<PAGE>
 
                                                                     EXHIBIT 3.1

                      RESTATED ARTICLES OF INCORPORATION
                              (WITHOUT AMENDMENT)
                                      OF
                              ENSERCH CORPORATION

     1.  ENSERCH CORPORATION, pursuant to the provisions of Article 4.07 of
the Texas Business Corporation Act, hereby adopts Restated Articles of
Incorporation which accurately copy the Articles of Incorporation and all
Amendments thereto that are in effect to date and such Restated Articles of
Incorporation contain no change in any provision thereof.

     2. The Restated Articles of Incorporation were adopted by the Board of
Directors of the Corporation on the 12th day of May, 1987.

     3. The Articles of Incorporation and all Amendments and Supplements
thereto are hereby superseded by the following Restated Articles of
Incorporation which accurately copy the entire text thereof:

                                  ARTICLE ONE

     The name of the corporation is ENSERCH CORPORATION.

                                  ARTICLE TWO

     The purposes for which the corporation is organized are:

          (1)  To store, transport, buy and sell oil, gas, salt, brine and other
     mineral solutions and liquefied minerals; also sand and clay for the
     manufacture and sale of clay products; except that the corporation shall
     not engage directly in the oil pipeline business within the State of Texas;

          (2)  To engage in all phases of the gas public utility business,
     including but not limited to the purchase and sale, transportation and
     distribution of natural gas, butanes, propanes and the various component
     parts and constituents thereof;

          (3)  To explore for, produce, purchase and sell, store, process and
     manufacture, transport and distribute oil, gas and all other minerals
     except that the corporation shall not engage directly in the oil pipeline
     business within the State of Texas;

          (4) To engage in all phases of the business of developing, producing,
     purchasing, storing, transporting, distributing and selling all forms of
     energy, including but not limited to gas, electric and atomic energy;

          (5) To engage in all phases of the chemical business, including but
     not limited to the purchase and sale, production, manufacture,
     transportation and distribution of all kinds of chemicals and the raw
     materials from which they are derived;

          (6) To manufacture, produce, purchase or otherwise acquire, sell or
     dispose of, distribute, mortgage, pledge, lease, repair, install, operate,
     deal in and with, whether as principal or agent,
<PAGE>
 
     products, goods, appliances, wares, merchandise, fixtures, plants,
     structures, machinery, and materials of every kind and description, and to
     lend money for the carrying out of such purposes and to take and hold real
     and personal property for the payment of such funds so loaned;

          (7) To operate a gas, electric current and power corporation, which
     shall have power to generate, make and manufacture, transport and sell gas,
     electric current and power to individuals, the public and municipalities
     for light, heat, power and other purposes, and to make reasonable charges
     therefor; to construct, maintain and operate power plants and substations
     and such machinery, apparatus, pipes, poles, wires, devices and
     arrangements as may he necessary to operate said lines at and between
     different points in this state; to own, hold and use such lands, rights-of-
     way, easements, franchises, buildings and structures as may be necessary
     for the purpose of such corporation;

          (8) To own all or any part of the stock of other corporations
     including but not limited to one or more corporations engaged in the oil
     and gas producing business and one or more corporations engaged in the oil
     pipeline business;

          (9) To engage in all phases of practical and scientific research;

          (10) To do all and everything necessary, suitable, and proper for the
     accomplishment of any of the purposes or the attainment of any of the
     objects hereinabove set forth, either alone or in association with other
     corporations, firms or individuals, and to do every other act or acts,
     thing or things incidental or pertinent to or growing out of or connected
     with the aforesaid objects or purposes or any part or parts thereof,
     provided the same be not inconsistent with the laws under which this
     corporation is organized;

          (11) In connection with the doing of all and everything or of anything
     necessary, suitable or proper for the accomplishment of any of the purposes
     or the attainment of any of the objects hereinabove set forth, to exercise
     all or any and to exercise each of the powers granted to corporations by
     the Texas Business Corporation Act or by any other statutes or laws of the
     State of Texas.

                                 ARTICLE THREE

     The places where the business of the corporation is to be transacted
are: the City of Dallas in Dallas County, Texas, and elsewhere within or without
the State of Texas in accordance with the laws of said State; and its principal
place of business and domicile is to be in the city of Dallas, County of Dallas,
State of Texas. The post office address of the Company's initial registered
office is 300 South St. Paul Street, Dallas, Texas, and the name of the
Company's registered agent at such address is Michael G. Fortado.

                                 ARTICLE FOUR

                                       2
<PAGE>
 
     The period of its duration is perpetual.

                                 ARTICLE FIVE

     The number of Directors constituting the Board of Directors is nine,
subject to being increased or decreased as the by-laws of the corporation may
provide, but in no event shall there be less than three Directors; and the names
and residences of the existing Directors of the Company who are to serve until
the next regular Annual Meeting of the Stockholders or until their successors
are elected and qualify are:
<TABLE>
<CAPTION>
<S>                       <C>                            <C>               
W. C. McCord              300 South St. Paul Street      Dallas,
                                                         Texas

 
William B. Boyd           40 West 40th Street            New York,
                                                         New York
 
B. A. Bridgewater, Jr.    8400 Maryland Avenue           St. Louis,       
                                                         Missouri

T. C. Cochran, Jr.        40 Standish Boulevard          Pittsburgh,      
                                                         Pennsylvania

Preston M. Geren, Jr.     619 Overton Park Bank          Fort Worth,
                          4200 South Hulen               Texas
 
Edmond R. Haggar          6113 Lemmon Avenue             Dallas,
                                                         Texas
 
Edward J. Ledder          6342 Canterbury Lane           Mariner Sands,
                                                         Stuart, Florida
 
Lord Nelson               1 Stanhope Gate                London, England
of Stafford
 
W. Ray Wallace            2525 Stemmons Expressway       Dallas,
                                                         Texas
</TABLE>

                                  ARTICLE SIX

     The total number of shares of all classes of stock which the Company shall
have authority to issue is 104,000,000 of which 2,000,000 shares are of no par
value and are of a class designated Preferred Stock, 2,000,000 shares are of no
par value and of a class designated Voting Preference Stock and 100,000,000
shares of which are of the par value of $4.45 per share and are of a class
designated Common Stock. The preferences, limitations and relative rights of the
Preferred Stock, Voting Preference Stock and the Common Stock shall be as
follows:

                                  DIVISION A

                              THE PREFERRED STOCK

     1. The shares of Preferred Stock may be divided into and issued in series.
Each such series shall be so designated as to distinguish the

                                       3
<PAGE>
 
shares thereof from the shares of all other series and classes, and all shares
of the Preferred Stock shall be identical, except as to the following relative
rights and preferences, as to which there may be variations between different
series:

          a. The rate of dividend;

          b. The price at and the terms and conditions on which shares may be
     redeemed;

          c. The amount payable upon shares in the event of involuntary
     liquidation;

          d. The amount payable upon shares in the event of voluntary 
     liquidation;

          e. Sinking fund provisions for the redemption or purchase of shares;

          f. The terms and conditions on which shares may be converted, if the
     shares of any series are issued with the privilege of conversion;

          g. Voting rights.

     No change shall be made in any of the rights and preferences of any series
of Preferred Stock at the time outstanding in those respects in which the shares
thereof vary from the shares of other series of Preferred Stock at the time
outstanding without the affirmative vote at a meeting of the holders of shares
representing at least two-thirds of the votes entitled to be cast with respect
to the shares of such series of Preferred Stock outstanding on the record date
for such meeting in addition to such other vote, if any, as may be required for
such change under the applicable provisions of these articles or of the laws of
the State of Texas at the time applicable thereto.

     2. To the extent that series of Preferred Stock have not been established
and variations in the relative rights and preferences as between series have not
been fixed and determined in these articles, authority is vested in the Board of
Directors of the Company, by resolution or resolutions providing for the
issuance thereof, to divide the shares of Preferred Stock into and to establish
series of Preferred Stock, to fix and determine the relative rights and
preferences of the shares of any series so established, and to issue and sell
any and all of the authorized and unissued shares of Preferred Stock as shares
of any series thereof established by action of the Board of Directors pursuant
hereto.

     3. The following provisions shall apply to all shares of the Preferred
Stock irrespective of series:

          a. To the extent that the resolution or resolutions creating any
     series of Preferred Stock shall provide that any dividends shall be paid
     thereon, the holders of Preferred Stock of each series shall be entitled to
     receive on the dates and for the periods hereinafter set forth, dividends
     in cash, payable when and as declared by the

                                       4
<PAGE>
 
     Board of Directors, at such rates as shall be determined for the respective
     series, from the date upon which such shares shall have been originally
     issued. Such dividends, if any, shall be cumulative so that no dividend
     (other than a dividend payable in Common Stock of the Company) or other
     distribution shall be paid or declared or made on, and no amounts shall be
     applied to the purchase or redemption of, the Common Stock or any other
     class of stock ranking junior to the Preferred Stock as to dividends or
     assets unless (i) full cumulative dividends for all past dividend periods
     shall have been paid or declared and set apart for payment, and full
     cumulative dividends for the then current dividend period shall have been
     or simultaneously therewith shall be paid or declared, on outstanding
     Preferred Stock of all series entitled thereto at the rates determined for
     the respective series, and (ii) after giving effect to such payment of
     dividend, other distribution, purchase or redemption, the aggregate capital
     of the Company applicable to all capital stock outstanding ranking junior
     to the Preferred Stock as to dividends or assets plus the consolidated
     earned and capital surplus of the Company and its subsidiaries shall exceed
     the aggregate amount payable on involuntary dissolution, liquidation or
     winding up of the Company on all shares of the Preferred Stock and all
     stock ranking prior to or on a parity with the Preferred Stock as to
     dividends or assets to be outstanding after such payment of dividend, other
     distribution, purchase or redemption. Dividends shall not be paid or
     declared and set apart for payment on the Preferred Stock of any one series
     for any dividend period unless dividends have been or are contemporaneously
     paid or declared and set apart for the payment on the Preferred Stock of
     all series entitled thereto for all dividend periods terminating on the
     same or earlier date. The term "dividend period" shall mean any of the four
     calendar quarters in each year commencing respectively on the first day of
     February, May, August and November. The first day of each such calendar
     quarter shall be the dividend payment date for the regular quarterly
     dividend payable for the preceding dividend period of such series, except
     that the first dividend on shares of each series shall be payable on the
     quarterly dividend payment date next succeeding the expiration of 30 days
     after the date of initial issue of any shares of such series.

          b. In the event of any dissolution, liquidation or winding up of the
     Company, whether voluntarily or involuntarily, the holders of Preferred
     Stock of each series, without any preference of the shares of any series of
     Preferred Stock over the shares of any other series of Preferred Stock,
     shall be entitled to receive in cash out of the assets of the Company,
     whether capital, surplus, or other, before any distribution of the assets
     shall be made to the holders of Common Stock or of any other class of stock
     ranking junior to the Preferred Stock as to dividends or assets, the amount
     determined pursuant to paragraphs "1,c" and "1,d" of this Division A to be
     payable on the shares of such series in the event of voluntary or
     involuntary dissolution, liquidation or winding up, as the case may be,
     together in all cases with unpaid accumulated dividends, if any, to the
     date fixed for such payment. If the assets shall not be sufficient to pay
     in full the amounts so determined to be payable on all shares of the
     Preferred Stock in the event of such voluntary or involuntary dissolution,
     liquidation or winding up, as the case may be, then the

                                       5
<PAGE>
 
     assets available for payment shall be distributed ratably among the holders
     of the Preferred Stock of all series in accordance with the amounts so
     determined to be payable on the shares of each series in the event of
     voluntary or involuntary dissolution, liquidation or winding up, as the
     case may be, in proportion to the full preferential amounts to which they
     are respectively entitled. After payment to the holders of the Preferred
     Stock of the full preferential amounts hereinbefore provided for, the
     holders of Preferred Stock will have no other rights or claims to any of
     the remaining assets of the Company either upon distribution of such assets
     or upon dissolution, liquidation or winding up. The sale of all or
     substantially all the property of the Company to, or the merger or
     consolidation of the Company into or with, any other corporation, or the
     purchase or redemption by the Company of any shares of its Preferred Stock
     or its Common Stock or any other class of its stock shall not be deemed to
     be a distribution of assets or a dissolution, liquidation or winding up for
     the purposes of this paragraph.

