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                                                                   EXHIBIT 3.1


                     RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                           MORGAN STANLEY GROUP INC.      


                         Pursuant to Section 245 of the
                General Corporation Law of the State of Delaware


                 Morgan Stanley Group Inc., a corporation duly organized and 
existing under the General Corporation Law of the State of Delaware (the 
"Corporation") and originally incorporated in the State of Delaware on
July 10, 1975 under the name Morgan Stanley Holdings Incorporated, does
hereby certify as follows:

                 FIRST:  That the Certificate of Incorporation of the
Corporation was filed in the office of the Secretary of State of the State of
Delaware, and a certified copy thereof was recorded in the office of the
Recorder of Kent County, Delaware, on the 10th day of July, 1975.

                 SECOND:  That the Restated Certificate of Incorporation was
filed in the office of the Secretary of State of the State of Delaware, and a
certified copy thereof was recorded in the office of the Recorder of Kent
County, Delaware, on the 30th day of October, 1989.

                 THIRD:  That Certificates of Amendment to the Restated
Certificate of Incorporation were filed in the office of the Secretary of State
of the State of Delaware, and certified copies thereof were recorded in the
office of the Recorder of Kent County, Delaware, on the 8th day of May, 1991,
and the 21st day of May, 1992.

                 FOURTH:  That Certificates of Stock Designation were filed in
the office of the Secretary of State of the State of Delaware, and certified
copies thereof were recorded in the office of the Recorder of Kent County,
Delaware, on the 19th day of September, 1990, the 24th day of May, 1991, the
29th day of August, 1991, the 15th day of November, 1991, the 20th day of
March, 1992, and the 6th day of May, 1992.

                 FIFTH:  That a Certificate of Retirement of Stock was filed in
the office of the Secretary of State of the State of Delaware and a certified
copy thereof was recorded in the office of the Recorder of Kent County,
Delaware, on the 20th day of June, 1992.
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                 SIXTH:  That this Restated Certificate of Incorporation
restates and integrates and does not further amend the provisions of the
Corporation's Restated Certificate of Incorporation as heretofore amended or
supplemented, and that there is no discrepancy between those provisions and the
provisions of this Restated Certificate of Incorporation, and that the Restated
Certificate of Incorporation is hereby restated to read in its entirety as
follows:

                                   ARTICLE I

                                      NAME

                 The name of the Corporation is:

                           MORGAN STANLEY GROUP INC.


                                   ARTICLE II

                     REGISTERED OFFICE AND REGISTERED AGENT

                 The registered office of the Corporation in the State of
Delaware is located at 32 Loockerman Sq., Ste. L-100, City of Dover, County of
Kent.  The name of the registered agent of the Corporation at such address is
United States Corporation Company.


                                  ARTICLE III

                               CORPORATE PURPOSE

                 The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may now or hereafter be organized under the
General Corporation Law of Delaware.


                                   ARTICLE IV

                                 CAPITAL STOCK

                 SECTION 1.  Shares and Classes Authorized.  The total number
of shares of all classes of capital stock which the Corporation shall have
authority to issue is 330,000,000 shares, which shall include:

                 (a)  30,000,000 shares of preferred stock of no par value
         each (hereinafter referred to as "Preferred Stock"); and
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                 (b)  300,000,000 shares of common stock of the par value
         of $1.00 each (hereinafter referred to as "Common Stock");

such classes of Preferred Stock and Common Stock being sometimes hereinafter
collectively referred to as "capital stock".

                 SECTION 2.  Preferences, Rights, Limitations and Restrictions
of Capital Stock.  The designations and the powers, preferences and rights, and
the qualifications, limitations or restrictions thereof, in respect of the
classes of the capital stock, and the authority with respect thereto expressly
vested in the Board of Directors of the Corporation, are as follows:

                 PART I -- PREFERRED STOCK  (a)  The Preferred Stock may be
issued either as a class without series or, if so determined by the Board of
Directors of the Corporation, from time to time in one or more series and with
such designation for such class or each such series as shall be stated and
expressed in the resolution or resolutions providing for the issue of such
class or each such series adopted by the Board of Directors.  The Board of
Directors in any such resolution or resolutions is expressly authorized to
state and express for such class or each such series:

                 (i)  Voting rights, if any, including, without limitation, the
         authority to confer multiple votes per share, voting rights as to
         specified matters or issues or, subject to the provisions of this
         Restated Certificate of Incorporation, voting rights to be exercised
         either together with holders of Common Stock as a single class, or
         independently as a separate class;

                (ii)  The rate per annum and the times at and conditions upon
         which the holders of shares of such class or series shall be entitled
         to receive dividends, the conditions and dates upon which such
         dividends shall be payable and whether such dividends shall be
         cumulative or noncumulative, and, if cumulative, the terms upon which
         such dividends shall be cumulative;

               (iii)  Redemption, repurchase, retirement and sinking fund 
         rights, preferences and limitations, if any, the amount payable on
         shares of such class or series in the event of such redemption, 
         repurchase or retirement, the terms and conditions of any sinking 
         fund, the manner of creating such fund or funds and whether any of the
         foregoing shall be cumulative or noncumulative;
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                (iv)  The rights to which the holders of the shares of such 
         class or series shall be entitled upon any voluntary or involuntary 
         liquidation, dissolution or winding up of the Corporation;

                 (v)  The terms, if any, upon which the shares of such class or
         series shall be convertible into, or exchangeable for, shares of stock
         of any other class or classes or of any other series of the same or
         any other class or classes, including the price or prices or the rate
         or rates of conversion or exchange and the terms of adjustment, if
         any; and

                (vi)  Any other designations, preferences and relative,
         participating, optional or other special rights and qualifications,
         limitations or restrictions thereof so far as they are not
         inconsistent with the provisions of this Restated Certificate of
         Incorporation and to the full extent now or hereafter permitted by the
         laws of the State of Delaware.

                 (b)  All shares of the Preferred Stock, if issued as a
class without series, or all shares of the Preferred Stock of any one series,
if issued in series, shall be identical to each other in all respects and shall
entitle the holders thereof to the same rights and privileges, except that
shares of any one series issued at different times may differ as to the dates
from which dividends thereon, if cumulative, shall be cumulative.
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         Subpart A:  ESOP Convertible Preferred Stock*

         1.  Designation and Issuance.

                 (A)  The shares of such series shall be designated ESOP
CONVERTIBLE PREFERRED STOCK (hereinafter referred to as the "ESOP Preferred
Stock") and such series shall consist of 3,902,438 shares.  Such number of
shares may be increased or decreased from time to time by resolution of the
Pricing Committee of this Board of Directors (the "Pricing Committee"), but no
such increase shall result in such series consisting of more than 4,000,000
shares, and no decrease shall reduce the number of shares of ESOP Preferred
Stock to a number less than that of shares of ESOP Preferred Stock then
outstanding plus the number of shares issuable upon exercise of any rights,
options or warrants or upon conversion of outstanding securities issued by the
Corporation relating to such shares.  Any shares of ESOP Preferred Stock
redeemed or purchased by the Corporation shall remain issued and outstanding
for all purposes (except that as long as such shares are held by the
Corporation or its nominee, no dividends shall be paid on such shares and they
shall neither be entitled to vote nor counted for quorum purposes) and may
thereafter be transferred by the Corporation from time to time to a trustee or
trustees referred to in paragraph (B) of this Section 1 (whereupon the voting
and dividend rights of such shares shall be restored); provided that the
Corporation may provide at the time of or at any time after such redemption or
purchase that any such shares then held by the Corporation or its nominee shall
be retired, and such shares shall then be restored to the status of authorized
but unissued shares of preferred stock of the Corporation.

                 (B)  Shares of ESOP Preferred Stock shall be issued only to a
trustee or trustees acting on behalf of an employee stock ownership trust or
plan or other employee benefit plan (a "Plan") of the Corporation.  In the
event of any sale, transfer or other disposition (hereinafter a "transfer") of
shares of ESOP Preferred Stock to any person (including, without limitation,
any participant in the Plan) other than (x) any trustee or trustees of the Plan
or (y) any pledgee of such shares acquiring such shares as security for any
loan or

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

*    Terms defined in this Subpart A are so defined for purposes of this
     Subpart alone.
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loans made to the Plan or to any trustee or trustees acting on behalf of the
Plan, the shares of ESOP Preferred Stock so transferred, upon such transfer and
without any further action by the Corporation or the holder, shall be
automatically converted into shares of Common Stock at the Conversion Price (as
hereinafter defined) and on the terms otherwise provided for the conversion of
shares of ESOP Preferred Stock into shares of Common Stock pursuant to Section
5 hereof and no such transferee shall have any of the voting powers,
preferences and relative, participating, optional or special rights ascribed to
shares of ESOP Preferred Stock hereunder, but, rather, only the powers and
rights pertaining to the Common Stock into which such shares of ESOP Preferred
Stock shall be so converted; provided, however, that in the event of a
foreclosure or other realization upon shares of ESOP Preferred Stock pledged as
security for any loan or loans made to the Plan or to the trustee or the
trustees acting on behalf of the Plan, the pledged shares so foreclosed or
otherwise realized upon shall be converted automatically into shares of Common
Stock at the Conversion Price and on the terms otherwise provided for
conversions of shares of ESOP Preferred Stock into shares of Common Stock
pursuant to Section 5 hereof.  In the event of such a conversion, such
transferee shall be treated for all purposes as the record holder of the shares
of Common Stock into which the ESOP Preferred Stock shall have been converted
as of the date of such conversion.  Certificates representing shares of ESOP
Preferred Stock shall be legended to reflect such restrictions on transfer.
Notwithstanding the foregoing provisions of this Section 1, shares of ESOP
Preferred Stock (i) may be converted into shares of Common Stock as provided by
Section 5 hereof and the shares of Common Stock issued upon such conversion may
be transferred by the holder thereof as permitted by law and (ii) shall be
redeemable by the Corporation upon the terms and conditions provided by
Sections 6, 7 and 8 hereof.

         2.  Dividends and Distributions.

                 (A)  (1)  Subject to the provisions for adjustment
hereinafter set forth, the holders of shares of ESOP Preferred Stock (other
than the Corporation or its nominee) shall be entitled to receive, when and as
declared by the Board of Directors out of funds legally available therefor,
cash dividends ("Preferred Dividends") payable in accordance with either of the
following elections, as the Board of Directors shall elect from time to time in
its absolute discretion:
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                 (i)  in an amount per share initially equal to $2.78 per
         share per annum, and no more (such amount, as adjusted from time to
         time pursuant to the terms hereof, including during any period in
         which a Semiannual Payment Election (as defined below) shall be in
         effect, the "Annual Dividend Rate"), payable annually in arrears on
         December 31 (or such later date not more than four business days
         thereafter as the Board of Directors may from time to time elect in
         its absolute discretion; such date, the "Annual Payment Date") of each
         year (such election, the "Annual Payment Election") beginning on the
         Annual Payment Date occurring immediately after the effective date of
         such Annual Payment Election; or

                (ii)  in an amount per share initially equal to $2.78 per share
         per annum, and no more (such amount, as adjusted from time to time
         pursuant to the terms hereof, including during any period in which an
         Annual Payment Election is in effect, the "Semiannual Dividend Rate";
         and the Semiannual Dividend Rate and the Annual Dividend Rate, as in
         effect at any time, are each hereinafter referred to as the "Preferred
         Dividend Rate"), semiannually in arrears, one-half on each June 30 and
         December 31 (or, in either case, such later date not more than four
         business days after either of such dates as the Board of Directors may
         from time to time elect in its absolute discretion; such dates, the
         "Semiannual Payment Dates") of each year (such election, the
         "Semiannual Payment Election"), beginning on the Semiannual Payment
         Date occurring immediately after the effective date of such Semiannual
         Payment Election;

provided that any Semiannual Payment Election shall be made effective only
during the period beginning on January 5 and ending on June 29 in each year.
The Board of Directors shall give prompt notice to the holders of the ESOP
Preferred Stock of any Semiannual Payment Election or Annual Payment Election
and any election to alter any Dividend Payment Date pursuant to this Section
2(A)(1).  Each Annual Payment Date or Semiannual Payment Date, as applicable,
is hereinafter referred to as a "Dividend Payment Date", and each payment of a
Preferred Dividend shall be made to holders of record at the opening of
business on such Dividend Payment Date.

                 (2)  Preferred Dividends shall begin to accrue on
outstanding shares of ESOP Preferred Stock from the date of issuance of such
shares, except that with respect to any shares of ESOP Preferred Stock redeemed
or purchased by the Corporation and then reissued, Preferred Dividends shall
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accrue on such shares from their date of reissuance.  Preferred Dividends shall
accrue on a daily basis, whether or not the Corporation shall then have
earnings or surplus (computed on the basis of a 360-day year of twelve 30-day
months in case of any period less than one year) based on the Preferred
Dividend Rate in effect on such date; provided that if a Semiannual Payment
Election or an Annual Payment Election becomes effective on or after such date
and before the immediately succeeding Dividend Payment Date, payments in
respect of dividends on the ESOP Preferred Stock made on or after the effective
date of such Semiannual Payment Election or Annual Payment Election and on or
before such Dividend Payment Date shall be computed using the Preferred
Dividend Rate in effect on the date of such payment.  Accrued but unpaid
Preferred Dividends shall cumulate as of the Dividend Payment Date on which
they first become payable, but no interest shall accrue on accumulated but
unpaid Preferred Dividends.

                 (B)  So long as any shares of ESOP Preferred Stock shall be
outstanding, no dividend shall be declared or paid or set apart for payment on
any other series of stock ranking on a parity with the ESOP Preferred Stock as
to dividends, unless there shall also be or have been declared and paid or set
apart for payment on the ESOP Preferred Stock, like dividends for all dividend
payment periods of the ESOP Preferred Stock ending on or before the dividend
payment date of such parity stock, ratably in proportion to the respective
amounts of dividends (1) accumulated and unpaid or payable on such parity
stock, on the one hand, and (2) accumulated and unpaid through the dividend
payment period or periods of the ESOP Preferred Stock next preceding such
dividend payment date, on the other hand.  If full cumulative dividends on the
ESOP Preferred Stock have not been declared and paid or set apart for payment
when due, the Corporation shall not declare or pay or set apart for payment any
dividends or make any other distributions on, or make any payment on account of
the purchase, redemption or other retirement of, any other class of stock or
series thereof of the Corporation ranking, as to dividends or upon dissolution,
junior to the ESOP Preferred Stock until full cumulative dividends on the ESOP
Preferred Stock shall have been paid or declared and set apart; provided,
however, that the foregoing shall not apply to (i) any dividend or distribution
payable solely in any shares of, or options, warrants or rights to subscribe
for or purchase shares of, any stock ranking, as to dividends and upon
dissolution, junior to the ESOP Preferred Stock or (ii) the acquisition of
shares of any stock ranking, as to dividends and upon dissolution, junior to
the ESOP Preferred Stock in
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exchange solely for or by conversion solely into shares of any other stock
ranking junior to the ESOP Preferred Stock as to dividends and upon
dissolution.

                 (C)  Any dividend payment made on shares of ESOP Preferred
Stock shall first be credited against the earliest accumulated but unpaid
dividend due with respect to such shares.

         3.  Liquidation Preference.

                 (A)  In the event of any dissolution or liquidation of the
Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus)
shall be made to or set apart for the holders of any series or class or classes
of stock of the Corporation ranking junior to ESOP Preferred Stock upon
dissolution or liquidation, the holders of ESOP Preferred Stock (other than the
Corporation or its nominee) shall be entitled to receive the Liquidation Price
(as hereinafter defined) per share in effect at the time of dissolution or
liquidation plus an amount equal to all dividends accrued (whether or not
accumulated) and unpaid on the ESOP Preferred Stock to the date of final
distribution to such holders; but such holders shall not be entitled to and
shall not otherwise receive any further payments.  The Liquidation Price per
share that holders of ESOP Preferred Stock shall receive upon dissolution or
liquidation shall be $35.875, subject to adjustment as hereinafter provided.
If, upon any dissolution or liquidation of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of ESOP
Preferred Stock shall be insufficient to pay in full the preferential amount
aforesaid and liquidating payments on any other shares ranking, as to
dissolution or liquidation, on a parity with ESOP Preferred Stock, then such
assets, or the proceeds thereof, shall be distributed among the holders of ESOP
Preferred Stock and any such other shares ratably in accordance with the
respective amounts that would be payable on such shares of ESOP Preferred Stock
and any such other shares if all amounts payable thereon were paid in full.
For the purposes of this Section 3, neither a consolidation or merger of the
Corporation with or into one or more corporations, nor the sale, transfer,
lease or exchange (for cash, shares of equity stock, securities or other
consideration) of all or substantially all of the assets of the Corporation,
nor the distribution to the stockholders of the Corporation of all or
substantially all of the consideration for such sale, unless such consideration
(apart from assumption of liabilities) or the net proceeds
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thereof consists substantially entirely of cash, shall be deemed to be a
dissolution or liquidation, voluntary or involuntary.

                 (B)  Subject to the rights of the holders of shares of any
series or class or classes of stock ranking on a parity with or senior to ESOP
Preferred Stock upon dissolution or liquidation, upon any dissolution or
liquidation of the Corporation, after payment shall have been made in full to
the holders of ESOP Preferred Stock as provided in this Section 3, but not
prior thereto, any other series or class or classes of stock ranking junior to
ESOP Preferred Stock upon dissolution or liquidation shall, subject to the
respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets of the Corporation remaining to be paid or
distributed, and the holders of ESOP Preferred Stock shall not be entitled to
share therein.

         4.  Ranking and Voting of Shares.

                 (A)  The Corporation's 9.36% Cumulative Preferred Stock, with
a liquidation value of $25.00 per share, the Corporation's 8.88% Cumulative
Preferred Stock, with a liquidation value of $200.00 per share, and the
Corporation's 8-3/4% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share, shall rank on a parity with ESOP Preferred Stock as to
dividends and as to distribution of assets upon dissolution or liquidation.

                 Unless otherwise provided in the Restated Certificate of
Incorporation of the Corporation, as the same may be amended, or in a
Certificate of Designation of Rights and Preferences relating to any subsequent
series of preferred stock, the ESOP Preferred Stock shall rank on a parity with
all series of the Corporation's preferred stock as to dividends and as to the
distribution of assets upon dissolution or liquidation.

                 (B)  The holders of shares of ESOP Preferred Stock (other
than the Corporation or its nominee) shall have the following voting rights:

                 (1)  The holders of ESOP Preferred Stock shall be entitled
to vote on all matters submitted to a vote of the stockholders of the
Corporation, voting together with the holders of Common Stock as one class.
The holder of each share of ESOP Preferred Stock shall be entitled to a number
of votes equal to 1.35 times the number of shares of Common
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Stock into which such share of ESOP Preferred Stock could be converted on the
record date for determining the stockholders entitled to vote; it being
understood that whenever the "Conversion Price" (as defined in Section 5
hereof) is adjusted as provided in Section 9 hereof, the number of votes of the
ESOP Preferred Stock shall also be correspondingly adjusted.  Notwithstanding
the immediately preceding sentence, if the governing body of the New York Stock
Exchange or any other securities listing service or exchange (each, an
"Exchange") or any relevant governmental or regulatory entity (each such
entity, and each governing body of an Exchange, a "Regulating Entity") shall
have disapproved of such voting power or taken or threatened any action against
the Corporation or in respect of any of its securities in accordance with Rule
19c-4 promulgated under the Securities Exchange Act of 1934 (the "Exchange
Act"), or any other rule or listing standard of any Regulating Entity regarding
the voting power of securities, or if the Board of Directors determines in its
sole judgment that any Regulating Entity may so disapprove or take or threaten
any such action, the holder of each share of ESOP Preferred Stock shall be
entitled to a maximum number of votes permissible (consistent with continued
listing of the Corporation's securities on any such Exchange) in accordance
with the interpretations of any such rule or listing standard by such
Regulating Entity, as determined by the Board of Directors.

                 (2)  Except as otherwise required by law or set forth herein,
holders of ESOP Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for the taking of any
corporate action, including the issuance of any preferred stock now or
hereafter authorized; provided, however, that the vote of at least 66-2/3% of
the outstanding shares of ESOP Preferred Stock, voting separately as a series,
shall be necessary to approve any alteration, amendment or repeal of any
provision of the Restated Certificate of Incorporation or any alteration,
amendment or repeal of any provision of the resolutions relating to the
designation, preferences and rights of ESOP Preferred Stock (including any such
alteration, amendment or repeal effected by any merger or consolidation in
which the Corporation is the surviving or resulting corporation, but not
including any alteration or amendment of rights expressly provided for in
Section (B)(1) above or in Section 2(A)(1)), if such amendment, alteration or
repeal would alter or change the powers, preferences, or special rights of the
ESOP Preferred Stock so as to affect them adversely.
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         5.  Conversion into Common Stock.

                 (A)  A holder of shares of ESOP Preferred Stock shall be
entitled, at any time prior to the close of business on the date fixed for
redemption of such shares pursuant to Section 6, 7 or 8 hereof, to cause any or
all of such shares to be converted into shares of Common Stock.  The number of
shares of Common Stock into which each share of the ESOP Preferred Stock may be
converted shall be determined by dividing the Liquidation Price in effect at
the time of conversion by the Conversion Price (as hereinafter defined) in
effect at the time of conversion.  The initial Conversion Price per share at
which shares of Common Stock shall be issuable upon conversion of any shares of
ESOP Preferred Stock shall be $35.875, subject to adjustment as hereinafter
provided; that is, a conversion rate initially equivalent to one share of
Common Stock for each share of ESOP Preferred Stock, which is subject to
adjustment as hereinafter provided.

                 (B)  Any holder of shares of ESOP Preferred Stock desiring to
convert such shares into shares of Common Stock shall surrender, if
certificated, the certificate or certificates representing the shares of ESOP
Preferred Stock being converted, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating thereto), or
if uncertificated, a duly executed stock power relating thereto, at the
principal executive office of the Corporation or the offices of the transfer
agent for the ESOP Preferred Stock or such office or offices in the continental
United States of an agent for conversion as may from time to time be designated
by notice to the holders of the ESOP Preferred Stock by the Corporation or the
transfer agent for the ESOP Preferred Stock, accompanied by written notice of
conversion.  Such notice of conversion shall specify (i) the number of shares
of ESOP Preferred Stock to be converted and the name or names in which such
holder wishes the Common Stock and any shares of ESOP Preferred Stock not to be
so converted to be issued, and (ii) the address to which such holder wishes
delivery to be made of a confirmation of such conversion, if uncertificated, or
any new certificates which may be issued upon such conversion, if certificated.

                 (C)  Upon surrender, if certificated, of a certificate
representing a share or shares of ESOP Preferred Stock for conversion, or if
uncertificated, of a duly executed stock power relating thereto, the
Corporation shall issue and send by hand delivery (with receipt to be
acknowledged) or by first class mail, postage prepaid, to the
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holder thereof or to such holder's designee, at the address designated by such
holder, if certificated, a certificate or certificates for, or if
uncertificated, confirmation of, the number of shares of Common Stock to which
such holder shall be entitled upon conversion.  If there shall have been
surrendered shares of ESOP Preferred Stock only part of which are to be
converted, the Corporation shall issue and deliver to such holder or such
holder's designee, if certificated, a new certificate or certificates
representing the number of shares of ESOP Preferred Stock that shall not have
been converted, or if uncertificated, confirmation of the number of shares of
ESOP Preferred Stock that shall not have been converted.

                 (D)  The issuance by the Corporation of shares of Common
Stock upon a conversion of shares of ESOP Preferred Stock into shares of Common
Stock made at the option of the holder thereof shall be effective as of the
earlier of (i) the delivery to such holder or such holder's designee of the
certificates representing the shares of Common Stock issued upon conversion
thereof, if certificated, or confirmation, if uncertificated, and (ii) the
commencement of business on the second business day after the surrender of the
certificate or certificates, if certificated, or a duly executed stock power,
if uncertificated, for the shares of ESOP Preferred Stock to be converted.  On
and after the effective date of conversion, the person or persons entitled to
receive Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock, and no
allowance or adjustment shall be made in respect of dividends payable to
holders of Common Stock of record on any date prior to such effective date.
The Corporation shall not be obligated to pay any dividend that may have
accrued or have been declared but that is not payable to holders of shares of
ESOP Preferred Stock if the Dividend Payment Date for such dividend is on or
subsequent to the effective date of conversion of such shares.

                 (E)  The Corporation shall not be obligated to deliver to
holders of ESOP Preferred Stock any fractional share or shares of Common Stock
issuable upon any conversion of such shares of ESOP Preferred Stock, but in
lieu thereof may make a cash payment in respect thereof in any manner permitted
by law.

                 (F)  The Corporation shall at all times reserve and keep
available out of its authorized and unissued Common Stock or treasury Common
Stock, solely for issuance upon the conversion of shares of ESOP Preferred
Stock as herein
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provided, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the shares of ESOP Preferred Stock then
outstanding.

         6.  Redemption at the Option of the Corporation.

              (A)  The ESOP Preferred Stock shall be redeemable, in whole or in
part, at the option of the Corporation at any time after September 19, 2000,
out of funds legally available therefor, at a redemption price per share equal
to 100% of the Liquidation Price plus an amount equal to all accrued (whether 
or not accumulated) and unpaid dividends thereon to the date fixed for 
redemption.  Payment of the redemption price shall be made by the Corporation
in cash or shares of Common Stock, or a combination thereof, as permitted by
paragraph (E) of this Section 6.  From and after the date fixed for redemption,
dividends on shares of ESOP Preferred Stock called for redemption will cease to
accrue and all rights of the holder in respect of such shares shall cease,
except the right to receive the redemption price.  Upon payment of the
redemption price, such shares shall be deemed to have been transferred to the
Corporation, to be held as treasury shares or to be retired, in either case as
provided in Section 1(A).  If less than all of the outstanding shares of ESOP
Preferred Stock are to be redeemed, the Corporation shall either redeem a
portion of the shares of each holder determined pro rata based on the number of
shares held by each holder or shall select the shares to be redeemed by lot, as
may be determined by the Board of Directors of the Corporation.

              (B)  Notice of redemption will be sent to the holders of ESOP 
Preferred Stock at the address shown on the books of the Corporation or any 
transfer agent for ESOP Preferred Stock by first class mail, postage prepaid, 
mailed not less than twenty (20) days nor more than sixty (60) days prior to the
redemption date or in any other manner provided by law.  Each notice shall
state:  (i) the redemption date; (ii) the total number of shares of ESOP
Preferred Stock to be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (iii) the redemption price; (iv) the place or places where
certificates, if certificated, for such shares are to be surrendered for
payment of the redemption price; (v) that dividends on the shares to be
redeemed will cease to accrue on such redemption date; (vi) whether such
redemption price should be paid in cash or in shares of Common Stock; and (vii)
the conversion rights of the shares to be redeemed, the period within which
conversion
<PAGE>   15
 
                                       15

rights may be exercised and the Conversion Price and number of shares of Common
Stock issuable upon conversion of a share of ESOP Preferred Stock at the time.
Upon surrender of the certificates, if certificated, for any shares so called
for redemption, or upon the date fixed for redemption, if uncertificated, such
shares, if not previously converted, shall be redeemed by the Corporation as of
the close of business on the date fixed for redemption and at the redemption
price set forth in this Section 6.

              (C)  The Corporation may, in its sole discretion and 
notwithstanding anything to the contrary in paragraph (A) of this Section 6, at
any time within one year after either of the following events:

              (i)  there shall be a change in the federal tax law or 
         regulations of the United States of America or of an interpretation or 
         application of such law or regulations or of a determination by a 
         court of competent jurisdiction that in any case has the effect of 
         precluding the Corporation from claiming (other than for purposes of 
         calculating any alternative minimum tax) any of the tax deductions for
         dividends paid on the ESOP Preferred Stock when such dividends are 
         used as provided under Section 404(k)(2) of the Internal Revenue Code
         of 1986, as amended (the "Code"), as in effect on the date shares of 
         ESOP Preferred Stock are initially issued, or

             (ii)  the Corporation shall certify to the holders of the ESOP
         Preferred Stock that the Corporation has determined in good faith that
         the Plan either is not qualified as a "stock bonus plan" within the
         meaning of Section 401(a) of the Code or is not an "employee stock
         ownership plan" within the meaning of Section 4975(e)(7) of the Code,

elect either to (a) redeem, out of funds legally available therefor, any or all
of such ESOP Preferred Stock for cash or, if the Corporation so elects, in
shares of Common Stock, or a combination of such shares of Common Stock and
cash, as permitted by paragraph (E) of this Section 6, at a redemption price
equal to (x) if the relevant event is as provided in clause (i) above, the
Liquidation Price per share on the date fixed for redemption, plus an amount
equal to accrued (whether or not accumulated) and unpaid dividends thereon to
the date fixed for redemption or (y) if the relevant event is as provided in
clause (ii) above, an amount calculated on the basis of the redemption prices
provided in paragraph (D) of this Section 6 on the date fixed for redemption or
(b)
<PAGE>   16
 
                                       16

exchange any or all of such shares of ESOP Preferred Stock for securities of at
least equal value (as determined by an independent appraiser) that constitute
"qualifying employer securities" with respect to a holder of ESOP Preferred
Stock within the meaning of Section 409(1) of the Code and Section 407(d)(5) of
the Employment Retirement Income Security Act of 1974, as amended ("ERISA"), or
any successor provisions of law.  If the Corporation elects to redeem any or
all of the ESOP Preferred Stock pursuant to clause (a) of the preceding
sentence, notice of such redemption shall be given as required in paragraph (B)
of this Section 6, and if the Corporation elects to exchange any or all of the
ESOP Preferred Stock for securities of at least equal value pursuant to clause
(b) of the preceding sentence, it will cause notice of such election to be sent
to the holders of ESOP Preferred Stock at the address shown on the books of the
Corporation or any transfer agent for ESOP Preferred Stock by first class mail,
postage prepaid, mailed not less than twenty (20) days nor more than sixty (60)
days prior to the date of exchange or in any other manner required by law.
Each notice shall state:  (i) the exchange date; (ii) the total number of
shares of ESOP Preferred Stock to be exchanged and, if fewer than all the
shares held by such holder are to be exchanged, the number of shares held by
such holder to be exchanged; (iii) the exchange rate; (iv) the place or places
where certificates, if certificated, for such shares are to be surrendered for
exchange; and (v) that dividends on the shares to be exchanged will cease to
accrue on such exchange date.

                 (D)  Notwithstanding anything to the contrary in paragraph (A)
of this Section 6, in the event that the Plan is, or contributions thereto are,
terminated, the Corporation may, in its sole discretion, call for redemption 
any or all of the then outstanding ESOP Preferred Stock, upon notice as 
required in paragraph (B) of this Section 6, out of funds legally available
therefor, at a redemption price per share equal to the following percentages of
the Liquidation Price in effect on the date fixed for redemption:
<PAGE>   17
 
                                       17

<TABLE>
<CAPTION>
             During the Twelve-
                Month Period                             Percentage of
           Beginning September 19,                     Liquidation Price
           -----------------------                     -----------------
                    <S>                                      <C>
                    1991                                     106.98
                    1992                                     106.20
                    1993                                     105.43
                    1994                                     104.65
                    1995                                     103.88
                    1996                                     103.10
                    1997                                     102.33
                    1998                                     101.55
                    1999                                     100.78
                    2000                                     100.00
</TABLE>

and thereafter at 100%, plus, in each case, an amount equal to all accrued
(whether or not accumulated) and unpaid dividends thereon to the date fixed for
redemption.  Payment of the redemption price shall be made by the Corporation
in cash or shares of Common Stock, or a combination thereof, as permitted by
paragraph (E) of this Section 6.  From and after the date fixed for redemption,
dividends on shares of ESOP Preferred Stock called for redemption will cease to
accrue and all rights of the holder in respect of such shares shall cease,
except the right to receive the redemption price.  Upon payment of the
redemption price, such shares shall be deemed to have been transferred to the
Corporation, to be held as treasury shares or to be retired, in either case as
provided in Section 1(A).

              (E)  The Corporation, at its option, may make payment of the 
redemption price required upon redemption of shares of ESOP Preferred Stock
in cash or in shares of Common Stock, or in a combination of such shares and
cash, any such shares of Common Stock to be valued for such purpose at their
Fair Market Value (as defined in paragraph 9(H)(2)); provided, however, that in
calculating their Fair Market Value the Adjustment Period (as defined in
paragraph 9(H)(2)) shall be deemed to be the five (5) consecutive trading days
preceding the date of redemption.

         7.  Redemption at the Option of the Holder.

              (A)  Unless otherwise provided by law, shares of ESOP
Preferred Stock shall be redeemed by the Corporation at the option of the
holder, at any time and from time to time upon notice to the Corporation given
not less than five business days prior to the date fixed by the holder in such
notice, when and to the extent necessary for such holder to
<PAGE>   18
 
                                       18

provide for distributions required to be made under, or to satisfy an
investment election provided to participants in accordance with, the Plan or
any successor plan or when the holder elects to redeem shares of ESOP Preferred
Stock in connection with any Preferred Dividend (a "Dividend Redemption"), in
shares of Common Stock legally available therefor, at a redemption price equal
to the higher of (x) the Liquidation Price per share on the date fixed for
redemption and (y) the Fair Market Value (as defined in paragraph 9(H)(2)) of
the number of shares of Common Stock into which each share of ESOP Preferred
Stock is convertible at the time the notice of such redemption is given, plus
in either case an amount equal to accrued (whether or not accumulated) and
unpaid dividends thereon to the date fixed for redemption (such higher price on
any date, together with such accrued and unpaid dividends, the "Special
Redemption Price").  At the election of the Corporation, such redemption may
instead be made out of funds legally available therefor in cash or a
combination of Common Stock and cash.  Any shares of Common Stock shall be
valued for the purposes of redemption pursuant to this paragraph (A) as
provided by paragraph (E) of Section 6.  In the case of any Dividend
Redemption, such holder shall give the notice specified above on the fifth
business day after the related Dividend Payment Date and such redemption shall
be effective as to such number of shares of ESOP Preferred Stock as shall equal
(x) the aggregate amount of such Preferred Dividends paid with respect to
shares of ESOP Preferred Stock allocated or credited to the accounts of
participants in the Plan or any successor plan that are used to repay any loan
associated with such allocated or credited shares divided by (y) the Special
Redemption Price specified above in this paragraph (A).

