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                                                                     EXHIBIT 3.9

                                                         EFFECTIVE AS OF 1/30/97


                                        
                                   BY-LAWS OF

                              LEHMAN BROTHERS INC.
                            (A DELAWARE CORPORATION)


                                   ARTICLE I
                            MEETINGS OF SHAREHOLDERS


SECTION 1. ANNUAL MEETING. The annual meeting of the shareholders of Lehman
Brothers Inc. (hereinafter referred to as the "Corporation") for the election of
directors and for the transaction of such other business as may come before the
meeting shall be held on the fourth Thursday in September in each year, if not a
legal or recognized religious holiday, and if a legal or recognized religious
holiday, then on the next succeeding day not a legal or recognized religious
holiday, at such time as shall be designated by the Board of Directors
(hereinafter referred to as the "Board"), the Chairman of the Board or the
President. The Board may, in its absolute discretion, direct that the annual
meeting be held on such day other than the fourth Thursday in September (but
within thirty days prior thereto or sixty days subsequent thereto) as shall be
designated in the Board resolution calling such meeting. If the annual meeting
shall not be held as hereinabove provided for, the Board shall call a special
meeting for the election of directors, which meeting shall be held within two
months after said day.

SECTION 2. SPECIAL MEETINGS. Special meetings of the shareholders, unless
otherwise prescribed by statute, may be called at any time by the Board, the
Chairman of the Board or the President.

SECTION 3. NOTICE OF MEETINGS. Notice of the place, date and time of the holding
of each annual and special meeting of the shareholders and, in the case of a
special meeting, the purpose or purposes thereof, shall be given personally or
by mail in a postage prepaid envelope, not less than ten nor more than sixty
days before the date of such meeting, to each shareholder entitled to vote at
such meeting, and, if mailed, it shall be directed to such shareholder at his
address as it appears on the record of shareholders, unless he shall have filed
with the Secretary of the Corporation a written request that notices to him be
mailed to some other address. Any such notice for any meeting other than the
annual meeting shall indicate that it is being issued at the direction of the
Board or officer who shall have called the meeting. Notice of any meeting of
shareholders shall not be required to be given to any shareholder who shall
attend such meeting in person or by proxy and who does not, prior to the
conclusion of such meeting, protest the lack of notice thereof, or who shall,
either before or after the meeting, submit a signed waiver of notice, in person
or by proxy. Unless the Board shall fix after the adjournment a new record date
for an adjourned
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meeting, notice of such adjourned meeting need not be given if the time and
place to which the meeting shall be adjourned were announced at the meeting at
which the adjournment is taken. Any action required to be taken at any annual or
special meeting of shareholders of this Corporation or any action which may be
taken at any such annual or special meeting of such shareholders, may be taken
without a meeting, without prior notice and without a vote, if a consent in
writing setting forth the action so taken shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those shareholders who have not consented in writing.

SECTION 4. PLACE OF MEETINGS. Meetings of the shareholders may be held at such
place, within or without the State of New York, as the Board or the officer
calling the same shall specify in the notice of such meeting.

SECTION 5. QUORUM. At all meetings of the shareholders the holders of a majority
of the shares of stock of the Corporation issued and outstanding and entitled to
vote shall be present in person or by proxy to constitute a quorum for the
transaction of any business, except as otherwise provided by statute. In the
absence of a quorum, the holders of a majority of the shares of stock present in
person or by proxy and entitled to vote may adjourn the meeting from time to
time. At any such adjourned meeting at which a quorum may be present any
business may be transacted which might have been transacted at the meeting as
originally called.

SECTION 6. ORGANIZATION. At each meeting of the shareholders the Chairman of the
Board, or in his absence or inability to act, the Co-Chairman of the Board, or
in his absence or inability to act, a Vice Chairman of the Board, or in the
absence or inability to act of the Chairman of the Board, the Co-Chairman of the
Board and the Vice Chairmen of the Board, the Chief Executive Officer, or in his
absence, the Chief Operating Officer, or in the absence of any of the foregoing,
the President shall act as chairman of the meeting. The Secretary, or, in his
absence or inability to act, any person appointed by the chairman of the
meeting, shall act as secretary of the meeting and keep the minutes thereof.

SECTION 7. ORDER OF BUSINESS. The order of business at all meetings of the
shareholders shall be as determined by the chairman of the meeting.

SECTION 8. VOTING. Except as otherwise provided by statute or the Certificate of
Incorporation, each holder of record of shares of stock of the Corporation
having voting power shall be entitled at each meeting of the shareholders to one
vote for every share of such stock standing in his name on the record of
shareholders of the Corporation:

         a.       on the date fixed pursuant to the provisions of Section 5 of
                  Article VI of these By-Laws as the record date for the
                  determination of the shareholders who shall be entitled to
                  notice of and to vote at such meeting; or


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         b.       if such record date should not have been so fixed, then at the
                  close of business on the day next preceding the day on which
                  notice thereof shall be given.

Each shareholder entitled to vote at any meeting of shareholders may authorize
another person or persons to act for him by a proxy signed by such shareholder
or his attorney-in-fact. Any such proxy shall be delivered to the secretary of
such meeting at or prior to the time designated in the order of business for so
delivering such proxies. A proxy shall not be valid after the expiration of
eleven months from the date thereof, unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the shareholder executing it,
except in those cases where an irrevocable proxy is permitted by law. Except as
otherwise provided by statute or the Certificate of Incorporation, any corporate
action to be taken by vote of the shareholders shall be authorized by a majority
of the votes cast at a meeting of shareholders by the holders of shares present
in person or represented by proxy and entitled to vote on such action. Unless
required by statute, or determined by the chairman of the meeting to be
advisable, the vote on any question need not be by ballot. On a vote by ballot,
each ballot shall be signed by the shareholder voting, or by his proxy, if there
be such proxy, and shall state the number of shares voted.

SECTION 9. LIST OF SHAREHOLDERS. A list of shareholders as of the record date,
certified by the Secretary of the Corporation or by the transfer agent for the
Corporation, shall be produced at any meeting of the shareholders upon the
request of any shareholder made at or prior to such meeting.

SECTION 10. INSPECTORS. The Board may, in advance of any meeting of
shareholders, appoint one or more inspectors to act at such meeting or any
adjournment thereof. If the inspectors should not be so appointed or if any of
them should fail to appear or act, the chairman of the meeting may, and on the
request of any shareholder entitled to vote thereat shall, appoint inspectors.
Each inspector, before entering upon the discharge of his duties, shall take and
sign an oath faithfully to execute the duties of inspector at such meeting with
strict impartiality and according to the best of his ability. The inspectors
shall determine the number of shares outstanding and the voting power of each,
the number of shares represented at the meeting, the existence of a quorum, the
validity and effect of proxies, and shall receive votes, ballots or consents,
hear and determine all challenges and questions arising in connection with the
right to vote, count and tabulate all votes, ballots or consents, determine the
result, and do such acts as are proper to conduct the election or vote with
fairness to all shareholders. On request of the chairman of the meeting or any
shareholder entitled to vote thereat, the inspectors shall make a report in
writing of any challenge, request or matter determined by them and shall execute
a certificate of any fact found by them. No director or candidate for the office
of director shall act as an inspector of an election of directors. Inspectors
need not be shareholders.


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                                  ARTICLE II
                              BOARD OF DIRECTORS

SECTION 1. GENERAL POWERS. The business and affairs of the Corporation shall be
managed by the Board. The Board may exercise all such authority and powers of
the Corporation and do all such lawful acts and things as are not by statute,
the Constitution of the New York Stock Exchange, Inc., the Rules of the Board of
Directors of the New York Stock Exchange, Inc., or the Certificate of
Incorporation directed or required to be exercised or done by the shareholders.

