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                                MBNA CORPORATION
                       COMPOSITE ARTICLES OF INCORPORATION
            (AS AMENDED AND SUPPLEMENTED THROUGH SEPTEMBER 18, 1996)

                                ARTICLE I - NAME

         The name of the corporation (hereinafter called the "Corporation") is
MBNA Corporation.

                              ARTICLE II - PURPOSE

         The Corporation is formed to engage in the business of banking and
finance, directly and through subsidiaries. It may engage in any other business
permitted by law.

                ARTICLE III - PRINCIPAL OFFICE AND RESIDENT AGENT

         The address of the principal office of the Corporation in the State of
Maryland is c/o The Corporation Trust Incorporated, 32 South Street, Baltimore,
Maryland 21202. The resident agent of the Corporation in the State of Maryland
is The Corporation Trust Incorporated, 32 South Street, Baltimore, Maryland
21202. The resident agent is a Maryland corporation.

                           ARTICLE IV - CAPITAL STOCK

         (a) The total number of shares of stock of all classes which the
Corporation has authority to issue is 720,000,000 shares, of which 700,000,000
shares are classified as Common Stock, par value $.01 per share, and 20,000,000
shares are classified as Preferred Stock, par value $.01 per share. The
aggregate par value of all shares of all classes which the Corporation is
authorized to issue is $7,200,000.

         (b) The Preferred Stock may be issued in series. Prior to issuance, the
Board of Directors shall set the terms of the Preferred Stock, including the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption.

         (c) The Board of Directors shall have the power to classify or
reclassify any unissued stock, whether now or hereafter authorized, by setting
or changing the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption of such stock.

         (d) Unless otherwise provided by the Board of Directors, no holder of
stock of any class shall be entitled to preemptive rights to subscribe for or
purchase or receive any stock of any class or securities convertible into stock
of any class of the Corporation.
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                         ARTICLE V - BOARD OF DIRECTORS

         (a) The Corporation shall initially have four directors. The initial
directors, who shall act as such until the first annual meeting or until their
successors are duly elected and qualify shall be Charles M. Cawley, John R.
Cochran, Bruce L. Hammonds and M. Scot Kaufman. The number of directors may be
increased or decreased as provided in the By-Laws of the Corporation.

         (b) The Board of Directors may authorize the issuance from time to time
of stock of the Corporation of any class, now or hereafter authorized, and
securities convertible into stock of the Corporation of any class, now or
hereafter authorized, for such consideration and on such other terms as the
Board of Directors may deem advisable, without stockholder approval.

                               ARTICLE VI - VOTING

         Notwithstanding any provision of law requiring any action to be taken
or authorized by the affirmative vote of the holders of a greater proportion of
the votes of all classes or of any class of stock of the Corporation, such
action shall be effective and valid if taken or authorized by the affirmative
vote of a majority of the total number of votes entitled to be cast thereon,
except as otherwise provided in the charter.

                   ARTICLE VII - LIABILITY AND INDEMNIFICATION

         (a) To the fullest extent that limitations on the liability of
directors and officers are permitted by the Maryland General Corporation Law, no
director or officer of the Association shall have any liability to the
Corporation or its stockholders for damages. This limitation on liability
applies to events occurring at the time a person serves as director or officer
of the Corporation whether or not such person is a director or officer at the
time of any proceeding in which liability is asserted.

         (b) To the fullest extent permitted by the Maryland General Corporation
Law, the Corporation shall indemnify and advance expenses to its currently
acting and its former directors. The Corporation shall indemnify and advance
expenses to its officers to the same extent as its directors, and may do so to
such further extent as is consistent with law. The Board of Directors may by
bylaw, resolution or agreement make further provision for indemnification of
directors, officers, employees and agents to the fullest extent permitted by the
Maryland General Corporation Law.

         (c) References to the Maryland General Corporation Law in this Article
are to that law as from time to time amended. No amendment to the charter of the
Corporation shall affect any right of any person under this Article based on any
event, omission or proceeding prior to the amendment.
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           ARTICLE VIII - CONTROL SHARE ACQUISITION STATUTE EXEMPTIONS


         Any acquisition of shares of the Corporation on or after January 21,
1991 by Alfred Lerner (or his successor in interest) ("Lerner") or by The
Progressive Corporation (or its successors in interest) ("Progressive"), or by
any present or future affiliate or associate thereof so long as such affiliate
or associate is at the time in question such an affiliate or associate (or any
person acting in concert or in a group with any of the foregoing) is, pursuant
to Section 3-702(b) of the Maryland General Corporation Law (the "MGCL") (or any
successor or replacement provision or statute), hereby approved for purposes of
and exempted from the provisions of, Subtitle 7 of Title 3 of the MGCL (or any
successor or replacement provision or statute), with the result that any shares
acquired by any such person shall have all voting rights otherwise appurtenant
thereto, notwithstanding Subtitle 7 of Title 3 of the MGCL (or any successor or
replacement provision or statute).