                 (B)  Unless otherwise provided by law, shares of ESOP
Preferred Stock shall be redeemed by the Corporation at the option of the
holder, at any time and from time to time upon notice to the Corporation given
not less than five business days prior to the date fixed by the holder in such
notice, upon certification by such holder to the Corporation of the following
events:  (i) when and to the extent necessary for such holder to make any
payments of principal, interest or premium due and payable (whether voluntary,
scheduled, upon acceleration or otherwise) upon any obligations of the trust
established under the Plan in connection with the acquisition of ESOP Preferred
Stock or any indebtedness, expenses or costs incurred by the holder for the
benefit of the Plan; or (ii) when and if it shall be established to the
satisfaction of the holder that the Plan
<PAGE>   19
 
                                       19

has not initially been determined by the Internal Revenue Service to be
qualified as a "stock bonus plan" and an "employee stock ownership plan" within
the meaning of Section 401(a) or 4975(e)(7) of the Code, respectively, in
shares of Common Stock legally available therefor, at a redemption price equal
to the Liquidation Price plus an amount equal to accrued and unpaid dividends
thereon to the date fixed for redemption.  At the election of the Corporation,
such redemption may instead be made out of funds legally available therefor in
cash or a combination of Common Stock and cash.  Any shares of Common Stock
shall be valued for the purposes of redemption pursuant to this paragraph (B)
as provided by paragraph (E) of Section 6.

      8.  Consolidation, Merger, etc.

            (A)  If the Corporation shall consummate any consolidation or merger
or similar transaction, however named, pursuant to which the outstanding shares
of Common Stock are by operation of law exchanged solely for or changed,
reclassified or converted solely into securities of any successor or resulting
company (including the Corporation) that constitute "qualifying employer
securities" with respect to a holder of ESOP Preferred Stock within the
meanings of Section 409(l) of the Code and Section 407(d)(5) of ERISA, or any
successor provision of law, and, if applicable, for a cash payment in lieu of
fractional shares, if any, then, in such event, the terms of such consolidation
or merger or similar transaction shall provide that the shares of ESOP
Preferred Stock of such holder shall be converted into or exchanged for and
shall become preferred securities of such successor or resulting company,
having in respect of such company insofar as possible (taking into account,
without limitation, any requirements relating to the listing of such preferred
securities on any national securities exchange or the qualification of such
preferred securities for trading in any over-the-counter market) the same
powers, preferences and relative, participating, optional or other special
rights (including the redemption rights provided by Sections 6, 7 and 8
hereof), and the qualifications, limitations or restrictions thereon, that the
ESOP Preferred Stock had immediately prior to such transaction; provided,
however, that after such transaction each security into which the ESOP
Preferred Stock is so converted or for which it is exchanged shall be
convertible, pursuant to the terms and conditions provided by Section 5 hereof,
into the number and kind of qualifying employer securities receivable by a
holder equivalent to the number of shares of Common Stock into which such
shares of ESOP
<PAGE>   20
 
                                       20

Preferred Stock could have been converted pursuant to Section 5 hereof
immediately prior to such transaction and provided further that if by virtue of
the structure of such transaction, 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, which election cannot practicably be made by the holders
of the ESOP Preferred Stock, then such election shall be deemed to be solely
for "qualifying employer securities" (together, if applicable, with a cash
payment in lieu of fractional shares) with the effect provided above on the
basis of the number and kind of qualifying employer securities receivable by a
holder of the number of shares of Common Stock into which the shares of ESOP
Preferred Stock could have been converted pursuant to Section 5 hereof
immediately prior to such transaction (it being understood that if the kind or
amount of qualifying employer securities receivable in respect of each share of
Common Stock upon such transaction is not the same for each such share, then
the kind and amount of qualifying employer securities deemed to be receivable
in respect of each share of Common Stock for purposes of this proviso shall be
the kind and amount so receivable per share of Common Stock by a plurality of
such shares).  The rights of the ESOP Preferred Stock as preferred equity of
such successor or resulting company shall successively be subject to
adjustments pursuant to Section 9 hereof after any such transaction as nearly
equivalent as practicable to the adjustments provided for by such Section prior
to such transaction.  The Corporation shall not consummate any such merger,
consolidation or similar transaction unless all the terms of this paragraph (A)
are complied with.

                 (B)  If the Corporation shall consummate any consolidation or
merger or similar transaction, however named, pursuant to which the outstanding
shares of Common Stock are by operation of law exchanged for or changed,
reclassified or converted into other shares or securities or cash or any other
property, or any combination thereof, other than any such consideration which
is constituted solely of qualifying employer securities that are common stock
or common equity (as referred to in paragraph (A) of this Section 8) and cash
payments, if applicable, in lieu of fractional shares or other interests,
outstanding shares of ESOP Preferred Stock shall, without any action on the
part of the Corporation or any holder thereof (but subject to paragraph (C) of
this Section 8), be automatically converted immediately prior to the
consummation of such merger, consolidation or similar transaction into shares
of Common Stock at the Conversion Price then in effect.
<PAGE>   21
 
                                       21

              (C)  If the Corporation shall enter into any agreement providing
for any consolidation or merger or similar transaction described in paragraph 
(B) of this Section 8, then the Corporation shall as soon as practicable 
thereafter (and in any event at least ten (10) business days before 
consummation of such transaction) give notice of such agreement and the 
material terms thereof to each holder of ESOP Preferred Stock and each such 
holder shall have the right to elect, by written notice to the Corporation, to
receive, upon consummation of such transaction (if and when such transaction 
is consummated), out of funds legally available therefor, from the Corporation
or the successor of the Corporation, in redemption of such ESOP Preferred 
Stock, in lieu of any cash or other securities which such holder would 
otherwise be entitled to receive under paragraph (B) of this Section 8, a cash
payment equal to the Liquidation Price per share on the date fixed for such 
transaction, plus an amount equal to accrued (whether or not accumulated) and 
unpaid dividends thereon to the date fixed for such transaction.  No such 
notice of redemption shall be effective unless given to the Corporation prior 
to the close of business of the fifth business day prior to consummation of 
such transaction, unless the Corporation or the successor of the Corporation 
shall waive such prior notice, but any notice or redemption so given prior to 
such time may be withdrawn by notice of withdrawal given to the Corporation 
prior to the close of business on the fifth business day prior to consummation
of such transaction.

         9.  Anti-dilution Adjustments.

              (A)  (1)  Subject to the provisions of paragraphs (E) and (F)
of this Section 9, in the event the Corporation shall, at any time or from time
to time while any of the shares of the ESOP Preferred Stock are outstanding,
(i) pay a dividend or make a distribution in respect of the Common Stock in
shares of Common Stock or (ii) subdivide the outstanding shares of Common Stock
into a greater number of shares, in each case whether by reclassification of
shares, recapitalization of the Corporation (excluding a recapitalization or
reclassification effected by a merger or consolidation to which Section 8
applies) or otherwise, then, in such event, the Board of Directors shall, to
the extent legally permissible, declare a dividend in respect of the ESOP
Preferred Stock in shares of ESOP Preferred Stock (a "Special Dividend") in
such a manner that a holder of ESOP Preferred Stock will become a holder of
that number of shares of ESOP Preferred Stock equal to the product of the
number of such shares held prior to such event times a fraction (the
<PAGE>   22
 
                                       22

"Section 9(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 outstanding immediately before
such event.  A Special Dividend declared pursuant to this Section 9(A)(1) shall
be effective, upon payment of such dividend or distribution in respect of the
Common Stock, as of the record date for the determination of stockholders
entitled to receive such dividend or distribution (on a retroactive basis), and
in the case of a subdivision shall become effective immediately as of the
effective date thereof.  Concurrently with the declaration of the Special
Dividend pursuant to this paragraph 9(A)(1), the Conversion Price, the
Liquidation Price and the Preferred Dividend Rate of all shares of ESOP
Preferred Stock shall be adjusted by dividing the Conversion Price, the
Liquidation Price and the Preferred Dividend Rate, respectively, in effect
immediately before such event by the Section 9(A) Fraction.

               (2)  Subject to the provisions of paragraphs (E) and (F) of this
Section 9, in the event the Corporation shall, at any time or from time to time
while any of the shares of the ESOP Preferred Stock are outstanding, combine
the outstanding shares of Common Stock into a lesser number of shares, whether
by reclassification of shares, recapitalization of the Corporation (excluding a
recapitalization or reclassification effected by a merger, consolidation or
other transaction to which Section 8 applies) or otherwise, then, in such
event, the Conversion Price shall automatically be adjusted by dividing the
Conversion Price in effect immediately before such event by the Section 9(A)
Fraction and the Liquidation Price and the Preferred Dividend Rate will not be
adjusted.  An adjustment to the Conversion Price made pursuant to this
paragraph 9(A)(2) shall be given effect immediately as of the effective date of
such combination.

               (B)  Subject to the provisions of paragraphs (E) and (F) of this
Section 9, in the event the Corporation shall, at any time or from time to time
while any of the shares of ESOP Preferred Stock are outstanding, issue to
holders of shares of Common Stock as a dividend or distribution, including by
way of a reclassification of shares or a recapitalization of the Corporation,
any right or warrant to purchase shares of Common Stock (but not including as a
right or warrant for this purpose any security convertible into or exchangeable
for shares of Common Stock) for a consideration having a Fair Market Value (as
hereinafter defined) per share less than the Fair Market Value of a share of
Common Stock on the date of issuance of such right or warrant (other than
pursuant to any
<PAGE>   23
 
                                       23

employee or director incentive, compensation or benefit plan or arrangement of
the Corporation or any subsidiary of the Corporation heretofore or hereafter
adopted), then, in such event, the Board of Directors shall, to the extent
legally permissible, declare a Special Dividend in such a manner that a holder
of ESOP Preferred Stock will become a holder of that number of shares of ESOP
Preferred Stock equal to the product of the number of such shares held prior to
such event times a fraction (the "Section 9(B) Fraction"), the numerator of
which is the number of shares of Common Stock outstanding immediately before
such issuance of rights or warrants plus the maximum number of shares of Common
Stock that could be acquired upon exercise in full of all such rights and
warrants and the denominator of which is the number of shares of Common Stock
outstanding immediately before such issuance of warrants or rights plus the
number of shares of Common Stock that could be purchased at the Fair Market
Value of a share of Common Stock at the time of such issuance for the maximum
aggregate consideration payable upon exercise in full of all such rights and
warrants.  A Special Dividend declared pursuant to this Section 9(B) shall be
effective upon such issuance of rights or warrants.  Concurrently with the
declaration of the Special Dividend pursuant to this Section 9(B), the
Conversion Price, the Liquidation Price and the Preferred Dividend Rate of all
shares of ESOP Preferred Stock shall be adjusted by dividing the Conversion
Price, the Liquidation Price and the Preferred Dividend Rate, respectively, in
effect immediately before such event by the Section 9(B) Fraction.

              (C)  (1)  Subject to the provisions of paragraphs (E) and (F) of 
this Section 9, in the event the Corporation shall, at any time or from time to
time while any of the shares of ESOP Preferred Stock are outstanding, issue, 
sell or exchange shares of Common Stock (other than pursuant to (x) any right or
warrant to purchase or acquire shares of Common Stock (including as such a
right or warrant any security convertible into or exchangeable for shares of
Common Stock) or (y) any employee or director incentive, compensation or
benefit plan or arrangement of the Corporation or any subsidiary of the
Corporation heretofore or hereafter adopted) at a purchase price per share less
than the Fair Market Value of a share of Common Stock on the date of such
issuance, sale or exchange, then, in such event, the Board of Directors shall,
to the extent legally permissible, declare a Special Dividend in such a manner
that a holder of ESOP Preferred Stock will become the holder of that number of
shares of ESOP Preferred Stock equal to the product of the number of such
shares held prior to such event times a
<PAGE>   24
 
                                       24

fraction (the "Section 9(C)(1) Fraction"), the numerator of which is the number
of shares of Common Stock outstanding immediately before such issuance, sale or
exchange plus the number of shares of Common Stock so issued, sold or exchanged
and the denominator of which is the number of shares of Common Stock
outstanding immediately before such issuance, sale or exchange plus the number
of shares of Common Stock that could be purchased at the Fair Market Value of a
share of Common Stock at the time of such issuance, sale or exchange for the
maximum aggregate consideration paid therefor.

              (2)  Subject to the provisions of paragraphs (E) and (F) of this
Section 9, in the event that the Corporation shall, at any time or from time to
time while any ESOP Preferred Stock is outstanding, issue, sell or exchange any
right or warrant to purchase or acquire shares of Common Stock (including as
such a right or warrant any security convertible into or exchangeable for
shares of Common Stock other than pursuant to (x) any employee or director
incentive, compensation or benefit plan or arrangement of the Corporation or
any subsidiary of the Corporation heretofore or hereafter adopted and (y) any
dividend or distribution on shares of Common Stock contemplated in Section
9(A)(1)) for a consideration having a Fair Market Value, on the date of such
issuance, sale or exchange, less than the Non-Dilutive Amount (as hereinafter
defined), then, in such event, the Board of Directors shall, to the extent
legally permissible, declare a Special Dividend in such a manner that a holder
of ESOP Preferred Stock will become the holder of that number of shares of ESOP
Preferred Stock equal to the product of the number of such shares held prior to
such event times a fraction (the "Section 9(C)(2) Fraction"), the numerator of
which is the number of shares of Common Stock outstanding immediately before
such issuance of rights or warrants plus the maximum number of shares of Common
Stock that could be acquired upon exercise in full of all such rights and
warrants and the denominator of which is the number of shares of Common Stock
outstanding immediately before such issuance of rights or warrants plus the
number of shares of Common Stock that could be purchased at the Fair Market
Value of a share of Common Stock at the time of such issuance for the total of
(x) the maximum aggregate consideration payable at the time of the issuance,
sale or exchange of such right or warrant and (y) the maximum aggregate
consideration payable upon exercise in full of all such rights or warrants.

              (3)  A Special Dividend declared pursuant to this Section 9(C) 
shall be effective upon the effective date of
<PAGE>   25
 
                                       25

such issuance, sale or exchange.  Concurrently with the declaration of the
Special Dividend pursuant to this Section 9(C), the Conversion Price, the
Liquidation Price and the Preferred Dividend Rate of all shares of ESOP
Preferred Stock shall be adjusted by dividing the Conversion Price, the
Liquidation Price and the Preferred Dividend Rate, respectively, in effect
immediately before such event by the Section 9(C)(1) Fraction or Section
9(C)(2) Fraction, as the case may be.

               (D)  Subject to the provisions of paragraphs (E) and (F) of this
Section 9, in the event the Corporation shall, at any time or from time to time
while any of the shares of ESOP Preferred Stock are outstanding, make an
Extraordinary Distribution (as hereinafter defined) in respect of the Common
Stock, whether by dividend, distribution, reclassification of shares or
recapitalization of the Corporation (including capitalization or
reclassification effected by a merger or consolidation to which Section 8 does
not apply) or effect a Pro Rata Repurchase (as hereinafter defined) of Common
Stock, then, in such event, the Board of Directors shall, to the extent legally
permissible, declare a Special Dividend in such a manner that a holder of ESOP
Preferred Stock will become a holder of that number of shares of ESOP Preferred
Stock equal to the product of the number of such shares held prior to such
event times a fraction (the "Section 9(D) Fraction"), the numerator of which is
the product of (a) the number of shares of Common Stock outstanding immediately
before such Extraordinary Distribution or Pro Rata Repurchase minus, in the
case of Pro Rata Repurchase, the number of shares of Common Stock repurchased
by the Corporation multiplied by (b) the Fair Market Value of a share of Common
Stock on the day before the ex-dividend date with respect to an Extraordinary
Distribution that is paid in cash and on the distribution date with respect to
an Extraordinary Distribution that is paid other than in cash, or on the
applicable expiration date (including all extensions thereof) of any tender
offer that is a Pro Rata Repurchase or on the date of purchase with respect to
any Pro Rata Repurchase that is not a tender offer, as the case may be, and the
denominator of which is (i) the product of (x) the number of shares of Common
Stock outstanding immediately before such Extraordinary Distribution or Pro
Rata Repurchase multiplied by (y) the Fair Market Value of a share of Common
Stock on the day before the ex-dividend date with respect to an Extraordinary
Distribution that is paid in cash and on the distribution date with respect to
an Extraordinary Distribution that is paid other than in cash, or on the
applicable expiration date
<PAGE>   26
 
                                       26

(including all extensions thereof) of any tender offer that is a Pro Rata
Repurchase, or on the date of purchase with respect to any Pro Rata Repurchase
that is not a tender offer, as the case may be, minus (ii) the Fair Market
Value of the Extraordinary Distribution or the aggregate purchase price of the
Pro Rata Repurchase, as the case may be.  The Corporation shall send each
holder of ESOP Preferred Stock (i) notice of its intent to make any
Extraordinary Distribution and (ii) notice of any offer by the Corporation to
make a Pro Rata Repurchase, in each case at the same time as, or as soon as
practicable after, such offer is first communicated to holders of Common Stock
or, in the case of an Extraordinary Distribution, the announcement of a record
date in accordance with the rules of any stock exchange on which the Common
Stock is listed or admitted to trading.  Such notice shall indicate the
intended record date and the amount and nature of such dividend or
distribution, or the number of shares subject to such offer for a Pro Rata
Repurchase and the purchase price payable by the Corporation pursuant to such
offer, as well as the Conversion Price and the number of shares of Common Stock
into which a share of ESOP Preferred Stock may be converted at such time.
Concurrently with the Special Dividend paid pursuant to this Section 9(D), the
Conversion Price, the Liquidation Price and the Preferred Dividend Rate of all
shares of ESOP Preferred Stock shall be adjusted by dividing the Conversion
Price, the Liquidation Price and the Preferred Dividend Rate, respectively, in
effect immediately before such Extraordinary Distribution or Pro Rata
Repurchase by the Section 9(D) Fraction.

              (E)  Notwithstanding any other provision of this Section 9, the
Corporation shall not be required to make (i) any Special Dividend or any
adjustment of the Conversion Price, the Liquidation Price or the Preferred
Dividend Rate unless such Special Dividend or adjustment would require an
increase or decrease of at least one percent (1%) in the number of shares of
ESOP Preferred Stock outstanding, or, (ii) if no additional shares of ESOP
Preferred Stock are issued, any adjustment of the Conversion Price unless such
adjustment would require an increase or decrease of at least one percent (1%)
in the Conversion Price.  Any lesser Special Dividend or adjustment shall be
carried forward and shall be made no later than the time of, and together with,
the next subsequent Special Dividend or adjustment which, together with any
Special Dividend or Dividends, adjustment or adjustments so carried forward,
shall amount to an increase or decrease of at least one percent (1%) of the
number of shares of ESOP Preferred Stock outstanding or, if no additional
shares of ESOP Preferred Stock are being issued,
<PAGE>   27
 
                                       27

an increase or decrease of at least one percent (1%) of the Conversion Price,
whichever the case may be.

              (F)  The Corporation and the Board of Directors shall each use its
best efforts to take all necessary steps or to take all actions as are
reasonably necessary or appropriate for declaration of any Special Dividend
provided in any of paragraphs (A), (B), (C) and (D) of this Section 9, but
shall not be required to call a special meeting of stockholders in order to
implement the provisions thereof.  If for any reason the Board of Directors is
precluded from giving full effect to the Special Dividend provided in any of
such paragraphs, then no such Special Dividend shall be declared, but instead
the Conversion Price shall automatically be adjusted by dividing the Conversion
Price in effect immediately before the relevant event by the Section 9(A),
Section 9(B), Section 9(C) or Section 9(D) Fraction, as applicable, and the
Liquidation Price and the Preferred Dividend Rate will not be adjusted.  An
adjustment to the Conversion Price made pursuant to this paragraph (F) shall be
given effect, (i) in the case of a payment of a dividend or distribution under
Section 9(A), upon payment thereof as of the record date for the determination
of holders entitled to receive such dividend or distribution (on a retroactive
basis), and, in the case of a subdivision under Section 9(A), immediately as of
the effective date thereof, (ii) in the case of Section 9(B), upon such
issuance of rights or warrants, (iii) in the case of Section 9(C), upon the
effective date of such issuance, sale or exchange and (iv) in the case of an
Extraordinary Dividend under Section 9(D), as of the record date for the
determination of holders entitled to receive such Extraordinary Dividend (on a
retroactive basis), and, in the case of a Pro Rata Repurchase under Section
9(D), upon the expiration date thereof (if such Pro Rata Repurchase is a tender
offer) or the effective date thereof (if such Pro Rata Repurchase is not a
tender offer).  If subsequently the Board of Directors is able to give full
effect to the Special Dividend as provided in paragraph (A), (B), (C) or (D) of
this Section 9, then such Special Dividend will be declared and other
adjustments will be made in accordance with the provisions of such paragraph
and the adjustment in the Conversion Price as provided in this paragraph (F)
will automatically be reversed and nullified prospectively.

              (G)  If the Corporation shall make any dividend or distribution 
on the Common Stock or issue any Common Stock, other capital stock or other 
security of the Corporation or any rights or warrants to purchase or acquire 
any such
<PAGE>   28
 
                                       28

security, which transaction does not result in an adjustment to the number of
shares of ESOP Preferred Stock outstanding or the Conversion Price pursuant to
the foregoing provisions of this Section 9, the Board of Directors of the
Corporation may, in its sole discretion, consider whether such action is of
such a nature that some type of equitable adjustment should be made in respect
of such transaction.  If in such case the Board of Directors of the Corporation
determines that some type of adjustment should be made, an adjustment shall be
made effective as of such date as determined by the Board of Directors of the
Corporation.  The determination of the Board of Directors of the Corporation as
to whether some type of adjustment should be made pursuant to the foregoing
provisions of this Section 9(G), and, if so, as to what adjustment should be
made and when, shall be final and binding on the Corporation and all
stockholders of the Corporation.  The Corporation shall be entitled, but not
required, to make such additional adjustments, in addition to those required by
the foregoing provisions of this Section 9, as shall be necessary in order that
any dividend or distribution in shares of capital stock of the Corporation,
subdivision, reclassification or combination of shares of the Corporation or
any reclassification of the Corporation shall not be taxable to holders of the
Common Stock.

              (H)  For purposes hereof, the following definitions shall apply:

              (1)  "Extraordinary Distribution" shall mean any dividend or other
distribution to holders of Common Stock (effected while any of the shares of
ESOP Preferred Stock are outstanding) of (i) cash or (ii) any shares of capital
stock of the Corporation (other than shares of Common Stock), other securities
of the Corporation (other than securities of the type referred to in paragraph
(B) of this Section 9), evidences of indebtedness of the Corporation or any
other person or any other property (including shares of any subsidiary of the
Corporation), or any combination of the foregoing, where the aggregate amount
of such cash dividend or other distribution together with the amount of all
cash dividends and other distributions made during the preceding period of
twelve months, when combined with the aggregate amount of all Pro Rata
Repurchases (for this purpose, including only that portion of the aggregate
purchase price of such Pro Rata Repurchase that is in excess of the Fair Market
Value of the Common Stock repurchased as determined on the applicable
expiration date (including all extensions thereof) of any tender offer or
exchange offer that is a Pro Rata Repurchase, or the date of purchase with
respect to any
<PAGE>   29
 
                                       29

other Pro Rata Repurchase that is not a tender offer or exchange offer) made
during such period, exceeds twelve and one-half percent (12-1/2%) of the
aggregate Fair Market Value of all shares of Common Stock outstanding on the
day before the ex-dividend date with respect to such Extraordinary Distribution
that is paid in cash and on the distribution date with respect to an
Extraordinary Distribution that is paid other than in cash.  The Fair Market
Value of an Extraordinary Distribution for purposes of paragraph (D) of this
Section 9 shall be the sum of the Fair Market Value of such Extraordinary
Distribution plus the aggregate amount of any cash dividends or other
distributions that are not Extraordinary Distributions made during such
twelve-month period and not previously included in the calculation of an
adjustment pursuant to paragraph (D) of this Section 9, but shall exclude the
aggregate amount of regular quarterly dividends declared by the Board of
Directors and paid by the Corporation in such twelve-month period.

              (2)  "Fair Market Value" shall mean, as to shares of Common Stock
or any other class of capital stock or securities of the Corporation or any 
other issuer that are publicly traded, the average of the Current Market Prices
(as hereinafter defined) of such shares or securities for each day of the
Adjustment Period (as hereinafter defined).  "Current Market Price" of publicly
traded shares of Common Stock or any other class of capital stock or other
security of the Corporation or any other issuer for a day shall mean the last
reported sales price, regular way, or, in case no sale takes place on such day,
the average of the reported closing bid and asked prices, regular way, in
either case as reported on the New York Stock Exchange Composite Tape or, if
such security is not listed or admitted to trading on the New York Stock
Exchange, on the principal national securities exchange on which such security
is listed or admitted to trading or, if not listed or admitted to trading on
any national securities exchange, on the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") National Market System or, if
such security is not quoted on such National Market System, the average of the
closing bid and asked prices on such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for such security on such day
shall not have been reported through NASDAQ, the average of the bid and asked
prices for such day as furnished by any New York Stock Exchange member firm
regularly making a market in such security selected for such purpose by the
Board of Directors of the Corporation.  "Adjustment Period" shall mean the
period of five consecutive trading days, selected by the Board of Directors of
the
<PAGE>   30
 
                                       30

Corporation, during the twenty (20) trading days preceding, and including, the
date as of which the Fair Market Value of a security is to be determined.  The
"Fair Market Value" of any security that is not publicly traded or of any other
property shall mean the fair value thereof as determined by an independent
investment banking or appraisal firm experienced in the valuation of such
securities or property selected in good faith by the Board of Directors of the
Corporation, or, if no such investment banking or appraisal firm is in the good
faith judgment of the Board of Directors available to make such determination,
as determined in good faith by the Board of Directors of the Corporation.

              (3)  "Non-Dilutive Amount" in respect of an issuance, sale or 
exchange by the Corporation of any right or warrant to purchase or acquire 
shares of Common Stock (including any security convertible into or exchangeable
for shares of Common Stock) shall mean the difference between (i) the product of
the Fair Market Value of a share of Common Stock on the day preceding the first
public announcement of such issuance, sale or exchange multiplied by the
maximum number of shares of Common Stock that could be acquired on such date
upon the exercise in full of such rights or warrants (including upon the
conversion or exchange of all such convertible or exchangeable securities),
whether or not exercisable (or convertible or exchangeable) at such date, and
(ii) the aggregate amount payable pursuant to such right or warrant to purchase
or acquire such maximum number of shares of Common Stock; provided, however,
that in no event shall the Non-Dilutive Amount be less than zero.  For purposes
of the foregoing sentence, in the case of a security convertible into or
exchangeable for shares of Common Stock, the amount payable pursuant to a right
or warrant to purchase or acquire shares of Common Stock shall be the Fair
Market Value of such security on the date of the issuance, sale or exchange of
such security by the Corporation.

              (4)  "Pro Rata Repurchase" shall mean any purchase of shares or 
Common Stock by the Corporation or any subsidiary thereof, whether for cash, 
shares of capital stock of the Corporation, other securities of the Corporation,
evidences of indebtedness of the Corporation or any other person or any other
property (including shares of a subsidiary of the Corporation), or any
combination thereof, effected while any of the shares of ESOP Preferred Stock
are outstanding, pursuant to any tender offer or exchange offer subject to
Section 13(e) of the Exchange Act, or any successor provision of law, or
pursuant to any other offer available to substantially all holders of Common
Stock;
<PAGE>   31
 
                                       31

provided, however, that no purchase of shares by the Corporation or any
subsidiary thereof made in open market transactions shall be deemed a Pro Rata
Repurchase.  For purposes of this Section 9(H), shares shall be deemed to have
been purchased by the Corporation or any subsidiary thereof "in open market
transactions" if they have been purchased substantially in accordance with the
requirements of Rule 10b-18 as in effect under the Exchange Act on the date
shares of ESOP Preferred Stock are initially issued by the Corporation or on
such other terms and conditions as the Board of Directors of the Corporation
shall have determined are reasonably designed to prevent such purchases from
having a material effect on the trading market for the Common Stock.

              (I)  Whenever an adjustment increasing the number of shares of 
ESOP Preferred Stock outstanding is required pursuant hereto, the Board of 
Directors shall take action as is necessary so that a sufficient number of 
shares of ESOP Preferred Stock are designated with respect to such increase 
resulting from such adjustment.  Whenever an adjustment to the Conversion 
Price, the Liquidation Price or the Preferred Dividend Rate of the ESOP 
Preferred Stock is required pursuant hereto, the Corporation shall forthwith 
place on file with the transfer agent for the Common Stock and the ESOP 
Preferred Stock, if there be one, and with the Treasurer of the Corporation, a
statement signed by the Treasurer or any Assistant Treasurer of the Corporation
stating the adjusted Conversion Price, Liquidation Price and Preferred Dividend
Rate determined as provided herein.  Such statement shall set forth in
reasonable detail such facts as shall be necessary to show the reason and the 
manner of computing such adjustments, including any determination of Fair 
Market Value involved in such computation.  Promptly after each adjustment to 
the number of shares of ESOP Preferred Stock outstanding, the Conversion Price,
the Liquidation Price or the Preferred Dividend Rate, the Corporation shall 
mail a notice thereof and of the then prevailing number of shares of ESOP 
Preferred Stock outstanding, the Conversion Price, the Liquidation Price and 
the Preferred Dividend Rate to each holder of shares of ESOP Preferred Stock.

         10.  Miscellaneous.

              (A)  All notices referred to herein shall be in writing, and
all notices hereunder shall be deemed to have been given upon the earlier of
receipt thereof or three (3) business days after the mailing thereof if sent by
registered mail (unless first-class mail shall be specifically permitted for
such notice under the terms hereof) with postage prepaid,
<PAGE>   32
 
                                       32

addressed:  (i) if to the Corporation, to its office at 1251 Avenue of the
Americas, New York, New York 10020 (Attention: Secretary) or to the transfer
agent for the ESOP Preferred Stock, or other agent of the Corporation
designated as permitted hereof or (ii) if to any holder of the ESOP Preferred
Stock or Common Stock, as the case may be, to such holder at the address of
such holder as listed in the stock record books of the Corporation (which may
include the records of any transfer agent for Common Stock) or (iii) to such
other address as the Corporation or any such holder, as the case may be, shall
have designated by notice similarly given.

             (B)  The term "Common Stock" as used herein means the Corporation's
Common Stock, par value $1.00 per share, as the same exists at the date of
filing of this Certificate of Designation pursuant to Section 151 of the
General Corporation Law of the State of Delaware, or any other class of stock
resulting from successive changes or reclassifications of such Common Stock
consisting solely of changes in par value, or from par value to without par
value, or from without par value to par value.  In the event that, at any time
as a result of an adjustment made pursuant to Section 9 hereof, the holder of
any shares of the ESOP Preferred Stock upon thereafter surrendering such shares
for conversion shall become entitled to receive any shares or other securities
of the Corporation other than shares of Common Stock, the anti-dilution
provisions contained in Section 9 hereof shall apply in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to Common
Stock, and the provisions of Sections 1 through 8 and 10 hereof with respect to
the Common Stock shall apply on like or similar terms to any such other shares
or securities.

             (C)  The Corporation shall pay any and all stock transfer and
documentary stamp taxes that may be payable in respect of any issuance or
delivery of shares of ESOP Preferred Stock or shares of Common Stock or other
securities issued on account of ESOP Preferred Stock pursuant thereto or
certificates representing such shares or securities.  The Corporation shall
not, however, be required to pay any such tax which may be payable in respect
of any transfer involved in the issuance or delivery of shares of ESOP
Preferred Stock or Common Stock or other securities in a name other than that
in which the shares of ESOP Preferred Stock with respect to which such shares
or other securities are issued or delivered were registered, or in respect of
any payment to any person with respect to any shares or securities other than a
payment
<PAGE>   33
 
                                       33

to the registered holder thereof, and shall not be required to make any such
issuance, delivery or payment unless and until the person otherwise entitled to
such issuance, delivery or payment has paid to the Corporation the amount of
any such tax or has established, to the satisfaction of the Corporation, that
such tax has been paid or is not payable.

              (D)  In the event that a holder of shares of ESOP Preferred Stock
shall not by written notice designate the name in which shares of Common Stock
to be issued upon conversion or exchange of such shares should be registered or
to whom payment upon redemption of shares of ESOP Preferred Stock should be
made or the address to which the certificate or certificates representing such
shares, or such payment, should be sent, the Corporation shall be entitled to
register such shares, and make such payment, in the name of the holder of such
ESOP Preferred Stock as shown on the records of the Corporation and to send the
certificate or certificates or other documentation representing such shares, or
such payment, to the address of such holder shown on the records of the
Corporation.