SECTION 2. NUMBER, QUALIFICATIONS, ELECTION AND TERM OF OFFICE. The number of
directors which this Corporation shall have shall be not less than three and
shall consist of such number as may be fixed from time to time by resolution of
the Board. Any decrease in the number of directors shall be effective at the
time of the next succeeding annual meeting of the shareholders unless there
shall be vacancies in the Board, in which case such decrease may become
effective at any time prior to the next succeeding annual meeting to the extent
of the number of such vacancies. All the directors shall be of full age.
Directors need not be shareholders. Except as otherwise provided by statute or
these By-Laws, the directors shall be elected at the annual meeting of the
shareholders and at each meeting of the shareholders for the election of
directors at which a quorum is present the persons receiving a plurality of the
votes cast at such election shall be elected. Each director shall hold office
until the next annual meeting of the shareholders and until his successor shall
have been duly elected and qualified, or until his death, or until he shall have
resigned or have been removed, as hereinafter provided in these By-Laws.

SECTION 3. PLACE OF MEETINGS. Meetings of the Board may be held at such place,
within or without the State of New York, as the Board may from to time determine
or as shall be specified in the notice of such meeting.

SECTION 4. FIRST MEETING. The Board shall meet for the purpose of organization,
the election of officers and the transaction of other business, as soon as
practicable after each annual meeting of the shareholders, on the same day and
at the same place where such annual meeting shall be held. Notice of such
meeting need not be given. Such meeting may be held at any other time or place
(within or without the State of New York) which shall be specified in a notice
thereof given as hereinafter provided in Section 7 of this Article II.

SECTION 5. REGULAR MEETINGS. Regular meetings of the Board shall be held at such
time as the Board may fix. If any day fixed for a regular meeting should be a
legal or recognized religious holiday at the place where the meeting is to be
held, then the meeting which would otherwise be held on that day shall be held
at the same hour on the next succeeding business day. Notice of regular meetings
of the Board need not be given except as otherwise required by statute or these
By-Laws.


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SECTION 6. SPECIAL MEETINGS. Special meetings of the Board may be called by two
or more directors of the Corporation or by the Chairman of the Board or the
President.

SECTION 7. NOTICE OF MEETINGS. Notice of each special meeting of the Board (and
of each regular meeting for which notice shall be required) shall be given by
the Secretary or the Chairman of the Board as hereinafter provided in this
Section 7, in which notice shall be stated the time and place (within or without
the State of New York) of the meeting. Notice of each such meeting shall be
delivered to each director either personally or by telephone, telegraph, cable
or wireless, at least twenty-four hours before the time at which such meeting is
to be held or by first class mail, postage prepaid, addressed to him at his
residence or usual place of business, at least two days before the day on which
such meeting is to be held. Notice of any such meeting need not be given to any
director who shall, either before or after the meeting, submit a signed waiver
of notice or who shall attend such meeting without protesting, prior to or at
its commencement, the lack of notice to him. Except as otherwise specifically
required by these By-Laws, a notice or waiver of notice of any regular or
special meeting need not state the purposes of such meeting. Any action required
or permitted to be taken at any meeting of the Board of Directors or any
committee thereof may be taken without a meeting if all members of the Board of
Directors or such committee, as the case may be, consent thereto in writing, and
the writing is filed with the minutes of proceedings of the Board or such
committee.

SECTION 8. QUORUM AND MANNER OF ACTING. A majority of the entire Board shall be
present in person at any meeting of the Board in order to constitute a quorum
for the transaction of business at such meeting, and, except as otherwise
expressly required by statute or the Certificate of Incorporation, the act of a
majority of the directors present at any meeting at which a quorum is present
shall be the act of the Board. In the absence of a quorum at any meeting of the
Board, a majority of the directors present thereat may adjourn such meeting to
another time and place. Notice of the time and place of any such adjourned
meeting shall be given to the directors who were not present at the time of the
adjournment and, unless such time and place were announced at the meeting at
which the adjournment was taken, to the other directors. At any adjourned
meeting at which a quorum is present, any business may be transacted which might
have been transacted at the meeting as originally called. The directors shall
act only as a Board and the individual directors shall have no power as such.

SECTION 9. ORGANIZATION. At each meeting of the Board, the officer specified in
Article IV hereof (or, in the absence or inability to act of all officers
designated in Article IV hereof so to act, another director chosen by a majority
of the directors present) shall act as chairman of the meeting and preside
thereat. The Secretary (or, in his absence or inability to act, any person
appointed by the Chairman) shall act as secretary of the meeting and keep the
minutes thereof.

SECTION 10. RESIGNATIONS. Any director of the Corporation may resign at any time
by giving written notice of his resignation to the Board, the Chairman of the
Board or the Secretary. Any such resignation shall take effect at the time
specified therein or, if the time when it shall

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become effective shall not be specified therein, immediately upon its receipt;
and, unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.

SECTION 11. VACANCIES. Any vacancy in the Board, whether arising from death,
resignation, removal (with or without cause), an increase in the number of
directors or any other cause, may be filled by the vote of a majority of the
directors then in office, though less than a quorum, or by the shareholders at
the next annual meeting thereof or at a special meeting thereof; and each
director so elected shall hold office for the unexpired term of his predecessor.

SECTION 12. REMOVAL OF DIRECTORS. Any director may be removed, either with or
without cause, at any time, by the shareholders at a special meeting thereof.
Any director may be removed for cause by the Board at a special meeting thereof.

SECTION 13. COMPENSATION. The Board shall have authority to fix the
compensation, including fees and reimbursement of expenses, of directors for
services to the Corporation in any capacity.

SECTION 14. MEETINGS BY CONFERENCE TELEPHONE. Notwithstanding anything to the
contrary contained in these By-Laws, the Board of Directors of this Corporation,
and any committee (including but not limited to the Executive Committee)
designated by such Board pursuant to Article III hereof, may participate in a
meeting of said Board of Directors or committee by means of conference telephone
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, and participation in a meeting pursuant to
this Section 14 shall constitute presence in person at such meeting.

                                   ARTICLE III
                         EXECUTIVE AND OTHER COMMITTEES

SECTION 1. EXECUTIVE COMMITTEE. The Board may, by resolution adopted by a
majority of the entire Board, designate an Executive Committee consisting of one
or more of the directors of the Corporation, which Committee shall have and may
exercise all the authority of the Board as permitted pursuant to the Delaware
General Corporation Law including but not limited to declaration of dividends,
authorization for the issuance of stock, adoption of a certificate of ownership
and merger pursuant to Section 253 of the said Delaware Law, except that it
shall not have authority with respect to:

         a.       the submission to shareholders of any action requiring
                  authorization of shareholders pursuant to statute or the
                  Certificate of Incorporation;

         b.       the filling of vacancies on the Board or in any committee of
                  the Board, including the Executive Committee;

         c.       the amendment or repeal of these By-Laws or the adoption of
                  new By-Laws; and


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         d.       the amendment or repeal of any resolution of the Board which
                  by its terms may be amended or repealed only by the Board.

The Board shall have the power at any time to change the membership of the
Executive Committee, to fill all vacancies in it, or to dissolve it.

The Executive Committee shall keep written minutes of its proceedings and shall
report such minutes to the Board upon the request of a majority of the members
of the Board of Directors. All such proceedings shall be subject to revision or
alteration by the Board; provided, however, that third parties shall not be
prejudiced by such revision or alteration.

SECTION 2. OTHER COMMITTEES. The Board may, by resolution adopted by a majority
of the entire Board, designate other committees, each consisting of one or more
of the directors of the Corporation, which committees, except as otherwise
prescribed by statute, shall have and may exercise the authority of the Board to
the extent that such authority shall be conferred by the resolutions designating
such committees.

