CERTIFICATE OF INCORPORATION
                                       OF
                             W HOLDING COMPANY, INC.
 
                                      FIRST
 
            The name of this corporation is "W Holding Company, Inc."
(hereinafter "Holding").
 
                                     SECOND
 
            The principal office of Holding, which is also its postal and
physical address, shall be located at 19 W. McKinley Street, Mayaguez, Puerto
Rico 00680. Holding will serve as its Resident Agent, at this same address.
 
                                      THIRD
 
            The term of existence of Holding is perpetual.
 
                                     FOURTH
 
            The purpose of Holding is to engage, for profit, in any lawful acts
or businesses for which corporations may be organized under the General
Corporations Law of the Commonwealth of Puerto Rico, as amended from time to
time (hereinafter, as so amended, the "Corporations Law").
 
                                      FIFTH
 
            The business and activities of Holding shall be under the authority
of a Board of Directors composed of the number of directors fixed from time to
time by resolution of an absolute majority of the Board of Directors, provided
that the number of directors shall be an odd number and not less than five (5)
nor more than nine (9). The Board of Directors shall be divided into three
classes of approximately equal numbers of directors. The members of each class
shall be elected by Holding's stockholders at the annual meeting for three-year
terms and shall remain in office until their successors have been duly elected
and qualified. A majority of the directors holding office shall constitute a
quorum at meetings of the Board of Directors.
 
            The directors shall have such qualifications, shall be subject to
such responsibilities, shall comply with such requirements and shall hold office
pursuant to the provisions of the Corporations Law and the By-laws of Holding.
 
            Any vacancy in the Board of Directors may be filled by a majority of
the votes of the directors then holding office. A director elected to fill a
vacancy so created shall be elected to serve the term of such directorship and
until a successor has been duly elected and sworn in their office.
 
            Upon the filing of this Certificate of Incorporation at the
Department of State of the Commonwealth of Puerto Rico, the following persons,
having the indicated mailing addresses, shall serve as the initial directors of
Holding, which directors shall hold office, unless sooner removed or
disqualified, until the end of their terms at the annual meeting of Holding in
the year indicated below and until their successors are elected or are
appointed.
 
 
 
<PAGE>   2
 
 
 
 
 
<TABLE>
<CAPTION>
NAMES AND ADDRESSES OF DIRECTORS                                                    TERMS ENDING
<S>                                                                                     <C>   
Fidel Pino Cros                                                                         2001  
19 W. McKinley Street                                                                         
Mayaguez, Puerto Rico  00680                                                                  
                                                                                              
Pedro R. Dominguez                                                                      2001  
19 W. McKinley Street                                                                         
Mayaguez, Puerto Rico  00680                                                                  
                                                                                              
Fredeswinda G. Frontera                                                                 1999  
19 W. McKinley Street                                                                         
Mayaguez, Puerto Rico  00680                                                                  
                                                                                              
Angel Luis Rosas                                                                        2000  
19 W. McKinley Street                                                                         
Mayaguez, Puerto Rico  00680                                                                  
                                                                                              
Cesar A. Ruiz                                                                           1999  
19 W. McKinley Street                                                                         
Mayaguez, Puerto Rico  00680                                                                  
                                                                                              
Frank C. Stipes                                                                         2000  
19 W. McKinley Street                                                                         
Mayaguez, Puerto Rico  00680                                                                  
                                                                                              
Cornelius Tamboer                                                                       1999  
19 W. McKinley Street                                                                   
Mayaguez, Puerto Rico  00680                                                            
 
</TABLE>
 
 
            The personal liability of the directors of Holding in cases of
monetary claims for damages resulting from the breach of the fiduciary duties as
director is eliminated, provided that this provision does not eliminate or limit
the liability of the director for: (i) any breach of the duty of loyalty of the
director to Holding or its stockholders; (ii) acts or omissions not in good
faith, or which involve intentional misconduct or knowing violations of law;
(iii) unlawful payments of dividends or purchase and redemption of stock; or
(iv) any transaction where the director derives an improper personal benefit.
 
                                      SIXTH
 
            The authorized capital stock of Holding shall be THREE HUNDRED
TWENTY MILLION DOLLARS ($320,000,000) represented by THREE HUNDRED MILLION
(300,000,000) shares of common stock, $1.00 par value per share (the "Common
Stock"), and TWENTY MILLION (20,000,000) shares of preferred stock, $1.00 par
value per share ("Preferred Stock"). The shares may be issued by Holding from
time to time as authorized by the Board of Directors without the further
approval of stockholders, except as otherwise provided in this Article SIXTH or
to the extent that such approval is required by governing law, rule or
regulation.
 
            The holders of Common Stock and Preferred Stock shall be entitled to
dividends at the rate and on the conditions and terms which shall be stated in
the resolutions providing for the issuance of 
 
 
 
                                       2
<PAGE>   3
 
 
such stock and adopted by the Board of Directors pursuant to the Corporations
Law. When dividends have been paid on the Preferred Stock in accordance with the
preferences to which they are entitled, or when such dividends have been
declared and set aside for payment, then dividends may be paid on the Common
Stock from the remaining assets of Holding which are available for the payment
of dividends, pursuant to provisions of the Corporations Law.
 