              (E)  The Corporation may appoint, and from time to time discharge
and change, a transfer agent for the ESOP Preferred Stock.  Upon any such
appointment or discharge of a transfer agent, the Corporation shall send notice
thereof by first-class mail, postage prepaid, to each holder of record of ESOP
Preferred Stock.
<PAGE>   34
 
                                       34

              Subpart B:  9.36% Cumulative Preferred Stock*

              1.  Designation and Amount; Fractional Shares.  The designation 
for such series of the Preferred Stock authorized by this resolution shall be 
the 9.36% Cumulative Preferred Stock, without par value but with a stated value
of $25.00 per share (the "Cumulative Preferred Stock").  The maximum number of
shares of Cumulative Preferred Stock shall be 5,500,000.  The Cumulative
Preferred Stock is issuable in whole shares only.

              2.  Dividends.  Holders of shares of Cumulative Preferred Stock 
will be entitled to receive, when and as declared by the Board out of assets of
the Corporation legally available for payment, cash dividends payable quarterly
at the rate of 9.36% per annum.  Dividends on the Cumulative Preferred Stock,
calculated as a percentage of the stated value, will be payable quarterly on
February 28, May 30, August 30 and November 30, commencing August 30, 1991
(each a "dividend payment date").  Dividends on shares of the Cumulative
Preferred Stock will be cumulative from the date of initial issuance of such
shares of Cumulative Preferred Stock.  Dividends will be payable, in arrears,
to holders of record as they appear on the stock books of the Corporation on
such record dates, not more than 60 days nor less than 10 days preceding the
payment dates thereof, as shall be fixed by the Board.  The amount of dividends
payable for the initial dividend period or any period shorter than a full
dividend period shall be calculated on the basis of a 360-day year of twelve
30-day months.  No dividends may be declared or paid or set apart for payment
on any Parity Preferred Stock (as defined in paragraph 9(b) below) with regard
to the payment of dividends unless there shall also be or have been declared
and paid or set apart for payment on the Cumulative Preferred Stock, like
dividends for all dividend payment periods of the Cumulative Preferred Stock
ending on or before the dividend payment date of such Parity Preferred Stock,
ratably in proportion to the respective amounts of dividends (x) accumulated
and unpaid or payable on such Parity Preferred Stock, on the one hand, and (y)
accumulated and unpaid through the dividend payment period or periods of the
Cumulative Preferred Stock next preceding such dividend payment date, on the
other hand.



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

*    Terms defined in this Subpart B are so defined for purposes of this
     Subpart alone.
<PAGE>   35
 
                                       35

              Except as set forth in the preceding sentence, unless full
cumulative dividends on the Cumulative Preferred Stock have been paid, no 
dividends (other than in Common Stock of the Corporation) may be paid or 
declared and set aside for payment or other distribution made upon the Common 
Stock or on any other stock of the Corporation ranking junior to or on a parity
with the Cumulative Preferred Stock as to dividends, nor may any Common Stock 
or any other stock of the Corporation ranking junior to or on a parity with the
Cumulative Preferred Stock as to dividends be redeemed, purchased or otherwise
acquired for any consideration (or any payment be made to or available for a 
sinking fund for the redemption of any shares of such stock; provided, however,
that any moneys theretofore deposited in any sinking fund with respect to any 
preferred stock of the Corporation in compliance with the provisions of such 
sinking fund may thereafter be applied to the purchase or redemption of such 
preferred stock in accordance with the terms of such sinking fund regardless of
whether at the time of such application full cumulative dividends upon shares 
of the Cumulative Preferred Stock outstanding to the last dividend payment date
shall have been paid or declared and set apart for payment) by the Corporation
(except by conversion into or exchange for stock of the Corporation ranking
junior to the Cumulative Preferred Stock as to dividends).

              3.  Liquidation Preference.  The shares of Cumulative Preferred 
Stock shall rank, as to liquidation, dissolution or winding up of the 
Corporation, prior to the shares of Common Stock and any other class of stock 
of the Corporation ranking junior to the Cumulative Preferred Stock as to 
rights upon liquidation, dissolution or winding up of the Corporation, so that
in the event of any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of the Cumulative Preferred Stock
shall be entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of Common Stock or any
other such junior stock, an amount equal to $25.00 per share (the "Liquidation
Preference" of a share of Cumulative Preferred Stock) plus an amount equal to
all dividends (whether or not earned or declared) accrued and accumulated and
unpaid on the shares of Cumulative Preferred Stock to the date of final
distribution.  The holders of the Cumulative Preferred Stock will not be
entitled to receive the Liquidation Preference until the liquidation preference
of any other class of stock of the Corporation ranking senior to the Cumulative
Preferred Stock as to rights upon
<PAGE>   36
 
                                       36

liquidation, dissolution or winding up shall have been paid (or a sum set aside
therefor sufficient to provide for payment) in full.  After payment of the full
amount of the Liquidation Preference and such dividends, the holders of shares
of Cumulative Preferred Stock will not be entitled to any further participation
in any distribution of assets by the Corporation.  If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of shares of Parity Preferred
Stock shall be insufficient to pay in full the preferential amount aforesaid,
then such assets, or the proceeds thereof, shall be distributable among such
holders ratably in accordance with the respective amounts which would be
payable on such shares if all amounts payable thereon were paid in full.  For
the purposes hereof, neither a consolidation or merger of the Corporation with
or into any other corporation, nor a merger of any other corporation with or
into the Corporation, nor a sale or transfer of all or any part of the
Corporation's assets for cash or securities shall be considered a liquidation,
dissolution or winding up of the Corporation.

                 4.  Conversion.  The Cumulative Preferred Stock is not 
convertible into shares of any other class or series of stock of the 
Corporation.

                 5.  Voting Rights.  The holders of shares of Cumulative 
Preferred Stock shall have no voting rights whatsoever, except for any voting 
rights to which they may be entitled under the laws of the State of Delaware, 
and except as follows:

                 (a)  Whenever, at any time or times, dividends payable on the
         shares of Cumulative Preferred Stock or on any Parity Preferred Stock
         with respect to payment of dividends shall be in arrears for an
         aggregate number of days equal to six calendar quarters or more,
         whether or not consecutive, the holders of the outstanding shares of
         Cumulative Preferred Stock shall have the right, with holders of
         shares of any one or more other class or series of stock upon which
         like voting rights have been conferred and are exercisable (voting
         together as a class), to elect two of the authorized number of members
         of the Board of Directors of the Corporation at the Corporation's next
         annual meeting of stockholders and at each subsequent annual meeting
         of stockholders until such arrearages have been paid or set apart for
         payment, at which time such right shall terminate, except as herein or
         by law expressly provided, subject to revesting in the
<PAGE>   37
 
                                       37

         event of each and every subsequent default of the character above
         mentioned.  Upon any termination of the right of the holders of shares
         of Cumulative Preferred Stock as a class to vote for directors as
         herein provided, the term of office of all directors then in office
         elected by the holders of shares of Cumulative Preferred Stock shall
         terminate immediately.  Any director who shall have been so elected
         pursuant to this paragraph may be removed at any time, either with or
         without cause.  Any vacancy thereby created may be filled, only by the
         affirmative vote of the holders of shares of Cumulative Preferred
         Stock voting separately as a class (together with the holders of
         shares of any other class or series of stock upon which like voting
         rights have been conferred and are exercisable).  If the office of any
         director elected by the holders of shares of Cumulative Preferred
         Stock voting as a class becomes vacant for any reason other than
         removal from office as aforesaid, the remaining director elected
         pursuant to this paragraph may choose a successor who shall hold
         office for the unexpired term in respect of which such vacancy
         occurred.  At elections for such directors, each holder of shares of
         Cumulative Preferred Stock shall be entitled to one vote for each
         share held (the holders of shares of any other class or series of
         preferred stock having like voting rights being entitled to such
         number of votes, if any, for each share of such stock held as may be
         granted to them).

                 (b)  So long as any shares of Cumulative Preferred Stock
         remain outstanding, the consent of the holders of at least two-thirds
         of the shares of Cumulative Preferred Stock outstanding at the time
         and all other class or series of stock upon which like voting rights
         have been conferred and are exercisable (voting together as a class)
         given in person or by proxy, either in writing or at any meeting
         called for the purpose, shall be necessary to permit, effect or
         validate any one or more of the following:

                      (i)  the issuance or increase of the authorized amount of
                 any class or series of shares ranking prior (as that term is
                 defined in paragraph 9(a) hereof) to the shares of the
                 Cumulative Preferred Stock; or

                     (ii)  the amendment, alteration or repeal, whether by
                 merger, consolidation or otherwise, of any of the provisions
                 of the Certificate of
<PAGE>   38
 
                                       38

                 Incorporation (including this resolution or any provision
                 hereof) that would materially and adversely affect any power,
                 preference, or special right of the shares of Cumulative
                 Preferred Stock or of the holders thereof;

         provided, however, that any increase in the amount of authorized
         Common Stock or authorized Preferred Stock or any increase or decrease
         in the number of shares of any series of Preferred Stock or the
         creation and issuance of other series of Common Stock or Preferred
         Stock, in each case ranking on a parity with or junior to the shares
         of Cumulative Preferred Stock with respect to the payment of dividends
         and the distribution of assets upon liquidation, dissolution or
         winding up, shall not be deemed to materially and adversely affect
         such powers, preferences or special rights.

                 (c)  The foregoing voting provisions shall not apply if, at or
         prior to the time when the act with respect to which such vote would
         otherwise be required shall be effected, all outstanding shares of
         Cumulative Preferred Stock shall have been redeemed or called for
         redemption and sufficient funds shall have been deposited in trust to
         effect such redemption.

                 6.  Redemption.  The shares of the Cumulative Preferred Stock
may be redeemed at the option of the Corporation, as a whole, or from time to
time in part, at any time, upon not less than 30 days' prior notice mailed to
the holders of the shares to be redeemed at their addresses as shown on the
stock books of the Corporation; provided, however, that shares of the
Cumulative Preferred Stock shall not be redeemable prior to May 30, 1996.
Subject to the foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $25.00 per share together with an amount
equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for redemption.

                 If full cumulative dividends on the Cumulative Preferred Stock
have not been paid, the Cumulative Preferred Stock may not be redeemed in part
and the Corporation may not purchase or acquire any shares of the Cumulative
Preferred Stock otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of the Cumulative Preferred Stock.  If fewer than
all the outstanding shares of Cumulative Preferred Stock are to be redeemed,
the Corporation will select those to be redeemed by lot or a substantially
equivalent method.
<PAGE>   39
 
                                       39

                 If a notice of redemption has been given pursuant to this
paragraph 6 and if, on or before the date fixed for redemption, the funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds, in trust for the pro rata benefit of
the holders of the shares of Cumulative Preferred Stock so called for
redemption, then, notwithstanding that any certificates for such shares have
not been surrendered for cancellation, on the redemption date dividends shall
cease to accrue on the shares to be redeemed, and at the close of business on
the redemption date the holders of such shares shall cease to be stockholders
with respect to such shares and shall have no interest in or claims against the
Corporation by virtue thereof and shall have no voting or other rights with
respect to such shares, except the right to receive the moneys payable upon
surrender (and endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no longer be outstanding.
Subject to applicable escheat laws, any moneys so set aside by the Corporation
and unclaimed at the end of two years from the redemption date shall revert to
the general funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such redemption.  Any
interest accrued on funds so deposited shall be paid to the Corporation from
time to time.

                 7.  Authorization and Issuance of Other Securities.  No
consent of the holders of the Cumulative Preferred Stock shall be required for
(a) the creation of any indebtedness of any kind of the Corporation, (b) the
creation, or increase or decrease in the amount, of any class or series of
stock of the Corporation not ranking prior as to dividends or upon liquidation,
dissolution or winding up to the Cumulative Preferred Stock or (c) any increase
or decrease in the amount of authorized Common Stock or any increase, decrease
or change in the par value thereof or in any other terms thereof.

                 8.  Amendment of Resolution.  Subject to the provisions of
paragraph 5, the Board reserves the right by subsequent amendment of this
resolution from time to time to increase or decrease the number of shares which
constitute the Cumulative Preferred Stock (but not below the number of shares
thereof then outstanding) and in other respects to amend this resolution within
the limitations provided by law, this resolution and the Certificate of
Incorporation.

                 9.  Rank.  For the purposes of this resolution, any stock of
any class or classes of the Corporation shall be deemed to rank:
<PAGE>   40
 
                                       40

                 (a)  prior to shares of the Cumulative Preferred Stock, either
         as to dividends or upon liquidation, dissolution or winding up, or
         both, if the holders of stock of such class or classes shall be
         entitled by the terms thereof to the receipt of dividends or of
         amounts distributable upon liquidation, dissolution or winding up, as
         the case may be, in preference or priority to the holders of shares of
         the Cumulative Preferred Stock;

                 (b)  on a parity with shares of the Cumulative Preferred
         Stock, either as to dividends or upon liquidation, dissolution or
         winding up, or both, whether or not the dividend rates, dividend
         payment dates, or redemption or liquidation prices per share thereof
         be different from those of the Cumulative Preferred Stock, if the
         holders of stock of such class or classes shall be entitled by the
         terms thereof to the receipt of dividends or of amounts distributed
         upon liquidation, dissolution or winding up, as the case may be, in
         proportion to their respective dividend rates or liquidation prices,
         without preference or priority of one over the other as between the
         holders of such stock and the holders of shares of Cumulative
         Preferred Stock (the term "Parity Preferred Stock" being used to refer
         to any stock on a parity with the shares of Cumulative Preferred
         Stock, either as to dividends or upon liquidation, dissolution or
         winding up, or both, as the context may require); and

                 (c)  junior to shares of the Cumulative Preferred Stock,
         either as to dividends or upon liquidation, dissolution or winding up,
         or both, if such class shall be Common Stock or if the holders of the
         Cumulative Preferred Stock shall be entitled to the receipt of
         dividends or of amounts distributable upon liquidation, dissolution or
         winding up, as the case may be, in preference or priority to the
         holders of stock of such class or classes.

                 The Cumulative Preferred Stock shall rank prior, as to
dividends and upon liquidation, dissolution or winding up, to the Common Stock
and on a parity with the Corporation's ESOP Convertible Preferred Stock, with a
liquidation value of $35.875 per share, the Corporation's 8.88% Cumulative
Preferred Stock, with a liquidation value of $200.00 per share, and the
Corporation's 8-3/4% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share.
<PAGE>   41
 
                                       41

                 Subpart C:  8.88% Cumulative Preferred Stock*

                 1.  Designation and Amount; Fractional Shares.  The
designation for such series of the Preferred Stock authorized by this
resolution shall be the 8.88% Cumulative Preferred Stock, without par value,
with a stated value of $200.00 per share (the "Cumulative Preferred Stock").
The stated value per share of Cumulative Preferred Stock shall not for any
purpose be considered to be a determination by the Board or the Committee with
respect to the capital and surplus of the Corporation.  The maximum number of
shares of Cumulative Preferred Stock shall be 975,000.  The Cumulative
Preferred Stock is issuable in whole shares only.

                 2.  Dividends.  Holders of shares of Cumulative Preferred
Stock will be entitled to receive, when and as declared by the Board or the
Committee out of assets of the Corporation legally available for payment, cash
dividends payable quarterly at the rate of 8.88% per annum.  Dividends on the
Cumulative Preferred Stock, calculated as a percentage of the stated value,
will be payable quarterly on February 28, May 30, August 30 and November 30,
commencing February 28, 1992 (each a "dividend payment date").  Dividends on
shares of the Cumulative Preferred Stock will be cumulative from the date of
initial issuance of such shares of Cumulative Preferred Stock.  Dividends will
be payable, in arrears, to holders of record as they appear on the stock books
of the Corporation on such record dates, not more than 60 days nor less than 10
days preceding the payment dates thereof, as shall be fixed by the Board or the
Committee.  The amount of dividends payable for the initial dividend period or
any period shorter than a full dividend period shall be calculated on the basis
of a 360-day year of twelve 30-day months.  No dividends may be declared or
paid or set apart for payment on any Parity Preferred Stock (as defined in
paragraph 9(b) below) with regard to the payment of dividends unless there
shall also be or have been declared and paid or set apart for payment on the
Cumulative Preferred Stock, like dividends for all dividend payment periods of
the Cumulative Preferred Stock ending on or before the dividend payment date of
such Parity Preferred Stock, ratably in proportion to the respective amounts of
dividends (x) accumulated and unpaid or payable on such Parity Preferred Stock,
on the one hand, and (y) accumulated and unpaid

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

*     Terms defined in this Subpart C are so defined for purposes of this
      Subpart alone.
<PAGE>   42
 
                                       42

through the dividend payment period or periods of the Cumulative Preferred
Stock next preceding such dividend payment date, on the other hand.

                 Except as set forth in the preceding sentence, unless full
cumulative dividends on the Cumulative Preferred Stock have been paid, no
dividends (other than in Common Stock of the Corporation) may be paid or
declared and set aside for payment or other distribution made upon the Common
Stock or on any other stock of the Corporation ranking junior to or on a parity
with the Cumulative Preferred Stock as to dividends, nor may any Common Stock
or any other stock of the Corporation ranking junior to or on a parity with the
Cumulative Preferred Stock as to dividends be redeemed, purchased or otherwise
acquired by the Corporation for any consideration or any payment by the
Corporation be made to or available for a sinking fund for the redemption of
any shares of such stock; provided, however, that any moneys theretofore
deposited in any sinking fund with respect to any preferred stock of the
Corporation in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such preferred stock in
accordance with the terms of such sinking fund regardless of whether at the
time of such application full cumulative dividends upon shares of the
Cumulative Preferred Stock outstanding to the last dividend payment date shall
have been paid or declared and set apart for payment; and provided further that
any such junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Corporation ranking junior to the Cumulative
Preferred Stock as to dividends.

                 3.  Liquidation Preference.  The shares of Cumulative
Preferred Stock shall rank, as to liquidation, dissolution or winding up of the
Corporation, prior to the shares of Common Stock and any other class of stock
of the Corporation ranking junior to the Cumulative Preferred Stock as to
rights upon liquidation, dissolution or winding up of the Corporation, so that
in the event of any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of the Cumulative Preferred Stock
shall be entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of Common Stock or any
other such junior stock, an amount equal to $200.00 per share (the "Liquidation
Preference" of a share of Cumulative Preferred Stock) plus an amount equal to
all dividends (whether or not earned or declared) accrued and
<PAGE>   43
 
                                       43

accumulated and unpaid on the shares of Cumulative Preferred Stock to the date
of final distribution.  The holders of the Cumulative Preferred Stock will not
be entitled to receive the Liquidation Preference until the liquidation
preference of any other class of stock of the Corporation ranking senior to the
Cumulative Preferred Stock as to rights upon liquidation, dissolution or
winding up shall have been paid (or a sum set aside therefor sufficient to
provide for payment) in full.  After payment of the full amount of the
Liquidation Preference and an amount equal to such dividends, the holders of
shares of Cumulative Preferred Stock will not be entitled to any further
participation in any distribution of assets by the Corporation.  If, upon any
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation, or proceeds thereof, distributable among the holders of shares of
Parity Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid, then such assets, or the proceeds thereof, shall be
distributable among such holders ratably in accordance with the respective
amounts which would be payable on such shares if all amounts payable thereon
were paid in full.  For the purposes hereof, neither a consolidation or merger
of the Corporation with or into any other corporation, nor a merger of any
other corporation with or into the Corporation, nor a sale or transfer of all
or any part of the Corporation's assets for cash or securities shall be
considered a liquidation, dissolution or winding up of the Corporation.

                 4.  Conversion.  The Cumulative Preferred Stock is not
convertible into shares of any other class or series of stock of the
Corporation.

                 5.  Voting Rights.  The holders of shares of Cumulative
Preferred Stock shall have no voting rights whatsoever, except for any voting
rights to which they may be entitled under the laws of the State of Delaware,
and except as follows:

                 (a)  Whenever, at any time or times, dividends payable on the
         shares of Cumulative Preferred Stock or on any Parity Preferred Stock
         with respect to payment of dividends shall be in arrears for an
         aggregate number of days equal to six calendar quarters or more,
         whether or not consecutive, the holders of the outstanding shares of
         Cumulative Preferred Stock shall have the right, with holders of
         shares of any one or more other class or series of stock upon which
         like voting rights have been conferred and are exercisable (voting
         together as a class), to elect two of the authorized number of members
<PAGE>   44
 
                                       44

         of the Board at the Corporation's next annual meeting of stockholders
         and at each subsequent annual meeting of stockholders until such
         arrearages have been paid or set apart for payment, at which time such
         right shall terminate, except as herein or by law expressly provided,
         subject to revesting in the event of each and every subsequent default
         of the character above mentioned.  Upon any termination of the right
         of the holders of shares of Cumulative Preferred Stock as a class to
         vote for directors as herein provided, the term of office of all
         directors then in office elected by the holders of shares of
         Cumulative Preferred Stock shall terminate immediately.  Any director
         who shall have been so elected pursuant to this paragraph may be
         removed at any time, either with or without cause.  Any vacancy
         thereby created may be filled only by the affirmative vote of the
         holders of shares of Cumulative Preferred Stock voting separately as a
         class (together with the holders of shares of any other class or
         series of stock upon which like voting rights have been conferred and
         are exercisable).  If the office of any director elected by the
         holders of shares of Cumulative Preferred Stock voting as a class
         becomes vacant for any reason other than removal from office as
         aforesaid, the remaining director elected pursuant to this paragraph
         may choose a successor who shall hold office for the unexpired term in
         respect of which such vacancy occurred.  At elections for such
         directors, each holder of shares of Cumulative Preferred Stock shall
         be entitled to one vote for each share held (the holders of shares of
         any other class or series of preferred stock having like voting rights
         being entitled to such number of votes, if any, for each share of such
         stock held as may be granted to them).

                 (b)  So long as any shares of Cumulative Preferred Stock
         remain outstanding, the consent of the holders of at least two-thirds
         of the shares of Cumulative Preferred Stock outstanding at the time
         and all other classes or series of stock upon which like voting rights
         have been conferred and are exercisable (voting together as a class)
         given in person or by proxy, either in writing or at any meeting
         called for the purpose, shall be necessary to permit, effect or
         validate any one or more of the following:

                      (i)  the issuance or increase of the authorized amount of
                 any class or series of shares ranking prior (as that term is
                 defined in paragraph 9(a) hereof) to the shares of the
                 Cumulative Preferred Stock; or
<PAGE>   45
 
                                       45

                     (ii)  the amendment, alteration or repeal, whether by
                 merger, consolidation or otherwise, of any of the provisions
                 of the Certificate of Incorporation (including this resolution
                 or any provision hereof) that would materially and adversely
                 affect any power, preference, or special right of the shares
                 of Cumulative Preferred Stock or of the holders thereof;
                 provided, however, that any increase in the amount of
                 authorized Common Stock or authorized Preferred Stock or any
                 increase or decrease in the number of shares of any series of
                 Preferred Stock or the creation and issuance of other series
                 of Common Stock or Preferred Stock, in each case ranking on a
                 parity with or junior to the shares of Cumulative Preferred
                 Stock with respect to the payment of dividends and the
                 distribution of assets upon liquidation, dissolution or
                 winding up, shall not be deemed to materially and adversely
                 affect such powers, preferences or special rights.

                 (c)  The foregoing voting provisions shall not apply if, at or
         prior to the time when the act with respect to which such vote would
         otherwise be required shall be effected, all outstanding shares of
         Cumulative Preferred Stock shall have been redeemed or called for
         redemption and sufficient funds shall have been deposited in trust to
         effect such redemption.

                 6.  Redemption.  The shares of the Cumulative Preferred Stock
may be redeemed at the option of the Corporation, as a whole, or from time to
time in part, at any time, upon not less than 30 days' prior notice mailed to
the holders of the shares to be redeemed at their addresses as shown on the
stock books of the Corporation; provided, however, that shares of the
Cumulative Preferred Stock shall not be redeemable prior to November 30, 1996.
Subject to the foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $200.00 per share together with an amount
equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for redemption.

                 If full cumulative dividends on the Cumulative Preferred Stock
have not been paid, the Cumulative Preferred Stock may not be redeemed in part
and the Corporation may not purchase or acquire any shares of the Cumulative
Preferred Stock otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of the Cumulative Preferred Stock.
<PAGE>   46
 
                                       46

                 If fewer than all the outstanding shares of Cumulative
Preferred Stock are to be redeemed, the Corporation will select those to be
redeemed by lot or a substantially equivalent method.

                 If a notice of redemption has been given pursuant to this
paragraph 6 and if, on or before the date fixed for redemption, the funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds, in trust for the pro rata benefit of
the holders of the shares of Cumulative Preferred Stock so called for
redemption, then, notwithstanding that any certificates for such shares have
not been surrendered for cancellation, on the redemption date dividends shall
cease to accrue on the shares to be redeemed, and at the close of business on
the redemption date the holders of such shares shall cease to be stockholders
with respect to such shares and shall have no interest in or claims against the
Corporation by virtue thereof and shall have no voting or other rights with
respect to such shares, except the right to receive the moneys payable upon
surrender (and endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no longer be outstanding.
Subject to applicable escheat laws, any moneys so set aside by the Corporation
and unclaimed at the end of two years from the redemption date shall revert to
the general funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such redemption.  Any
interest accrued on funds so deposited shall be paid to the Corporation from
time to time.

                 All shares of Cumulative Preferred Stock redeemed, purchased
or otherwise acquired by the Corporation shall be retired and cancelled and
shall be restored to the status of authorized but unissued shares of Preferred
Stock, without designation as to series, and may thereafter be issued.

                 7.  Authorization and Issuance of Other Securities.  No
consent of the holders of the Cumulative Preferred Stock shall be required for
(a) the creation of any indebtedness of any kind of the Corporation, (b) the
creation, or increase or decrease in the amount, of any class or series of
stock of the Corporation not ranking prior as to dividends or upon liquidation,
dissolution or winding up to the Cumulative Preferred Stock or (c) any increase
or decrease in the amount of authorized Common Stock or any increase, decrease
or change in the par value thereof or in any other terms thereof.
<PAGE>   47
 
                                       47

                 8.  Amendment of Resolution.  The Board and the Committee each
reserves the right by subsequent amendment of this resolution from time to time
to increase or decrease the number of shares that constitute the Cumulative
Preferred Stock (but not below the number of shares thereof then outstanding)
and in other respects to amend this resolution within the limitations provided
by law, this resolution and the Certificate of Incorporation.

                 9.  Rank.  For the purposes of this resolution, any stock of
any class or classes of the Corporation shall be deemed to rank:

                 (a)  prior to shares of the Cumulative Preferred Stock, either
         as to dividends or upon liquidation, dissolution or winding up, or
         both, if the holders of stock of such class or classes shall be
         entitled by the terms thereof to the receipt of dividends or of
         amounts distributable upon liquidation, dissolution or winding up, as
         the case may be, in preference or priority to the holders of shares of
         the Cumulative Preferred Stock;

                 (b)  on a parity with shares of the Cumulative Preferred
         Stock, either as to dividends or upon liquidation, dissolution or
         winding up, or both, whether or not the dividend rates, dividend
         payment dates, or redemption or liquidation prices per share thereof
         be different from those of the Cumulative Preferred Stock, if the
         holders of stock of such class or classes shall be entitled by the
         terms thereof to the receipt of dividends or of amounts distributed
         upon liquidation, dissolution or winding up, as the case may be, in
         proportion to their respective dividend rates or liquidation prices,
         without preference or priority of one over the other as between the
         holders of such stock and the holders of shares of Cumulative
         Preferred Stock (the term "Parity Preferred Stock" being used to refer
         to any stock on a parity with the shares of Cumulative Preferred
         Stock, either as to dividends or upon liquidation, dissolution or
         winding up, or both, as the context may require); and

                 (c)  junior to shares of the Cumulative Preferred Stock,
         either as to dividends or upon liquidation, dissolution or winding up,
         or both, if such class shall be Common Stock or if the holders of the
         Cumulative Preferred Stock shall be entitled to the receipt of
         dividends or of amounts distributable upon liquidation, dissolution or
         winding up, as the case may be, in preference or priority to the
         holders of stock of such class or classes.
<PAGE>   48
 
                                       48

                 The Cumulative Preferred Stock shall rank prior, as to
dividends and upon liquidation, dissolution or winding up, to the Common Stock
and on a parity with the Corporation's ESOP Convertible Preferred Stock, with a
liquidation value of $35.875 per share, the Corporation's 9.36% Cumulative
Preferred Stock, with a liquidation value of $25.00 per share, and the
Corporation's 8-3/4% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share.
<PAGE>   49
 
                                       49

                 Subpart D:  8-3/4% Cumulative Preferred Stock*

                 1.  Designation and Amount; Fractional Shares.  The
designation for such series of the Preferred Stock authorized by this
resolution shall be the 8-3/4% Cumulative Preferred Stock, without par value,
with a stated value of $200.00 per share (the "Cumulative Preferred Stock").
The stated value per share of Cumulative Preferred Stock shall not for any
purpose be considered to be a determination by the Board or the Committee with
respect to the capital and surplus of the Corporation.  The number of shares of
Cumulative Preferred Stock shall be 750,000.  The Cumulative Preferred Stock is
issuable in whole shares only.

                 2.  Dividends.  Holders of shares of Cumulative Preferred
Stock will be entitled to receive, when and as declared by the Board or the
Committee out of assets of the Corporation legally available for payment, cash
dividends payable quarterly at the rate of 8-3/4% per annum.  Dividends on the
Cumulative Preferred Stock, calculated as a percentage of the stated value,
will be payable quarterly on February 28, May 30, August 30 and November 30,
commencing May 30, 1992 (each a "dividend payment date").  Dividends on shares
of the Cumulative Preferred Stock will be cumulative from the date of initial
issuance of such shares of Cumulative Preferred Stock.  Dividends will be
payable, in arrears, to holders of record as they appear on the stock books of
the Corporation on such record dates, not more than 60 days nor less than 10
days preceding the payment dates thereof, as shall be fixed by the Board or the
Committee.  The amount of dividends payable for the initial dividend period or
any period shorter than a full dividend period shall be calculated on the basis
of a 360-day year of twelve 30-day months.  No dividends may be declared or
paid or set apart for payment on any Parity Preferred Stock (as defined in
paragraph 9(b) below) with regard to the payment of dividends unless there
shall also be or have been declared and paid or set apart for payment on the
Cumulative Preferred Stock, like dividends for all dividend payment periods of
the Cumulative Preferred Stock ending on or before the dividend payment date of
such Parity Preferred Stock, ratably in proportion to the respective amounts of
dividends (x) accumulated and unpaid or payable on such Parity Preferred Stock,
on the one hand, and (y) accumulated and unpaid through the dividend payment
period or periods of the

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

*    Terms defined in this Subpart D are so defined for purposes of this
     Subpart alone.
<PAGE>   50
 
                                       50

Cumulative Preferred Stock next preceding such dividend payment date, on the
other hand.

                 Except as set forth in the preceding sentence, unless full
cumulative dividends on the Cumulative Preferred Stock have been paid, no
dividends (other than in Common Stock of the Corporation) may be paid or
declared and set aside for payment or other distribution made upon the Common
Stock or on any other stock of the Corporation ranking junior to or on a parity
with the Cumulative Preferred Stock as to dividends, nor may any Common Stock
or any other stock of the Corporation ranking junior to or on a parity with the
Cumulative Preferred Stock as to dividends be redeemed, purchased or otherwise
acquired by the Corporation for any consideration or any payment by the
Corporation be made to or available for a sinking fund for the redemption of
any shares of such stock; provided, however, that any moneys theretofore
deposited in any sinking fund with respect to any preferred stock of the
Corporation in compliance with the provisions of such sinking fund may
thereafter be applied to the purchase or redemption of such preferred stock in
accordance with the terms of such sinking fund regardless of whether at the
time of such application full cumulative dividends upon shares of the
Cumulative Preferred Stock outstanding to the last dividend payment date shall
have been paid or declared and set apart for payment; and provided further that
any such junior or parity Preferred Stock or Common Stock may be converted into
or exchanged for stock of the Corporation ranking junior to the Cumulative
Preferred Stock as to dividends.

                 3.  Liquidation Preference.  The shares of Cumulative
Preferred Stock shall rank, as to liquidation, dissolution or winding up of the
Corporation, prior to the shares of Common Stock and any other class of stock
of the Corporation ranking junior to the Cumulative Preferred Stock as to
rights upon liquidation, dissolution or winding up of the Corporation, so that
in the event of any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of the Cumulative Preferred Stock
shall be entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, whether from capital, surplus or earnings,
before any distribution is made to holders of shares of Common Stock or any
other such junior stock, an amount equal to $200.00 per share (the "Liquidation
Preference" of a share of Cumulative Preferred Stock) plus an amount equal to
all dividends (whether or not earned or declared) accrued and accumulated and
unpaid on the shares of Cumulative Preferred
<PAGE>   51
 
                                       51

Stock to the date of final distribution.  The holders of the Cumulative
Preferred Stock will not be entitled to receive the Liquidation Preference
until the liquidation preference of any other class of stock of the Corporation
ranking senior to the Cumulative Preferred Stock as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set aside therefor
sufficient to provide for payment) in full.  After payment of the full amount
of the Liquidation Preference and an amount equal to such dividends, the
holders of shares of Cumulative Preferred Stock will not be entitled to any
further participation in any distribution of assets by the Corporation.  If,
upon any liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation, or proceeds thereof, distributable among the holders of
shares of Parity Preferred Stock shall be insufficient to pay in full the
preferential amount aforesaid, then such assets, or the proceeds thereof, shall
be distributable among such holders ratably in accordance with the respective
amounts which would be payable on such shares if all amounts payable thereon
were paid in full.  For the purposes hereof, neither a consolidation or merger
of the Corporation with or into any other corporation, nor a merger of any
other corporation with or into the Corporation, nor a sale or transfer of all
or any part of the Corporation's assets for cash or securities shall be
considered a liquidation, dissolution or winding up of the Corporation.

