EXHIBIT 3.1
                          CERTIFICATE OF INCORPORATION
                                       OF
                                   TEXACO INC.
                   (as amended to and including April 27, 1999)

      A Restated Certificate of  Incorporation  was duly adopted by the Board of
Directors  of Texaco  Inc.  on April 27,  1990,  pursuant  to Section 245 of the
General Corporation Law of the State of Delaware and was amended on December 22,
1992,  November 9, 1994,  September 10, 1997,  March 2, 1999 and April 27, 1999.
This  document  only  restates and  integrates  the  provisions of the Company's
Restated Certificate of Incorporation as heretofore amended or supplemented.

      The  Company  was  incorporated  under the laws of  Delaware on August 26,
1926, as The Texas Corporation.

                                       I.

      The name of this Company is TEXACO INC.

                                       II.

      Its principal  office in the State of Delaware is located at 32 Loockerman
Square,  Suite L-100, in the City of Dover,  County of Kent, and the name of its
resident agent is The Prentice-Hall  Corporation System,  Inc., whose address is
32 Loockerman Square, Suite L-100, Dover, Delaware.

                                      III.

      The objects or purposes  for which the Company is formed and the nature of
the  business  to be  carried  on,  any one or all of which it may pursue in the
United States of America and the states, districts,  territories and possessions
thereof and in foreign countries, are as follows:

      A. to  engage  in and  carry on the  petroleum  business  and the  various
branches thereof, including the extraction, production, storage, transportation,
purchase  and  sale of oil  and  gas,  natural  gas  liquids,  shale  and  other
hydrocarbon  substances  and  their  products  and  by-products,  and  refining,
treating,  applying,  compounding,  processing and otherwise  preparing them for
market;

      B. to engage in and carry on any other business,  without limit as to kind
and whether or not related  to,  similar to or  different  from,  the  petroleum
business, including but not limited to, the businesses of mining, manufacturing,
processing, storage, construction, service, transportation and merchandising;

      C. to acquire,  own, hold, enjoy, lease, deal in, operate,  dispose of and
convey  real and  personal  property of every kind and  description,  rights and
interests  therein,  and the  business,  property,  assets  and good will of any
person, partnership, association, firm, corporation or other entity;

      D. to acquire,  own, hold, enjoy, deal in and sell,  transfer or otherwise
dispose  of  stock,  bonds,  notes and other  securities,  as well as  accounts,
contracts and evidences of indebtedness of any person, partnership, association,
firm,  corporation or other entity,  in whatsoever  business or activity engaged
and  whether  private  or public in  character,  and to  exercise  all rights in
respect thereto;

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<PAGE>

     E. to make  secured and  unsecured  loans,  with or without  interest,  to
assume or  guarantee  the stock,  bonds,  and  obligations  of, or  otherwise to
assist, any person, partnership, association, firm, corporation or other entity,
in  whatsoever  business  or activity  engaged and whether  public or private in
character,  when so doing, in the opinion of the Board of Directors,  would tend
to promote the business of this Company;

      F. to  acquire,  own,  hold,  enjoy,  grant,  deal in,  transfer,  sell or
otherwise  dispose  of  intangible  property  of  every  kind  and  description,
including, without limitation,  patents, patent rights, trademarks, trade names,
copyrights, licenses, formulae and chooses in action of any kind;

      G. to do all and everything useful in or incidental to the  accomplishment
of the objects and purposes  herein  stated,  as principal,  agent,  contractor,
trustee,  or otherwise,  either alone or in association with others, to the same
extent and as fully as could natural persons.

      No  enumeration  of specific  objects,  purposes or powers,  or particular
description  of business in this  article  shall be held to limit or restrict in
any  manner  those  enumerations  or  descriptions  which are  general  in their
character,  and the objects,  powers and descriptions of one section shall in no
wise be limited or restricted by reference to or inference from the terms of any
other section.

                                       IV.

      The total number of shares of all classes of stock which the Company shall
have authority to issue is 880,000,000  shares,  consisting of 30,000,000 shares
of  Preferred  Stock of the par value of $1.00  each and  850,000,000  shares of
Common Stock of the par value of $3.125 each.

      The  designations  and  the  powers,   preferences  and  rights,  and  the
qualifications,  limitations  or  restrictions  of the  Preferred  Stock and the
Common Stock are as follows:

      (A) The  Preferred  Stock may be  issued  from time to time in one or more
series.  Subject  to the  limitations  set  forth  herein  and  any  limitations
prescribed  by law, the Board of Directors  is  expressly  authorized,  prior to
issuance of any series of Preferred  Stock,  to fix by resolution or resolutions
providing  for the issue of any  series the  number of shares  included  in such
series and the  designation,  relative powers,  preferences and rights,  and the
qualifications,  limitations  or  restrictions  of such series.  Pursuant to the
foregoing  general  authority  vested  in the  Board  of  Directors,  but not in
limitation of the powers conferred on the Board of Directors  thereby and by the
General  Corporation  Law of the State of  Delaware,  the Board of  Directors is
expressly  authorized  to  determine  with  respect to each series of  Preferred
Stock:

            1. the  designation or designations of such series and the number of
      shares  (which  number from time to time may be  decreased by the Board of
      Directors,  but not below the number of such  shares of such  series  then
      outstanding,  or may  be  increased  by  the  Board  of  Directors  unless
      otherwise provided in creating such series) constituting such series;

            2. the rate or amount and times at which,  and the  preferences  and
      conditions  under  which,  dividends  shall be  payable  on shares of such
      series, the status of such dividends as cumulative or
      non-cumulative,  the date or dates from  which  dividends, if  cumulative,
      shall   accumulate,   and  the   status   of  such  as  participating   or
      non-participating  after the payment of dividends  as to which such shares
      are entitled to any preference;

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<PAGE>

            3. the rights and  preferences,  if any, of the holders of shares of
      such series upon the liquidation, dissolution or winding up of the affairs
      of, or upon any  distribution of the assets of, the Company,  which amount
      may vary depending upon whether such  liquidation,  dissolution or winding
      up is voluntary or  involuntary  and, if voluntary,  may vary at different
      dates,  and the status of the shares of such  series as  participating  or
      non-participating   after  the   satisfaction   of  any  such  rights  and
      preferences;

            4. the full or limited  voting  rights,  if any, to be provided  for
      shares of such series, in addition to the voting rights provided by law;

            5. the times,  terms and  conditions,  if any,  upon which shares of
      such  series  shall be subject  to  redemption,  including  the amount the
      holders  of  shares of such  series  shall be  entitled  to  receive  upon
      redemption  (which  amount  may  vary  under  different  conditions  or at
      different redemption dates) and the amount,  terms,  conditions and manner
      of operation of any  purchase,  retirement  or sinking fund to be provided
      for the shares of such series;

            6. the  rights,  if any,  of  holders  of shares  of such  series to
      convert such shares into,  or to exchange  such shares for,  shares of any
      other  class or  classes  or of any other  series of the same  class,  the
      prices or rates of conversion or exchange,  and adjustments  thereto,  and
      any other terms and conditions applicable to such conversion or exchange;

            7.  the  limitations,  if  any,  applicable  while  such  series  is
      outstanding on the payment of dividends or making of distributions  on, or
      the  acquisition  or  redemption  of,  Common  Stock or any other class of
      shares ranking junior, either as to dividends or upon liquidation,  to the
      shares of such series;

            8. the  conditions  or  restrictions,  if any, upon the issue of any
      additional shares (including additional shares of such series or any other
      series or of any other  class)  ranking  on a parity  with or prior to the
      shares of such series either as to dividends or upon liquidation; and

            9.  any  other  relative  powers,   preferences  and  participating,
      optional or other special rights, and the  qualifications,  limitations or
      restrictions thereof, of shares of such series;

in each case, so far as not inconsistent with the provisions of this Certificate
of Incorporation or the General Corporation Law of the State of Delaware as then
in effect.  All shares of Preferred  Stock shall be identical  and of equal rank
except in respect to the particulars that may be fixed by the Board of Directors
as provided  above,  and all shares of each series of  Preferred  Stock shall be
identical  and of equal  rank  except  as to the  times  from  which  cumulative
dividends, if any, thereon shall be cumulative.

      B. Pursuant to the authority  conferred upon the Board of Directors by the
Restated  Certificate of  Incorporation,  the Board of Directors has created the
following  series  of  Preferred  Stock,   with  the  following  voting  powers,
preferences and relative,  participating,  optional or other special rights, and
the following qualifications, limitations or restrictions.

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                    Series B ESOP Convertible Preferred Stock

      SECTION 1.  Designation and Amount;  Special Purpose  Restricted  Transfer
Issue.

      (A) The  shares  of such  series  shall be  designated  as  "Series B ESOP
Convertible  Preferred  Stock"  ("Series B  Preferred  Stock") and the number of
shares constituting such series shall be 833,333 1/3.

      (B)  Shares  of Series B  Preferred  Stock  shall be issued  only to State
Street Bank and Trust Company,  as trustee (the "Trustee") of the employee stock
ownership plan feature of the Employees Thrift Plan of the Company (the "Plan").
All  references  to the holder of shares of Series B Preferred  Stock shall mean
the  Trustee  or any  successor  trustee  under  the  Plan.  In the event of any
transfer of record ownership of shares of Series B Preferred Stock to any person
other  than any  successor  trustee  under  the  Plan,  the  shares  of Series B
Preferred  Stock so  transferred,  upon such  transfer  and  without any further
action by the Company or the holder thereof,  shall be  automatically  converted
into shares of Common Stock on the terms  otherwise  provided for the conversion
of shares of Series B 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 Series B Preferred  Stock hereunder but,  rather,  only the powers and
rights  pertaining  to the  Common  Stock  into  which  such  shares of Series B
Preferred  Stock shall be so converted.  In the event of such a conversion,  the
transferee  of the shares of Series B  Preferred  Stock shall be treated for all
purposes  as the  record  holder of the  shares of Common  Stock into which such
shares of Series B Preferred Stock have been  automatically  converted as of the
date of such transfer.  Certificates  representing  shares of Series B Preferred
Stock shall bear a legend to reflect the foregoing  provisions.  Notwithstanding
the foregoing  provisions of this paragraph (B) of Section 1, shares of Series B
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 Company upon the terms and conditions  provided by Sections 6,
7 and 8 hereof.

      SECTION 2. Dividends and Distribution.

      (A) Subject to the provisions for adjustment  hereinafter  set forth,  the
holders of shares of Series B  Preferred  Stock  shall be  entitled  to receive,
when,  as and if  declared  by the  Board  of  Directors  out of  funds  legally
available  therefor,  cash  dividends  ("Preferred  Dividends") in an amount per
share equal to $57.00 per share per annum, and no more, payable  semiannually in
arrears,  one-half on the 20th day of December  and  one-half on the 20th day of
June of each year (each a "Dividend  Payment Date") commencing on June 20, 1989,
to holders of record at the start of business on such Dividend  Payment Date. In
the event  that any  Dividend  Payment  Date  shall fall on any day other than a
"Business  Day" (as  hereinafter  defined),  the  dividend  payment  due on such
Dividend  Payment Date shall be paid on the Business Day  immediately  preceding
such  Dividend  Payment  Date.  Preferred  Dividends  shall  begin to  accrue on
outstanding shares of Series B Preferred Stock from the date of issuance of such
shares of Series B Preferred Stock.  Preferred Dividends shall accrue on a daily
basis whether or not the Company shall have earnings or surplus at the time, but
Preferred  Dividends  accrued after issuance on the shares of Series B Preferred
Stock for any period less than a full semiannual period between Dividend Payment
Dates shall be computed on the basis of a 360-day year of 30-day months. 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.

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<PAGE>

     (B)  So  long  as  any  shares  of  Series  B  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 Series B Preferred  Stock
as to  dividends,  unless there shall also be or have been  declared and paid or
set apart  for  payment  on the  Series B  Preferred  Stock,  dividends  for all
dividend payment periods of the Series B Preferred Stock ending on or before the
Dividend  Payment  Date of such  parity  stock,  ratably  in  proportion  to the
respective  amounts of dividends  accumulated  and unpaid  through such dividend
period on the Series B Preferred Stock and accumulated and unpaid on such parity
stock through the dividend  payment  period on such parity stock next  preceding
such Dividend  Payment Date. In the event that full cumulative  dividends on the
Series B  Preferred  Stock  have not been  declared  and paid or set  apart  for
payment when due, the Company  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 Company ranking, as to dividends or as to distributions in
the event of a liquidation,  dissolution or winding up of the Company, junior to
the Series B Preferred  Stock until full  cumulative  dividends  on the Series B
Preferred  Stock  shall have been paid or  declared  and set apart for  payment;
provided,  however,  that the  foregoing  shall  not  apply to (i) any  dividend
payable  solely in any shares of any stock  ranking,  as to dividends  and as to
distributions  in the event of a  liquidation,  dissolution or winding up of the
Company,  junior to the  Series B  Preferred  Stock or (ii) the  acquisition  of
shares of any stock ranking, as to dividends or as to distributions in the event
of a liquidation, dissolution or winding up of the Company, junior to the Series
B Preferred Stock in exchange  solely for shares of any other stock ranking,  as
to dividends and as to distributions in the event of a liquidation,  dissolution
or winding up of the Company, junior to the Series B Preferred Stock.

      SECTION 3. Voting Rights.

      The holders of shares of Series B Preferred Stock shall have the following
voting rights:

      (A) The holders of Series B  Preferred  Stock shall be entitled to vote on
all matters  submitted  to a vote of the  stockholders  of the  Company,  voting
together with the holders of Common Stock as one class. The holder of each share
of Series B Preferred  Stock shall be entitled to a number of votes equal to the
number of shares of Common  Stock into  which  such share of Series B  Preferred
Stock could be converted  on the record date for  determining  the  stockholders
entitled  to  vote,  rounded  to the  nearest  one-tenth  of a  vote;  it  being
understood that whenever the "Conversion Price" (as defined in Section 5 hereof)
is adjusted as provided in Section 9 hereof,  the voting  rights of the Series B
Preferred Stock shall also be similarly adjusted.

      (B) Except as otherwise  required by law or set forth  herein,  holders of
Series B 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; provided,  however, that the vote of at least 66 2/3% of the outstanding
shares of Series B Preferred  Stock,  voting  separately  as a series,  shall be
necessary to adopt any  alteration,  amendment or repeal of any provision of the
Restated  Certificate  of  Incorporation  of the  Company,  as amended,  or this
Resolution  (including any such alteration,  amendment or repeal effected by any
merger or  consolidation  in which the  Company is the  surviving  or  resulting
corporation), if such amendment,  alteration or repeal would alter or change the
powers,  preferences or special rights of the shares of Series B Preferred Stock
so as to affect them adversely.

                                       5
<PAGE>

      SECTION 4. Liquidation, Dissolution or Winding Up.

      (A) Upon any voluntary or involuntary liquidation,  dissolution or winding
up of the Company,  the holders of Series B Preferred Stock shall be entitled to
receive out of assets of the Company which remain after  satisfaction in full of
all valid claims of creditors of the Company and which are available for payment
to  stockholders,  and  subject to the rights of the holders of any stock of the
Company  ranking  senior to or on a parity with the Series B Preferred  Stock in
respect of  distributions  upon  liquidation,  dissolution  or winding up of the
Company,  before any amount  shall be paid or  distributed  among the holders of
Common Stock or any other shares ranking junior to the Series B Preferred  Stock
in respect of distributions  upon liquidation,  dissolution or winding up of the
Company,  liquidating  distributions  in the amount of $600 per  share,  plus an
amount equal to all accrued and unpaid  dividends  thereon to the date fixed for
distribution, and no more. If upon any liquidation, dissolution or winding up of
the Company,  the amounts  payable with respect to the Series B Preferred  Stock
and any other  stock  ranking as to any such  distribution  on a parity with the
Series B  Preferred  Stock are not paid in full,  the  holders  of the  Series B
Preferred Stock and such other stock shall share ratably in any  distribution of
assets in proportion to the full respective  preferential  amounts to which they
are  entitled.  After  payment of the full amount to which they are  entitled as
provided by the foregoing  provisions  of this  paragraph  4(A),  the holders of
shares of Series B Preferred Stock shall not be entitled to any further right or
claim to any of the remaining assets of the Company.

      (B) Neither the merger or  consolidation  of the Company  with or into any
other corporation, nor the merger or consolidation of any other corporation with
or into the Company,  nor the sale, lease,  exchange or other transfer of all or
any portion of the assets of the Company,  shall be deemed to be a  dissolution,
liquidation  or winding up of the affairs of the  Company  for  purposes of this
Section 4, but the holders of Series B Preferred  Stock  shall  nevertheless  be
entitled in the event of any such merger or consolidation to the rights provided
by Section 8 hereof.

      (C)  Written   notice  of  any  voluntary  or   involuntary   liquidation,
dissolution  or winding up of the  Company,  stating the  payment  date or dates
when,  and the place or places where,  the amounts  distributable  to holders of
Series B Preferred Stock in such circumstances shall be payable,  shall be given
by  first-class  mail,  postage  prepaid,  mailed not less than twenty (20) days
prior to any payment date stated  therein,  to the holders of Series B Preferred
Stock,  at the address  shown on the books of the Company or any transfer  agent
for the Series B Preferred Stock.

      SECTION 5. Conversion into Common Stock.

      (A) A holder of shares of Series B 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  Sections  6, 7 and 8  hereof,  to cause any or all of such
shares to be converted  into shares of Common  Stock,  initially at a conversion
rate equal to the ratio of $600 to the amount which  initially  shall be $60 and
which  shall be  adjusted as  hereinafter  provided  (and,  as so  adjusted,  is
hereinafter  sometimes  referred  to as the  "Conversion  Price")  (that  is,  a
conversion  rate  initially  equivalent  to ten shares of Common  Stock for each
share of Series B Preferred  Stock so converted,  which is subject to adjustment
as the Conversion Price is adjusted as hereinafter provided).

      (B) Any holder of shares of Series B Preferred  Stock  desiring to convert
such shares  into shares of Common  Stock shall  surrender  the  certificate  or
certificates   representing  the  shares  of  Series  B  Preferred  Stock  being
converted, duly assigned or endorsed for transfer to the Company (or

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<PAGE>

accompanied by duly executed stock powers  relating  thereto),  at the principal
executive  office of the  Company or the offices of the  transfer  agent for the
Series B  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  Series B  Preferred  Stock by the  Company or the
transfer agent for the Series B Preferred  Stock,  accompanied by written notice
of conversion.  Such notice of conversion shall specify (i) the number of shares
of Series B Preferred  Stock to be converted and the name or names in which such
holder  wishes the  certificate  or  certificates  for Common  Stock and for any
shares of Series B Preferred  Stock not to be so converted to be issued and (ii)
the  address  to  which  such  holder  wishes  delivery  to be made of such  new
certificates to be issued upon such conversion.

      (C) Upon  surrender  of a  certificate  representing  a share or shares of
Series B Preferred  Stock for  conversion,  the Company  shall issue and send by
hand delivery (with receipt to be acknowledged) or by first-class mail,  postage
prepaid,  to the holder  thereof or to such  holder's  designee,  at the address
designated  by such holder,  a  certificate  or  certificates  for the number of
shares of Common Stock to which such holder shall be entitled  upon  conversion.
In  the  event  that  there  shall  have  been   surrendered  a  certificate  or
certificates representing shares of Series B Preferred Stock, only part of which
are to be converted,  the Company shall issue and deliver to such holder or such
holder's  designee a new certificate or certificates  representing the number of
shares of Series B Preferred Stock which shall not have been converted.

      (D)  The  issuance  by the  Company  of  shares  of  Common  Stock  upon a
conversion  of shares of Series B 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 or (ii)
the  commencement  of business on the second business day after the surrender of
the certificate or certificates for the shares of Series B Preferred Stock to be
converted, duly assigned or endorsed for transfer to the Company (or accompanied
by duly executed stock powers relating  thereto) as provided by this Resolution.
On and after the effective day of conversion,  the person or persons entitled to
receive the Common Stock issuable upon such conversion  shall be treated for all
purposes as the record holder or holders of such shares of Common Stock,  but no
allowance or adjustment shall be made in respect of dividends payable to holders
of Common  Stock in respect  of any period  prior to such  effective  date.  The
Company  shall not be  obligated  to pay any  dividends  which  shall  have been
declared  and shall be payable to holders of shares of Series B Preferred  Stock
on a Dividend  Payment Date if such  Dividend  Payment Date for such dividend is
subsequent to the effective date of conversion of such shares.

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

      (F) The Company shall at all times  reserve and keep  available out of its
authorized and unissued Common Stock, solely for issuance upon the conversion of
shares of Series B Preferred Stock as herein provided,  free from any preemptive
rights,  such  number of shares  of Common  Stock as shall  from time to time be
issuable upon the conversion of all the shares of Series B Preferred  Stock then
outstanding.  Nothing  contained  herein shall preclude the Company from issuing
shares of Common Stock held in its  treasury  upon the  conversion  of shares of
Series B Preferred  Stock into Common Stock  pursuant to the terms  hereof.  The
Company shall prepare and shall use its best efforts to obtain and keep in force
such  governmental  or  regulatory  permits  or other  authorizations  as may be
required by law, and shall comply with all  requirements  as to  registration or
qualification  of the Common Stock,  in order to enable the

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<PAGE>

Company  lawfully  to issue  and  deliver  to each  holder of record of Series B
Preferred  Stock such number of shares of its Common Stock as shall from time to
time be sufficient to effect the  conversion of all shares of Series B Preferred
Stock then outstanding and convertible into shares of Common Stock.

      SECTION 6. Redemption at the Option of the Company.

      (A) The Series B Preferred Stock shall be redeemable, in whole or in part,
at the option of the Company at any time after December 20, 1991, or at any time
after the date of issuance,  if permitted by paragraph (D) of this Section 6, at
the following redemption prices per share:

<TABLE>
<CAPTION>
         During the Twelve-
            Month Period                                                                 Price Per
        Beginning December 20                                                              Share
                <S>                                                                       <C>     
                1988                                                                      $ 657.00
                1989                                                                      $ 651.30
                1990                                                                      $ 645.60
                1991                                                                      $ 639.90
                1992                                                                      $ 634.20
                1993                                                                      $ 628.50
                1994                                                                      $ 622.80
                1995                                                                      $ 617.10
                1996                                                                      $ 611.40
                1997                                                                      $ 605.70
</TABLE>

and  thereafter  at $600 per share,  plus,  in each case, an amount equal to all
accrued and unpaid dividends  thereon to the date fixed for redemption.  Payment
of the redemption price shall be made by the Company in cash or shares of Common
Stock, or a combination  thereof,  as permitted by paragraph (F) of this Section
6. From and after the date fixed for redemption, dividends on shares of Series B
Preferred Stock called for redemption will cease to accrue,  such shares will no
longer be deemed to be  outstanding  and all rights in respect of such shares of
the Company shall cease,  except the right to receive the redemption  price.  If
less than all of the  outstanding  shares of Series B Preferred  Stock are to be
redeemed, the Company 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 Company.

      (B)   Unless  otherwise required by law, notice of redemption will be sent
to the holders of Series B Preferred  Stock at the address shown on the books of
the  Company  or any  transfer  agent  for  the  Series  B  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.  Each such notice shall
state:  (i) the redemption date; (ii) the total number of shares of the Series B
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
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; and (vi) the  conversion  rights of the shares to be redeemed,
the period within which conversion  rights may be exercised,  and the Conversion
Price and number of shares of Common Stock  issuable upon  conversion of a share
of Series B Preferred  Stock at the time.  Upon surrender of the certificate for
any shares so called  for  redemption  and not  previously  converted  (properly
endorsed or assigned  for  transfer,  if the Board of  Directors  of the Company
shall so require

                                       8
<PAGE>

and the notice shall so state),  such shares shall be redeemed by the Company at
the date  fixed for  redemption  and at the  redemption  price set forth in this
Section 6.

      (C)   In the event of a change in the federal tax law of the United States
of America which has the effect of  precluding  the Company from claiming any of
the tax deductions for dividends paid on the Series B Preferred  Stock when such
dividends are used as provided under Section 404(k) (2) of the Internal  Revenue
Code of 1986,  as amended and in effect on the date shares of Series B Preferred
Stock  are  initially  issued,  the  Company  may,  in its sole  discretion  and
notwithstanding  anything to the  contrary in  paragraph  (A) of this Section 6,
elect to redeem any or all of such  shares for the amount  payable in respect of
the shares upon liquidation of the Company pursuant to Section 4 hereof.

      (D)   Notwithstanding  anything to the contrary in  paragraph  (A) of this
Section 6, the  Company may elect to redeem any or all of the shares of Series B
Preferred  Stock at any time on or prior to December 20, 1991,  on the terms and
conditions  set forth in  paragraphs  (A) and (B) of this Section 6, if the last
reported  sales price,  regular way, of a share of Common Stock,  as reported on
the New York Stock Exchange Composite Tape or, if the Common Stock is not listed
or admitted to trading on the New York Stock Exchange, on the principal national
securities  exchange on which such stock is listed or admitted to trading or, if
the Common Stock is not listed or admitted to trading on any national securities
exchange,  on  the  National  Market  System  of  the  National  Association  of
Securities  Dealers,  Inc.  Automated  Quotation System ("NASDAQ") or, if Common
Stock is not quoted on such National  Market System,  the average of the closing
bid and asked prices in the  over-the-counter  market as reported by NASDAQ, for
at least  twenty (20)  trading  days within a period of thirty (30)  consecutive
trading days ending within five (5) days of the notice of redemption,  equals or
exceeds one hundred fifty percent (150%) of the Conversion  Price (giving effect
in making such calculation to any adjustments required by Section 9 hereof).

      (E)   In  the event that the Plan is  terminated  in  accordance  with its
terms,  and  notwithstanding  anything to the contrary in paragraph  (A) of this
Section 6, the  Company  shall,  as soon  thereafter  as  practicable,  call for
redemption  all then  outstanding  shares  of Series B  Preferred  Stock for the
amount payable in respect of the shares upon liquidation of the Company pursuant
to Section 4 hereof.

      (F)   The Company, at its option, may make payment of the redemption price
required  upon  redemption  of shares of Series B 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 purposes at their Fair Market Value
(as defined in paragraph (G) of Section 9 hereof).

      SECTION 7. Other Redemption Rights.

      Shares of Series B  Preferred  Stock  shall be redeemed by the Company for
cash or, if the Company so elects,  in shares of Common Stock,  or a combination
of such shares and cash,  any such shares of Common  Stock to be valued for such
purpose as provided by paragraph (F) of Section 6, at a redemption price of $600
per share  plus  accrued  and  unpaid  dividends  thereon  to the date fixed for
redemption,  at the option of the holder, at any time and from time to time upon
notice to the Company  given not less than five (5)  business  days prior to the
date fixed by the holder in such notice for such redemption,  upon certification
by such  holder to the  Company  of the  following  events:  (i) when and to the
extent  necessary  for such holder to provide for  distributions  required to be
made to  participants  under, or to satisfy an investment  election  provided to
participants in accordance  with, the Plan, or any successor plan; (ii) when and
to the extent  necessary  for such  holder to make any  payments  of  principal,
interest or premium due and payable (whether as scheduled or upon  acceleration)
under the Loan 

                                       9
<PAGE>

Agreement among the Trustee, certain banking parties thereto (collectively,  the
"Banks") and Chase Manhattan Bank (National Association), as agent for the Banks
or any indebtedness incurred by the holder for the benefit of the Plan; or (iii)
in the event that the Plan is not initially  determined by the Internal  Revenue
Service to be qualified  within the meaning of Sections 401(a) and 4975(e)(7) of
the Internal Revenue Code of 1986, as amended.