            The holders of the Preferred Stock shall have, upon dissolution of
Holding, or upon any distribution of its assets, the rights stated in the
resolutions providing for the issue of such stock and adopted by the Board of
Directors pursuant to the Corporations Law.
 
            The Board of Directors is expressly authorized to provide, when it
deems necessary, for the issuance of shares of Preferred Stock in one or more
series, with such voting powers, full or limited, but not to exceed ten votes
per share, or without voting powers; and with such designations, powers,
preferences, rights, qualifications, limitations or restrictions thereof, as
shall be expressed in the resolution or resolutions of the Board of Directors,
authorizing such issuance, including (but without limiting the generality of the
foregoing) the following:
 
                     (a)    the designation of such series;
 
                     (b)    the dividend rate of such series, the conditions and
                            dates upon which the dividends shall be payable, the
                            preference or relation which such dividends shall
                            bear to the dividends payable on any other class or
                            classes of capital stock of Holding, and whether
                            such dividends shall be cumulative or
                            non-cumulative;
 
                     (c)    whether the shares of such series shall be subject
                            to redemption by Holding, and if made subject to
                            such redemption, the terms and conditions of such
                            redemption;
 
                     (d)    the terms and amount of any sinking fund provided
                            for the purchase or redemption of the shares of such
                            series;
 
                     (e)    whether the shares of such series shall be
                            convertible and if provision be made for conversion,
                            the terms of such conversion;
 
                     (f)    the extent, if any, to which the holders of such
                            shares shall be entitled to vote; provided, however,
                            that in no event, shall any holder of any series of
                            preferred stock be entitled to more than ten votes
                            for each such share;
 
                     (g)    the restrictions and conditions, if any, upon the
                            issue or re-issue of any additional preferred stock
                            ranking on a parity with or prior to such shares as
                            to dividends or upon dissolution; and
 
                     (h)    the rights of the holders of such shares upon
                            dissolution of, or upon distribution of assets of
                            Holding, which rights may be different in the case
                            of a voluntary dissolution.
 
                                     SEVENTH
 
            The Board of Directors has approved the issuance of shares of its
7.125% Non-Cumulative, Convertible Preferred Stock, Series A, liquidation
preference $25.00 per share, par value $1.00 per share, which shall have the
same terms and preferences as the 7.125% Non-Cumulative, Convertible Preferred
Stock, 1998 Series A, liquidation preference $25.00 per share, par value $1.00
per share, previously issued by Westernbank Puerto Rico, with only such changes
as necessary to reflect the 
 
 
 
                                       3
<PAGE>   4
 
change in issuer. The Board of Directors of Holding has fixed the powers,
preferences, rights, and qualifications, limitations and restrictions as
follows:
 
            1.          Designation; Ranking.
 
                        (a) The designation of such series of Preferred Stock
shall be "7.125% Non-Cumulative, Convertible Preferred Stock, Series
A" (hereinafter referred to as "Series A Preferred Stock"), and the number of
shares constituting such series shall be 1,219,000, which number may be
increased (but not above the total number of shares of Preferred Stock) or
decreased (but not below the number of shares of Series A Preferred Stock then
outstanding) from time to time by the Board of Directors.
 
                        (b) The Series A Preferred Stock will, with respect to
dividend rights and rights on liquidation, rank (i) senior to all
classes of the Common Stock and to all other equity securities issued by Holding
the terms of which specifically provide that such equity securities will rank
junior to the Series A Preferred Stock (or to all series of Preferred Stock in
general) as to dividends and the distribution of assets upon liquidation (the
Common Stock, together with such other equity securities, being hereinafter
referred to as "Junior Stock"); (ii) on a parity with all equity securities
issued by Holding the terms of which specifically provide that such equity
securities will rank on a parity to the Series A Preferred Stock (or to all
series of Preferred Stock in general) as to dividends or the distribution of
assets upon liquidation ("Parity Stock"); and (iii) junior to all equity
securities issued by Holding the terms of which specifically provide that such
equity securities will rank senior to the Series A Preferred Stock (or to all
series of Preferred Stock in general) as to dividends or the distribution of
assets upon liquidation. For this purpose, the term "equity securities" does not
include debt securities convertible into or exchangeable for equity securities.
 
                        (c) Holding may not issue capital stock of Holding
ranking, as to dividend rights or rights on liquidation, senior to the
Series A Preferred Stock except with the consent of the holders of at least
two-thirds of the aggregate liquidation preference of the Series A Preferred
Stock and any series of Parity Stock at the time outstanding.
 