                 4.  Conversion.  The Cumulative Preferred Stock is not
convertible into shares of any other class or series of stock of the
Corporation.

                 5.  Voting Rights.  The holders of shares of Cumulative
Preferred Stock shall have no voting rights whatsoever, except for any voting
rights to which they may be entitled under the laws of the State of Delaware,
and except as follows:

                 (a)  Whenever, at any time or times, dividends payable on the
         shares of Cumulative Preferred Stock or on any Parity Preferred Stock
         with respect to payment of dividends shall be in arrears for an
         aggregate number of days equal to six calendar quarters or more,
         whether or not consecutive, the holders of the outstanding shares of
         Cumulative Preferred Stock shall have the right, with holders of
         shares of any one or more other class or series of stock upon which
         like voting rights have been conferred and are exercisable (voting
         together as a class), to elect two of the authorized number of members
         of the Board at the Corporation's next annual meeting of
<PAGE>   52
 
                                       52

         stockholders and at each subsequent annual meeting of stockholders
         until such arrearages have been paid or set apart for payment, at
         which time such right shall terminate, except as herein or by law
         expressly provided, subject to revesting in the event of each and
         every subsequent default of the character above mentioned.  Upon any
         termination of the right of the holders of shares of Cumulative
         Preferred Stock as a class to vote for directors as herein provided,
         the term of office of all directors then in office elected by the
         holders of shares of Cumulative Preferred Stock shall terminate
         immediately.  Any director who shall have been so elected pursuant to
         this paragraph may be removed at any time, either with or without
         cause.  Any vacancy thereby created may be filled only by the
         affirmative vote of the holders of shares of Cumulative Preferred
         Stock voting separately as a class (together with the holders of
         shares of any other class or series of stock upon which like voting
         rights have been conferred and are exercisable).  If the office of any
         director elected by the holders of shares of Cumulative Preferred
         Stock voting as a class becomes vacant for any reason other than
         removal from office as aforesaid, the remaining director elected
         pursuant to this paragraph may choose a successor who shall hold
         office for the unexpired term in respect of which such vacancy
         occurred.  At elections for such directors, each holder of shares of
         Cumulative Preferred Stock shall be entitled to one vote for each
         share held (the holders of shares of any other class or series of
         preferred stock having like voting rights being entitled to such
         number of votes, if any, for each share of such stock held as may be
         granted to them).

                 (b)  So long as any shares of Cumulative Preferred Stock
         remain outstanding, the consent of the holders of at least two-thirds
         of the shares of Cumulative Preferred Stock outstanding at the time
         and all other classes or series of stock upon which like voting rights
         have been conferred and are exercisable (voting together as a class)
         given in person or by proxy, either in writing or at any meeting
         called for the purpose, shall be necessary to permit, effect or
         validate any one or more of the following:

                      (i)  the issuance or increase of the authorized amount of
                 any class or series of shares ranking prior (as that term is
                 defined in paragraph 9(a) hereof) to the shares of the
                 Cumulative Preferred Stock; or
<PAGE>   53
 
                                       53

                     (ii)  the amendment, alteration or repeal, whether by
                 merger, consolidation or otherwise, of any of the provisions
                 of the Certificate of Incorporation (including this resolution
                 or any provision hereof) that would materially and adversely
                 affect any power, preference, or special right of the shares
                 of Cumulative Preferred Stock or of the holders thereof;
                 provided, however, that any increase in the amount of
                 authorized Common Stock or authorized Preferred Stock or any
                 increase or decrease in the number of shares of any series of
                 Preferred Stock or the creation and issuance of other series
                 of Common Stock or Preferred Stock, in each case ranking on a
                 parity with or junior to the shares of Cumulative Preferred
                 Stock with respect to the payment of dividends and the
                 distribution of assets upon liquidation, dissolution or
                 winding up, shall not be deemed to materially and adversely
                 affect such powers, preferences or special rights.

                 (c)  The foregoing voting provisions shall not apply if, at or
         prior to the time when the act with respect to which such vote would
         otherwise be required shall be effected, all outstanding shares of
         Cumulative Preferred Stock shall have been redeemed or called for
         redemption and sufficient funds shall have been deposited in trust to
         effect such redemption.

                 6.  Redemption.  The shares of the Cumulative Preferred Stock
may be redeemed at the option of the Corporation, as a whole, or from time to
time in part, at any time, upon not less than 30 days' prior notice mailed to
the holders of the shares to be redeemed at their addresses as shown on the
stock books of the Corporation; provided, however, that shares of the
Cumulative Preferred Stock shall not be redeemable prior to May 30, 1997.
Subject to the foregoing, on or after such date, shares of the Cumulative
Preferred Stock are redeemable at $200.00 per share together with an amount
equal to all dividends (whether or not earned or declared) accrued and
accumulated and unpaid to, but excluding, the date fixed for redemption.

                 If full cumulative dividends on the Cumulative Preferred Stock
have not been paid, the Cumulative Preferred Stock may not be redeemed in part
and the Corporation may not purchase or acquire any shares of the Cumulative
Preferred Stock otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of the Cumulative Preferred Stock.
<PAGE>   54
 
                                       54

                 If fewer than all the outstanding shares of Cumulative
Preferred Stock are to be redeemed, the Corporation will select those to be
redeemed by lot or a substantially equivalent method.

                 If a notice of redemption has been given pursuant to this
paragraph 6 and if, on or before the date fixed for redemption, the funds
necessary for such redemption shall have been set aside by the Corporation,
separate and apart from its other funds, in trust for the pro rata benefit of
the holders of the shares of Cumulative Preferred Stock so called for
redemption, then, notwithstanding that any certificates for such shares have
not been surrendered for cancellation, on the redemption date dividends shall
cease to accrue on the shares to be redeemed, and at the close of business on
the redemption date the holders of such shares shall cease to be stockholders
with respect to such shares and shall have no interest in or claims against the
Corporation by virtue thereof and shall have no voting or other rights with
respect to such shares, except the right to receive the moneys payable upon
surrender (and endorsement, if required by the Corporation) of their
certificates, and the shares evidenced thereby shall no longer be outstanding.
Subject to applicable escheat laws, any moneys so set aside by the Corporation
and unclaimed at the end of two years from the redemption date shall revert to
the general funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of the
Corporation for the payment of the amounts payable upon such redemption.  Any
interest accrued on funds so deposited shall be paid to the Corporation from
time to time.

                 All shares of Cumulative Preferred Stock redeemed, purchased
or otherwise acquired by the Corporation shall be retired and cancelled and
shall be restored to the status of authorized but unissued shares of Preferred
Stock, without designation as to series, and may thereafter be issued.

                 7.  Authorization and Issuance of Other Securities.  No
consent of the holders of the Cumulative Preferred Stock shall be required for
(a) the creation of any indebtedness of any kind of the Corporation, (b) the
creation, or increase or decrease in the amount, of any class or series of
stock of the Corporation not ranking prior as to dividends or upon liquidation,
dissolution or winding up to the Cumulative Preferred Stock or (c) any increase
or decrease in the amount of authorized Common Stock or any increase, decrease
or change in the par value thereof or in any other terms thereof.
<PAGE>   55
 
                                       55

                 8.  Amendment of Resolution.  The Board and the Committee each
reserves the right by subsequent amendment of this resolution from time to time
to increase or decrease the number of shares that constitute the Cumulative
Preferred Stock (but not below the number of shares thereof then outstanding)
and in other respects to amend this resolution within the limitations provided
by law, this resolution and the Certificate of Incorporation.

                 9.  Rank.  For the purposes of this resolution, any stock of
any class or classes of the Corporation shall be deemed to rank:

                 (a)  prior to shares of the Cumulative Preferred Stock, either
         as to dividends or upon liquidation, dissolution or winding up, or
         both, if the holders of stock of such class or classes shall be
         entitled by the terms thereof to the receipt of dividends or of
         amounts distributable upon liquidation, dissolution or winding up, as
         the case may be, in preference or priority to the holders of shares of
         the Cumulative Preferred Stock;

                 (b)  on a parity with shares of the Cumulative Preferred
         Stock, either as to dividends or upon liquidation, dissolution or
         winding up, or both, whether or not the dividend rates, dividend
         payment dates, or redemption or liquidation prices per share thereof
         be different from those of the Cumulative Preferred Stock, if the
         holders of stock of such class or classes shall be entitled by the
         terms thereof to the receipt of dividends or of amounts distributed
         upon liquidation, dissolution or winding up, as the case may be, in
         proportion to their respective dividend rates or liquidation prices,
         without preference or priority of one over the other as between the
         holders of such stock and the holders of shares of Cumulative
         Preferred Stock (the term "Parity Preferred Stock" being used to refer
         to any stock on a parity with the shares of Cumulative Preferred
         Stock, either as to dividends or upon liquidation, dissolution or
         winding up, or both, as the context may require); and

                 (c)  junior to shares of the Cumulative Preferred Stock,
         either as to dividends or upon liquidation, dissolution or winding up,
         or both, if such class shall be Common Stock or if the holders of the
         Cumulative Preferred Stock shall be entitled to the receipt of
         dividends or of amounts distributable upon liquidation, dissolution or
         winding up, as the case may be, in preference or priority to the
         holders of stock of such class or classes.
<PAGE>   56
 
                                       56

                 The Cumulative Preferred Stock shall rank prior, as to
dividends and upon liquidation, dissolution or winding up, to the Common Stock
and on a parity with the Corporation's ESOP Convertible Preferred Stock, with a
liquidation value of $35.875 per share, the Corporation's 9.36% Cumulative
Preferred Stock, with a liquidation value of $25.00 per share, and the
Corporation's 8.88% Cumulative Preferred Stock, with a liquidation value of
$200.00 per share.
<PAGE>   57
 
                                       57

                 PART II -- COMMON STOCK  (a)  Dividends.  Subject to the
preferential dividend rights applicable to shares of any class or series of
stock having preference over the Common Stock as to dividends, the holders of
shares of Common Stock shall be entitled to receive such dividends when and as
declared by the Board of Directors and shall share equally, share for share
alike, in such dividends.

                 (b)  Liquidation, Dissolution or Winding Up.  In the event of
any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, after distribution in full of the preferential amounts to be
distributed to the holders of shares of any class or series of stock having
preference over the Common Stock upon voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Common
Stock shall be entitled to receive all of the remaining assets of the
Corporation available for distribution, ratably in proportion to the number of
shares of the Common Stock held.

                 (c)  Voting.  Each share of Common Stock shall entitle the
holder thereof to one vote on all matters submitted to a vote of the
stockholders of the Corporation.  The holders of the shares of Common Stock
shall at all times, except as otherwise provided in this Restated Certificate
of Incorporation or required by law, vote as one class, together with the
holders of any other class or series of stock of the Corporation accorded such
general class voting right.

                 SECTION 3.  Definitions.  For the purposes of this Restated
Certificate of Incorporation:

                 (a)  the term "outstanding", when used in reference to shares
         of stock, shall mean issued shares, excluding shares held by the
         Corporation or a Subsidiary; and

                 (b)  the term "Subsidiary" or "Subsidiaries" shall mean a
         corporation(s) of which the Corporation, directly or indirectly, has
         the power, whether through the ownership of voting securities,
         contract or otherwise, to elect at least a majority of the members of
         such corporation's board of directors; provided, however, that for
         purposes of Article VI of the Restated Certificate of Incorporation,
         the term "Subsidiary" or "Subsidiaries" shall mean a corporation(s),
         all of the capital stock of which is owned by the Corporation, other
         than directors' qualifying shares.
<PAGE>   58
 
                                       58


                                   ARTICLE V

                               BOARD OF DIRECTORS

                 SECTION 1.  Number, Election and Terms of Directors.
The business and affairs of the Corporation shall be managed by or under the
direction of a Board of Directors consisting of not fewer than four nor more
than fifteen persons; provided, however, that, pursuant to the provisions of
Section 141(a) of the General Corporation Law of the State of Delaware, the
powers and authority of the Board of Directors with respect to any stock
option, performance unit or other compensation or employee benefit plan of the
Corporation, to the extent not otherwise assigned or reserved to the Board of
Directors by the provisions of any such plan, are hereby conferred upon and
shall be exercised by a committee or committees designated by resolution passed
by the Board of Directors to consist of one or more persons who may or may not
be directors of the Corporation, unless the Board of Directors, by resolution
passed by the Board of Directors, shall determine that any or all such powers
and authority shall instead be conferred upon and exercised by the Board of
Directors.  The exact number of directors within the minimum and maximum
limitations specified in the preceding sentence may be established from time to
time by the Board of Directors pursuant to a resolution adopted by a majority
of the entire Board of Directors.  Subject to the rights of the holders of any
class or series of stock having preference over the Common Stock as to
dividends or upon liquidation, dissolution or winding up of the Corporation to
elect directors under specified circumstances, if any, directors shall be
elected each year at the annual meeting of stockholders and shall hold office
until their successors shall have been duly elected and qualified, or until
their earlier resignation or removal.

                 SECTION 2.  Calling Special Meetings of Stockholders.
A special meeting of the stockholders may be called at any time and for any
purpose or purposes by the President or the Chairman of the Board or by order
of the Board of Directors, and shall be called by the Secretary upon the
written request of the holders of record of at least 80% of the voting power of
the then outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (the "Voting Stock").

                 SECTION 3.  Newly Created Directorships and Vacancies on the
Board of Directors.  Subject to the rights of any class or series of stock
having preference over the
<PAGE>   59
 
                                       59

Common Stock as to dividends or upon liquidation, dissolution or winding up of
the Corporation to elect directors under specified circumstances, if any,
newly-created directorships resulting from any increase in the authorized
number of directors or any vacancies on the Board of Directors resulting from
death, resignation, retirement, disqualification, removal from office or other
cause shall be filled by a majority vote of the directors then in office,
although less than a quorum; and any director so chosen shall hold office for
the remaining term of his predecessor or, if there shall have been no
predecessor, until the next annual election of directors or until his successor
shall have been duly elected and qualified.  No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director.

                 SECTION 4.  Removal of Directors.  Subject to the rights of
the holders of any class or series of stock having preference over the Common
Stock as to dividends or upon liquidation, dissolution or winding up of the
Corporation to elect directors under specified circumstances, if any, any
director, or the entire Board of Directors, may be removed from office at any
time, with or without cause, only by the affirmative vote of the holders of at
least 80% of the voting power of the Voting Stock, voting together as a single
class.

                 SECTION 5.  Amendment of By-Laws.  In furtherance of and not
in limitation of the powers conferred by statute, the Board of Directors of the
Corporation from time to time, may amend, repeal or adopt By-Laws of the
Corporation; provided, that any By-Laws made, amended or repealed by the Board
of Directors or the stockholders may be amended or repealed, and that any
By-Laws may be made, by the stockholders of the Corporation.  Notwithstanding
any other provisions of this Restated Certificate of Incorporation or the
By-Laws of the Corporation (and notwithstanding the fact that a lesser
percentage may be specified by law, this Restated Certificate of Incorporation
or the By-Laws of the Corporation), the affirmative vote of the holders of at
least 80% of the voting power of the Voting Stock, voting together as a single
class, shall be required for the stockholders of the Corporation to amend,
repeal or adopt any By-Laws of the Corporation or to adopt any amendment to
this Restated Certificate of Incorporation inconsistent with the By-Laws of the
Corporation.

                 SECTION 6.  Amendment of Certificate of Incorporation.
Notwithstanding any other provisions of this Restated Certificate of
Incorporation or the By-Laws of the
<PAGE>   60
 
                                       60

Corporation (and notwithstanding the fact that a lesser percentage may be
specified by law, this Restated Certificate of Incorporation or the By-Laws of
the Corporation), the affirmative vote of the holders of at least 80% of the
voting power of the Voting Stock, voting together as a single class, shall be
required to amend or repeal, or to adopt any provision inconsistent with, this
Article V hereof.

                 SECTION 7.  Other Powers.  The By-Laws of the Corporation may
confer upon the Board of Directors powers in addition to the foregoing and in
addition to the powers and authorities expressly conferred upon them by law,
but only to the extent permitted by law and not prohibited by the provisions of
this Restated Certificate of Incorporation.


                                   ARTICLE VI

                                INDEMNIFICATION

                 The Corporation shall indemnify, to the fullest extent
permitted by applicable law, any person who was or is a party or is threatened
to be made a party to, or is involved in any manner in, any threatened, pending
or completed action, suit or proceeding (whether civil, criminal,
administrative or investigative) by reason of the fact that such person (1) is
or was a director or officer of the Corporation or a Subsidiary or (2) is or
was serving at the request of the Corporation or a Subsidiary as a director,
officer, partner, member, employee or agent of another corporation,
partnership, joint venture, trust, committee or other enterprise.

                 To the extent deemed advisable by the Board of Directors, the
Corporation may indemnify, to the fullest extent permitted by applicable law,
any person who was or is a party or is threatened to be made a party to, or is
involved in any manner in, any threatened, pending or completed action, suit or
proceeding (whether civil, criminal, administrative or investigative) by reason
of the fact that the person is or was an employee or agent (other than a
director or officer) of the Corporation or a Subsidiary.

                 The Corporation shall have the power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the Corporation or a Subsidiary, or is or was serving at the
request of the Corporation or a Subsidiary as a director, officer, partner,
<PAGE>   61
 
                                       61

member, employee or agent of another corporation, partnership, joint venture,
trust, committee or other enterprise, against any expense, liability or loss
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the Corporation or a Subsidiary would
have the power to indemnify him against such expense, liability or loss under
the provisions of applicable law.

                 No repeal, modification or amendment of, or adoption of any
provision inconsistent with, this Article VI nor, to the fullest extent
permitted by applicable law, any modification of law shall adversely affect any
right or protection of any person granted pursuant hereto existing at, or with
respect to events that occurred prior to, the time of such repeal, amendment,
adoption or modification.

                 For purposes of this Article VI, the term "Subsidiary" or
"Subsidiaries" shall mean a corporation(s), all of the capital stock of which
is owned directly or indirectly by the Corporation, other than directors'
qualifying shares.

                 The right to indemnification conferred in this Article VI also
includes, to the fullest extent permitted by applicable law, the right to be
paid the expenses (including attorneys' fees) incurred in connection with any
such proceeding in advance of its final disposition.  The payment of any
amounts to any director, officer, partner, member, employee or agent pursuant
to this Article VI shall subrogate the Corporation to any right such director,
officer, partner, member, employee or agent may have against any other person
or entity.  The rights conferred in this Article VI shall be contract rights.


                                  ARTICLE VII

                             LIABILITY OF DIRECTORS

                 A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for any breach of
fiduciary duty as a director, except for liability (i) for any breach by the
director of his duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of the General
Corporation Law of the State of Delaware or (iv) for any transaction from which
the director derived an improper personal benefit.
<PAGE>   62
 
                                       62

                 No repeal, modification or amendment of, or adoption of any
provision inconsistent with, this Article VII nor, to the fullest extent
permitted by law, any modification of law shall adversely affect any right or
protection of a director of the Corporation existing at the time of such
repeal, amendment, adoption or modification or affect the liability of any
director of the Corporation for any action taken or any omission that occurred
prior to the time of such repeal, amendment, adoption or modification.

                 If the General Corporation Law of the State of Delaware shall
be amended, after this Restated Certificate of Incorporation is amended to
include this Article VII, to authorize corporate action further eliminating or
limiting the liability of directors, then a director of the Corporation, in
addition to the circumstances in which he is not liable immediately prior to
such amendment, shall be free of liability to the fullest extent permitted by
the General Corporation Law of the State of Delaware, as so amended.

                 SEVENTH:  That this restatement has been duly adopted by
resolution of the Board of Directors of the Corporation in accordance with
Section 245 of the General Corporation Law of the State of Delaware.

                 IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused this
Certificate to be executed by its President and attested by its Assistant
Secretary and its corporate seal to be affixed hereto this 14th day of
September, 1992.

                                             /s/ Robert F. Greenhill
(Seal)                                     ----------------------------
                                                Robert F. Greenhill
                                                    President


Attest:


 /s/ Patricia A. Kurtz
-------------------------
   Patricia A. Kurtz
  Assistant Secretary
<PAGE>   63
 
                            CERTIFICATE OF AMENDMENT

                                     TO THE

                     RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                           MORGAN STANLEY GROUP INC.

                        (Pursuant to Section 242 of the
                       Delaware General Corporation Law)


                 MORGAN STANLEY GROUP INC., a Delaware corporation, HEREBY
CERTIFIES AS FOLLOWS;

                 1.  The name of the Corporation is Morgan Stanley Group Inc.  
The date of filing of its original Certificate of Incorporation with the
Secretary of State of the State of Delaware was July 10, 1975.  The date of
filing of the most recent Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware was September 15, 1992.

                 2.  This Certificate of Amendment sets forth amendments to the 
Restated Certificate of Incorporation of the Corporation that were duly adopted
in accordance with the provisions of Section 242 of the General Corporation Law
of the State of Delaware.

                 3.  Article IV, Section 2, Part I, Subpart A, Section 1(A) of 
the  Restated Certificate of Incorporation is hereby amended in full to be and
read as follows:

                 (A) The shares of such series shall be designated ESOP
         CONVERTIBLE PREFERRED STOCK (hereinafter referred to as the "ESOP
         Preferred Stock") and such series shall consist of 3,902,438 shares.
         Such number of shares may be increased or decreased from time to time
         by resolution of the Pricing Committee of this Board of Directors (the
         "Pricing Committee"), but no such increase shall result in such series
         consisting of more than 4,000,000 shares, and no decrease shall reduce
         the number of shares of ESOP Preferred Stock to a number less than
         that of shares of ESOP Preferred Stock then outstanding plus the
         number of shares issuable upon exercise of any rights, options or
         warrants or upon conversion of outstanding securities issued by the
         Corporation relating to such shares.  Notwithstanding the preceding
         sentence, the Board of Directors may increase the number of shares of
         ESOP
<PAGE>   64
 
                                       2

         Preferred Stock to a number greater than 4,000,000 shares, or may
         decrease the number of such shares, subject only to any limitations
         imposed by applicable law or this Restated Certificate of
         Incorporation.  Any shares of ESOP Preferred Stock redeemed or
         purchased by the Corporation shall remain issued and outstanding for
         all purposes (except that as long as such shares are held by the
         Corporation or its nominee, no dividends shall be paid on such shares
         and they shall neither be entitled to vote nor counted for quorum
         purposes) and may thereafter be transferred by the Corporation from
         time to time to a trustee or trustees referred to in paragraph (B) of
         this Section 1 (whereupon the voting and dividend rights of such
         shares shall be restored); provided that the Corporation may provide
         at the time of or at any time after such redemption or purchase that
         any such shares then held by the Corporation or its nominee shall be
         retired, and such shares shall then be restored to the status of
         authorized but unissued shares of preferred stock of the Corporation.

                 4.  Article IV, Section 2, Part I, Subpart A, Section 9,
Paragraphs (A), (B), (C), (D), (E), (F), (G) and (I) of the Restated
Certificate of Incorporation are hereby amended in full to be and read as
follows:

                 (A)(1)  In the event the Corporation shall, at any time or
         from time to time while any of the shares of the ESOP Preferred Stock
         are outstanding, (i) pay a dividend or make a distribution in respect
         of the Common Stock in shares of Common Stock or (ii) subdivide the
         outstanding shares of Common Stock into a greater number of shares, in
         each case whether by reclassification of shares, recapitalization of
         the Corporation (excluding a recapitalization or reclassification
         effected by a merger or consolidation to which Section 8 applies) or
         otherwise, then, in such event, the Conversion Price shall, subject to
         the provisions of paragraphs (E) and (F) of this Section 9,
         automatically be adjusted by dividing such Conversion Price by a
         fraction (the "Section 9(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 outstanding immediately before such event.  Such adjustment to
         the Conversion Price shall be effective, upon payment of such dividend
         or distribution in respect of the Common Stock, as of the record date
         for the determination of stockholders entitled to receive such
         dividend or distribution (on a
<PAGE>   65
 
                                       3

         retroactive basis), and in the case of a subdivision shall become
         effective immediately as of the effective date thereof.  An adjustment
         to the Conversion Price pursuant to this Section 9(A)(1) shall have no
         effect on the Liquidation Price or the Preferred Dividend Rate of the
         ESOP Preferred Stock.

                 (2)  In the event the Corporation shall, at any time or from
         time to time while any of the shares of the ESOP Preferred Stock are
         outstanding, combine the outstanding shares of Common Stock into a
         lesser number of shares, whether by reclassification of shares,
         recapitalization of the Corporation (excluding a recapitalization or
         reclassification effected by a merger, consolidation or other
         transaction to which Section 8 applies) or otherwise, then, in such
         event, the Conversion Price shall, subject to the provisions of
         paragraph (F) of this Section 9, automatically be adjusted by dividing
         the Conversion Price in effect immediately before such event by the
         Section 9(A) Fraction.  An adjustment to the Conversion Price made
         pursuant to this paragraph 9(A)(2) shall be given effect immediately
         as of the effective date of such combination and shall have no effect
         on the Liquidation Price or the Preferred Dividend Rate of the ESOP
         Preferred Stock.

                 (B)  In the event the Corporation shall, at any time or from 
         time to time while any of the shares of ESOP Preferred Stock are
         outstanding, issue to holders of shares of Common Stock as a dividend
         or distribution, including by way of a reclassification of shares or a
         recapitalization of the Corporation, any right or warrant to purchase
         shares of Common Stock (but not including as a right or warrant for
         this purpose any security convertible into or exchangeable for shares
         of Common Stock) for a consideration having a Fair Market Value (as
         hereinafter defined) per share less than the Fair Market Value of a
         share of Common Stock on the date of issuance of such right or warrant
         (other than pursuant to any employee or director incentive,
         compensation or benefit plan or arrangement of the Corporation or any
         subsidiary of the Corporation heretofore or hereafter adopted), then,
         in such event, the Conversion Price shall, subject to the provisions
         of paragraphs (E) and (F) of this Section 9, automatically be adjusted
         by dividing such Conversion Price by a fraction (the "Section 9(B)
         Fraction"), the numerator of which is the number of shares of Common
         Stock outstanding immediately before such issuance of rights or
         warrants plus the maximum
<PAGE>   66
 
                                       4

         number of shares of Common Stock that could be acquired upon exercise
         in full of all such rights and warrants and the denominator of which
         is the number of shares of Common Stock outstanding immediately before
         such issuance of warrants or rights plus the number of shares of
         Common Stock that could be purchased at the Fair Market Value of a
         share of Common Stock at the time of such issuance for the maximum
         aggregate consideration payable upon exercise in full of all such
         rights and warrants.  Such adjustment to the Conversion Price shall be
         effective upon such issuance of rights or warrants.  An adjustment to
         the Conversion Price pursuant to this Section 9(B) shall have no
         effect on the Liquidation Price or the Preferred Dividend Rate of the
         ESOP Preferred Stock.

                 (C)(1)  In the event the Corporation shall, at any time or
         from time to time while any of the shares of ESOP Preferred Stock are
         outstanding, issue, sell or exchange shares of Common Stock (other
         than pursuant to (x) any right or warrant to purchase or acquire
         shares of Common Stock (including as such a right or warrant for this
         purpose any security convertible into or exchangeable for shares of
         Common Stock) or (y) any employee or director incentive, compensation
         or benefit plan or arrangement of the Corporation or any subsidiary of
         the Corporation heretofore or hereafter adopted) at a purchase price
         per share less than the Fair Market Value of a share of Common Stock
         on the date of such issuance, sale or exchange, then, in such event,
         the Conversion Price shall, subject to the provisions of paragraphs
         (E) and (F) of this Section 9, automatically be adjusted by dividing
         such Conversion Price by a fraction (the "Section 9(C)(1) Fraction"),
         the numerator of which is the number of shares of Common Stock
         outstanding immediately before such issuance, sale or exchange plus
         the number of shares of Common Stock so issued, sold or exchanged and
         the denominator of which is the number of shares of Common Stock
         outstanding immediately before such issuance, sale or exchange plus
         the number of shares of Common Stock that could be purchased at the
         Fair Market Value of a share of Common Stock at the time of such
         issuance, sale or exchange for the maximum aggregate consideration
         paid therefor.

                 (2)  In the event that the Corporation shall, at any time or 
         from time to time while any ESOP Preferred Stock is outstanding, issue,
         sell or exchange any right or warrant to purchase or acquire
         shares of Common Stock (including as such a right or warrant for this 
         purpose
<PAGE>   67
 
                                       5

         any security convertible into or exchangeable for shares of Common
         Stock other than pursuant to any employee or director incentive,
         compensation or benefit plan or arrangement of the Corporation or any
         subsidiary of the Corporation heretofore or hereafter adopted) for a
         consideration having a Fair Market Value, on the date of such
         issuance, sale or exchange, less than the Non-Dilutive Amount (as
         hereinafter defined), then, in such event, the Conversion Price shall,
         subject to the provisions of paragraphs (E) and (F) of this Section 9,
         automatically be adjusted by dividing such Conversion Price by a
         fraction (the "Section 9(C)(2) Fraction"), the numerator of which is
         the number of shares of Common Stock outstanding immediately before
         such issuance of rights or warrants plus the maximum number of shares
         of Common Stock that could be acquired upon exercise in full of all
         such rights and warrants and the denominator of which is the number of
         shares of Common Stock outstanding immediately before such issuance of
         rights or warrants plus the number of shares of Common Stock that
         could be purchased at the Fair Market Value of a share of Common Stock
         at the time of such issuance for the total of (x) the maximum
         aggregate consideration payable at the time of the issuance, sale or
         exchange of such right or warrant and (y) the maximum aggregate
         consideration payable upon exercise in full of all such rights or
         warrants.

                 (3)  An adjustment to the Conversion Price pursuant to this 
         Section 9(C) shall be effective upon the effective date of any
         issuance, sale or exchange described in paragraph (1) or (2) above.
         Any such adjustment shall have no effect on the Liquidation Price or
         the Preferred Dividend Rate of the ESOP Preferred Stock.

                 (D)  In the event the Corporation shall, at any time or from 
         time to time while any of the shares of ESOP Preferred Stock are
         outstanding, make an Extraordinary Distribution (as hereinafter
         defined) in respect of the Common Stock, whether by dividend,
         distribution, reclassification of shares or recapitalization of the
         Corporation (including capitalization or reclassification effected by
         a merger or consolidation to which Section 8 does not apply) or effect
         a Pro Rata Repurchase (as hereinafter defined) of Common Stock, then,
         in such event, the Conversion Price shall, subject to the provisions
         of paragraphs (E) and (F) of this Section 9, automatically be adjusted
         by dividing such Conversion
<PAGE>   68
 
                                       6

         Price by a fraction (the "Section 9(D) Fraction"), the numerator of
         which is the product of (a) the number of shares of Common Stock
         outstanding immediately before such Extraordinary Distribution or Pro
         Rata Repurchase minus, in the case of a Pro Rata Repurchase, the
         number of shares of Common Stock repurchased by the Corporation
         multiplied by (b) the Fair Market Value of a share of Common Stock on
         the day before the ex-dividend date with respect to an Extraordinary
         Distribution that is paid in cash and on the distribution date with
         respect to an Extraordinary Distribution that is paid other than in
         cash, or on the applicable expiration date (including all extensions
         thereof) of any tender offer that is a Pro Rata Repurchase or on the
         date of purchase with respect to any Pro Rata Repurchase that is not a
         tender offer, as the case may be, and the denominator of which is (i)
         the product of (x) the number of shares of Common Stock outstanding
         immediately before such Extraordinary Distribution or Pro Rata
         Repurchase multiplied by (y) the Fair Market Value of a share of
         Common Stock on the day before the ex-dividend date with respect to an
         Extraordinary Distribution that is paid in cash and on the
         distribution date with respect to an Extraordinary Distribution that
         is paid other than in cash, or on the applicable expiration date
         (including all extensions thereof) of any tender offer that is a Pro
         Rata Repurchase, or on the date of purchase with respect to any Pro
         Rata Repurchase that is not a tender offer, as the case may be, minus
         (ii) the Fair Market Value of the Extraordinary Distribution or the
         aggregate purchase price of the Pro Rata Repurchase, as the case may
         be.  The Corporation shall send each holder of ESOP Preferred Stock
         (i) notice of its intent to make any Extraordinary Distribution and
         (ii) notice of any offer by the Corporation to make a Pro Rata
         Repurchase, in each case at the same time as, or as soon as
         practicable after, such offer is first communicated to holders of
         Common Stock or, in the case of an Extraordinary Distribution, the
         announcement of a record date in accordance with the rules of any
         stock exchange on which the Common Stock is listed or admitted to
         trading.  Such notice shall indicate the intended record date and the
         amount and nature of such dividend or distribution, or the number of
         shares subject to such offer for a Pro Rata Repurchase and the
         purchase price payable by the Corporation pursuant to such offer, as
         well as the Conversion Price and the number of shares of Common Stock
         into which a share of ESOP Preferred Stock may be converted at such
         time.  An adjustment to the Conversion Price pursuant to
<PAGE>   69
 
                                       7

         this Section 9(D) shall be effective (i) in the case of an
         Extraordinary Dividend as of the record date for the determination of
         holders entitled to receive such Extraordinary Dividend (on a
         retroactive basis) and (ii) in the case of a Pro Rata Repurchase upon
         the expiration date thereof (if such Pro Rata Repurchase is a tender
         offer) or the effective date thereof (if such Pro Rata Repurchase is
         not a tender offer).  Any such adjustment shall have no effect on the
         Liquidation Price or the Preferred Dividend Rate of the ESOP Preferred
         Stock.