      SECTION 8. Consolidation, Merger, etc.

      (A)   In the event that the Company shall consummate any  consolidation or
merger or similar business combination, pursuant to which the outstanding shares
of  Common  Stock are by  operation  of law  exchanged  solely  for or  changed,
reclassified  or  converted  solely  into stock of any  successor  or  resulting
corporation  (including  the  Company)  that  constitutes  "qualifying  employer
securities"  with  respect to a holder of Series B  Preferred  Stock  within the
meaning of Section 409(l) of the Internal Revenue Code of 1986, as amended,  and
Section  407(d)(5) of the Employee  Retirement  Income  Security Act of 1974, as
amended,  or any successor  provisions of law,  and, if  applicable,  for a cash
payment in lieu of fractional  shares,  if any, the shares of Series B Preferred
Stock of such holder shall,  in connection  with such  consolidation,  merger or
similar business combination,  be assumed by and shall become preferred stock of
such successor or resulting corporation,  having in respect of such corporation,
insofar as possible, 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  Series  B  Preferred  Stock  had  immediately  prior to such
transaction,  except  that  after  such  transaction  each share of the Series B
Preferred  Stock shall be  convertible,  otherwise  on the terms and  conditions
provided by Section 5 hereof,  into the number and kind of  qualifying  employer
securities  so  receivable  by a holder of the number of shares of Common  Stock
into which such  shares of Series B Preferred  Stock  could have been  converted
immediately prior to such transaction;  provided,  however, 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 Series B Preferred Stock, then the shares of Series B Preferred Stock shall,
by virtue of such  transaction  and on the same terms as apply to the holders of
Common Stock, be converted into or exchanged for the aggregate  amount of stock,
securities,  cash or other property  (payable in kind) receivable by a holder of
the  number of  shares  of  Common  Stock  into  which  such  shares of Series B
Preferred Stock could have been converted  immediately prior to such transaction
if such  holder of Common  Stock  failed to  exercise  any rights of election to
receive any kind or amount of stock,  securities,  cash or other property (other
than such qualifying employer  securities and a cash payment, if applicable,  in
lieu of fractional shares)  receivable upon such transaction  (provided that, if
the kind or  amount  of  qualifying  employer  securities  receivable  upon such
transaction  is not the  same  for each  non-electing  share,  then the kind and
amount so receivable upon such transaction for each non-electing  share shall be
the kind and amount so receivable per share by the plurality of the non-electing
shares).  The rights of the Series B Preferred  Stock as preferred stock of such
successor or resulting  corporation shall successively be subject to adjustments
pursuant to Section 9 hereof after any such transaction as nearly  equivalent as
practicable  to the  adjustment  provided  for by  such  section  prior  to such
transaction.  The Company shall not consummate any such merger, consolidation or
similar  transaction  unless all then  outstanding  shares of Series B Preferred
Stock shall be assumed and authorized by the successor or resulting  corporation
as aforesaid.

      (B)   In the event that the Company shall consummate any  consolidation or
merger or similar business combination, pursuant to which the outstanding shares
of Common Stock are by operation of law exchanged  for or changed,  reclassified
or converted  into other stock or securities or cash or any

                                       10
<PAGE>

other property,  or any combination  thereof,  other than any such consideration
which is constituted solely of qualifying employer securities (as referred to in
paragraph (A) of this Section 8) and cash payments,  if  applicable,  in lieu of
fractional shares, outstanding shares of Series B Preferred Stock shall, without
any  action on the part of the  Company or any holder  thereof  (but  subject to
paragraph (C) of this Section 8), be  automatically  converted by virtue of such
merger,   consolidation  or  similar  transaction   immediately  prior  to  such
consummation into the number of shares of Common Stock into which such shares of
Series B  Preferred  Stock could have been  converted  at such time so that each
share of Series B Preferred  Stock shall,  by virtue of such  transaction and on
the same terms as apply to the holders of Common  Stock,  be  converted  into or
exchanged for the aggregate amount of stock, securities,  cash or other property
(payable in like kind)  receivable by a holder of the number of shares of Common
Stock  into  which  such  shares of Series B  Preferred  Stock  could  have been
converted immediately prior to such transaction;  provided,  however, 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 Series B Preferred  Stock,  then the
shares of Series B Preferred Stock shall,  by virtue of such  transaction and on
the same terms as apply to the holders of Common  Stock,  be  converted  into or
exchanged for the aggregate amount of stock, securities,  cash or other property
(payable in kind) receivable by a holder of the number of shares of Common Stock
into which such  shares of Series B Preferred  Stock  could have been  converted
immediately  prior to such  transaction if such holder of Common Stock failed to
exercise  any rights of election as to the kind or amount of stock,  securities,
cash or other property  receivable upon such transaction  (provided that, if the
kind or amount of stock, securities, cash or other property receivable upon such
transaction  is not the  same  for each  non-electing  share,  then the kind and
amount  of  stock,  securities,  cash or other  property  receivable  upon  such
transaction  for  each  non-electing  share  shall be the  kind  and  amount  so
receivable per share by a plurality of the non-electing shares).

      (C)   In the event the Company  shall enter into any  agreement  providing
for any  consolidation  or merger or similar business  combination  described in
paragraph (B) of this Section 8, then the Company  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 Series B Preferred  Stock and each such holder  shall
have the right to elect,  by written  notice to the  Company,  to receive,  upon
consummation of such  transaction (if and when such transaction is consummated),
from the Company or the successor of the Company,  in redemption  and retirement
of such Series B Preferred  Stock, a cash payment equal to the amount payable in
respect of shares of Series B Preferred  Stock upon  liquidation  of the Company
pursuant to Section 4 thereof.  No such notice of redemption  shall be effective
unless given to the Company prior to the close of business on the fifth business
day  prior to  consummation  of such  transaction,  unless  the  Company  or the
successor  of the  Company  shall  waive  such prior  notice,  but any notice of
redemption  so given prior to such time may be withdrawn by notice of withdrawal
given to the Company  prior to the close of business on the fifth  business  day
prior to consummation of such transaction.


      SECTION 9. Anti-Dilution Adjustments.

      (A)   In  the event the  Company  shall,  at any time or from time to time
while any of the shares of the Series B Preferred Stock are outstanding, (i) pay
a dividend or make a  distribution  in respect of the Common  Stock in shares of
Common Stock,  (ii) subdivide the  outstanding  shares of Common Stock, or (iii)
combine the outstanding  shares of Common Stock into a smaller number of shares,
in each case  whether by  reclassification  of shares,  recapitalization  of the
Company (including a  recapitalization  effected by a merger or consolidation to
which  Section  8 hereof does not apply) or  otherwise,  the Conversion Price in
effect immediately prior to such action  shall  be  adjusted by multiplying such

                                       11
<PAGE>

Conversion  Price by a fraction,  the numerator of which is the number of shares
of Common Stock outstanding  immediately  before such event, and the denominator
of which is the number of shares of Common Stock  outstanding  immediately after
such event.  An adjustment  made pursuant to this  paragraph 9(A) shall be given
effect,  upon payment of such a dividend or distribution,  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  or
combination shall become effective immediately as of the effective date thereof.

      (B)   In  the event that the  Company  shall,  at any time or from time to
time while any of the shares of Series B 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 Company,  any
right or warrant to purchase shares of Common Stock (but not including as such a
right or warrant any security  convertible  into or  exchangeable  for shares of
Common Stock) at a purchase  price per share less than the Fair Market Value (as
hereinafter  defined) of a share of Common Stock on the date of issuance of such
right or warrant,  then,  subject to the provisions of paragraphs (E) and (F) of
this  Section 9, the  Conversion  Price shall be adjusted  by  multiplying  such
Conversion  Price by a fraction,  the  numerator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants  plus the number of shares of Common  Stock which 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 or  warrants,  and the  denominator  of which shall be 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.

      (C)   In  the event the  Company  shall,  at any time or from time to time
while any of the shares of Series B Preferred Stock are outstanding, issue, sell
or exchange  shares of Common Stock (other than pursuant to 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) and other than pursuant to any employee or director  incentive or benefit
plan  or  arrangement,   including  any  employment,   severance  or  consulting
agreement,  of the  Company  or any  subsidiary  of the  Company  heretofore  or
hereafter  adopted) for a consideration  having a Fair Market Value, on the date
of such  issuance,  sale or  exchange,  less than the Fair Market  Value of such
shares  on the  date  of  issuance,  sale  or  exchange,  then,  subject  to the
provisions of  paragraphs  (E) and (F) of this Section 9, the  Conversion  Price
shall be adjusted by  multiplying  such  Conversion  Price by the  fraction  the
numerator  of which  shall be the sum of (i) the  Fair  Market  Value of all the
shares of Common Stock  outstanding on the day  immediately  preceding the first
public announcement of such issuance, sale or exchange plus (ii) the Fair Market
Value of the consideration  received by the Company in respect of such issuance,
sale or exchange of shares of Common Stock,  and the  denominator of which shall
be the  product of (a) the Fair Market  Value of a share of Common  Stock on the
day immediately  preceding the first public announcement of such issuance,  sale
or exchange  multiplied  by (b) the sum of the number of shares of Common  Stock
outstanding  on such day plus the  number of shares of Common  Stock so  issued,
sold or exchanged by the Company. In the event the Company shall, at any time or
from time to time while any shares of Series B Preferred Stock are  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 any such issuance 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 Company) and
other than  pursuant to any  employee or director  incentive  or benefit plan or
arrangement (including any employment, severance or consulting agreement) of the
Company or any subsidiary of the Company heretofore or hereafter adopted, for a

                                       12
<PAGE>

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,
subject  to the  provisions  of  paragraphs  (E) and (F) of this  Section 9, the
Conversion  Price shall be adjusted by multiplying  such  Conversion  Price by a
fraction the numerator of which shall be the sum of (i) the Fair Market Value of
all the shares of Common Stock outstanding on the day immediately  preceding the
first public announcement of such issuance,  sale or exchange plus (ii) the Fair
Market  Value of the  consideration  received  by the Company in respect of such
issuance,  sale or exchange of such right or warrant  plus (iii) the Fair Market
Value at the time of such issuance of the  consideration  which the  Corporation
would  receive  upon  exercise in full of all such rights or  warrants,  and the
denominator  of which  shall be the  product of (a) the Fair  Market  Value of a
share  of  Common  Stock  on the day  immediately  preceding  the  first  public
announcement of such issuance, sale or exchange multiplied by (b) the sum of the
number of shares of Common Stock outstanding on such day plus the maximum number
of shares of Common  Stock  which  could be  acquired  pursuant to such right or
warrant at the time of the  issuance,  sale or exchange of such right or warrant
(assuming  shares of Common  Stock could be  acquired  pursuant to such right or
warrant at such time).

      (D)   In  the event the  Company  shall,  at any time or from time to time
while any of the shares of Series B  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   Company   (including   a   recapitalization    or
reclassification effected by a merger or consolidation to which Section 8 hereof
does not apply) or effect a Pro Rata  Repurchase  (as  hereinafter  defined)  of
Common  Stock,  the  Conversion  Price  in  effect  immediately  prior  to  such
Extraordinary  Distribution or Pro Rata Repurchase shall,  subject to paragraphs
(E) and (F) of this Section 9, be adjusted by multiplying  such Conversion Price
by the fraction  the  numerator 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  which is paid in cash and on the distribution  date
with respect to an Extraordinary  Distribution which is paid other than in cash,
or on the applicable  expiration date  (including all extensions  hereof) of any
tender  offer which is a Pro Rata  Repurchase,  or on the date of purchase  with
respect to any Pro Rata Repurchase  which 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, and the
denominator  of which shall be the product of (a) the number of shares of Common
Stock outstanding  immediately  before such  Extraordinary  Dividend or Pro Rata
Repurchase minus, in the case of a Pro Rata Repurchase,  the number of shares of
Common Stock repurchased by the Company  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  which is paid in cash and on the distribution
date with respect to an Extraordinary  Distribution  which is paid other than in
cash, or on the applicable expiration date (including all extensions thereof) of
any tender offer which is a Pro Rata  Repurchase or on the date of purchase with
respect to any Pro Rata Repurchase  which is not a tender offer, as the case may
be. The Company shall send each holder of Series B Preferred Stock (i) notice of
its intent to make any dividend or distribution  and (ii) notice of any offer by
the Company 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  (including by
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) to holders of Common
Stock.  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  Company  pursuant to such offer,  as well as the  Conversion  Price and the
number of shares of Common Stock into which a share of Series B Preferred  Stock
may be converted at such time.

                                       13
<PAGE>


      (E)   Notwithstanding  any other provisions of this Section 9, the Company
shall not be required to make any adjustment to the Conversion Price unless such
adjustment would require an increase or decrease of at least one percent (1%) in
the Conversion  Price. Any lesser  adjustment shall be carried forward and shall
be made no later  than  the time of,  and  together  with,  the next  subsequent
adjustment  which,  together  with any  adjustment  or  adjustments  so  carried
forward, shall amount to an increase or decrease of at least one percent (1%) in
the Conversion Price.

      (F)   If the Company shall make any dividend or distribution on the Common
Stock or issue any Common Stock,  other  capital stock or other  security of the
Company or any rights or warrants  to  purchase  or acquire  any such  security,
which  transaction  does not result in an  adjustment  to the  Conversion  Price
pursuant to the  foregoing  provisions of this Section 9, the Board of Directors
of the Company  shall  consider  whether such action is of such a nature that an
adjustment to the Conversion  Price should  equitably be made in respect of such
transaction.  If in such case the Board of Directors  of the Company  determines
that an adjustment to the Conversion  Price should be made, an adjustment  shall
be made  effective as of such date,  as  determined by the Board of Directors of
the Company.  The  determination  of the Board of Directors of the Company as to
whether an  adjustment  to the  Conversion  Price should be made pursuant to the
foregoing  provisions of this paragraph  9(F), and, if so, as to what adjustment
should  be made and when,  shall be final and  binding  on the  Company  and all
stockholders  of the  Company.  The  Company  shall  be  entitled  to make  such
additional adjustments in the Conversion Price, 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  Company,
subdivision,  reclassification  or combination of shares of stock of the Company
or any  recapitalization  of the Company  shall not be taxable to the holders of
the Common Stock.

      (G)   For  purposes of this Resolution,  the following  definitions  shall
apply:

      "Business Day" shall mean each day that is not a Saturday, Sunday or a day
on which state or federally chartered banking institutions in New York, New York
are not required to be open.

      "Current  Market  Price" of publicly  traded shares of Common Stock or any
other  class of  capital  stock or other  security  of the  Company or any other
issuer for any day shall mean the last reported sales price, regular way, or, in
the event  that 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
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 each
such day in the  over-the-counter  market as  reported  by NASDAQ or, if bid and
asked  prices for such  security  on each 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
Company or a committee  thereof,  in each case,  on each  trading day during the
Adjustment  Period.  "Adjustment  Period"  shall  mean  the  period  of five (5)
consecutive 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  which 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 Company or a committee
thereof,  or, if no such  investment  banking or  appraisal  firm is in the good
faith  judgment of the Board of  Directors or such  committee  available to make
such

                                       14
<PAGE>

determination,  as  determined  in good faith by the Board of  Directors  of the
Company or such committee.

      "Extraordinary Distribution" shall mean any dividend or other distribution
to  holders  of  Common  Stock  (effected  while  any of the  shares of Series B
Preferred Stock are outstanding) (i) of cash, where the aggregate amount of such
cash dividend or distribution together with the amount of all cash dividends and
distributions made during the preceding period of 12 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
which 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 which is a Pro Rata  Repurchase,  or the
date of purchase  with respect to any other Pro Rata  Repurchase  which 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  which is paid in cash and on the distribution
date with respect to an Extraordinary  Distribution  which is paid other than in
cash,  and/or  (ii) of any shares of capital  stock of the  Company  (other than
shares of Common Stock),  other securities of the Company (other than securities
of the type referred to in paragraph (B) or (C) of this Section 9), evidences of
indebtedness of the Company or any other person or any other property (including
shares of any subsidiary of the Company) or any  combination  thereof.  The Fair
Market Value of an  Extraordinary  Distribution for purposes of paragraph (D) of
this  Section  9 shall  be equal  to the sum of the  Fair  Market  Value of such
Extraordinary  Distribution  plus the amount of any cash dividends which are not
Extraordinary  Distributions made during such 12-month period and not previously
included in the  calculation of an adjustment  pursuant to paragraph (D) of this
Section 9.

      "Fair Market  Value" shall mean, as to shares of Common Stock or any other
class of capital  stock or  securities  of the Company or any other issuer which
are publicly traded,  the average of the Current Market Prices of such shares or
securities  for each day of the  Adjustment  Period.  "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
remainder of (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 which could
be acquired on such date upon the  exercise in full of such rights and  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, minus (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 Company.

      "Pro Rata Repurchase" shall mean any purchase of shares of Common Stock by
the Company or any subsidiary thereof, whether for cash, shares of capital stock
of the Company,  other  securities of the Company,  evidences of indebtedness of
the Company or any other  person or any other  property  (including  shares of a
subsidiary of the Company),  or any combination  thereof,  effected while any of
the shares of Series B Preferred Stock are  outstanding,  pursuant to any tender
offer or exchange offer subject to Section 13(e) of the Securities  Exchange Act
of 1934, as amended (the "Exchange Act"), or any successor  provision of law, or
pursuant to any other offer available to substantially all holders of

                                       15
<PAGE>

Common Stock;  provided,  however, that no purchase of shares by the Company, or
any subsidiary  thereof made in open market  transactions  shall be deemed a Pro
Rata Repurchase.  For purposes of this paragraph 9(G), shares shall be deemed to
have been  purchased  by the Company 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 Series B  Preferred  Stock are  initially  issued by the Company or on
such other terms and  conditions  as the Board of  Directors of the Company or a
committee thereof shall have determined are reasonably  designed to prevent such
purchases  from having a material  effect on the  trading  market for the Common
Stock.

      (A)     Whenever an  adjustment  to the  Conversion  Price and the related
voting  rights of the Series B  Preferred  Stock is  required  pursuant  to this
Resolution,  the Company shall  forthwith  place on file with the transfer agent
for the Common Stock and the Series B Preferred Stock, and with the Secretary of
the  Company,  a statement  signed by two  officers  of the Company  stating the
adjusted  Conversion  Price  determined  as  provided  herein and the  resulting
conversion  ratio,  and the voting rights (as  appropriately  adjusted),  of the
Series B Preferred  Stock.  Such statement shall set forth in reasonable  detail
such facts as shall be  necessary to show the reason and the manner of computing
such  adjustment,  including any  determination of Fair Market Value involved in
such computation. Promptly after each adjustment to the Conversion Price and the
related voting rights of the Series B Preferred  Stock, the Company shall mail a
notice  thereof and of the then  prevailing  conversion  ratio to each holder of
shares of the Series B Preferred Stock.

      SECTION  10.  Ranking;  Attributable  Capital  and  Adequacy  of  Surplus;
Retirement of Shares.

      (A) The Series B Preferred  Stock shall rank senior to the Common Stock as
to the  payment of  dividends  and the  distribution  of assets on  liquidation,
dissolution and winding up of the Company, and, unless otherwise provided in the
Restated  Certificate  of  Incorporation  of the  Company,  as the  same  may be
amended,  or a certificate of  designations  relating to a subsequent  series of
Preferred  Stock,  par value  $1.00 per  share,  of the  Company,  the  Series B
Preferred  Stock  shall  rank  junior to all series of the  Company's  Preferred
Stock,  par value  $1.00 per  share,  as to the  payment  of  dividends  and the
distribution of assets on liquidation, dissolution or winding up.

      (B) In addition to any vote of  stockholders  required by law, the vote of
the holders of a majority of the outstanding  shares of Series B Preferred Stock
shall be  required to increase  the par value of the Common  Stock or  otherwise
increase  the  capital of the  Company  allocable  to the  Common  Stock for the
purpose of the  Delaware  General  Corporation  Law (the "DGCL") if, as a result
thereof,  the surplus of the Company for purposes of the DGCL would be less than
the amount of  Preferred  Dividends  that would  accrue on the then  outstanding
shares of Series B Preferred Stock during the following three years.

      (C) (C)(C)Any  shares of Series B Preferred  Stock acquired by the Company
by reason of the  conversion  or  redemption  of such shares as provided by this
Resolution,  or otherwise  so  acquired,  shall be retired as shares of Series B
Preferred  Stock and restored to the status of authorized but unissued shares of
Preferred Stock,  par value $1.00 per share, of the Company,  undesignated as to
series, and may thereafter be reissued as part of a new series of such Preferred
Stock as permitted by law.

      SECTION 11. 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 

                                       16
<PAGE>

sent by registered mail (unless first-class mail shall be specifically permitted
for such  notice  under  the terms of this  Resolution)  with  postage  prepaid,
addressed:  (i) if to the  Company,  to its office at 2000  Westchester  Avenue,
White Plains, New York 10650 (Attention: Secretary) or to the transfer agent for
the Series B  Preferred  Stock,  or other  agent of the  Company  designated  as
permitted by this  Resolution or (ii) if to any holder of the Series B 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 Company (which may include the
records of any transfer agent for the Series B Preferred  Stock or Common Stock,
as the case may be) or (iii) to such other  address  as the  Company or any such
holder, as the case may be, shall have designated by notice similarly given.

      (B) The term "Common Stock" as used in this Resolution means the Company's
Common  Stock,  par value  $6.25 per  share,  as the same  exists at the date of
filing of a certificate of designations  relating to Series B Preferred Stock 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 no par value,  or from no par value to par value. In the event that, at
any time as a  result  of an  adjustment  made  pursuant  to  Section  9 of this
Resolution,  the  holder  of any  share of the  Series B  Preferred  Stock  upon
thereafter  surrendering  such shares for  conversion,  shall become entitled to
receive  any shares or other  securities  of the  Company  other than  shares of
Common Stock, the Conversion Price in respect of such other shares or securities
so  receivable  upon  conversion  of shares of Series B  Preferred  Stock  shall
thereafter be adjusted,  and shall be subject to further adjustment from time to
time,  in a manner  and on terms as  nearly  equivalent  as  practicable  to the
provisions with respect to Common Stock  contained in Section 9 hereof,  and the
provisions of Sections 1 through 8, 10 and 11 of this Resolution with respect to
the Common  Stock shall apply on like or similar  terms to any such other shares
or securities.

      (C) The Company 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
Series B Preferred Stock or shares of Common Stock or other securities issued on
account of Series B Preferred Stock pursuant hereto or certificates representing
such shares or securities.  The Company 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 Series B Preferred  Stock or Common  Stock or
other  securities  in a name  other  than that in which  the  shares of Series B
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 such shares or securities other than a payment, 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  Company the amount of any such tax or has
established,  to the satisfaction of the Company, that such tax has been paid or
is not payable.

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

      (E)  Unless   otherwise   provided   in  the   Restated   Certificate   of
Incorporation,  as the same may be amended, of the Company,  all payments in the
form of  dividends,  distributions  on  voluntary  or  involuntary  dissolution,
liquidation  or  winding-up  or  otherwise  made  upon the  shares  of  Series B
                                       17

<PAGE>


Preferred  Stock and any  other  stock  ranking  on a parity  with the  Series B
Preferred Stock with respect to such dividend or distribution shall be pro rata,
so that  amounts  paid per share on the Series B Preferred  Stock and such other
stock  shall in all cases bear to each  other the same  ratio that the  required
dividends, distributions or payments, as the case may be, then payable per share
on the shares of the Series B Preferred  Stock and such other stock bear to each
other.

      (F) The Company may appoint, and from time to time discharge and change, a
transfer agent for the Series B Preferred  Stock.  Upon any such  appointment or
discharge  of a  transfer  agent,  the  Company  shall  send  notice  thereof by
first-class mail postage prepaid, to each holder or record of Series B Preferred
Stock.

                  Series D Junior Participating Preferred Stock

      SECTION 1. Designation and Amount.

      The  shares  of such  series  shall  be  designated  as  "Series  D Junior
Participating Preferred Stock" and the number of shares constituting such series
shall be 3,000,000.

      SECTION 2. Dividends and Distributions.

      (A) Subject to the prior and superior  rights of the holders of any shares
of any series of  Preferred  Stock  ranking  prior and superior to the shares of
Series D Junior  Participating  Preferred  Stock with respect to dividends,  the
holders  of shares of Series D Junior  Participating  Preferred  Stock  shall be
entitled to receive,  when,  as and if declared by the Board of Directors out of
funds legally available for the purpose,  quarterly dividends payable in cash on
the 15th day of March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"),  commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction  of a share of Series D Junior  Participating  Preferred  Stock,  in an
amount per share (rounded to the nearest cent) equal to the greater of (a) $5.00
or (b) subject to the provision for adjustment  hereinafter set forth, 100 times
the  aggregate  per  share  amount  of all cash  dividends,  and 100  times  the
aggregate per share amount (payable in kind) of all non-cash  dividends or other
distributions other than a dividend payable in shares of common stock, par value
$6.25 per share,  of the Company (the "Common  Stock") or a  subdivision  of the
outstanding shares of Common Stock (by reclassification or otherwise),  declared
on the Common Stock, since the immediately  preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly  Dividend  Payment Date, since the
first  issuance  of any  share  or  fraction  of a  share  of  Series  D  Junior
Participating  Preferred Stock. In the event the Company shall at any time after
March 16, 1989 (the  "Rights  Declaration  Date") (i)  declare  any  dividend on
Common Stock payable in shares of Common Stock,  (ii) subdivide the  outstanding
Common  Stock,  or (iii)  combine the  outstanding  Common  Stock into a smaller
number of shares,  then in each such case the amount to which  holders of shares
of Series D Junior Participating Preferred Stock were entitled immediately prior
to such event under clause (b) of the  preceding  sentence  shall be adjusted by
multiplying  such amount by a fraction  the  numerator of which is the number of
shares  of  Common  Stock  outstanding  immediately  after  such  event  and the
denominator  of  which is the  number  of  shares  of  Common  Stock  that  were
outstanding immediately prior to such event.

      (B) The Company shall declare a dividend or  distribution  on the Series D
Junior  Participating  Preferred  Stock  as  provided  in  paragraph  (A)  above
immediately  after it declares a dividend or  distribution  on the Common  Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or  distribution  shall have been declared on the Common Stock

                                       18
<PAGE>


during the period  between  any  Quarterly  Dividend  Payment  Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $5.00 per share on the
Series D Junior  Participating  Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.