          c. So long as full cumulative dividends on all outstanding shares of
     Preferred Stock for all dividend periods ending on or prior to the date
     fixed for redemption shall have been paid or declared and set apart for
     payment and subject to any applicable requirements of Texas law, the
     Company may, (i) at the option of the Board of Directors of the Company,
     redeem the whole or any part of any series of Preferred Stock determined by
     it to be redeemable pursuant to paragraph "1,b" of this Division A, or (ii)
     redeem the whole or any part of any series of Preferred Stock to meet any
     sinking fund requirement determined pursuant to paragraph "1,e" of this
     Division A, in each case on the terms and conditions and at the redemption
     price so determined for such series plus the amount of unpaid accumulated
     dividends, if any, to the date of such redemption. All such redemptions of
     Preferred Stock shall be effected in accordance with the Procedure for
     Redemptions as set forth in the Texas Business Corporation Act.

          d. So long as full cumulative dividends on all outstanding shares of
     Preferred Stock for all dividend periods ending on or prior to the date of
     purchase shall have been paid or declared and set apart for payment and
     subject to any applicable requirements of Texas law, the Company may
     purchase, directly or indirectly, shares of Preferred Stock of any series
     to the extent of the aggregate of unrestricted capital surplus available
     therefore and unrestricted reduction surplus available therefore.

          e. So long as any shares of the Preferred Stock are outstanding, the
     Company shall not, without the affirmative vote at a meeting of the holders
     of shares representing at least two-thirds of the votes entitled to be cast
     with respect to the shares of Preferred Stock outstanding on the record
     date for such meeting, adopt an amendment to these Articles if such
     amendment would (i) authorize or create, or increase the authorized amount
     of, any class of stock which is entitled to dividends or assets in priority
     to or on a parity with the Preferred Stock, (ii) increase the authorized
     number of shares of Preferred Stock, or (iii) change any of the rights or

                                       6
<PAGE>
 
     preferences of the then outstanding Preferred Stock or any series thereof.

          f. So long as any shares of the Preferred Stock shall be outstanding,
     the Company shall not, without the affirmative vote at a meeting of the
     holders of shares representing a majority of the votes entitled to be cast
     with respect to the shares of the Preferred Stock outstanding on the record
     date for such meeting, issue any additional shares, or reissue any
     reacquired shares, of Preferred Stock or of any other class of stock
     ranking prior to or on a parity with the outstanding shares of the
     Preferred Stock as to dividends or assets for any purpose other than to
     purchase or redeem an equal par or stated value on involuntary liquidation
     of Preferred Stock or of stock ranking prior to or on a parity with the
     Preferred Stock as to dividends or assets at the time outstanding, unless

              (i) the consolidated gross income of the Company and its
          subsidiaries as hereinafter in this paragraph "f" defined, for 12
          consecutive calendar months within a period of 15 calendar months
          immediately preceding the calendar month of such issuance is equal to
          at least 1 1/2 times the aggregate of the annual interest charges on
          indebtedness of the Company and its subsidiaries, as hereinafter in
          this paragraph "f" defined, (excluding interest charges on
          indebtedness to be retired by the application of the proceeds from the
          issuance of such shares) and the annual dividend requirements on all
          Preferred Stock (including dividend requirements on any class of stock
          ranking prior to or on a parity with the shares to be issued as to
          dividends or assets but excluding any dividend requirements on any
          stock to be retired by the application of the proceeds from the
          issuance of such shares), which will be outstanding immediately after
          the issuance of such shares; and

              (ii) the aggregate capital of the Company applicable to all
          capital stock outstanding ranking junior to the Preferred Stock as to
          dividends and assets, plus the consolidated earned and capital surplus
          of the Company and its subsidiaries, shall be at least equal to the
          aggregate amount payable upon involuntary dissolution, liquidation or
          winding up of the Company on all shares of the Preferred Stock, and
          all stock ranking prior to or on a parity with the Preferred Stock as
          to dividends or assets, to be outstanding immediately after the
          issuance of such shares of Preferred Stock or such stock ranking prior
          to or on a parity therewith and the application of the proceeds
          thereof.

     Whenever used in the paragraph "f", the following terms shall have the
following meanings:

          The term "consolidated gross income of the Company and its
     subsidiaries'' shall mean the consolidated net income of the Company and
     its subsidiaries, as hereinafter defined, plus the amounts deducted in the
     computation of such consolidated net income for interest charges on
     indebtedness of the Company and its subsidiaries and for dividends paid or
     accrued on the Preferred Stock of the

                                       7
<PAGE>
 
     Company and on any class of stock ranking prior to or on a parity with the
     Preferred Stock as to dividends or assets.

          The term "consolidated net income of the Company and its subsidiaries"
     shall mean the consolidated gross earnings of the Company and its
     subsidiaries from all sources less all proper deductions for operating
     expenses, taxes (including income, excess profits and other taxes based on
     or measured by income or undistributed earnings or income), interest
     charges and other appropriate items, including provision for maintenance,
     depreciation and depletion, and less all dividends paid or accrued on the
     Preferred Stock of the Company and all shares of stock, if any, ranking
     prior thereto or on a parity therewith as to dividends or assets, which are
     applicable to the period in question, and otherwise determined in
     accordance with generally accepted accounting principles.

          The term "indebtedness of the Company and its subsidiaries" shall mean
     all obligations of the Company and its subsidiaries, whether or not
     represented by bonds, debentures or notes, for the repayment of money
     borrowed by the Company and its subsidiaries, all deferred obligations of
     the Company and its subsidiaries for the payment of the purchase price of
     property or assets purchased by the Company and its subsidiaries and all
     such obligations assumed by the Company and its subsidiaries, but shall not
     include any customers' deposits or employees' deposit accounts or
     employees' pension or other accounts.

          g. Shares of any series of Preferred Stock which have been redeemed
     (whether through the operation of a sinking fund or otherwise) or purchased
     by the Company (whether or not used or to be used as a credit with respect
     to any sinking fund obligation), or which, if convertible or exchangeable,
     have been converted or exchanged for shares of stock of any other class or
     classes shall, upon the filing of any required certificate, have the status
     of authorized and unissued shares of Preferred Stock and may be
     reclassified and reissued as part of a new series of Preferred Stock to be
     created by resolution or resolutions of the Board of Directors or as a part
     of any other series of Preferred Stock, all subject to the conditions and
     restrictions on issuance set forth in paragraph "f" hereof and in the
     resolution or resolutions adopted by the Board of Directors providing for
     the issue of any series of Preferred Stock and to any filing required by
     law.

          h. Upon any issue for money or other consideration of any stock of the
     Company that may be authorized from time to time, or treasury stock, no
     holder of Preferred Stock shall have any preemptive or other right to
     subscribe for, purchase, or receive any proportionate or other share of the
     stock so issued, but the Board of Directors may dispose of all or any
     portion of such stock as and when it may determine, free of any such
     rights, whether by offering the same to shareholders or by sale or other
     disposition as said Board of Directors may deem advisable.

     4. Voting Powers.

                                       8
<PAGE>
 
          a. Except as otherwise provided by law, the holders of Preferred Stock
     shall not have any right to vote for the election of Directors or for any
     other purpose except as heretofore set forth in this Division A or as may
     be provided with respect to any series pursuant to paragraph "1,g" hereof
     or as set forth below. For the purpose of the following provisions, the
     Preferred Stock of all series shall be deemed to be a single class.

          Whenever and as often as the full amount of cumulative dividends
     payable on the Preferred Stock shall not have been paid, or declared and a
     sum sufficient for payment thereof set apart, for six quarterly dividend
     periods, the number of Directors of the Company shall be increased by two
     and the holders of the Preferred Stock shall have exclusive right, voting
     separately and as a single class, to vote for and elect such additional
     directors and the holders of the Common Stock shall have the exclusive
     rights, voting separately and as a class, to elect the remaining number of
     directors of the Company. The election of additional directors by holders
     of Preferred Stock shall be held at the next annual meeting of shareholders
     or may be held at a special meeting of shareholders, which shall be held
     upon notice as provided in the bylaws of the Company for a special meeting
     of the shareholders, at the request of the holders of shares representing
     not less than ten percent (10%o) of the votes entitled to be cast by the
     shares of the then outstanding Preferred Stock, addressed to the Secretary
     of the Company at the principal business office. Any vacancy in the Board
     of Directors occurring during any period when the Preferred Stock shall
     have elected representatives on the Board shall be filled by a majority
     vote of the remaining directors (or the one director) representing the
     class of stock theretofore represented by the director causing the vacancy.
     In the event of simultaneous vacancies among directors elected by the
     holders of the Preferred Stock an election, pursuant to the provisions of
     this paragraph, will bc held. The right of the holders of Preferred Stock
     to elect additional directors shall cease and the terms of any additional
     directors elected by the holders of the Preferred Stock voting as a
     separate class shall terminate forthwith whenever full cumulative dividends
     on the Preferred Stock shall have been paid, or declared and a sum
     sufficient for payment thereof set apart.

          b. At all meetings of the shareholders held for the purpose of
     electing directors during such times as the holders of Preferred Stock
     shall have the exclusive right to elect any directors of the Company, the
     presence in person or by proxy of the holders of a majority of the
     outstanding shares of Common Stock shall be required to constitute a quorum
     of such class for the election of directors, and the presence in person or
     by proxy of the holders of shares representing a majority of the votes
     entitled to be cast by the outstanding shares of Preferred Stock shall be
     required to constitute a quorum of such class for the election of
     directors; provided, however, that the absence of a quorum of the holders
     of stock of either class shall not prevent the election at any such
     meeting, or adjournment thereof, of directors by the other class if the
     necessary quorum of the holders of stock of such class is present in person
     or by proxy at such meeting; and provided, further, that in the absence

                                       9
<PAGE>
 
     of a quorum of the holders of stock of either class, a majority of those
     holders of such stock who are present in person or by proxy shall have the
     power to adjourn the election of those directors to be elected by that
     class from time to time without notice, other than announcement at the
     meeting, until the requisite amount of holders of stock of such class shall
     be present in person or by proxy.

          c. Holders of Preferred Stock shall not be entitled to receive notice
     of any meeting of shareholders at which they are not entitled to vote or
     consent.

                                  DIVISION B

                          THE VOTING PREFERENCE STOCK

     1. Voting Preference Stock shall rank junior to the Preferred Stock as to
dividends and assets. The shares of Voting Preference Stock may be divided into
and issued in series. Each such series shall be so designated as to distinguish
the shares thereof from the shares of all other series and classes, and all
shares of the Voting Preference Stock shall be identical, except as to the
following relative rights and preferences, as to which there may be variations
between different series:

          a.   The rate of dividend;

          b.   The price at and the terms and conditions on which shares may be
               redeemed;

          c.   The amount payable upon shares in the event of involuntary
               liquidation;

          d.   The amount payable upon shares in the event of voluntary
               liquidation;

          e.   Sinking fund provisions for the redemption or purchase of shares;

          f.   The terms and conditions on which shares may be converted, if the
               shares of any series are issued with the privilege of conversion;

          g.   Voting rights.

     No change shall be made in any of the rights and preferences of any series
of Voting Preference Stock at the time outstanding in those respects in which
the shares thereof vary from the shares of other series of Voting Preference
Stock at the time outstanding without the affirmative vote at a meeting of the
holders of shares representing at least two-thirds of the votes entitled to be
cast with respect to the shares of such series of Voting Preference Stock
outstanding on the record date for such meeting in addition to such other vote,
if any, as may be required for such change under the applicable provisions of
these articles or of the laws of the State of Texas at the time applicable
thereto.

                                       10
<PAGE>
 
     2. To the extent that series of Voting Preference Stock have not been
established and variations in the relative rights and preferences as between
series have not been fixed and determined in these articles, authority is vested
in the Board of Directors of the Company, by resolution or resolutions providing
for the issuance thereof, to divide the shares of Voting Preference Stock into
and to establish series of Voting Preference Stock, to fix and determine the
relative rights and preferences of the shares of any series so established, and
to issue and sell any and all of the authorized and unissued shares of Voting
Preference Stock as shares of any series thereof established by action of the
Board of Directors pursuant hereto.