                 (E)  The Board of Directors shall have the authority to
         determine that any adjustment to the Conversion Price provided for in
         paragraph (A)(1), (B), (C) or (D) of this Section 9 shall not be made
         (or if already made, to determine that such adjustment shall be
         cancelled prospectively), and in lieu thereof to declare a dividend in
         respect of the ESOP Preferred Stock in shares of ESOP Preferred Stock
         (a "Special Dividend") in such a manner that a holder of ESOP
         Preferred Stock will become a holder of that number of shares of ESOP
         Preferred Stock equal to the product of the number of such shares held
         prior to such event times the Section 9(A), Section 9(B), Section
         9(C)(1), Section 9(C)(2) or Section 9(D) Fraction, as applicable.  The
         declaration of such a Special Dividend shall be authorized, if at all,
         by the Board of Directors no later than 30 calendar days following the
         authorization by the Board of Directors (or by a committee duly
         authorized by the Board of Directors) of the transaction or other
         event described in any of the foregoing paragraphs (A)(1), (B), (C) or
         (D) that would otherwise result in an adjustment to the Conversion
         Price being made pursuant to any such paragraphs, and if the Board of
         Directors does not authorize the declaration of a Special Dividend by
         the end of such 30-day period, then no such Special Dividend shall be
         declared and the adjustment to the Conversion Price provided for in
         paragraph (A)(1), (B), (C) or (D) of this Section 9 shall become final
         and binding on the Corporation and all stockholders of the
         Corporation.  Concurrently with the declaration of any Special
         Dividend pursuant to this paragraph (E), the Conversion Price, the
         Liquidation Price and the Preferred Dividend Rate of all shares of
         ESOP Preferred Stock shall be adjusted by dividing the Conversion
         Price, the Liquidation Price and the Preferred Dividend Rate,
         respectively, in effect immediately before such event by the Section
         9(A), Section 9(B), Section 9(C)(1), Section 9(C)(2) or Section 9(D)
         Fraction, as applicable.
<PAGE>   70
 
                                       8

                 (F)  Unless the Board of Directors determines otherwise, and 
         notwithstanding any other provision of this Section 9, any adjustment
         to the Conversion Price provided for in any of paragraphs (A), (B), (C)
         or (D) of this Section 9 shall not be made unless such adjustment 
         would require an increase or decrease of at least one percent (1%) in
         the Conversion Price and, similarly, the Board of Directors shall not
         declare any Special Dividend pursuant to paragraph (E) of this Section
         9 unless such Special Dividend or adjustment would require an
         increase or decrease of at least one percent (1%) in the number of
         shares of ESOP Preferred Stock outstanding.  Any lesser adjustment to
         the Conversion Price or Special Dividend shall be carried forward and
         shall be made no later than the time of, and together with, the next
         subsequent adjustment to the Conversion Price or Special Dividend
         which, together with any adjustment or adjustments or Special Dividend
         or Dividends so carried forward, shall amount to an increase or
         decrease of at least one percent (1%) of the Conversion Price or an
         increase or decrease of at least one percent (1%) in the number of
         shares of ESOP Preferred Stock outstanding, whichever the case may be.

                 (G)  If the Corporation shall make any dividend or
         distribution on the Common Stock or issue any Common Stock, other
         capital stock or other security of the Corporation or any rights or
         warrants to purchase or acquire any such security, which transaction
         does not result in an adjustment to the Conversion Price or to the
         number of shares of ESOP Preferred Stock outstanding pursuant to the
         foregoing provisions of this Section 9, the Board of Directors of the
         Corporation may, in its sole discretion, consider whether such action
         is of such a nature that some type of equitable adjustment should be
         made in respect of such transaction.  If in such case the Board of
         Directors of the Corporation determines that some type of adjustment
         should be made, an adjustment shall be made effective as of such date
         as determined by the Board of Directors of the Corporation.  The
         determination of the Board of Directors of the Corporation as to
         whether some type of adjustment should be made pursuant to the
         foregoing provisions of this Section 9(G), and, if so, as to what
         adjustment should be made and when, shall be final and binding on the
         Corporation and all stockholders of the Corporation.  The Corporation
         shall be entitled, but not required, to make such additional
         adjustments, in addition to those required by the foregoing provisions
         of this Section 9, as shall be necessary in order that any dividend or
<PAGE>   71
 
                                       9

         distribution in shares of capital stock of the Corporation,
         subdivision, reclassification or combination of shares of the
         Corporation or any reclassification of the Corporation shall not be
         taxable to holders of the Common Stock.

                                     * * *

                 (I)  Whenever an adjustment to the Conversion Price of the
         ESOP Preferred Stock is required pursuant to this Section 9, the
         Corporation shall forthwith place on file with the transfer agent for
         the Common Stock and the ESOP Preferred Stock, if there be one, and
         with the Treasurer of the Corporation, a statement signed by the
         Treasurer or any Assistant Treasurer of the Corporation stating the
         adjusted Conversion Price determined as provided herein.  In addition,
         whenever a Special Dividend is declared pursuant to paragraph (E) of
         this Section 9, (i) the maximum number of shares of ESOP Preferred
         Stock shall be adjusted by multiplying 4,000,000 (or such other number
         as shall be the maximum number of shares of ESOP Preferred Stock in
         effect prior to the authorization of such Special Dividend) by the
         Section 9(A), Section 9(B), Section 9(C)(1), Section 9(C)(2) or
         Section 9(D) Fraction, as the case may be, (ii) the Board of Directors
         shall take action as is necessary so that a sufficient number of
         shares of ESOP Preferred Stock are designated with respect to any
         increase in the number of shares of ESOP Preferred Stock to be
         outstanding as a result of such Special Dividend and (iii) the
         Corporation shall forthwith place on file with the transfer agent for
         the Common Stock and the ESOP Preferred Stock, if there be one, and
         with the Treasurer of the Corporation, a statement signed by the
         Treasurer or any Assistant Treasurer of the Corporation stating the
         adjusted maximum number of shares of ESOP Preferred Stock, Conversion
         Price, Liquidation Price and Preferred Dividend Rate determined as
         provided herein.  The statement required by either of the two
         preceding sentences shall set forth in reasonable detail such facts as
         shall be necessary to show the reason and the manner of computing such
         adjustments, including any determination of Fair Market Value involved
         in such computation.  Promptly after each adjustment to the maximum
         number of shares of ESOP Preferred Stock, Conversion Price, the
         Liquidation Price, the Preferred Dividend Rate, or the number of
         shares of ESOP Preferred Stock outstanding, the Corporation shall mail
         a notice thereof and of the then prevailing maximum number of shares
         of ESOP Preferred Stock, Conversion Price, Liquidation Price,
         Preferred Dividend Rate and
<PAGE>   72
 
                                       10

         number of shares of ESOP Preferred Stock outstanding to each holder of
         shares of ESOP Preferred Stock.


                 IN WITNESS WHEREOF, MORGAN STANLEY GROUP INC. has caused this
Certificate to be signed by John J. Mack, its President, and attested by
Jonathan M. Clark, its General Counsel and Secretary, this 30th day of June,
1993.



                                                       MORGAN STANLEY GROUP INC.


                                                       By:  /s/ John J. Mack
                                                           --------------------
                                                           Name:  John J. Mack
                                                           Title: President


ATTEST:



 /s/ Jonathan M. Clark 
--------------------------
Name:  Jonathan M. Clark
Title: General Counsel and
          Secretary
<PAGE>   73
 
              CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
                                     OF THE
                       7-3/8% CUMULATIVE PREFERRED STOCK

                             ($200.00 Stated Value)

                                       OF

                           MORGAN STANLEY GROUP INC.

                         ______________________________


                         Pursuant to Section 151 of the

                General Corporation Law of the State of Delaware

                         ______________________________


                 The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors (the "Board") of Morgan
Stanley Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), by unanimous written consent in lieu of a meeting dated as of
July 27, 1993, with certain of the designations, preferences and rights having
been fixed by the Pricing Committee of the Board (the "Committee") at a meeting
on August 18, 1993, pursuant to authority delegated to it by the Board pursuant
to the provisions of Section 141(c) of the General Corporation Law of the State
of Delaware:

                 RESOLVED that, pursuant to authority expressly granted to and
         vested in the Committee by the Board and in the Board by provisions of
         the Restated Certificate of Incorporation of the Corporation, as
         amended (the "Certificate of Incorporation"), the issuance of a series
         of Preferred Stock, without par value (the "Preferred Stock"), which
         shall consist of 1,000,000 of the 30,000,000 shares of Preferred Stock
         which the Corporation now has authority to issue, is authorized, and
         the Board and, pursuant to the authority expressly granted to the
         Committee by the Board pursuant to the provisions of Section 141(c) of
         the General Corporation Law of the State of Delaware and the
         Certificate of Incorporation, the Committee, fix the powers,
<PAGE>   74
 
                                       2

         designations, preferences and relative, participating, optional or
         other special rights, and the qualifications, limitations or
         restrictions thereof, of the shares of such series (in addition to the
         powers, designations, preferences and relative, participating,
         optional or other special rights, and the qualifications, limitations
         or restrictions thereof, set forth in the Certificate of Incorporation
         which may be applicable to the Preferred Stock) as follows:

                          1.  Designation and Amount; Fractional Shares.  The
                 designation for such series of the Preferred Stock authorized
                 by this resolution shall be the 7-3/8% Cumulative Preferred
                 Stock, without par value, with a stated value of $200.00 per
                 share (the "Cumulative Preferred Stock").  The stated value
                 per share of Cumulative Preferred Stock shall not for any
                 purpose be considered to be a determination by the Board or
                 the Committee with respect to the capital and surplus of the
                 Corporation.  The number of shares of Cumulative Preferred
                 Stock shall be 1,000,000.  The Cumulative Preferred Stock is
                 issuable in whole shares only.

                          2.  Dividends.  Holders of shares of Cumulative
                 Preferred Stock will be entitled to receive, when, as and if
                 declared by the Board or the Committee out of assets of the
                 Corporation legally available for payment, cash dividends
                 payable quarterly at the rate of 7-3/8% per annum.  Dividends
                 on the Cumulative Preferred Stock, calculated as a percentage
                 of the stated value, will be payable quarterly on February 28,
                 May 30, August 30 and November 30 commencing November 30, 1993
                 (each a "dividend payment date").  Dividends on shares of the
                 Cumulative Preferred Stock will be cumulative from the date of
                 initial issuance of such shares of Cumulative Preferred Stock.
                 Dividends will be payable, in arrears, to holders of record as
                 they appear on the stock books of the Corporation on such
                 record dates, not more than 60 days nor less than 10 days
                 preceding the payment dates thereof, as shall be fixed by the
                 Board or the Committee.  The amount of dividends payable for
                 the initial dividend period or any period shorter than a full
                 dividend period shall be calculated on the basis of a 360-day
                 year of twelve 30-day months.  No dividends may be declared or
                 paid or set apart for payment on any Parity Preferred Stock
                 (as defined in paragraph 9(b) below) with regard to the
                 payment of dividends
<PAGE>   75
 
                                       3

                 unless there shall also be or have been declared and paid or
                 set apart for payment on the Cumulative Preferred Stock, like
                 dividends for all dividend payment periods of the Cumulative
                 Preferred Stock ending on or before the dividend payment date
                 of such Parity Preferred Stock, ratably in proportion to the
                 respective amounts of dividends (x) accumulated and unpaid or
                 payable on such Parity Preferred Stock, on the one hand, and
                 (y) accumulated and unpaid through the dividend payment
                 period or periods of the Cumulative Preferred Stock next
                 preceding such dividend payment date, on the other hand.

                          Except as set forth in the preceding sentence, unless
                 full cumulative dividends on the Cumulative Preferred Stock
                 have been paid, no dividends (other than in Common Stock of
                 the Corporation) may be paid or declared and set aside for
                 payment or other distribution made upon the Common Stock or on
                 any other stock of the Corporation ranking junior to or on a
                 parity with the Cumulative Preferred Stock as to dividends,
                 nor may any Common Stock or any other stock of the Corporation
                 ranking junior to or on a parity with the Cumulative Preferred
                 Stock as to dividends be redeemed, purchased or otherwise
                 acquired for any consideration (or any payment be made to or
                 available for a sinking fund for the redemption of any shares
                 of such stock; provided, however, that any moneys theretofore
                 deposited in any sinking fund with respect to any preferred
                 stock of the Corporation in compliance with the provisions of
                 such sinking fund may thereafter be applied to the purchase or
                 redemption of such preferred stock in accordance with the
                 terms of such sinking fund, regardless of whether at the time
                 of such application full cumulative dividends upon shares of
                 the Cumulative Preferred Stock outstanding to the last
                 dividend payment date shall have been paid or declared and set
                 apart for payment) by the Corporation; provided that any such
                 junior or parity Preferred Stock or Common Stock may be
                 converted into or exchanged for stock of the Corporation
                 ranking junior to the Cumulative Preferred Stock as to
                 dividends.

                          3.  Liquidation Preference.  The shares of Cumulative
                 Preferred Stock shall rank, as to liquidation, dissolution or
                 winding up of the Corporation, prior to the shares of Common
                 Stock and any other class of stock of the Corporation ranking
<PAGE>   76
 
                                       4

                 junior to the Cumulative Preferred Stock as to rights upon
                 liquidation, dissolution or winding up of the Corporation, so
                 that in the event of any liquidation, dissolution or winding
                 up of the Corporation, whether voluntary or involuntary, the
                 holders of the Cumulative Preferred Stock shall be entitled to
                 receive out of the assets of the Corporation available for
                 distribution to its stockholders, whether from capital,
                 surplus or earnings, before any distribution is made to
                 holders of shares of Common Stock or any other such junior
                 stock, an amount equal to $200.00 per share (the "Liquidation
                 Preference" of a share of Cumulative Preferred Stock) plus an
                 amount equal to all dividends (whether or not earned or
                 declared) accrued and accumulated and unpaid on the shares of
                 Cumulative Preferred Stock to the date of final distribution.
                 The holders of the Cumulative Preferred Stock will not be
                 entitled to receive the Liquidation Preference until the
                 liquidation preference of any other class of stock of the
                 Corporation ranking senior to the Cumulative Preferred Stock
                 as to rights upon liquidation, dissolution or winding up shall
                 have been paid (or a sum set aside therefor sufficient to
                 provide for payment) in full.  After payment of the full
                 amount of the Liquidation Preference and such dividends, the
                 holders of shares of Cumulative Preferred Stock will not be
                 entitled to any further participation in any distribution of
                 assets by the Corporation.  If, upon any liquidation,
                 dissolution or winding up of the Corporation, the assets of
                 the Corporation, or proceeds thereof, distributable among the
                 holders of shares of Parity Preferred Stock shall be
                 insufficient to pay in full the preferential amount aforesaid,
                 then such assets, or the proceeds thereof, shall be
                 distributable among such holders ratably in accordance with
                 the respective amounts which would be payable on such shares
                 if all amounts payable thereon were paid in full.  For the
                 purposes hereof, neither a consolidation or merger of the
                 Corporation with or into any other corporation, nor a merger
                 of any other corporation with or into the Corporation, nor a
                 sale or transfer of all or any part of the Corporation's
                 assets for cash or securities shall be considered a
                 liquidation, dissolution or winding up of the Corporation.

                          4.  Conversion.  The Cumulative Preferred Stock is
                 not convertible into shares of any other class or series of
                 stock of the Corporation.
<PAGE>   77
 
                                       5

                          5.  Voting Rights.  The holders of shares of
                 Cumulative Preferred Stock shall have no voting rights
                 whatsoever, except for any voting rights to which they may be
                 entitled under the laws of the State of Delaware, and except
                 as follows:

                                  (a)  Whenever, at any time or times,
                          dividends payable on the shares of Cumulative
                          Preferred Stock or on any Parity Preferred Stock with
                          respect to payment of dividends, shall be in arrears
                          for an aggregate number of days equal to six calendar
                          quarters or more, whether or not consecutive, the
                          holders of the outstanding shares of Cumulative
                          Preferred Stock shall have the right, with holders of
                          shares of any one or more other class or series of
                          stock upon which like voting rights have been
                          conferred and are exercisable (voting together as a
                          class), to elect two of the authorized number of
                          members of the Board at the Corporation's next annual
                          meeting of stockholders and at each subsequent annual
                          meeting of stockholders until such arrearages have
                          been paid or set apart for payment, at which time
                          such right shall terminate, except as herein or by
                          law expressly provided, subject to revesting in the
                          event of each and every subsequent default of the
                          character above mentioned.  Upon any termination of
                          the right of the holders of shares of Cumulative
                          Preferred Stock as a class to vote for directors as
                          herein provided, the term of office of all directors
                          then in office elected by the holders of shares of
                          Cumulative Preferred Stock shall terminate
                          immediately.

                          Any director who shall have been so elected pursuant
                          to this paragraph may be removed at any time, either
                          with or without cause.  Any vacancy thereby created
                          may be filled only by the affirmative vote of the
                          holders of shares of Cumulative Preferred Stock
                          voting separately as a class (together with the
                          holders of shares of any other class or series of
                          stock upon which like voting rights have been
                          conferred and are exercisable).  If the office of any
                          director elected by the holders of shares of
                          Cumulative Preferred Stock voting as a class becomes
                          vacant for any reason other than removal from office
                          as aforesaid, the remaining
<PAGE>   78
 
                                       6

                          director elected pursuant to this paragraph may
                          choose a successor who shall hold office for the
                          unexpired term in respect of which such vacancy
                          occurred.  At elections for such directors, each
                          holder of shares of Cumulative Preferred Stock shall
                          be entitled to one vote for each share held (the
                          holders of shares of any other class or series of
                          preferred stock having like voting rights being
                          entitled to such number of votes, if any, for each
                          share of such stock held as may be granted to them).

                                  (b)  So long as any shares of Cumulative
                          Preferred Stock remain outstanding, the consent of
                          the holders of at least two-thirds of the shares of
                          Cumulative Preferred Stock outstanding at the time
                          and all other classes or series of stock upon which
                          like voting rights have been conferred and are
                          exercisable (voting together as a class) given in
                          person or by proxy, either in writing or at any
                          meeting called for the purpose, shall be necessary to
                          permit, effect or validate any one or more of the
                          following:

                                       (i)  the issuance or increase of the
                                  authorized amount of any class or series of
                                  shares ranking prior (as that term is defined
                                  in paragraph 9(a) hereof) to the shares of
                                  the Cumulative Preferred Stock; or

                                      (ii)  the amendment, alteration or
                                  repeal, whether by merger, consolidation or
                                  otherwise, of any of the provisions of the
                                  Certificate of Incorporation, (including this
                                  resolution or any provision hereof) that
                                  would materially and adversely affect any
                                  power, preference, or special right of the
                                  shares of Cumulative Preferred Stock or of
                                  the holders thereof;

                          provided, however, that any increase in the amount of
                          authorized Common Stock or authorized Preferred Stock
                          or any increase or decrease in the number of shares
                          of any series of Preferred Stock or the creation and
                          issuance of other series of Common Stock or Preferred
                          Stock, in each case ranking on a parity with or
                          junior to the shares of Cumulative Preferred Stock
                          with
<PAGE>   79
 
                                       7

                          respect to the payment of dividends and the
                          distribution of assets upon liquidation, dissolution
                          or winding up, shall not be deemed to materially and
                          adversely affect such powers, preferences or special
                          rights.

                                  (c)  The foregoing voting provisions shall
                          not apply if, at or prior to the time when the act
                          with respect to which such vote would otherwise be
                          required shall be effected, all outstanding shares of
                          Cumulative Preferred Stock shall have been redeemed
                          or called for redemption and sufficient funds shall
                          have been deposited in trust to effect such
                          redemption.

                          6.  Redemption.  The shares of the Cumulative
                 Preferred Stock may be redeemed at the option of the
                 Corporation, as a whole, or from time to time in part, at any
                 time, upon not less than 30 days' prior notice mailed to the
                 holders of the shares to be redeemed at their addresses as
                 shown on the stock books of the Corporation; provided,
                 however, that shares of the Cumulative Preferred Stock shall
                 not be redeemable prior to August 30, 1998.  Subject to the
                 foregoing, on or after such date, shares of the Cumulative
                 Preferred Stock are redeemable at $200.00 per share together
                 with an amount equal to all dividends (whether or not earned
                 or declared) accrued and accumulated and unpaid to, but
                 excluding, the date fixed for redemption.

                          If full cumulative dividends on the Cumulative
                 Preferred Stock have not been paid, the Cumulative Preferred
                 Stock may not be redeemed in part and the Corporation may not
                 purchase or acquire any shares of the Cumulative Preferred
                 Stock otherwise than pursuant to a purchase or exchange offer
                 made on the same terms to all holders of the Cumulative
                 Preferred Stock.  If fewer than all the outstanding shares of
                 Cumulative Preferred Stock are to be redeemed, the Corporation
                 will select those to be redeemed by lot or a substantially
                 equivalent method.

                          If a notice of redemption has been given pursuant to
                 this paragraph 6 and if, on or before the date fixed for
                 redemption, the funds necessary for such redemption shall have
                 been set aside by the Corporation, separate and apart from its
                 other funds, in trust for the pro rata benefit of the holders
                 of the shares of Cumulative Preferred Stock
<PAGE>   80
 
                                       8

                 so called for redemption, then, notwithstanding that any
                 certificates for such shares have not been surrendered for
                 cancellation, on the redemption date dividends shall cease to
                 accrue on the shares to be redeemed, and at the close of
                 business on the redemption date the holders of such shares
                 shall cease to be stockholders with respect to such shares and
                 shall have no interest in or claims against the Corporation by
                 virtue thereof and shall have no voting or other rights with
                 respect to such shares, except the right to receive the moneys
                 payable upon surrender (and endorsement, if required by the
                 Corporation) of their certificates, and the shares evidenced
                 thereby shall no longer be outstanding.  Subject to applicable
                 escheat laws, any moneys so set aside by the Corporation and
                 unclaimed at the end of two years from the redemption date
                 shall revert to the general funds of the Corporation, after
                 which reversion the holders of such shares so called for
                 redemption shall look only to the general funds of the
                 Corporation for the payment of the amounts payable upon such
                 redemption.  Any interest accrued on funds so deposited shall
                 be paid to the Corporation from time to time.

                          7.  Authorization and Issuance of Other Securities.
                 No consent of the holders of the Cumulative Preferred Stock
                 shall be required for (a) the creation of any indebtedness of
                 any kind of the Corporation, (b) the creation, or increase or
                 decrease in the amount, of any class or series of stock of the
                 Corporation not ranking prior as to dividends or upon
                 liquidation, dissolution or winding up to the Cumulative
                 Preferred Stock or (c) any increase or decrease in the amount
                 of authorized Common Stock or any increase, decrease or change
                 in the par value thereof or in any other terms thereof.

                          8.  Amendment of Resolution.  The Board and the
                 Committee each reserves the right by subsequent amendment of
                 this resolution from time to time to increase or decrease the
                 number of shares that constitute the Cumulative Preferred
                 Stock (but not below the number of shares thereof then
                 outstanding) and in other respects to amend this resolution
                 within the limitations provided by law, this resolution and
                 the Certificate of Incorporation.

                          9.  Rank.  For the purposes of this resolution, any
                 stock of any class or classes of the Corporation shall be
                 deemed to rank:
<PAGE>   81
 
                                       9

                                  (a)  prior to shares of the Cumulative
                          Preferred Stock, either as to dividends or upon
                          liquidation, dissolution or winding up, or both, if
                          the holders of stock of such class or classes shall
                          be entitled by the terms thereof to the receipt of
                          dividends or of amounts distributable upon
                          liquidation, dissolution or winding up, as the case
                          may be, in preference or priority to the holders of
                          shares of the Cumulative Preferred Stock;

                                  (b)  on a parity with shares of the
                          Cumulative Preferred Stock, either as to dividends or
                          upon liquidation, dissolution or winding up, or both,
                          whether or not the dividend rates, dividend payment
                          dates, or redemption or liquidation prices per share
                          thereof be different from those of the Cumulative
                          Preferred Stock, if the holders of stock of such
                          class or classes shall be entitled by the terms
                          thereof to the receipt of dividends or of amounts
                          distributed upon liquidation, dissolution or winding
                          up, as the case may be, in proportion to their
                          respective dividend rates or liquidation prices,
                          without preference or priority of one over the other
                          as between the holders of such stock and the holders
                          of shares of Cumulative Preferred Stock (the term
                          "Parity Preferred Stock" being used to refer to any
                          stock on a parity with the shares of Cumulative
                          Preferred Stock, either as to dividends or upon
                          liquidation, dissolution or winding up, or both, as
                          the context may require); and

                                  (c)  junior to shares of the Cumulative
                          Preferred Stock, either as to dividends or upon
                          liquidation, dissolution or winding up, or both, if
                          such class shall be Common Stock or if the holders of
                          the Cumulative Preferred Stock shall be entitled to
                          the receipt of dividends or of amounts distributable
                          upon liquidation, dissolution or winding up, as the
                          case may be, in preference or priority to the holders
                          of stock of such class or classes.

                          The Cumulative Preferred Stock shall rank prior, as
                 to dividends and upon liquidation, dissolution or winding up,
                 to the Common Stock and on a parity with the Corporation's
                 ESOP Convertible
<PAGE>   82
 
                                       10

                 Preferred Stock, with a liquidation value of $35.88 per share,
                 the Corporation's 9.36% Cumulative Preferred Stock, with a
                 liquidation value of $25.00 per share, the Corporation's 8.88%
                 Cumulative Preferred Stock, with a liquidation value of
                 $200.00 per share and the Corporation's 8-3/4% Cumulative
                 Preferred Stock, with a liquidation value of $200.00 per
                 share.

                          IN WITNESS WHEREOF, Morgan Stanley Group Inc. has
         caused this Certificate to be made under the seal of the Corporation
         and signed by Barton M. Biggs, its Managing Director, and attested by
         Ralph L. Pellecchio, its Assistant Secretary, this 24th day of August,
         1993.

                                        MORGAN STANLEY GROUP INC.



                                        By:  /s/ Barton M. Biggs   
                                             ---------------------
                                             Name: Barton M. Biggs
                                             Title: Managing Director,
                                               who is duly authorized to
                                               exercise the duties of a
                                               Vice President.

[SEAL]



Attest:



 /s/ Ralph L. Pellecchio          
 -----------------------
      Assistant Secretary
<PAGE>   83
 
                        CERTIFICATE OF CORRECTION FILED
                       TO CORRECT A CERTAIN ERROR IN THE
              CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
                    OF THE 7-3/8% CUMULATIVE PREFERRED STOCK
                             ($200.00 STATED VALUE)
                                       OF
                           MORGAN STANLEY GROUP INC,
                FILED IN THE OFFICE OF THE SECRETARY OF STATE OF
                 THE STATE OF DELAWARE ON AUGUST 24, 1993, AND
                FORWARDED TO THE OFFICE OF THE RECORDER OF DEEDS
              IN AND FOR KENT COUNTY, DELAWARE ON AUGUST 25, 1993


                       Pursuant to Section 103(f) of the
                General Corporation Law of the State of Delaware


          Morgan Stanley Group Inc., a corporation organized and existing 
under and by virtue of the General Corporation Law of the State of Delaware,

          DOES HEREBY CERTIFY:

          1.       The name of the corporation is Morgan Stanley Group
Inc. (the "Corporation").

          2.       A Certificate of Designation of Preferences and Rights
of the 7-3/8% Cumulative Preferred Stock ($200.00 Stated Value) of the
Corporation was filed on August 24, 1993 and forwarded to the Office of the
Recorder of Deeds in and for Kent County, Delaware on August 25, 1993 (the
"Certificate").

          3.       The Certificate requires correction as permitted by
subsection (f) of the Section 103 of the General Corporation Law of the State
of Delaware.
<PAGE>   84
 
          4.       The inaccuracy or defect of the Certificate to be
corrected is that the concluding clause is corrected to read as follows:

                  "IN WITNESS WHEREOF, Morgan Stanley Group Inc. has
          caused this Certificate to be made under the seal of the
          Corporation and signed by Barton M. Biggs, its Managing
          Director, and attested by Ralph Pallecchio, its Assistant
          Secretary, this 24th day of August, 1993."

          IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused this
Certificate of Correction to be made under the seal of the Corporation and
signed by Anson M. Beard, Jr., its Managing Director, and attested by Patricia
A. Kurtz, its Assistant Secretary, this 27th day of August, 1993.

                                          MORGAN STANLEY GROUP INC.

                                          By: /s/     Anson M. Beard, Jr.  
                                              --------------------------------
                                              Name:   Anson M. Beard, Jr.
                                              Title:  Managing Director,
                                                      who is duly authorized
                                                      to exercise the duties
                                                      of a Vice President

[SEAL]

Attest:

 /s/ Patricia A. Kurtz    
 -------------------------
      Assistant Secretary
<PAGE>   85
 
              CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
                                     OF THE
                        7.82% CUMULATIVE PREFERRED STOCK

                             ($200.00 Stated Value)

                                       OF

                           MORGAN STANLEY GROUP INC.

                         ______________________________


                         Pursuant to Section 151 of the

                General Corporation Law of the State of Delaware

                         ______________________________


                 The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors (the "Board") of Morgan
Stanley Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), by unanimous written consent in lieu of a meeting dated as of
October 29, 1993, with certain of the designations, preferences and rights
having been fixed by the Pricing Committee of the Board (the "Committee") at a
meeting on November 19, 1993, pursuant to authority delegated to it by the
Board pursuant to the provisions of Section 141(c) of the General Corporation
Law of the State of Delaware:

                 RESOLVED that, pursuant to authority expressly granted to and
         vested in the Committee by the Board and in the Board by provisions of
         the Restated Certificate of Incorporation of the Corporation, as
         amended (the "Certificate of Incorporation"), the issuance of a series
         of Preferred Stock, without par value (the "Preferred Stock"), which
         shall consist of 682,813 of the 30,000,000 shares of Preferred Stock
         which the Corporation now has authority to issue, is authorized, and
         the Board and, pursuant to the authority expressly granted to the
         Committee by the Board pursuant to the provisions of Section 141(c) of
         the General Corporation Law of the State of Delaware and the
         Certificate of Incorporation, the Committee, fix the powers,
         designations, preferences
<PAGE>   86
 
                                       2

         and relative, participating, optional or other special rights, and
         the qualifications, limitations or restrictions thereof, of the
         shares of such series (in addition to the powers, designations,
         preferences and relative, participating, optional or other special
         rights, and the qualifications, limitations or restrictions thereof,
         set forth in the Certificate of Incorporation which may be applicable
         to  the Preferred Stock) as follows:
        
                     1.  Designation and Amount; Fractional Shares.  The        
              designation for such series of the Preferred Stock authorized by
              this resolution shall be the 7.82% Cumulative Preferred Stock,
              without par value, with a stated value of $200.00 per share (the
              "Cumulative Preferred Stock").  The stated value per share of
              Cumulative Preferred Stock shall not for any purpose be
              considered to be a determination by the Board or the Committee
              with respect to the capital and surplus of the Corporation.  The
              maximum number of shares of Cumulative Preferred Stock shall be
              682,813.  The Cumulative Preferred Stock is issuable in whole
              shares only.

                     2.  Dividends.  Holders of shares of Cumulative Preferred  
              Stock will be entitled to receive, when, as and if declared by
              the Board or the Committee out of assets of the Corporation
              legally available for payment, cash dividends payable quarterly
              at the rate of 7.82% per annum.  Dividends on the Cumulative
              Preferred Stock will be payable quarterly on February 28, May 30,
              August 30 and November 30 (each a "dividend payment date"). 
              Dividends on shares of the Cumulative Preferred Stock will be
              cumulative from the date of initial issuance of such shares of
              Cumulative Preferred Stock.  Dividends will be payable, in
              arrears, to holders of record as they appear on the stock books
              of the Corporation on such record dates, not more than 60 days
              nor less than 10 days preceding the payment dates thereof, as
              shall be fixed by the Board or the Committee.  The amount of
              dividends payable for the initial dividend period or any period
              shorter than a full dividend period shall be calculated on the
              basis of a 360-day year of twelve 30-day months.  No dividends
              may be declared or paid or set apart for payment on any Parity
              Preferred Stock (as defined in paragraph 9(b) below) with regard
              to the payment of dividends unless there shall also be or have
              been declared and paid or set apart for payment on the Cumulative
<PAGE>   87
 
                                       3

              Preferred Stock, like dividends for all dividend payment periods
              of the Cumulative Preferred Stock ending on or before the
              dividend payment date of such Parity Preferred Stock, ratably in
              proportion to the respective amounts of dividends (x) accumulated
              and unpaid or payable on such Parity Preferred Stock, on the one
              hand, and (y) accumulated and unpaid through the dividend payment
              period or periods of the Cumulative Preferred Stock next
              preceding such dividend payment date, on the other hand.