      (C)  Dividends  shall  begin to accrue and be  cumulative  on  outstanding
shares of  Series D Junior  Participating  Preferred  Stock  from the  Quarterly
Dividend  Payment Date next preceding the date of issue of such shares of Series
D Junior Participating  Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first  Quarterly  Dividend  Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series D Junior  Participating  Preferred  Stock entitled to receive a quarterly
dividend and before such  Quarterly  Dividend  Payment  Date, in either of which
events  such  dividends  shall  begin to  accrue  and be  cumulative  from  such
Quarterly  Dividend  Payment Date.  Accrued but unpaid  dividends shall not bear
interest.  Dividends  paid  on the  shares  of  Series  D  Junior  Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time  accrued  and  payable  on such  shares  shall be  allocated  pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors  may fix a record date for the  determination  of holders of shares of
Series D Junior  Participating  Preferred Stock entitled to receive payment of a
dividend or distribution  declared  thereon,  which record date shall be no more
than 45 days prior to the date fixed for the payment thereof.

      SECTION 3. Voting Rights.

      The  holders of shares of Series D Junior  Participating  Preferred  Stock
shall have the following voting rights:

      (A) Subject to the provision for adjustment  hereinafter  set forth,  each
share of Series D Junior Participating  Preferred Stock shall entitle the holder
thereof to 100 votes on all matters  submitted to a vote of the  stockholders of
the  Company.  In the  event the  Company  shall at any time  after  the  Rights
Declaration  Date (i) declare any dividend on Common Stock  payable in shares of
Common Stock, (ii) subdivide the outstanding  Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the  number  of votes per  share to which  holders  of shares of Series D Junior
Participating  Preferred  Stock were  entitled  immediately  prior to such event
shall be adjusted by  multiplying  such number by a fraction  the  numerator  of
which is the number of shares of Common Stock outstanding immediately after such
event and the  denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.

      (B) Except as otherwise  provided  herein or by law, the holders of shares
of Series D Junior  Participating  Preferred  Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Company.

      (C) If at the time of any annual meeting of stockholders  for the election
of  directors,  the  equivalent  of  six  quarterly  dividends  (whether  or not
consecutive)  payable on any share or shares of preferred  stock are in default,
the number of directors constituting the Board of Directors of the Company shall
be increased by two. The holders of record of the Series D Junior  Participating
Preferred Stock,  voting separately as a class with the holders of shares of any
one or more other series of preferred  stock upon which like voting  rights have
been conferred,  shall be entitled at said meeting of stockholders  (and at each
subsequent annual meeting of stockholders), unless all dividends in arrears have
been paid or declared and set apart for payment prior  thereto,  to vote for the
election of two  directors  of the  Company,  the holders of any Series D Junior
Participating Preferred Stock being entitled

                                       19
<PAGE>


to cast 100 votes per share of Series D Junior  Participating  Preferred  Stock,
with the  remaining  directors  of the  Company to be elected by the  holders of
shares of any  other  class or  classes  or  series  of stock  entitled  to vote
therefor.  Until the default in payments of all  dividends  which  permitted the
election of said  directors  shall cease to exist,  any  director who shall have
been so elected  pursuant to the next  preceding  sentence may be removed at any
time,  either with or without cause, only by the affirmative vote of the holders
of the shares at the time  entitled to cast a majority of the votes  entitled to
be cast for the  election  of any such  director  at a special  meeting  of such
holders called for that purpose,  and any vacancy  thereby created may be filled
by the vote of such holders.  If and when such default shall cease to exist, the
holders of the Series D Junior Participating  Preferred Stock and the holders of
shares of any one or more  series of  preferred  stock upon  which  like  voting
rights have been  conferred  shall be divested of the foregoing  special  voting
rights,  subject to  revesting  in the event of each and every  subsequent  like
default in payments of dividends.  Upon the termination of the foregoing special
voting  rights,  the terms of office of all  persons  who may have been  elected
directors pursuant to said special voting rights shall forthwith terminate,  and
the number of directors  constituting the Board of Directors shall be reduced by
two.

      (D) Except as set forth herein,  holders of Series D Junior  Participating
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 taking any corporate action.

      SECTION 4. Certain Restrictions.

      (A) In the event  that full  cumulative  dividends  on the Series D Junior
Participating  Preferred  Stock have not been declared and paid or set apart for
payment when due, the Company  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 Company ranking, as to dividends or as to distributions in
the event of a liquidation,  dissolution or winding-up of the Company, junior to
the  Series  D  Junior  Participating  Preferred  Stock  until  full  cumulative
dividends on the Series D Junior  Participating  Preferred Stock shall have been
paid or  declared  and set  apart  for  payment;  provided,  however,  that  the
foregoing  shall not apply to (i) any dividend  payable  solely in any shares of
any stock  ranking,  as to dividends and as to  distributions  in the event of a
liquidation,  dissolution  or winding-up of the Company,  junior to the Series D
Junior  Participating  Preferred  Stock or (ii) the acquisition of shares of any
stock  ranking,  as to  dividends  or as to  distributions  in  the  event  of a
liquidation,  dissolution  or winding-up of the Company,  junior to the Series D
Junior Participating  Preferred Stock in exchange solely for shares of any other
stock  ranking,  as to  dividends  and as to  distributions  in the  event  of a
liquidation,  dissolution  or winding-up of the Company,  junior to the Series D
Junior Participating Preferred Stock.

      (B) The Company shall not permit any subsidiary of the Company to purchase
or otherwise acquire for consideration any shares of stock of the Company unless
the Company could,  under paragraph (A) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.

      SECTION 5. Reacquired Shares.

      Any shares of Series D Junior  Participating  Preferred Stock purchased or
otherwise  acquired by the Company in any manner whatsoever shall be retired and
canceled  promptly  after the  acquisition  thereof.  All such shares shall upon
their cancellation  become authorized but unissued shares of Preferred Stock and
may be  reissued  as part of a new  series of  Preferred  Stock to be created by

                                       20
<PAGE>


resolution or resolutions  of the Board of Directors,  subject to the conditions
and restrictions on issuance set forth herein.

      SECTION 6. Liquidation, Dissolution or Winding Up.

      (A) Upon any liquidation (voluntary or otherwise),  dissolution or winding
up of the  Company,  no  distribution  shall be made to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series D Junior  Participating  Preferred Stock unless, prior
thereto, the holders of shares of Series D Junior Participating  Preferred Stock
shall have received  $100 per share,  plus an amount equal to accrued and unpaid
dividends and  distributions  thereon,  whether or not declared,  to the date of
such payment (the "Series D Liquidation  Preference").  Following the payment of
the  full  amount  of  the  Series  D  Liquidation  Preference,   no  additional
distributions  shall  be made to the  holders  of  shares  of  Series  D  Junior
Participating  Preferred Stock unless,  prior thereto,  the holders of shares of
Common Stock shall have  received an amount per share (the "Common  Adjustment")
equal  to the  quotient  obtained  by  dividing  (i) the  Series  D  Liquidation
Preference by (ii) 100 (as  appropriately  adjusted as set forth in subparagraph
(C)  below  to  reflect  such  events  as  stock  splits,  stock  dividends  and
recapitalizations  with respect to the Common Stock) (such number in clause (ii)
immediately above being referred to as the "Adjustment  Number").  Following the
payment of the full amount of the Series D Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series D Junior Participating
Preferred  Stock and  Common  Stock,  respectively,  holders  of Series D Junior
Participating  Preferred  Stock and  holders  of shares  of Common  Stock  shall
receive their  ratable and  proportionate  share of the  remaining  assets to be
distributed  in the ratio of the  Adjustment  Number to one (1) with  respect to
such Preferred Stock and Common Stock, on a per share basis, respectively.

      (B) In the event,  however, that there are not sufficient assets available
to  permit  payment  in full of the  Series  D  Liquidation  Preference  and the
liquidation  preferences of all other series of Preferred  Stock,  if any, which
rank on a parity with the Series D Junior  Participating  Preferred Stock,  then
such remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences.  In the event,
however,  that there are not  sufficient  assets  available to permit payment in
full of the Common  Adjustment,  then such remaining assets shall be distributed
ratably to the holders of Common Stock.

      (C)  In the  event  the  Company  shall  at  any  time  after  the  Rights
Declaration  Date (i) declare any dividend on Common Stock  payable in shares of
Common Stock, (ii) subdivide the outstanding  Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the  Adjustment  Number  in  effect  immediately  prior to such  event  shall be
adjusted by multiplying  such  Adjustment  Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the  denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.

                                       21

<PAGE>

      SECTION 7. Consolidation, Merger, etc.

      In  case  the  Company  shall  enter  into  any   consolidation,   merger,
combination  or other  transaction  in which  the  shares  of  Common  Stock are
exchanged for or changed into other stock or  securities,  cash and/or any other
property,  then in any such case the  shares  of  Series D Junior  Participating
Preferred  Stock shall at the same time be similarly  exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 100 times the aggregate  amount of stock,  securities,  cash and/or any
other  property  (payable in kind),  as the case may be, into which or for which
each share of Common  Stock is changed or  exchanged.  In the event the  Company
shall at any time after the Rights  Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock,  (ii) subdivide the  outstanding
Common  Stock,  or (iii)  combine the  outstanding  Common  Stock into a smaller
number of shares,  then in each such case the amount set forth in the  preceding
sentence  with  respect to the  exchange  or change of shares of Series D Junior
Participating  Preferred Stock shall be adjusted by multiplying such amount by a
fraction  the  numerator  of which is the  number  of  shares  of  Common  Stock
outstanding  immediately  after such event and the  denominator  of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

      SECTION 8. Redemption.

      The outstanding  shares of Series D Junior  Participating  Preferred Stock
may be redeemed at the option of the Board of Directors as a whole,  or in part,
at any time,  or from  time to time,  at a cash  price  per  share  equal to the
product of the Adjustment Number times the Average Market Value (as such term is
hereinafter defined) of the Common Stock on the date of mailing of the notice of
redemption,  plus all dividends which on the redemption date have accrued on the
shares to be redeemed and have not been paid,  or declared and a sum  sufficient
for the payment thereof set apart, without interest.  The "Average Market Value"
as of a particular  date is the average of the closing sale prices of the Common
Stock during the 10 consecutive  Trading Day period  immediately  preceding such
date on the Composite  Tape for New York Stock Exchange  Listed  Stocks,  or, if
such stock is not quoted on the Composite  Tape, on the New York Stock Exchange,
or, if such stock is not listed on such Exchange, on the principal United States
securities  exchange  registered  under the Securities  Exchange Act of 1934, as
amended,  on which such stock is listed,  or, if such stock is not listed on any
such exchange, the average of the closing sale prices with respect to a share of
Common Stock during such 10-day period, as quoted on the National Association of
Securities Dealers,  Inc. Automated Quotations System or any system then in use,
or if no such  quotations  are  available,  the fair market  value of the Common
Stock as determined  by the Board of Directors in good faith.  The term "Trading
Day" shall mean a day on which the  principal  national  securities  exchange on
which  the  Common  Stock is  listed  or  admitted  to  trading  is open for the
transaction  of  business  or, if the Common  Stock is not listed or admitted to
trading on any  national  securities  exchange,  a Monday,  Tuesday,  Wednesday,
Thursday or Friday on which  banking  institutions  in the State of New York are
not authorized or obligated by law or executive order to close.

      SECTION 9. Ranking.

      The Series D Junior Participating Preferred Stock shall rank junior to the
Company's  Series B ESOP  Convertible  Preferred Stock, and shall rank junior to
all other series of the Company's  Preferred  Stock unless the terms of any such
other series shall  provide  otherwise,  as to the payment of dividends  and the
distribution of assets.

                                       22

<PAGE>



      SECTION 10. Amendment.

      The Restated  Certificate  of  Incorporation  of the Company  shall not be
further amended in any manner which would materially alter or change the powers,
preferences  or special  rights of the Series D Junior  Participating  Preferred
Stock so as to affect them adversely without the affirmative vote of the holders
of a majority or more of the outstanding shares of Series D Junior Participating
Preferred Stock, voting separately as a class.

      SECTION 11. Fractional Shares.

      Series D Junior  Participating  Preferred Stock may be issued in fractions
of a share  which  shall  entitle the holder,  in  proportion  to such  holder's
fractional shares, to exercise voting rights, receive dividends,  participate in
distributions and to have the benefit of all other rights of holders of Series D
Junior Participating Preferred Stock.

                         Market Auction Preferred Shares

      SECTION 1. Designation; Amount and Series.

      The Preferred Stock authorized hereby consists of 1,200 shares (each share
a series)  designated as "Market Auction  Preferred  Shares" (referred to as the
"Auction  Preferred",  the  "Preferred  Stock" or the  "Remarketing  Preferred")
issuable in the following  groups of series (each group a "Series"):  300 shares
designated  "Market  Auction  Preferred  Shares,  Series G-1 through G-300" (the
"Series G Preferred  Stock"),  300 shares  designated  "Market Auction Preferred
Shares,  Series H-1 through H-300" (the "Series H Preferred Stock"),  300 shares
designated  "Market  Auction  Preferred  Shares,  Series I-1 through I-300" (the
"Series I Preferred Stock") and 300 shares designated  "Market Auction Preferred
Shares,  Series J-1 through J-300" (the "Series J Preferred  Stock").  Except as
expressly  provided  herein,  each  share of each  separate  Series  of  Auction
Preferred  shall be  identical  and equal in all aspects to every other share of
such Series, and the shares of all of the Series shall be identical and equal in
all respects.

      SECTION 2. Definitions.

      Any  references to Sections or  subsections  that are made in this part of
Article  IV(B)  shall be to Sections or  subsections  contained  in this part of
Article IV(B).  Unless the context or use indicates another or different meaning
or intent,  the following  terms shall have the following  meanings when used in
this part of Article IV(B), whether used in the singular or plural:

      "Act" means the Securities Act of 1933, as amended.

      "Additional  Payments"  means an amount  equal to the  product  of (i) the
Default Rate on the date on which such Failure to Deposit  occurred (or, if such
Failure to Deposit  relates to a failure to pay dividends  other than at the end
of a Dividend Period, the Default Rate computed using the Percentage  applicable
to the rating category below "baa3" or "BBB-" as of the Business Day immediately
preceding the Auction Date or the date of the immediately  preceding Remarketing
for such  shares),  times (ii) a fraction,  the  numerator  of which will be the
number of days during which such failure  existed and was not cured as described
in Section 3(i)(B)  (including the day such failure occurs and excluding the day
such failure is cured) and the denominator of which will be 360, times (iii) the
full

                                       23
<PAGE>

amount of the  dividends  required to be paid on the Dividend  Payment Date with
respect to which such failure occurred.

      "Affiliate" means any Person controlled by, in control of, or under common
control with, the Corporation.

      "Applicable `AA' Composite  Commercial Paper Rate", on any date, means, in
the case of any Dividend Period of (1) 1 to 48 days, the interest  equivalent of
the  30-day  rate,  (2) 49 days or more but  less  than 70  days,  the  interest
equivalent  of the 60-day rate,  (3) 70 days or more but less than 85 days,  the
arithmetic  average of the interest  equivalent  of the 60-day and 90-day rates,
(4) 85 days or more but less  than 120  days,  the  interest  equivalent  of the
90-day rate, (5) 120 days or more but less than 148 days, the arithmetic average
of the interest equivalent of the 90-day and 180-day rates, (6) 148 days or more
but less than 184 days,  the interest  equivalent  of the 180-day  rate, in each
case, on commercial  paper placed on behalf of issuers whose corporate bonds are
rated  "AA" by S&P or "Aa" by  Moody's,  or the  equivalent  of such  rating  by
another rating agency, as made available on a discount basis or otherwise by the
Federal Reserve Bank of New York for the Business Day immediately preceding such
date.  In the  event  that the  Federal  Reserve  Bank of New York does not make
available  any of the  foregoing  rates,  then such rates  shall be the  30-day,
60-day,  90-day or 180-day rate or arithmetic average of such rates, as the case
may be, as quoted on a discount  basis or  otherwise,  by the  Commercial  Paper
Dealers to the Auction Agent or the applicable Remarketing Agent as of the close
of business on the  Business Day next  preceding  such date.  If any  Commercial
Paper Dealer does not quote a rate  required to determine  the  Applicable  "AA"
Composite  Commercial Paper Rate, the Applicable "AA" Composite Commercial Paper
Rate shall be determined  on the basis of the quotation or quotations  furnished
by the remaining Commercial Paper Dealer (if any) and any Substitute  Commercial
Paper Dealer or Substitute  Commercial Paper Dealers selected by the Corporation
to  provide  such rate or rates  or,  if the  Corporation  does not  select  any
Substitute  Commercial Paper Dealer or Substitute  Commercial Paper Dealers,  by
the remaining Commercial Paper Dealer (if any). For purposes of this definition,
the "interest  equivalent"  means the  equivalent  yield on a 360-day basis of a
discount-basis security to an interest-bearing security.

      "Applicable  Determining Rate" means (i) for any Dividend Period from 1 to
48 days, Standard Dividend Period or Short-Dividend  Period of 183 days or less,
the Applicable "AA" Composite Commercial Paper Rate, (ii) for any Short Dividend
Period of 184 to 364 days, the  Applicable  Treasury Bill Rate and (iii) for any
Long Dividend Period, the Applicable Treasury Note Rate.

      "Applicable  Rate" means the dividend rate payable on a share of Preferred
Stock for any Dividend Period subsequent to the Initial Dividend Period for such
share established pursuant to Section 3 below.

      "Applicable Treasury Bill Rate" for any Short Dividend Period in excess of
183 days and "Applicable  Treasury Note Rate" for any Long Dividend  Period,  on
any date,  means the interest  equivalent of the rate for direct  obligations of
the United States  Treasury  having an original  maturity  which is equal to, or
next  lower  than,  the length of such Short  Dividend  Period or Long  Dividend
Period,  as the case may be, as published weekly by the Federal Reserve Board in
"Federal Reserve Statistical Release H.15(519)-Selected  Interest Rates", or any
successor  publication  by the Federal  Reserve  Board,  within 5 Business  Days
preceding  such  date.  In the event  that the  Federal  Reserve  Board does not
publish such rate, or if such release is not available,  the Applicable Treasury
Bill Rate or Applicable  Treasury Note Rate will be the  arithmetic  mean of the
secondary market bid rates as of approximately 3:30 P.M., New York City time, on
the  Business Day next  preceding  such date of the U.S.  Government  Securities
Dealers  furnished to the Auction Agent or the applicable  Remarketing

                                       24
<PAGE>

Agent for the issue of direct  obligations of the United States Treasury,  in an
aggregate  principal amount of at least $250,000 with a remaining maturity equal
to, or next  lower  than,  the  length  of such  Short  Dividend  Period or Long
Dividend Period,  as the case may be. If any U.S.  Government  Securities Dealer
does not quote a rate required to determine the Applicable Treasury Bill Rate or
the  Applicable  Treasury  Note  Rate,  the  Applicable  Treasury  Bill  Rate or
Applicable  Treasury Note Rate shall be determined on the basis of the quotation
or quotations  furnished by the remaining U.S. Government  Securities Dealer (if
any) or any Substitute U.S. Government  Securities Dealer or Dealers selected by
the  Corporation to provide such rate or rates or, if the  Corporation  does not
select any such Substitute U.S.  Government  Securities Dealer, by the remaining
U.S. Government Securities Dealer (if any); provided that, if the Corporation is
unable to cause such  quotations  to be  furnished  to the Auction  Agent or the
applicable  Remarketing  Agent by such sources,  the  Corporation may cause such
rates to be furnished to the Auction Agent or the applicable  Remarketing  Agent
by such  alternative  source  as the  Corporation  in  good  faith  deems  to be
reliable.  For purposes of this definition,  the "interest equivalent" of a rate
stated on a discount  basis shall be equal to the  quotient of (A) the  discount
rate divided by (B) the difference between 1.00 and the discount rate.

      "Articles   of   Incorporation"   means  the   Restated   Certificate   of
Incorporation, as amended, of the Corporation.

      "Auction" means each periodic implementation of the Auction Procedures.

      "Auction  Agent" means The Bank of New York,  unless or until another bank
or trust company has been appointed as such by the Corporation.

      "Auction Agent Agreement" has the meaning set forth in Section 8 below.

      "Auction  Date"  means,  for any  Series of Auction  Preferred,  the first
Business Day  preceding  the first day of each  Dividend  Period for such Series
other than the Initial Dividend Period for such Series.

      "Auction  Method"  means a method  of  determining  Dividend  Periods  and
dividend  rates for the Auction  Preferred  of a Series  pursuant to the Auction
Procedures.

      "Auction  Preferred" means the Auction Preferred,  including the Converted
Remarketing Preferred, being auctioned pursuant to the Auction Procedures.

      "Auction  Procedures"  means the procedures  for  conducting  Auctions set
forth in Section 7 below.

      "Board of Directors"  means the Board of Directors of the  Corporation  or
any duly  authorized  committee  of the  Board of  Directors  acting  on  behalf
thereof.

      "Broker-Dealer" means any broker-dealer,  or other entity permitted by law
to  perform  the  functions   required  of  a  Broker-Dealer  in  these  Auction
Procedures,  that has been  selected by the  Corporation  and has entered into a
Broker-Dealer Agreement with the Auction Agent that remains effective.

      "Business  Day" means a day on which the New York Stock  Exchange  is open
for  trading  and which is not a day on which  banks in The City of New York are
authorized or obliged by law to close.

                                       25

<PAGE>

      "Certificate of Designations"  or  "Certificate"  means the Certificate of
Designations,  Preferences and Rights of Market Auction  Preferred Shares of the
Corporation dated and filed with the Delaware Secretary of State on December 22,
1992.

      "Chief  Financial  Officer" has the meaning set forth in Section  3(g)(ii)
below.

      "Code" means the Internal Revenue Code of 1986, as amended.

      "Commercial  Paper  Dealers"  means Morgan Stanley and First Boston or, in
lieu thereof, their respective affiliates or successors.

      "Converted  Auction Preferred" means shares of Auction Preferred which, by
reason of an election  by the Method  Selection  Agent of a  different  Dividend
Determination  Method,  will  become  Remarketing  Preferred  at the  end of the
then-current Dividend Period applicable thereto.

      "Converted  Remarketing  Preferred" means shares of Remarketing  Preferred
which,  by reason of an  election by the Method  Selection  Agent of a different
Dividend  Determination  Method, will become Auction Preferred at the end of the
then-current Dividend Period applicable thereto.

      "Corporation" means Texaco Inc., a Delaware corporation, or its successor.

      "Date of Original  Issue",  with respect to any share of Preferred  Stock,
means  the  date on  which  the  Corporation  originally  issued  such  share of
Preferred Stock.

      "Default Period" has the meaning set forth in Section 6(b)(i) below.

      "Default  Rate"  means  the  higher  of (A) the  Maximum  Applicable  Rate
obtained by multiplying the Applicable  Determining  Rate,  determined as of the
Business Day next preceding the date of the Failure to Deposit that, pursuant to
Section 3(i), caused the application of such Default Rate, by the Percentage for
the rating  category below "baa3" or "BBB-",  and (B) (i) if the Corporation has
failed  timely to pay  dividends,  the dividend  rate in effect for the Dividend
Period in  respect of which such  Failure  to Deposit  occurred,  or (ii) if the
Corporation has failed timely to pay the redemption price (including accumulated
and unpaid  dividends)  of shares of any Series of  Preferred  Stock  called for
redemption, the dividend rate in effect on the date such redemption price was to
have been paid. The Percentage used to determine the Default Rate for any shares
of Preferred  Stock shall be the Percentage for the rating category below "baa3"
or "BBB-" (i) in effect on the immediately preceding Auction Date or the date of
the  immediately  preceding  Remarketing,  in the case of a  Default  Rate  that
applies to the  portion of a Dividend  Period  occurring  after a failure to pay
dividends and (ii) in effect on the date of determination, in all other cases.

      "Depository  Agreement"  means each agreement among the  Corporation,  the
Remarketing Depository and a Remarketing Agent.

      "Dividend  Determination Method" or "Method" shall mean either the Auction
Method or the Remarketing Method.

      "Dividend  Payment  Date" has the meaning  set forth in Section  3(b)(iii)
below.

      "Dividend Period" has the meaning set forth in Section 3(b)(v) below.

                                       26

<PAGE>

      "Dividend Quarter" has the meaning set forth in Section 3(b)(iii) below.

      "Dividends-Received  Deduction"  has the  meaning  set  forth  in  Section
3(f)(v) below.

      "Existing  Holder"  means a Person  who has  signed  a Master  Purchaser's
Letter and is listed as the beneficial owner of any shares of Auction  Preferred
in the records of the Auction Agent.

      "Failure to Deposit"  means the failure by the  Corporation  to pay to the
Paying Agent by 11:00 A.M., New York City Time, in immediately  available funds,
(i) on a Dividend Payment Date, the full amount of any dividend  (whether or not
earned or  declared) to be paid on such  Dividend  Payment Date on any shares of
Preferred  Stock  or (ii) on any  redemption  date,  the full  redemption  price
(including accumulated and unpaid dividends), to be paid on such redemption date
for any shares of Preferred Stock.

      "Federal  Reserve  Board"  means the  Board of  Governors  of the  Federal
Reserve System.

      "First Boston" means The First Boston Corporation.

      "Holder"  means an Existing  Holder or any  beneficial  owner of Preferred
Stock acquired pursuant to a Remarketing.

      "Initial  Auction Date" means the Business Day  immediately  preceding the
first day of a Dividend Period for Auction Preferred.

      "Initial Dividend Rate" has the meaning set forth in Section 3(g)(i) 
below.

      "Initial  Dividend  Period"  means the periods  commencing  on the Date of
Original  Issue and ending on the  respective  days  immediately  preceding  the
Initial Dividend Payment Dates for each Series of Preferred Stock.

      "Initial  Dividend Payment Date" has the meaning set forth in Section 3(b)
below.

      "Long Dividend Period" has the meaning set forth in Section 3(b)(v) below.

      "Marketing  Conditions"  means the following  factors:  (i) short-term and
long-term market rates and indices of such short-term and long-term rates,  (ii)
market supply and demand for  short-term and long-term  securities,  (iii) yield
curves for  short-term  and  long-term  securities  comparable  to the Preferred
Stock,  (iv)  industry and financial  conditions  which may affect the Preferred
Stock,  (v) the number of shares of  Preferred  Stock to be sold  pursuant to an
Auction  or a  Remarketing,  as the case may be,  (vi) the  number of  potential
purchasers of Preferred Stock,  (vii) the Dividend Periods and dividend rates at
which  current and  potential  holders  would remain or become  holders,  (viii)
current tax laws and  administrative  interpretations  with respect  thereto and
(ix) the Corporation's  current and projected funding  requirements based on its
asset and liability position, tax position and current financing objectives.  If
Marketing  Conditions are being assessed by the Chief  Financial  Officer,  such
officer's  evaluation  of the factors  described in clauses (vi) and (vii) above
may be  based on  discussions  with one or more  Broker-Dealers  or  Remarketing
Agents.

      If Marketing  Conditions are being assessed by the Term Selection Agent or
the Method Selection Agent,  such agent's  evaluation of the factor described in
clause  (ix)  above  may be based on  discussions  with  representatives  of the
Corporation.