     3. The following provisions shall apply to all shares of the Voting
Preference Stock irrespective of series:

          a.  To the extent that the resolution or resolutions creating any
     series of Voting Preference Stock shall provide that any dividends shall be
     paid thereon, and subject to the prior preference with respect to dividends
     upon Preferred Stock set forth in paragraph "3,a of Division A but in
     preference to the holders of any other class of shares ranking junior to
     the Voting Preference Stock, the holders of Voting Preference Stock of each
     series shall be entitled to receive on the dates and for the periods
     hereinafter set forth, dividends in cash, payable when and as declared by
     the Board of Directors, at such rates as shall be determined for the
     respective series, from the date upon which such shares shall have been
     originally issued. Such dividends, if any, shall be cumulative so that no
     dividend (other than a dividend payable in Common Stock of the Company) or
     other distribution shall be paid or declared or made on, and no amounts
     shall be applied to the purchase or redemption of, the Common Stock or any
     other class of stock ranking junior to the Voting Preference Stock as to
     dividends or assets unless (i) full cumulative dividends for all past
     dividend periods shall have been paid or declared and set apart for
     payment, and full cumulative dividends for the then current dividend period
     shall have been or simultaneously therewith shall be paid or declared, on
     outstanding Voting Preference Stock of all series entitled thereto at the
     rates determined for the respective series, and (ii) after giving effect to
     such payment of dividend, other distribution, purchase or redemption, the
     aggregate capital of the Company applicable to all capital stock
     outstanding ranking junior to the Voting Preference Stock as to dividends
     or assets plus the consolidated earned and capital surplus of the Company
     and its subsidiaries shall exceed the aggregate amount payable on
     involuntary dissolution, liquidation or winding up of the Company on all
     shares of the Voting Preference Stock and all stock ranking prior to or on
     a parity with the Voting Preference Stock as to dividends or assets to be
     outstanding after such payment of dividend, other distribution, purchase or
     redemption. Dividends shall not be paid or declared and set apart for
     payment on the Voting Preference Stock of any one series for any dividend
     period unless dividends have been or are contemporaneously paid or declared
     and set apart for the payment on the Voting Preference Stock of all series
     entitled thereto for all dividend periods terminating on the same or
     earlier date. The term "dividend period" shall mean any of the four
     calendar quarters in each year commencing respectively on the first

                                       11
<PAGE>
 
     day of February, May, August and November. The first day of each such
     calendar quarter shall be the dividend payment date for the regular
     quarterly dividend payable for the preceding dividend period of such
     series, except that the first dividend on shares of each series shall be
     payable on the quarterly dividend payment date next succeeding the
     expiration of 30 days after the date of initial issue of any shares of such
     series.

          b. In the event of any dissolution, liquidation or winding up of the
     Company, whether voluntarily or involuntarily, the holders of Voting
     Preference Stock of each series, without any preference of the shares of
     any series of Voting Preference Stock over the shares of any other series
     of Voting Preference Stock, but subject to the prior preference of the
     holders of Preferred Stock as set forth in paragraph "3,b" of Division A,
     shall be entitled to receive in cash out of the assets of the Company,
     whether capital, surplus, or other, before any distribution of the assets
     shall be made to the holders of Common Stock or of any other class of stock
     ranking junior to the Voting Preference Stock as to dividends or assets,
     the amount determined pursuant to paragraphs "1,c" and "1,d" of this
     Division B to be payable on the shares of such series in the event of
     voluntary or involuntary dissolution, liquidation or winding up, as the
     case may be, together in all cases with unpaid accumulated dividends, if
     any, to the date fixed for such payment. If the assets available for
     distribution to holders of shares of Voting Preference Stock shall not be
     sufficient to pay in full the amounts so determined to be payable on all
     shares of the Voting Preference Stock in the event of such voluntary or
     involuntary dissolution, liquidation or winding up, as the case may be,
     then the assets available for payment shall be distributed ratably among
     the holders of the Voting Preference Stock of all series in accordance with
     the amounts so determined to be payable on the shares of each series in the
     event of voluntary or involuntary dissolution, liquidation or winding up,
     as the case may be, in proportion to the full preferential amounts to which
     they are respectively entitled. After payment to the holders of the Voting
     Preference Stock of the full preferential amounts hereinbefore provided
     for, the holders of Voting Preference Stock will have no other rights or
     claims to any of the remaining assets of the Company either upon
     distribution of such assets or upon dissolution, liquidation or winding up.
     The sale of all or substantially all of the property of the Company to, or
     the merger or consolidation of the Company into or with, any other
     corporation, or the purchase or redemption by the Company of any shares of
     its Preferred Stock, or its Voting Preference Stock or its Common Stock or
     any other class of its stock shall not be deemed to be a distribution of
     assets or a dissolution, liquidation or winding up for the purposes of this
     paragraph.

          c. So long as full cumulative dividends on all outstanding shares of
     Voting Preference Stock for all dividend periods ending on or prior to the
     date fixed for redemption shall have been paid or declared and set apart
     for payment and subject to the provisions of paragraph "3,a" of Division A
     and further subject to any applicable requirements of Texas law, the
     Company may, (i) at the option of the Board of Directors of the Company,
     redeem the whole or any part of

                                       12
<PAGE>
 
     any series of Voting Preference Stock determined by it to be redeemable
     pursuant to paragraph "1,b" of this Division B, or (ii) redeem the whole or
     any part of any series of Voting Preference Stock to meet any sinking fund
     requirement determined pursuant to paragraph "1,e" of this Division B, in
     each case on the terms and conditions and at the redemption price so
     determined for such series plus the amount of unpaid accumulated dividends,
     if any, to the date of such redemption. All such redemptions of Voting
     Preference Stock shall be effected in accordance with the Procedure for
     Redemptions as set forth in the Texas Business Corporation Act.

          d. So long as full cumulative dividends on all outstanding shares of
     Voting Preference Stock for all dividend periods ending on or prior to the
     date of purchase shall have been paid or declared and set apart for payment
     and subject to the provisions of paragraph "3,a" of Division A and further
     subject to any applicable requirements of Texas law, the Company may
     purchase, directly or indirectly, shares of Voting Preference Stock of any
     series to the extent of the aggregate of unrestricted capital surplus
     available therefor and unrestricted reduction surplus available therefor.

          e. So long as any shares of the Voting Preference Stock are
     outstanding, the Company shall not, without the affirmative vote at a
     meeting of the holders of shares representing at least two-thirds of the
     votes entitled to be cast with respect to the shares of Voting Preference
     Stock outstanding on the record date for such meeting, adopt an amendment
     to these Articles if such amendment would (i) authorize or create, or
     increase the authorized amount of, any class of stock which is entitled to
     dividends or assets in priority to or on a parity with the Voting
     Preference Stock, (ii) increase the authorized number of shares of Voting
     Preference Stock, or (iii) change any of the rights or preferences of the
     then outstanding Voting Preference Stock or any series thereof.

          f. Shares of any series of Voting Preference Stock which have been
     redeemed (whether through the operation of a sinking fund or otherwise) or
     purchased by the Company (whether or not used or to be used as a credit
     with respect to any sinking fund obligation), or which, if convertible or
     exchangeable, have been converted or exchanged for shares of stock of any
     other class or classes shall, upon the filing of any required certificate,
     have the status of authorized and unissued shares of Voting Preference
     Stock and may be reclassified and reissued as part of a new series of
     Voting Preference Stock to be created by resolution or resolutions of the
     Board of Directors or as a part of any other series of Voting Preference
     Stock, all subject to the conditions and restrictions on issuance set forth
     in the resolution or resolutions adopted by the Board of Directors
     providing for the issue of any series of Voting Preference Stock and to any
     filing required by law.

          g. Upon any issue for money or other consideration of any stock of the
     Company that may be authorized from time to time, or treasury stock, no
     holder of Voting Preference Stock shall have any preemptive or other right
     to subscribe for, purchase, or receive any proportionate or other share of
     the stock so issued, but the Board of 

                                       13
<PAGE>
 
      Directors may dispose of all or any portion of such stock as and when it
      may determine, free of any such rights, whether by offering the same to
      shareholders or by sale or other disposition as said Board of Directors
      may deem advisable.

                                  DIVISION C

                               THE COMMON STOCK

     1. Dividends. Subject to the provisions of paragraph "3,a" of Division A
and paragraph ''3,a" of Division B, and after making such provision, if any, as
may be required for any sinking fund applicable to any series of Preferred Stock
and Voting Preference Stock determined as provided in paragraph "1,e" of
Division A and paragraph ''1,e'' of Division B hereof, dividends may be paid
upon the Common Stock to the exclusion of the Preferred Stock and Voting
Preference Stock out of any assets of the Company available therefor.

     2. Distribution of Assets. In the event of any dissolution, liquidation or
winding up of the Company, after there shall have been paid or set aside in cash
for the holders of Preferred Stock and Voting Preference Stock the full
preferential amounts to which they are entitled under the provisions of the
foregoing Division A and Division B, respectively, the holders of the Common
Stock shall then be entitled to receive pro rata all of the remaining assets of
the Company available for distribution to its shareholders.

     3. Preemptive Rights. Upon any issue for money or other consideration of
any stock of the Company that may be authorized from time to time, or treasury
stock, no holder of Common Stock shall have any preemptive or other right to
subscribe for, purchase, or receive any proportionate or other share of the
stock so issued, but the Board of Directors may dispose of all or any portion of
such stock as and when it may determine, free of any such rights, whether by
offering the same to shareholders or by sale or other disposition as said Board
of Directors may deem advisable.

                                  DIVISION D

                         PROVISIONS APPLICABLE TO THE
               PREFERRED, VOTING PREFERENCE AND THE COMMON STOCK

     1. Except as specifically provided in this Article Six, and as may be
required in statutory proceedings, if any, as to which the vote of the holders
of the Preferred Stock is required by the then existing laws of the State of
Texas, the holders of the Voting Preference Stock and Common Stock, voting
together as a single class, shall have the exclusive voting rights for the
election of Directors and for all other purposes; provided, however, that except
as specifically provided in Article 4.03B of the Texas Business Corporation Act
and in Paragraph "3,e" of Division B, holders of the Voting Preference Stock
shall not be entitled to vote, as a class or otherwise, upon any amendment to
the Corporation's Restated Articles of Incorporation.

     2. Any Director may be removed from office by vote of the holders of shares
representing a majority of the votes entitled to be cast by the

                                       14
<PAGE>
 
shares of the class or classes of stock by which his successor would be elected.
A special meeting of the holders of shares of such class or classes may be
called by a majority vote of the Board of Directors for the purpose of removing
a Director in accordance with the provisions of this paragraph. The President of
the Company shall, in any event, within ten days after delivery to the Company
at its principal office of a request to such effect signed by the holders of
shares representing at least five percent (5%) of the votes entitled to be cast
by the outstanding shares of Preferred Stock or twenty-five percent (25%) of the
votes entitled to be cast by the outstanding shares of Voting Preference Stock
and Common Stock, combined, as the case may be, call a special meeting of the
holders of the shares of such class or classes for such purpose to be held
within 40 days after the delivery of such request.

     3. Each holder of the Common Stock of the Company entitled to vote shall be
entitled to one vote for each share held. Each holder of shares of any series of
the Preferred Stock of the Company entitled to vote which has a stated value of
$100 on involuntary liquidation shall be entitled to one vote for each share
held. Each holder of shares of any series of the Preferred Stock of the Company
entitled to vote which has a stated value other than $100 on involuntary
liquidation shall be entitled to as many full votes or a fractional vote, as the
case may be, for each share held as determined by the ratio of the stated value
on involuntary liquidation of a share of each such series to the sum of $100.
Each holder of shares of any series of the Voting Preference Stock of the
Company entitled to vote which has a stated value of $10,000 on involuntary
liquidation shall be entitled to one vote for each share held or fractional vote
for each fractional share held, as the case may be. Each holder of shares of any
series of the Voting Preference Stock of the Company entitled to vote which has
a stated value other than $10,000 on involuntary liquidation shall be entitled
to as many full votes or a fractional vote, as the case may be, for each share
held as determined by the ratio of the stated value on involuntary liquidation
of a share of each such series to the sum of $10,000.

     4. At each election of Directors every shareholder entitled to vote at such
election shall have the right to cast, in accordance with the provisions of the
Texas Business Corporation Act, the number of votes represented by the shares
owned by him for as many persons as there are Directors to be elected and for
whose election he has the right to vote; provided that cumulative voting is
expressly prohibited.