SECTION 3. GENERAL. A majority of any committee may determine its action and fix
the time and place of its meetings, unless the Board shall otherwise provide.
The Board shall have power at any time to fill vacancies in, to change the
membership of, or to dissolve any such committee. Nothing herein shall be deemed
to prevent the Board from appointing one or more committees consisting in whole
or in part of persons who are not directors of the Corporation; provided,
however, that any such committee shall not have nor exercise any authority of
the Board.

                                  ARTICLE IV
                                   OFFICERS

SECTION 1. NUMBER AND QUALIFICATIONS. The officers of the Corporation shall
include the Chairman of the Board of Directors, the Co-Chairman of the Board,
one or more Vice Chairmen of the Board, the Chief Executive Officer, the Chief
Operating Officer, the Chief Administrative Officer, the Co-Chief Administrative
Officers, the Chief Financial Officer, the President, one or more Senior
Managing Directors and Managing Directors of the Corporation, one or more Vice
Presidents (one or more of whom may be designated by the Board of Directors as
Senior Executive Vice Presidents, Executive Vice Presidents, Executive Vice
President--Finance, Senior Vice Presidents or First Vice Presidents), the
Controller, the Treasurer, the Secretary, and one or more Assistant Treasurers
and Assistant Secretaries. The Board may also from time to time by resolution
establish Divisions of the Corporation, and may elect officers of any such
Division, including a Chairman, Vice Chairman, President, one or more Senior
Managing Directors and one or more Managing Directors, and one or more Senior
Vice Presidents, First Vice Presidents and Vice Presidents, who shall be
Officers of the Corporation. Any two or more offices may be held by the same
person, except the offices of President and Secretary. The Chairman of the
Board, the

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Co-Chairman of the Board, the Vice Chairman of the Board, the Chief Executive
Officer, the Chief Operating Officer and the President shall be chosen from
among the Board of Directors. All of the officers mentioned hereinbefore in this
Article shall be elected from time to time by the Board, each to hold office
until the meeting of the Board following the next annual meeting of the
shareholders, or until his successor shall have been duly elected and shall have
qualified, or until his death, or until he shall have resigned, or shall have
been removed as hereinafter provided in these By-Laws. The Board may from time
to time elect, or delegate to any one or more officers the power to appoint,
such other noncorporate titleholders and Davis, Skaggs Divisional Noncorporate
Titleholders (including Chief Financial Officer of the Lehman Brothers Division,
President of the Private Client Group of the Shearson Lehman Brothers Division,
Managing Partner of the Lehman Brothers Division, Chief Administrative Officer
of the Lehman Brothers Division, Chief Administrative Officer of the Shearson
Lehman Brothers Division, Chief Financial Officer of the Shearson Lehman
Brothers Division, Chief Technology and Operations Officer of the Lehman
Brothers Division, President of the Asset Management Group of the Shearson
Lehman Brothers Division, one or more Advisory Directors, Assistant Vice
Presidents, Controllers--Commodities, Senior Vice Presidents--Administration,
Vice Presidents--Administration, Second Vice Presidents--Administrative Manager,
Senior Vice Presidents--Arbitrage, First Vice Presidents--Arbitrage, Vice
Presidents--Arbitrage, Vice Presidents--Assistant Manager, Vice
Presidents--Associate Manager, Senior Vice Presidents--Commodities, First Vice
Presidents--Commodities, Vice Presidents-- Commodities, Assistant Vice
Presidents--Commodities, Second Vice Presidents-- Commodities, Assistant Vice
Presidents--Commodity Meteorologist, First Vice Presidents--Commodity Research,
Vice Presidents--Commodity Research, Assistant Vice Presidents--Commodity
Research, Vice Presidents--Communications Planning and Technology, Vice
Presidents--Control Administrator, Senior Vice Presidents--Convertible
Arbitrage, First Vice Presidents--Convertible Arbitrage, Vice
Presidents--Convertible Arbitrage, Assistant Vice Presidents--Convertible
Arbitrage, Senior Vice Presidents-- Corporate Bonds, Vice Presidents--Corporate
Bonds, Assistant Vice Presidents--Corporate Bonds, Second Vice
Presidents--Corporate Bonds, Assistant Vice Presidents--Corporate Bond
Administration, First Vice Presidents--Corporate Bond Liaison, Vice Presidents--
Corporate Bond Liaison, Assistant Vice Presidents--Corporate Bond Liaison,
Senior Vice Presidents--Corporate Bond Sales, Assistant Vice
Presidents--Corporate Planning & Development, Senior Vice Presidents--Derivative
Marketing, Senior Vice Presidents-- Derivative Products, First Vice
Presidents--Derivative Products, Vice Presidents--Direct Marketing, First Vice
Presidents--Equity Arbitrage Group, Vice Presidents--Equity Arbitrage Group,
Assistant Vice Presidents--Equity Arbitrage Group, President--Shearson Equity
Management, Vice Presidents--Shearson Equity Management, Assistant Vice
Presidents--Shearson Equity Management, Vice Presidents--Executive Compensation
Planning, Managing Directors/Financial Consultant, Executive Vice
Presidents/Financial Consultant, Senior Vice Presidents/Financial Consultants,
First Vice Presidents/Financial Consultants, Vice Presidents/Financial
Consultants, Assistant Vice Presidents/Financial Consultants, Second Vice
Presidents/Financial Consultants, Senior Vice Presidents/Financial
Consultants--Commodities, First Vice Presidents/Financial
Consultants--Commodities, Vice Presidents/Financial Consultants--Commodities,
Second Vice Presidents/Financial Consultants--Commodities, Senior Vice
Presidents--Financial Futures and Options, First Vice Presidents--Financial
Futures and Options, Vice Presidents--Financial Planning,