         Notwithstanding anything in the Charter or bylaws of the Corporation
(as each may be amended from time to time) to the contrary, this ARTICLE may not
be amended, altered or repealed except with the unanimous approval of all of the
members of the Board of Directors and the written consent of all persons or
entities then in existence and specified above that may be adversely affected,
or that may lose any privilege or right, as a result of such amendment,
alteration or repeal.

                             ARTICLE IX - AMENDMENTS

         Except as set forth in this Article, The Corporation reserves the right
to make, from time to time, any amendments of its charter which may now or
hereafter be authorized by law, including any amendments which alter the
contract rights of any class of outstanding stock as expressly set forth in the
charter.
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                                MBNA CORPORATION

                             ARTICLES SUPPLEMENTARY

                            (Filed November 9, 1995)

                  FIRST: 10,000,000 shares of authorized but unissued common
         stock, par value $.01 per share, of the Corporation, have been
         reclassified as additional shares of Preferred Stock, par value $.01
         per share, and 6,000,000 shares of authorized but unissued Preferred
         Stock of the Corporation have been classified as 7-1/2% Cumulative
         Preferred Stock, Series A, $.01 par value, of the Corporation (the
         "Series") with the preferences, conversion and other rights, voting
         powers, restrictions, limitations as to dividends, qualifications, and
         terms and conditions of redemption, as follows:

                  1. Dividends. (a) Dividends shall be payable on the shares of
         this Series: (i) for the period (the "Initial Dividend Period") from
         the date of original issue of shares of this Series to and including
         January 14, 1996 and (ii) for each quarterly dividend period thereafter
         (the Initial Dividend Period and each quarterly dividend period
         thereafter being hereinafter individually referred to as a "Dividend
         Period" and collectively referred to as "Dividend Periods"), which
         quarterly Dividend Periods shall commence on January 15, April 15, July
         15 and October 15 in each year, commencing January 15, 1996, and shall
         end on and include the day next preceding the first day of the next
         Dividend Period, in an amount equal to $.46875 per share per quarterly
         Dividend Period. Dividends shall be cumulative from such date of
         original issue and shall be payable, when, as and if declared by the
         Board of Directors, on April 15, July 15, October 15 and January 15 of
         each year (each, a "Dividend Payment Date"), commencing on January 15,
         1996. Each dividend on the shares of this Series will be payable to the
         holders of record of the shares of this Series as they appear on the
         stock books of the Corporation on such record date as may be fixed by
         the Board of Directors of the Corporation, which record date will not
         be more than sixty (60) days prior to the applicable Dividend Payment
         Date.

                  (b) Dividends payable on this Series for any period greater or
         less than a full Dividend Period, including the Initial Dividend
         Period, shall be computed on the basis of a 360-day year consisting of
         twelve 30-day months and the actual number of days included in the
         Dividend Period.

                  (c) Holders of shares of this Series shall not be entitled to
         any dividend, whether payable in cash, property or stock, in excess of
         full cumulative dividends, as herein provided, on this Series. No
         interest, or sum of money in lieu of interest, shall be payable in
         respect of any dividend payment or payments on this Series which may be
         in arrears.

                  (d) No full dividends shall be declared or paid or set apart
         for payment on any series stock ranking, as to dividends, on a parity
         with this Series for any period unless full cumulative dividends have
         been or contemporaneously are declared and paid or declared
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         and a sum sufficient for the payment thereof set apart for such payment
         on this Series for all Dividend Periods terminating on or prior to the
         date of payment of such full cumulative dividends. When dividends are
         not paid in full, as aforesaid, upon the shares of this Series and any
         other stock ranking on a parity as to dividends with this Series, all
         dividends declared upon shares of this Series and any other series of
         stock ranking on a parity as to dividends with this Series shall be
         declared pro rata so that the amount of dividends declared per share on
         this Series and such other stock shall in all cases bear to each other
         the same ratio that accrued and unpaid dividends per share on the
         shares of this Series and such other stock bear to each other.

                  (e) So long as any shares of this Series are outstanding, no
         dividend (other than a dividend payable in common stock or in any other
         stock ranking junior to this Series as to dividends and upon
         liquidation) shall be declared or paid or set aside for payment or
         other distribution declared or made upon the common stock or upon any
         other stock ranking junior to this Series as to dividends or upon
         liquidation, nor shall any common stock or any other stock of the
         Corporation ranking junior to this Series as to dividends or upon
         liquidation be redeemed, purchased or otherwise acquired for any
         consideration (or any moneys be paid to or made available for a sinking
         fund for the redemption of any shares of any such stock) by the
         Corporation (except by conversion into or exchange for stock of the
         Corporation ranking junior to this Series as to dividends and upon
         liquidation) unless, in each case, the full cumulative dividends on all
         outstanding shares of this Series shall have been paid or declared and
         set aside for payment for all past Dividend Periods.