__________________

     As adopted by the Board of Directors of the Corporation on September 2,
1982:

     "RESOLVED, That pursuant to the authority conferred upon the Board of
Directors of this Company by Article Six of the Restated Articles of
Incorporation of this Company, the Board of Directors hereby creates a new
series of Preferred Stock of the Company which shall consist of One Million Five
Hundred Thousand (1,500,000) shares of no par value (stated value of $50 per
share), which shall be designated and known as 'Adjustable Rate Cumulative
Preferred Stock, Series D' (herein call 'Adjustable Rate Preferred Stock'), and
that in addition to the preferences, rights, voting powers and the restrictions
or qualifications of all shares of Preferred

                                       15
<PAGE>
 
Stock, regardless of series, described and expressed in the Restated Articles of
Incorporation of the Company, the Board of Directors hereby declares that the
shares of the Adjustable Rate Preferred Stock shall have the terms, conditions,
rights and preferences, as follows:

     1. Dividend Rate

     (a) Dividend rates on the shares of Adjustable Rate Preferred Stock shall
be (i) for the period (the 'Initial Dividend Period') from the date of their
original issue to and including January 31,1983, at a rate per annum of the
stated value thereof equal to 13.5%, and (ii) for each quarterly dividend period
(hereinafter referred to as a 'Quarterly Dividend Period'; and the Initial
Dividend Period or any Quarterly Dividend Period being hereinafter individually
referred to as a 'Dividend Period' and collectively referred to as 'Dividend
Periods') thereafter, which quarterly dividend periods shall commence on
February 1, May 1, August 1 and November 1 in each year and shall end on and
include the day next preceding the first day of the next quarterly dividend
period, at a rate per annum of the Stated Value thereof equal to 0.10% below the
Applicable Rate (as hereinafter defined) in respect of such quarterly dividend
period; provided, however, that the dividend rate per annum on the shares of
Adjustable Rate Preferred Stock for any Quarterly Dividend Period shall in no
event be less than 7.50% per annum or greater than 15.50% per annum. Such
dividends shall be cumulative from the date of original issue of such shares.
The amount of dividends payable for the Initial Dividend Period or any period
shorter than a full Quarterly Dividend Period shall be computed on the basis of
30-day months and a 360-day year.

     (b) The 'Applicable Rate' for any Quarterly Dividend Period shall be the
highest of the Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Twenty Year Constant Maturity Rate (each as hereinafter defined) for such
Dividend Period. In the event that the Company determines in good faith that for
any reason one or more of such rates cannot be determined for any Quarterly
Dividend Period, then the Applicable Rate for such Dividend Period shall be the
higher of whichever of such rates can be so determined. In the event that the
Company determines in good faith that none of such rates can be determined for
any Quarterly Dividend Period, then the Applicable Rate in effect for the
preceding Dividend Period shall be continued for such Dividend Period.

          (i) Except as provided below in this paragraph, the 'Treasury Bill
     Rate' for each Quarterly Dividend Period will be the arithmetic average of
     the two most recent weekly per annum market discount rates (or the one
     weekly per annum market discount rate, if only one such rate shall be
     published during the relevant Calendar Period, as defined below) for three-
     month U.S. Treasury bills, as published weekly by the Federal Reserve Board
     during the Calendar Period immediately prior to the last ten calendar days
     of January, April, July or October, as the case may be, prior to the
     Quarterly Dividend Period for which the dividend rate on the Adjustable
     Rate Preferred Stock is being determined. In the event that the Federal
     Reserve Board does not publish such a weekly per annum market discount rate
     during any such Calendar Period, then the Treasury Bill Rate for the
     related Dividend Period shall be the arithmetic average of the two most
     recent weekly per annum market discount rates (or the one weekly

                                       16
<PAGE>
 
     per annum market discount rate, if only one such rate shall be published
     during the relevant Calendar Period) for three-month U.S. Treasury bills,
     as published weekly during such Calendar Period by any Federal Reserve Bank
     or by any U.S. Government department or agency selected by the Company. In
     the event that a per annum market discount rate for three-month U.S.
     Treasury bills shall not be published by the Federal Reserve Board or by
     any Federal Reserve Bank or by any U.S. Government department or agency
     during such Calendar Period, then the Treasury Bill Rate for such Dividend
     Period shall be the arithmetic average of the two most recent weekly per
     annum market discount rates (or the one weekly per annum market discount
     rate, if only one such rate shall be published during the relevant Calendar
     Period) for all of the U.S. Treasury bills then having maturities of not
     less than 80 nor more than 100 days, as published during such Calendar
     Period by the Federal Reserve Board or, if the Federal Reserve Board shall
     not publish such rates, by any Federal Reserve Bank or by any U.S.
     Government department or agency selected by the Company. In the event that
     the Company determines in good faith that for any reason no such U.S.
     Treasury bill rates are published as provided above during such Calendar
     Period then the Treasury Bill Rate for such Dividend Period shall be the
     arithmetic average of the per annum market discount rates based upon the
     closing bids during such Calendar Period for each of the issues of
     marketable noninterest bearing U.S. Treasury securities with a maturity of
     not less than 80 nor more than 100 days from the date of each such
     quotation, as quoted daily for each business day in New York City (or less
     frequently if daily quotations shall not be generally available) to the
     Company by at least three recognized U.S. Government securities dealers
     selected by the Company. In the event that the Company determines in good
     faith that for any reason the Company cannot determine the Treasury Bill
     Rate for any Quarterly Dividend Period as provided above in this paragraph,
     the Treasury Bill Rate for such Dividend Period shall be the arithmetic
     average of the per annum market discount rates based upon the closing bids
     during the related Calendar Period for each of the issues of marketable
     interest-bearing U.S. Treasury securities with a maturity of not less than
     80 nor more than 100 days from the date of each such quotation, as quoted
     daily for each business day in New York City (or less frequently if daily
     quotations shall not be generally available) to the Company by at least
     three recognized U.S. Government securities dealers selected by the
     Company. 

          (ii) Except as provided below in this paragraph, the 'Ten Year
     Constant Maturity Rate' for each Quarterly Dividend Period shall be the
     arithmetic average of the two most recent weekly per annum Ten Year Average
     Yields (or the one weekly per annum Ten Year Average Yield, if only one
     such Yield shall be published during the relevant Calendar Period as
     provided below), as published weekly by the Federal Reserve Board during
     the Calendar Period immediately prior to the last ten calendar days of
     January, April, July or October, as the case may be, prior to the Quarterly
     Dividend Period for which the dividend rate on the Adjustable Rate
     Preferred Stock is being determined. In the event that the Federal Reserve
     Board does not publish such a weekly per annum Ten Year Average Yield
     during such Calendar Period, then the Ten Year Constant Maturity Rate for
     such 

                                      17
<PAGE>
 
     Dividend Period shall be the arithmetic average of the two most
     recent weekly per annum Ten Year Average Yields (or the one weekly per
     annum Ten Year Average Yield; if only one such Yield shall be published
     during such Calendar Period), as published weekly during such Calendar
     Period by any Federal Reserve Bank or by any U.S. Government department or
     agency selected by the Company. In the event that a per annum Ten Year
     Average Yield shall not be published by the Federal Reserve Board or by any
     Federal Reserve Bank or by any U.S. (Government department or agency during
     such Calendar Period, then the Ten Year Constant Maturity Rate for such
     Dividend Period shall be the arithmetic average of the two most recent
     weekly per annum average yields to maturity (or the one weekly average
     yield to maturity, if only one such yield shall be published during such
     Calendar Period) for all of the actively traded marketable U.S. Treasury
     fixed interest rate securities (other than Special Securities, as defined
     below) then having maturities of not less than eight nor more than twelve
     years, as published during such Calendar Period by the Federal Reserve
     Board or, if the Federal Reserve Board shall not publish such yields, by
     any Federal Reserve Bank or by any U.S. Government department or agency
     selected by the Company. In the event that the Company determines in good
     faith that for any reason the Company cannot determine the Ten Year
     Constant Maturity Rate for any Quarterly Dividend Period as provided above
     in this paragraph, then the Ten Year Constant Maturity Rate for such
     Dividend Period shall be the arithmetic average of the per annum average
     yields to maturity based upon the closing bids during such Calendar Period
     for each of the issues of actively traded marketable U.S. Treasury fixed
     interest rate securities (other than Special Securities) with a final
     maturity date not less than eight nor more than twelve years from the date
     of each such quotation, as quoted daily for each business day in New York
     City (or less frequently if daily quotations shall not be generally
     available) to the Company by at least three recognized U.S. Government
     securities dealers selected by the Company.

          (iii) Except as provided below in this paragraph, the 'Twenty Year
     Constant Maturity Rate' for each Quarterly Dividend Period shall be the
     arithmetic average of the two most recent weekly per annum Twenty Year
     Average Yields (or the one weekly per annum Twenty Year Average Yield, if
     only one such Yield shall be published during the relevant Calendar
     Period), as published weekly by the Federal Reserve Board during the
     Calendar Period immediately prior to the last ten calendar days of January,
     April, July or October, as the case may be, prior to the Quarterly Dividend
     Period for which the dividend rate on the Adjustable Rate Preferred Stock
     is being determined. In the event that the Federal Reserve Board does not
     publish such a weekly per annum Twenty Year Average Yield during such
     Calendar Period, then the Twenty Year Constant Maturity Rate for such
     Dividend Period shall be the arithmetic average of the two most recent
     weekly per annum Twenty Year Average Yields (or the one weekly per annum
     Twenty Year Average Yield, if only one such Yield shall be published during
     such Calendar Period), as published weekly during such Calendar Period by
     any Federal Reserve Bank or by any U.S. Government department or agency
     selected by the Company. In the event that a per annum Twenty Year Average
     Yield shall not be published by the Federal Reserve Board or by any Federal
     Reserve Bank or by any U.S. Government department or

                                       18
<PAGE>
 
     agency during such Calendar Period, then the Twenty Year Constant Maturity
     Rate for such Dividend Period shall be the arithmetic average of the two
     most recent weekly per annum average yields to maturity (or the one weekly
     average yield to maturity, if only one such yield shall be published during
     such Calendar Period) for all of the actively traded marketable U.S.
     Treasury fixed interest rate securities (other than Special Securities)
     then having maturities of not less than eighteen nor more than twenty-two
     years, as published during such Calendar Period by the Federal Reserve
     Board, or, if the Federal Reserve Board shall not publish such yields, by
     any Federal Reserve Bank or by any U.S. Government department or agency
     selected by the Company. In the event that the Company determines in good
     faith that for any reason the Company cannot determine the Twenty Year
     Constant Maturity Rate for any Quarterly Dividend Period as provided above
     in this paragraph, then the Twenty Year Constant Maturity Rate for such
     Dividend Period shall be the arithmetic average of the per annum average
     yields to maturity based upon the closing bids during such Calendar Period
     for each of the issues of actively traded marketable U.S. Treasury fixed
     interest rate securities (other than Special Securities) with a final
     maturity date not less than eighteen nor more than twenty-two years from
     the date of each such quotation, as quoted daily for each business day in
     New York City (or less frequently if daily quotations shall not be
     generally available) to the Company by at least three recognized U.S.
     Government securities dealers selected by the Company.

          (iv) The Treasury Bill Rate, the Ten Year Constant Maturity Rate and
     the Twenty Year Constant Maturity Rate shall each be rounded to the nearest
     five hundredths of a percentage point.

          (v) The amount of dividends per share payable for each Quarterly
     Dividend Period shall be computed by dividing the dividend rate for such
     dividend period by four and applying such rate against the stated value per
     share of the Adjustable Rate Preferred Stock.

          (vi) The dividend rate with respect to each Quarterly Dividend Period
     will be calculated as promptly as practicable by the Company according to
     the appropriate method described herein. The mathematical accuracy of each
     such calculation will be confirmed in writing by independent accountants of
     recognized standing. The Company will cause each dividend rate to be
     published in a newspaper of general circulation in New York City prior to
     the commencement of the new Quarterly Dividend Period to which it applies
     and will cause notice of such dividend rate to be enclosed with the
     dividend payment checks next mailed to the holders of the Adjustable Rate
     Preferred Stock.

          (vii) As used herein, the term 'Calendar Period' means a period of
     fourteen calendar days; the term 'Special Securities' means securities
     which can, at the option of the holder, be surrendered at face value in
     payment of any Federal estate tax or which provide tax benefits to the
     holder and are priced to reflect such tax benefits or which were originally
     issued at a deep or substantial discount; the term 'Ten Year Average Yield'
     means the average yield to maturity for actively traded marketable U.S.
     Treasury fixed interest rate 

                                       19
<PAGE>
 
     securities (adjusted to constant maturities of ten years); and the term
     'Twenty Year Average Yield' means the average yield to maturity for
     actively traded marketable U.S. Treasury fixed interest rate securities
     (adjusted to constant maturities of twenty years).