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Vice Presidents--Financial Reporting, Senior Vice Presidents--Fixed Income, Vice
Presidents--Fixed Income, Assistant Vice Presidents--Fixed Income, Second Vice
Presidents--Fixed Income, Vice Presidents--Fixed Income International, Vice
Presidents-- Fixed Income Research, Assistant Vice Presidents--Fixed Income
Research, Second Vice Presidents--Fixed Income Research, Vice Presidents--Fixed
Income Systems, Senior Vice Presidents--Foreign Currency Trading and Sales,
First Vice Presidents--Foreign Currency Trading and Sales, Vice
Presidents--Foreign Currency Trading and Sales, Assistant Vice
Presidents--Foreign Currency Trading and Sales, Vice Presidents--Foreign
Exchange, Senior Vice Presidents--Futures, First Vice Presidents--Futures, Vice
Presidents--Futures, Assistant Vice Presidents--Futures, Vice
Presidents--Government Bonds, Vice Presidents-- Government Securities, Second
Vice Presidents--Government Securities, Vice Presidents-- High Yield, Vice
Presidents--Institutional Administration, Assistant Vice Presidents--
Institutional Administration, Senior Vice Presidents-- Institutional Equity
Services, First Vice Presidents--Institutional Equity Services, Vice
Presidents--Institutional Equity Services, Assistant Vice
Presidents--Institutional Equity Services, First Vice Presidents-- Institutional
Funds, Vice Presidents--Institutional Investor Services, First Vice Presidents--
Institutional Options, Vice Presidents--Institutional Options, Assistant Vice
Presidents-- Institutional Options, Vice Presidents--Institutional Options &
Futures, Assistant Vice Presidents--Institutional Options & Futures, Senior Vice
Presidents--Institutional Sales, First Vice Presidents--Institutional Sales,
Vice Presidents--Institutional Sales, Second Vice Presidents--Institutional
Sales, Senior Vice Presidents--International, First Vice Presidents-
-International, Vice Presidents--International, Assistant Vice
Presidents--International, Second Vice Presidents--International, Vice
Presidents--International Operations, Senior Vice Presidents--Investments, First
Vice Presidents--Investments, Vice Presidents-- Investments, Second Vice
Presidents--Investments, Assistant Vice Presidents--Investment Banking, Vice
President--Investment Strategy-Research, Vice Presidents--Latin America, First
Vice Presidents--Leasing, First Vice Presidents--Loan Transaction, Vice
Presidents-- Loan Transaction, Assistant Vice Presidents--Loan Transaction,
Senior Vice Presidents-- Metals, Vice Presidents--Metals, Vice Presidents--Money
Market, Senior Vice Presidents-- Municipals, Vice Presidents--Municipals,
Assistant Vice Presidents--Municipals, Second Vice Presidents--Municipals, Vice
Presidents--Mutual Funds, Vice Presidents--OTC Trading, Second Vice
Presidents--OTC Trading, First Vice Presidents--Operations, Vice
Presidents--Operations, Assistant Vice Presidents--Operations, Second Vice
Presidents-- Operations, First Vice Presidents--Options Arbitrage, Vice
Presidents--Options Arbitrage, Overseas Director, Vice Presidents--Personal
Financial Planning, Vice Presidents--Public Finance, Vice Presidents--Real
Estate, Assistant Vice Presidents--Regulatory Reporting, Senior Vice
Presidents--Research, First Vice Presidents--Research, Vice Presidents--
Research, Assistant Vice Presidents--Research, Second Vice Presidents--Research,
Vice Presidents--Research High Yield, Assistant Vice Presidents--Research
Liaison, Senior Vice Presidents--Resident Manager, Vice Presidents--Resident
Manager, Senior Vice Presidents--Risk Arbitrage, Vice Presidents--Risk
Arbitrage, Assistant Vice Presidents-- Risk Arbitrage, Vice
Presidents--Securities International, Vice Presidents--Senior Economist, Vice
Presidents--Senior Financial Planning, First Vice Presidents--Stock Loan, Vice
Presidents--Stock Loan, Assistant Vice Presidents--Taxable Fixed Income
Research, Senior Vice Presidents--Trading, First Vice Presidents--Trading, Vice
Presidents--Trading, Assistant Vice Presidents--Trading, Second Vice
Presidents--Trading, Vice Presidents-- Trading Floor Technology, Vice
Presidents--

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Unit Trust, Second Vice Presidents--Unit Trust) and such agents, as may be
necessary or desirable for the business of the Corporation. Such other officers
and agents shall have such duties and shall hold their offices for such terms as
may be prescribed by the Board or by the appointing authority. However, absent
specific affirmative action by the Board of Directors, holders of the
noncorporate titles (including Davis, Skaggs Divisional Noncorporate Titles) of
Chief Financial Officer of the Lehman Brothers Division, President of the
Private Client Group of the Shearson Lehman Brothers Division, Managing Partner
of the Lehman Brothers Division, Chief Administrative Officer of the Lehman
Brothers Division, Chief Administrative Officer of the Shearson Lehman Brothers
Division, Chief Financial Officer of the Shearson Lehman Brothers Division,
Chief Technology and Operations Officer of the Lehman Brothers Division,
President of the Asset Management Group of the Shearson Lehman Brothers
Division, Advisory Director, Assistant Vice President, Controller--Commodities,
Senior Vice President-- Administration, Vice President--Administration, Second
Vice President--Administrative Manager, Senior Vice President--Arbitrage, First
Vice President--Arbitrage, Vice President--Arbitrage, Vice President--Assistant
Manager, Vice President--Associate Manager, Senior Vice President--Commodities,
First Vice President--Commodities, Vice President--Commodities, Assistant Vice
President--Commodities, Second Vice President-- Commodities, Assistant Vice
President--Commodity Meteorologist, First Vice President-- Commodity Research,
Vice President--Commodity Research, Assistant Vice President-- Commodity
Research, Vice President--Communications Planning and Technology, Vice
President--Control Administrator, Senior Vice President--Convertible Arbitrage,
First Vice President--Convertible Arbitrage, Vice President--Convertible
Arbitrage, Assistant Vice President--Convertible Arbitrage, Senior Vice
President--Corporate Bonds, Vice President--Corporate Bonds, Assistant Vice
President--Corporate Bonds, Second Vice President--Corporate Bonds, Assistant
Vice President--Corporate Bond Administration, First Vice President--Corporate
Bond Liaison, Vice President--Corporate Bond Liaison, Assistant Vice
President--Corporate Bond Liaison, Senior Vice President--Corporate Bond Sales,
Assistant Vice President--Corporate Planning & Development, Senior Vice
President--Derivative Marketing, Senior Vice President--Derivative Products,
First Vice President--Derivative Products, Vice President--Direct Marketing,
First Vice President-- Equity Arbitrage Group, Vice President--Equity Arbitrage
Group, Assistant Vice President--Equity Arbitrage Group, President--Shearson
Equity Management, Vice President--Shearson Equity Management, Assistant Vice
President--Shearson Equity Management, Vice President--Executive Compensation
Planning, Managing Director/Financial Consultant, Executive Vice
President/Financial Consultant, Senior Vice President/Financial Consultant,
First Vice President/Financial Consultant, Vice President/Financial Consultant,
Assistant Vice President/Financial Consultant, Second Vice President Financial/
Consultant, Senior Vice President/Financial Consultant-- Commodities, First Vice
President/Financial Consultant--Commodities, Vice President/Financial
Consultant--Commodities, Second Vice President/Financial
Consultant--Commodities, Senior Vice President--Financial Futures and Options,
First Vice President--Financial Futures and Options, Vice President--Financial
Planning, Vice President--Financial Reporting, Senior Vice President--Fixed
Income, Vice President-- Fixed Income, Assistant Vice President--Fixed Income,
Second Vice President--Fixed Income, Vice President--Fixed Income International,
Vice President--Fixed Income Research, Assistant Vice President--Fixed Income
Research, Second Vice President--Fixed Income Research, Vice President--Fixed