            2.          Dividend Rights.
 
                        (a) The holders of Series A Preferred Stock shall be
entitled to receive when, as and if declared by the Board of Directors
of Holding, out of assets of Holding legally available therefor, cash dividends,
accruing from the date of original issuance (the "Issue Date") at the annual
rate per share of 7.125% of the liquidation preference of $25 per share
(equivalent to $ 1.78125 per share per annum), (the "Dividends"), payable, when,
as and if declared by the Board of Directors, monthly in arrears on the 15th day
of each month (each monthly period ending on any such date being hereinafter
referred to as a "dividend period"), at such annual rate. Dividends in each
dividend period shall accrue from the first day of such period, whether or not
declared or paid for the prior dividend period (except that the first Dividends
payable after the Issue Date shall accrue from the Issue Date). Each declared
Dividend shall be payable to holders of record as they appear at the close of
business on the stock register of Holding on such record dates, not exceeding 45
days preceding the payment dates thereof, as shall be fixed by the Board of
Directors of Holding. The amount of Dividends paid for any monthly dividend
period will be computed on the basis of twelve 30-day months and a 360-day year.
The amount of Dividends payable for any period shorter than a full monthly
dividend period will be computed on the basis of the actual number of days
elapsed in such period.
 
                        (b) Dividends shall be non-cumulative. Holding is not
obligated or required to declare or pay Dividends, even if it has
funds available for the payment of such dividends. If the Board of Directors of
Holding or an authorized committee thereof does not declare a Dividend payable
on a dividend payment date, then the holders of such Series A Preferred Stock
shall have no 
 
 
                                       4
<PAGE>   5
 
 
right to receive a Dividend in respect of the dividend period ending on such
dividend payment date and Holding will have no obligation to pay a Dividend
accrued for such dividend period or to pay any interest thereon, whether or not
dividends on such Series A Preferred Stock or the Common Stock are declared for
any future dividend period.
 
                        (c) If all Dividends due and payable for each of the
twelve previous monthly dividend periods (or such fewer dividend
periods as there actually are) shall not have been declared and paid, or
declared and a sum sufficient for the payment thereof shall not have been set
apart for such payments, or Holding has defaulted on the payment of the
redemption price of any Series A Preferred Stock called for redemption, no
dividends shall be declared or paid or set aside for payment and no other
distribution shall be declared or made or set aside for payment upon the Junior
Stock, nor shall any Junior Stock be redeemed, purchased or otherwise acquired
for any consideration (or any monies to be paid to or made available for a
sinking fund for the redemption of any such stock) by Holding (except by
conversion into or exchange for other Junior Stock).
 
                        (d) When Dividends and dividends upon any Parity Stock
are not paid in full (or a sum sufficient for such full payment is
not set apart), all Dividends and dividends upon any Parity Stock shall be
declared pro rata so that the amount of dividends declared upon such series of
capital stock shall in all cases bear to each other the same ratio that full
Dividends for the then-current dividend period (which shall not include any
accumulation in respect of unpaid dividends for prior dividend periods) and full
dividends, including required or permitted accumulations, if any, on such Parity
Stock, bear to each other.
 
                        (e) Subject to any applicable laws and regulations, each
Dividend payment will be made by U.S. dollar check drawn on a bank
in New York, New York or San Juan, Puerto Rico and mailed to the record holder
thereof at such holder's address as it appears on the register for such Series A
Preferred Stock.
 
            3.          Conversion Rights.
 
                        (a) At any time on or after 90 days after the Issue 
Date, unless previously redeemed, any holder of record of the Series A Preferred
Stock may convert, at its option, any outstanding share of the Series A
Preferred Stock owned by such holder into .995 shares (subject to adjustment
upon certain events) of fully paid and non-assessable Common Stock (calculated
as to each conversion to the nearest 1/100th of a share) for each share of
Series A Preferred Stock. The right to convert a share of the Series A Preferred
Stock called for redemption will terminate at the close of business on the fifth
Business Day immediately prior to the date fixed for redemption (the "Redemption
Date") for such share, unless Holding fails to pay the applicable redemption
price. The conversion ratio per share of Series A Preferred Stock is subject to
adjustment upon certain events, including (a) the issuance of Common Stock as a
dividend or distribution with respect to the outstanding Common Stock, (b)
subdivisions of the Common Stock, (c) the issuance to holders of Common Stock of
rights or warrants to subscribe for Common Stock at less than the then-current
market price, (d) the distribution to holders of Common Stock of any shares of
capital stock of Holding (other than Common Stock) or evidences of indebtedness
or assets (excluding cash dividends or distributions paid from retained
earnings), or rights or warrants to subscribe for securities of Holding other
than those described above, (e) any distribution consisting exclusively of cash
(excluding any cash portion of distributions referred to in (d) above, or cash
distributed upon a merger or consolidation to which the third succeeding
paragraph applies) to all or substantially all holders of Common Stock in an
aggregate amount that, combined together with (i) all other such all-cash
distributions made within the then preceding 12 months in respect of which no
adjustment has been made and (ii) any cash and the fair market value of other
consideration paid or payable in respect of any tender or exchange offer by
Holding or any of its subsidiaries for Common Stock concluded within the
preceding 12 months in respect of which no adjustment has been made, exceeds 15%
of Holding's market capitalization (defined as being the product of the then
current market price 
 