     2. Involuntary Liquidation. In the event of any involuntary liquidation,
dissolution or winding up of the Company, the holders of the Adjustable Rate
Preferred Stock shall be entitled to receive Fifty Dollars ($50.00) for each
share (which amount shall be deemed to be its stated value on involuntary
liquidation) plus accrued dividends to the date of distribution, whether or not
earned or declared.

     3. Voluntary Liquidation. In the event of any voluntary liquidation,
dissolution or winding up of the Company, the holders of the Adjustable Rate
Preferred Stock shall be entitled to receive $51.50 per share through October
31, 1992, and $50 per share thereafter plus an amount equal to the accrued
dividends thereon to the date of distribution, whether or not earned or
declared.

     4. Optional Redemption. The Adjustable Rate Preferred Stock may not be
redeemed prior to November 1, 1987. Thereafter, the Company shall have the
option to redeem the whole or any part of the Adjustable Rate Preferred Stock at
any time on at least thirty day's notice in accordance with the provisions of
Paragraph 3, c, (i) of Division A of Article Six of the Restated Articles of
Incorporation at $51.50 per share if redeemed during the period November 1,
1987, through October 31, 1992, and $50 per share thereafter, in each case
together with any accrued dividends to the date of such redemption.

     5. So long as any shares of the Adjustable Rate Preferred Stock are
outstanding, shares of the Adjustable Rate Preferred Stock which are purchased,
redeemed or otherwise acquired by the Company shall not be reissued, or
otherwise disposed of, as shares of Adjustable Rate Preferred Stock.

     6. The Adjustable Rate Preferred Stock shall not have any conversion,
exchange or sinking fund rights.

     7. The Adjustable Rate Preferred Stock shall have no voting rights other
than the voting rights set forth in the Restated Articles of Incorporation of
the Company or as otherwise provided by Texas law.

     "RESOLVED, That the President or any Vice President together with the
Secretary or any Assistant Secretary, be and hereby they are authorized and
directed to prepare, execute and deliver to the Secretary of State of Texas for
filing all certificates or other documents as may be required under the laws of
the State of Texas in order to give effect to the foregoing resolutions."

____________________

     As adopted by the Board of Directors of the Corporation on January 26,
1984:

                                       20
<PAGE>
 
     "RESOLVED, That pursuant to the authority conferred upon the Board of
Directors of this Company by Article Six of the Restated Articles of
Incorporation of this Company, the Board of Directors hereby creates a new
series of Preferred Stock of the Company which shall consist of One Hundred
Thousand (100,000) shares of no par value (stated value of $1,000 per share),
which shall be designated and known as 'Adjustable Rate Cumulative Preferred
Stock, Series E' (herein called 'Adjustable Rate Preferred Stock'), and that in
addition to the preferences, rights, voting powers and the restrictions or
qualifications of all shares of Preferred Stock, regardless of series, described
and expressed in the Restated Articles of Incorporation of the Company, the
Board of Directors hereby declares that the shares of the Adjustable Rate
Preferred Stock shall have the terms, conditions, rights and preferences, as
follows:

     1. Dividend Rate

     (a) Dividend rates on the shares of Adjustable Rate Preferred Stock shall
be (i) for the period (the 'Initial Dividend Period') from the date of their
original issue to and including April 30,1984, at a rate per annum of the stated
value thereof equal to 10.625%, and (ii) for each quarterly dividend period
(hereinafter referred to as a 'Quarterly Dividend Period'; and the Initial
Dividend Period or any Quarterly Dividend Period being hereinafter individually
referred to as a 'Dividend Period' and collectively referred to as 'Dividend
Periods') thereafter, which quarterly dividend periods shall commence on
February 1, May 1, August 1 and November 1 in each year and shall end on and
include the day next preceding the first day of the next quarterly dividend
period, at a rate per annum of the Stated Value thereof equal to 1.20% below the
Applicable Rate (as hereinafter defined) in respect of such quarterly dividend
period; provided, however, that the dividend rate per annum on the shares of
Adjustable Rate Preferred Stock for any Quarterly Dividend Period shall in no
event be less than 7% per annum or greater than 13% per annum. Such dividends
shall be cumulative from the date of original issue of such shares. The amount
of dividends payable for the Initial Dividend Period or any period shorter than
a full Quarterly Dividend Period shall be computed on the basis of 30-day months
and a 360-day year.

     (b) The 'Applicable Rate' for any Quarterly Dividend Period shall be the
highest of the Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
Twenty Year Constant Maturity Rate (each as hereinafter defined) for such
Dividend Period. In the event that the Company determines in good faith that for
any reason one or more of such rates cannot be determined for any Quarterly
Dividend Period, then the Applicable Rate for such Dividend Period shall be the
higher of whichever of such rates can be so determined. In the event that the
Company determines in good faith that none of such rates can be determined for
any Quarterly Dividend Period, then the Applicable Rate in effect for the
preceding Dividend Period shall be continued for such Dividend Period.

          (i) Except as provided below in this paragraph, the 'Treasury Bill
     Rate' for each Quarterly Dividend Period will be the arithmetic average of
     the two most recent weekly per annum market discount rates (or the one
     weekly per annum market discount rate, if only one such rate shall be
     published during the relevant Calendar Period, as defined below) for three-
     month U.S. Treasury bills, as published

                                       21
<PAGE>
 
     weekly by the Federal Reserve Board during the Calendar Period immediately
     prior to the last ten calendar days of January, April, July or October, as
     the case may be, prior to the Quarterly Dividend Period for which the
     dividend rate on the Adjustable Rate Preferred Stock is being determined.
     In the event that the Federal Reserve Board does not publish such a weekly
     per annum market discount rate during any such Calendar Period, then the
     Treasury Bill Rate for the related Dividend Period shall be the arithmetic
     average of the two most recent weekly per annum market discount rates (or
     the one weekly per annum market discount rate, if only one such rate shall
     be published during the relevant Calendar Period) for three-month U.S.
     Treasury bills, as published weekly during such Calendar Period by any
     Federal Reserve Bank or by any U.S. Government department or agency
     selected by the Company. In the event that a per annum market discount rate
     for three-month U.S. Treasury bills shall not be published by the Federal
     Reserve Board or by any Federal Reserve Bank or by any U.S. Government
     department or agency during such Calendar Period, then the Treasury Bill
     Rate for such Dividend Period shall be the arithmetic average of the two
     most recent weekly per annum market discount rates (or the one weekly per
     annum market discount rate, if only one such rate shall be published during
     the relevant Calendar Period) for all of the U.S. Treasury bills then
     having maturities of not less than 80 nor more than 100 days, as published
     during such Calendar Period by the Federal Reserve Board or, if the Federal
     Reserve Board shall not publish such rates, by any Federal Reserve Bank or
     by any U.S. Government department or agency selected by the Company. In the
     event that the Company determines in good faith that for any reason no such
     U.S. Treasury bill rates are published as provided above during such
     Calendar Period, then the Treasury Bill Rate for such Dividend Period shall
     be the arithmetic average of the per annum market discount rates based upon
     the closing bids during such Calendar Period for each of the issues of
     marketable noninterest bearing U.S. Treasury securities with a maturity of
     not less than 80 nor more than 100 days from the date of each such
     quotation, as quoted daily for each business day in New York City (or less
     frequently if daily quotations shall not be generally available) to the
     Company by at least three recognized U.S. Government securities dealers
     selected by the Company. In the event that the Company determines in good
     faith that for any reason the Company cannot determine the Treasury Bill
     Rate for any Quarterly Dividend Period as provided above in this paragraph,
     the Treasury Bill Rate for such Dividend Period shall be the arithmetic
     average of the per annum market discount rates based upon the closing bids
     during the related Calendar Period for each of the issues of marketable
     interest-bearing U.S. Treasury securities with a maturity of not less than
     80 nor more than 100 days from the date of each such quotation, as quoted
     daily for each business day in New York City (or less frequently if daily
     quotations shall not be generally available) to the Company by at least
     three recognized U.S. Government securities dealers selected by the
     Company.

          (ii) Except as provided below in this paragraph, the 'Ten Year
     Constant Maturity Rate' for each Quarterly Dividend Period shall be the
     arithmetic average of the two most recent weekly per annum Ten Year Average
     Yields (or the one weekly per annum Ten Year Average

                                       22
<PAGE>
 
     Yield, if only one such Yield shall be published during the relevant
     Calendar Period as provided below), as published weekly by the Federal
     Reserve Board during the Calendar Period immediately prior to the last ten
     calendar days of January, April, July or October, as the case may be, prior
     to the Quarterly Dividend Period for which the dividend rate on the
     Adjustable Rate Preferred Stock is being determined. In the event that the
     Federal Reserve Board does not publish such a weekly per annum Ten Year
     Average Yield during such Calendar Period, then the Ten Year Constant
     Maturity Rate for such Dividend Period shall be the arithmetic average of
     the two most recent weekly per annum Ten Year Average Yields (or the one
     weekly per annum Ten Year Average Yield, if only one such Yield shall be
     published during such Calendar Period), as published weekly during such
     Calendar Period by any Federal Reserve Bank or by any U.S. Government
     department or agency selected by the Company. In the event that a per annum
     Ten Year Average Yield shall not be published by the Federal Reserve Board
     or by any Federal Reserve Bank or by any U.S. Government department or
     agency during such Calendar Period, then the Ten Year Constant Maturity
     Rate for such Dividend Period shall be the arithmetic average of the two
     most recent weekly per annum average yields to maturity (or the one weekly
     average yield to maturity, if only one such yield shall be published during
     such Calendar Period) for all of the actively traded marketable U.S.
     Treasury fixed interest rate securities (other than Special Securities, as
     defined below) then having maturities of not less than eight nor more than
     twelve years, as published during such Calendar Period by the Federal
     Reserve Board or, if the Federal Reserve Board shall not publish such
     yields, by any Federal Reserve Bank or by any U.S. Government department or
     agency selected by the Company. In the event that the Company determines in
     good faith that for any reason the Company cannot determine the Ten Year
     Constant Maturity Rate for any Quarterly Dividend Period as provided above
     in this paragraph, then the Ten Year Constant Maturity Rate for such
     Dividend Period shall be the arithmetic average of the per annum average
     yields to maturity based upon the closing bids during such Calendar Period
     for each of the issues of actively traded marketable U.S. Treasury fixed
     interest rate securities (other than Special Securities) with a final
     maturity date not less than eight nor more than twelve years from the date
     of each such quotation, as quoted daily for each business day in New York
     City (or less frequently if daily quotations shall not be generally
     available) to the Company by at least three recognized U.S. Government
     securities dealers selected by the Company.

          (iii) Except as provided below in this paragraph, the 'Twenty Year
     Constant Maturity Rate' for each Quarterly Dividend Period shall be the
     arithmetic average of the two most recent weekly per annum Twenty Year
     Average Yields (or the one weekly per annum Twenty Year Average Yield, if
     only one such Yield shall be published during the relevant Calendar
     Period), as published weekly by the Federal Reserve Board during the
     Calendar Period immediately prior to the last ten calendar days of January,
     April, July or October, as the case may be, prior to the Quarterly Dividend
     Period for which the dividend rate on the Adjustable Rate Preferred Stock
     is being determined. In the event that the Federal Reserve Board does not
     publish such a weekly per annum Twenty Year Average Yield during such
     Calendar Period, then the

                                       23
<PAGE>
 
     Twenty Year Constant Maturity Rate for such Dividend Period shall be the
     arithmetic average of the two most recent weekly per annum Twenty Year
     Average Yields (or the one weekly per annum Twenty Year Average Yield, if
     only one such Yield shall be published during such Calendar Period), as
     published weekly during such Calendar Period by any Federal Reserve Bank or
     by any U.S. Government department or agency selected by the Company. In the
     event that a per annum Twenty Year Average Yield shall not be published by
     the Federal Reserve Board or by any Federal Reserve Bank or by any U.S.
     Government department or agency during such Calendar Period, then the
     Twenty Year Constant Maturity Rate for such Dividend Period shall be the
     arithmetic average of the two most recent weekly per annum average yields
     to maturity (or the one weekly average yield to maturity, if only one such
     yield shall be published during such Calendar Period) for all of the
     actively traded marketable U.S. Treasury fixed interest rate securities
     (other than Special Securities) then having maturities of not less than
     eighteen nor more than twenty-two years, as published during such Calendar
     Period by the Federal Reserve Board, or, if the Federal Reserve Board shall
     not publish such yields, by any Federal Reserve Bank or by any U.S.
     Government department or agency selected by the Company. In the event that
     the Company determines in good faith that for any reason the Company cannot
     determine the Twenty Year Constant Maturity Rate for any Quarterly Dividend
     Period as provided above in this paragraph, then the Twenty Year Constant
     Maturity Rate for such Dividend Period shall be the arithmetic average of
     the per annum average yields to maturity based upon the closing bids during
     such Calendar Period for each of the issues of actively traded marketable
     U.S. Treasury fixed interest rate securities (other than Special
     Securities) with a final maturity date not less than eighteen nor more than
     twenty-two years from the date of each such quotation, as quoted daily for
     each business day in New York City (or less frequently if daily quotations
     shall not be generally available) to the Company by at least three
     recognized U.S. Government securities dealers selected by the Company.