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Income Systems, Senior Vice President--Foreign Currency Trading and Sales, First
Vice President--Foreign Currency Trading and Sales, Vice President--Foreign
Currency Trading and Sales, Assistant Vice President--Foreign Currency Trading
and Sales, Vice President--Foreign Exchange, Senior Vice President--Futures,
First Vice President-- Futures, Vice President--Futures, Assistant Vice
President--Futures, Vice President-- Government Bonds, Vice
President--Government Securities, Second Vice President-- Government Securities,
Vice President--High Yield, Vice President--Institutional Administration,
Assistant Vice President--Institutional Administration, Senior Vice
President--Institutional Equity Services, First Vice President--Institutional
Equity Services, Vice President--Institutional Equity Services, Assistant Vice
President--Institutional Equity Services, First Vice President--Institutional
Funds, Vice President--Institutional Investor Services, First Vice
President--Institutional Options, Vice President--Institutional Options,
Assistant Vice President--Institutional Options, Vice President--Institutional
Options & Futures, Assistant Vice President--Institutional Options & Futures,
Senior Vice President--Institutional Sales, First Vice President--Institutional
Sales, Vice President-- Institutional Sales, Second Vice
President--Institutional Sales, Senior Vice President-- International, First
Vice President--International, Vice President--International, Assistant Vice
President--International, Second Vice President--International, Vice President--
International Operations, Senior Vice President--Investments, First Vice
President-- Investments, Vice President--Investments, Second Vice
President--Investments, Assistant Vice President-- Investment Banking, Vice
President--Investment Strategy-Research, Vice President--Latin America, First
Vice President--Leasing, First Vice President--Loan Transaction, Vice
President--Loan Transaction, Assistant Vice President--Loan Transaction, Senior
Vice President--Metals, Vice President--Metals, Vice President-- Money Market,
Senior Vice President--Municipals, Vice President--Municipals, Assistant Vice
President--Municipals, Second Vice President--Municipals, Vice President--Mutual
Funds, Vice President--OTC Trading, Second Vice President--OTC Trading, First
Vice President--Operations, Vice President--Operations, Assistant Vice
President--Operations, Second Vice President--Operations, First Vice
President--Options Arbitrage, Vice President-- Options Arbitrage, Overseas
Director, Vice President--Personal Financial Planning, Vice President--Public
Finance, Vice President--Real Estate, Assistant Vice President--Regulatory
Reporting, Senior Vice President--Research, First Vice President-- Research,
Vice President--Research, Assistant Vice President--Research, Second Vice
President--Research, Vice President--Research High Yield, Assistant Vice
President-- Research Liaison, Senior Vice President-- Resident Manager, Vice
President--Resident Manager, Senior Vice President--Risk Arbitrage, Vice
President--Risk Arbitrage, Assistant Vice President--Risk Arbitrage, Vice
President--Securities International, Vice President-- Senior Economist, Vice
President--Senior Financial Planning, First Vice President--Stock Loan, Vice
President--Stock Loan, Assistant Vice President--Taxable Fixed Income Research,
Senior Vice President--Trading, First Vice President-- Trading, Vice President--
Trading, Assistant Vice President--Trading, Second Vice President--Trading, Vice
President--Trading Floor Technology, Vice President--Unit Trust, and Second Vice
President--Unit Trust shall not be deemed to be corporate officers and shall not
have authority to bind the Corporation to substantial obligations, and in the
case of holders of departmental titles, shall not have the authority to bind the
Corporation to any obligations outside their respective departments.
Accordingly, the holders of such noncorporate titles (including Davis, Skaggs
Divisional Noncorporate Titles) as Chief Financial Officer of the Lehman
Brothers Division,

                                      -11-
<PAGE>   12
President of the Private Client Group of the Shearson Lehman Brothers Division,
Managing Partner of the Lehman Brothers Division, Chief Administrative Officer
of the Lehman Brothers Division, Chief Administrative Officer of the Shearson
Lehman Brothers Division, Chief Financial Officer of the Shearson Lehman
Brothers Division, Chief Technology and Operations Officer of the Lehman
Brothers Division, President of the Asset Management Group of the Shearson
Lehman Brothers Division, Advisory Director, Assistant Vice President,
Controller--Commodities, Senior Vice President-- Administration, Vice
President--Administration, Second Vice President--Administrative Manager, Senior
Vice President--Arbitrage, First Vice President--Arbitrage, Vice
President--Arbitrage Vice President--Assistant Manager, Vice
President--Associate Manager Senior Vice President--Commodities, First Vice
President--Commodities, Vice President--Commodities, Assistant Vice
President--Commodities, Second Vice President-- Commodities, Assistant Vice
President--Commodity Meteorologist, First Vice President-- Commodity Research,
Vice President--Commodity Research, Assistant Vice President-- Commodity
Research, Vice President--Communications Planning and Technology, Vice
President--Control Administrator, Senior Vice President--Convertible Arbitrage,
First Vice President--Convertible Arbitrage, Vice President--Convertible
Arbitrage, Assistant Vice President--Convertible Arbitrage, Senior Vice
President--Corporate Bonds, Vice President--Corporate Bonds, Assistant Vice
President--Corporate Bonds, Second Vice President--Corporate Bonds, Assistant
Vice President--Corporate Bonds Administration, First Vice President--Corporate
Bond Liaison, Vice President--Corporate Bond Liaison, Assistant Vice
President--Corporate Bond Liaison, Senior Vice President--Corporate Bond Sales,
Assistant Vice President--Corporate Planning & Development, Senior Vice
President--Derivative Marketing, Senior Vice President--Derivative Products,
First Vice President--Derivative Products, Vice President--Direct Marketing,
First Vice President-- Equity Arbitrage Group, Vice President--Equity Arbitrage
Group, Assistant Vice President--Equity Arbitrage Group, President--Shearson
Equity Management, Vice President--Shearson Equity Management, Assistant Vice
President--Shearson Equity Management, Vice President--Executive Compensation
Planning, Managing Director/Financial Consultant, Executive Vice
President/Financial Consultant, Senior Vice President/Financial Consultant,
First Vice President/Financial Consultant, Vice President/Financial Consultant,
Assistant Vice President/Financial Consultant, Second Vice President/Financial
Consultant, Senior Vice President /Financial Consultant-- Commodities, First
Vice President/Financial Consultant--Commodities, Vice President/Financial
Consultant--Commodities, Second Vice President/Financial
Consultant--Commodities, Senior Vice President--Financial Futures and Options,
First Vice President--Financial Futures and Options, Vice President--Financial
Planning, Vice President--Financial Reporting, Senior Vice President--Fixed
Income, Vice President-- Fixed Income, Assistant Vice President--Fixed Income,
Second Vice President--Fixed Income, Vice President--Fixed Income International,
Vice President--Fixed Income Research, Assistant Vice President--Fixed Income
Research, Second Vice President--Fixed Income Research, Vice President--Fixed
Income Systems, Senior Vice President--Foreign Currency Trading and Sales, First
Vice President--Foreign Currency Trading and Sales,
Vice President--Foreign Currency Trading and Sales, Assistant Vice
President--Foreign Currency Trading and Sales, Vice President--Foreign Exchange,
Senior Vice President-- Futures, First Vice President--Futures, Vice
President--Futures, Assistant Vice President-- Futures, Vice
President--Government Bonds, Vice President--Government Securities, Second Vice
President--Government Securities,

                                      -12-
<PAGE>   13

Vice President--High Yield, Vice President--Institutional Administration,
Assistant Vice President--Institutional Administration, Senior Vice
President--Institutional Equity Services, First Vice President-- Institutional
Equity Services, Vice President--Institutional Equity Services, Assistant Vice
President--Institutional Equity Services, First Vice President--Institutional
Funds, Vice President--Institutional Investor Services, First Vice
President--Institutional Options, Vice President--Institutional Options,
Assistant Vice President--Institutional Options, Vice President--Institutional
Options & Futures, Assistant Vice President--Institutional Options & Futures,
Senior Vice President--Institutional Sales, First Vice President--Institutional
Sales, Vice President--Institutional Sales, Second Vice President--Institutional
Sales, Senior Vice President--International, First Vice
President--International, Vice President-- International, Assistant Vice
President--International, Second Vice President-- International, Vice
President--International Operations, Senior Vice President-- Investments, First
Vice President--Investments, Vice President--Investments, Second Vice
President--Investment, Assistant Vice President--Investment Banking, Vice
President-- Investments Strategy-Research, Vice President--Latin America, First
Vice President-- Leasing, First Vice President--Loan Transaction, Vice
President--Loan Transaction, Assistant Vice President--Loan Transaction, Senior
Vice President--Metals, Vice President- -Metals, Vice President--Money Market,
Senior Vice President--Municipals, Vice President--Municipals, Assistant Vice
President--Municipals, Second Vice President-- Municipals, Vice
President--Mutual Funds, Vice President--OTC Trading, Second Vice President--OTC
Trading, First Vice President--Operations, Vice President--Operations, Assistant
Vice President--Operations, Second Vice President--Operations, First Vice
President--Options Arbitrage, Vice President--Options Arbitrage, Overseas
Director, Vice President--Personal Financial Planning, Vice President--Public
Finance, Vice President-- Real Estate, Assistant Vice President--Regulatory
Reporting, Senior Vice President-- Research, First Vice President--Research,
Vice President--Research, Assistant Vice President--Research, Second Vice
President--Research, Vice President--Research High Yield, Assistant Vice
President--Research Liaison, Senior Vice President--Resident Manager, Vice
President--Resident Manager, Senior Vice President--Risk Arbitrage, Vice
President--Risk Arbitrage, Assistant Vice President--Risk Arbitrage, Vice
President-- Securities International, Vice President--Senior Economist, Vice
President--Senior Financial Planning, First Vice President--Stock Loan, Vice
President--Stock Loan, Assistant Vice President--Taxable Fixed Income Research,
Senior Vice President--Trading, First Vice President--Trading, Vice
President--Trading, Assistant Vice President--Trading, Second Vice
President--Trading, Vice President-Trading Floor Technology, Vice
President--Unit Trust, and Second Vice President--Unit Trust shall not be
reportable as officers of the Corporation to any regulatory or self-regulatory
authority, exchange, clearing corporation or the like.