                                       27


      "Maximum  Applicable  Rate",  as of any date,  means the rate  obtained by
multiplying the Applicable Determining Rate then in effect for a Dividend Period
by the  Percentage  (as it may be  adjusted  from time to time  based on certain
factors by the Chief Financial Officer in accordance with the provisions hereof)
determined as set forth below based on the lower of the credit ratings  assigned
to the Preferred Stock by Moody's and S&P.

<TABLE>
<CAPTION>
                                   Credit Rating
------------------------------------------------------------------------------
 <S>                                                <C>                                     <C> 
              Moody's                                  S & P                                Percentage
         "aa3" or Above                             AA- or Above                                 150%
         "a3" to "a1"                               A- to A+                                     200%
         "baa3" to "baa1"                           BBB- to BBB+                                 225%
         Below "baa3"                               Below BBB                                    275%
</TABLE>

      The  Corporation  will  take all  reasonable  action  necessary  to enable
Moody's and S&P to provide ratings for the Preferred Stock. If either Moody's or
S&P does not make such rating  available  or neither  Moody's nor S&P shall make
such a rating  available,  the  Corporation  will  designate a rating  agency or
rating agencies as a substitute rating agency or substitute rating agencies,  as
the case may be,  subject to the  approval of Morgan  Stanley and First  Boston,
such approval not to be unreasonably withheld, and the Corporation will take all
reasonable  action to enable such rating agency or rating  agencies to provide a
rating or ratings for each Series of Preferred  Stock.  If either Moody's or S&P
shall  change its  rating  categories  for  preferred  stock,  or if one or more
substitute  rating agencies are  designated,  then the  determination  set forth
above will be made based upon the substantially equivalent new rating categories
for preferred stock of such rating agency or substitute rating agency.

      "Memorandum"  means the Private  Placement  Memorandum  dated December 16,
1992  relating to the  Corporation  and the placement of the shares of Preferred
Stock.

      "Method  Selection Agent" means any entity appointed by the Corporation to
act on its behalf in selecting  Dividend  Determination  Methods for a Series of
Preferred  Stock,  provided that if the Corporation  shall appoint more than one
entity to so act with respect to a Series,  "Method Selection Agent" shall mean,
unless the context otherwise requires, all entities so appointed.

      "Method  Selection  Agreement" means an agreement  between the Corporation
and the Method  Selection  Agent  pursuant to which the Method  Selection  Agent
agrees to determine the Method applicable to a Series of Preferred Stock.

      "Minimum Holding Period" has the meaning set forth in Section 3(f)(v) 
below.

      "Moody's" means Moody's Investors Service, Inc., or its successor, so long
as such agency (or  successor)  is in the business of rating  securities  of the
type of the Preferred Stock and, if such agency is not in such business,  then a
Substitute Rating Agency.

      "Morgan Stanley" means Morgan Stanley & Co. Incorporated.

      "Normal  Dividend  Payment  Date" has the  meaning  set  forth in  Section
3(b)(ii) below.

      "Notice of Change in Dividend Period" has the meaning set forth in Section
3(d)(ii) below.

      "Notice  of  Method  Revocation"  has the  meaning  set  forth in  Section
3(C)(ii) below.

                                       28

<PAGE>

      "Notice of Method  Selection" has the meaning set forth in Section 3(C)(i)
below.

      "Notice  of  Percentage  Increase"  has the  meaning  set forth in Section
3(h)(i) below.

      "Notice of Removal" has the meaning set forth in Section 3(C)(iii) below.

      "Notice of Revocation" has the meaning set forth in Section 3(d)(ii) 
below.

      "Outstanding" means, as of any date, shares of Preferred Stock theretofore
issued  except,   without  duplication,   (i)  any  shares  of  Preferred  Stock
theretofore cancelled, delivered to the Corporation for cancellation or redeemed
and (ii) as of any Auction  Date or  Remarketing  Date,  any shares of Preferred
Stock subject to redemption on the next following Business Day.

      "Participant" means the member of the Securities  Depository that will act
on behalf of an Existing  Holder or a Potential  Holder,  in the case of Auction
Preferred,  or the beneficial owner, in the case of Remarketing  Preferred,  and
that is  identified  as  such in such  Holder's  or  Potential  Holder's  Master
Purchaser's Letter.

      "Paying  Agent"  means the  Auction  Agent  unless  another  bank or trust
company  has  been  appointed  to act as the  paying  agent  for the  shares  of
Preferred Stock by resolution of the Board of Directors.

      "Percentage" has the meaning set forth in Section 3(h)(i) below.

      "Person" means and includes an individual, a partnership, a corporation, a
trust,  an  unincorporated  association,  a joint  venture or other  entity or a
government or any agency or political subdivision thereof.

      "Purchaser's  Letter" means a Master Purchaser's  Letter  substantially in
the form of Appendix E to the Memorandum  delivered to the initial purchasers of
the Preferred Stock which each prospective  purchaser of Preferred Stock will be
required to sign as a condition to purchasing  Preferred Stock or  participating
in an Auction or Remarketing.

      "Redemption  Agent" means the Auction  Agent unless  another bank or trust
company  has been  appointed  to act as the  redemption  agent for the shares of
Preferred Stock by resolution of the Board of Directors.

      "Remarketing" means the implementation of Remarketing Procedures.

      "Remarketing  Agent" means, at any time, the entity or entities  appointed
by the  Corporation  to act on its  behalf in  establishing  dividend  rates and
Dividend  Periods for  Remarketing  Preferred and to act on behalf of holders of
Remarketing  Preferred in remarketing such Remarketing  Preferred as provided in
the Remarketing Procedures.

      "Remarketing Depository" means The Bank of New York, and its successors or
any other  depository  selected by the  Corporation  which  agrees to follow the
procedures  required to be followed by such depository in connection with shares
of Remarketing Preferred with a Dividend Period of less than 7 days.

                                       29

<PAGE>

      "Remarketing  Method" means a method of determining  Dividend  Periods and
dividend rates for the Preferred Stock.

      "Remarketing Preferred" means the Preferred Stock, including the Converted
Auction  Preferred  for which the dividend  rate and  Dividend  Period are to be
determined pursuant to the Remarketing Method.

      "Remarketing  Procedures"  means the procedures for remarketing  shares of
Remarketing Preferred as set forth in Section 9.

      "Securities  Depository"  means The Depository  Trust Company or any other
securities  depository  selected  by the  Corporation  that agrees to follow the
procedures  required to be followed by such securities  depository in connection
with the Preferred Stock.

      "Series"  means any of the Series G, Series H, Series I or Series J of the
Preferred Stock authorized by this Certificate.

      "Short Dividend Period" has the meaning set forth in Section 3(b)(v)
below.

      "Standard  Dividend  Period" has the meaning set forth in Section  3(b)(v)
below.

      "Standard & Poor's" or "S&P" means Standard & Poor's  Corporation,  or its
successor,  so long as such agency (or  successor)  is in the business of rating
securities of the type of the Preferred Stock and, if such agency is not in such
business, then a Substitute Rating Agency.

      "Stock Books" means the stock transfer books of the Corporation maintained
by the Paying Agent.

      "Substitute  Commercial Paper Dealer" means Goldman, Sachs & Co., Shearson
Lehman Brothers Inc. or Merrill Lynch, Pierce,  Fenner & Smith Incorporated,  or
their  respective  affiliates or successors or, if none of such firms  furnishes
commercial  paper  quotations,  a leading dealer in the commercial  paper market
selected by the Corporation in good faith.

      "Substitute  Rating  Agency"  means a  nationally  recognized  statistical
rating  organization  (as that term is used in the rules and  regulations of the
Securities  Exchange  Act of  1934)  selected  by the  Corporation,  subject  to
approval  by  Morgan  Stanley  and First  Boston,  which  approval  is not to be
unreasonably withheld.

      "Substitute U.S.  Government  Securities  Dealers" means Goldman,  Sachs &
Co.,  Shearson  Lehman  Brothers Inc. or Merrill Lynch,  Pierce,  Fenner & Smith
Incorporated,  or their respective  affiliates or successors or, if none of such
firms provides  quotes in U.S.  government  securities,  a leading dealer in the
government securities market selected by the Corporation in good faith.

      "Tender Agent" means, at any time, the bank or the organization (initially
The Bank of New York)  appointed  by the  Corporation  to perform  the duties of
Tender Agent as provided in the Remarketing Procedures.

      "Term  Selection  Agent" means any entity  appointed by the Corporation to
act on its behalf in  establishing  the length of any Dividend Period other than
the Standard Dividend Period,  the Dividend Payment Dates for any Short Dividend
Period  and,  in the case of any Long  Dividend  Period,  additional  redemption
provisions,  if any,  for a Series of Auction  Preferred,  provided  that if the
Corporation  shall

                                       30
<PAGE>

appoint more than one entity to so act with respect to a Series, "Term Selection
Agent"  shall  mean,  unless the context  otherwise  requires,  all  entities so
appointed.

      "U.S. Government Securities Dealers" means Morgan Stanley and First Boston
or, in lieu thereof, their respective affiliates or successors.

      SECTION 3. Dividends.

      (a)  Holders of shares of  Preferred  Stock  shall be entitled to receive,
when,  as and if  declared  by the  Board  of  Directors  out of  funds  legally
available therefor,  cumulative cash dividends at the Applicable Rate per annum,
determined  as set forth in  Section  3(f)  below,  and no more,  payable on the
respective dates set forth below.

      (b) (i)  Dividends on the shares of  Preferred  Stock of each Series shall
accumulate (whether or not declared) from the Date of Original Issue.

         (ii)  Dividends on each Series of  Preferred  Stock shall be payable on
      the  Initial  Dividend  Payment  Date for such  Series.  After the Initial
      Dividend  Periods,  dividends on any shares of Preferred  Stock with (a) a
      Dividend Period of 1 to 48 days (which, in the case of Auction  Preferred,
      shall be a  period  of days  divisible  by 7) will be  payable  on the day
      following the last day of such Dividend  Period,  (b) a Standard  Dividend
      Period will be payable on the day  following the last day of such Standard
      Dividend  Period  (which last day of such  Standard  Dividend  Period will
      normally  be each  seventh  Wednesday  following  the  preceding  Dividend
      Payment Date for such Series),  (c) a Short  Dividend  Period,  on the day
      following  the last day of such  Short  Dividend  Period and on such other
      Dividend  Payment  Dates as  established  at the time such Short  Dividend
      Period is determined and (d) a Long Dividend Period,  on the day following
      the last day of such Long  Dividend  Period and on the March 31,  June 30,
      September  30 and  December 31 of each year during such  dividend  period.
      Each day on which  dividends on shares of  Preferred  Stock of each Series
      would be payable as  determined  as set forth in this  clause (ii) but for
      adjustments set forth in Section 3(f)(v) below,  other than adjustments to
      reflect changes in the Minimum Holding Period,  is referred to herein as a
      "Normal Dividend Payment Date".

         (iii) Each date on which  dividends  for each share of Preferred  Stock
      shall be payable as set forth  herein is referred to herein as a "Dividend
      Payment  Date".  If  applicable,  the period from the  preceding  Dividend
      Payment Date to the next Dividend  Payment Date for any share of Preferred
      Stock with a Long  Dividend  Period is herein  referred  to as a "Dividend
      Quarter".  Although any particular  Dividend Payment Date may not occur on
      the  originally  scheduled  Normal  Dividend  Payment  Date because of the
      adjustments set forth in Section 3(f)(v) below,  each succeeding  Dividend
      Payment Date shall be, subject to such adjustments, the date determined as
      set forth in clause (ii) above as if each preceding  Dividend Payment Date
      had  occurred  on the  respective  originally  scheduled  Normal  Dividend
      Payment Date.

         (iv)  Dividend  Periods  may be of any  duration  (including  perpetual
      duration)  and  not  less  than  (i)  seven  days in the  case of  Auction
      Preferred (other than Converted Remarketing Preferred) and (ii) one day in
      the  case  of  Remarketing   Preferred   (other  than  Converted   Auction
      Preferred).  The duration of each subsequent Dividend Period following the
      Initial  Dividend  Period for each Series and the Applicable Rate for such
      subsequent Dividend Period will be determined by either the Auction Method
      or the Remarketing Method.
                                       31
<PAGE>

         (v) The Initial  Dividend  Payment Date for the Initial Dividend Period
      for Series G  Preferred  Stock shall be February  11,  1993,  for Series H
      Preferred  Stock shall be February 18, 1993, for Series I Preferred  Stock
      shall be February 25, 1993 and for Series J Preferred Stock shall be March
      4, 1993.  After the Initial  Dividend  Period for each Series of Preferred
      Stock,  each subsequent  Dividend Period for any shares of Preferred Stock
      shall  (except for the  adjustments  for  non-Business  Days  described in
      Section 3(f)(v) below) be 49 days (each such 49-day period, subject to any
      adjustment as a result of a change in law  adjusting  the Minimum  Holding
      Period as described in Section 3(f)(v) below,  being referred to herein as
      a "Standard Dividend Period"), unless as provided in clause (d) below, the
      Term Selection Agent or the applicable  Remarketing Agent, as the case may
      be,  specifies that any such  subsequent  Dividend Period for a particular
      share of  Preferred  Stock shall be (A) a Dividend  Period of 1 to 48 days
      (which  in the  case of  Auction  Preferred,  shall  be a  period  of days
      divisible by 7), (B) a Dividend Period of 50 to 364 days and consisting of
      a whole  number of weeks (a "Short  Dividend  Period")  or (C) a  Dividend
      Period of 365 days or longer and  consisting of a whole number of weeks (a
      "Long  Dividend  Period").  Each  such  Dividend  Period  of 1 to 48 days,
      Standard  Dividend Period,  Short Dividend Period and Long Dividend Period
      (together  with (i) any  Initial  Dividend  Periods  and  (ii) any  period
      commencing on a redemption date on which there is a Failure to Deposit and
      ending on the date the  redemption  price  for such  shares is paid to the
      Paying Agent) being referred to herein as a "Dividend Period").

      (c) (i)  Subject  to  certain  limitations  set forth in clause (v) below,
      either  Dividend  Determination  Method  may be  selected  by  the  Method
      Selection  Agent  for a  Series  of  Preferred  Stock  for any  subsequent
      Dividend  Period with respect to all shares of such Series,  provided that
      such Method  Selection Agent determines at the time of such selection that
      a change in the Dividend  Determination  Method will be the most favorable
      financing  alternative  for the  Corporation  based upon the  then-current
      Marketing  Conditions.  If more  than one  entity  is  serving  as  Method
      Selection  Agent for a Series,  such  entities  shall  act in  concert  in
      performing  their duties,  provided that notices referred to herein may be
      given by one entity on behalf of all such entities.  The Method  Selection
      Agent for any  Series of  Preferred  Stock will make such  selection  in a
      notice (a  "Notice of Method  Selection")  sent by such  Method  Selection
      Agent to the Corporation, the Term Selection Agent, the Auction Agent, the
      Securities Depository,  the Remarketing  Depository,  the Tender Agent and
      any  applicable  Remarketing  Agent by  telephone  (with  confirmation  in
      writing), and to any other record holders of the shares of Preferred Stock
      of such Series by first-class mail,  postage prepaid,  not less then seven
      Business Days prior to the first day of such subsequent  Dividend  Period.
      Each  Notice of Method  Selection  will state the Method  selected  by the
      Method  Selection  Agent. If the Method Selection Agent for a Series which
      is then a Series of Remarketing  Preferred  selects the Auction Method for
      any subsequent Dividend Period, the Remarketing Agent for such Series will
      establish  Dividend Periods and Applicable Rates for shares of such Series
      until the  Initial  Auction  Date in a manner  that will best  promote  an
      orderly  transition  to the Auction  Method.  Any  Dividend  Determination
      Method so  selected  by the  Method  Selection  Agent  for a Series  shall
      continue  in effect  for such  Series  until the  Method  Selection  Agent
      selects the other Method in the aforesaid manner. Until a Method Selection
      Agent for any Series has been appointed, the Dividend Determination Method
      will be the Auction Method.

         (ii) A Notice of Method  Selection  may be revoked (a "Notice of Method
      Revocation")  by the Method  Selection  Agent on or prior to 10:00 A.M. on
      the  second  Business  Day  preceding  the  first  day of the  sub-sequent
      Dividend   Period  by  giving  a  Notice  of  Method   Revocation  to  the
      Corporation,  the Term Selection  Agent,  the Securities  Depository,  the
      Remarketing  Depository,   the  Auction  Agent,   the  Tender  Agent,  any
      applicable Remarketing  Agent and  any other record  holders of the shares
      of Preferred  Stock of such Series.

                                       32
<PAGE>


         (iii) Any Notice of Method  Selection  with  respect to any  subsequent
      Dividend  Period for any Series of Preferred Stock shall be deemed to have
      been  withdrawn if on or prior to the second  Business Day  preceding  the
      first day of such subsequent  Dividend  Period the Corporation  shall have
      removed the Method  Selection  Agent for such  Series,  provided  that the
      Corporation  shall have given a notice (a "Notice of Removal") to the Term
      Selection Agent, the Securities  Depository,  the Remarketing  Depository,
      the Auction Agent, the Tender Agent, any applicable  Remarketing Agent and
      any other record  holders of shares of  Preferred  Stock of such Series no
      later than 3:00 P.M., New York City time, on such second  Business Day. If
      more than one entity has been appointed and is acting as Method  Selection
      Agent for that Series,  such Notice of Method Selection shall be deemed to
      have been  withdrawn only if the  Corporation  shall have removed all such
      entities;  and the removal at any time by the  Corporation  of one or more
      but not all such entities shall not effect a deemed withdrawal of a Notice
      of Method  Selection  and in any such event no Notice of  Removal  need be
      given.  If the Method  Selection  Agent for any Series of Preferred  Stock
      resigns or is removed  (or,  in either  case,  if more than one entity has
      been  appointed  and is acting as Method  Selection  Agent for that Series
      then all such entities),  the Dividend  Determination Method applicable to
      such  Series in effect at the time of such  resignation  or  removal  will
      continue  in effect  until the  Corporation  appoints a  successor  Method
      Selection  Agent for such Series and such Method  Selection  Agent sends a
      Notice of Method Selection.  If, as a result of the resignation or removal
      of the Method Selection Agent, the Dividend  Determination  Method for any
      Series will  continue to be the Auction  Method,  then the duration of the
      next  succeeding  Dividend  Period for such  Series  will be the  Standard
      Dividend Period.

         (iv) Any Method for a Series of Preferred  Stock selected by the Method
      Selection Agent for such Series  pursuant to a Notice of Method  Selection
      (except a Notice of Method  Selection  that is  revoked  or deemed to have
      been withdrawn) shall be conclusive and binding on the Corporation and the
      holders  of  Preferred  Stock of such  Series.  If the  Notice  of  Method
      Selection is not revoked or deemed to have been  withdrawn,  any Method so
      selected  by the Method  Selection  Agent for a Series  will  continue  in
      effect for that Series until such Method  Selection Agent or any successor
      selects the other Method in the aforesaid  manner. No defect in the Notice
      of Method  Selection,  the  Notice of Method  Revocation  or the Notice of
      Removal of the Method  Selection  Agent or in the  mailing  thereof  shall
      affect the validity of any change in the Dividend  Determination Method or
      any withdrawal, revocation or removal.

                  (v) Notwithstanding the foregoing,  the Method Selection Agent
      shall not be entitled  to change the  Dividend  Determination  Method then
      applicable  to a  Series  if (i) at  the  time  of an  election  that  the
      Remarketing  Method apply to a Series,  the  Corporation has not appointed
      (and given notice or taken such other  action as may be necessary  for the
      timely  effectiveness of such  appointment) a Remarketing  Agent, a Tender
      Agent,  a Securities  Depository  and a  Remarketing  Depository  for such
      Series, (ii) at the time of an election that the Auction Method apply to a
      Series,  the Corporation has not appointed (and given notice or taken such
      other action as aforesaid) an Auction Agent,  a Securities  Depository and
      at least one  Broker-Dealer for such Series, or such election would result
      in more than one Dividend Period for the shares of Preferred Stock of such
      Series or (iii) at the time of any such election, a Failure to Deposit has
      occurred and is continuing. Once the Method Selection Agent has selected a
      Dividend  Determination  Method for a Series in the aforesaid manner, such
      selection shall become effective on the last day of the Dividend Period(s)
      then   applicable   to  shares   of   Preferred   Stock  of  such   Series
      notwithstanding  any  Failure  to Deposit for such Series  which may occur
      after the  delivery of  the  Notice  of  Method  Selection  by such Method
      Selection Agent, the failure  to remarket  tendered  shares of Remarketing
      Preferred of

                                       33
<PAGE>

      such Series,  in  the  case of the  selection  of the  emarketing  Method,
      or the  lack of  Sufficient Clearing  Bids in the Auction for such Series,
      in the case of  the selection of the Auction Method.

      (d) (i) With  respect  to shares of  Auction  Preferred,  each  successive
      Dividend  Period  shall  commence  on the  Dividend  Payment  Date for the
      preceding Dividend Period for such Series and shall end (A) in the case of
      a Dividend Period of 7 to 48 days or a Standard  Dividend  Period,  on the
      day  preceding  the next  Dividend  Payment  Date and (B) in the case of a
      Short Dividend  Period or a Long Dividend  Period,  on the last day of the
      Short  Dividend  Period  or Long  Dividend  Period,  as the  case  may be,
      specified by the Term Selection  Agent, in the related Notice of Change in
      Dividend Period.

         (ii) The Term Selection  Agent will give telephonic and written notice,
      not less than 10 and not more than 30 days  prior to an  Auction  Date and
      based on the then-current  Marketing Conditions,  to the Corporation,  the
      Auction Agent, the Method  Selection Agent, the Securities  Depository and
      any other record holders of a Series of Auction Preferred if it determines
      that  the next  succeeding  Dividend  Period  for  such  Series  will be a
      Dividend  Period  of 7 to 48  days,  a  Short  Dividend  Period  or a Long
      Dividend  Period  (any  such  notice,  a "Notice  of  Change  in  Dividend
      Period");  provided, that if the then-current Dividend Period is less than
      10 days,  the Term  Selection  Agent  will give  such  Notice of Change in
      Dividend  Period no less than 5 days prior to an Auction  Date.  Each such
      Notice of Change in Dividend Period shall be in substantially  the form of
      Exhibit D to the Auction  Agent  Agreement and shall specify the following
      terms,  (A) the next  succeeding  Dividend  Period  for such  Series  as a
      Dividend  Period  of 7 to 48  days,  a  Short  Dividend  Period  or a Long
      Dividend  Period;  provided  that a Dividend  Period of 7 to 48 days shall
      only be  established  so long  as  corporate  holders  of such  Series  of
      Preferred  Stock  shall  not lose  entitlement  to the  Dividends-Received
      Deduction as a result of the length of such Dividend Period,  (B) the term
      thereof,  (C) in the case of a Short Dividend Period, the Dividend Payment
      Dates with respect thereto and (D) in the case of a Long Dividend  Period,
      additional redemption provisions or restrictions on redemption, if any, as
      authorized in Section 4(b)(ii) hereof.  However, for any Auction occurring
      after the initial Auction,  the Term Selection Agent may not give a Notice
      of Change in  Dividend  Period  (and any such Notice of Change in Dividend
      Period shall be null and void) unless  Sufficient  Clearing Bids were made
      in  the  last  occurring  Auction  for  any  Series  and  full  cumulative
      dividends,  if any, for all Series of Auction  Preferred  payable prior to
      the date of such notice have been paid in full. The Term  Selection  Agent
      may establish a Dividend  Period of 7 to 48 days, a Short Dividend  Period
      or a Long Dividend  Period for any Series of Preferred  Stock, if the Term
      Selection Agent determines that such Dividend Period and, in the case of a
      Long Dividend Period,  additional redemption provisions or restrictions on
      redemption,  provide the  Corporation  with the most  favorable  financing
      alternative based upon the then-current Marketing Conditions.  A Notice of
      Change in Dividend Period may be revoked by the Term Selection Agent on or
      prior to 10:00  A.M.  New York City time on the  related  Auction  Date by
      telephonic and written notice (a "Notice of Revocation"), in substantially
      the form of Exhibit E to the Auction Agent Agreement,  to the Corporation,
      the Auction Agent, the Method  Selection Agent, the Securities  Depository
      and any other record holders of the shares of such Series, specifying that
      the Term Selection Agent has determined that because of subsequent changes
      in such Marketing Conditions, such Dividend Period would not result in the
      most  favorable  financing  alternative  for the  Corporation.  Notices of
      Revocation  given by the  Term  Selection  Agent  will be  conclusive  and
      binding  upon  the  Corporation  and the  holders  of  shares  of  Auction
      Preferred  and,  except  as  set  forth  below in clause (iv), a Notice of
      Change  in Dividend Period given by  the  Term  Selection  Agent  will  be
      conclusive and  binding upon the Corporation  and  the holder of shares of
      Auction Preferred.

                                       34
<PAGE>


         (iii) Any  Notice of Change in  Dividend  Period  with  respect  to any
      subsequent  Dividend  Period for any Series of Auction  Preferred  will be
      deemed to have been  withdrawn  if on or prior to the second  Business Day
      preceding  an Auction  Date the  Corporation  shall have  removed the Term
      Selection Agent,  provided that the Corporation shall have given Notice of
      Removal  to  the  Auction  Agent,  the  Method  Selection  Agent  and  the
      Securities  Depository  and any other record holders of the shares of such
      Series,  no later  than 3:00  P.M.,  New York City  time,  on such  second
      Business  Day. If the Term  Selection  Agent  resigns or is  removed,  the
      Dividend  Period for each Series of Auction  Preferred shall be a Standard
      Dividend Period until the Corporation  appoints a successor Term Selection
      Agent for such  Series  and such Term  Selection  Agent  sends a Notice of
      Change in Dividend Period.

         (iv) If the Term  Selection  Agent  does not give a Notice of Change in
      Dividend  Period with respect to the next  succeeding  Dividend Period for
      any  Series of Auction  Preferred  or has given such a Notice of Change in
      Dividend  Period and gives a Notice of Revocation  with respect thereto or
      such Notice of Change in Dividend  Period is deemed to be withdrawn,  such
      next succeeding  Dividend Period shall be a Standard  Dividend Period with
      respect to such Series. In addition, in the event the Term Selection Agent
      has given a Notice of Change in Dividend  Period with  respect to the next
      succeeding Dividend Period for a Series of Preferred Stock and such notice
      has not been revoked or deemed to be withdrawn,  but  Sufficient  Clearing
      Bids are not made in the related  Auction or such  Auction is not held for
      any reason,  such next  succeeding  Dividend  Period for such Series will,
      notwithstanding  such Notice of Change in Dividend  Period,  be a Standard
      Dividend  Period and the Term Selection  Agent may not again give a Notice
      of Change in  Dividend  Period  (and any such Notice of Change in Dividend
      Period shall be null and void) for such Series until  Sufficient  Clearing
      Bids have been made in an Auction for such Series.

      (e) (i) With respect to shares of Remarketing  Preferred,  the duration of
      each  subsequent  Dividend  Period and the  Applicable  Rate for each such
      subsequent  Dividend Period shall be established by the Remarketing  Agent
      for such  shares  of  Remarketing  Preferred  and will be  conclusive  and
      binding on the Corporation and the holders of such shares.