          (iv) The Treasury Bill Rate, the Ten Year Constant Maturity Rate and
     the Twenty Year Constant Maturity Rate shall each be rounded to the nearest
     five hundredths of a percentage point.

          (v) The amount of dividends per share payable for each Quarterly
     Dividend Period shall be computed by dividing the dividend rate for such
     dividend period by four and applying such rate against the stated value per
     share of the Adjustable Rate Preferred Stock.

          (vi) The dividend rate with respect to each Quarterly Dividend Period
     will be calculated as promptly as practicable by the Company according to
     the appropriate method described herein. The mathematical accuracy of each
     such calculation will be confirmed in writing by independent accountants of
     recognized standing. The Company will cause each dividend rate to be
     published in a newspaper of general circulation in New York City prior to
     the commencement of the new Quarterly Dividend Period to which it applies
     and will cause notice of such dividend rate to be enclosed with the
     dividend payment checks next mailed to the holders of the Adjustable Rate
     Preferred Stock.

                                       24
<PAGE>
 
          (vii) As used herein, the term 'Calendar Period' means a period of
     fourteen calendar days; the term 'Special Securities' means securities
     which can, at the option of the holder, be surrendered at face value in
     payment of any Federal estate tax or which provide tax benefits to the
     holder and are priced to reflect such tax benefits or which were originally
     issued at a deep or substantial discount; the term 'Ten Year Average Yield'
     means the average yield to maturity for actively traded marketable U.S.
     Treasury fixed interest rate securities (adjusted to constant maturities of
     ten years); and the term 'Twenty Year Average Yield' means the average
     yield to maturity for actively traded marketable U.S. Treasury fixed
     interest rate securities (adjusted to constant maturities of twenty years).

     2. Involuntary Liquidation. In the event of any involuntary liquidation,
dissolution or winding up of the Company, the holders of the Adjustable Rate
Preferred Stock shall be entitled to receive One Thousand Dollars ($1,000.00)
for each share (which amount shall be deemed to be its stated value on
involuntary liquidation) plus accrued dividends to the date of distribution,
whether or not earned or declared.

     3. Voluntary Liquidation. In the event of any voluntary liquidation,
dissolution or winding up of the Company, the holders of the Adjustable Rate
Preferred Stock shall be entitled to receive $1,030 per share through April 30,
1994, and $1,000 per share thereafter plus an amount equal to the accrued
dividends thereon to the date of distribution, whether or not earned or
declared.

     4. Optional Redemption. The Adjustable Rate Preferred Stock may not be
redeemed prior to May 1, 1989. Thereafter, the Company shall have the option to
redeem the whole or any part of the Adjustable Rate Preferred Stock at any time
on at least thirty day's notice in accordance with the provisions of Paragraph
3,c, (i) of Division A of Article Six of the Restated Articles of Incorporation
at $1,030.00 per share if redeemed during the period May 1, 1989, through April
30, 1994, and $1,000.00 per share thereafter, in each case together with any
accrued dividends to the date of such redemption.

     5. So long as any shares of the Adjustable Rate Preferred Stock are
outstanding, shares of the Adjustable Rate Preferred Stock which are purchased,
redeemed or otherwise acquired by the Company shall not be reissued, or
otherwise disposed of, as shares of Adjustable Rate Preferred Stock.

     6. The Adjustable Rate Preferred Stock shall not have any conversion,
exchange or sinking fund rights.

     7. The Adjustable Rate Preferred Stock shall have no voting rights other
than the voting rights set forth in the Restated Articles of Incorporation of
the Company or as otherwise provided by Texas law.

     "RESOLVED, That the President or any Vice President together with the
Secretary or any Assistant Secretary, be and hereby they are authorized and
directed to prepare, execute and deliver to the Secretary of State of Texas for
filing all certificates or other documents as may be required under the

                                       25
<PAGE>
 
laws of the State of Texas in order to give effect to the foregoing
resolutions."

____________________

     As adopted by the Board of Directors of the Corporation on April 15, 1986:

     "RESOLVED, That pursuant to the authority conferred upon the Board of
Directors of this Company by Article Six of the Restated Articles of
Incorporation of this Company, the Board of Directors hereby creates a new
series of Voting Preference Stock of the Company which shall consist of five
hundred thousand (500,000) shares of no par value, which shall be designated and
known as '$200 Participating Voting Preference Stock, Series C' (herein called
'Series C Voting Preference Stock'), and that in addition to the preferences,
rights, voting powers and the restrictions or qualifications of all shares of
Voting Preference Stock regardless of series, described and expressed in the
Restated Articles of Incorporation of the Company, the Board of Directors hereby
declares that the shares of the Series C Voting Preference Stock shall have the
terms, conditions, rights and preferences, as follows:

     1. Dividends. The dividend rate on the shares of Series C Voting Preference
Stock for each quarterly dividend period (hereinafter referred to as a
"quarterly dividend period"), which quarterly dividend periods shall commence on
February 1, May 1, August 1 and November 1 in each year (or in the case of
original issuance, from the date of original issuance) and shall end on and
include the day next preceding the first date of the next quarterly dividend
period, shall be equal (rounded to the nearest cent) to the greater of (a) $20
or (b) subject to the provision for adjustment hereinafter set forth, 200 times
the aggregate per share amount of all cash dividends, and 200 times the
aggregate per share amount (payable in cash, based upon the fair market value at
the time the non-cash dividend or other distribution is declared as determined
in good faith by the Board of Directors) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared (but not withdrawn) on the Common Stock, par value $4.45
per share, of this Company (the "Common Stock") during the immediately preceding
quarterly dividend period, or, with respect to the first quarterly dividend
period, since the first issuance of any share or fraction of a share of Series C
Voting Preference Stock. In the event this Company shall at any time after April
15, 1986 (the "Rights Declaration Date") (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares of Series C
Voting Preference Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.

                                       26
<PAGE>
 
     2. Liquidation. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holders of the Series C Voting
Preference Stock shall be entitled to receive the greater of (a) $200 per share,
or (b) an amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 200 times the aggregate amount to be distributed per share
to holders of Common Stock, plus in either instance accrued dividends to the
date of distribution, whether or not earned or declared.

     In the event the Company shall at any time after the Rights Declaration
Date (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the amount
to which holders of shares of Series C Voting Preference Stock were entitled
immediately prior to such event pursuant to clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event. For purposes of Paragraph 3 of
Division D of Article Six of the Restated Articles of Incorporation, the Series
C Voting Preference Stock shall be deemed to have a stated value per share of
$200 on involuntary liquidation until such time as a plan of liquidation shall
be adopted and the actual amount payable upon liquidation is determined.

     3. Optional Redemption. The Company shall have the option to redeem the
whole or any part of the Series C Voting Preference Stock at any time on at
least 30 days notice in accordance with the provisions of Paragraph 3,c of
Division B of Article Six of the Restated Articles of Incorporation at a
redemption price equal to the greater of (a) $200 and (b), subject to the
provision for adjustment hereinafter set forth, 200 times the "current per share
market price" of the Common Stock on the date of mailing of the notice of
redemption, together with unpaid accumulated dividends to the date of such
redemption. In the event this Company shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount to which holders of shares of Series C Voting Preference Stock were
otherwise entitled immediately prior to such event under the preceding sentence
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event. The "current per share market
price'' on any date shall be deemed to be the average of the closing price per
share of such Common Stock for the 10 consecutive "trading days" (as such term
is hereinafter defined) immediately prior to such date. The closing price for
each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Common Stock is not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with

                                       27
<PAGE>
 
respect to securities listed or admitted to trading on the principal national
securities exchange on which the Common Stock is listed or admitted to trading
or, if the Common Stock is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted the average of
the high bid and low asked prices in the over-the-counter market, as reported by
the National Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use or, if on any such date the Common
Stock is not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in the
Common Stock selected by the Board of Directors of the Company. If on such date
no such market maker is making a market in the Common Stock, the fair value of
the Common Stock on such date as determined in good faith by the Board of
Directors of the Company shall be used. The term "trading day" shall mean a day
on which the principal national securities exchange on which the Common Stock is
listed or admitted to trading is open for the transaction of business or, if the
Common Stock is not listed or admitted to trading on any national securities
exchange, a Monday, Tuesday, Wednesday, Thursday or Friday on which banking
institutions in the State of New York are not authorized or obligated by law or
executive order to close.

     4. So long as any shares of the Series C Voting Preference Stock are
outstanding, shares of the Series C Voting Preference Stock which are purchased,
redeemed or otherwise acquired by the Company shall not be reissued, or
otherwise disposed of, as shares of Series C Voting Preference Stock.

     5. Other than as set forth above, the Series C Voting Preference Stock
shall not have any conversion or exchange rights.

     6. The Series C Voting Preference Stock shall have no voting rights other
than the voting rights set forth in the Restated Articles of Incorporation of
the Company or as otherwise provided by Texas law.

     "RESOLVED, That the Chairman and President or any Vice President together
with the Secretary or any Assistant Secretary, be and hereby they are authorized
and directed to prepare, execute and deliver to the Secretary of State of Texas
for filing all certificates or other documents as may be required under the laws
of the State of Texas in order to give effect to the foregoing resolution."

                                 ARTICLE SEVEN

     The power to alter, amend or repeal the By-Laws or to adopt new By-Laws
shall be vested in the Board of Directors; provided, however, that any By-Law or
Amendment thereto as adopted by the Board of Directors may be altered, amended
or repealed by vote of the shareholders entitled to vote for the election of
Directors or a new By-Law in lieu thereof may be adopted by vote of such
shareholders. No By-Law which has been altered, amended or adopted by such a
vote of the shareholders may be altered, amended or repealed by vote of the
Directors until two years shall have expired since such action by vote of such
shareholders.

     WITNESS THE EXECUTION HEREOF on this 8th day of November, 1987.

                                       28
<PAGE>
 
                                     ENSERCH Corporation



                                     By:   /s/ W. C. McCord
                                           W. C. McCord
                                           Chairman and President

                                       29
<PAGE>
 
                   ARTICLES OF AMENDMENT BY THE SHAREHOLDERS
                 TO THE RESTATED ARTICLES OF INCORPORATION OF
                              ENSERCH CORPORATION


     Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned corporation adopts the following Articles of
Amendment to its Restated Articles of Incorporation:

     ARTICLE ONE. The name of the Corporation is ENSERCH Corporation.

     ARTICLE TWO. The following amendment to the Restated Articles of
Incorporation was adopted by the Shareholders of the Corporation on May 10,
1988:

     The Restated Articles of Incorporation of the Corporation are amended by
adding a new ARTICLE EIGHT as follows:

                                 ARTICLE EIGHT

          No director of this Corporation shall be liable to this Corporation or
     its shareholders for monetary damages for an act or omission in such
     director's capacity as a director of this Corporation, except this ARTICLE
     EIGHT does not eliminate or limit the liability of a director of this
     Corporation for (1) a breach of the director's duty of loyalty to this
     Corporation or its shareholders, (2) an act or omission not in good faith
     or that involves intentional misconduct or a knowing violation of the law,
     (3) a transaction from which the director received an improper benefit,
     whether or not the benefit resulted from an action taken within the scope
     of the director's office, (4) an act or omission for which the liability of
     the director is expressly provided for by statute, or (5) an act related to
     an unlawful stock repurchase or payment of a dividend.