SECTION 2. RESIGNATIONS. Any officer of the Corporation may resign at any time
by giving written notice of his resignation to the Board, the Chairman of the
Board or the Secretary. Any such resignation shall take effect at the time
specified therein or, if the time when it shall become effective shall not be
specified therein, immediately upon its receipt; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.

                                      -13-
<PAGE>   14
SECTION 3. REMOVAL. Any officer or agent of the Corporation may be removed,
either with or without cause and without prejudice to any rights existing under
any contract, at any time, by the Board at any meeting of the Board, or except
in the case of an officer or agent elected or appointed by the Board, by any
officer to whom the Board shall have delegated the power to appoint such officer
being removed.

SECTION 4. VACANCIES. A vacancy in any office, whether arising from death,
resignation, removal or any other cause, may be filled for the unexpired portion
of the term of the office which shall be vacant, in the manner prescribed in
these By-Laws for the regular election or appointment to such office.

SECTION 5. THE CHAIRMAN OF THE BOARD. The Chairman of the Board shall, if
present, preside at each meeting of the shareholders and of the Board. He shall
perform all duties incident to the office of Chairman of the Board and such
other duties as may from time to time be assigned to him by the Board.

SECTION 6. THE CO-CHAIRMAN OF THE BOARD. The Co-Chairman of the Board shall, in
the absence of the Chairman of the Board, preside at each meeting of the
shareholders and the Board. He shall perform all duties incident to the office
of Co- Chairman of the Board and such other duties as may from time to time be
assigned to him by the Board.

SECTION 7. THE VICE CHAIRMAN OF THE BOARD. One of the Vice Chairmen of the Board
shall, in the absence of the Chairman of the Board and the Co-Chairman of the
Board, preside at each meeting of the shareholders and the Board. They shall
perform all duties incident to the office of Vice Chairman of the Board and such
other duties as may from time to time be assigned to them by the Board.

SECTION 8. THE CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall be the
chief executive officer of the Corporation and shall have the general and active
management of and supervision and direction over the business and affairs of the
Corporation and over its several officers, subject, however, to the control of
the Board. He shall, in the absence of the Chairman of the Board, the
Co-Chairman of the Board and the Vice Chairmen of the Board, preside at each
meeting of the shareholders and of the Board and shall be an ex officio member
of all committees of the Board. He shall see that all orders and directions of
the shareholders and the Board are carried into effect. He may sign, execute and
deliver, in the name of the Corporation, all certificates, deeds, mortgages,
bonds, contracts and other instruments authorized by the Board, except in cases
where the signing, execution and delivery thereof shall be expressly delegated
by the Board or by these By-Laws to some other officer or agent of the
Corporation or except as otherwise provided by statute. He may affix the seal of
the Corporation to any instrument which shall require it. In general, he shall
perform all duties incident to the office of Chief Executive Officer and such
other duties as from time to time may be assigned to him by the Board, or by
these By-Laws.

                                      -14-
<PAGE>   15
SECTION 9. THE CHIEF OPERATING OFFICER. The Chief Operating Officer shall be the
chief operating officer of the Corporation, and shall assist the Chief Executive
Officer in the active management of and supervision and direction over the
business and affairs of the Corporation and over its several officers, subject,
however, to the control of the Board. He shall, in the absence of the Chairman
of the Board, the Co-Chairman of the Board, the Vice Chairmen of the Board and
the Chief Executive Officer, preside at each meeting of the shareholders and of
the Board. He shall see that all orders and directions of the shareholders and
the Board are carried into effect. In general, he shall perform all duties
incident to the office of Chief Operating Officer and such other duties as from
time to time may be assigned to him by the Board, or by these By-Laws.

SECTION 10. PRESIDENT. The President shall, in the absence of the Chairman of
the Board, the Co-Chairman of the Board, the Vice Chairmen of the Board, the
Chief Executive Officer and the Chief Operating Officer, preside at each meeting
of the shareholders and of the Board. He shall perform all duties incident to
the office of President and such other duties as may from time to time be
assigned to him by the Board, or by these By-Laws.

SECTION 11. THE CHIEF FINANCIAL OFFICER. The Chief Financial Officer shall be
the chief financial officer of the Corporation, and shall render to the Board,
whenever the Board may require, an account of the financial condition of the
Corporation; shall make, sign and execute financial, tax and similar reports to
any State, Federal or Municipal Government or Department; shall provide for the
continuous review of all accounts and reports; and shall perform such other
duties as may, from time to time, be assigned to him by the Board or the
Chairman of the Board.

SECTION 12. THE CHIEF ADMINISTRATIVE OFFICER OR CO-CHIEF ADMINISTRATIVE
OFFICERS. The Chief Administrative Officer or Co-Chief Administrative Officers
as the case may be shall be the chief administrative officer(s) of the
Corporation, and shall have responsibility for the various operational
facilities and personnel and related support services of the Corporation. In
general, they shall perform all duties incident to the office of the Chief
Administrative Officer or Co-Chief Administrative Officer and such other duties
as from time to time may be assigned to them by the Board or the Chairman of the
Board.

SECTION 13. SENIOR MANAGING DIRECTOR OF THE CORPORATION. Each Senior Managing
Director of the Corporation shall have such powers and perform such duties as
the Board or the Chairman of the Board may from time to time prescribe, and
shall perform such other duties as may be prescribed in these By-Laws. The
office of Senior Managing Director of the Corporation described in this section
shall be distinguished from the office of Senior Managing Director of a Division
described in Section 18 of these By-Laws.

SECTION 14. VICE PRESIDENTS. Each Senior Executive Vice President, Executive
Vice President, Senior Vice President, First Vice President and Vice President
shall have such powers and perform such duties as the Board or the Chairman of
the Board may from time to time prescribe, and shall perform such other duties
as may be prescribed in these By-Laws.

                                      -15-
<PAGE>   16
SECTION 15. THE CONTROLLER. The Controller shall be the Chief Accounting Officer
of the Corporation and shall cause to be maintained adequate records of all
assets, liabilities and transactions of the Corporation; shall keep full and
accurate accounts of receipts and disbursements in books belonging to the
Corporation and have control of all the books of account of the Corporation; and
shall perform such other duties as may, from time to time, be assigned to him by
the Board or the Chairman of the Board.

SECTION 16.             THE TREASURER.  The Treasurer shall:

         a.       have charge and custody of, and be responsible for, all the
                  funds and securities of the Corporation;

         b.       cause all monies and other valuables to be deposited to the
                  credit of the Corporation in such depositories as may be
                  designated by the Board;

         c.       be responsible for managing the funds of the Corporation and
                  arranging for short term financing to carry out the business
                  of the Corporation; and

         d.       in general, perform all the duties incident to the office of
                  Treasurer and Chief Money Manager of the Corporation and such
                  other duties as may from time to time be assigned to him by
                  the Board or the Chairman of the Board.