 
 
                                       5
<PAGE>   6
 
of the Common Stock times the number of shares of Common Stock then outstanding)
on the record date of such distribution, and (f) the completion of a tender or
exchange offer made by Holding or any of its subsidiaries for Common Stock that
involves an aggregate consideration that, together with (i) any cash and other
consideration payable in a tender or exchange offer by Holding or any of its
subsidiaries for Common Stock expiring within the 12 months preceding the
expiration of such tender or exchange offer in respect of which no adjustment
has been made and (ii) the aggregate amount of any such all-cash distributions
referred to in (e) above to all holders of Common Stock within the 12 months
preceding the expiration of such tender or exchange offer in respect of which no
adjustments have been made, exceeds 15% of Holding's market capitalization on
the expiration of such tender offer. No adjustments in the conversion ratio will
be required, however, unless the adjustment would require a change of at least
one percent in the conversion ratio. Each adjustment of less than one percent in
the conversion ratio will be carried forward and taken into account in any
subsequent adjustment. The adjustment will be made not later than such time as
may be required in order to preserve the tax-free nature of a distribution to
the holders of shares of Common Stock. Holding will be entitled to make such
reductions in the conversion ratio, in addition to those required by the
provisions described above, as it in its discretion may determine to be
advisable in order that certain stock related distributions which may be made by
Holding to its stockholders will not be taxable.
 
                                    In items (a) and (b) above in this Section
3(a), the conversion ratio per share of Series A Preferred Stock in effect
immediately prior to such actions shall be adjusted so that the holders of any
shares of Series A Preferred Stock thereafter surrendered for conversion shall
be entitled to receive the number of shares of Common Stock or other capital
stock of Holding that they would have owned or been entitled to receive
immediately following such actions had such shares of Series A Preferred Stock
been converted immediately prior to the occurrence of such events. An adjustment
made pursuant to this paragraph shall become effective immediately after the
record date, in the case of a dividend or distribution, or immediately after the
effective date, in the case of a subdivision, combination or reclassification.
If, as a result of an adjustment made pursuant to this paragraph, the holders of
any shares of Series A Preferred Stock thereafter surrendered for conversion
shall become entitled to receive shares of two or more classes of capital stock
or shares of Common Stock and other capital stock of Holding, the Board of
Directors (whose determination shall be conclusive) shall determine the
allocation of the adjusted conversion ratio between or among of such shares of
capital stock or shares of Common Stock and other capital stock.
 
                                    In item (c) above in this Section 3(a), the
holders of any shares of Series A Preferred Stock shall be entitled to
receive such rights, warrants or options to subscribe for or purchase shares of
Common Stock that they would have received or been entitled to receive if such
shares of Series A Preferred Stock had been converted into shares of Common
Stock immediately prior to the issuance of such rights, warrants or options.
Such computation shall be made successively whenever any such rights, warrants
or options are issued, and shall become effective immediately after the record
date for the determination of stockholders entitled to receive such rights,
warrants or options. In determining whether any rights, warrants or options
entitle the holders to subscribe for or purchase shares of Common Stock (or
securities convertible into Common Stock) at less than such current market
price, there shall be taken into account any consideration received by Holding
for such rights, warrants or options (and for such convertible securities), and
the value of such consideration, if other than cash, shall be determined by the
Board of Directors (whose determination shall be conclusive). If at the end of
the period during which such rights, warrants or options are exercisable not all
such rights, warrants or options shall have been exercised, the rights, warrants
or options that the holders of Series A Preferred Stock were entitled to receive
shall be adjusted based on the number of additional shares of Common Stock
actually issued.
 
                                    In item (d) above in this Section 3(a), the
holders of any shares of Series A Preferred Stock shall be entitled to
receive such shares of capital stock, evidences of indebtedness or assets, and
such rights, warrants or options to subscribe for or purchase capital stock of
Holding, that 
 
 
                                       6
<PAGE>   7
\
 
they would have received or been entitled to receive if such shares of Series A
Preferred Stock had been converted into shares of Common Stock immediately prior
to the issuance of such shares of capital stock, evidences of indebtedness or
assets, and such rights, warrants or options to subscribe for or purchase
capital stock of Holding.
 
                            In items (e) and (f) above in this Section 3(a), 
each holder of shares of Series A Preferred Stock who converts such shares into
shares of Common Stock will be entitled to receive upon such conversion, in
addition to the shares of Common Stock, such additional consideration such
stockholder would have received had such shares of Series A Preferred Stock
been converted into shares of Common Stock immediately prior to the record date
of such distributions described in items (e) and (f) above in this Section
3(a).
 
            Notwithstanding anything in this section to the contrary, with
respect to any rights, warrants or options, if such rights, warrants or options
are only exercisable upon the occurrence of certain triggering events, then for
purposes of this section such rights, warrants or options shall not be deemed
issued or distributed until such triggering events occur and such rights,
warrants or options become exercisable.
 