                     Except as set forth in the preceding sentence, unless full
              cumulative dividends on the Cumulative Preferred Stock have been
              paid, no dividends (other than in Common Stock of the
              Corporation) may be paid or declared and set aside for payment
              or other distribution made upon the Common Stock or on any other
              stock of the Corporation ranking junior to or on a parity with
              the Cumulative Preferred Stock as to dividends, nor may any
              Common Stock or any other stock of the Corporation ranking junior
              to or on a parity with the Cumulative Preferred Stock as to 
              dividends be redeemed, purchased or otherwise acquired for any 
              consideration (or any payment be made to or available for a 
              sinking fund for the redemption of any shares of such stock; 
              provided, however, that any moneys theretofore deposited in any 
              sinking fund with respect to any preferred stock of the 
              Corporation in compliance with the provisions of such sinking 
              fund may thereafter be applied to the purchase or redemption of 
              such preferred stock in accordance with the terms of such sinking
              fund, regardless of whether at the time of such application full 
              cumulative dividends upon shares of the Cumulative Preferred 
              Stock outstanding to the last dividend payment date shall have 
              been paid or declared and set apart for payment) by the 
              Corporation; provided that any such junior or parity Preferred 
              Stock or Common Stock may be converted into or exchanged for 
              stock of the Corporation ranking junior to the Cumulative 
              Preferred Stock as to dividends.

                     3.  Liquidation Preference.  The shares of Cumulative      
              Preferred Stock shall rank, as to liquidation, dissolution or
              winding up of the Corporation, prior to the shares of Common
              Stock and any other class of stock of the Corporation ranking
              junior to the Cumulative Preferred Stock as to
<PAGE>   88
 
                                       4

              rights upon liquidation, dissolution or winding up of the
              Corporation, so that in the event of any liquidation, dissolution
              or winding up of the Corporation, whether voluntary or
              involuntary, the holders of the Cumulative Preferred Stock shall
              be entitled to receive out of the assets of the Corporation
              available for distribution to its stockholders, whether from
              capital, surplus or earnings, before any distribution is made to
              holders of shares of Common Stock or any other such junior stock,
              an amount equal to $200.00 per share (the "Liquidation
              Preference" of a share of Cumulative Preferred Stock) plus an
              amount equal to all dividends (whether or not earned or declared)
              accrued and accumulated and unpaid on the shares of Cumulative
              Preferred Stock to the date of final distribution.  The holders
              of the Cumulative Preferred Stock will not be entitled to receive
              the Liquidation Preference until the liquidation preference of
              any other class of stock of the Corporation ranking senior to the
              Cumulative Preferred Stock as to rights upon liquidation,
              dissolution or winding up shall have been paid (or a sum set
              aside therefor sufficient to provide for payment) in full.  After
              payment of the full amount of the Liquidation Preference and such
              dividends, the holders of shares of Cumulative Preferred Stock
              will not be entitled to any further participation in any
              distribution of assets by the Corporation.  If, upon any
              liquidation, dissolution or winding up of the Corporation, the
              assets of the Corporation, or proceeds thereof, distributable
              among the holders of shares of Parity Preferred Stock shall be
              insufficient to pay in full the preferential amount aforesaid,
              then such assets, or the proceeds thereof, shall be distributable
              among such holders ratably in accordance with the respective
              amounts which would be payable on such shares if all amounts
              payable thereon were paid in full.  For the purposes hereof,
              neither a consolidation or merger of the Corporation with or into
              any other corporation, nor a merger of any other corporation with
              or into the Corporation, nor a sale or transfer of all or any
              part of the Corporation's assets for cash or securities shall be
              considered a liquidation, dissolution or winding up of the
              Corporation.

                       4.  Conversion.  The Cumulative Preferred Stock is not
              convertible into shares of any other class or series of stock of
              the Corporation.
<PAGE>   89
 
                                      5

                       5.  Voting Rights.  The holders of shares of Cumulative
              Preferred Stock shall have no voting rights whatsoever, except
              for any voting rights to which they may be entitled under the
              laws of the State of Delaware, and except as follows:

                          (a)  Whenever, at any time or times, dividends payable
                   on the shares of Cumulative Preferred Stock or on any Parity
                   Preferred Stock with respect to payment of dividends, shall
                   be in arrears for an aggregate number of days equal to six
                   calendar quarters or more, whether or not consecutive, the
                   holders of the outstanding shares of Cumulative Preferred
                   Stock shall have the right, with holders of shares of any
                   one or more other class or series of stock upon which like
                   voting rights have been conferred and are exercisable
                   (voting together as a class), to elect two of the authorized
                   number of members of the Board at the Corporation's next
                   annual meeting of stockholders and at each subsequent annual
                   meeting of stockholders until such arrearages have been paid
                   or set apart for payment, at which time such right shall
                   terminate, except as herein or by law expressly provided,
                   subject to revesting in the event of each and every
                   subsequent default of the character above mentioned.  Upon
                   any termination of the right of the holders of shares of
                   Cumulative Preferred Stock as a class to vote for directors
                   as herein provided, the term of office of all directors then
                   in office elected by the holders of shares of Cumulative
                   Preferred Stock shall terminate immediately.

                   Any director who shall have been so elected pursuant to this 
                   paragraph may be removed at any time, either with or without
                   cause.  Any vacancy thereby created may be filled only by
                   the affirmative vote of the holders of shares of Cumulative
                   Preferred Stock voting separately as a class (together with
                   the holders of shares of any other class or series of stock
                   upon which like voting rights have been conferred and are
                   exercisable).  If the office of any director elected by the
                   holders of shares of Cumulative Preferred Stock voting as a
                   class becomes vacant for any reason other than removal from
                   office as aforesaid, the remaining
<PAGE>   90
 
                                       6

                   director elected pursuant to this paragraph may choose
                   a successor who shall hold office for the unexpired term in
                   respect of which such vacancy occurred.  At elections for
                   such directors, each holder of shares of Cumulative
                   Preferred Stock shall be entitled to one vote for each share
                   held (the holders of shares of any other class or series of
                   preferred stock having like voting rights being entitled to
                   such number of votes, if any, for each share of such stock
                   held as may be granted to them).

                          (b)  So long as any shares of Cumulative Preferred
                   Stock remain outstanding, the consent of the holders of at
                   least two-thirds of the shares of Cumulative Preferred Stock
                   outstanding at the time and all other classes or series of
                   stock upon which like voting rights have been conferred and
                   are exercisable (voting together as a class) given in person
                   or by proxy, either in writing or at any meeting called for
                   the purpose, shall be necessary to permit, effect or
                   validate any one or more of the following:

                               (i)  the issuance or increase of the authorized
                          amount of any class or series of shares ranking prior
                          (as that term is defined in paragraph 9(a) hereof) to
                          the shares of the Cumulative Preferred Stock; or

                              (ii)  the amendment, alteration or repeal,
                          whether by merger, consolidation or otherwise, of any
                          of the provisions of the Certificate of
                          Incorporation, (including this resolution or any
                          provision hereof) that would materially and adversely
                          affect any power, preference, or special right of the
                          shares of Cumulative Preferred Stock or of the
                          holders thereof;

                          provided, however, that any increase in the amount of
                          authorized Common Stock or authorized Preferred Stock
                          or any increase or decrease in the number of shares
                          of any series of Preferred Stock or the creation and
                          issuance of other series of Common Stock or Preferred
                          Stock, in each case ranking on a parity with or
                          junior to the shares of Cumulative Preferred Stock
                          with
<PAGE>   91
 
                                       7

                          respect to the payment of dividends and the
                          distribution of assets upon liquidation, dissolution
                          or winding up, shall not be deemed to materially and
                          adversely affect such powers, preferences or special
                          rights.

                          (c)  The foregoing voting provisions shall not apply  
                   if, at or prior to the time when the act with respect to
                   which such vote would otherwise be required shall be
                   effected, all outstanding shares of Cumulative Preferred
                   Stock shall have been redeemed or called for redemption and
                   sufficient funds shall have been deposited in trust to
                   effect such redemption.

                     6.  Redemption Shares.  The shares of the Cumulative       
              Preferred Stock may be redeemed at the option of the Corporation,
              as a whole, or from time to time in part, at any time, upon not
              less than 30 days' prior notice mailed to the holders of the
              shares to be redeemed at their addresses as shown on the stock
              books of the Corporation; provided, however, that shares of the
              Cumulative Preferred Stock shall not be redeemable prior to
              November 30, 1998.  Subject to the foregoing, on or after such
              date, shares of the Cumulative Preferred Stock are redeemable at
              $200.00 per share together with an amount equal to all dividends
              (whether or not earned or declared) accrued and accumulated and
              unpaid to, but excluding, the date fixed for redemption.

                     If full cumulative dividends on the Cumulative Preferred   
              Stock have not been paid, the Cumulative Preferred Stock may not
              be redeemed in part and the Corporation may not purchase or
              acquire any shares of the Cumulative Preferred Stock otherwise
              than pursuant to a purchase or exchange offer made on the same
              terms to all holders of the Cumulative Preferred Stock.  If fewer
              than all the outstanding shares of Cumulative Preferred Stock are
              to be redeemed, the Corporation will select those to be redeemed
              by lot or a substantially equivalent method.

                     If a notice of redemption has been given pursuant to this
              paragraph 6 and if, on or before the date fixed for redemption,
              the funds necessary for such redemption shall have been set aside
              by the Corporation, separate and apart from its other funds, in
              trust for the pro rata benefit of the holders of the shares of
              Cumulative Preferred Stock
<PAGE>   92
 
                                       8

              so called for redemption, then, notwithstanding that any
              certificates for such shares have not been surrendered for
              cancellation, on the redemption date dividends shall cease to
              accrue on the shares to be redeemed, and at the close of business
              on the redemption date the holders of such shares shall cease to
              be stockholders with respect to such shares and shall have no
              interest in or claims against the Corporation by virtue thereof
              and shall have no voting or other rights with respect to such
              shares, except the right to receive the moneys payable upon
              surrender (and endorsement, if required by the Corporation) of
              their certificates, and the shares evidenced thereby shall no
              longer be outstanding.  Subject to applicable escheat laws, any
              moneys so set aside by the Corporation and unclaimed at the end
              of two years from the redemption date shall revert to the general
              funds of the Corporation, after which reversion the holders of
              such shares so called for redemption shall look only to the
              general funds of the Corporation for the payment of the amounts
              payable upon such redemption.  Any interest accrued on funds so
              deposited shall be paid to the Corporation from time to time.

                     7.  Authorization and Issuance of Other Securities.  No 
              consent of the holders of the Cumulative Preferred Stock shall be
              required for (a) the creation of any indebtedness of any kind of
              the Corporation, (b) the creation, or increase or decrease in the
              amount, of any class or series of stock of the Corporation not
              ranking prior as to dividends or upon liquidation, dissolution or
              winding up to the Cumulative Preferred Stock or (c) any increase
              or decrease in the amount of authorized Common Stock or any
              increase, decrease or change in the par value thereof or in any
              other terms thereof.

                     8.  Amendment of Resolution.  The Board and the Committee
              each reserves the right by subsequent amendment of this
              resolution from time to time to increase or decrease the number
              of shares that constitute the Cumulative Preferred Stock (but not
              below the number of shares thereof then outstanding) and in other
              respects to amend this resolution within the limitations provided
              by law, this resolution and the Certificate of Incorporation.

                     9.  Rank.  For the purposes of this resolution, any stock
              of any class or classes of the Corporation shall be deemed to
              rank:
<PAGE>   93
 
                                       9

                          (a)  prior to shares of the Cumulative Preferred
                   Stock, either as to dividends or upon liquidation,
                   dissolution or winding up, or both, if the holders of stock
                   of such class or classes shall be entitled by the terms
                   thereof to the receipt of dividends or of amounts
                   distributable upon liquidation, dissolution or winding up,
                   as the case may be, in preference or priority to the holders
                   of shares of the Cumulative Preferred Stock;

                          (b)  on a parity with shares of the Cumulative
                   Preferred Stock, either as to dividends or upon liquidation,
                   dissolution or winding up, or both, whether or not the
                   dividend rates, dividend payment dates, or redemption or
                   liquidation prices per share thereof be different from those
                   of the Cumulative Preferred Stock, if the holders of stock
                   of such class or classes shall be entitled by the terms
                   thereof to the receipt of dividends or of amounts
                   distributed upon liquidation, dissolution or winding up, as
                   the case may be, in proportion to their respective dividend
                   rates or liquidation prices, without preference or priority
                   of one over the other as between the holders of such stock
                   and the holders of shares of Cumulative Preferred Stock (the
                   term "Parity Preferred Stock" being used to refer to any
                   stock on a parity with the shares of Cumulative Preferred
                   Stock, either as to dividends or upon liquidation,
                   dissolution or winding up, or both, as the context may
                   require); and

                          (c)  junior to shares of the Cumulative Preferred
                   Stock, either as to dividends or upon liquidation,
                   dissolution or winding up, or both, if such class shall be
                   Common Stock or if the holders of the Cumulative Preferred
                   Stock shall be entitled to the receipt of dividends or of
                   amounts distributable upon liquidation, dissolution or
                   winding up, as the case may be, in preference or priority to
                   the holders of stock of such class or classes.

                   The Cumulative Preferred Stock shall rank prior, as to
              dividends and upon liquidation, dissolution or winding up, to the
              Common Stock and on a parity with the Corporation's ESOP
              Convertible
<PAGE>   94
 
                                       10

              Preferred Stock, with a liquidation value of $35.88 per share,
              the Corporation's 9.36% Cumulative Preferred Stock, with a
              liquidation value of $25.00 per share, the Corporation's 8.88%
              Cumulative Preferred Stock, with a liquidation value of $200.00
              per share, the Corporation's 8-3/4% Cumulative Preferred Stock,
              with a liquidation value of $200.00 per share and the
              Corporation's 7-3/8% Cumulative Preferred Stock, with a
              liquidation value of $200.00 per share.

                   IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused 
this Certificate to be made under the seal of the Corporation and signed by
Richard B. Fisher, its Chairman, and attested by Patricia A. Kurtz, its
Assistant Secretary, this 23rd day of November, 1993.


                                                  MORGAN STANLEY GROUP INC.


                                                       /s/ Richard B. Fisher
                                                  By: ------------------------
                                                      Name:  Richard B. Fisher
                                                      Title: Chairman

[SEAL]



Attest:


/s/ Patricia A. Kurtz
-----------------------------
Assistant Secretary
<PAGE>   95
 
              CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
                                     OF THE
                        7.80% CUMULATIVE PREFERRED STOCK

                             ($200.00 Stated Value)

                                       OF

                           MORGAN STANLEY GROUP INC.

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

                         Pursuant to Section 151 of the

                General Corporation Law of the State of Delaware

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

                 The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors (the "Board") of Morgan
Stanley Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), by unanimous written consent in lieu of a meeting dated as of
October 29, 1993, with certain of the designations, preferences and rights
having been fixed by the Pricing Committee of the Board (the "Committee") at a
meeting on February 1, 1994, pursuant to authority delegated to it by the Board
pursuant to the provisions of Section 141(c) of the General Corporation Law of
the State of Delaware:

                 RESOLVED that, pursuant to authority expressly granted to and
         vested in the Committee by the Board and in the Board by provisions of
         the Restated Certificate of Incorporation of the Corporation, as
         amended (the "Certificate of Incorporation"), the issuance of a series
         of Preferred Stock, without par value (the "Preferred Stock"), which
         shall consist of 1,150,000 of the 30,000,000 shares of Preferred
         Stock which the Corporation now has authority to issue, is authorized,
         and the Board and, pursuant to the authority expressly granted to the
         Committee by the Board pursuant to the provisions of Section 141(c) of
         the General Corporation Law of the State of Delaware and the
         Certificate of Incorporation, the Committee, fix the powers,
<PAGE>   96
 
                                      2

         designations, preferences and relative, participating, optional or
         other special rights, and the qualifications, limitations or
         restrictions thereof, of the shares of such series (in addition to the
         powers, designations, preferences and relative, participating,
         optional or other special rights, and the qualifications, limitations
         or restrictions thereof, set forth in the Certificate of Incorporation
         which may be applicable to the Preferred Stock) as follows:

                          1.      Designation and Amount; Fractional Shares.
                 The designation for such series of the Preferred Stock
                 authorized by this resolution shall be the 7.80% Cumulative
                 Preferred Stock, without par value, with a stated value of
                 $200.00 per share (the "Cumulative Preferred Stock").  The
                 stated value per share of Cumulative Preferred Stock shall not
                 for any purpose be considered to be a determination by the
                 Board or the Committee with respect to the capital and surplus
                 of the Corporation.  The maximum number of shares of
                 Cumulative Preferred Stock shall be 1,150,000.  The Cumulative
                 Preferred Stock is issuable in whole shares only.

                          2.      Dividends.  Holders of shares of Cumulative
                 Preferred Stock will be entitled to receive, when, as and if
                 declared by the Board or the Committee out of assets of the
                 Corporation legally available for payment, cash dividends
                 payable quarterly at the rate of 7.80% per annum.  Dividends
                 on the Cumulative Preferred Stock will be payable quarterly on
                 February 28, May 30, August 30 and November 30 (each a
                 "dividend payment date").  Dividends on shares of the
                 Cumulative Preferred Stock will be cumulative from the date of
                 initial issuance of such shares of Cumulative Preferred Stock.
                 Dividends will be payable, in arrears, to holders of record as
                 they appear on the stock books of the Corporation on such
                 record dates, not more than 60 days nor less than 10 days
                 preceding the payment dates thereof, as shall be fixed by the
                 Board or the Committee.  The amount of dividends payable for
                 the initial dividend period or any period shorter than a full
                 dividend period shall be calculated on the basis of a 360-day
                 year of twelve 30-day months.  No dividends may be declared or
                 paid or set apart for payment on any Parity Preferred Stock
                 (as defined in paragraph 9(b) below) with regard to the
                 payment of dividends unless there shall also be or have been
                 declared and paid or set apart for payment on the Cumulative
<PAGE>   97
 
                                       3

                 Preferred Stock, like dividends for all dividend payment
                 periods of the Cumulative Preferred Stock ending on or before
                 the dividend payment date of such Parity Preferred Stock,
                 ratably in proportion to the respective amounts of dividends
                 (x) accumulated and unpaid or payable on such Parity Preferred
                 Stock, on the one hand, and (y) accumulated and unpaid through
                 the dividend payment period or periods of the Cumulative
                 Preferred Stock next preceding such dividend payment date, on
                 the other hand.

                          Except as set forth in the preceding sentence, unless
                 full cumulative dividends on the Cumulative Preferred Stock
                 have been paid, no dividends (other than in Common Stock of
                 the Corporation) may be paid or declared and set aside for
                 payment or other distribution made upon the Common Stock or on
                 any other stock of the Corporation ranking junior to or on a
                 parity with the Cumulative Preferred Stock as to dividends,
                 nor may any Common Stock or any other stock of the Corporation
                 ranking junior to or on a parity with the Cumulative Preferred
                 Stock as to dividends be redeemed, purchased or otherwise
                 acquired for any consideration (or any payment be made to or
                 available for a sinking fund for the redemption of any shares
                 of such stock; provided, however, that any moneys theretofore
                 deposited in any sinking fund with respect to any preferred
                 stock of the Corporation in compliance with the provisions of
                 such sinking fund may thereafter be applied to the purchase or
                 redemption of such preferred stock in accordance with the
                 terms of such sinking fund, regardless of whether at the time
                 of such application full cumulative dividends upon shares of
                 the Cumulative Preferred Stock outstanding to the last
                 dividend payment date shall have been paid or declared and set
                 apart for payment) by the Corporation; provided that any such
                 junior or parity Preferred Stock or Common Stock may be
                 converted into or exchanged for stock of the Corporation
                 ranking junior to the Cumulative Preferred Stock as to
                 dividends.

                          3.      Liquidation Preference.  The shares of
                 Cumulative Preferred Stock shall rank, as to liquidation,
                 dissolution or winding up of the Corporation, prior to the
                 shares of Common Stock and any other class of stock of the
                 Corporation ranking junior to the Cumulative Preferred Stock
                 as to
<PAGE>   98
 
                                       4

                 rights upon liquidation, dissolution or winding up of the
                 Corporation, so that in the event of any liquidation,
                 dissolution or winding up of the Corporation, whether
                 voluntary or involuntary, the holders of the Cumulative
                 Preferred Stock shall be entitled to receive out of the assets
                 of the Corporation available for distribution to its
                 stockholders, whether from capital, surplus or earnings,
                 before any distribution is made to holders of shares of Common
                 Stock or any other such junior stock, an amount equal to
                 $200.00 per share (the "Liquidation Preference" of a share of
                 Cumulative Preferred Stock) plus an amount equal to all
                 dividends (whether or not earned or declared) accrued and
                 accumulated and unpaid on the shares of Cumulative Preferred
                 Stock to the date of final distribution.  The holders of the
                 Cumulative Preferred Stock will not be entitled to receive the
                 Liquidation Preference until the liquidation preference of any
                 other class of stock of the Corporation ranking senior to the
                 Cumulative Preferred Stock as to rights upon liquidation,
                 dissolution or winding up shall have been paid (or a sum set
                 aside therefor sufficient to provide for payment) in full.
                 After payment of the full amount of the Liquidation Preference
                 and such dividends, the holders of shares of Cumulative
                 Preferred Stock will not be entitled to any further
                 participation in any distribution of assets by the
                 Corporation.  If, upon any liquidation, dissolution or winding
                 up of the Corporation, the assets of the Corporation, or
                 proceeds thereof, distributable among the holders of shares of
                 Parity Preferred Stock shall be insufficient to pay in full
                 the preferential amount aforesaid, then such assets, or the
                 proceeds thereof, shall be distributable among such holders 
                 ratably in accordance with the respective amounts which would
                 be payable on such shares if all amounts payable thereon were
                 paid in full.  For the purposes hereof, neither a 
                 consolidation or merger of the Corporation with or into any 
                 other corporation, nor a merger of any other corporation with 
                 or into the Corporation, nor a sale or transfer of all or any
                 part of the Corporation's assets for cash or securities shall
                 be considered a liquidation, dissolution or winding up of the
                 Corporation.

                          4.      Conversion.  The Cumulative Preferred Stock
                 is not convertible into shares of any other class or series of
                 stock of the Corporation.
<PAGE>   99
 
                                       5

                          5.      Voting Rights.  The holders of shares of
                 Cumulative Preferred Stock shall have no voting rights
                 whatsoever, except for any voting rights to which they may be
                 entitled under the laws of the State of Delaware, and except
                 as follows:

                                  (a)      Whenever, at any time or times,
                          dividends payable on the shares of Cumulative
                          Preferred Stock or on any Parity Preferred Stock with
                          respect to payment of dividends, shall be in arrears
                          for an aggregate number of days equal to six calendar
                          quarters or more, whether or not consecutive, the
                          holders of the outstanding shares of Cumulative
                          Preferred Stock shall have the right, with holders of
                          shares of any one or more other class or series of
                          stock upon which like voting rights have been
                          conferred and are exercisable (voting together as a
                          class), to elect two of the authorized number of
                          members of the Board at the Corporation's next annual
                          meeting of stockholders and at each subsequent annual
                          meeting of stockholders until such arrearages have
                          been paid or set apart for payment, at which time
                          such right shall terminate, except as herein or by
                          law expressly provided, subject to revesting in the
                          event of each and every subsequent default of the
                          character above mentioned.  Upon any termination of
                          the right of the holders of shares of Cumulative
                          Preferred Stock as a class to vote for directors as
                          herein provided, the term of office of all directors
                          then in office elected by the holders of shares of
                          Cumulative Preferred Stock shall terminate
                          immediately.

                          Any director who shall have been so elected pursuant
                          to this paragraph may be removed at any time, either
                          with or without cause.  Any vacancy thereby created
                          may be filled only by the affirmative vote of the
                          holders of shares of Cumulative Preferred Stock
                          voting separately as a class (together with the
                          holders of shares of any other class or series of
                          stock upon which like voting rights have been
                          conferred and are exercisable).  If the office of any
                          director elected by the holders of shares of
                          Cumulative Preferred Stock voting as a class becomes
                          vacant for any reason other than removal from office
                          as aforesaid, the remaining
<PAGE>   100
 
                                      6

       director elected pursuant to this paragraph may choose a successor who
       shall hold office for the unexpired term in respect of which such
       vacancy occurred.  At elections for such directors, each holder of
       shares of Cumulative Preferred Stock shall be entitled to one vote for
       each share held (the holders of shares of any other class or series of
       preferred stock having like voting rights being entitled to such number
       of votes, if any, for each share of such stock held as may be granted to
       them).

                (b)     So long as any shares of Cumulative Preferred Stock
       remain outstanding, the consent of the holders of at least two-thirds of
       the shares of the Cumulative Preferred Stock outstanding at the time and
       all other classes or series of stock upon which like voting rights have
       been conferred and are exercisable (voting together as a class) given in
       person or by proxy, either in writing or at any meeting called for the
       purpose, shall be necessary to permit, effect or validate any one or
       more of the following:

                     (i)   the issuance or increase of the authorized amount of
                any class or series of shares ranking prior (as that term is 
                defined in paragraph 9(a) hereof) to the shares of the 
                Cumulative Preferred Stock; or

                    (ii)   the amendment, alteration or repeal, whether by 
                merger, consolidation or otherwise, of any of the provisions of
                the Certificate of Incorporation, (including this resolution or
                any provision hereof) that would materially and adversely 
                affect any power, preference, or special right of the shares of
                Cumulative Preferred Stock or of the holders thereof;

                provided, however, that any increase in the amount of authorized
                Common Stock or authorized Preferred Stock or any increase or
                decrease in the number of shares of any series of Preferred
                Stock or the creation and issuance of other series of Common
                Stock or Preferred Stock, in each case ranking on a parity with
                or junior to the shares of Cumulative Preferred Stock with
<PAGE>   101
 
                                      7

                respect to the payment of dividends and the distribution
                of assets upon liquidation, dissolution or winding up, shall
                not be deemed to materially and adversely affect such
                powers, preferences or special rights.

                        (c)      The foregoing voting provisions shall not
                apply if, at or prior to the time when the act with respect to
                which such vote would otherwise be required shall be effected,
                all outstanding shares of Cumulative Preferred Stock shall have
                been redeemed or called for redemption and sufficient funds
                shall have been deposited in trust to effect such redemption.

                6.      Redemption Shares.  The shares of the Cumulative
       Preferred Stock may be redeemed at the option of the Corporation, as a
       whole, or from time to time in part, at any time, upon not less than 30
       days' prior notice mailed to the holders of the shares to be redeemed at
       their addresses as shown on the stocks books of the Corporation;
       provided, however, that shares of the Cumulative Preferred Stock shall
       not be redeemable prior to February 28, 1999.  Subject to the foregoing,
       on or after such date, shares of the Cumulative Preferred Stock are
       redeemable at $200.00 per share together with an amount equal to all
       dividends (whether or not earned or declared) accrued and accumulated
       and unpaid to, but excluding, the date fixed for redemption.

                If full cumulative dividends on the Cumulative Preferred Stock
       have not been paid, the Cumulative Preferred Stock may not be redeemed
       in part and the Corporation may not purchase or acquire any shares of
       the Cumulative Preferred Stock otherwise than pursuant to a purchase or
       exchange offer made on the same terms to all holders of the Cumulative
       Preferred Stock.  If fewer than all the outstanding shares of Cumulative
       Preferred Stock are to be redeemed, the Corporation will select those to
       be redeemed by lot or a substantially equivalent method.

                If a notice of redemption has been given pursuant to this
       paragraph 6 and if, on or before the date fixed for redemption, the
       funds necessary for such redemption shall have been set aside by the
       Corporation, separate and apart from its other funds, in trust for the
       pro rata benefit of the holders of the shares of Cumulative Preferred
       Stock 
<PAGE>   102
 
                                      8

       so called for redemption, then, notwithstanding that any certificates 
       for such shares have not been surrendered for cancellation, on the
       redemption date dividends shall cease to accrue on the shares to
       be redeemed, and at the close of business on the redemption date the
       holders of such shares shall cease to be stockholders with respect to
       such shares and shall have no interest in or claims against the
       Corporation by virtue thereof and shall have no voting or other rights
       with respect to such shares, except the right to receive the moneys
       payable upon surrender (and endorsement, if required by the Corporation)
       of their certificates, and the shares evidenced thereby shall no longer
       be outstanding.  Subject to applicable escheat laws, any moneys so set
       aside by the Corporation and unclaimed at the end of two years from the
       redemption date shall revert to the general funds of the Corporation,
       after which reversion the holders of such shares so called for
       redemption shall look only to the general funds of the Corporation for
       the payment of the amounts payable upon such redemption.  Any interest
       accrued on funds so deposited shall be paid to the Corporation from time
       to time.

                7.      Authorization and Issuance of Other Securities.  No
       consent of the holders of the Cumulative Preferred Stock shall be
       required for (a) the creation of any indebtedness of any kind of the
       Corporation, (b) the creation, or increase or decrease in the amount, of
       any class or series of stock of the Corporation not ranking prior as to
       dividends or upon liquidation, dissolution or winding up to the
       Cumulative Preferred Stock or (c) any increase or decrease in the amount
       of authorized Common Stock or any increase, decrease or change in the
       par value thereof or in any other terms thereof.

                8.      Amendment of Resolution.  The Board and the Committee
       each reserves the right by subsequent amendment of this resolution from
       time to time to increase or decrease the number of shares that
       constitute the Cumulative Preferred Stock (but not below the number of
       shares thereof then outstanding) and in other respects to amend this
       resolution within the limitations provided by law, this resolution and
       the Certificate of Incorporation.

                9.      Rank.  For the purposes of this resolution, any stock
       of any class or classes of the Corporation shall be deemed to rank:
<PAGE>   103
 
                                      9

                        (a)      prior to shares of the Cumulative Preferred
                Stock, either as to dividends or upon liquidation, dissolution
                or winding up, or both, if the holders of stock of such class
                or classes shall be entitled by the terms thereof to the
                receipt of dividends or of amounts distributable upon
                liquidation, dissolution or winding up, as the case may be, in
                preference or priority to the holders of shares of the
                Cumulative Preferred Stock;

                        (b)      on a parity with shares of the Cumulative
                Preferred Stock, either as to dividends or upon liquidation,
                dissolution or winding up, or both, whether or not the dividend
                rates, dividend payment dates, or redemption or liquidation
                prices per share thereof be different from those of the
                Cumulative Preferred Stock, if the holders of stock of such
                class or classes shall be entitled by the terms thereof to the
                receipt of dividends or of amounts distributed upon
                liquidation, dissolution or winding up, as the case may be, in
                proportion to their respective dividend rates or liquidation
                prices, without preference or priority of one over the other as
                between the holders of such stock and the holders of shares of
                Cumulative Preferred Stock (the term "Parity Preferred Stock"
                being used to refer to any stock on a parity with the shares of
                Cumulative Preferred Stock, either as to dividends or upon
                liquidation, dissolution or winding up, or both, as the context
                may require); and

                        (c)      junior to shares of the Cumulative Preferred
                Stock, either as to dividends or upon liquidation, dissolution
                or winding up, or both, if such class shall be Common Stock or
                if the holders of the Cumulative Preferred Stock shall be
                entitled to the receipt of dividends or of amounts
                distributable upon liquidation, dissolution or winding up, as
                the case may be, in preference or priority to the holders of
                stock in such class or classes.

                The Cumulative Preferred Stock shall rank prior, as to
       dividends and upon liquidation, dissolution or winding up, to the Common
       Stock and on a parity with the Corporation's ESOP Convertible
<PAGE>   104
 
                                      10
                                      


                 Preferred Stock, with a liquidation value of $35.88
                 per share, the Corporation's 9.36% Cumulative
                 Preferred Stock, with a liquidation value of $25.00
                 per share, the Corporation's 8.88% Cumulative
                 Preferred Stock, with a liquidation value of $200.00
                 per share, the Corporation's 8-3/4% Cumulative
                 Preferred Stock, with a liquidation value of $200.00
                 per share, the Corporation's 7-3/8% Cumulative
                 Preferred Stock, with a liquidation value of $200.00
                 per share and, if issued, the Corporation's 7.82%
                 Cumulative Preferred Stock with a liquidation value
                 of $200.00 per share.

                      IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused
      this Certificate to be made under the seal of the Corporation and signed
      by Richard B. Fisher, its Chairman, and attested by Patricia A. Kurtz, 
      its Assistant Secretary, this 4 day of February, 1994.

                                                MORGAN STANLEY GROUP INC.


                                                By: /s/ Richard B. Fisher  
                                                    ---------------------------
                                                    Name: Richard B. Fisher
                                                    Title: Chairman of the Board



[SEAL]


Attest:


/s/ Patricia A. Kurtz      
-------------------------
Patricia A. Kurtz
Assistant Secretary
<PAGE>   105
 
                            CERTIFICATE OF DECREASE
                                       OF
                          AUTHORIZED NUMBER OF SHARES
                                       OF
                        7.82% CUMULATIVE PREFERRED STOCK



          Morgan Stanley Group Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"),

          DOES HEREBY CERTIFY:

          That the Restated Certificate of Incorporation of the Corporation was
filed in the Office of the Secretary of State of Delaware on September 15, 1992
and forwarded for recording in the Office of the Recorder of Deeds for Kent
County, Delaware on September 15, 1992 and a Certificate of Designation of
Preferences and Rights ("Certificate of Designation") of the 7.82% Cumulative
Preferred Stock, was filed in said Office of the Secretary of State on November
24, 1993 and forwarded for recording in the office of the Recorder of Deeds on
even date therewith.

          That pursuant to authority expressly granted to and vested in the
Pricing Committee of the Board of Directors of the Corporation (the "Pricing
Committee"), by resolutions duly adopted by said Board of Directors on October
29, 1993 (the "Resolutions"), the Pricing Committee fixed certain designations,
preferences and rights of the aforesaid 7.82% Cumulative Preferred Stock as set
forth in the Certificate of Designation.