                  2. Redemption. (a) The holders of the shares of this Series
         may not require the Corporation to redeem any shares of this Series.
         The Corporation, at its option, may redeem shares of this Series, as a
         whole or in part, at any time on or after January 15, 2001, at a
         redemption price of $25 per share, plus accrued and unpaid dividends
         thereon to the date fixed for redemption.

                  (b) In the event that fewer than all the outstanding shares of
         this Series are to be redeemed, the number of shares to be redeemed
         shall be determined by lot or pro rata as may be determined by the
         Corporation or by any other method as may be determined by the Board of
         Directors of the Corporation in its sole discretion to be equitable,
         provided that such method satisfies any applicable requirements of any
         securities exchange on which this Series is listed.

                  (c) In the event the Corporation shall redeem shares of this
         Series, notice of such redemption shall be given by first class mail,
         postage prepaid, mailed not less than 30 or more than 60 days prior to
         the redemption date, to each holder of record of the shares to be
         redeemed, at such holder's address as the same appears on the stock
         register of the Corporation. Each such notice shall state: (i) the
         redemption date; (ii) the number of shares of this Series 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; and (v) that dividends on the shares to be redeemed cease to
         accrue on the redemption date.
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                  (d) Notice having been mailed as aforesaid, from and after the
         redemption date (unless default shall be made by the Corporation in
         providing money for the payment of the redemption price) dividends on
         the shares of this Series so called for redemption shall cease to
         accrue, and said shares shall no longer be deemed to be outstanding,
         and all rights of the holders thereof as stockholders of the
         Corporation (except the right to receive from the Corporation the
         redemption price) shall cease. Upon surrender in accordance with said
         notice of the certificates for any shares so redeemed (properly
         endorsed or assigned for transfer, if the Corporation shall so require
         and the notice shall so state), such shares shall be redeemed by the
         Corporation at the redemption price aforesaid. In case fewer than all
         the shares represented by any such certificate are redeemed, a new
         certificate shall be issued representing the unredeemed shares without
         cost to the holder thereof.

                  (e) Any shares of this Series which shall at any time have
         been redeemed shall, after such redemption, have the status of
         authorized but unissued shares of Preferred Stock, without designation
         as to series.

                  (f) Notwithstanding the foregoing provisions of this Section
         2, if any dividends on this Series or any other series of cumulative
         Preferred Stock ranking on a parity with this Series are in arrears, no
         shares of this Series or any such parity series shall be redeemed
         unless all outstanding shares of this Series or any such parity series
         are simultaneously redeemed, and the Corporation shall not purchase or
         otherwise acquire any shares of this Series or any such parity series;
         provided, however, that the foregoing shall not prevent the purchase or
         acquisition of shares of this Series or any such parity series pursuant
         to a purchase or exchange offer made on the same terms to holders of
         all outstanding shares of this Series.

                      3. Conversion. The holders of shares of this Series shall
         not have any rights to convert such shares into shares of any other
         class or series of capital stock of the Corporation.

                      4. Liquidation Rights. (a) Upon the voluntary or
         involuntary dissolution, liquidation or winding up of the Corporation,
         the holders of the shares of this Series shall be entitled to receive
         and to be paid out of the assets of the Corporation available for
         distribution to its stockholders, before any payment or distribution
         shall be made on the common stock or on any other class of stock
         ranking junior to this Series upon liquidation, the amount of $25 per
         share, plus accrued and unpaid dividends thereon.

                  (b) After the payment to the holders of the shares of this
         Series of the full preferential amounts provided for in this Section 4,
         the holders of this Series as such shall have no right or claim to any
         of the remaining assets of the Corporation.
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                  (c) If, upon any voluntary or involuntary dissolution,
         liquidation, or winding up of the Corporation, the amounts payable with
         respect to the shares of this Series and any other shares of stock of
         the Corporation ranking as to any such distribution on a parity with
         the shares of this Series are not paid in full, the holders of the
         shares of this Series and of such other shares will share ratably in
         any such distribution of assets of the Corporation in proportion to the
         full preferential amounts to which they are entitled.

                  (d) Neither the sale of all or substantially all of the assets
         of the Corporation, nor the merger or consolidation or share exchange
         of the Corporation into or with any other corporation or the merger or
         consolidation or share exchange of any other corporation into or with
         the Corporation, shall be deemed to be a dissolution, liquidation or
         winding up, voluntary or involuntary, for the purposes of this Section
         4.