SECTION 17.             THE SECRETARY.  The Secretary shall:

         a.       keep or cause to be kept, in one or more books provided for
                  the purpose, the minutes of all meetings of the Board, the
                  committees of the Board and the shareholders;

         b.       see that all notices are duly given in accordance with the
                  provisions of these By-Laws and as required by law;

         c.       be custodian of the records and the seal of the Corporation
                  and affix and attest the seal to all stock certificates of the
                  Corporation (unless the seal of the Corporation on such
                  certificates shall be a facsimile, as hereinafter provided)
                  and affix and attest the seal to all other documents to be
                  executed on behalf of the Corporation under its seal;

         d.       see that the books, reports, statements, certificates and
                  other documents and records required by law to be kept and
                  filed are properly kept and filed; and

         e.       in general, perform all the duties incident to the office of
                  Secretary and such other duties as from time to time may be
                  assigned to him by the Board or the Chairman of the Board.

                                      -16-
<PAGE>   17
SECTION 18. DIVISIONS AND DIVISIONAL OFFICERS AND NONCORPORATE TITLEHOLDERS. The
Lehman Brothers Division shall carry on the investment banking, merchant
banking, capital markets and related activities of the Corporation. The
Chairman, Vice Chairman, President, Chief Executive Officer (or Co-Chief
Executive Officers as the case may be) each Senior Managing Director and each
Managing Director of the Lehman Brothers Division shall for all purposes be
corporate Officers of the Corporation with authority at least commensurate with
any Senior Vice President of the Corporation to enter into commitments on behalf
of the Corporation, and shall have such further duties as may from time to time
be assigned to each of them by the Board, the Chairman of the Board, or these
By-Laws.

The Shearson Lehman Brothers Division shall carry on the individual investor and
asset management and related activities of the Corporation. The Chairman, Vice
Chairman, President and Chief Executive Officer of the Shearson Lehman Brothers
Division shall for all purposes be a corporate Officer of the Corporation, and
shall have such duties as may from time to time be assigned to him by the Board,
the Chairman of the Board, or these By-Laws.


The Davis, Skaggs Division shall carry on business previously carried on by
Davis, Skaggs & Co., Inc. The Davis, Skaggs Division shall initially include the
noncorporate title of Vice President/Financial Consultant and shall from time to
time include such other noncorporate titles as shall be available at the
Corporation generally in accordance with Section 1 of this Article IV.

The Board may also from time to time by resolution establish other Divisions of
the Corporation for such purposes as shall be specified in the resolution
creating each such respective Division. The Chairman, each Senior Managing
Director and each Managing Director of each such other Division shall likewise
be corporate Officers of the Corporation and shall have such duties and such
authority as shall from time to time be assigned to each of them by the Board,
the Chairman of the Board, or these By-Laws.

The Chairman, the Senior Managing Directors and the Managing Directors of any
Division shall not, however, unless otherwise so elected, be members of the
Board of Directors of the Corporation.

SECTION 19. OFFICERS' BONDS OR OTHER SECURITY. If required by the Board, any
officer of the Corporation shall give a bond or other security for the faithful
performance of his duties, in such amount and with such surety or sureties as
the Board may require.

SECTION 20. COMPENSATION. The compensation of the officers of the Corporation
for their services as such officers may be fixed from time to time by the Board;
provided, however, that the Board may delegate to any officer the power to fix
the compensation of officers and agents appointed by such officer. An officer of
the Corporation shall not be prevented from receiving compensation by reason of
the fact that he is also a director of the Corporation, but any such officer 

                                      -17-
<PAGE>   18
who shall also be a director shall not have any vote in the determination of the
amount of compensation paid to him.

SECTION 21. DIRECTORS AND OFFICERS OF SUBSIDIARIES. All directors and corporate
officers of subsidiaries of the Corporation must be approved by the Board of
Directors of this Corporation.

                                    ARTICLE V
                 CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.

SECTION 1. EXECUTION OF CONTRACTS. Except as otherwise required by statute, the
Certificate of Incorporation or these By-Laws, any contracts or other
instruments may be executed and delivered in the name and on behalf of the
Corporation by such officer or officers (including any assistant officer or
officers) of the Corporation as the Board may from time to time direct. Such
authority may be general or confined to specific instances as the Board may
determine. Unless authorized by the Board or expressly permitted by these
By-Laws, an officer or agent or employee shall not have any power or authority
to bind the Corporation by any contract or engagement or to pledge its credit or
to render it pecuniarily liable for any purpose or to any amount.
Notwithstanding the foregoing, any officer of the Corporation of the rank of
Executive Vice President or above is authorized upon instruction from the Vice
Chairman of the Board of the Corporation to sign on behalf of the Corporation
the Memorandum of Agreement, dated May 13, 1982, among McLeod Young Weir
Limited, the Corporation and Shearson Loeb Rhoades (Canada) Inc., and any other
documents and agreements contemplated thereby which are required to be executed
by the Corporation.

SECTION 2. LOANS. Unless the Board shall otherwise determine, the Chairman of
the Board, the Co-Chairman of the Board, the Vice Chairmen of the Board, the
Chief Executive Officer, the Chief Operating Officer, the President, any
Executive Vice President, the Controller, the Treasurer or the Secretary may
effect loans and advances at any time for the Corporation from any bank, trust
company or other institution, or from any firm, corporation or individual, and
for such loans and advances may make, execute and deliver promissory notes,
bonds or other certificates or evidences of indebtedness of the Corporation, but
no officer or officers shall mortgage, pledge, hypothecate or transfer any
securities or other property of the Corporation, except when authorized by the
Board.

SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts, bills of exchange or other
orders for the payment of money out of the funds of the Corporation, and all
notes or other evidences of indebtedness of the Corporation, shall be signed in
the name and on behalf of the Corporation by such persons and in such manner as
shall from time to time be authorized by the Board or as may be designated by
any officer or officers of the Corporation to whom such power of designation may
from time to time be delegated by the Board.

                                      -18-
<PAGE>   19
SECTION 4. DEPOSITS. All funds of the Corporation not otherwise employed shall
be deposited from time to time to the credit of the Corporation in such banks,
trust companies or other depositories as the Board may from time to time
designate or as may be designated by any officer or officers of the Corporation
to whom such power of designation may from time to time be delegated by the
Board. For the purpose of deposit and for the purpose of collection for the
account of the Corporation, checks, drafts and other orders for the payment of
money which are payable to the order of the Corporation may be endorsed,
assigned and delivered by any officer or agent of the Corporation.

SECTION 5. GENERAL AND SPECIAL BANK ACCOUNTS. The Board may from time to time
authorize the opening and keeping of general and special bank accounts with such
banks, trust companies or other depositories as the Board may designate or as
may be designated by any officer or officers of the Corporation to whom such
power of designation may from time to time be delegated by the Board. The Board
may make such special rules and regulations with respect to such bank accounts,
not inconsistent with the provisions of these By-Laws, as it may deem expedient.

                                  ARTICLE VI
                                 SHARES, ETC.