          That pursuant to authority expressly granted to and vested in the
Pricing Committee by the Resolutions, the Pricing Committee by a written
unanimous consent in lieu of a meeting dated as of April 12, 1994 duly adopted
a resolution authorizing and directing a decrease in the authorized number of
shares of the 7.82% Cumulative Preferred Stock of the Corporation, from 682,813
shares to 611,238 shares and providing that the 71,575 shares of the 7.82%
Cumulative Preferred Stock designated by the Pricing Committee but not issued
and outstanding resume the status of authorized and unissued Preferred Stock,
all in accordance with the provisions of Section 151 of The General Corporation
Law of the State of Delaware and the aforesaid Restated Certificate of
Incorporation of the Corporation.
<PAGE>   106
 
          IN WITNESS WHEREOF, said Morgan Stanley Group Inc., has caused this
certificate to be signed by Richard B. Fisher, its Chairman, and attested by
Patricia A. Kurtz, its Assistant Secretary, this 12 day of April, 1994.



                                              By  /s/ Richard B. Fisher 
                                                 ------------------------------
                                               Name:    Richard B. Fisher
                                               Title:   Chairman


ATTEST:

By  /s/ Patricia A. Kurtz                  
   ------------------------------
     Name:    Patricia A. Kurtz
     Title:   Assistant Secretary
<PAGE>   107
 
             CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
                                     OF THE
                        9.00% CUMULATIVE PREFERRED STOCK

                             ($200.00 Stated Value)

                                       OF

                           MORGAN STANLEY GROUP INC.

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


                         Pursuant to Section 151 of the

                General Corporation Law of the State of Delaware

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


          The undersigned DOES HEREBY CERTIFY that the following resolution was
duly adopted by the Board of Directors (the "Board") of Morgan Stanley Group
                                             -----                          
Inc., a Delaware corporation (hereinafter called the "Corporation"), by
                                                      -----------      
unanimous written consent in lieu of a meeting dated as of October 29, 1993 with
certain of the designations, preferences and rights having been fixed by the
Pricing Committee of the Board (the "Committee") at a meeting on February 10,
                                     ---------                               
1995, pursuant to authority delegated to it by the Board pursuant to the
provisions of Section 141(c) of the General Corporation Law of the State of
Delaware:

          RESOLVED that, pursuant to authority expressly granted to and vested
     in the Committee by the Board and in the Board by provisions of the
     Restated Certificate of Incorporation of the Corporation, as amended (the
     "Certificate of Incorporation"), the issuance of a series of Preferred
     -----------------------------                                         
     Stock, without par value (the "Preferred Stock"), which shall consist of
                                    ---------------                          
     738,763 of the 30,000,000 shares of Preferred Stock which the Corporation
     now has authority to issue, is authorized, and the Board and, pursuant to
     the authority expressly granted to the Committee by the Board pursuant to
     the provisions of Section 141(c) of the General Corporation Law of the
     State of Delaware and the Certificate of Incorporation, the Committee fix
     the powers, designations, preferences and relative, participating, optional
     or other special rights, and the qualifications, limitations or
     restrictions thereof, of the shares of such series (in addition to the
     powers, designations, preferences and relative, participating, optional or
     other special rights, and the qualifications, limitations or restrictions
     thereof, set
<PAGE>   108
 
                                       2


     forth in the Certificate of Incorporation which may be applicable to the
     Preferred Stock) as follows:

               1.   Designation and Amount; Fractional Shares.  The designation
                    -----------------------------------------                  
          for such series of the Preferred Stock authorized by this resolution
          shall be the 9.00% Cumulative Preferred Stock, without par value, with
          a stated value of $200.00 per share (the "Cumulative Preferred
                                                    --------------------
          Stock").  The stated value per share of Cumulative Preferred Stock
          ------
          shall not for any purpose be considered to be a determination by the
          Board or the Committee with respect to the capital and surplus of the
          Corporation.  The maximum number of shares of Cumulative Preferred
          Stock shall be 738,763.  The Cumulative Preferred Stock is issuable in
          whole shares only.

               2.  Dividends.  Holders of shares of Cumulative Preferred Stock
                   ---------                                                  
          will be entitled to receive, when, as and if declared by the Board or
          the Committee out of assets of the Corporation legally available for
          payment, cash dividends payable quarterly at the rate of 9.00% per
          annum.  Dividends on the Cumulative Preferred Stock will be payable
          quarterly on February 28, May 30, August 30 and November 30 (each a
          "dividend payment date").  Dividends on shares of the Cumulative
          ----------------------                                          
          Preferred Stock will be cumulative from the date of initial issuance
          of such shares of Cumulative Preferred Stock.  Dividends will be
          payable, in arrears, to holders of record as they appear on the stock
          books of the Corporation on such record dates, not more than 60 days
          nor less than 10 days preceding the payment dates thereof, as shall be
          fixed by the Board or the Committee.  The amount of dividends payable
          for the initial dividend period or any period shorter than a full
          dividend period shall be calculated on the basis of a 360-day year of
          twelve 30-day months.  No dividends may be declared or paid or set
          apart for payment on any Parity Preferred Stock (as defined in
          paragraph 9(b) below) with regard to the payment of dividends unless
          there shall also be or have been declared and paid or set apart for
          payment on the Cumulative Preferred Stock, like dividends for all
          dividend payment periods of the Cumulative Preferred Stock ending on
          or before the dividend payment date of such Parity Preferred Stock,
          ratably in proportion to the respective amounts of dividends (x)
          accumulated and unpaid or payable on such Parity Preferred Stock, on
          the one hand, and (y) accumulated and unpaid through the dividend
          payment period or periods of the Cumulative Preferred Stock next
          preceding such dividend payment date, on the other hand.

               Except as set forth in the preceding sentence, unless full
          cumulative dividends on the Cumulative Preferred Stock have been paid,
          no dividends (other than in Common Stock of the Corporation) may be
          paid or declared and set aside for payment or other distribution made
          upon the Common Stock or on any other stock of the Corporation ranking
          junior to or on a parity with the
<PAGE>   109
 
                                       3

          Cumulative Preferred Stock as to dividends, nor may any Common Stock
          or any other stock of the Corporation ranking junior to or on a parity
          with the Cumulative Preferred Stock as to dividends be redeemed,
          purchased or otherwise acquired for any consideration (or any payment
          be made to or available for a sinking fund for the redemption of any
          shares of such stock; provided, however, that any moneys theretofore
          deposited in any sinking fund with respect to any preferred stock of
          the Corporation in compliance with the provisions of such sinking fund
          may thereafter be applied to the purchase or redemption of such
          preferred stock in accordance with the terms of such sinking fund,
          regardless of whether at the time of such application full cumulative
          dividends upon shares of the Cumulative Preferred Stock outstanding to
          the last dividend payment date shall have been paid or declared and
          set apart for payment) by the Corporation; provided that any such
          junior or parity Preferred Stock or Common Stock may be converted into
          or exchanged for stock of the Corporation ranking junior to the
          Cumulative Preferred Stock as to dividends.

               3.  Liquidation Preference.  The shares of Cumulative Preferred
                   ----------------------                                     
          Stock shall rank, as to liquidation, dissolution or winding up of the
          Corporation, prior to the shares of Common Stock and any other class
          of stock of the Corporation ranking junior to the Cumulative Preferred
          Stock as to rights upon liquidation, dissolution or winding up of the
          Corporation, so that in the event of any liquidation, dissolution or
          winding up of the Corporation, whether voluntary or involuntary, the
          holders of the Cumulative Preferred Stock shall be entitled to receive
          out of the assets of the Corporation available for distribution to its
          stockholders, whether from capital, surplus or earnings, before any
          distribution is made to holders of shares of Common Stock or any other
          such junior stock, an amount equal to $200.00 per share (the
          "Liquidation Preference" of a share of Cumulative Preferred Stock)
          -----------------------                                           
          plus an amount equal to all dividends (whether or not earned or
          declared) accrued and accumulated and unpaid on the shares of
          Cumulative Preferred Stock to the date of final distribution.  The
          holders of the Cumulative Preferred Stock will not be entitled to
          receive the Liquidation Preference until the liquidation preference of
          any other class of stock of the Corporation ranking senior to the
          Cumulative Preferred Stock as to rights upon liquidation, dissolution
          or winding up shall have been paid (or a sum set aside therefor
          sufficient to provide for payment) in full.  After payment of the full
          amount of the Liquidation Preference and such dividends, the holders
          of shares of Cumulative Preferred Stock will not be entitled to any
          further participation in any distribution of assets by the
          Corporation.  If, upon any liquidation, dissolution or winding up of
          the Corporation, the assets of the Corporation, or proceeds thereof,
          distributable among the holders of shares of Parity Preferred Stock
          shall be insufficient to pay in full the preferential amount
          aforesaid, then such assets, or the proceeds thereof, shall be
          distributable among such holders
<PAGE>   110
 
                                       4

          ratably in accordance with the respective amounts which would be
          payable on such shares if all amounts payable thereon were paid in
          full.  For the purposes hereof, neither a consolidation or merger of
          the Corporation with or into any other corporation, nor a merger of
          any other corporation with or into the Corporation, nor a sale or
          transfer of all or any part of the Corporation's assets for cash or
          securities shall be considered a liquidation, dissolution or winding
          up of the Corporation.

               4.  Conversion.  The Cumulative Preferred Stock is not
                   ----------                                        
          convertible into shares of any other class or series of stock of the
          Corporation.

               5.  Voting Rights.  The holders of shares of Cumulative Preferred
                   -------------                                                
          Stock shall have no voting rights whatsoever, except for any voting
          rights to which they may be entitled under the laws of the State of
          Delaware, and except as follows:

                    (a) Whenever, at any time or times, dividends payable on the
               shares of Cumulative Preferred Stock or on any Parity Preferred
               Stock with respect to payment of dividends, shall be in arrears
               for an aggregate number of days equal to six calendar quarters or
               more, whether or not consecutive, the holders of the outstanding
               shares of Cumulative Preferred Stock shall have the right, with
               holders of shares of any one or more other class or series of
               stock upon which like voting rights have been conferred and are
               exercisable (voting together as a class), to elect two of the
               authorized number of members of the Board at the Corporation's
               next annual meeting of stockholders and at each subsequent annual
               meeting of stockholders until such arrearages have been paid or
               set apart for payment, at which time such right shall terminate,
               except as herein or by law expressly provided, subject to
               revesting in the event of each and every subsequent default of
               the character above mentioned.  Upon any termination of the right
               of the holders of shares of Cumulative Preferred Stock as a class
               to vote for directors as herein provided, the term of office of
               all directors then in office elected by the holders of shares of
               Cumulative Preferred Stock shall terminate immediately.

               Any director who shall have been so elected pursuant to this
               paragraph may be removed at any time, either with or without
               cause.  Any vacancy thereby created may be filled only by the
               affirmative vote of the holders of shares of Cumulative Preferred
               Stock voting separately as a class (together with the holders of
               shares of any other class or series of stock upon which like
               voting rights have been conferred and are exercisable).  If the
               office of any director elected by the holders of shares of
               Cumulative Preferred Stock voting as a class becomes vacant
<PAGE>   111
 
                                       5

               for any reason other than removal from office as aforesaid, the
               remaining director elected pursuant to this paragraph may choose
               a successor who shall hold office for the unexpired term in
               respect of which such vacancy occurred.  At elections for such
               directors, each holder of shares of Cumulative Preferred Stock
               shall be entitled to one vote for each share held (the holders of
               shares of any other class or series of preferred stock having
               like voting rights being entitled to such number of votes, if
               any, for each share of such stock held as may be granted to
               them).

                    (b) So long as any shares of Cumulative Preferred Stock
               remain outstanding, the consent of the holders of at least two-
               thirds of the shares of Cumulative Preferred Stock outstanding at
               the time and all other classes or series of stock upon which like
               voting rights have been conferred and are exercisable (voting
               together as a class) given in person or by proxy, either in
               writing or at any meeting called for the purpose, shall be
               necessary to permit, effect or validate any one or more of the
               following:

                         (i) the issuance or increase of the authorized amount
                    of any class or series of shares ranking prior (as that term
                    is defined in paragraph 9(a) hereof) to the shares of the
                    Cumulative Preferred Stock; or

                         (ii) the amendment, alteration or repeal, whether by
                    merger, consolidation or otherwise, of any of the provisions
                    of the Certificate of Incorporation, (including this
                    resolution or any provision hereof) that would materially
                    and adversely affect any power, preference, or special right
                    of the shares of Cumulative Preferred Stock or of the
                    holders thereof;

                    provided, however, that any increase in the amount of
                    authorized Common Stock or authorized Preferred Stock or any
                    increase or decrease in the number of shares of any series
                    of Preferred Stock or the creation and issuance of other
                    series of Common Stock or Preferred Stock, in each case
                    ranking on a parity with or junior to the shares of
                    Cumulative Preferred Stock with respect to the payment of
                    dividends and the distribution of assets upon liquidation,
                    dissolution or winding up, shall not be deemed to materially
                    and adversely affect such powers, preferences or special
                    rights.

                    (c) The foregoing voting provisions shall not apply if, at
               or prior to the time when the act with respect to which such vote
               would
<PAGE>   112
 
                                       6

               otherwise be required shall be effected, all outstanding shares
               of Cumulative Preferred Stock shall have been redeemed or called
               for redemption and sufficient funds shall have been deposited in
               trust to effect such redemption.

               6.  Redemption Shares.  The shares of the Cumulative Preferred
                   -----------------                                         
          Stock may be redeemed at the option of the Corporation, as a whole, or
          from time to time in part, at any time, upon not less than 30 days'
          prior notice mailed to the holders of the shares to be redeemed at
          their addresses as shown on the stock books of the Corporation;
          provided, however, that shares of the Cumulative Preferred Stock shall
          not be redeemable prior to February 28, 2000.  Subject to the
          foregoing, on or after such date, shares of the Cumulative Preferred
          Stock are redeemable at $200.00 per share together with an amount
          equal to all dividends (whether or not earned or declared) accrued and
          accumulated and unpaid to, but excluding, the date fixed for
          redemption.

               If full cumulative dividends on the Cumulative Preferred Stock
          have not been paid, the Cumulative Preferred Stock may not be redeemed
          in part and the Corporation may not purchase or acquire any shares of
          the Cumulative Preferred Stock otherwise than pursuant to a purchase
          or exchange offer made on the same terms to all holders of the
          Cumulative Preferred Stock.  If fewer than all the outstanding shares
          of Cumulative Preferred Stock are to be redeemed, the Corporation will
          select those to be redeemed by lot or a substantially equivalent
          method.

               If a notice of redemption has been given pursuant to this
          paragraph 6 and if, on or before the date fixed for redemption, the
          funds necessary for such redemption shall have been set aside by the
          Corporation, separate and apart from its other funds, in trust for the
          pro rata benefit of the holders of the shares of Cumulative Preferred
          Stock so called for redemption, then, notwithstanding that any
          certificates for such shares have not been surrendered for
          cancellation, on the redemption date dividends shall cease to accrue
          on the shares to be redeemed, and at the close of business on the
          redemption date the holders of such shares shall cease to be
          stockholders with respect to such shares and shall have no interest in
          or claims against the Corporation by virtue thereof and shall have no
          voting or other rights with respect to such shares, except the right
          to receive the moneys payable upon surrender (and endorsement, if
          required by the Corporation) of their certificates, and the shares
          evidenced thereby shall no longer be outstanding.  Subject to
          applicable escheat laws, any moneys so set aside by the Corporation
          and unclaimed at the end of two years from the redemption date shall
          revert to the general funds of the Corporation, after which reversion
          the holders of such shares so called for redemption shall look only to
          the general funds of the Corporation for the
<PAGE>   113
 
                                       7

          payment of the amounts payable upon such redemption.  Any interest
          accrued on funds so deposited shall be paid to the Corporation from
          time to time.

               7.  Authorization and Issuance of Other Securities.  No consent
                   ----------------------------------------------             
          of the holders of the Cumulative Preferred Stock shall be required for
          (a) the creation of any indebtedness of any kind of the Corporation,
          (b) the creation, or increase or decrease in the amount, of any class
          or series of stock of the Corporation not ranking prior as to
          dividends or upon liquidation, dissolution or winding up to the
          Cumulative Preferred Stock or (c) any increase or decrease in the
          amount of authorized Common Stock or any increase, decrease or change
          in the par value thereof or in any other terms thereof.

               8.    Amendment of Resolution.  The Board and the Committee each
                     -----------------------                                   
          reserves the right by subsequent amendment of this resolution from
          time to time to increase or decrease the number of shares that
          constitute the Cumulative Preferred Stock (but not below the number of
          shares thereof then outstanding) and in other respects to amend this
          resolution within the limitations provided by law, this resolution and
          the Certificate of Incorporation.

               9.    Rank.  For the purposes of this resolution, any stock of
                     ----                                                    
          any class or classes of the Corporation shall be deemed to rank:

                    (a) prior to shares of the Cumulative Preferred Stock,
               either as to dividends or upon liquidation, dissolution or
               winding up, or both, if the holders of stock of such class or
               classes shall be entitled by the terms thereof to the receipt of
               dividends or of amounts distributable upon liquidation,
               dissolution or winding up, as the case may be, in preference or
               priority to the holders of shares of the Cumulative Preferred
               Stock;

                    (b) on a parity with shares of the Cumulative Preferred
               Stock, either as to dividends or upon liquidation, dissolution or
               winding up, or both, whether or not the dividend rates, dividend
               payment dates, or redemption or liquidation prices per share
               thereof be different from those of the Cumulative Preferred
               Stock, if the holders of stock of such class or classes shall be
               entitled by the terms thereof to the receipt of dividends or of
               amounts distributed upon liquidation, dissolution or winding up,
               as the case may be, in proportion to their respective dividend
               rates or liquidation prices, without preference or priority of
               one over the other as between the holders of such stock and the
               holders of shares of Cumulative Preferred Stock (the term "Parity
                                                                          ------
               Preferred Stock" being used to refer to any stock on a parity
               ---------------                                              
               with the shares of
<PAGE>   114
 
                                       8

               Cumulative Preferred Stock, either as to dividends or upon
               liquidation, dissolution or winding up, or both, as the context
               may require); and

                    (c) junior to shares of the Cumulative Preferred Stock,
               either as to dividends or upon liquidation, dissolution or
               winding up, or both, if such class shall be Common Stock or if
               the holders of the Cumulative Preferred Stock shall be entitled
               to the receipt of dividends or of amounts distributable upon
               liquidation, dissolution or winding up, as the case may be, in
               preference or priority to the holders of stock of such class or
               classes.

               The Cumulative Preferred Stock shall rank prior, as to dividends
     and upon liquidation, dissolution or winding up, to the Common Stock and on
     a parity with (i) the Corporation's ESOP Convertible Preferred Stock, with
     a liquidation value of $35.88 per share, (ii) the Corporation's 9.36%
     Cumulative Preferred Stock, with a liquidation value of $25.00 per share,
     (iii) the Corporation's 8.88% Cumulative Preferred Stock, with a
     liquidation value of $200.00 per share, (iv) the Corporation's 8-3/4%
     Cumulative Preferred Stock, with a liquidation value of $200.00 per share,
     (v) the Corporation's 7-3/8% Cumulative Preferred Stock, with a liquidation
     value of $200.00 per share, (vi) if issued, the Corporation's 7.82%
     Cumulative Preferred Stock, with a liquidation value of $200.00 per share
     and (vii) if issued, the Corporation's 7.80% Cumulative Preferred Stock,
     with a liquidation value of $200.00 per share.
<PAGE>   115
 
                                       9


               IN WITNESS WHEREOF, Morgan Stanley Group Inc. has caused this
     Certificate to be made under the seal of the Corporation and signed by
     Richard B. Fisher, its Chairman, and attested by Patricia A. Kurtz, its
     Assistant Secretary, this 14th day of February, 1995.

                                  MORGAN STANLEY GROUP INC.
 
 
                                  By:       /s/ Richard B. Fisher
                                     -----------------------------------------
                                     Name: Richard B. Fisher
                                     Title:  Chairman of the Board

[SEAL]




ATTEST:


  /s/ Patricia A. Kurtz
----------------------------------
      Name:     Patricia A. Kurtz
      Title:    Assistant Secretary


<PAGE>   116

                             CERTIFICATE OF DECREASE
                                       OF
                           AUTHORIZED NUMBER OF SHARES
                                       OF
                        9.00% CUMULATIVE PREFERRED STOCK


                  Morgan Stanley Group Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"),

                  DOES HEREBY CERTIFY:

                  That the Restated Certificate of Incorporation of the
Corporation was filed in the Office of the Secretary of State of Delaware on
September 15, 1992 and forwarded for recording in the Office of the Recorder of
Deeds for Kent County, Delaware on September 15, 1992 and a Certificate of
Designation of Preferences and Rights ("Certificate of Designation") of the
9.00% Cumulative Preferred Stock, was filed in said Office of the Secretary of
State on February 17, 1995 and forwarded for recording in the office of the
Recorder of Deeds on even date therewith.

                  That pursuant to authority expressly granted to and vested in
the Pricing Committee of the Board of Directors of the Corporation (the "Pricing
Committee"), by resolutions duly adopted by said Board of Directors on October
29, 1993 (the "Resolutions"), the Pricing Committee fixed certain designations,
preferences and rights of the aforesaid 9.00% Cumulative Preferred Stock as set
forth in the Certificate of Designation.

                  That pursuant to authority expressly granted to and vested in
the Pricing Committee by the Resolutions, the Pricing Committee by a written
unanimous consent in lieu of a meeting dated as of March 9, 1995 duly adopted a
resolution authorizing and directing a decrease in the authorized number of
shares of the 9.00% Cumulative Preferred Stock of the Corporation, from 738,763
shares to 720,900 shares and providing that the 17,863 shares of the 9.00%
Cumulative Preferred Stock designated by the Pricing Committee but not issued
and outstanding resume the status of authorized and unissued Preferred Stock,
all in accordance with the provisions of Section 151 of The General Corporation
Law of the State of Delaware and the aforesaid Restated Certificate of
Incorporation of the Corporation.

                  IN WITNESS WHEREOF, said Morgan Stanley Group Inc., has caused
this certificate to be signed by Richard B. Fisher, its Chairman, and attested
by Patricia A. Kurtz, its Assistant Secretary, this 13th day of March, 1995.



                                             By /s/ Richard B. Fisher
                                                --------------------------------
                                                 Name:     Richard B. Fisher
                                                 Title:    Chairman


ATTEST:


By  /s/ Patricia A. Kurtz
    -------------------------------
      Name:     Patricia A. Kurtz
      Title:    Assistant Secretary


<PAGE>   117

              CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
                                     OF THE
                        8.40% CUMULATIVE PREFERRED STOCK

                             ($200.00 Stated Value)

                                       OF

                            MORGAN STANLEY GROUP INC.

                                   ----------


                         Pursuant to Section 151 of the

                General Corporation Law of the State of Delaware

                                   ----------


                  The undersigned DOES HEREBY CERTIFY that the following
resolution was duly adopted by the Board of Directors (the "Board") of Morgan
Stanley Group Inc., a Delaware corporation (hereinafter called the
"Corporation"), by unanimous written consent in lieu of a meeting dated as of
April 12, 1995 with certain of the designations, preferences and rights having
been fixed by the Pricing Committee of the Board (the "Committee") at a meeting
on July 27, 1995, pursuant to authority delegated to it by the Board pursuant to
the provisions of Section 141(c) of the General Corporation Law of the State of
Delaware:

                  RESOLVED that, pursuant to authority expressly granted to and
         vested in the Committee by the Board and in the Board by provisions of
         the Restated Certificate of Incorporation of the Corporation, as
         amended (the "Certificate of Incorporation"), the issuance of a series
         of Preferred Stock, without par value (the "Preferred Stock"), which
         shall consist of 1,006,250 of the 30,000,000 shares of Preferred Stock
         which the Corporation now has authority to issue, is authorized, and
         the Board and, pursuant to the authority expressly granted to the
         Committee by the Board pursuant to the provisions of Section 141(c) of
         the General Corporation Law of the State of Delaware and the
         Certificate of Incorporation, the Committee fix the powers,
         designations, preferences and relative, participating, optional or
         other special rights, and the qualifications, limitations or
         restrictions thereof, of the shares of such series (in addition to the
         powers, designations, preferences and relative, participating, optional
         or other special rights, and the qualifications, limitations or
         restrictions thereof, set


<PAGE>   118


                                        2

          forth in the Certificate of Incorporation which may be applicable
          to the Preferred Stock) as follows:

                           1. Designation and Amount; Fractional Shares. The
                  designation for such series of the Preferred Stock authorized
                  by this resolution shall be the 8.40% Cumulative Preferred
                  Stock, without par value, with a stated value of $200.00 per
                  share (the "Cumulative Preferred Stock"). The stated value per
                  share of Cumulative Preferred Stock shall not for any purpose
                  be considered to be a determination by the Board or the
                  Committee with respect to the capital and surplus of the
                  Corporation. The total number of shares of Cumulative
                  Preferred Stock shall be 1,006,250. The Cumulative Preferred
                  Stock is issuable in whole shares only.

                           2. Dividends. Holders of shares of Cumulative
                  Preferred Stock will be entitled to receive, when, as and if
                  declared by the Board or the Committee out of assets of the
                  Corporation legally available for payment, cash dividends
                  payable quarterly at the rate of 8.40% per annum. Dividends on
                  the Cumulative Preferred Stock will be payable quarterly on
                  February 28, May 30, August 30 and November 30 (each a
                  "dividend payment date"). Dividends on shares of the
                  Cumulative Preferred Stock will be cumulative from the date of
                  initial issuance of such shares of Cumulative Preferred Stock.
                  Dividends will be payable, in arrears, to holders of record as
                  they appear on the stock books of the Corporation on such
                  record dates, not more than 60 days nor less than 10 days
                  preceding the payment dates thereof, as shall be fixed by the
                  Board or the Committee. The amount of dividends payable for
                  the initial dividend period or any period shorter than a full
                  dividend period shall be calculated on the basis of a 360-day
                  year of twelve 30-day months. No dividends may be declared or
                  paid or set apart for payment on any Parity Preferred Stock
                  (as defined in paragraph 9(b) below) with regard to the
                  payment of dividends unless there shall also be or have been
                  declared and paid or set apart for payment on the Cumulative
                  Preferred Stock, like dividends for all dividend payment
                  periods of the Cumulative Preferred Stock ending on or before
                  the dividend payment date of such Parity Preferred Stock,
                  ratably in proportion to the respective amounts of dividends
                  (x) accumulated and unpaid or payable on such Parity Preferred
                  Stock, on the one hand, and (y) accumulated and unpaid through
                  the dividend payment period or periods of the Cumulative
                  Preferred Stock next preceding such dividend payment date, on
                  the other hand.

                           Except as set forth in the preceding sentence, unless
                  full cumulative dividends on the Cumulative Preferred Stock
                  have been paid, no dividends (other than in Common Stock of
                  the Corporation) may be paid or declared and set aside for
                  payment or other distribution made upon the Common Stock or on
                  any other stock of the Corporation ranking junior to or on a
                  parity with the


<PAGE>   119


                                        3

                  Cumulative Preferred Stock as to dividends, nor may any Common
                  Stock or any other stock of the Corporation ranking junior to
                  or on a parity with the Cumulative Preferred Stock as to
                  dividends be redeemed, purchased or otherwise acquired for any
                  consideration (or any payment be made to or available for a
                  sinking fund for the redemption of any shares of such stock;
                  provided, however, that any moneys theretofore deposited in
                  any sinking fund with respect to any preferred stock of the
                  Corporation in compliance with the provisions of such sinking
                  fund may thereafter be applied to the purchase or redemption
                  of such preferred stock in accordance with the terms of such
                  sinking fund, regardless of whether at the time of such
                  application full cumulative dividends upon shares of the
                  Cumulative Preferred Stock outstanding to the last dividend
                  payment date shall have been paid or declared and set apart
                  for payment) by the Corporation; provided that any such junior
                  or parity Preferred Stock or Common Stock may be converted
                  into or exchanged for stock of the Corporation ranking junior
                  to the Cumulative Preferred Stock as to dividends.

                           3. Liquidation Preference. The shares of Cumulative
                  Preferred Stock shall rank, as to liquidation, dissolution or
                  winding up of the Corporation, prior to the shares of Common
                  Stock and any other class of stock of the Corporation ranking
                  junior to the Cumulative Preferred Stock as to rights upon
                  liquidation, dissolution or winding up of the Corporation, so
                  that in the event of any liquidation, dissolution or winding
                  up of the Corporation, whether voluntary or involuntary, the
                  holders of the Cumulative Preferred Stock shall be entitled to
                  receive out of the assets of the Corporation available for
                  distribution to its stockholders, whether from capital,
                  surplus or earnings, before any distribution is made to
                  holders of shares of Common Stock or any other such junior
                  stock, an amount equal to $200.00 per share (the "Liquidation
                  Preference" of a share of Cumulative Preferred Stock) plus an
                  amount equal to all dividends (whether or not earned or
                  declared) accrued and accumulated and unpaid on the shares of
                  Cumulative Preferred Stock to the date of final distribution.
                  The holders of the Cumulative Preferred Stock will not be
                  entitled to receive the Liquidation Preference until the
                  liquidation preference of any other class of stock of the
                  Corporation ranking senior to the Cumulative Preferred Stock
                  as to rights upon liquidation, dissolution or winding up shall
                  have been paid (or a sum set aside therefor sufficient to
                  provide for payment) in full. After payment of the full amount
                  of the Liquidation Preference and such dividends, the holders
                  of shares of Cumulative Preferred Stock will not be entitled
                  to any further participation in any distribution of assets by
                  the Corporation. If, upon any liquidation, dissolution or
                  winding up of the Corporation, the assets of the Corporation,
                  or proceeds thereof, distributable among the holders of shares
                  of Parity Preferred Stock shall be insufficient to pay in full
                  the preferential amount aforesaid, then such assets, or the
                  proceeds thereof, shall be distributable among such holders


<PAGE>   120

                                        4

                  ratably in accordance with the respective amounts which would
                  be payable on such shares if all amounts payable thereon were
                  paid in full. For the purposes hereof, neither a consolidation
                  or merger of the Corporation with or into any other
                  corporation, nor a merger of any other corporation with or
                  into the Corporation, nor a sale or transfer of all or any
                  part of the Corporation's assets for cash or securities shall
                  be considered a liquidation, dissolution or winding up of the
                  Corporation.

                           4. Conversion. The Cumulative Preferred Stock is
                  not convertible into shares of any other class or series of
                  stock of the Corporation.

                           5. Voting Rights.  The holders of shares of
                  Cumulative Preferred Stock shall have no voting rights
                  whatsoever, except for any voting rights to which they may be
                  entitled under the laws of the State of Delaware, and
                  except as follows:

                                    (a) Whenever, at any time or times,
                           dividends payable on the shares of Cumulative
                           Preferred Stock or on any Parity Preferred Stock with
                           respect to payment of dividends, shall be in arrears
                           for an aggregate number of days equal to six calendar
                           quarters or more, whether or not consecutive, the
                           holders of the outstanding shares of Cumulative
                           Preferred Stock shall have the right, with holders of
                           shares of any one or more other class or series of
                           stock upon which like voting rights have been
                           conferred and are exercisable (voting together as a
                           class), to elect two of the authorized number of
                           members of the Board at the Corporation's next annual
                           meeting of stockholders and at each subsequent annual
                           meeting of stockholders until such arrearages have
                           been paid or set apart for payment, at which time
                           such right shall terminate, except as herein or by
                           law expressly provided, subject to revesting in the
                           event of each and every subsequent default of the
                           character above mentioned. Upon any termination of
                           the right of the holders of shares of Cumulative
                           Preferred Stock as a class to vote for directors as
                           herein provided, the term of office of all directors
                           then in office elected by the holders of shares of
                           Cumulative Preferred Stock shall terminate
                           immediately.

                           Any director who shall have been so elected pursuant
                           to this paragraph may be removed at any time, either
                           with or without cause. Any vacancy thereby created
                           may be filled only by the affirmative vote of the
                           holders of shares of Cumulative Preferred Stock
                           voting separately as a class (together with the
                           holders of shares of any other class or series of
                           stock upon which like voting rights have been
                           conferred and are exercisable). If the office of any
                           director elected by the holders of shares of
                           Cumulative Preferred Stock voting as a class becomes
                           vacant


<PAGE>   121


                                        5

                           for any reason other than removal from office as
                           aforesaid, the remaining director elected pursuant to
                           this paragraph may choose a successor who shall hold
                           office for the unexpired term in respect of which
                           such vacancy occurred. At elections for such
                           directors, each holder of shares of Cumulative
                           Preferred Stock shall be entitled to one vote for
                           each share held (the holders of shares of any other
                           class or series of preferred stock having like voting
                           rights being entitled to such number of votes, if
                           any, for each share of such stock held as may be
                           granted to them).

                                    (b) So long as any shares of Cumulative
                           Preferred Stock remain outstanding, the consent of
                           the holders of at least two-thirds of the shares of
                           Cumulative Preferred Stock outstanding at the time
                           and all other classes or series of stock upon which
                           like voting rights have been conferred and are
                           exercisable (voting together as a class) given in
                           person or by proxy, either in writing or at any
                           meeting called for the purpose, shall be necessary to
                           permit, effect or validate any one or more of the
                           following:

                                            (i) the issuance or increase of the
                                    authorized amount of any class or series of
                                    shares ranking prior (as that term is
                                    defined in paragraph 9(a) hereof) to the
                                    shares of the Cumulative Preferred Stock; or

                                            (ii) the amendment, alteration or
                                    repeal, whether by merger, consolidation or
                                    otherwise, of any of the provisions of the
                                    Certificate of Incorporation, (including
                                    this resolution or any provision hereof)
                                    that would materially and adversely affect
                                    any power, preference, or special right of
                                    the shares of Cumulative Preferred Stock or
                                    of the holders thereof; provided, however,
                                    that any increase in the amount of
                                    authorized Common Stock or authorized
                                    Preferred Stock or any increase or decrease
                                    in the number of shares of any series of
                                    Preferred Stock or the creation and issuance
                                    of other series of Common Stock or Preferred
                                    Stock, in each case ranking on a parity with
                                    or junior to the shares of Cumulative
                                    Preferred Stock with respect to the payment
                                    of dividends and the distribution of assets
                                    upon liquidation, dissolution or winding up,
                                    shall not be deemed to materially and
                                    adversely affect such powers, preferences or
                                    special rights.