     ARTICLE THREE. The designation and number of outstanding shares of each
class entitled to vote thereon as a class were as follows:

                    CLASS          NUMBER OF SHARES
                    -----          ----------------

                    Common Stock   57,602,674

     ARTICLE FOUR. The number of shares of each class voted for and against such
amendment, respectively, was:

                    CLASS          NUMBER OF SHARES VOTED
                    -----          ----------------------
                                   For             Against
                                   ---             -------

                    Common Stock   42,753,448      5,721,265


                                  ENSERCH Corporation


Dated: May 10, 1988               By    /s/ W. C. McCord
                                        --------------------

<PAGE>
 
                                        W. C. McCord
                                        Its Chairman and
                                        President

<PAGE>
 
                           ASSUMED NAME CERTIFICATE
                  FOR AN INCORPORATED BUSINESS OR PROFESSION


To The Secretary of State of the State of Texas:

     WHEREAS, ENSERCH Corporation is a business corporation incorporated under
the laws of the State of Texas and Lone Star Gas Company has been designated by
such corporation as a division thereof; and

     WHEREAS, the Business and Commerce Code of the State of Texas requires that
any corporation which regularly conducts business or renders professional
services in such state under an assumed name file in the office of the Secretary
of State an Assumed Name Certificate; and

     WHEREAS, the name Lone Star Gas Company is an assumed name under which
ENSERCH Corporation conducts business within the State of Texas.

     NOW, THEREFORE, pursuant to Section 36.11 of the Texas Assumed Business or
Professional Name Act, the undersigned hereby files this Assumed Name
Certificate and states the following:

     1.   The assumed name under which the business service is conducted is LONE
                                                                            ----
          STAR GAS COMPANY.
          ---------------- 

     2.   The name of the incorporated business as stated in its Articles of
          Incorporation is ENSERCH Corporation.
                           ------------------- 

     3.   The state jurisdiction under the laws of which the aforesaid
          corporation, was incorporated in Texas, and the address of its
          registered or similar office in that jurisdiction is 300 South St.
                                                               -------------
          Paul Street, Dallas. Texas. 75201.
          ----------------------------------

     4.   The period, not to exceed ten years, during which the assumed name
          will be used is ten years.
                          --------- 

     5.   The corporation is a business corporation.

     6.   The corporation is required to maintain a registered office in Texas,
          the address of the registered office is 300 South St. Paul Street,
                                                  --------------------------
          Dallas, Texas 75201, and the name of its Registered Agent at such
          -------------------
          address is Michael G. Fortado. The address of the principal office 
                     ------------------
          is the same as the registered office.

     7.   Business services are being conducted under such assumed name in ALL
                                                                           ---
          counties within the state.



                             /s/ R. B. Williams
                             R. B. Williams
                             Vice President


STATE OF TEXAS    )

<PAGE>
 
                  )
COUNTY OF DALLAS  )

     Before me on this 24th day of January, 1989, personally appeared  R. B.
Williams and acknowledged to me that he executed the foregoing certificate for
the purposes therein expressed.



                             /s/ Jean H. Luttrell
                             Jean H. Luttrell
                             Notary Public for the
                             State of Texas

<PAGE>
 
                            STATEMENT OF RESOLUTION
                                 ESTABLISHING
             ADJUSTABLE RATE CUMULATIVE PREFERRED STOCK, SERIES F
                   (LIQUIDATION PREFERENCE $1,000 PER SHARE)
                            OF ENSERCH CORPORATION


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 the Adjustable Rate Cumulative
Preferred Stock, Series F (liquidation preference $1,000 per share) of its
preferred stock and fixing and determining the relative rights and preferences
thereof:

     1.   The name of the corporation is ENSERCH Corporation.

     2.   The following resolution, establishing and designating the Adjustable
Rate Cumulative Preferred Stock, Series F, and fixing and determining the
relative rights and preferences thereof, was duly adopted by the Corporate
Securities Committee of the Board of Directors of the Corporation on April 8,
1994:

          "RESOLVED, That pursuant to the authority conferred upon the Corporate
     Securities Committee by the Board of Directors of this Company acting
     pursuant to Article Six of the Restated Articles of Incorporation of this
     Company and the Company's Bylaws, a new series of Preferred Stock of the
     Company is hereby created which shall consist of  Seventy-Five Thousand
     (75,000) shares of no par value (stated value of $1,000 per share), which
     shall be designated and known as 'Adjustable Rate Cumulative Preferred
     Stock, Series F (liquidation preference $1,000 per share)' (herein called
     'Adjustable Rate Preferred Stock'), and that in addition to the
     preferences, rights, voting powers and the restrictions or qualifications
     of all shares of Preferred Stock, regardless of series, described and
     expressed in the Restated Articles of Incorporation of the Company, the
     Corporate Securities Committee of the Board of Directors hereby declares
     that the shares of the Adjustable Rate Preferred Stock shall have the
     terms, conditions, rights and preferences, as follows:

     1.   Dividend Rate

          (a) Dividend rates on the shares of Adjustable Rate Preferred Stock
     shall be (i) for the period (the 'Initial Dividend Period') from the date
     of their original issue to and including July 31, 1994, at a rate per annum
     of the then stated value thereof equal to 6.375%, and (ii) for each
     quarterly dividend period (hereinafter referred to as a 'Quarterly Dividend
     Period'; and the Initial Dividend Period or any Quarterly Dividend Period
     being hereinafter individually referred to as a 'Dividend Period' and
     collectively referred to as 'Dividend Periods') thereafter, which quarterly
     dividend

<PAGE>
 
     periods shall commence on February 1, May 1, August 1 and November 1 in
     each year and shall end on and include the day next preceding the first day
     of the next quarterly dividend period, at a rate per annum of the Stated
     Value thereof equal to the Applicable Rate (as hereinafter defined) in
     respect of such quarterly dividend period; provided, however, that the
     dividend rate per annum on the shares of Adjustable Rate Preferred Stock
     for any Quarterly Dividend Period shall in no event be less than 4.50% per
     annum or greater than 10.50% per annum. Such dividends shall be cumulative
     from the date of original issue of such shares. The amount of dividends
     payable for the Initial Dividend Period or any period shorter than a full
     Quarterly Dividend Period shall be computed on the basis of 30-day months
     and a 360-day year.

          (b) The 'Applicable Rate' for any Quarterly Dividend Period shall be
     the highest of the Treasury Bill Rate, the Ten Year Constant Maturity Rate
     and the Thirty Year Constant Maturity Rate (each as hereinafter defined)
     for such Dividend Period, multiplied by 87%.  In the event that the Company
     determines in good faith that for any reason one or more of such rates
     cannot be determined for any Quarterly Dividend Period, then the Applicable
     Rate for such Dividend Period shall be the higher of whichever of such
     rates can be so determined, multiplied by 87%.  In the event that the
     Company determines in good faith that none of such rates can be determined
     for any Quarterly Dividend Period, then the Applicable Rate in effect for
     the preceding Dividend Period shall be continued for such Dividend Period.

     (i)  Except as provided below in this paragraph, the 'Treasury Bill Rate'
     for each Quarterly Dividend Period will be the arithmetic average of the
     two most recent weekly per annum market discount rates (or the one weekly
     per annum market discount rate, if only one such rate shall be published
     during the relevant Calendar Period, as defined below) for three-month U.S.
     Treasury bills, as published weekly by the Federal Reserve Board during the
     Calendar Period immediately prior to the last ten calendar days of January,
     April, July or October, as the case may be, prior to the Quarterly Dividend
     Period for which the dividend rate on the Adjustable Rate Preferred Stock
     is being determined. In the event that the Federal Reserve Board does not
     publish such a weekly per annum market discount rate during any such
     Calendar Period, then the Treasury Bill Rate for the related Dividend
     Period shall be the arithmetic average of the two most recent weekly per
     annum market discount rates (or the one weekly per annum market discount
     rate, if only one such rate shall be published during the relevant Calendar
     Period) for three-month U.S. Treasury bills, as published weekly during
     such Calendar Period by any Federal Reserve Bank or by any U.S. Government
     department or agency selected by the Company. In the event that a per annum
     market discount rate for three-month U.S. Treasury bills shall not be
     published by the Federal Reserve Board or by any Federal Reserve Bank or by
     any U.S. Government department or agency during such Calendar

                                       2
<PAGE>
 
     Period, then the Treasury Bill Rate for such Dividend Period shall be the
     arithmetic average of the two most recent weekly per annum market discount
     rates (or the one weekly per annum market discount rate, if only one such
     rate shall be published during the relevant Calendar Period) for all of the
     U.S. Treasury bills then having maturities of not less than 80 nor more
     than 100 days, as published during such Calendar Period by the Federal
     Reserve Board or, if the Federal Reserve Board shall not publish such
     rates, by any Federal Reserve Bank or by any U.S. Government department or
     agency selected by the Company. In the event that the Company determines in
     good faith that for any reason no such U.S. Treasury bill rates are
     published as provided above during such Calendar Period, then the Treasury
     Bill Rate for such Dividend Period shall be the arithmetic average of the
     per annum market discount rates based upon the closing bids during such
     Calendar Period for each of the issues of marketable non-interest bearing
     U.S. Treasury securities with a maturity of not less than 80 nor more than
     100 days from the date of each such quotation, as quoted daily for each
     business day in New York City (or less frequently if daily quotations shall
     not be generally available) to the Company by at least three recognized
     U.S. Government securities dealers selected by the Company. In the event
     that the Company determines in good faith that for any reason the Company
     cannot determine the Treasury Bill Rate for any Quarterly Dividend Period
     as provided above in this paragraph, the Treasury Bill Rate for such
     Dividend Period shall be the arithmetic average of the per annum market
     discount rates based upon the closing bids during the related Calendar
     Period for each of the issues of marketable interest-bearing U.S. Treasury
     securities with a maturity of not less than 80 nor more than 100 days from
     the date of each such quotation, as quoted daily for each business day in
     New York City (or less frequently if daily quotations shall not be
     generally available) to the Company by at least three recognized U.S.
     Government securities dealers selected by the Company.

     (ii) Except as provided below in this paragraph, the 'Ten Year Constant
     Maturity Rate' for each Quarterly Dividend Period shall be the arithmetic
     average of the two most recent weekly per annum Ten Year Average Yields (or
     the one weekly per annum Ten Year Average Yield, if only one such Yield
     shall be published during the relevant Calendar Period as provided below),
     as published weekly by the Federal Reserve Board during the Calendar Period
     immediately prior to the last ten calendar days of January, April, July or
     October, as the case may be, prior to the Quarterly Dividend Period for
     which the dividend rate on the Adjustable Rate Preferred Stock is being
     determined. In the event that the Federal Reserve Board does not publish
     such a weekly per annum Ten Year Average Yield during such Calendar Period,
     then the Ten Year Constant Maturity Rate for such Dividend Period shall be
     the arithmetic average of the two most recent weekly per annum Ten Year
     Average Yields (or the one weekly per annum Ten Year Average Yield, if only
     one such Yield shall be published during such

                                       3
<PAGE>
 
     Calendar Period), as published weekly during such Calendar Period by any
     Federal Reserve Bank or by any U.S. Government department or agency
     selected by the Company. In the event that a per annum Ten Year Average
     Yield shall not be published by the Federal Reserve Board or by any Federal
     Reserve Bank or by any U.S. Government department or agency during such
     Calendar Period, then the Ten Year Constant Maturity Rate for such Dividend
     Period shall be the arithmetic average of the two most recent weekly per
     annum average yields to maturity (or the one weekly average yield to
     maturity, if only one such yield shall be published during such Calendar
     Period) for all of the actively traded marketable U.S. Treasury fixed
     interest rate securities (other than Special Securities, as defined below)
     then having maturities of not less than eight nor more than twelve years,
     as published during such Calendar Period by the Federal Reserve Board or,
     if the Federal Reserve Board shall not publish such yields, by any Federal
     Reserve Bank or by any U.S. Government department or agency selected by the
     Company. In the event that the Company determines in good faith that for
     any reason the Company cannot determine the Ten Year Constant Maturity Rate
     for any Quarterly Dividend Period as provided above in this paragraph, then
     the Ten Year Constant Maturity Rate for such Dividend Period shall be the
     arithmetic average of the per annum average yields to maturity based upon
     the closing bids during such Calendar Period for each of the issues of
     actively traded marketable U.S. Treasury fixed interest rate securities
     (other than Special Securities) with a final maturity date not less than
     eight nor more than twelve years from the date of each such quotation, as
     quoted daily for each business day in New York City (or less frequently if
     daily quotations shall not be generally available) to the Company by at
     least three recognized U.S. Government securities dealers selected by the
     Company.