SECTION 1. STOCK CERTIFICATES. Each owner of stock of the Corporation shall be
entitled to have a certificate, in such form as shall be approved by the Board,
certifying the number of shares of stock of the Corporation owned by him. The
certificates representing shares of stock shall be signed in the name of the
Corporation by the Chairman or a Vice Chairman of the Board of Directors, or the
President or a Vice President, and by the Secretary or an Assistant Secretary or
the Treasurer or an Assistant Treasurer and sealed with the seal of the
Corporation (which seal may be a facsimile, engraved or printed); provided,
however, that where any such certificate is countersigned by a transfer agent,
or is countersigned by a transfer clerk acting on behalf of the Corporation and
is registered by a registrar (which may be the same entity as the transfer
agent) (other than the Corporation or one of its employees), the signatures of
the Chairman of the Board, a Vice Chairman of the Board, President, Vice
President, Secretary, Assistant Secretary, Treasurer or Assistant Treasurer upon
such certificates may be facsimiles, engraved or printed. If any officer who has
signed such certificates shall cease to be such officer before such certificates
have been issued, they may nevertheless be issued by the Corporation with the
same effect as if such officer were still in office at the date of their issue.

SECTION 2. BOOKS OF ACCOUNT AND RECORD OF SHAREHOLDERS. There shall be kept
correct and complete books and records of account of all the business and
transactions of the Corporation. There shall also be kept, at the office of the
Corporation in the State of New York or at the office of its transfer agent
within or without said State, a record containing the names and addresses of all
shareholders of the Corporation, the number of shares of stock held by each, and
the dates when they became the owners of record thereof.

                                      -19-
<PAGE>   20
SECTION 3. TRANSFERS OF SHARES. Transfers of shares of stock of the Corporation
shall be made on the stock records of the Corporation only upon authorization by
the registered holder thereof, or by his attorney thereunto authorized by power
of attorney duly executed and filed with the Secretary or with a transfer agent
or transfer clerk, and on surrender of the certificate or certificates for such
shares properly endorsed or accompanied by a duly executed stock transfer power
and the payment of all taxes thereon. Except as otherwise provided by law, the
Corporation shall be entitled to recognize the exclusive right of a person in
whose name any share or shares stand on the record of shareholders as the owner
of such share or shares for all purposes, including, without limitation, the
rights to receive dividends or other distributions, and to vote as such owner,
and the Corporation shall not be bound to recognize any equitable or legal claim
to or interest in any such share or shares on the part of any other person.
Whenever any transfers of shares shall be made for collateral security and not
absolutely and written notice thereof shall be given to the Secretary or to such
transfer agent or transfer clerk, such fact shall be stated in the entry of the
transfer.

SECTION 4. REGULATIONS. The Board may make such additional rules and
regulations, not inconsistent with these By-Laws, as it may deem expedient
concerning the issue, transfer and registration of certificates for shares of
stock of the Corporation. It may appoint, or authorize any officer or officers
to appoint, one or more transfer agents or one or more transfer clerks and one
or more registrars and may require all certificates for shares of stock to bear
the signature or signatures of any of them.

SECTION 5. FIXING OF RECORD DATE. The Board may fix, in advance, a date not more
than sixty nor less than ten days before the date then fixed for the holding of
any meeting of the shareholders or before the last day on which the consent or
dissent of the shareholders may be effectively expressed for any purpose without
a meeting, as the time as of which the shareholders entitled to notice of and to
vote at such meetings or whose consent or dissent is required or may be
expressed for any purpose, as the case may be, shall be determined, and all
persons who were holders of record of voting stock at such time, and no others,
shall be entitled to notice of and to vote at such meeting or to express
their consent or dissent, as the case may be. The Board may fix, in advance, a
date not more than sixty days preceding the date fixed for the payment of any
dividend or the making of any distribution or the allotment of rights to
subscribe for securities of the Corporation, or for the delivery of evidences of
rights or evidences of interests arising out of any change, conversion or
exchange of capital stock or other securities, as the record date for the
determination of the shareholders entitled to receive any such dividend,
distribution, allotment, rights or interests and in such case only the
shareholders of record at the time so fixed shall be entitled to receive such
dividend, distribution, allotment, rights or interests.

SECTION 6. LOST, DESTROYED OR MUTILATED CERTIFICATES. The holder of any
certificate representing shares of stock of the Corporation shall immediately
notify the Corporation of any loss, destruction or mutilation of such
certificate, and the Corporation may issue a new certificate of stock in the
place of any certificate theretofore issued by it which the owners thereof shall
allege to 

                                      -20-
<PAGE>   21
have been lost or destroyed or which shall have been mutilated, and
the Board may, in its discretion, require such owner or his legal
representatives to give to the Corporation a bond in such sum, limited or
unlimited, and in such form and with such surety or sureties as the Board in its
absolute discretion shall determine to indemnify the Corporation against any
claim that may be made against it on account of the alleged loss or destruction
of any such certificate, or the issuance of such new certificate. Anything
herein to the contrary notwithstanding, the Board, in its absolute discretion,
may refuse to issue any such new certificate, except pursuant to legal
proceedings under the laws of the State of New York.

SECTION 7. INFORMATION TO SHAREHOLDERS AND OTHERS. Any person who shall have
been a shareholder of record of the Corporation for at least six months
immediately preceding his demand, or any person holding, or thereunto authorized
by the holders of, at least 5 percent of the outstanding shares of stock of the
Corporation,

      a.    shall, upon at least five days' written demand to the Corporation,
            have the right to examine in person or by agent or attorney, during
            the usual business hours, its minutes of the proceedings of its
            shareholders and its record of shareholders and to make extracts
            therefrom, subject, however, to compliance by such person with such
            rules and regulations, not inconsistent with statute, as the Board
            may prescribe; and

      b.    shall, upon at least five days' written request to the Corporation,
            be furnished by the Corporation with its balance sheet and profit
            and loss statement for the Corporation's fiscal year last preceding
            such request (or, if such balance sheet and profit and loss
            statement shall not have been prepared at the date of such request,
            the Corporation shall prepare them within a reasonable time
            thereafter and shall furnish them to such shareholder), together
            with the Corporation's most recent interim balance
            sheet and profit and loss statement, if any, that shall have been
            distributed to its shareholders or otherwise made available to the
            public.

Within two business days after written demand to the Corporation by any
shareholder (or by any other person entitled to make such demand pursuant to
statute) to inspect a current list of the directors and officers of the
Corporation and their respective residence addresses, the Corporation shall,
within two business days after its receipt of such demand and for a period of
one week thereafter, make such a list available for such inspection at its
principal office during regular business hours.

                                  ARTICLE VII
                                    OFFICE

The principal office of the Corporation within the State of New York shall be
American Express Tower, World Financial Center, New York, New York, 10285 or at
such other address within the State of New York as may be fixed by the Board.

                                      -21-
<PAGE>   22
                                 ARTICLE VIII
                                     SEAL

The seal of the Corporation shall be circular in form and shall include the
words and numbers "Shearson Lehman Brothers Inc., Delaware, l965."

                                  ARTICLE IX
                                  AMENDMENTS

These By-Laws may be amended or repealed, or new By-Laws may be adopted, at any
annual or special meeting of the shareholders, by vote of the shareholders
entitled to vote in the election of directors; provided, however, that the
notice of such meeting shall have been given as provided in these By-Laws, which
notice shall mention that amendment or repeal of these By-Laws, or the adoption
of new By-Laws, is one of the purposes of such meeting. These By-Laws may also
be amended or repealed, or new By-Laws may be adopted, by the Board at any
meeting thereof; provided, however, that notice of such meeting shall have been
given as provided in these By-Laws, which notice shall mention that amendment or
repeal of the By-Laws, or the adoption of new By-Laws, is one of the purposes of
such meeting; and provided, further, that By-Laws adopted by the Board may be
amended or repealed by the shareholders as hereinabove provided.

                                   ARTICLE X
                                 MISCELLANEOUS

No dividend shall be declared or paid which shall impair the capital of the
Corporation nor shall any distribution of assets be made to any shareholder
unless the value of the assets of the Corporation remaining after such payment
or distribution is at least equal to the aggregate of its debts and liabilities,
including capital.

                                    -22-