          (ii) For each  Dividend  Period the applicable Remarketing Agent shall
      establish a dividend rate, not in excess of the Maximum  Applicable  Rate,
      which it determines  shall be the lowest rate at which tendered  shares of
      Remarketing  Preferred  would be  remarketed  at  $250,000  per share.  In
      establishing  each Dividend  Period and dividend  rate,  each  Remarketing
      Agent  will  establish  Dividend  Periods  and  dividend  rates  which  it
      determines will result in the most favorable financing alternative for the
      Corporation based on the then-current Marketing Conditions.

         (iii)  Each  Holder  will be  deemed  to have  tendered  its  shares of
      Remarketing  Preferred  for  sale  by  Remarketing  on  the  Business  Day
      immediately  preceding the first day of each  subsequent  Dividend  Period
      applicable   thereto,   unless  it  gives  irrevocable  notice  otherwise.
      Consequently,  a Holder will hold shares of Remarketing Preferred only for
      a Dividend  Period and at a dividend rate accepted by that holder,  except
      for one or more  successive  Dividend  Periods of one day resulting from a
      Failure to Deposit or the  failure to remarket  such  shares as  described
      below. At any time, any or all shares of Remarketing Preferred of a Series
      may have  Dividend  Periods of various  lengths.  Depending  on  Marketing
      Conditions at the time of  Remarketing,  any or all shares  of Remarketing
      Preferred of a Series may have different Applicable Rates, including those
      set on the same day for Dividend Periods of equal length.

                                       35
<PAGE>


      (f) (i) Not later  than  11:00  A.M.  New York  City time on the  Dividend
      Payment Date (except as provided in Section  3(f)(v) below) for each share
      of Preferred Stock, the Corporation is required to deposit with the Paying
      Agent sufficient  immediately  available funds for the payment of declared
      dividends.

            (ii) Each  dividend  shall be  payable  to the  holder or holders of
      record of such shares of Preferred  Stock as such holders' names appear on
      the Stock Books on the Business Day next preceding the applicable Dividend
      Payment  Date.  Subject  to  Section  3(i)  below,  dividends  in  arrears
      (including any Additional Payments) for any past Dividend Payment Date may
      be  declared  by the  Board of  Directors  and paid at any  time,  without
      reference to any regular  Dividend  Payment Date, to the holder or holders
      of record as such holders appear on the Stock Books as of the Business Day
      next  preceding such Dividend  Payment Date. Any dividend  payment made on
      any  shares  of  Preferred  Stock  shall  first be  credited  against  the
      dividends  accumulated with respect to the earliest  Dividend Payment Date
      for which dividends have not been paid with respect to such shares.

         (iii) So long as the  shares of  Preferred  Stock are held of record by
      the nominee of the Securities Depository or the Remarketing Depository, as
      the case may be,  dividends  will be paid to the nominee of the Securities
      Depository or the Remarketing  Depository,  on each Dividend Payment Date.
      Dividends  on  shares of  Preferred  Stock  held  through  the  Securities
      Depository will be paid through the Securities Depository on each Dividend
      Payment Date in accordance with its normal procedures.

         (iv) Dividends on any shares of Preferred Stock held by the Remarketing
      Depository  will  be  paid  through  the  Remarketing  Depository  on each
      Dividend  Payment Date by wire or other transfer of immediately  available
      funds to a Holder's account with a commercial bank in the United States so
      long as such  Holder has  provided  the  Remarketing  Depository  with the
      necessary  information to effect such  transfer.  Any payments not made by
      wire  or  other  transfer  will be made by  check  to the  Holder  of such
      Preferred Stock.

         (v) In the  case of  dividends  payable  with  respect  to a  share  of
      Preferred  Stock  with a  Dividend  Period  of 7 to 48  days,  a  Standard
      Dividend Period or a Short Dividend Period, if:


                  (A) (x)  The  Securities  Depository  shall  continue  to make
            available  to  Participants  the  amounts due as  dividends  on such
            shares of  Preferred  Stock in next-day  funds on the dates on which
            such dividends are payable and (y) a Normal Dividend Payment Date is
            not a Business Day, or the day next  succeeding such Normal Dividend
            Payment Date is not a Business Day, then dividends  shall be payable
            on the first  Business Day preceding  such Normal  Dividend  Payment
            Date that is next succeeded by a Business Day; or

                 (B) (x) The  Securities  Depository  shall  make  available  to
            Participants  the  amounts  due  as  dividends  on  such  shares  of
            Preferred Stock in immediately available funds on the dates on which
            such dividends are payable (and the Securities Depository shall have
            so advised the Auction Agent) and (y) a Normal Dividend Payment Date
            is not a Business Day, then dividends  shall be payable on the first
            Business Day following such Normal Dividend Payment Date.

                  (C) In the case of dividends payable with respect to shares of
            Preferred Stock with a Long Dividend Period, if:

                                       36

<PAGE>

                  (I) (x)  The  Securities  Depository  shall  continue  to make
                  available to its  Participants the amounts due as dividends on
                  such shares of Preferred  Stock in next-day funds on the dates
                  on which such dividends are payable and (y) a Normal  Dividend
                  Payment Date is not a Business Day, or the day next succeeding
                  such Normal Dividend  Payment Date is not a Business Day, then
                  dividends shall be payable on the first Business Day following
                  such Normal Dividend  Payment Date that is next succeeded by a
                  Business Day; or

                  (II) (x) The Securities Depository shall make available to its
                  Participants  the amounts due as  dividends  on such shares of
                  Preferred Stock in immediately available funds on the dates on
                  which  such   dividends   are  payable  (and  the   Securities
                  Depository  shall have so advised the Auction Agent) and (y) a
                  Normal  Dividend  Payment  Date is not a  Business  Day,  then
                  dividends shall be payable on the first Business Day following
                  such Normal Dividend Payment Date.

                  (D)  Notwithstanding  the  foregoing,  in case of  payment  in
            next-day  funds,  if the  date  on  which  dividends  on  shares  of
            Preferred  Stock  would be  payable  as  determined  as set forth in
            clauses  (A), (B) and (C) above is a day that would  result,  due to
            such procedures,  in the number of days between  successive  Auction
            Dates or Remarketing Dates for such shares  (determined by excluding
            the first Auction Date or Remarketing  Date, as the case may be, and
            including the second Auction Date and the second  Remarketing  Date,
            as the case may be),  not being at least  equal to the  then-current
            minimum holding period (currently set forth in Section 246(c) of the
            Code)  (the  "Minimum  Holding   Period")   required  for  corporate
            taxpayers  to be entitled to the  dividends-  received  deduction on
            preferred stock held by  nonaffiliated  corporations  (currently set
            forth  in  Section  243(a)  of the  Code)  (the  "Dividends-Received
            Deduction"),  then  dividends on such shares shall be payable on the
            first Business Day following such date on which  dividends  would be
            so payable that is next  succeeded by a Business Day that results in
            the  number  of  days  between  such  successive  Auction  Dates  or
            Remarketing  Dates,  as the case  may be  (determined  as set  forth
            above),  being at least equal to the then  current  Minimum  Holding
            Period.

                  (E) In addition,  notwithstanding the foregoing,  in the event
            of a change in law altering the Minimum Holding  Period,  the period
            of time  between  Dividend  Payment  Dates  shall  automatically  be
            adjusted  so  that  there  shall  be a  uniform  number  of  days in
            subsequent  Dividend  Periods  (such number of days  without  giving
            effect to the adjustments referred to above being referred to herein
            as "Subsequent  Dividend Period Days")  commencing after the date of
            such change in law equal to or, to the extent  necessary,  in excess
            of the then current Minimum Holding Period; provided that the number
            of  Subsequent  Dividend  Period  Days shall not exceed by more than
            nine days the length of such then-current Minimum Holding Period and
            shall be  evenly  divisible  by  seven,  and the  maximum  number of
            Subsequent  Dividend  Period  Days,  as  adjusted  pursuant  to this
            provision, in no event shall exceed 119 days.

                  (F)  If  a  Normal   Dividend   Payment  Date  for  shares  of
            Remarketing  Preferred with Dividend  Periods of less than 7 days is
            not a Business  Day,  then  dividends  shall be payable on the first
            Business Day following such Normal Dividend Payment Date.

      (g) (i) For the Initial  Dividend  Periods  dividends will accumulate at a
rate per  annum of 3.25%  for  Series G  Preferred  Stock,  3.25%  for  Series H
Preferred  Stock,  3.25% for Series I  Preferred  Stock,  

                                       37
<PAGE>


and 3.25% for Series J  Preferred  Stock (in each case,  the  "Initial  Dividend
Rate").  The dividend rate for each share of Preferred Stock for each subsequent
Dividend  Period shall be the Applicable  Rate  determined by either the Auction
Method or the Remarketing Method.

      (ii)  Notwithstanding  the application of either the Auction Method or the
      Remarketing  Method,  the dividend  rate on each share of Preferred  Stock
      shall not exceed the Maximum  Applicable  Rate per annum for any  Dividend
      Period;  provided,  however,  that  the  Chief  Financial  Officer  of the
      Corporation (the "Chief  Financial  Officer") based on certain factors may
      increase the Percentage  used to calculate the Maximum  Applicable Rate at
      any time up to certain  amounts set forth below in Section  3(h)(ii).  The
      provisions of the immediately preceding sentence  notwithstanding,  at any
      time that the  application of the provisions  with respect to a Failure to
      Deposit  would,  but  for  the  provisions  of the  immediately  preceding
      sentence, result in a dividend rate on a share of Preferred Stock being in
      excess of the Maximum Applicable Rate per annum, the maximum dividend rate
      applicable to such share of Preferred  Stock shall be such higher dividend
      rate as provided below.

      (h) (i) Not later than 10:00  A.M.,  New York City  time,  on the  related
Auction Date or Remarketing  Date, as the case may be, and based on the criteria
set forth below,  the Chief  Financial  Officer may, upon telephonic and written
notice, to the Auction Agent, each applicable  Remarketing Agent, the Securities
Depository,  the Remarketing Depository and any other record holder of shares of
Preferred Stock affected  thereby,  increase the percentage  (the  "Percentage")
used to calculate the Maximum  Applicable Rate for any shares of Preferred Stock
(a "Notice of Percentage  Increase").  Such Notice of Percentage  Increase shall
specify the new Percentages to be used to calculate the Maximum  Applicable Rate
and  shall  be in  substantially  the form of  Exhibit  G to the  Auction  Agent
Agreement.

      The Chief  Financial  Officer may increase such  Percentages  if the Chief
Financial   Officer   determines  that  supervening   considerations   make  the
Percentages  then  in  effect  inimical  to  the  financial   interests  of  the
Corporation  and that such  increase is necessary to enable the operation of the
then-applicable  Method  to  provide  the  Corporation  with the most  favorable
financing  alternatives based on then-current  Marketing  Conditions.  The Chief
Financial  Officer  may not  revoke  a Notice  of  Percentage  Increase  and the
Percentages  specified  therein  will  be the  applicable  Percentages  for  the
determination  of the Maximum  Applicable  Rate with  respect to such shares for
subsequent  Dividend Periods,  except as described below,  until a new Notice of
Percentage Increase shall be delivered in accordance with the terms thereof.

                                       38

<PAGE>



         (ii) Except as described  below,  the Chief  Financial  Officer may not
      increase the Percentage  used to calculate the Maximum  Applicable Rate to
      above the  Percentages  set forth in the third  column of the table  below
      corresponding to the applicable  credit ratings set forth in the first two
      columns of the table below.
<TABLE>
<CAPTION>

                            Credit Rating                                             Maximum Percentage
                                                                                       Permitted to be
                                                                                      Used to Calculate
                                                                                      Maximum Applicable
               Moody's                        Standard & Poor's                              Rate
               -------                        -----------------                       ------------------

<S>                                           <C>                                    <C> 
           "aa3" or Above                       AA- or Above                                 175%
            "a3" to "a1"                          A- to A+                                   225%
          "baa3" to "baa1"                      +BBB- to BBB                                 250%
            Below "baa3"                          Below BBB                                  275%
</TABLE>


            The maximum  percentages  set forth in the third column of the above
            table may be increased by the Chief Financial Officer,  upon receipt
            of an opinion of counsel  addressed to the Corporation to the effect
            that the use of such higher  percentages  to  calculate  the Maximum
            Applicable  Rate will not adversely  affect the tax treatment of the
            Preferred Stock.

         (iii)  The  Chief  Financial  Officer  may only  raise  the  Percentage
      applicable to a Series of Auction Preferred if the Chief Financial Officer
      raises  such  Percentage  for all the  shares  of such  Series.  The Chief
      Financial  Officer may, however,  only raise the Percentage  applicable to
      shares  of   Remarketing   Preferred  with  respect  to  those  shares  of
      Remarketing  Preferred being remarketed on the same date, and shall not be
      required  to raise  the  Percentage  applicable  to any  other  shares  of
      Remarketing Preferred. However, if the Percentage applicable to a share of
      Remarketing  Preferred is less than the Percentage applicable to any other
      share of Remarketing  Preferred of the same Series,  the lower  Percentage
      applicable to such share shall, at the end of the current  Dividend Period
      for such share,  automatically be increased to the highest Percentage then
      applicable to any share of  Remarketing  Preferred of such Series,  unless
      the Chief  Financial  Officer  elects to increase  further the  Percentage
      applicable to such share.

      (i) (A) In the event a Failure to Deposit  occurs and any such  Failure to
      Deposit  shall not have been cured within three  Business  Days after such
      occurrence,  then until  such time as the full  amount due shall have been
      paid to the Paying  Agent,  the  Auction  Procedures  and the  Remarketing
      Procedures will be suspended. The Applicable Rate for each Dividend Period
      commencing on or after any such Dividend Payment Date (or redemption date,
      as the case may be) on which  there has been a Failure to Deposit and such
      Failure to Deposit has not been cured within three  Business Days shall be
      equal to the Default Rate for such Dividend  Period.  In addition,  if any
      such Dividend Payment Date was not the last day of a Dividend Period,  the
      Applicable Rate for the portion of such Dividend Period commencing on such
      Dividend  Payment Date and ending on the day preceding the next succeeding
      Dividend Payment Date shall be the Default Rate for such period,  computed
      as if such period were a "Dividend Period". If there has been a failure to
      pay dividends on the last day of a Dividend Period, the Dividend Period to
      which such Default Rate will apply shall be a Standard  Dividend Period in
      the case of Auction  Preferred and  successive one day periods in the case
      of  Remarketing  Preferred.  If  there  has  been a  failure  to  pay  the
      redemption  price of shares of Preferred Stock called for redemption,  the
      Dividend  Period to which such

                                       39
<PAGE>

      Default Rate will apply shall be the period  commencing on, and including,
      the redemption date and ending on, but excluding,  the date the redemption
      price  is  paid  to the  Paying  Agent.  The  suspension  of  the  Auction
      Procedures and the Remarketing  Procedures  shall continue in effect until
      there shall occur a Dividend  Payment Date at least one Business Day prior
      to which  the full  amount  of any  dividends  (whether  or not  earned or
      declared)  payable on each  Dividend  Payment Date prior to and  including
      such Dividend  Payment Date along with any  Additional  Payments then due,
      and the full amount of any redemption  price  (including  accumulated  and
      unpaid  dividends) then due shall have been paid to the Paying Agent,  and
      thereupon  application  of the  Auction  Procedures  and  the  Remarketing
      Procedures  shall  resume for any  Outstanding  shares on the terms stated
      herein for Dividend Periods commencing with such Dividend Payment Date. If
      a Failure  to  Deposit  is cured  within  three  Business  Days,  then the
      Applicable  Rate will be the dividend rate  established in connection with
      any Auction or  Remarketing  relating to such  shares of  Preferred  Stock
      conducted immediately preceding the Failure to Deposit,  provided that the
      Applicable Rate shall be the Default Rate for each day (excluding the date
      of deposit) until the Failure to Deposit is cured. Such Default Rate shall
      be computed using the Dividend  Period  established in connection with any
      Auction  or  Remarketing  relating  to  such  shares  of  Preferred  Stock
      conducted immediately preceding the Failure to Deposit.

             (B) Any Failure to Deposit  with  respect to any share of Preferred
      Stock shall be deemed to be cured if, with respect to a Failure to Deposit
      relating  to (a) the  payment of  dividends  on such  shares of  Preferred
      Stock,  the Corporation  deposits with the Paying Agent by 11:00 A.M., New
      York City time,  all  accumulated  and unpaid  dividends on such shares of
      Preferred  Stock,  including  the full amount of any  dividends to be paid
      with  respect to the  Dividend  Period or portion  thereof with respect to
      which the Failure to Deposit occurred,  plus Additional Payments,  and (b)
      the redemption of such shares,  the  Corporation  deposits with the Paying
      Agent  by 11:00  A.M.,  New  York  City  time,  funds  sufficient  for the
      redemption of such shares (including accumulated and unpaid dividends) and
      gives irrevocable instructions to apply such funds and, if applicable, the
      income and  proceeds  therefrom,  to the payment of the  redemption  price
      (including  accumulated  and unpaid  dividends)  for such  shares.  If the
      Corporation  shall  have cured  such  Failure to Deposit by making  timely
      payment to the Paying Agent,  either the Auction Agent or the  Remarketing
      Agent, as the case may be, will give telephonic and written notice of such
      cure to each Holder of shares of Preferred  Stock at the telephone  number
      and address  specified in such Holder's Master  Purchaser's  Letter and to
      each  Broker-Dealer,  in the case of the  Auction  Agent,  as  promptly as
      practicable after such cure is effected.  Additional  Payments paid to the
      Paying  Agent with  respect to a Failure to Deposit will be payable to the
      Holders of shares of  Preferred  Stock on the Record Date for the Dividend
      Payment Date with respect to which such Failure to Deposit occurred.

      (j) If an Auction or Remarketing  for any shares of Preferred Stock is not
held on an Auction Date or  Remarketing  Date for any reason (other than because
of the  suspension  of  Auctions or  Remarketing  due to a Failure to Deposit as
described  above),  the  dividend  rate for  such  shares  shall be the  Maximum
Applicable Rate (calculated  assuming a Standard Dividend Period)  determined as
of such Auction  Date or  Remarketing  Date and the  Dividend  Period shall be a
Standard  Dividend  Period,  in the case of Auction  Preferred,  and  successive
Dividend  Periods of one day, in the case of Remarketing  Preferred,  until such
shares of Remarketing Preferred are remarketed.

      (k) The amount of dividends per share payable on any Dividend Payment Date
on a share of Preferred  Stock having a Dividend  Period of up to 364 days shall
be computed by  multiplying  the Applicable  Rate for each Dividend  Period by a
fraction the  numerator  of which shall be the number of days  between  Dividend
Payment Dates (calculated by counting the date of the preceding Dividend

                                       40
<PAGE>

Payment Date as the first day and the day preceding the current Dividend Payment
Date as the last day) and the denominator of which shall be 360, and multiplying
the amount so obtained by $250,000.  During any  Dividend  Period of 365 days or
longer,  the amount of dividends  accumulated  on each share will be computed on
the basis of a 360-day year consisting of twelve 30-day months.

      (l) (i) Holders of shares of each Series of  Preferred  Stock shall not be
      entitled to any dividends,  whether payable in cash, property or stock, in
      excess of full  cumulative  dividends.  So long as any shares of Preferred
      Stock are  Outstanding,  the  Corporation  shall not declare or pay or set
      apart for payment any  dividends  or make any other  distributions  on, or
      payment on account of the purchase,  redemption or other retirement of the
      common  stock  of  the  Corporation  or any  other  capital  stock  of the
      Corporation ranking junior to the Preferred Stock as to dividends or as to
      distributions   upon   liquidation,   dissolution  or  winding-up  of  the
      Corporation  unless (i) full  cumulative  dividends on the Preferred Stock
      have been paid (or declared and a sum sufficient  for the payment  thereof
      set apart for such  payment) for all Dividend  Periods  terminating  on or
      prior to the date of such payment,  distribution,  purchase, redemption or
      other  retirement  with respect to such junior  capital stock and (ii) the
      Corporation  is not in default with respect to any obligation to redeem or
      retire  shares  of  the  Preferred  Stock;  provided,  however,  that  the
      foregoing shall not apply to (i) any dividend payable solely in any shares
      of any stock ranking, as to dividends and as to distributions in the event
      of a liquidation,  dissolution or winding-up of the Corporation, junior to
      the  Preferred  Stock or (ii)  the  acquisition  of  shares  of any  stock
      ranking,  as to  dividends  or as  to  distributions  in  the  event  of a
      liquidation,  dissolution or winding-up of the Corporation,  junior to the
      Preferred  Stock in exchange solely for shares of any other stock ranking,
      as to dividends  and as to  distributions  in the event of a  liquidation,
      dissolution  or  winding-up  of the  Corporation,  junior to the Preferred
      Stock.

         (ii) Each  dividend  will be payable to the holder or holders of record
       of shares of  Preferred  stock as they  appear on the Stock  Books on the
       Business  Day  next  preceding  the  applicable  Dividend  Payment  Date.
       Dividends  in  arrears  for any past  Dividend  Period  (and for any past
       Dividend  Payment  Date  occurring  prior  to the end of a Long  Dividend
       Period or a Short Dividend  Period) may be declared and paid at any time,
       without  reference to any regular  Dividend  Payment  Date, to the record
       holders  of such  shares.  Any  dividend  payment  made on any  shares of
       Preferred Stock shall first be credited against the dividends accumulated
       with respect to the earliest  Dividend  Payment Date for which  dividends
       have not been paid with respect to such shares.  So long as the shares of
       Preferred  stock  are held of  record by the  nominee  of the  Securities
       Depository or the Remarketing  Depository,  as the case may be, dividends
       will  be  paid  to  the  nominee  of  the  Securities  Depository  or the
       Remarketing Depository, on each Dividend Payment Date.

         (iii) Unless  otherwise  provided for in the  Restated  Certificate  of
      Incorporation,  as the  same  may be  amended,  of  the  Corporation,  all
      payments in the form of dividends made upon shares of Preferred  Stock and
      any other stock ranking on a parity with the Preferred  Stock with respect
      to such dividend  shall be pro rata, so that amounts paid per share on the
      Preferred Stock and such other stock shall in all cases bear to each other
      the same ratio that the required  dividends  then payable per share on the
      shares of Preferred Stock and such other stock bear to each other.

                                       41

<PAGE>



      SECTION 4. Optional Redemption.

      (a) At the  option  of the  Corporation,  by  resolution  of the  Board of
Directors,  the shares of a Series of Preferred Stock may be redeemed,  in whole
or in  part,  out of funds  legally  available  therefor,  on the  Business  Day
immediately  preceding any Dividend Payment Date for such shares,  upon at least
15 but not more than 45 days notice,  at a  redemption  price per share equal to
the sum of $250,000 plus premium thereon, if any, and an amount equal to accrued
and unpaid  dividends  thereon  (whether or not earned or  declared) to the date
that the  Corporation  pays the full  amount  payable  upon  redemption  of such
shares;  provided that such redemption  date shall be the Dividend  Payment Date
for such shares if the payment on the  Business  Day  preceding  such date would
reduce the holding  period for such shares since the Auction Date or Remarketing
Date preceding such payment below the Minimum Holding  Period.  Pursuant to such
right of optional redemption, the Corporation may elect to redeem some or all of
the shares of  Preferred  Stock of any Series  without  redeeming  shares of any
other Series.

      (b) (i) Notwithstanding  the foregoing,  if any dividends on shares of any
      Series of Preferred Stock are in arrears,  (i) no shares of such Series of
      Preferred  Stock  or of any  other  Series  of  Preferred  Stock  shall be
      redeemed unless all  outstanding  shares of each Series of Preferred Stock
      are simultaneously redeemed and (ii) the Corporation shall not purchase or
      otherwise acquire any shares of Preferred Stock;  provided,  however, that
      the foregoing  shall not prevent the purchase or  acquisition of shares of
      Preferred Stock pursuant to an otherwise lawful purchase or exchange offer
      made on the same terms to all Holders of  Outstanding  shares of Preferred
      Stock.

         (ii) In connection  with the selection of a Long Dividend  Period,  the
      Term Selection Agent or the applicable  Remarketing Agent, as the case may
      be, may restrict the  Corporation's  ability to redeem shares of Preferred
      Stock by  providing  for the payment of a  redemption  premium or fixing a
      period of time  during  which such  shares of  Preferred  Stock may not be
      redeemed if the Term Selection Agent or the applicable  Remarketing Agent,
      as  the  case  be,  determines,   based  on  the  then-current   Marketing
      Conditions,  that  adding  such  terms will  result in the most  favorable
      financing alternative for the Corporation.

      (c) (i) If shares of Preferred  Stock are to be redeemed,  the  Redemption
      Agent will,  at the  direction of the  Corporation,  cause to be sent,  by
      first-class or air mail, postage prepaid,  telex or facsimile, a notice of
      redemption to each holder of record  (initially  Cede & Co., as nominee of
      the Securities  Depository)  of shares of Preferred  Stock to be redeemed.
      Such notice of  redemption  shall be sent not fewer than  fifteen nor more
      than 45 days prior to the redemption  date. Each notice of redemption will
      identify the Preferred Stock to be redeemed by CUSIP number and will state
      (a) the redemption date, (b) the redemption price, (c) the place where the
      redemption  price is to be paid and (d) the number of shares of  Preferred
      Stock and the Series  thereof  to be  redeemed.  The  notice  will also be
      published in The Wall Street Journal.

            (ii) No defect in the  notice of  redemption  or in the  mailing  or
      publication   thereof   will  affect  the   validity  of  the   redemption
      proceedings,  except as required by applicable law. A notice of redemption
      will be deemed given on the day that it is mailed in  accordance  with the
      foregoing description.

            (iii) The  Corporation may elect to redeem some or all of the shares
      of each Series of Preferred Stock.

                                       42
<PAGE>

            (iv) In the case of shares of a Series of Auction Preferred, so long
      as the  Securities  Depository's  nominee  is the  record  holder  of such
      shares,   the  Redemption   Agent  will  give  notice  to  the  Securities
      Depository,  and the  Securities  Depository  will determine the number of
      shares of each such Series to be redeemed from the accounts of each of its
      Participants. A Participant may determine to redeem shares from certain of
      the beneficial holders holding through such Participant (which may include
      a Participant holding shares for its own account) without redeeming shares
      from the accounts of other beneficial owners.

      Any such  redemption  will be made in accordance  with applicable laws and
rules.

            (v) In the case of shares of Remarketing  Preferred,  notice of such
      redemption shall be given to the Securities  Depository or the Remarketing
      Depository,  as the case  may be,  and any  other  record  holders  of the
      Remarketing  Preferred to be redeemed.  The Corporation  shall identify by
      CUSIP number the shares of  Remarketing  Preferred to be redeemed.  To the
      extent less than all of the shares of Remarketing Preferred represented by
      a  certificate  with a particular  CUSIP  number are to be  redeemed,  the
      applicable  Depository  shall  determine  the shares  represented  by such
      certificate to be redeemed. In the case of the Securities Depository,  the
      shares to be redeemed  shall be  determined  as described in the preceding
      paragraph, and in the case of the Remarketing Depository,  the Remarketing
      Depository  shall  determine  the  number  of shares  represented  by such
      certificate to be redeemed from each Holder thereof.