     (iii)  Except as provided below in this paragraph, the 'Thirty Year
     Constant Maturity Rate' for each Quarterly Dividend Period shall be the
     arithmetic average of the two most recent weekly per annum Thirty Year
     Average Yields (or the one weekly per annum Thirty Year Average Yield, if
     only one such Yield shall be published during the relevant Calendar
     Period), as published weekly by the Federal Reserve Board during the
     Calendar Period immediately prior to the last ten calendar days of January,
     April, July or October, as the case may be, prior to the Quarterly Dividend
     Period for which the dividend rate on the Adjustable Rate Preferred Stock
     is being determined. In the event that the Federal Reserve Board does not
     publish such a weekly per annum Thirty Year Average Yield during such
     Calendar Period, then the Thirty Year Constant Maturity Rate for such
     Dividend Period shall be the arithmetic average of the two most recent
     weekly per annum Thirty Year Average Yields (or the one weekly per annum
     Thirty Year Average Yield, if only one such Yield shall be published during
     such Calendar Period), as published weekly during such Calendar Period by
     any Federal Reserve Bank or by any U.S. Government department or agency
     selected by the Company.  In the event that a per annum Thirty

                                       4
<PAGE>
 
     Year Average Yield shall not be published by the Federal Reserve Board or
     by any Federal Reserve Bank or by any U.S. Government department or agency
     during such Calendar Period, then the Thirty Year Constant Maturity Rate
     for such Dividend Period shall be the arithmetic average of the two most
     recent weekly per annum average yields to maturity (or the one weekly
     average yield to maturity, if only one such yield shall be published during
     such Calendar Period) for all of the actively traded marketable U.S.
     Treasury fixed interest rate securities (other than Special Securities)
     then having maturities of not less than twenty-eight nor more than thirty
     years, as published during such Calendar Period by the Federal Reserve
     Board, or, if the Federal Reserve Board shall not publish such yields, by
     any Federal Reserve Bank or by any U.S. Government department or agency
     selected by the Company. In the event that per annum average yields to
     maturity for all of the actively traded marketable U.S. Treasury fixed
     interest rate securities (other than Special Securities) then having
     maturities of not less than twenty-eight nor more than thirty years shall
     not be published by the Federal Reserve Board or by any Federal Reserve
     Bank or by any U.S. Government department or agency during such Calendar
     Period, then the Thirty Year Constant Maturity Rate for such dividend
     period shall be determined in the manner specified in the preceding
     sentence based upon all of the actively traded marketable U.S. Treasury
     fixed interest rate securities (other than Special Securities) then having
     maturities of not less than twenty-five years or, in the absence of which,
     twenty years.  In the event that the Company determines in good faith that
     for any reason the Company cannot determine the Thirty Year Constant
     Maturity Rate for any Quarterly Dividend Period as provided above in this
     paragraph, then the Thirty Year Constant Maturity Rate for such Dividend
     Period shall be the arithmetic average of the per annum average yields to
     maturity based upon the closing bids during such Calendar Period for each
     of the issues of actively traded marketable U.S. Treasury fixed interest
     rate securities (other than Special Securities) with a final maturity date
     not less than twenty-eight nor more than thirty years (or, in the absence
     of which, having maturities of not less than twenty-five years or, in the
     further absence of which, twenty years) from the date of each such
     quotation, as quoted daily for each business day in New York City (or less
     frequently if daily quotations shall not be generally available) to the
     Company by at least three recognized U.S. Government securities dealers
     selected by the Company.

     (iv) The Treasury Bill Rate, the Ten Year Constant Maturity Rate and the
     Thirty Year Constant Maturity Rate shall each be rounded to the nearest one
     hundredth of a percentage point.

     (v) The amount of dividends per share payable for each Quarterly Dividend
     Period shall be computed by dividing the dividend rate for such dividend
     period by four and applying such rate against the stated value per share of
     the Adjustable Rate Preferred Stock.

                                       5
<PAGE>
 
     (vi) The dividend rate with respect to each Quarterly Dividend Period will
     be calculated as promptly as practicable by the Company according to the
     appropriate method described herein. The mathematical accuracy of each such
     calculation will be confirmed in writing by independent accountants of
     recognized standing. After May 1, 1994, the Company will cause each
     dividend rate to be published in a newspaper of general circulation in New
     York City prior to the commencement of the new Quarterly Dividend Period to
     which it applies and will cause notice of such dividend rate to be enclosed
     with the dividend payment checks next mailed to the holders of the
     Adjustable Rate Preferred Stock.

     (vii)  As used herein, the term 'Calendar Period' means a period of
     fourteen calendar days; the term 'Special Securities' means securities
     which can, at the option of the holder, be surrendered at face value in
     payment of any Federal estate tax or which provide tax benefits to the
     holder and are  priced to reflect such tax benefits or which were
     originally issued at a deep or substantial discount; the term 'Ten Year
     Average Yield' means the average yield to maturity for actively traded
     marketable U.S. Treasury fixed interest rate securities (adjusted to
     constant maturities of ten years); and the term 'Thirty Year Average Yield'
     means the average yield to maturity for actively traded marketable U.S.
     Treasury fixed interest rate securities (adjusted to constant maturities of
     thirty years).

          2.  Involuntary Liquidation. In the event of any involuntary
     liquidation, dissolution or winding up of the Company, the holders of the
     Adjustable Rate Preferred Stock shall be entitled to receive One Thousand
     Dollars ($1,000) for each share (which amount shall be deemed to be its
     stated value and liquidation preference on involuntary liquidation) plus
     accrued dividends to the date of distribution.

          3.  Voluntary Liquidation. In the event of any voluntary liquidation,
     dissolution or winding up of the Company, the holders of the Adjustable
     Rate Preferred Stock shall be entitled to receive One Thousand Dollars
     ($1,000) for each share  (which amount shall be deemed to be its stated
     value and liquidation preference  on voluntary liquidation) plus an amount
     equal to the accrued dividends thereon to the date of distribution.

          4.  Optional Redemption. The Adjustable Rate Preferred Stock may not
     be redeemed prior to May 1, 1999. Thereafter, the Company, at its option,
     may redeem all or any part of the Adjustable Rate Preferred Stock at any
     time on at least thirty days' notice in accordance with the provisions of
     Paragraph 3,c,(i) of Division A of Article Six of the Restated Articles of
     Incorporation at $1,000 per share together with any unpaid accumulated
     dividends to the date of such redemption.

                                       6
<PAGE>
 
          5.  So long as any shares of the Adjustable Rate Preferred Stock are
     outstanding, shares of the Adjustable Rate Preferred Stock which are
     purchased, redeemed or otherwise acquired by the Company shall not be
     reissued, or otherwise disposed of, as shares of Adjustable Rate Preferred
     Stock.

          6.  The Adjustable Rate Preferred Stock shall not have any conversion,
     exchange or sinking fund rights.

          7.  The Adjustable Rate Preferred Stock shall have no voting rights
     other than the voting rights set forth in the Restated Articles of
     Incorporation of the Company or as otherwise provided by Texas law."

          "RESOLVED, That the President or any Vice President together with the
     Secretary or any Assistant Secretary, be and hereby they are authorized and
     directed to prepare, execute and deliver to the Secretary of State of Texas
     for filing all certificates or other documents as may be required under the
     laws of the State of Texas in order to give effect to the foregoing
     resolutions."

     WITNESS THE EXECUTION HEREOF on this 8th day of April, 1994.

                             ENSERCH Corporation



                             By:  /s/ D. W. Biegler
                                  ----------------------
                                  D. W. Biegler
                                  Chairman and President

                                       7
<PAGE>
 
                           ASSUMED NAME CERTIFICATE
                  FOR AN INCORPORATED BUSINESS OR PROFESSION


1.  The assumed name under which the business or professional service is to be
    conducted or rendered is Enserch Processing Company.

2.  The name of the incorporated business or profession as stated in its
    Restated Articles of Incorporation is ENSERCH Corporation.

3.  The state, country, or other jurisdiction under the laws of which it was
    incorporated or associated in Texas, and the address of its registered or
    similar office in that jurisdiction is c/o Corporate Secretary's Department,
    ENSERCH Center, 300 South St. Paul Street, Suite 850 E-C, Dallas, Texas
    75201.

4.  The period, not to exceed ten years, during which the assumed name will be
    used is January 18, 1995, to January 17, 2005.

5.  The corporation is a business corporation.

6.  The corporation is required to maintain a registered office in Texas. The
    address of the registered office is c/o Corporate Secretary's Department,
    ENSERCH Center, Suite 850 E-C, Dallas, Texas 75201, and the name of its
    registered agent at such address is Michael G. Fortado. The address of the
    principal office is 300 South St. Paul Street, Suite 850 E-C, Dallas, Texas
    75201.

7.  The county or counties where business or professional services are being or
    are to be conducted or rendered under such assumed name are all counties
    within the State.



                                  /s/ Robert L. Jay
                                  ------------------------------
                                  Assistant Corporate Secretary


    Before me on this 8th day of January, 1995, personally appeared Robert L.
Jay, Assistant Corporate Secretary and acknowledged to me that he executed the
foregoing certificate of the purposes therein expressed.


                                  /s/ Jo D. Wade
                                  ------------------------------
                                  Notary Public - Dallas County


<PAGE>
 
                   ARTICLES OF AMENDMENT BY THE SHAREHOLDERS
                 TO THE RESTATED ARTICLES OF INCORPORATION OF
                              ENSERCH CORPORATION

     Pursuant to the provisions of Article 4.04 of the Texas Business
Corporation Act, the undersigned ENSERCH Corporation (the "Corporation") adopts
the following Articles of Amendment to its Restated Articles of Incorporation.

     Article One:  The name of the corporation is ENSERCH Corporation.

     Article Two: In the first sentence of the first paragraph of Article Six of
the Restated Articles of Incorporation of the Corporation, "$4.45" is hereby
changed to "$0.01", so that the par value per share of the Common Stock
hereafter be $0.01 instead of $4.45.

     The remaining provisions of Article Six of the Restated Articles of
Incorporation of the Corporation, including without limitation Division A,
Division B.  Division C and Division D thereof, shall remain unchanged and in
full force and effect.  The designations, preferences, limitations and relative
and other rights of the authorized and outstanding shares of Preferred Stock and
Voting Preference Stock are not changed by this Amendment.

     Article Three:  The foregoing amendment (the "Amendment") to the Restated
Articles of Incorporation was adopted by the shareholders of the Corporation on
November 15, 1996.  The designation and number of outstanding shares of each
class entitled to vote on the Amendment were as follows:

                                                     Number of
       Class                                           Shares

    Common Stock...................................  69,527,645

     The number of shares of Common Stock that voted for the Amendment was
55,905,176 and the number of shares of Common Stock that voted against the
Amendment was 269,072.

     Article Four: All outstanding shares of the Corporation's Common Stock, par
value $4.45 per share ("Existing Common Stock"), are reclassified and converted,
effective as of the issuance of a certificate of amendment by the Secretary of
State of the State of Texas upon the filing of these Articles of Amendment, into
shares of the Corporation's Common Stock, par value $0.01 per share ("New Common
Stock"), on the basis of one share of New Common Stock for each outstanding
share of Existing Common Stock. Certificates representing shares of Existing
Common Stock will represent shares of New Common Stock without any further
action by the holders thereof.

     Article Six:  The Amendment effects a change in the stated capital of the
Corporation by reducing the par value per share of the Corporation's Common
Stock from $4.45 to $0.01.  The amount of stated capital of the Corporation,
based upon the 69,527,645 shares of Existing Common Stock outstanding and
entitled to vote on the Amendment, was reduced by


<PAGE>
 
$308,702,744 from $309,398,020 before the Amendment to $695,276 after the
Amendment, and the $308,702,744 by which stated capital was reduced is hereby
transferred to the surplus of the Corporation.

     IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment of the Corporation this 15th day of November , 1996.

                                  ENSERCH Corporation


                                  By:   /s/ A. E. Gallatin
                                        ---------------------
                                        A. E. Gallatin
                                        Its Vice President

Dated:  November 15, 1996