                                    (c) The foregoing voting provisions shall
                           not apply if, at or prior to the time when the act
                           with respect to which such vote would otherwise be
                           required shall be effected, all outstanding shares of


<PAGE>   122


                                        6

                           Cumulative Preferred Stock shall have been redeemed
                           or called for redemption and sufficient funds shall
                           have been deposited in trust to effect such
                           redemption.

                           6. Redemption Shares. The shares of the Cumulative
                  Preferred Stock may be redeemed at the option of the
                  Corporation, as a whole, or from time to time in part, at any
                  time, upon not less than 30 days' prior notice mailed to the
                  holders of the shares to be redeemed at their addresses as
                  shown on the stock books of the Corporation; provided,
                  however, that shares of the Cumulative Preferred Stock shall
                  not be redeemable prior to August 30, 2000. Subject to the
                  foregoing, on or after such date, shares of the Cumulative
                  Preferred Stock are redeemable at $200.00 per share together
                  with an amount equal to all dividends (whether or not earned
                  or declared) accrued and accumulated and unpaid to, but
                  excluding, the date fixed for redemption.

                           If full cumulative dividends on the Cumulative
                  Preferred Stock have not been paid, the Cumulative Preferred
                  Stock may not be redeemed in part and the Corporation may not
                  purchase or acquire any shares of the Cumulative Preferred
                  Stock otherwise than pursuant to a purchase or exchange offer
                  made on the same terms to all holders of the Cumulative
                  Preferred Stock. If fewer than all the outstanding shares of
                  Cumulative Preferred Stock are to be redeemed, the Corporation
                  will select those to be redeemed by lot or a substantially
                  equivalent method.

                           If a notice of redemption has been given pursuant to
                  this paragraph 6 and if, on or before the date fixed for
                  redemption, the funds necessary for such redemption shall have
                  been set aside by the Corporation, separate and apart from its
                  other funds, in trust for the pro rata benefit of the holders
                  of the shares of Cumulative Preferred Stock so called for
                  redemption, then, notwithstanding that any certificates for
                  such shares have not been surrendered for cancellation, on the
                  redemption date dividends shall cease to accrue on the shares
                  to be redeemed, and at the close of business on the redemption
                  date the holders of such shares shall cease to be stockholders
                  with respect to such shares and shall have no interest in or
                  claims against the Corporation by virtue thereof and shall
                  have no voting or other rights with respect to such shares,
                  except the right to receive the moneys payable upon surrender
                  (and endorsement, if required by the Corporation) of their
                  certificates, and the shares evidenced thereby shall no longer
                  be outstanding. Subject to applicable escheat laws, any moneys
                  so set aside by the Corporation and unclaimed at the end of
                  two years from the redemption date shall revert to the general
                  funds of the Corporation, after which reversion the holders of
                  such shares so called for redemption shall look only to the
                  general funds of the Corporation for the payment of the
                  amounts payable upon such redemption. Any interest accrued on
                  funds so deposited shall be paid to the Corporation from time
                  to time.


<PAGE>   123


                                        7


                           7. Authorization and Issuance of Other Securities. No
                  consent of the holders of the Cumulative Preferred Stock shall
                  be required for (a) the creation of any indebtedness of any
                  kind of the Corporation, (b) the creation, or increase or
                  decrease in the amount, of any class or series of stock of the
                  Corporation not ranking prior as to dividends or upon
                  liquidation, dissolution or winding up to the Cumulative
                  Preferred Stock or (c) any increase or decrease in the amount
                  of authorized Common Stock or any increase, decrease or change
                  in the par value thereof or in any other terms thereof.

                           8. Amendment of Resolution. The Board and the
                  Committee each reserves the right by subsequent amendment of
                  this resolution from time to time to increase or decrease the
                  number of shares that constitute the Cumulative Preferred
                  Stock (but not below the number of shares thereof then
                  outstanding) and in other respects to amend this resolution
                  within the limitations provided by law, this resolution and
                  the Certificate of Incorporation.

                           9. Rank.  For the purposes of this resolution, any
                  stock of any class or classes of the Corporation shall be
                  deemed to rank:

                                    (a) prior to shares of the Cumulative
                           Preferred Stock, either as to dividends or upon
                           liquidation, dissolution or winding up, or both, if
                           the holders of stock of such class or classes shall
                           be entitled by the terms thereof to the receipt of
                           dividends or of amounts distributable upon
                           liquidation, dissolution or winding up, as the case
                           may be, in preference or priority to the holders of
                           shares of the Cumulative Preferred Stock;

                                    (b) on a parity with shares of the
                           Cumulative Preferred Stock, either as to dividends or
                           upon liquidation, dissolution or winding up, or both,
                           whether or not the dividend rates, dividend payment
                           dates, or redemption or liquidation prices per share
                           thereof be different from those of the Cumulative
                           Preferred Stock, if the holders of stock of such
                           class or classes shall be entitled by the terms
                           thereof to the receipt of dividends or of amounts
                           distributed upon liquidation, dissolution or winding
                           up, as the case may be, in proportion to their
                           respective dividend rates or liquidation prices,
                           without preference or priority of one over the other
                           as between the holders of such stock and the holders
                           of shares of Cumulative Preferred Stock (the term
                           "Parity Preferred Stock" being used to refer to any
                           stock on a parity with the shares of Cumulative
                           Preferred Stock, either as to dividends or upon
                           liquidation, dissolution or winding up, or both, as
                           the context may require); and



<PAGE>   124


                                        8

                                    (c) junior to shares of the Cumulative
                           Preferred Stock, either as to dividends or upon
                           liquidation, dissolution or winding up, or both, if
                           such class shall be Common Stock or if the holders of
                           the Cumulative Preferred Stock shall be entitled to
                           the receipt of dividends or of amounts distributable
                           upon liquidation, dissolution or winding up, as the
                           case may be, in preference or priority to the holders
                           of stock of such class or classes.

                           The Cumulative Preferred Stock shall rank prior, as
                  to dividends and upon liquidation, dissolution or winding up,
                  to the Common Stock and on a parity with (i) the Corporation's
                  ESOP Convertible Preferred Stock, with a liquidation value of
                  $35.88 per share, (ii) the Corporation's 9.36% Cumulative
                  Preferred Stock, with a liquidation value of $25.00 per share,
                  (iii) the Corporation's 8.88% Cumulative Preferred Stock, with
                  a liquidation value of $200.00 per share, (iv) the
                  Corporation's 8-3/4% Cumulative Preferred Stock, with a
                  liquidation value of $200.00 per share, (v) the Corporation's
                  7-3/8% Cumulative Preferred Stock, with a liquidation value of
                  $200.00 per share, (vi) if issued, the Corporation's 7.82%
                  Cumulative Preferred Stock, with a liquidation value of
                  $200.00 per share, (vii) if issued, the Corporation's 7.80%
                  Cumulative Preferred Stock, with a liquidation value of
                  $200.00 per share and (viii) if issued, the Corporation's
                  9.00% Cumulative Preferred Stock, with a liquidation value of
                  $200.00 per share.


<PAGE>   125


                                        9

                           IN WITNESS WHEREOF, Morgan Stanley Group Inc. has
         caused this Certificate to be made under the seal of the Corporation
         and signed by Richard B. Fisher, its Chairman, and attested by Patricia
         A. Kurtz, its Assistant Secretary, this 27th day of July, 1995.

                                         MORGAN STANLEY GROUP INC.


                                         By:  /s/ Richard B. Fisher
                                             -----------------------------------
                                              Name:     Richard B. Fisher
                                              Title:    Chairman of the Board

[SEAL]



Attest:



/s/ Patricia A. Kurtz
----------------------------
Patricia A. Kurtz
Assistant Secretary


<PAGE>   126

                             CERTIFICATE OF DECREASE
                                       OF
                           AUTHORIZED NUMBER OF SHARES
                                       OF
                        8.40% CUMULATIVE PREFERRED STOCK


                  Morgan Stanley Group Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"),

                  DOES HEREBY CERTIFY:

                  That the Restated Certificate of Incorporation of the
Corporation was filed in the Office of the Secretary of State of Delaware on
September 15, 1992 and forwarded for recording in the Office of the Recorder of
Deeds for Kent County, Delaware on September 15, 1992 and a Certificate of
Designation of Preferences and Rights ("Certificate of Designation") of the
8.40% Cumulative Preferred Stock, was filed in said Office of the Secretary of
State on July 31, 1995 and forwarded for recording in the office of the Recorder
of Deeds on even date therewith.

                  That pursuant to authority expressly granted to and vested in
the Pricing Committee of the Board of Directors of the Corporation (the "Pricing
Committee"), by resolutions duly adopted by said Board of Directors on April 12,
1995 (the "Resolutions"), the Pricing Committee fixed certain designations,
preferences and rights of the aforesaid 8.40% Cumulative Preferred Stock as set
forth in the Certificate of Designation.

          That pursuant to authority expressly granted to and vested in the
Pricing Committee by the Resolutions, the Pricing Committee by a written
unanimous consent in lieu of a meeting dated as of September 6, 1995 duly
adopted a resolution authorizing and directing a decrease in the authorized
number of shares of the 8.40% Cumulative Preferred Stock of the Corporation,
from 1,006,250 shares to 996,776 shares and providing that the 9,474 shares of
the 8.40% Cumulative Preferred Stock designated by the Pricing Committee but not
issued and outstanding resume the status of authorized and unissued Preferred
Stock, all in accordance with the provisions of Section 151 of The General
Corporation Law of the State of Delaware and the aforesaid Restated Certificate
of Incorporation of the Corporation.

                  IN WITNESS WHEREOF, said Morgan Stanley Group Inc., has caused
this certificate to be signed by Richard B. Fisher, its Chairman, and attested
by Patricia A. Kurtz, its Assistant Secretary, this 6th day of September, 1995.



                                           By  /s/ Richard B. Fisher
                                               ---------------------------------
                                               Name:     Richard B. Fisher
                                               Title:    Chairman


ATTEST:


By    /s/ Patricia A. Kurtz
     ----------------------------------
      Name:     Patricia A. Kurtz
      Title:    Assistant Secretary

<PAGE>   127

              CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS 
                                     OF THE 
                        8.20% CUMULATIVE PREFERRED STOCK 

                             ($200.00 Stated Value) 

                                       OF 

                            MORGAN STANLEY GROUP INC. 




                         Pursuant to Section 151 of the 

                General Corporation Law of the State of Delaware 
<PAGE>   128


                  The undersigned DOES HEREBY CERTIFY that the following 
resolution was duly adopted by the Board of Directors (the "Board") of Morgan 
Stanley Group Inc., a Delaware corporation (hereinafter called the 
"Corporation"), by unanimous written consent in lieu of a meeting dated as of 
April 12, 1995 with certain of the designations, preferences and rights having 
been fixed by the Pricing Committee of the Board (the "Committee") at a meeting 
on October 13, 1995, pursuant to authority delegated to it by the Board pursuant
to the provisions of Section 141(c) of the General Corporation Law of the State 
of Delaware: 

                  RESOLVED that, pursuant to authority expressly granted to and 
         vested in the Committee by the Board and in the Board by provisions of 
         the Restated Certificate of Incorporation of the Corporation, as 
         amended (the "Certificate of Incorporation"), the issuance of a series 
         of Preferred Stock, without par value (the "Preferred Stock"), which 
         shall consist of 862,500 of the 30,000,000 shares of Preferred Stock 
         which the Corporation now has authority to issue, is authorized, and 
         the Board and, pursuant to the authority expressly granted to the 
         Committee by the Board pursuant to the provisions of Section 141(c) of 
         the General Corporation Law of the State of Delaware and the 
         Certificate of Incorporation, the Committee fix the powers, 
         designations, preferences and relative, participating, optional or 
         other special rights, and the qualifications, limitations or 
         restrictions thereof, of the shares of such series (in addition to the 
         powers, designations, preferences and relative, participating, optional
         or other special rights, and the qualifications, limitations or 
         restrictions thereof, set 


<PAGE>   129


                                        2 

         forth in the Certificate of Incorporation which may be applicable to 
         the Preferred Stock) as follows: 

                           1. Designation and Amount; Fractional Shares. The 
                  designation for such series of the Preferred Stock authorized 
                  by this resolution shall be the 8.20% Cumulative Preferred 
                  Stock, without par value, with a stated value of $200.00 per 
                  share (the "Cumulative Preferred Stock"). The stated value per
                  share of Cumulative Preferred Stock shall not for any purpose 
                  be considered to be a determination by the Board or the 
                  Committee with respect to the capital and surplus of the 
                  Corporation. The total number of shares of Cumulative 
                  Preferred Stock shall be 862,500. The Cumulative Preferred 
                  Stock is issuable in whole shares only. 

                           2. Dividends. Holders of shares of Cumulative 
                  Preferred Stock will be entitled to receive, when, as and if 
                  declared by the Board or the Committee out of assets of the 
                  Corporation legally available for payment, cash dividends 
                  payable quarterly at the rate of 8.20% per annum. Dividends 
                  on the Cumulative Preferred Stock will be payable quarterly on
                  February 28, May 30, August 30 and November 30 (each a 
                  "dividend payment date"). Dividends on shares of the 
                  Cumulative Preferred Stock will be cumulative from the date of
                  initial issuance of such shares of Cumulative Preferred Stock.
                  Dividends will be payable, in arrears, to holders of record as
                  they appear on the stock books of the Corporation on such 
                  record dates, not more than 60 days nor less than 10 days 
                  preceding the payment dates thereof, as shall be fixed by the 
                  Board or the Committee. The amount of dividends payable for 
                  the initial dividend period or any period shorter than a full 
                  dividend period shall be calculated on the basis of a 360-day 
                  year of twelve 30-day months. No dividends may be declared or 
                  paid or set apart for payment on any Parity Preferred Stock 
                  (as defined in paragraph 9(b) below) with regard to the 
                  payment of dividends unless there shall also be or have been 
                  declared and paid or set apart for payment on the Cumulative 
                  Preferred Stock, like dividends for all dividend payment 
                  periods of the Cumulative Preferred Stock ending on or before 
                  the dividend payment date of such Parity Preferred Stock, 
                  ratably in proportion to the respective amounts of dividends 
                  (x) accumulated and unpaid or payable on such Parity Preferred
                  Stock, on the one hand, and (y) accumulated and unpaid through
                  the dividend payment period or periods of the Cumulative 
                  Preferred Stock next preceding such dividend payment date, on 
                  the other hand. 

                           Except as set forth in the preceding sentence, unless
                  full cumulative dividends on the Cumulative Preferred Stock 
                  have been paid, no dividends (other than in Common Stock of 
                  the Corporation) may be paid or declared and set aside for 
                  payment or other distribution made upon the Common Stock or on
                  any other stock of the Corporation ranking junior to or on a 
                  parity with the 


<PAGE>   130


                                        3 

                  Cumulative Preferred Stock as to dividends, nor may any Common
                  Stock or any other stock of the Corporation ranking junior to 
                  or on a parity with the Cumulative Preferred Stock as to 
                  dividends be redeemed, purchased or otherwise acquired for any
                  consideration (or any payment be made to or available for a 
                  sinking fund for the redemption of any shares of such stock; 
                  provided, however, that any moneys theretofore deposited in 
                  any sinking fund with respect to any preferred stock of the 
                  Corporation in compliance with the provisions of such sinking 
                  fund may thereafter be applied to the purchase or redemption 
                  of such preferred stock in accordance with the terms of such 
                  sinking fund, regardless of whether at the time of such 
                  application full cumulative dividends upon shares of the 
                  Cumulative Preferred Stock outstanding to the last dividend 
                  payment date shall have been paid or declared and set apart 
                  for payment) by the Corporation; provided that any such junior
                  or parity Preferred Stock or Common Stock may be converted 
                  into or exchanged for stock of the Corporation ranking junior 
                  to the Cumulative Preferred Stock as to dividends. 

                           3. Liquidation Preference. The shares of Cumulative 
                  Preferred Stock shall rank, as to liquidation, dissolution or 
                  winding up of the Corporation, prior to the shares of Common 
                  Stock and any other class of stock of the Corporation ranking 
                  junior to the Cumulative Preferred Stock as to rights upon 
                  liquidation, dissolution or winding up of the Corporation, so 
                  that in the event of any liquidation, dissolution or winding 
                  up of the Corporation, whether voluntary or involuntary, the 
                  holders of the Cumulative Preferred Stock shall be entitled to
                  receive out of the assets of the Corporation available for 
                  distribution to its stockholders, whether from capital, 
                  surplus or earnings, before any distribution is made to 
                  holders of shares of Common Stock or any other such junior 
                  stock, an amount equal to $200.00 per share (the "Liquidation 
                  Preference" of a share of Cumulative Preferred Stock) plus an 
                  amount equal to all dividends (whether or not earned or 
                  declared) accrued and accumulated and unpaid on the shares of 
                  Cumulative Preferred Stock to the date of final distribution. 
                  The holders of the Cumulative Preferred Stock will not be 
                  entitled to receive the Liquidation Preference until the 
                  liquidation preference of any other class of stock of the 
                  Corporation ranking senior to the Cumulative Preferred Stock 
                  as to rights upon liquidation, dissolution or winding up shall
                  have been paid (or a sum set aside therefor sufficient to 
                  provide for payment) in full. After payment of the full amount
                  of the Liquidation Preference and such dividends, the holders 
                  of shares of Cumulative Preferred Stock will not be entitled 
                  to any further participation in any distribution of assets by 
                  the Corporation. If, upon any liquidation, dissolution or 
                  winding up of the Corporation, the assets of the Corporation, 
                  or proceeds thereof, distributable among the holders of shares
                  of Parity Preferred Stock shall be insufficient to pay in full
                  the preferential amount aforesaid, then such assets, or the 
                  proceeds thereof, shall be distributable among such holders 


<PAGE>   131


                                        4 

                  ratably in accordance with the respective amounts which would 
                  be payable on such shares if all amounts payable thereon were 
                  paid in full. For the purposes hereof, neither a consolidation
                  or merger of the Corporation with or into any other 
                  corporation, nor a merger of any other corporation with or 
                  into the Corporation, nor a sale or transfer of all or any 
                  part of the Corporation's assets for cash or securities shall 
                  be considered a liquidation, dissolution or winding up of the 
                  Corporation. 

                           4.  Conversion.  The Cumulative Preferred Stock 
                  is not convertible into shares of any other class or series of
                  stock of the Corporation. 

                           5.  Voting Rights.  The holders of shares of 
                  Cumulative Preferred Stock shall have no voting rights 
                  whatsoever, except for any voting rights to which they may be 
                  entitled under the laws of the State of Delaware, and except 
                  as follows: 

                                    (a) Whenever, at any time or times, 
                           dividends payable on the shares of Cumulative 
                           Preferred Stock or on any Parity Preferred Stock with
                           respect to payment of dividends, shall be in arrears 
                           for an aggregate number of days equal to six calendar
                           quarters or more, whether or not consecutive, the 
                           holders of the outstanding shares of Cumulative 
                           Preferred Stock shall have the right, with holders of
                           shares of any one or more other class or series of 
                           stock upon which like voting rights have been 
                           conferred and are exercisable (voting together as a 
                           class), to elect two of the authorized number of 
                           members of the Board at the Corporation's next annual
                           meeting of stockholders and at each subsequent annual
                           meeting of stockholders until such arrearages have 
                           been paid or set apart for payment, at which time 
                           such right shall terminate, except as herein or by 
                           law expressly provided, subject to revesting in the 
                           event of each and every subsequent default of the 
                           character above mentioned. Upon any termination of 
                           the right of the holders of shares of Cumulative 
                           Preferred Stock as a class to vote for directors as 
                           herein provided, the term of office of all directors 
                           then in office elected by the holders of shares of 
                           Cumulative Preferred Stock shall terminate 
                           immediately. 

                           Any director who shall have been so elected pursuant 
                           to this paragraph may be removed at any time, either 
                           with or without cause. Any vacancy thereby created 
                           may be filled only by the affirmative vote of the 
                           holders of shares of Cumulative Preferred Stock 
                           voting separately as a class (together with the 
                           holders of shares of any other class or series of 
                           stock upon which like voting rights have been 
                           conferred and are exercisable). If the office of any 
                           director elected by the holders of shares of 
                           Cumulative Preferred Stock voting as a class becomes 
                           vacant 


<PAGE>   132


                                        5 

                           for any reason other than removal from office as 
                           aforesaid, the remaining director elected pursuant to
                           this paragraph may choose a successor who shall hold 
                           office for the unexpired term in respect of which 
                           such vacancy occurred. At elections for such 
                           directors, each holder of shares of Cumulative 
                           Preferred Stock shall be entitled to one vote for 
                           each share held (the holders of shares of any other 
                           class or series of preferred stock having like voting
                           rights being entitled to such number of votes, if 
                           any, for each share of such stock held as may be 
                           granted to them). 

                                    (b) So long as any shares of Cumulative 
                           Preferred Stock remain outstanding, the consent of 
                           the holders of at least two-thirds of the shares of 
                           Cumulative Preferred Stock outstanding at the time 
                           and all other classes or series of stock upon which 
                           like voting rights have been conferred and are 
                           exercisable (voting together as a class) given in 
                           person or by proxy, either in writing or at any 
                           meeting called for the purpose, shall be necessary to
                           permit, effect or validate any one or more of the 
                           following: 

                                            (i) the issuance or increase of the 
                                    authorized amount of any class or series of 
                                    shares ranking prior (as that term is 
                                    defined in paragraph 9(a) hereof) to the 
                                    shares of the Cumulative Preferred Stock; or

                                            (ii) the amendment, alteration or 
                                    repeal, whether by merger, consolidation or 
                                    otherwise, of any of the provisions of the 
                                    Certificate of Incorporation, (including 
                                    this resolution or any provision hereof) 
                                    that would materially and adversely affect 
                                    any power, preference, or special right of 
                                    the shares of Cumulative Preferred Stock or 
                                    of the holders thereof; provided, however, 
                                    that any increase in the amount of 
                                    authorized Common Stock or authorized 
                                    Preferred Stock or any increase or decrease 
                                    in the number of shares of any series of 
                                    Preferred Stock or the creation and issuance
                                    of other series of Common Stock or Preferred
                                    Stock, in each case ranking on a parity with
                                    or junior to the shares of Cumulative 
                                    Preferred Stock with respect to the payment 
                                    of dividends and the distribution of assets 
                                    upon liquidation, dissolution or winding up,
                                    shall not be deemed to materially and 
                                    adversely affect such powers, preferences or
                                    special rights. 

                                    (c) The foregoing voting provisions shall 
                           not apply if, at or prior to the time when the act 
                           with respect to which such vote would otherwise be 
                           required shall be effected, all outstanding shares of


<PAGE>   133


                                        6 

                           Cumulative Preferred Stock shall have been redeemed 
                           or called for redemption and sufficient funds shall 
                           have been deposited in trust to effect such 
                           redemption. 

                           6. Redemption Shares. The shares of the Cumulative 
                  Preferred Stock may be redeemed at the option of the 
                  Corporation, as a whole, or from time to time in part, at any 
                  time, upon not less than 30 days' prior notice mailed to the 
                  holders of the shares to be redeemed at their addresses as 
                  shown on the stock books of the Corporation; provided, 
                  however, that shares of the Cumulative Preferred Stock shall 
                  not be redeemable prior to November 30, 2000. Subject to the 
                  foregoing, on or after such date, shares of the Cumulative 
                  Preferred Stock are redeemable at $200.00 per share together 
                  with an amount equal to all dividends (whether or not earned 
                  or declared) accrued and accumulated and unpaid to, but 
                  excluding, the date fixed for redemption. 

                           If full cumulative dividends on the Cumulative 
                  Preferred Stock have not been paid, the Cumulative Preferred 
                  Stock may not be redeemed in part and the Corporation may not 
                  purchase or acquire any shares of the Cumulative Preferred 
                  Stock otherwise than pursuant to a purchase or exchange offer 
                  made on the same terms to all holders of the Cumulative 
                  Preferred Stock. If fewer than all the outstanding shares of 
                  Cumulative Preferred Stock are to be redeemed, the Corporation
                  will select those to be redeemed by lot or a substantially 
                  equivalent method. 

                           If a notice of redemption has been given pursuant to 
                  this paragraph 6 and if, on or before the date fixed for 
                  redemption, the funds necessary for such redemption shall have
                  been set aside by the Corporation, separate and apart from its
                  other funds, in trust for the pro rata benefit of the holders 
                  of the shares of Cumulative Preferred Stock so called for 
                  redemption, then, notwithstanding that any certificates for 
                  such shares have not been surrendered for cancellation, on the
                  redemption date dividends shall cease to accrue on the shares 
                  to be redeemed, and at the close of business on the redemption
                  date the holders of such shares shall cease to be stockholders
                  with respect to such shares and shall have no interest in or 
                  claims against the Corporation by virtue thereof and shall 
                  have no voting or other rights with respect to such shares, 
                  except the right to receive the moneys payable upon surrender 
                  (and endorsement, if required by the Corporation) of their 
                  certificates, and the shares evidenced thereby shall no longer
                  be outstanding. Subject to applicable escheat laws, any moneys
                  so set aside by the Corporation and unclaimed at the end of 
                  two years from the redemption date shall revert to the general
                  funds of the Corporation, after which reversion the holders of
                  such shares so called for redemption shall look only to the 
                  general funds of the Corporation for the payment of the 
                  amounts payable upon such redemption. Any interest accrued on 
                  funds so deposited shall be paid to the Corporation from time 
                  to time. 


<PAGE>   134


                                        7 


                           7. Authorization and Issuance of Other Securities. No
                  consent of the holders of the Cumulative Preferred Stock shall
                  be required for (a) the creation of any indebtedness of any 
                  kind of the Corporation, (b) the creation, or increase or 
                  decrease in the amount, of any class or series of stock of the
                  Corporation not ranking prior as to dividends or upon 
                  liquidation, dissolution or winding up to the Cumulative 
                  Preferred Stock or (c) any increase or decrease in the amount 
                  of authorized Common Stock or any increase, decrease or change
                  in the par value thereof or in any other terms thereof. 

                           8. Amendment of Resolution. The Board and the 
                  Committee each reserves the right by subsequent amendment of 
                  this resolution from time to time to increase or decrease the 
                  number of shares that constitute the Cumulative Preferred 
                  Stock (but not below the number of shares thereof then 
                  outstanding) and in other respects to amend this resolution 
                  within the limitations provided by law, this resolution and 
                  the Certificate of Incorporation. 

                           9. Rank.  For the purposes of this resolution, 
                  any stock of any class or classes of the Corporation shall be 
                  deemed to rank: 

                                    (a) prior to shares of the Cumulative 
                           Preferred Stock, either as to dividends or upon 
                           liquidation, dissolution or winding up, or both, if 
                           the holders of stock of such class or classes shall 
                           be entitled by the terms thereof to the receipt of 
                           dividends or of amounts distributable upon 
                           liquidation, dissolution or winding up, as the case 
                           may be, in preference or priority to the holders of 
                           shares of the Cumulative Preferred Stock; 

                                    (b) on a parity with shares of the 
                           Cumulative Preferred Stock, either as to dividends or
                           upon liquidation, dissolution or winding up, or both,
                           whether or not the dividend rates, dividend payment 
                           dates, or redemption or liquidation prices per share 
                           thereof be different from those of the Cumulative 
                           Preferred Stock, if the holders of stock of such 
                           class or classes shall be entitled by the terms 
                           thereof to the receipt of dividends or of amounts 
                           distributed upon liquidation, dissolution or winding 
                           up, as the case may be, in proportion to their 
                           respective dividend rates or liquidation prices, 
                           without preference or priority of one over the other 
                           as between the holders of such stock and the holders 
                           of shares of Cumulative Preferred Stock (the term 
                           "Parity Preferred Stock" being used to refer to any 
                           stock on a parity with the shares of Cumulative 
                           Preferred Stock, either as to dividends or upon 
                           liquidation, dissolution or winding up, or both, as 
                           the context may require); and 



<PAGE>   135


                                        8 

                                    (c) junior to shares of the Cumulative 
                           Preferred Stock, either as to dividends or upon 
                           liquidation, dissolution or winding up, or both, if 
                           such class shall be Common Stock or if the holders of
                           the Cumulative Preferred Stock shall be entitled to 
                           the receipt of dividends or of amounts distributable 
                           upon liquidation, dissolution or winding up, as the 
                           case may be, in preference or priority to the holders
                           of stock of such class or classes. 

                           The Cumulative Preferred Stock shall rank prior, as 
                  to dividends and upon liquidation, dissolution or winding up, 
                  to the Common Stock and on a parity with (i) the Corporation's
                  ESOP Convertible Preferred Stock, with a liquidation value of 
                  $35.88 per share, (ii) the Corporation's 9.36% Cumulative 
                  Preferred Stock, with a liquidation value of $25.00 per share,
                  (iii) the Corporation's 8.88% Cumulative Preferred Stock, with
                  a liquidation value of $200.00 per share, (iv) the 
                  Corporation's 8-3/4% Cumulative Preferred Stock, with a 
                  liquidation value of $200.00 per share, (v) the Corporation's 
                  7-3/8% Cumulative Preferred Stock, with a liquidation value of
                  $200.00 per share, (vi) if issued, the Corporation's 7.82% 
                  Cumulative Preferred Stock, with a liquidation value of 
                  $200.00 per share, (vii) if issued, the Corporation's 7.80% 
                  Cumulative Preferred Stock, with a liquidation value of 
                  $200.00 per share (viii) if issued, the Corporation's 9.00% 
                  Cumulative Preferred Stock, with a liquidation value of 
                  $200.00 per share and (ix) if issued, the Corporation's 8.40% 
                  Cumulative Preferred Stock, with a liquidation value of 
                  $200.00 per share. 


<PAGE>   136


                                        9


                           IN WITNESS WHEREOF, Morgan Stanley Group Inc. has 
         caused this Certificate to be made under the seal of the Corporation 
         and signed by Richard B. Fisher, its Chairman, and attested by Patricia
         A. Kurtz, its Assistant Secretary, this 13th day of October, 1995. 

                                          MORGAN STANLEY GROUP INC. 


                                           By  /s/ Richard B. Fisher 
                                               -------------------------------- 
                                               Name:     Richard B. Fisher 
                                               Title:    Chairman of the Board 

[SEAL] 


Attest: 


By    /s/ Patricia A. Kurtz 
     ---------------------------------- 
      Name:     Patricia A. Kurtz 
      Title:    Assistant Secretary

<PAGE>   137


                            CERTIFICATE OF DECREASE
                                       OF
                           AUTHORIZED NUMBER OF SHARES
                                       OF
                        8.20% CUMULATIVE PREFERRED STOCK


                  Morgan Stanley Group Inc., a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"Corporation"),

                  DOES HEREBY CERTIFY:

                  That the Restated Certificate of Incorporation of the
Corporation was filed in the Office of the Secretary of State of Delaware on
September 15, 1992 and forwarded for recording in the Office of the Recorder of
Deeds for Kent County, Delaware on September 15, 1992 and a Certificate of
Designation of Preferences and Rights ("Certificate of Designation") of the
8.20% Cumulative Preferred Stock, was filed in said Office of the Secretary of
State on October 17, 1995 and forwarded for recording in the office of the
Recorder of Deeds on even date therewith.

                  That pursuant to authority expressly granted to and vested in
the Pricing Committee of the Board of Directors of the Corporation (the "Pricing
Committee"), by resolutions duly adopted by said Board of Directors on April 12,
1995 (the "Resolutions"), the Pricing Committee fixed certain designations,
preferences and rights of the aforesaid 8.20% Cumulative Preferred Stock as set
forth in the Certificate of Designation.

                  That pursuant to authority expressly granted to and vested in
the Pricing Committee by the Resolutions, the Pricing Committee by a written
unanimous consent in lieu of a meeting dated as of October 27, 1995 duly adopted
a resolution authorizing and directing a decrease in the authorized number of
shares of the 8.20% Cumulative Preferred Stock of the Corporation, from 862,500
shares to 847,500 shares and providing that the 15,000 shares of the 8.20%
Cumulative Preferred Stock designated by the Pricing Committee but not issued
and outstanding resume the status of authorized and unissued Preferred Stock,
all in accordance with the provisions of Section 151 of The General Corporation
Law of the State of Delaware and the aforesaid Restated Certificate of
Incorporation of the Corporation.

                  IN WITNESS WHEREOF, said Morgan Stanley Group Inc., has caused
this certificate to be signed by Richard B. Fisher, its Chairman, and attested
by Patricia A. Kurtz, its Assistant Secretary, this 31st day of October, 1995.



                                               By /s/ Richard B. Fisher
                                                  ____________________________
                                                   Name:     Richard B. Fisher
                                                   Title:    Chairman


ATTEST:


By    /s/ Patricia A. Kurtz
      ______________________________
      Name:        Patricia A. Kurtz
      Title:       Assistant Secretary