             (vi) If any shares of  Preferred  Stock to be redeemed are not held
      of record by a nominee for the  Securities  Depository or the  Remarketing
      Depository,  the particular shares of Preferred Stock to be redeemed shall
      be  selected  by the  Corporation  by lot or by such  other  method as the
      Corporation shall deem fair and equitable.

             (vii)  Upon any date  fixed for  redemption  (unless  a Failure  to
      Deposit  occurs),  all rights of the Holders of shares of Preferred  Stock
      called for redemption  will cease and terminate,  except the right of such
      Holders  to receive  the  amounts  payable  in respect of such  redemption
      therefor, but without interest, and such shares of Preferred Stock will be
      deemed no longer  outstanding  and, upon the taking of any action required
      by applicable law, shall have the status of authorized and unissued shares
      of preferred  stock and may be reissued by the  Corporation at any time as
      shares of any series of preferred  stock other than as shares of Preferred
      Stock.

SECTION 5. Liquidation Preference.

      (a) In the event of any  liquidation,  dissolution  or  winding  up of the
affairs of the Corporation,  whether voluntary or involuntary,  after payment or
provision for payment of the debts and other liabilities of the Corporation, the
holders of the shares of the Preferred  Stock shall be entitled to receive,  out
of the assets of the Corporation, whether such assets are capital or surplus and
whether or not any  dividends  as such are  declared  but before any  payment or
distribution  of assets is made to holders of common stock of the Corporation or
any other class of stock or series thereof ranking junior to the Preferred Stock
with  respect  to  the  distribution  of  assets,  a  preferential   liquidation
distribution  in the amount of  $250,000  per share of  Preferred  Stock plus an
amount equal to accumulated and unpaid  dividends on each such share (whether or
not  declared)  to and  including  the  date of such  distribution  and no more.
Neither the merger or  consolidation  of the Corporation  with or into any other
corporation,  nor the merger or consolidation  of any other  corporation with or
into the Corporation,  nor the sale, lease, exchange or other transfer of all or
any  portion  of  the  assets  of  the  Corporation,  shall  be  deemed  to be a
liquidation,  dissolution or winding up of the Corporation within the meaning of
this Section 5.

                                       43

<PAGE>

      (b) If upon any  liquidation,  dissolution or winding up of the affairs of
the Corporation, whether voluntary or involuntary, the assets of the Corporation
available  for  distribution  to the  holders of  Preferred  Stock and any other
series  of  capital  stock  of the  Corporation  ranking  on a  parity  with the
Preferred  Stock are  insufficient to pay the holders of the Preferred Stock the
full  amount of the  preferential  liquidation  distributions  to which they are
entitled, then such assets of the Corporation shall be distributed ratably among
the  holders of  Preferred  Stock and any other  series of capital  stock of the
Corporation ranking on a parity with the Preferred Stock based upon the ratio of
(x) the aggregate  amount  available for distribution on all shares of Preferred
Stock and such parity stock to (y) the total amount  distributable on all shares
of Preferred Stock and such parity stock upon liquidation.

SECTION  6. Voting Rights.

      (a) Holders of the  Preferred  Stock will have no voting  rights except as
hereinafter described or as otherwise provided by the General Corporation Law of
the State of  Delaware;  provided,  however,  that the  affirmative  vote of the
holders  of record of at least 66 2/3% of the  Outstanding  shares of  Preferred
Stock,  voting  separately  as one  class,  shall  be  necessary  to  adopt  any
alteration,   amendment   or  repeal  of  any   provision  of  the  Articles  of
Incorporation   or  this   Certificate  of  Designations   (including  any  such
alteration,  amendment or repeal  effected by any merger or  consolidation),  if
such  alteration,  amendment  or  repeal  would  alter  or  change  the  powers,
preferences or special  rights of the shares of Preferred  Stock so as to affect
them adversely.

      (b)  (i) If at any  time  the  equivalent  of six or more  full  quarterly
      dividends  (whether or not  consecutive)  payable on the  Preferred  Stock
      shall be in arrears (to any extent) (a  "Default  Period"),  the number of
      directors  constituting the Board of Directors of the Corporation shall be
      increased  by two (2),  and the holders of record of the  Preferred  Stock
      shall have the exclusive right, voting as a class with any other shares of
      preferred stock of the  Corporation so entitled to vote thereon,  to elect
      the directors to fill such newly created  directorships.  This right shall
      remain vested until all  dividends in arrears on the Preferred  Stock have
      been paid or  declared  and set apart for  payment,  at which time (A) the
      right  shall  terminate  (subject  to  revesting),  (B)  the  term  of the
      directors  then in office elected in accordance  with the foregoing  shall
      terminate,  and (C) the  number  of  directors  constituting  the Board of
      Directors of the  Corporation  shall be reduced by the number of directors
      whose term has been terminated  pursuant to clause (B) above. For purposes
      of the  foregoing,  default in the payment of dividends for the equivalent
      of six quarterly  dividends  means,  in the case of Preferred  Stock which
      pays dividends either more or less frequently than every quarter,  default
      in the payment of  dividends  in respect of one or more  Dividend  Periods
      containing not less than 540 days.

            (ii) Whenever  such right shall vest, it may be exercised  initially
      by the vote of the  holders  of  record  of a  majority  of the  shares of
      Preferred  Stock present and voting,  in person or by proxy,  at a special
      meeting of holders of record of the Preferred  Stock or at the next annual
      meeting of stockholders.  A special meeting for the exercise of such right
      shall be  called  by the  Secretary  of the  Corporation  as  promptly  as
      possible,  and in any event  within  10 days  after  receipt  of a written
      request signed by the holders of record of at least 25% of the Outstanding
      shares  of  the  Preferred  Stock,   subject  to  any  applicable   notice
      requirements  imposed  by  law.  Notwithstanding  the  provisions  of this
      paragraph,  no such special meeting shall be held during the 30-day period
      preceding  the date fixed for the annual  meeting of  stockholders  of the
      Corporation.

            (iii) So long as a Default Period continues,  any director who shall
      have been elected by holders of record of Preferred Stock entitled to vote
      in accordance  herewith  shall hold office for a

                                       44
<PAGE>

      term expiring at the next annual meeting of  stockholders  and during such
      term may be  removed  at any  time,  without  cause by,  and only by,  the
      affirmative  vote of the  holders of record of a majority of the shares of
      Preferred  Stock present and voting,  in person or by proxy,  at a special
      meeting of such  stockholders  of record called for such purpose,  and any
      vacancy  created by such  removal  may also be filled at such  meeting.  A
      meeting for the removal of a director  elected by the holders of record of
      Preferred  Stock and the filling of the vacancy  created  thereby shall be
      called by the Secretary of the  Corporation as promptly as possible and in
      any event within 10 days after receipt of request  therefor  signed by the
      holders  of  record  of not less  than 25% of the  Outstanding  shares  of
      Preferred Stock,  subject to any applicable notice requirements imposed by
      law.  Such  meeting  shall  be  held  at  the  earliest  practicable  date
      thereafter.  Notwithstanding  the  provisions of this  paragraph,  no such
      meeting  shall be held during the 30-day  period  preceding the date fixed
      for the annual meeting of stockholders of the Corporation.

            (iv) Any vacancy  caused by the death,  resignation or expiration of
      the term of office of a director who shall have been elected in accordance
      with these  provisions may be filled by the remaining  director so elected
      or, if not so filled,  by a vote of holders of record of a majority of the
      shares of Preferred Stock present and voting,  in person or by proxy, at a
      meeting called for such purpose (or, in the case of expiration of the term
      of office of such director,  at the annual meeting of  stockholders of the
      Corporation).  Unless such vacancy shall have been filled by the remaining
      director or by vote at the annual  meeting of  stockholders,  such special
      meeting  shall  be  called  by the  Secretary  of the  Corporation  at the
      earliest  practicable date after such death,  resignation or expiration of
      term of office, and in any event within 10 days after receipt of a written
      request signed by the holders of record of at least 25% of the Outstanding
      shares  of  Preferred  Stock.   Notwithstanding  the  provisions  of  this
      paragraph,  no such special meeting shall be held during the 30-day period
      preceding  the date fixed for the annual  meeting of  stockholders  of the
      Corporation.

            (v) If any meeting of the holders of the  Preferred  Stock  required
      above to be  called  shall  not have  been  called  within  10 days  after
      personal  service of a written request  therefor upon the Secretary of the
      Corporation  or within 15 days after mailing the same by  registered  mail
      addressed to the Secretary of the  Corporation  at his  principal  office,
      subject to any  applicable  notice  requirements  imposed by law, then the
      holders of record of at least 25% of the  Outstanding  shares of Preferred
      Stock may  designate in writing a holder of  Preferred  Stock to call such
      meeting at the expense of the Corporation,  and such meeting may be called
      by such person so designated  upon the notice required for annual meetings
      of  stockholders  or such  shorter  notice (but in no event  shorter  than
      permitted by law) as may be acceptable to the holders of a majority of the
      total number of shares of Preferred  Stock.  Any holder of Preferred Stock
      so designated  shall have access to the stock books of the Corporation for
      the  purpose  of  causing  such  meeting  to be called  pursuant  to these
      provisions.  Such meeting shall be held at the earliest  practicable  date
      thereafter.  Notwithstanding  the  provisions of this  paragraph,  no such
      meeting  shall be held during the 30-day  period  preceding the date fixed
      for the annual meeting of stockholders of the Corporation.

            (vi) At any meeting of the holders of record of the Preferred  Stock
      called in accordance with the above provisions for the election or removal
      of directors,  the presence in person or by proxy of the holders of record
      of one-third of the total number of Outstanding  shares of Preferred Stock
      shall be required to  constitute a quorum;  in the absence of a quorum,  a
      majority of the holders of record present in person or by proxy shall have
      power to adjourn the meeting from time to time without notice,  other than
      announcement at the meeting, until a quorum shall be present.

                                       45

<PAGE>



      SECTION  7. Auction Procedures.

      (a) Certain  Definitions.  Capitalized terms not defined in this Section 7
shall have the respective  meanings specified  elsewhere in this part of Article
IV(B).  As used in this Section 7, the following  terms shall have the following
meanings, unless the context otherwise requires:

            (i)  "Available  Shares of Auction  Preferred"  has the  meaning set
forth in subsection (d)(i) below.

            (ii) "Bid" has the meaning set forth in subsection (b)(i) below.

            (iii) "Bidder" has the meaning set forth in subsection (b)(i) below.

            (iv)  "Broker-Dealer  Agreement"  means  an  agreement  between  the
      Auction  Agent and a  Broker-Dealer  pursuant to which such  Broker-Dealer
      agrees to follow the procedures specified in these Auction Procedures.

            (v) "Hold  Order" has the  meaning  set forth in  subsection  (b)(i)
below.

            (vi) "Order" has the meaning set forth in subsection (b)(i) below.

            (vii)  "Potential  Holder" means any Person,  including any Existing
      Holder,  (A) who shall have executed a Purchaser's  Letter and (B) who may
      be interested in acquiring shares of Auction Preferred (or, in the case of
      an Existing Holder, additional shares of Auction Preferred).

            (viii) "Sell Order" has the meaning set forth in  subsection  (b)(i)
below.

            (ix)  "Submission  Deadline" means 1:00 P.M., New York City time, on
      any  Auction  Date,  or  such  other  time on any  Auction  Date as may be
      specified  from  time to time by the  Auction  Agent as the time  prior to
      which each  Broker-Dealer  must submit to the Auction Agent in writing all
      Orders  obtained by it for the  Auction to be  conducted  on such  Auction
      Date.

            (x) "Submitted  Bid" has the meaning set forth in subsection  (C)(i)
below.

            (xi)  "Submitted Hold Order" has the meaning set forth in subsection
(C)(i) below.

            (xii)  "Submitted  Order" has the  meaning  set forth in  subsection
(C)(i) below.

            (xiii)   "Submitted  Sell  Order"  has  the  meaning  set  forth  in
subsection (C)(i) below.

            (xiv)  "Sufficient  Clearing  Bids"  has the  meaning  set  forth in
subsection (d)(i) below.

            (xv)  "Winning  Bid Rate" has the  meaning  set forth in  subsection
(d)(i) below.

      (b)   Orders by Existing Holders and Potential Holders.

            (i) Prior to the  Submission  Deadline on each  Auction Date for any
Series of Auction Preferred:

                                       46

<PAGE>

                  (A)  each  Existing  Holder  may  submit  to  a  Broker-Dealer
information as to:

                        (1)  the  number  of   Outstanding   shares  of  Auction
                  Preferred,  if any,  held by such  Existing  Holder  that such
                  Existing  Holder desires to continue to hold without regard to
                  the Applicable Rate for the next succeeding Dividend Period;

                        (2)  the  number  of   Outstanding   shares  of  Auction
                  Preferred,  if any,  held by such  Existing  Holder  that such
                  Existing Holder desires to sell,  provided that the Applicable
                  Rate for the next succeeding  Dividend Period is less than the
                  rate per annum specified by such Existing Holder; and/or

                        (3)  the  number  of   Outstanding   shares  of  Auction
                  Preferred,  if any,  held by such  Existing  Holder  that such
                  Existing   Holder  desires  to  sell  without  regard  to  the
                  Applicable Rate for the next succeeding Dividend Period; and

                  (B) each Broker-Dealer, using a list of Potential Holders that
            shall be maintained in accordance  with the  provisions set forth in
            the  Broker-Dealer   Agreement  for  the  purpose  of  conducting  a
            competitive  Auction,   shall  contact  both  Existing  Holders  and
            Potential  Holders,  including  Existing  Holders with respect to an
            offer by any such Existing Holder to purchase  additional  shares of
            Auction Preferred,  on such list to notify such Existing Holders and
            Potential  Holders as to the length of the next Dividend  Period and
            (i) with  respect  to any Short  Dividend  Period  or Long  Dividend
            Period,  the Dividend  Payment  Date(s) and (ii) with respect to any
            Long  Dividend  Period,  any dates  before  which  shares of Auction
            Preferred may not be redeemed and any redemption  premium applicable
            in an optional redemption and to determine the number of Outstanding
            shares of Auction Preferred, if any, with respect to which each such
            Existing Holder and each Potential Holder desires to submit an Order
            and each such Potential Holder offers to purchase, provided that the
            Applicable Rate for the next succeeding Dividend Period shall not be
            less than the rate per annum specified by such Potential Holder.

      For  the  purposes  hereof,   the  communication  to  a  Broker-Dealer  of
information  referred  to in  clause  (A) or (B) of this  Subsection  (b)(i)  is
hereinafter  referred  to as an  "Order"  and  each  Existing  Holder  and  each
Potential  Holder placing an Order is hereinafter  referred to as a "Bidder;" an
Order containing the information referred to in clause (A)(1) of this Subsection
(b)(i) is  hereinafter  referred to as a "Hold Order;" an Order  containing  the
information  referred to in clause  (A)(2) or (B) of this  Subsection  (b)(i) is
hereinafter  referred  to as a "Bid;" and an Order  containing  the  information
referred to in clause (A)(3) of this Subsection  (b)(i) is hereinafter  referred
to as a "Sell Order".

            (ii) (A) A Bid by an Existing Holder shall constitute an irrevocable
offer to sell:

                        (1)  the  number  of   Outstanding   shares  of  Auction
                  Preferred  specified  in  such  Bid  if  the  Applicable  Rate
                  determined  on such  Auction  Date shall be less than the rate
                  per annum specified in such Bid; or

                        (2) such number or a lesser number of Outstanding shares
                  of  Auction  Preferred  to  be  determined  as  set  forth  in
                  Subsections  (e)(i)(D)  and  (e)(iii) if the  Applicable  Rate
                  determined on such Auction Date shall be equal to the rate per
                  annum specified therein; or

                                       47

<PAGE>

                        (3) a lesser  number of  Outstanding  shares of  Auction
                  Preferred  to  be  determined  as  set  forth  in  Subsections
                  (e)(ii)(C) and (e)(iii) if such specified rate per annum shall
                  be higher  than the  Maximum  Applicable  Rate and  Sufficient
                  Clearing Bids do not exist.

                  (B) a Sell Order by an Existing  Holder  shall  constitute  an
            irrevocable offer to sell:

                        (1)  the  number  of   Outstanding   shares  of  Auction
                  Preferred specified in such Sell Order; or

                        (2) such number or a lesser number of Outstanding shares
                  of  Auction  Preferred  to  be  determined  as  set  forth  in
                  Subsections  (e)(ii)(C)  and (e)(iii) if  Sufficient  Clearing
                  Bids do not exist.


                  (C)  a  Bid  by  a  Potential   Holder  shall   constitute  an
            irrevocable offer to purchase:

                        (1)  the  number  of   Outstanding   shares  of  Auction
                  Preferred  specified  in  such  Bid  if  the  Applicable  Rate
                  determined  on such Auction Date shall be higher than the rate
                  per annum specified in such Bid; or

                        (2) such number or a lesser number of Outstanding shares
                  of  Auction  Preferred  to  be  determined  as  set  forth  in
                  Subsections  (e)(i)(E)  and  (e)(iv)  if the  Applicable  Rate
                  determined on such Auction Date shall be equal to the rate per
                  annum specified therein.

      (c)         Submission of Orders by Broker-Dealers to Auction Agent.

            (i) Each Broker-Dealer  shall submit in writing to the Auction Agent
      prior to the  Submission  Deadline on each  Auction Date for any Series of
      Auction  Preferred all Orders  obtained by such  Broker-Dealer  specifying
      with respect to each Order:

                  (A)   the name of the Bidder placing such Order;

                  (B) the  aggregate  number of  Outstanding  shares of  Auction
            Preferred that are the subject of such Order;

                  (C) to the extent that such Bidder is an Existing Holder:

                        (1)  the  number  of   Outstanding   shares  of  Auction
                  Preferred,  if any,  subject to any Hold Order  placed by such
                  Existing Holder;

                        (2)  the  number  of   Outstanding   shares  of  Auction
                  Preferred,  if any, subject to any Bid placed by such Existing
                  Holder and the rate per annum specified in such Bid; and

                        (3)  the  number  of  Outstanding   shares  of   Auction
                  Preferred,  if any,  subject to any Sell Order  placed by such
                  Existing Holder; and

                  (D) to the extent such Bidder is a Potential Holder,  the rate
            per annum specified in such Potential Holder's Bid.

                                       48

<PAGE>

            (Each "Hold  Order",  "Bid" or "Sell  Order" as  submitted or deemed
            submitted  by  a  Broker-Dealer   being   hereinafter   referred  to
            individually  as a "Submitted  Hold Order",  a "Submitted  Bid" or a
            "Submitted  Sell  Order",  as the  case may be,  or as a  "Submitted
            Order".)

            (ii) If any rate per annum  specified in any  Submitted Bid contains
      more than three  figures to the right of the  decimal  point,  the Auction
      Agent shall round such rate up to the next highest  one-thousandth  (.001)
      of 1%.

            (iii) If one or more  Orders  covering in the  aggregate  all of the
      Outstanding shares of Auction Preferred held by an Existing Holder are not
      submitted to the Auction  Agent prior to the  Submission  Deadline for any
      reason  (including the failure of a Broker-Dealer to contact such Existing
      Holder or to submit such Existing Holder's Order or Orders), such Existing
      Holder shall be deemed to have  submitted a Hold Order covering the number
      of Outstanding  shares of Auction  Preferred held by such Existing  Holder
      that are not subject to Orders submitted to the Auction Agent.

            (iv) A Submitted  Order or  Submitted  Orders of an Existing  Holder
      that cover in the aggregate more than the number of Outstanding  shares of
      Auction Preferred held by such Existing Holder will be considered valid in
      the following order of priority:

                  (A) any Submitted  Hold Order of such Existing  Holder will be
            considered  valid up to and  including  the  number  of  Outstanding
            shares of Auction  Preferred held by such Existing Holder,  provided
            that,  if there is more than one such  Submitted  Hold Order and the
            aggregate  number of shares of  Auction  Preferred  subject  to such
            Submitted Hold Orders  exceeds the number of  Outstanding  shares of
            Auction Preferred held by such Existing Holder, the number of shares
            of Auction  Preferred  subject to each of such Submitted Hold Orders
            will be reduced pro rata so that such  Submitted  Hold Orders in the
            aggregate  will cover  exactly the number of  Outstanding  shares of
            Auction Preferred held by such Existing Holder;

                  (B)  any  Submitted  Bids  of  such  Existing  Holder  will be
            considered  valid (in the ascending order of their  respective rates
            per annum if there is more than one  Submitted  Bid of such Existing
            Holder) for the number of  Outstanding  shares of Auction  Preferred
            held by such Existing Holder equal to the difference between (i) the
            number of  Outstanding  shares  of  Auction  Preferred  held by such
            Existing Holder and (ii) the number of Outstanding shares of Auction
            Preferred  subject  to any  Submitted  Hold  Order of such  Existing
            Holder  referred to in clause  (iv)(A)  above (and, if more than one
            Submitted  Bid of such Existing  Holder  specifies the same rate per
            annum and  together  they  cover more than the  remaining  number of
            shares  of  Auction  Preferred  that  can be the  subject  of  valid
            Submitted Bids of such Existing  Holder after  application of clause
            (iv)(A) above and of the foregoing portion of this clause (iv)(B) to
            any  Submitted  Bid  or  Submitted  Bids  of  such  Existing  Holder
            specifying a lower rate or rates per annum,  the number of shares of
            Auction  Preferred subject to each of such Submitted Bids specifying
            the same  rate  per  annum  will be  reduced  pro rata so that  such
            Submitted  Bids,  in the  aggregate,  cover  exactly such  remaining
            number of Outstanding  shares of Auction  Preferred of such Existing
            Holder).

                  (C) any  Submitted  Sell Order of an  Existing  Holder will be
            considered  valid up to and  including  the  excess of the number of
            Outstanding shares of Auction Preferred held by such Existing Holder
            over  the sum of (a) the  number  of  shares  of  Auction  Preferred
            subject to Submitted Hold Orders by such Existing Holder referred to
            in  clause  (iv)(A)  above and (b)

                                       49
<PAGE>

            the number of shares of Auction Preferred subject to valid Submitted
            Bids by such Existing  Holder  referred to in clause  (iv)(B) above;
            provided  that,  if there is more than one  Submitted  Sell Order of
            such Existing  Holder and the number of shares of Auction  Preferred
            subject to such  Submitted  Sell Orders is greater than such excess,
            the  number of shares of Auction  Preferred  subject to each of such
            Submitted  Sell  Orders  will be  reduced  pro  rata  so  that  such
            Submitted  Sell Orders,  in the  aggregate,  will cover  exactly the
            number of shares of Auction Preferred equal to such excess.

      The number of Outstanding shares of Auction Preferred,  if any, subject to
Submitted  Bids of such  Existing  Holder not valid under clause  (iv)(B)  above
shall be treated as the subject of a Submitted Bid by a Potential  Holder at the
rate per annum specified in such Submitted Bids.

            (v) If there is more than one Submitted Bid by any Potential  Holder
      in any Auction,  each such  Submitted  Bid shall be  considered a separate
      Submitted  Bid with  respect to the rate per annum and number of shares of
      Auction Preferred specified therein.

      (d)   Determination of Sufficient Clearing Bids, Winning Bid Rate and 
      Applicable Rate.

            (i) Not earlier  than the  Submission  Deadline on each Auction Date
      for any Series of Auction Preferred,  the Auction Agent shall assemble all
      Orders submitted or deemed submitted to it by the Broker-Dealers and shall
      determine:

                  (A) the excess of the total  number of  Outstanding  shares of
            Auction  Preferred  over the number of shares of  Auction  Preferred
            that are the subject of  Submitted  Hold Orders  (such  excess being
            hereinafter   referred  to  as  the  "Available  Shares  of  Auction
            Preferred");

                  (B)  from  the  Submitted   Orders,   whether  the  number  of
            Outstanding  shares of  Auction  Preferred  that are the  subject of
            Submitted Bids by Potential Holders specifying one or more rates per
            annum equal to or lower than the Maximum  Applicable Rate exceeds or
            is equal to the sum of:

                       (1) the number of Outstanding shares of Auction Preferred
                  that are the subject of  Submitted  Bids by  Existing  Holders
                  specifying one or more rates per annum higher than the Maximum
                  Applicable Rate, and

                       (2) the number of Outstanding shares of Auction Preferred
                  that are subject to Submitted Sell Orders.

                  (if such excess or such  equality  exists  (other than because
                  the  number of  Outstanding  shares of  Auction  Preferred  in
                  clauses  (1) and (2) above are each  zero  because  all of the
                  Outstanding  shares of Auction  Preferred  are the  subject of
                  Submitted Hold Orders), there shall exist "Sufficient Clearing
                  Bids" and such  Submitted  Bids by Potential  Holders shall be
                  hereinafter  referred to collectively as "Sufficient  Clearing
                  Bids"); and

                  (C) if Sufficient  Clearing  Bids exist,  the winning bid rate
            (the  "Winning Bid Rate"),  which shall be the lowest rate per annum
            specified in the Submitted Bids that if:

                       (1) each  Submitted Bid from Existing Holders  specifying
                  the  Winning  Bid  Rate  and all  other  Submitted  Bids  from
                  Existing  Holders   specifying  lower  rates  per  annum

                                       50
<PAGE>

                  were  accepted,   thus  entitling  such  Existing  Holders  to
                  continue to hold the shares of Auction  Preferred that are the
                  subject of such Submitted Bids, and

   
                       (2) each Submitted Bid from Potential Holders  specifying
                  the  Winning  Bid  Rate  and all  other  submitted  Bids  from
                  Potential  Holders  specifying  lower  rates  per  annum  were
                  accepted,  thus entitling  such Potential  Holders to purchase
                  the shares of Auction  Preferred  that are the subject of such
                  Submitted  Bids,   would  result  in  such  Existing   Holders
                  described in subclause (C)(1)  continuing to hold an aggregate
                  number of Outstanding  shares of Auction  Preferred that, when
                  added to the number of Outstanding shares of Auction Preferred
                  to  be  purchased  by  such  Potential  Holders  described  in
                  subclause  (C)(2),   would  equal  or  exceed  the  number  of
                  Available Shares of Auction Preferred.
    

            (ii) In connection  with any Auction and promptly  after the Auction
      Agent has made the  determinations  pursuant  to  Subsection  (d)(i),  the
      Auction Agent shall advise the Corporation of the Maximum  Applicable Rate
      and,  based  on such  determinations,  the  Applicable  Rate  for the next
      succeeding Dividend Period as follows:

                  (A) if  Sufficient  Clearing Bids exist,  that the  Applicable
            Rate for the next  succeeding  Dividend Period shall be equal to the
            Winning Bid Rate;

                  (B) if  Sufficient  Clearing  Bids do not  exist  (other  than
            because all of the Outstanding  shares of Auction  Preferred are the
            subject of Submitted Hold Orders), that the next succeeding Dividend
            Period will be a Standard  Dividend  Period and the Applicable  Rate
            for the next succeeding Dividend Period determined shall be equal to
            the  Maximum   Applicable  Rate  for  a  Standard   Dividend  Period
            determined on the Business Day  immediately  preceding such Auction;
            or

                  (C) if all of the Outstanding  shares of Auction Preferred are
            the subject of Submitted Hold Orders,  that the Applicable  Rate for
            the next  succeeding  Dividend  Period  shall be equal to 58% of the
            Applicable  "AA"  Composite  Commercial  Paper Rate,  in the case of
            Auction Preferred with a Dividend Period of 7 to 48 days, a Standard
            Dividend  Period or a Short Dividend Period of 183 days or less, 58%
            of the  Applicable  Treasury  Bill  Rate  in  the  case  of  Auction
            Preferred with a Short Dividend Period of 184 to 364 days, or 58% of
            the Applicable  Treasury Note Rate, in the case of Auction Preferred
            with a Long Dividend Period, in effect on the Auction Date.