                        (b) No fractional shares of Common Stock will be issued
upon conversion of Series A Preferred Stock. Any fractional
interest in a share of Common Stock resulting from a conversion of a share of
Series A Preferred Stock will be paid in cash based on the closing price of
Common Stock on the trading day immediately preceding the day of conversion.
 
                        (c) Conversion of Series A Preferred Stock will be
effected by surrendering certificates evidencing such shares, together
with a proper assignment of the certificates to Holding or in blank, to the
office or agency to be maintained by Holding for that purpose. In case fewer
than all the shares represented by any such certificate are converted, a new
certificate shall be issued representing the unconverted shares without cost to
the holder thereof.
 
                        (d) In case of any reclassification or change of
outstanding shares of Common Stock (other than a change in par value, or
as a result of a subdivision or combination), or in case of any consolidation of
Holding with, or merger of Holding with or into, any other entity that results
in a reclassification, change, conversion, exchange or cancellation of
outstanding shares of Common Stock or any sale or transfer of all or
substantially all of the assets of Holding, each holder of Series A Preferred
Stock then outstanding will have the right thereafter to convert its Series A
Preferred Stock into the kind and amount of securities, cash and other property
that the holder would have been entitled to receive if the holder had held the
Common Stock issuable upon the conversion of the Series A Preferred Stock
immediately prior to such reclassification, change, consolidation, merger, sale
or transfer.
 
                        (e) In the event that Holding consummates any
consolidation or merger or similar business combination, pursuant to which
the outstanding shares of Common Stock are by operation of law exchanged solely
for or changed, reclassified or converted into stock, securities or cash or any
other property, or any combination thereof, the Series A Preferred Stock will,
in connection with such consolidation, merger or similar business combination,
be assumed by and become preferred stock of such successor or resulting
corporation, having in respect of such corporation, insofar as possible, the
same powers, preferences and relative rights, and the qualifications,
limitations or restrictions thereon, that the Series A Preferred Stock had
immediately prior to such transaction, except that after such transaction each
share of Series A Preferred Stock will be convertible on the terms and
conditions described above, into the nature and kind of consideration so
receivable by a holder of the number of shares of Common Stock into which such
Series A Preferred Stock could have been converted immediately prior to such
transaction. If by virtue of the structure of such transaction, however, a
holder of Common Stock is required to make an election with respect to the
nature and kind of consideration to be received in such transaction, 
 
 
 
                                       7
<PAGE>   8
 
 
which election cannot practicably be made by the holder of the Series A
Preferred Stock, then the Series A Preferred Stock, by virtue of such
transaction and on the same terms as apply to the holders of Common Stock, will
be converted into or exchanged for the aggregate amount of stock, securities,
cash or other property (payable in kind) receivable by a holder of the number of
shares of Common Stock into which such Series A Preferred Stock could have been
converted immediately prior to such transaction if the holder of Common Stock
failed to exercise any rights of election. The rights of the Series A Preferred
Stock as preferred stock of the successor or resulting corporation will
successively be subject to adjustment after any such transaction as nearly
equivalent as practicable to the adjustments in existence prior to such
transaction. Holding will not consummate any such merger, consolidation or
similar transaction unless all then outstanding Series A Preferred Stock will be
assumed and authorized by the successor or resulting corporation as provided
above.
 
                        (f) Upon the conversion of Series A Preferred Stock, no
dividends thereon will be due or payable for any period unless previously
declared, but not yet paid.
 
            4.          Liquidation Preferences.
 
                        (a)         In the event of any liquidation of Holding,
whether voluntary or involuntary, the holders of Series A Preferred Stock shall
be entitled to receive out of the assets of Holding available for distribution
to shareholders an amount equal to $25 per share, plus accrued and unpaid
dividends, if any, for the then-current monthly dividend period to the date of
payment, and no more (the "Liquidation Preference"), before any distribution
shall be made to the holders of Junior Stock. After payment of the full amount
of such liquidating distributions, the holders of Series A Preferred Stock will
not be entitled to any further participation in any distribution of the
remaining assets of Holding.
 
                        (b) In the event that the assets of Holding available
for distribution to shareholders upon any liquidation of Holding, whether
voluntary or involuntary, shall be insufficient to pay in full the amounts
payable with respect to the Series A Preferred Stock and any Parity Stock, the
holders of Series A Preferred Stock and Parity Stock shall share ratably in any
distribution of assets of Holding in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.
 
                        (c) The merger or consolidation of Holding with or into
any other entity, the merger or consolidation of any other entity with or into
Holding, or the sale, lease or conveyance of all or substantially all of the
property or business of Holding, shall not be deemed to constitute a
liquidation of Holding within the meaning of this Section 4.
 
            5.          Redemption
 
                        (a) Holders of the Series A Preferred Stock will have no
right to require Holding to redeem or repurchase the Series A Preferred Stock,
and such shares are not subject to any sinking fund or similar obligation.
 
