions of Series A Preferred Stock. The
terms and provisions of the Series A Preferred Stock may be altered, amended or
repealed only by the affirmative vote of the holders of at least a majority of
the then issued and outstanding shares of Series A Preferred Stock; provided,
however, that neither the rate of dividend, the liquidation preference nor the
redemption price may be reduced without the consent of all the holders of Series
A Preferred Stock.

                                       13