      (e)  Acceptance  and Rejection of Submitted Bids and Submitted Sell Orders
and Allocation of Shares of Auction Preferred.  Based on the determinations made
pursuant to  Subsection  (d)(i),  the Submitted  Bids and Submitted  Sell Orders
shall be accepted or rejected and the Auction Agent shall take such other action
as set forth below:

            (i) If  Sufficient  Clearing  Bids have been  made,  subject  to the
      provisions  of  Subsections  (e)(iii)  and  (e)(iv),  Submitted  Bids  and
      Submitted Sell Orders shall be accepted or rejected in the following order
      of priority and all other Submitted Bids shall be rejected:

                  (A) the  Submitted  Sell Orders of Existing  Holders  shall be
            accepted  and the  Submitted  Bid of each  of the  Existing  Holders
            specifying  any rate per annum that is higher  than the  Winning Bid
            Rate shall be rejected,  thus requiring each such Existing Holder to
            sell  the

                                       51
<PAGE>

            Outstanding shares of Auction Preferred that are the subject of such
            Submitted Sell Order or Submitted Bid;

                  (B)  the  Submitted  Bid  of  each  of  the  Existing  Holders
            specifying  any rate per annum  that is lower than the  Winning  Bid
            Rate shall be accepted,  thus entitling each such Existing Holder to
            continue to hold the  Outstanding  shares of Auction  Preferred that
            are the subject of such Submitted Bid;

                  (C)  the  Submitted  Bid  of  each  of the  Potential  Holders
            specifying  any rate per annum  that is lower than the  Winning  Bid
            Rate shall be accepted;

                  (D)  the  Submitted  Bid  of  each  of  the  Existing  Holders
            specifying  a rate per annum that is equal to the  Winning  Bid Rate
            shall be  accepted,  thus  entitling  each such  Existing  Holder to
            continue to hold the  Outstanding  shares of Auction  Preferred that
            are  the  subject  of such  Submitted  Bid,  unless  the  number  of
            Outstanding   shares  of  Auction  Preferred  subject  to  all  such
            Submitted  Bids  shall be  greater  than the  number of  Outstanding
            shares  of   Auction   Preferred   ("Remaining   Shares  of  Auction
            Preferred")  equal to the excess of the Available  Shares of Auction
            Preferred over the number of Outstanding shares of Auction Preferred
            subject to Submitted  Bids  described in  Subsections  (e)(i)(B) and
            (e)(i)(C),  in which event the Submitted  Bids of each such Existing
            Holder shall be  rejected,  and each such  Existing  Holder shall be
            required to sell Outstanding shares of Auction  Preferred,  but only
            in an  amount  equal to the  difference  between  (1) the  number of
            Outstanding  shares of Auction  Preferred then held by such Existing
            Holder subject to such Submitted Bid and (2) the number of shares of
            Auction  Preferred   obtained  by  multiplying  (x)  the  number  of
            Remaining  Shares  of  Auction  Preferred  by  (y) a  fraction,  the
            numerator  of which  shall be the  number of  Outstanding  shares of
            Auction  Preferred  held by such  Existing  Holder  subject  to such
            Submitted  Bid and the  denominator  of which shall be the aggregate
            number of Outstanding  shares of Auction  Preferred  subject to such
            Submitted  Bids made by all such Existing  Holders that  specified a
            rate per annum equal to the Winning Bid Rate; and

                  (E)  the  Submitted  Bid  of  each  of the  Potential  Holders
            specifying  a rate per annum that is equal to the  Winning  Bid Rate
            shall be  accepted,  but only in an  amount  equal to the  number of
            Outstanding  shares of Auction Preferred obtained by multiplying (x)
            the difference between the Available Shares of Auction Preferred and
            the number of  Outstanding  shares of Auction  Preferred  subject to
            Submitted  Bids described in  Subsections  (e)(i)(B),  (e)(i)(C) and
            (e)(i)(D)  by (y) a fraction,  the  numerator  of which shall be the
            number of Outstanding  shares of Auction  Preferred  subject to such
            Submitted Bid and the  denominator  of which shall be the sum of the
            number of Outstanding  shares of Auction  Preferred  subject to such
            Submitted  Bids made by all such  Potential  Holders that  specified
            rates per annum equal to the Winning Bid Rate.

            (ii) If  Sufficient  Clearing  Bids have not been made  (other  than
      because all of the Outstanding  shares of Auction Preferred are subject to
      Submitted Hold Orders),  subject to the provisions of Subsection (e)(iii),
      Submitted Orders shall be accepted or rejected as follows in the following
      order of priority and all other Submitted Bids of Potential  Holders shall
      be rejected:

                  (A) the Submitted Bid of each Existing  Holder  specifying any
            rate per annum that is equal to or lower than the Maximum Applicable
            Rate shall be  accepted,  thus  entitling  such

                                       52
<PAGE>

            Existing  Holder  to  continue  to hold the  Outstanding  shares  of
            Auction Preferred that are the subject of such Submitted Bid;

                  (B) the Submitted Bid of each Potential Holder  specifying any
            rate per annum that is equal to or lower than the Maximum Applicable
            Rate shall be accepted,  thus  requiring  such  Potential  Holder to
            purchase the  Outstanding  shares of Auction  Preferred that are the
            subject of such Submitted Bid; and

                  (C) the Submitted Bids of each Existing Holder  specifying any
            rate per annum that is higher than the Maximum Applicable Rate shall
            be rejected,  thus requiring  each such Existing  Holder to sell the
            Outstanding shares of Auction Preferred that are the subject of such
            Submitted Bid, and the Submitted Sell Orders of each Existing Holder
            shall be  accepted,  in both  cases  only in an amount  equal to the
            difference  between (1) the number of Outstanding  shares of Auction
            Preferred  then  held  by  such  Existing  Holder  subject  to  such
            Submitted  Bid or Submitted  Sell Order and (2) the number of shares
            of Auction  Preferred  obtained by  multiplying  (x) the  difference
            between the Available Shares of Auction  Preferred and the aggregate
            number  of  Outstanding  shares  of  Auction  Preferred  subject  to
            Submitted Bids described in Subsections (e)(ii)(A) and (e)(ii)(B) by
            (y) a  fraction,  the  numerator  of which  shall be the  number  of
            Outstanding shares of Auction Preferred held by such Existing Holder
            subject  to such  Submitted  Bid or  Submitted  Sell  Order  and the
            denominator  of which shall be the aggregate  number of  Outstanding
            shares of Auction  Preferred  subject to all such Submitted Bids and
            Submitted Sell Orders

            (iii) If, as a result of the  procedures  described  in  Subsections
      (e)(i) or (e)(ii),  any  Existing  Holder would be entitled or required to
      sell or any Potential Holder would be entitled or required to purchase,  a
      fraction of a share of Auction  Preferred on any Auction Date, the Auction
      Agent shall, in such manner as in its sole discretion it shall  determine,
      round up or down the number of shares of Auction Preferred to be purchased
      or sold by any Existing Holder or Potential Holder on such Auction Date so
      that only whole shares of Auction  Preferred  will be entitled or required
      to be sold or purchased.

            (iv) If,  as a result  of the  procedures  described  in  Subsection
      (e)(i),  any  Potential  Holder  would be entitled or required to purchase
      less than a whole  share of Auction  Preferred  on any Auction  Date,  the
      Auction  Agent shall,  in such manner as in its sole  discretion  it shall
      determine,  allocate  shares  of  Auction  Preferred  for  purchase  among
      Potential  Holders so that only  whole  shares of  Auction  Preferred  are
      purchased  on such  Auction  Date by any  Potential  Holder,  even if such
      allocation results in one or more of such Potential Holders not purchasing
      any shares of Auction Preferred on such Auction Date.

            (v) Based on the results of each  Auction,  the Auction  Agent shall
      determine,  with respect to each Broker-Dealer that submitted Bids or Sell
      Orders on behalf of Existing Holders or Potential  Holders,  the aggregate
      number of Outstanding  shares of Auction Preferred to be purchased and the
      aggregate number of Outstanding  shares of Auction Preferred to be sold by
      such Potential  Holders and Existing  Holders and, to the extent that such
      aggregate  number  of  Outstanding  shares  of  Auction  Preferred  to  be
      purchased  and such  aggregate  number of  Outstanding  shares of  Auction
      Preferred to be sold differ,  the Auction  Agent shall  determine to which
      other  Broker-Dealer or  Broker-Dealers  acting for one or more purchasers
      such  Broker-Dealer  shall deliver,  or from which other  Broker-Dealer or
      Broker-Dealers  acting for one or more  sellers such  Broker-Dealer  shall
      receive, as the case may be, Outstanding shares of Auction Preferred.

                                       53
<PAGE>


SECTION 8. Auction Agent.

      The  Corporation  shall use its best  efforts to  maintain,  pursuant to a
written agreement (the "Auction Agent Agreement"), an Auction Agent with respect
to each Series of Auction  Preferred,  to act in accordance  with the provisions
set forth herein with respect to such Series.

SECTION 9. Remarketing Procedures.

      (a)  Determination  of Dividend Periods and Dividend Rates for Remarketing
MAPS.  Subject to Section 3 hereof,  the  duration of each  subsequent  Dividend
Period and the dividend rate for each subsequent Dividend Period with respect to
any share of Remarketing  Preferred  will be established by a Remarketing  Agent
and will be  conclusive  and binding on the  Corporation  and the Holder of such
share of Remarketing  Preferred.  Each Remarketing Agent will establish dividend
rates,  not in excess of the Maximum  Applicable  Rate, for each Dividend Period
which  it  determines  will be the  lowest  rate at  which  tendered  Shares  of
Remarketing Preferred would be remarketed at $250,000 per share. In establishing
each Dividend  Period and dividend rate, each  Remarketing  Agent will establish
Dividend  Periods and dividend rates which it determines will result in the most
favorable  financing  alternative for the Corporation  based on the then-current
Marketing Conditions.

      (b) Remarketing; Tender for Remarketing. The following procedures shall be
applicable to each share of Remarketing Preferred:

            (i) The Remarketing Agent. Each Remarketing Agent shall use its best
      efforts,  on behalf of the  Holders  thereof,  to  remarket  all shares of
      Remarketing  Preferred  tendered for sale by  Remarketing  for which it is
      acting  as  Remarketing  Agent  without  charge  to such  Holder,  only at
      $250,000  per share,  provided  that no such  Remarketing  Agent  shall be
      obligated  to  remarket  such  Remarketing  Preferred  if there shall be a
      material  misstatement or omission in any disclosure  document provided by
      the  Corporation  and  used in  connection  with the  Remarketing  of such
      Remarketing  Preferred  or at any time such  Remarketing  Agent shall have
      determined that it is not advisable to remarket  Remarketing  Preferred by
      reason of: (i) a pending or proposed change in applicable tax laws, (ii) a
      material  adverse  change in the financial  condition of the  Corporation,
      (iii) a banking  moratorium,  (iv) domestic or international  hostilities,
      (v) an amendment of the provisions  hereof which  materially and adversely
      changes  the  nature  of  the  shares  of  Remarketing  Preferred  or  the
      Remarketing Procedures or (vi) a Failure to Deposit. Any Remarketing Agent
      may,  but  shall  not  be  obligated  to,  purchase  tendered  Remarketing
      Preferred for its own account.  Should the Remarketing Agent for any share
      of  Remarketing  Preferred not succeed in  Remarketing  all such shares of
      Remarketing  Preferred  so  tendered  for  Remarketing  on any date,  such
      Remarketing Agent shall select the shares of such Remarketing Preferred to
      be sold from those  tendered pro rata.  Payments in the amount of $250,000
      per share of Remarketing  Preferred remarketed shall be made by the Tender
      Agent by crediting  such  payments to the accounts of the Holders  thereof
      maintained  by the Tender  Agent or, to the extent duly  requested  of the
      Tender  Agent  by  Holders,  by  wire or  other  transfer  in  immediately
      available  funds to their  accounts  with  commercial  banks in the United
      States.  If for  any  reason  a  share  of  Remarketing  Preferred  is not
      remarketed  on the date of  tender,  such share  will be  retained  by its
      Holder.  Until remarketed,  each such share of Remarketing  Preferred will
      have  successive  Dividend  Periods  of one day and  will be  entitled  to
      dividends,  payable  on  each  succeeding  Business  Day  at  the  Maximum
      Applicable Rate.

 
            (ii) Notice of Shares of Remarketing Preferred to be Retained.  Each
      share of  Remarketing  Preferred  will be deemed to have been tendered for
      sale by  Remarketing on the last day of each 

                                      54

<PAGE>

      Dividend Period, unless the Holder thereof gives irrevocable notice to the
      contrary to the Remarketing Agent for such share of Remarketing  Preferred
      or if so instructed by such Remarketing  Agent, to the Tender Agent.  Such
      notice,  which may be telephonic or written,  must be delivered,  prior to
      3:00 P.M., New York City time, on the Business Day  immediately  preceding
      the last day of a Dividend  Period or on the  earlier day  specified  in a
      notice,  if any,  mailed  by the  Tender  Agent at the  direction  of such
      Remarketing Agent to such record holder at its address as the same appears
      on the Stock Books of the Corporation, which day will be a Business Day at
      least four Business Days after the mailing of such notice. The notice from
      such Holder of an election to retain shares of Remarketing Preferred shall
      state:

                  (A) the number of shares of such Remarketing Preferred held by
            the Securities Depository or the Remarketing Depository, and

                  (B) the number of such shares of Remarketing  Preferred  which
            shall be deemed not to have been so tendered.

            (iii)  Shares  Deemed to Have Been  Tendered.  The  failure  to give
      notice of an election  to retain any shares of  Remarketing  Preferred  as
      provided in (b)(ii) above will constitute the irrevocable  tender for sale
      by  Remarketing  of such  shares of  Remarketing  Preferred.  Certificates
      representing shares of Remarketing  Preferred remarketed will be issued to
      the Securities Depository or the Remarketing  Depository,  as the case may
      be,  irrespective of whether the certificates  formerly  representing such
      shares of Remarketing Preferred have been delivered to the Tender Agent. A
      Holder  which has not  given  notice  that it will  retain  its  shares of
      Remarketing  Preferred  shall have no further  rights with respect to such
      shares of  Remarketing  Preferred  upon the  Remarketing of such shares of
      Remarketing Preferred, except the right to receive any declared but unpaid
      dividends thereon and the proceeds of the Remarketing of such shares.

            (iv) Funds for Purchase of Shares.  Payments to Holders of shares of
      Remarketing  Preferred  remarketed  will be made solely from the  proceeds
      received from the purchasers of such shares in a Remarketing.  Neither the
      Corporation, the Tender Agent nor any Remarketing Agent shall be obligated
      to provide  funds to make payment to the holders of shares of  Remarketing
      Preferred tendered for Remarketing.

                                       55

<PAGE>


            (c)  The  Remarketing  Process.  The  Remarketing  process  will  be
      conducted on the following schedule and in the following manner (all times
      are New York City time):

<TABLE>
<CAPTION>
  The Last Business Day of a Dividend Period:*
               Beginning Not Later Than

<S>                                                      <C>
      1:00 P.M ........................................  The  Remarketing  Agent  for the  shares of  Remarketing
                                                         Preferred  will   determine  and,  upon  request,   make
                                                         available   to  all   interested   persons   non-binding
                                                         indications  of  Dividend  Periods  and  dividend  rates
                                                         based  upon  then  current  Marketing  Conditions.  Each
                                                         Holder  may  obtain  a  binding  commitment  as  to  the
                                                         specific  Dividend  Period or  Dividend  Periods and the
                                                         related  Applicable Rate or Applicable  Rates which will
                                                         be  applicable  to  such  Holder's  shares  should  such
                                                         Holder elect to retain them.

      At 3:00 P.M .....................................  Holders  of  shares  of  Remarketing Preferred  will  be
                                                         deemed to have tendered shares of Remarketing  Preferred
                                                         for sale by  Remarketing  at $250,000  per share  unless
                                                         they   have   given   contrary   instructions   to   the
                                                         Remarketing   Agent  for  such  shares  of   Remarketing
                                                         Preferred  or,  if so  instructed  by  such  Remarketing
                                                         Agent, to the Tender Agent.

      After 3:00 P.M ..................................  The  applicable   Remarketing  Agent  will  solicit  and
                                                         receive  orders from  prospective  investors to purchase
                                                         tendered shares of Remarketing  Preferred.  A purchaser,
                                                         at the  time of its  agreement  to  purchase  shares  of
                                                         Remarketing  Preferred,  may obtain a binding commitment
                                                         as to the specific  Dividend Period or Dividend  Periods
                                                         and the related  Applicable Rate or Applicable Rates for
                                                         such  shares  of   Remarketing   Preferred   based  upon
                                                         then-current Marketing Conditions.
<FN>
--------
* Or such other time and day as may have been  specified in a notice mailed
to the holders of Remarketing Preferred.
</FN>
</TABLE>

                                       56
<PAGE>

<PAGE>


<TABLE>
<CAPTION>

      First Business Day of Next Dividend Period:

<S>                                                      <C>
      Opening of Business                                The  applicable   Remarketing Agent  will  continue,  if
                                                         necessary,  remarketing shares of Remarketing  Preferred
                                                         as described above.

      By 1:00 P.M .....................................  The  applicable  Remarketing  Agent  will have  completed
                                                         Remarketing  and will advise the Tender  Agent as to the
                                                         Applicable Rate and Dividend  Period  applicable to each
                                                         share of  Remarketing  Preferred  commencing  a Dividend
                                                         Period on that day and of any failure to remarket.

      By 2:30 P.M .....................................  New  Holders   must   deliver  the   purchase  price  as
                                                         instructed by the applicable  Remarketing Agent.  Former
                                                         Holders will be paid the proceeds of the  Remarketing of
                                                         their  shares by the Tender  Agent  (upon  surrender  of
                                                         their certificates, if applicable).
</TABLE>

SECTION 10. The Remarketing Agent.

      The Corporation will take all reasonable  action necessary so that, at all
times,  at least one  investment  bank,  broker,  dealer  or other  organization
qualified to remarket shares of Remarketing  Preferred and to establish Dividend
Periods and Applicable  Rates is acting as  Remarketing  Agent for each share of
Remarketing Preferred.

SECTION 11. Book Entry System.

      (a) Shares of Preferred  Stock with  Dividend  Periods of 7 days or longer
shall be represented by a global  certificate or certificates  registered in the
name of a nominee of the Securities Depository, as depository for such shares of
Preferred Stock.  Shares of Remarketing  Preferred with Dividend Periods of less
than 7 days  shall  be  represented  by a  global  certificate  or  certificates
registered in the name of a nominee of the Remarketing Depository, as depository
for such shares of Remarketing Preferred.

      (b) All of the  Outstanding  shares of Auction  Preferred  of each  Series
shall be represented by a single  certificate for each Series  registered in the
name of the nominee of the Securities  Depository  unless otherwise  required by
law or  unless  there is no  Securities  Depository.  If there is no  Securities
Depository,  shares of Auction  Preferred shall be registered in the Stock Books
in the name of the Existing  Holder thereof and such Existing  Holder  thereupon
will be entitled to receive a certificate  therefor and be required to deliver a
certificate therefor upon transfer or exchange thereof.

      (c)  Each  Series  of  Remarketing  Preferred  shall be  represented  by a
separate  global  security  or  global  securities  and  shares  of  Remarketing
Preferred having different  Dividend Payment Dates,  dividend rates,  redemption
provisions or  Percentages,  if any, shall be  represented by a separate  global
security.

      (d)  Interests  in  shares  of  Preferred  Stock  represented  by a global
security will be shown on, and transfers  thereof will be effected only through,
records maintained by the respective depository.

                                       57

<PAGE>

      (e) If the Securities  Depository  should resign and the  Corporation  not
select a substitute  securities  depository,  physical  delivery of certificates
shall be made in the names of designated  transferees in exchange for the global
security or securities held for the account of the Securities Depository.

SECTION 12. Miscellaneous.

      (a) So long as the dividend  rate is based on the results of an Auction or
Remarketing,  a Holder (i) may sell,  transfer or otherwise dispose of shares of
Auction  Preferred  only pursuant to a Bid or Sell Order in accordance  with the
Auction  Procedures  or to or through a  Broker-Dealer  or to a Person  that has
delivered a signed copy of a Purchaser's  Letter to a Broker-Dealer,  and in the
case of all transfers  other than pursuant to Auctions,  such Existing Holder of
the shares of Auction  Preferred,  its Broker-Dealer or its Participant  advises
the Auction  Agent of such  transfer,  (ii) may transfer  shares of  Remarketing
Preferred  only  pursuant to a tender of such shares to the Tender Agent or to a
person that has delivered a signed copy of a Purchaser's Letter to a Remarketing
Agent, and in the case of all transfers of shares of Remarketing Preferred other
than  pursuant  to a  tender  of  such  shares,  the  holder  of the  shares  so
transferred  advises a  Remarketing  Agent of such  transfer  and  (iii)  unless
otherwise required by law, shall have its ownership of shares of Preferred Stock
maintained in book entry form by the  Securities  Depository  or, in the case of
shares of Remarketing  Preferred with a Dividend Period of less than 7 days, the
Remarketing Depository.

      (b)  Each  Remarketing  Agent  will  be  required  to  register  on a list
maintained  pursuant  to  a  Remarketing  Agreement  a  transfer  of  shares  of
Remarketing  Preferred  for which it is the  Remarketing  Agent from a holder to
another  person only if such  transfer is made to a person that has  delivered a
signed copy of a Purchaser's  Letter to such  Remarketing  Agent and if (i) such
transfer is pursuant to a Remarketing  or (ii) such  Remarketing  Agent has been
notified  in writing  (A) by such  holder of such  transfer or (B) by any person
that  purchased  or sold such  Remarketing  Preferred  in a  Remarketing  of the
failure of such  Remarketing  Preferred to be delivered or paid for, as the case
may be, in connection with such Remarketing. A Remarketing Agent is not required
to register a transfer of Remarketing Preferred pursuant to clause (ii) above on
or prior to the Business Day immediately preceding the first day of a subsequent
Dividend Period for such  Remarketing  Preferred  unless it receives the written
notice  required by such clause  (ii) by 3:00 P.M.,  New York City time,  on the
second Business Day preceding the first day of such subsequent  Dividend Period.
Such  Remarketing  Agent will  rescind a transfer  registered  on such list as a
result of a Remarketing if the  Remarketing  Agent is notified in writing of the
failure  of shares  of  Remarketing  Preferred  to be  delivered  or paid for as
required.  Any transfer of shares of Remarketing  Preferred made in violation of
the terms of a Purchaser's  Letter may affect the right of the Person  acquiring
such shares to participate in Remarketings.

      (c) (i) If the Method of determining  the Dividend Rate for some or all of
      the Series of Preferred  Stock is the Auction  Method,  the Corporation or
      any Affiliate of the  Corporation may not submit for its own account a Bid
      or Hold Order in an Auction.  If the  Corporation  or any Affiliate  holds
      shares of Auction  Preferred  for its own  account,  it must submit a Sell
      Order in the next auction with respect to such shares.  Any  Broker-Dealer
      that is an Affiliate of the Corporation may not submit for its own account
      Bid Orders or Hold Orders in Auctions.  If such  affiliated  Broker-Dealer
      holds shares of Auction  Preferred  for its own account,  it must submit a
      Sell Order in the next  Auction  with  respect  to such  shares of Auction
      Preferred.

         (ii) The  Corporation or any Affiliate of the  Corporation may acquire,
      hold  or  dispose  of shares of  Remarketing  Preferred.  Subject  to such
      limitations as  the Corporation  and the

                                       58
<PAGE>

      Remarketing Agent may agree, it and its Affiliates will purchase shares of
      Remarketing Preferred, if any, during Remarketings only after 3:00 P.M. on
      the Business Day  immediately  preceding the first day of each  subsequent
      Dividend  Period and only at  Applicable  Rates and for  Dividend  Periods
      established by the Remarketing Agents without regard to such offers by the
      Corporation  or its  Affiliates  and will  tender  shares  of  Remarketing
      Preferred for Remarketing  only upon at least 10 days' prior notice to the
      Remarketing Agents;  provided,  however, that if the then current Dividend
      Period  is less than 10 days,  the  Corporation  will  give  notice to the
      Remarketing  Agent on the day such  Dividend  Period  of less than 10 days
      commences.  In the event that the  Corporation or its Affiliates  purchase
      shares of Remarketing Preferred for their respective accounts,  all shares
      of Remarketing  Preferred  tendered by other  holders,  including any such
      Remarketing  Preferred  owned by a Remarketing  Agent,  will be remarketed
      before the  Remarketing  of any such  Remarketing  Preferred  owned by the
      Corporation  or its  Affiliates.  If any shares of  Remarketing  Preferred
      tendered for Remarketing are not sold, any shares of Remarketing Preferred
      tendered  for  Remarketing  by  the  Corporation  or an  Affiliate  of the
      Corporation,  up to the number of such shares not so sold,  will be deemed
      not to have been so tendered.

      (d) The  purchase  price of each share of  Preferred  Stock  which is sold
either through the Auction  Procedures or the  Remarketing  Procedures  shall be
$250,000.

      (e) If a holder of Converted  Auction  Preferred fails to give irrevocable
notice otherwise to the Remarketing Agent for such Remarketing Preferred (or, if
so instructed by such  Remarketing  Agent, to the Tender Agent) by no later than
3:00 P.M.,  New York City time,  on the Business Day  immediately  preceding the
first day of the subsequent  Dividend Period applicable  thereto,  or such other
day as is  specified  in a notice  delivered  in the manner set forth in Section
9(b)(ii),  such holder will be deemed to have  tendered such  Converted  Auction
Preferred for sale by Remarketing on such Business Day.

      (f) An  Auction  will be held in  respect  of  each  Series  of  Converted
Remarketing  Preferred  on the Initial  Auction  Date.  If a holder of Converted
Remarketing Preferred does not submit an Order in such Auction, such holder will
be deemed to have submitted a Sell Order in such Auction.

SECTION 13. Exclusive Remedy.

      In the event  that  dividends  are not  timely  declared  on the shares of
Preferred Stock,  the exclusive remedy of Holders against the Corporation  shall
be as set forth in this part of Article IV (B) and in no event shall  Holders of
such  shares  have  a  specifically  enforceable  right  to the  declaration  of
dividends.

SECTION 14. Additional Terms.

      (a) The Board of Directors may  interpret  the  provisions of this part of
Article IV (B) to resolve any  inconsistency  or  ambiguity or remedy any formal
defect.