                        (b) The Series A Preferred Stock will not be redeemable
prior to July 1, 2002. On or after such date, the Series A Preferred Stock will
be redeemable at the option of Holding, in whole or in part, at any time or
from time to time, at the option of Holding upon not less than 30 nor more than
60 days' notice by mail, at the redemption prices set forth below, during the
12-month periods beginning on July 1 of the years set forth below, plus accrued
and unpaid dividends, if any, for the then-current dividend period to the date
fixed for redemption.
 
 
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<PAGE>   9
 
 
 
 
<TABLE>
<CAPTION>
Year
- ----
<C>                                                               <C>   
2002 ........................................................     $26.00
2003 ........................................................     $25.75
2004 ........................................................     $25.50
2005 ........................................................     $25.25
2006 and thereafter .........................................     $25.00
</TABLE>
 
                        (c) If less than all of the outstanding shares of the
Series A Preferred Stock are to be redeemed at the option of Holding,
the total number of shares to be redeemed in such redemption shall be determined
by the Board of Directors and the shares to be redeemed shall be allocated pro
rata or by lot as may be determined by the Board of Directors or by such other
method as the Board of Directors may approve and deem fair and appropriate,
including any method to conform to any rule or regulation of any national or
regional stock exchange or automated quotation system upon which the shares of
the Series A Preferred Stock may at the time be listed or eligible for
quotation; provided that, the shares of a holder must be redeemable in full
unless Holding obtains a ruling from the Puerto Rico Treasury Department or an
opinion from reputable counsel knowledgeable in Puerto Rico income tax matters
to the effect that the redemption in part of the holder's shares is not
equivalent to a dividend under Puerto Rico law.
 
                        (d) Notice of any redemption shall be given by first 
class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior
to the date fixed for redemption to each holder of record of the Series A
Preferred Stock to be redeemed, at their respective addresses appearing on the
stock books of Holding. Notice so mailed shall be conclusively presumed to have
been duly given whether or not actually received, and failure to duly give such
notice by mail, or any defect in such notice, to the holders of any shares
designated for redemption shall not affect the validity of the proceedings for
the redemption of any other shares of Series A Preferred Stock. Such notice
shall state: (i) the Redemption Date; (ii) the redemption price; (iii) the
number of shares of Series A Preferred Stock to be redeemed and, if less than
all the shares held by such holder are to be redeemed, the number of such shares
to be so redeemed from such holder; (iv) the place where certificates for such
shares are to be surrendered for payment of the redemption price; and (v) that
after such Redemption Date the shares to be redeemed shall not accrue dividends.
If such notice is mailed as aforesaid, and if on or before the Redemption Date
funds sufficient to redeem the shares called for redemption are set aside by
Holding in trust for the account of the holders of the shares to be redeemed,
notwithstanding the fact that any certificate for shares called for redemption
shall not have been surrendered for cancellation, on and after the Redemption
Date the shares represented thereby so called for redemption shall be deemed to
be no longer outstanding, dividends thereon shall cease to accrue, and all
rights of the holders of such shares as stockholders of Holding shall cease,
except the right to receive the redemption price, without interest, upon
surrender of the certificate representing such shares. Upon surrender in
accordance with the aforesaid notice of the certificate for any shares so
redeemed (duly endorsed or accompanied by appropriate instruments of transfer,
if so required by Holding in such notice), the holders of record of such shares
shall be entitled to receive the redemption price, without interest. In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued representing the unredeemed shares without cost
to the holder thereof.
 
                        (e) At its option, Holding may, on or prior to the
Redemption Date, irrevocably deposit the aggregate amount payable upon
redemption of the shares of the Series A Preferred Stock to be redeemed with a
bank or trust bank designated by Holding having its principal office in New
York, New York, San Juan, Puerto Rico, or any other city in which Holding shall
at that time maintain a transfer agent with respect to its capital stock, and
having a combined capital surplus (as shown by its latest published statement)
of at least $50,000,000 (hereinafter referred to as the "Depository"), to be
held in trust by the Depository for payment to the holders of the Series A
Preferred Stock to be redeemed. If such deposit is made and the funds so
deposited are made 
 
 
 
                                       9
<PAGE>   10
 
immediately available to the holders of the Series A Preferred Stock to be
redeemed, Holding shall thereupon be released and discharged (subject to the
provisions described in the next paragraph) from any obligation to make payment
of the amount payable upon redemption of the Series A Preferred Stock to be
redeemed, and the holders of such shares shall look only to the Depository for
such payment.
 
                        (f) Any funds remaining unclaimed at the end of two
years from and after the Redemption Date in respect of which such funds
were deposited shall be returned to Holding forthwith and thereafter the holders
of the Series A Preferred Stock called for redemption with respect to which such
funds were deposited shall look only to Holding for the payment of the
redemption price thereof. Any interest accrued on any funds deposited with the
Depository shall belong to Holding and shall be paid to it from time to time on
demand. Any of the Series A Preferred Stock which shall at any time have been
redeemed shall, after such redemption, have the status of authorized but
unissued preferred shares, without designation as to series, until such shares
are once more designated as part of a particular series by the Board of
Directors.
 