      (b) The  headings of the various  subdivisions  of this part of Article IV
(B)  are  for   convenience   of  reference   only  and  shall  not  affect  the
interpretation of any of the provisions hereof.


                                   ----------

      (C) Except as  otherwise  provided by the General  Corporation  Law of the
State of Delaware or by any  resolution  heretofore or hereafter  adopted by the
Board of Directors  fixing the relative  powers, preferences  and rights and the
qualifications,  limitations or restrictions of any additional  series of 

                                       59
<PAGE>

Preferred  Stock,  the entire  voting power of the shares of the Company for the
election of directors  and for all other  purposes,  as well as all other rights
appertaining to shares of the Company, shall be vested exclusively in the Common
Stock.  Each share of Common  Stock  shall have one vote upon all  matters to be
voted  on by the  holders  of  the  Common  Stock,  and  shall  be  entitled  to
participate  equally in all  dividends  payable with respect to the Common Stock
and to share  ratably,  subject to the rights and  preferences  of any Preferred
Stock, in all assets of the Company in the event of any voluntary or involuntary
liquidation,  dissolution  or winding up of the affairs of the Company,  or upon
any distribution of the assets of the Company.

      (D) The Company shall not, without either the prior approval of a majority
of the total number of shares then issued and  outstanding  and entitled to vote
or the  receipt by the  Company of a favorable  opinion  issued by a  nationally
recognized  investment  banking  firm  designated  by the  Committee  of  Equity
Security Holders of Texaco Inc. appointed in the Company's jointly  administered
Chapter 11 case in the United States  Bankruptcy Court for the Southern District
of New  York or its last  chairman  (or his  designee)  to the  effect  that the
proposed  issuance is fair from a finance point of view to the  stockholders  of
the Company issue to its  stockholders  generally (i) any warrant or other right
to purchase  any  security of the Company,  any  successor  thereto or any other
person or entity or (ii) any security of the Company  containing  any such right
to purchase,  which warrant, right or security (a) is exercisable,  exchangeable
or  convertible,  based or  conditioned  in whole or in part on (I) a change  of
control of the Company or (II) the owning or holding of any number or percentage
of  outstanding  shares or voting  power or any offer to  acquire  any number of
shares or  percentage  of voting  power by any  entity,  individual  or group of
entities and/or individuals or (b) discriminates among holders of the same class
of  securities  (or the class of  securities  for which such warrant or right is
exercisable or exchangeable) of the Company or any successor thereto.


                                       V.

      The Company is to have perpetual existence.

                                       VI.

      The  private  property  of the  stockholders  is not to be  subject to the
payment of corporate debts to any extent whatever.

                                      VII.

      No holder of stock of the  Company  shall have any  preferential  right of
subscription  to any share of any class of stock of the Company  issued or sold,
or to any  obligations  convertible  into stock of the Company,  or any right of
subscription  to any thereof  other than such, if any, as the Board of Directors
in its discretion  may  determine,  and at such prices as the Board of Directors
may fix.

                                      VIII.

      The  Company may use its surplus  earnings or  accumulated  profits in the
purchase or  acquisition of its own capital stock from time to time as its Board
of Directors  shall  determine,  and such capital stock so purchased may, if the
directors  so  determine,  be held in the  treasury  of the  Company as treasury
stock,  to be thereafter  disposed of in such manner as the directors shall deem
proper.

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                                       IX.

      (A) Number, Election and Terms of Directors.  Except as otherwise fixed by
or pursuant to the provisions of Article IV hereof relating 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  to  elect  additional  directors  under
specified  circumstances,  the number of the  directors of the Company  shall be
fixed from time to time by or pursuant to the by-laws. The directors, other than
those who may be elected by the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon  liquidation,  shall be
classified,  with respect to the time for which they severally hold office, into
three  classes,  as nearly equal in number as possible,  as shall be provided in
the manner  specified in the by-laws,  one class to be originally  elected for a
term expiring at the annual meeting of stockholders to be held in 1985,  another
class to be  originally  elected for a term  expiring  at the annual  meeting of
stockholders to be held in 1986, and another class to be originally  elected for
a term expiring at the annual meeting of  stockholders  to be held in 1987, with
each class to hold office until its successor is elected and qualified.  At each
annual meeting of the  stockholders of the Company,  the successors of the class
of directors  whose term expires at that meeting shall be elected to hold office
for a term expiring at the annual meeting of stockholders held in the third year
following the year of their election.

      (B)  Stockholder  Nomination  of Director  Candidates.  Advance  notice of
stockholder  nominations  for the  election of  directors  shall be given in the
manner provided in the by-laws.

      (C)  Newly  Created  Directorships  and  Vacancies.  Except  as  otherwise
provided  for or fixed by or  pursuant  to the  provisions  of Article IV hereof
relating to the rights of the  holders of any class or series of stock  having a
preference  over the Common Stock as to dividends or upon  liquidation  to elect
directors under specified  circumstances,  newly created directorships resulting
from any increase in the number of directors  and any  vacancies on the Board of
Directors resulting from death, resignation or disqualification,  or other cause
shall be filled by the affirmative vote of a majority of the remaining directors
then in office,  even though less than a quorum of the Board of  Directors.  Any
director so elected  shall stand for  election  (for the balance of his term) at
the next annual meeting of stockholders,  unless his term expires at such annual
meeting.  Any  vacancy  on the Board of  Directors  resulting  from  removal  by
stockholder  vote shall be filled  only by the vote of a majority  of the voting
power of all shares of the Company entitled to vote generally in the election of
directors, voting together as a single class.

      (D) Removal.  Subject to the rights of any class or series of stock having
a preference over the Common Stock as to dividends or upon  liquidation to elect
directors  under  specified  circumstances,  any  director  may be removed  from
office, with or without cause, only by the affirmative vote of the holders of 66
2/3% of the  combined  voting  power of the  then  outstanding  shares  of stock
entitled to vote  generally in the election of directors,  voting  together as a
single class.

      (E) Amendment,  Repeal,  Etc.  Notwithstanding  anything contained in this
Certificate  of  Incorporation  to the  contrary,  the  affirmative  vote of the
holders  of at least 66 2/3% of the voting  power of all  shares of the  Company
entitled to vote  generally in the election of directors,  voting  together as a
single  class,   shall  be  required  to  alter,   amend,  adopt  any  provision
inconsistent with or repeal this Article IX.

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<PAGE>



                                       X.

      In furtherance,  and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized:

      (A) to fix in the by-laws from time to time the number of directors of the
Company, none of whom need be stockholders;

      (B) to fix the amount to be reserved as working capital over and above its
capital stock paid in;

      (C) to  borrow  money  and to make and  issue  notes,  bonds,  debentures,
obligations  and  evidence  of  indebtedness  of all kinds,  with or without the
privilege of  conversion  into stock of the Company;  and also to authorize  and
cause to be executed  mortgages and liens upon the real and personal property of
the Company and conveyances of its real estate;

      (D) from time to time to determine whether and to what extent, and at what
times and places,  and under what conditions and  regulations,  the accounts and
books of the Company  (other than the stock  ledger),  or any of them,  shall be
open to inspection of stockholders;  and no stockholder  shall have any right of
inspecting  any account  book or document of the Company  except as conferred by
statute, unless authorized by a resolution of the stockholders or directors; and

      (E) if the by-laws so provide, to designate by resolution three or more of
its number to constitute an executive committee,  which committee shall, for the
time being,  have and  exercise  such of the powers of the Board of Directors in
the  management  of the business  and affairs of the Company,  and have power to
authorize  the seal of the Company to be affixed to all papers which may require
it.

      The  Company  may in its  by-laws  confer  powers  upon its  directors  in
addition  to  the  foregoing  and in  addition  to the  powers  and  authorities
expressly conferred upon them by statute.

      Both  stockholders  and  directors  shall have  power,  if the  by-laws so
provide, to hold their meeting and to have one or more offices within or without
the State of  Delaware,  and to keep the books of the  Company  (subject  to the
provisions of applicable laws),  outside of the State of Delaware at such places
as may be from time to time designated by the Board of Directors.

                                       XI.

      Any action  required or permitted to be taken by the  stockholders  of the
Company  must be  effected at a duly  called  annual or special  meeting of such
holders  and may not be  effected  by any  consent in  writing by such  holders.
Except as otherwise  required by law and subject to the rights of the holders of
any class or series of stock  having a  preference  over the Common  Stock as to
dividends or upon  liquidation,  special meetings of stockholders of the Company
may be called only by the Board of Directors  pursuant to a resolution  approved
by a  majority  of the  entire  Board  of  Directors.  Notwithstanding  anything
contained in this Certificate of Incorporation to the contrary,  the affirmative
vote of the holders of at least 66 2/3% of the voting power of all shares of the
Company entitled to vote generally in the election of directors, voting together
as a single  class,  shall be  required  to alter,  amend,  adopt any  provision
inconsistent with or repeal this Article XI.

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<PAGE>



                                      XII.

      The Board of Directors shall have power to make,  alter,  amend and repeal
the by-laws  (except so far as the  by-laws  adopted by the  stockholders  shall
otherwise provide). Any by-laws made by the directors under the powers conferred
hereby  may  be  altered,  amended  or  repealed  by  the  directors  or by  the
stockholders.  Notwithstanding  the  foregoing  and  anything  contained in this
Certificate  of  Incorporation  to the  contrary,  Section  2 of  Article  I and
Sections 1,2,3 and 4 of Article II of the by-laws shall not be altered,  amended
or repealed and no provision inconsistent therewith shall be adopted without the
affirmative  vote of the holders of at least 66 2/3% of the voting  power of all
the  shares  of the  Company  entitled  to vote  generally  in the  election  of
directors, voting together as a single class. Notwithstanding anything contained
in this Certificate of  Incorporation  to the contrary,  the affirmative vote of
the holders of at least 66 2/3% of the voting power of all shares of the Company
entitled to vote  generally in the election of directors,  voting  together as a
single  class,   shall  be  required  to  alter,   amend,  adopt  any  provision
inconsistent with or repeal this Article XII.

                                      XIII.

      (A)   Vote Required for Certain Business Combinations.

            (1) Higher Vote for Certain  Business  Combinations.  In addition to
      any affirmative vote required by law or this Certificate of Incorporation,
      and except as  otherwise  expressly  provided in Section B of this Article
      XIII:

                  (a)  any  merger  or  consolidation  of  the  Company  or  any
            Subsidiary  (as   hereinafter   defined)  with  (i)  any  Interested
            Stockholder  (as  hereinafter  defined)  or (ii) any  other  Company
            (whether or not itself an Interested Stockholder) which is, or after
            such merger or consolidation  would be, an Affiliate (as hereinafter
            defined) of an Interested Stockholder; or

                  (b) any sale, lease, exchange,  mortgage,  pledge, transfer or
            other  disposition (in one transaction or a series of  transactions)
            to or  with  any  Interested  Stockholder  or any  Affiliate  of any
            Interested   Stockholder  of  any  assets  of  the  Company  or  any
            Subsidiary  having an aggregate Fair Market Value of $100 million or
            more; or

                  (c) the issuance or transfer by the Company or any  Subsidiary
            (in one transaction or a series of  transactions)  of any securities
            of the Company or any  Subsidiary to any  Interested  Stockholder or
            any Affiliate of any  Interested  Stockholder  in exchange for cash,
            securities or other  property (or a combination  thereof)  having an
            aggregate Fair Market Value of $100 million or more or;

                  (d) the adoption of any plan or proposal  for the  liquidation
            or  dissolution  of  the  Company  proposed  by or on  behalf  of an
            Interested   Stockholder   or  any   Affiliate  of  any   Interested
            Stockholder; or

                  (e) any reclassification of securities  (including any reverse
            stock split), or  recapitalization  of the Company, or any merger or
            consolidation  of the Company  with any of its  Subsidiaries  or any
            other  transaction  (whether  or  not  with  or  into  or  otherwise
            involving an Interested  Stockholder) which has the effect, directly
            or  indirectly,   of  increasing  the  proportionate  share  of  the
            outstanding shares of any class of equity or convertible  securities
            of the Company or any  Subsidiary  which is  directly or  indirectly
            owned  by  any  Interested

                                       63
<PAGE>

            Stockholder  or any Affiliate of any Interested  Stockholder;  shall
            require the  affirmative  vote of the holders of at least 80% of the
            voting power of the then outstanding  shares of capital stock of the
            Company entitled to vote generally in the election of directors (the
            "Voting  Stock"),  voting  together  as a  single  class  (it  being
            understood that for purposes of this Article XIII, each share of the
            Voting  Stock shall have the number of votes  granted to it pursuant
            to  Article  IV  of  this   Certificate  of   Incorporation).   Such
            affirmative vote shall be required  notwithstanding the fact that no
            vote may be required,  or that a lesser percentage may be specified,
            by law or in any agreement with any national  securities exchange or
            otherwise.

            (2)  Definition  of  "Business   Combination."  The  term  "Business
      Combination" as used in this Article XIII shall mean any transaction which
      is referred to in any one or more of clauses (a) through (e) of  paragraph
      (1) of this Section (A).

      (B) When Higher Vote is Not Required.  The provisions of Section A of this
Article XIII shall not be applicable to any particular Business Combination, and
such  Business  Combination  shall  require  only  such  affirmative  vote as is
required by law and any other provision of this Certificate of Incorporation, if
all of the  conditions  specified in either of the following  paragraphs (1) and
(2) are met:

            (1) Approval by Disinterested  Directors.  The Business  Combination
      shall have been approved by a majority of the Disinterested  Directors (as
      hereinafter defined).

            (2)   Price  and  Procedure  Requirements.   All  of  the  following
      conditions shall have been met:

                  (a) The aggregate amount of the cash and the Fair Market Value
            (as hereinafter  defined) as of the date of the  consummation of the
            Business Combination of consideration other than cash to be received
            per share by holders of Common  Stock in such  Business  Combination
            shall be at least equal to the higher of the following:

                        (i)(if   applicable)   the   highest   per  share  price
                  (including  any  brokerage  commissions,  transfer  taxes  and
                  soliciting  dealers' fees) paid by the Interested  Stockholder
                  for any shares of Common  Stock  acquired by it (a) within the
                  two-year  period  immediately  prior to the first  publication
                  announcement of the proposal of the Business  Combination (the
                  "Announcement  Date")  or (b) in the  transaction  in which it
                  became an Interested Stockholder, whichever is higher; and

                        (ii) the Fair Market  Value per share of Common Stock on
                  the  Announcement  Date or on the date on which the Interested
                  Stockholder became an Interested Stockholder (such latter date
                  is  referred  to in this  Article  XIII as the  "Determination
                  Date"), whichever is higher.

                  (b) The aggregate amount of the cash and the Fair Market Value
            as of the date of the  consummation  of the Business  Combination of
            consideration other than cash to be received per share by holders of
            shares of any other class of  outstanding  Voting  Stock shall be at
            least equal to the highest of the following (it being  intended that
            the  requirements of this paragraph 2(b) shall be required to be met
            with respect to every class of outstanding Voting Stock,  whether or
            not the Interested Stockholder has previously acquired any shares of
            a particular class of Voting Stock):

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<PAGE>

                        (i)(if   applicable)   the   highest   per  share  price
                  (including  any  brokerage  commissions,  transfer  taxes  and
                  soliciting  dealers' fees) paid by the Interested  Stockholder
                  for any shares of such class of Voting  Stock  acquired  by it
                  (a)  within  the  two-year  period  immediately  prior  to the
                  Announcement Date or (b) in the transaction in which it became
                  an Interested Stockholder, whichever is higher;

                        (ii) (if applicable) the highest preferential amount per
                  share to which the  holders  of shares of such class of Voting
                  Stock  are   entitled  in  the  event  of  any   voluntary  or
                  involuntary  liquidation,  dissolution  or  winding  up of the
                  Company; and

                        (iii) the Fair  Market  Value per share of such class of
                  Voting Stock on the Announcement  Date or on the Determination
                  Date, whichever is higher.

                  (c)  The   consideration  to  be  received  by  holders  of  a
            particular  class of  outstanding  Voting  Stock  (including  Common
            Stock)  shall  be in cash  or in the  same  form  as the  Interested
            Stockholder  has previously  paid for shares of such class of Voting
            Stock.  If the  Interested  Stockholder  has paid for  shares of any
            class of Voting Stock with varying forms of consideration,  the form
            of consideration for such class of Voting Stock shall be either cash
            or the form used to  acquire  the  largest  number of shares of such
            class  of  Voting  Stock  previously   acquired  by  it.  The  price
            determined  in  accordance  with  paragraph  2(a)  and  2(b) of this
            Section B shall be subject to appropriate adjustment in the event of
            any stock  dividend,  stock split,  combination of shares or similar
            event.

                  (d) After such Interested Stockholder has become an Interested
            Stockholder   and  prior  to  the   consummation  of  such  Business
            Combination:   (i)  except  as   approved   by  a  majority  of  the
            Disinterested Directors, there shall have been no failure to declare
            and pay at the regular date  therefor any full  quarterly  dividends
            (whether or not cumulative) on the outstanding Preferred Stock; (ii)
            there  shall  have  been  (A) no  reduction  in the  annual  rate of
            dividends  paid on the Common Stock  (except as necessary to reflect
            any  subdivision  of the  Common  Stock),  except as  approved  by a
            majority of the Disinterested Directors, and (B) an increase in such
            annual   rate   of   dividends   as   necessary   to   reflect   any
            reclassification    (including    any    reverse    stock    split),
            recapitalization,  reorganization  or any similar  transaction which
            has the effect of reducing the number of  outstanding  shares of the
            Common Stock  unless the failure so to increase  such annual rate is
            approved by a majority  of the  Disinterested  Directors;  and (iii)
            such  Interested  Stockholder  shall have not become the  beneficial
            owner of any additional shares of Voting Stock except as part of the
            transaction which results in such Interested Stockholder becoming an
            Interested Stockholder.

                  (e) After such Interested Stockholder has become an Interested
            Stockholder, such Interested Stockholder shall not have received the
            benefit,   directly  or  indirectly  (except  proportionately  as  a
            stockholder), of any loans, advances,  guarantees,  pledges or other
            financial  assistance  or any tax  credits  or other tax  advantages
            provided by the Company, whether in anticipation of or in connection
            with such Business Combination or otherwise.

                  (f) A proxy or information  statement  describing the proposed
            Business  Combination  and complying  with the  requirements  of the
            Securities  Exchange  Act of 1934  and  the  rules  and  regulations
            thereunder (or any subsequent  provisions  replacing such Act, rules
            or  regulations)  shall be  mailed  to  public  stockholders  of the
            Company at least 30 days prior to

                                       65
<PAGE>

            the consummation of such Business  Combination  (whether or not such
            proxy or information  statement is required to be mailed pursuant to
            such Act or subsequent provisions).

      (C) Vote Required for Certain Stock Repurchases.  In addition to any other
requirement of this  Certificate of  Incorporation,  the affirmative vote of the
holders  of  at  least  50%  of  the  Voting  Stock  (other  than  Voting  Stock
beneficially owned by a Selling Stockholder (as hereinafter defined)),  shall be
required before the Company purchases any outstanding  shares of Common Stock at
a price above the Market Price (as  hereinafter  defined) from a person actually
known by the Company to be a Selling Stockholder, unless the purchase is made by
the Company (i) on the same terms and as a result of an offer made  generally to
all holders of Common Stock or (ii) pursuant to statutory appraisal right.

      (D) Certain Definitions. For the purposes of this Article XIII:

            (1) A "person" shall mean any individual, firm, corporation or other
      entity.

            (2) "Interested  Stockholder"  shall mean any person (other than the
      Company or any Subsidiary) who or which:

                  (a) is the beneficial owner,  directly or indirectly,  of more
            than 20% of the voting power of the outstanding Voting Stock; or

                  (b) is an  Affiliate of the Company and at any time within the
            two-year  period  immediately  prior to the date in question was the
            beneficial  owner,  directly  or  indirectly,  of 20% or more of the
            voting power of the then outstanding Voting Stock; or

                  (c) is an assignee of or has otherwise succeeded to any shares
            of Voting  Stock which were at any time within the  two-year  period
            immediately prior to the date in question  beneficially owned by any
            Interested Stockholder,  if such assignment or succession shall have
            occurred in the course of a  transaction  or series of  transactions
            not involving a public offering within the meaning of the Securities
            Act of 1933.

            (3) A person shall be a "beneficial owner" of any Voting Stock:

                  (a) which such person or any of its  Affiliates  or Associates
            (as hereinafter  defined)  beneficially owns directly or indirectly;
            or

                  (b) which such person or any of its  Affiliates  or Associates
            has (i) the right to  acquire  (whether  such  right is  exercisable
            immediately  or only  after the  passage of time),  pursuant  to any
            agreement,  arrangement  or  understanding  or upon the  exercise of
            conversion  rights,   exchange  rights,   warrants  or  options,  or
            otherwise,  or (ii) the  right to vote  pursuant  to any  agreement,
            arrangement or understanding; or

                  (c) which are beneficially owned,  directly or indirectly,  by
            any other person with which such person or any of its  Affiliates or
            Associates has any agreement,  arrangement or understanding  for the
            purpose of acquiring,  holding, voting or disposing of any shares of
            Voting Stock.

            (4)  For  the  purposes  of  determining  whether  a  person  is  an
      Interested  Stockholder  pursuant to  paragraph  2 of this  Section C, the
      number of shares of Voting Stock deemed to be  outstanding  shall  include
      shares deemed owned through  application  of paragraph 3 of this Section C
      but shall

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<PAGE>

      not  include  any other  shares  which  may be  issuable  pursuant  to any
      agreement,  arrangement or  understanding,  or upon exercise of conversion
      rights, warrants or options, or otherwise.

            (5)  "Affiliate" or "Associate"  shall have the respective  meanings
      ascribed to such terms in Rule 12b-2 of the General Rules and  Regulations
      under the Securities Exchange Act of 1934, as in effect on March 1, 1984.

            (6)  "Subsidiary"  means any  corporation of which a majority of any
      class of equity security is owned, directly or indirectly, by the Company;
      provided,  however,  that for the purposes of the definition of Interested
      Stockholder  set  forth  in  paragraph  2 of  this  Section  C,  the  term
      "Subsidiary"  shall mean only a  corporation  of which a majority  of each
      class of equity security is owned, directly or indirectly, by the Company.

            (7)  "Disinterested  Director"  means  any  member  of the  Board of
      Directors who is  unaffiliated  with the Interested  Stockholder and was a
      member of the  Board of  Directors  prior to the time that the  Interested
      Stockholder  became an  Interested  Stockholder,  and any  successor  of a
      Disinterested Director who is unaffiliated with the Interested Stockholder
      and is  recommended to succeed a  Disinterested  Director by a majority of
      Disinterested Directors then on the Board of Directors.

            (8) "Fair Market  Value"  means:  (a) in the case of the stock,  the
      highest closing sale price during the 30-day period immediately  preceding
      the date in  question of a share of such stock on the  Composite  Tape for
      New York Stock Exchange-Listed  Stocks, or, if such stock is not listed on
      such  Exchange,   on  the  principal  United  States  securities  exchange
      registered  under the Securities  Exchange Act of 1934 on which such stock
      is  listed,  or, if such  stock is not  listed on any such  exchange,  the
      highest closing bid quotation with respect to a share of such stock during
      the  30-day  period  preceding  the  date  in  question  on  the  National
      Association of Securities Dealers, Inc. Automated Quotations System or any
      system  then in use,  or if no such  quotations  are  available,  the fair
      market  value  on the  date in  question  of a  share  of  such  stock  as
      determined by the Board of Directors in good faith; and (b) in the case of
      property other than cash or stock,  the fair market value of such property
      on the date in question as  determined  by the Board of  Directors in good
      faith.

            (9)  "Selling  Stockholder"  means  any  person  who or which is the
      beneficial  owner  of in the  aggregate  more  than 1% of the  outstanding
      shares  of  Common  Stock  and who or which  has  purchased  or  agreed to
      purchase any of such shares within the most recent two-year period and who
      sells or proposes  to sell Common  Stock in a  transaction  requiring  the
      affirmative vote provided for in Section C of this Article XIII.

            (10)  "Market  Price"  means the highest sale price on or during the
      period of five trading days immediately  preceding the date in question of
      a  share  of  such  stock  on  the  Composite  Tape  for  New  York  Stock
      Exchange-Listed  Stocks,  or if such stock is not quoted on the  Composite
      Tape on the New York  Stock  Exchange,  or, if such stock is not listed on
      such  Exchange,   on  the  principal  United  States  securities  exchange
      registered  under the Securities  Exchange Act of 1934 on which such stock
      is  listed,  or, if such  stock is not  listed on any such  exchange,  the
      highest  closing  bid  quotation  with  respect  to a share of stock on or
      during the period of five trading days  immediately  preceding the date in
      question on the National Association of Securities Dealers, Inc. Automated
      Quotations  System or any system then in use, or if no such quotations are
      available,  the fair market

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<PAGE>

      value  on the  date in  question  of a  share  of such stock as determined
      by a majority of the Disinterested Directors.

      (E) Powers of the Board of Directors.  A majority of the  directors  shall
have the power and duty to determine  for the purposes of this Article  XIII, on
the basis of information known to them after reasonable  inquiry,  (1) whether a
person is an  Interested  Stockholder,  (2) the number of shares of Voting Stock
beneficially  owned by any  person,  (3)  whether  a person is an  Affiliate  or
Associate  of  another,  (4)  whether  the assets  which are the  subject of any
Business  Combination have, or the consideration to be received for the issuance
or  transfer of  securities  by the Company or any  Subsidiary  in any  Business
Combination  has, an  aggregate  Fair Market  Value of $100  million or more.  A
majority of the  directors  shall have the further power to interpret all of the
terms and provisions of this Article XIII.

      (F) No Effect on Fiduciary Obligations of Interested Stockholders. Nothing
contained in this  Article  XIII shall be  construed  to relieve any  Interested
Stockholder from any fiduciary obligation imposed by law.

      (G) Amendment,  Repeal, etc.  Notwithstanding any other provisions of this
Certificate of Incorporation or the by-laws (and notwithstanding the fact that a
lesser  percentage may be specified by law, this Certificate of Incorporation or
the  by-laws)  the  affirmative  vote  of the  holders  of 80%  or  more  of the
outstanding  Voting Stock,  voting together as a single class, shall be required
to amend or repeal, or adopt any provisions inconsistent with this Article XIII.

                                      XIV.

      A  director  of the  Company  shall not be liable  to the  Company  or its
stockholders  for monetary  damages for breach of fiduciary  duty as a director,
except to the extent such exemption from liability or limitation  thereof is not
permitted under the Delaware  General  Corporation Law as the same exists or may
hereafter be amended.

      Any repeal or modification of the foregoing  paragraph by the stockholders
of the Company shall not adversely  affect any right or protection of a director
of the Company existing at the time of such repeal or modification.

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                                       XV.

      The  Company  reserves  the right to amend,  alter,  change or repeal  any
provision  contained in this Certificate of Incorporation,  in the manner now or
hereafter  prescribed by this Certificate of  Incorporation or statute,  and all
rights  conferred  upon   stockholders   herein  are  granted  subject  to  this
reservation.







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