            6.          Voting Rights.
 
                        (a) Except as expressly required by applicable law, or 
except as indicated below, the holders of the Series A Preferred Stock will not
be entitled to receive notice of or attend or vote at any meeting of the
stockholders of Holding.
 
                        (b) If at the time of any annual meeting of Holding's
stockholders for the election of directors, Holding has failed to pay
or declare and set aside for payment a monthly Dividend for each of the 18
preceding monthly dividend periods, the number of directors then constituting
the Board of Directors of Holding shall be increased by one (if not already
increased by one due to a default in preference dividends), and at such annual
meeting the holders of the Series A Preferred Stock, along with the holders of
any other series of Preferred Stock which may have voting rights due to
Holding's failure to pay dividends, will be entitled to elect such additional
director to serve on Holding's Board of Directors. Such director elected by the
holders of the Series A Preferred Stock and any other Preferred Stock shall
continue to serve as director until the earlier of (i) the full term for which
he or she shall have been elected or (ii) the payment of 12 monthly Dividends.
 
                        (c) Unless the vote or consent of the holders of a
greater number of shares shall then be required by law, the affirmative
vote or consent of the holders of at least two-thirds of the aggregate
liquidation preference of the Series A Preferred Stock and of the shares of any
Parity Stock at the time outstanding, given in person or by proxy, either in
writing or by a vote at a meeting called for the purpose at which the holders of
Series A Preferred Stock and any such other series of Parity Stock shall vote
together as a single class without regard to series, shall be necessary for
authorizing, effecting or validating any variation or abrogation of the powers,
preferences, rights, privileges, qualifications, limitations and restrictions of
the Series A Preferred Stock or any such other series of Parity Stock by way of
amendment, alteration or repeal of any of the provisions of the Certificate of
Incorporation of Holding, or of any amendment or supplement thereto, or
otherwise (including any certificate of amendment or any similar document
relating to any series of Preferred Stock). Notwithstanding the foregoing,
Holding may, without the consent or sanction of the holders of Series A
Preferred Stock, authorize or issue capital stock of Holding ranking, as to
dividend rights and rights on liquidation, winding up and dissolution, on a
parity with or junior to the Series A Preferred Stock.
 
                        (d) Unless the vote or consent of the holders of a
greater number of shares shall then be required by law, the affirmative
vote or consent of the holders of at least two-thirds of the aggregate
liquidation preference of the Series A Preferred Stock and any other series of
 
 
 
                                       10
<PAGE>   11
 
 
Parity Stock at the time outstanding, given in person or by proxy, either in
writing or by a vote at a meeting called for the purpose at which the holders of
Series A Preferred Stock and any such other series of Parity Stock shall vote
together as a single class without regard to series, shall be necessary to
create, authorize or issue, or reclassify any authorized capital stock of
Holding into, or create, authorize or issue any obligation or security
convertible into or evidencing a right to purchase, any shares of any class of
stock of Holding ranking prior to both the Series A Preferred Stock and any
other series of Parity Stock. Subject to the foregoing, Holding's Certificate of
Incorporation may be amended to increase the number of authorized shares of
Preferred Stock without the vote of the holders of Preferred Stock, including
the Series A Preferred Stock. No vote of the holders of the Series A Preferred
Stock and any other series of Parity Stock will be required for Holding to
redeem or purchase and cancel the Series A Preferred Stock in accordance with
the Holding's Certificate of Incorporation.
 
            7. Re-acquired Shares. Series A Preferred Stock redeemed, or
otherwise purchased or acquired by Holding shall be restored to the status of
authorized but unissued shares of Preferred Stock without designation as to
series.
 
                                     EIGHTH
 
            The holders of Common and Preferred Stock of Holding shall not have
any preemptive or preferential right of subscription to or purchase of any
shares, nor to any obligations convertible into any shares of Holding; whether
now or hereafter authorized, except as the Board of Directors, in its
discretion, may from time to time determine and at such price as the Board of
Directors may from time to time fix.
 
                                      NINTH
 
            Holding shall hold at least one annual meeting of stockholders each
year, at such place and date prescribed by the By-laws of Holding. Special
meetings may be called only by the President and Board of Directors.
 
            The annual meeting shall be convened by mailing a notice to each
stockholder at least ten (10) days, but no more than sixty (60) days prior to
the date for the meeting.
 
            Notices of special meetings of stockholders shall contain the same
information as notices of annual meetings of stockholders, but they shall also
contain information in connection with the reasons for the call to the meeting
and in connection with the different matters to be considered and voted upon at
the meeting. Notices prepared in accordance with these provisions shall be
required in order to hold a valid stockholders' meeting, and dispensing
therewith shall be excused only by the written consent of the stockholders.
 
                                      TENTH
 
            In order to be valid and unless a higher vote is required by
applicable law or this Certificate of Incorporation, such resolutions as may be
adopted at stockholders meetings shall be approved by the majority of the
outstanding shares of voting capital stock present or represented by proxy if a
quorum is present.
 
                                    ELEVENTH
 
            Holding shall indemnify any person who was or is a party or is
threatened to be made a party to any imminent, pending or resolved action, suit
or proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of Holding) by reason of the fact that he is
or was a director, officer, employee or agent of Holding, or is or was serving
at the request of Holding as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or any other enterprise, against
expenses (including attorneys' fees), judgments, fines 
 
 
 
                                       11
<PAGE>   12
 
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if it is formally determined by
the Board of Directors, or other committee or entity empowered to make such
determination, that he acted in good faith and in a manner he reasonably deemed
consistent with and not opposed to the best interests of Holding, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the person did
not act in good faith nor in a manner which he reasonably believed to be
consistent with or not opposed to the best interests of Holding and, with
respect to any criminal action or proceeding, the person did not have reasonable
cause to believe that his conduct was unlawful.
 
            Holding shall indemnify any person who was or is a party or is
threatened to be made a party to any imminent, pending or resolved action, suit
or proceeding by or in the right of Holding to procure a judgment in its favor
by reason of the fact that he is or was a director, officer, employee or agent
of Holding, or is or was serving at the request of Holding as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or any other enterprise, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if it is formally determined by the Board of
Directors, or other committee or entity empowered to make such determination,
that he acted in good faith and in a manner he reasonably deemed consistent with
or not opposed to the best interests of Holding, except that no indemnification
shall be made in respect of any claim, matter or controversy as to which such
person shall have been determined to be liable to Holding unless and only to the
extent that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
 
            To the extent that a director, officer, employee or agent of Holding
has prevailed on the merits or otherwise in defense of any action, suit or
proceeding referred to in paragraphs 1 or 2 of this Article ELEVENTH, or in
defense of any claim, matter or controversy relating thereto, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
 
            Any indemnification under paragraphs 1 or 2 of this Article ELEVENTH
(unless ordered by a court) shall be made by Holding only as authorized in the
specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met the
applicable norms of conduct set forth in those paragraphs. Such determination
shall be made (a) by a majority vote of the directors who were not parties to
such action, suit or proceeding, even if the directors constitute less than a
quorum, or (b) if there are no such directors of if such directors so determine,
by independent legal counsel in a written opinion, or (c) by the stockholders.
 
            Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by Holding in advance of the final resolution of such
action, suit or proceeding as authorized by the Board of Directors in the
specific case upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount if it is ultimately determined
that he is not entitled to be indemnified by Holding as authorized in this
Article ELEVENTH.
 
            The indemnification provided by this Article ELEVENTH shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any statute, by-law, agreement, vote of uninvolved
stockholders, directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
 
                                       12
<PAGE>   13
 
            Holding may purchase and maintain insurance, in such amounts as the
Board of Directors deems appropriate, in the name of any person who is or was a
director, officer, employee or agent of Holding, or is or was serving at the
request of Holding as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or any other enterprise, against
any liability asserted against him or incurred by him in any such capacity, or
arising out of his status as such, whether or not Holding has the power to
indemnify him against such liability pursuant to this Article ELEVENTH and
applicable law.
 
            For purposes of this Article ELEVENTH, Holding includes any
constituent corporation of a consolidation or merger which is absorbed in a
consolidation or merger, which, if it had continued its independent legal
existence, would have had the power and the authority to compensate its
officers, directors, employees and agents.
 
                                     TWELFTH
 
            This Certificate of Incorporation may be amended in the manner
provided for herein and in the Corporations Law.
 
            The By-laws of Holding may be amended, altered or modified or new
by-laws may be adopted by the Board of Directors or at any annual or special
meeting of stockholders in accordance with applicable provisions of the
Corporations Law.
 
            Calls for meetings of stockholders shall clearly describe any and
all amendments to the Certificate of Incorporation or the By-laws to be
considered and voted upon at the meetings, but it shall not be necessary to
include in any such calls the wording of the amendments or the new text of the
paragraph or section, it being sufficient to designate therein the amendments by
the number of the paragraph or the section intended to be amended.
 
                                   THIRTEENTH
 
            The name and the postal and physical address of the sole
incorporator are as follows:
 
            Name:                          Postal and Physical Address:
 
            Frank C. Stipes                19 W. McKinley Street
                                           Mayaguez, Puerto Rico  00680
 
            I, the undersigned being the sole incorporator hereinbefore named
for the purposes of executing this Certificate of Incorporation pursuant to the
Corporations Law, hereby swear that the statements contained herein are true.
 
   Given at Mayaguez, Puerto Rico, this 3rd day of February, 1999.
 
 
 
                                 /s/ Frank C. Stipes
                                 ----------------------------
                                 Frank C. Stipes