                  (e) Upon the dissolution, liquidation or winding up of the
         Corporation, the holders of shares of this Series then outstanding
         shall be entitled to be paid out of the assets of the Corporation
         available for distribution to its stockholders all amounts to which
         such holders are entitled pursuant to paragraph (a) of this Section 4
         before any payment shall be made to the holder of any class of capital
         stock of the Corporation ranking junior to this Series upon
         liquidation.

                  5. Ranking. Any stock of any class or classes of the
         Corporation shall be deemed to rank:

                  (a) prior to the shares of this Series, either as to dividends
         or upon liquidation, if the holders of such class or classes shall be
         entitled to the receipt of dividends or of amounts distributable upon
         dissolution, liquidation or winding up of the Corporation, as the case
         may be, in preference or priority to the holders of shares of this
         Series;

                  (b) on a parity with shares of this Series, either as to
         dividends or upon liquidation, whether or not the dividend rates,
         dividend payment dates or redemption or liquidation prices per share or
         sinking fund provisions, if any, be different from those of this
         Series, if the holders of such stock shall be entitled to the receipt
         of dividends or of amounts distributable upon dissolution, liquidation
         or winding up of the Corporation, as the case may be, without
         preference or priority, one over the other, as between the holders of
         such stock and the holders of shares of this Series; and

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

                      6. Voting Rights. (a) Except as indicated below, the
         shares of this Series shall not be entitled to vote on any matter
         including, but not limited to:
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                                     (i) Any merger, consolidation, share
                  exchange or sale of all or substantially all of the assets of
                  the Corporation except to the extent such action changes or
                  alters the preferences, conversion and other rights, voting
                  powers, restrictions, limitation as to dividends,
                  qualifications and terms and conditions of redemption of this
                  Series as expressly set forth herein in a manner adverse to
                  the holders of this Series, or,

                                     (ii) An increase in the authorized amount
                  of this Series or the creation, authorization or issuance of
                  an additional series ranking on a parity with the shares of
                  this Series as to dividends or upon liquidation, or to
                  reclassify any authorized stock of the Corporation into any
                  such shares ranking on a parity with, or to authorize or issue
                  any obligation or security convertible into or evidencing the
                  right to purchase any such pari passu shares.

                  (b) Notwithstanding the foregoing:

                                     (i) The affirmative vote of at least
                  two-thirds of the votes entitled to be cast by holders of
                  shares of this Series, shall be necessary for any amendment,
                  alteration or repeal, whether by merger, consolidation, share
                  exchange or otherwise, of the Charter of the Corporation, any
                  articles supplementary thereto or of the resolutions contained
                  in the articles supplementary thereto, which changes or alters
                  the preferences, conversion and other rights, voting powers,
                  restrictions, limitations as to dividends, qualifications and
                  terms and conditions of redemption of this Series as expressly
                  set forth herein in a manner adverse to the holders of this
                  Series;

                                     (ii) The affirmative vote of at least
                  two-thirds of the votes entitled to be cast by the holders of
                  the shares of this Series and all other series of Preferred
                  Stock ranking on a parity with shares of this Series as to
                  dividends or upon liquidation upon which like voting rights
                  have been conferred and are exercisable, voting together as a
                  single class without regard to series, shall be necessary to
                  authorize or issue any shares of any class of stock of the
                  Corporation ranking prior to the shares of this Series as to
                  dividends or upon liquidation, or to reclassify any authorized
                  stock of the Corporation into any such prior shares, or
                  authorize or issue any obligation or security convertible into
                  or evidencing the right to purchase any such prior shares; and

                                     (iii) If at the time of any annual meeting
                  of the Corporation's stockholders for the election of
                  directors there is a default in preference dividends (as
                  hereinafter defined) on this Series, the number of directors
                  constituting the Board of Directors of the Corporation shall
                  be increased by two, and the holders of the shares of this
                  Series (together with the holders of the Preferred Stock of
                  all other series upon which like voting rights have been
                  conferred and are exercisable), shall have the right at such
                  meeting, voting together as a single class without regard to
                  series, to the exclusion of the holders of common stock, to
                  elect two directors of the Corporation (each a "Preferred
                  Director") to fill such newly created directorships. Each
                  holder of shares of this Series will have one vote for
<PAGE>   9
                  each share of stock held and each holder of each other series
                  of Preferred Stock with like voting rights will have such
                  number of rights, if any, for each share of stock held as may
                  be granted to such holder. Such right shall continue until
                  there are no dividends in arrears upon this Series, subject to
                  re-vesting in the event of each and every subsequent default
                  in preference dividends on this Series. Any Preferred Director
                  may be removed with or without cause by the vote of the
                  holders of record of the outstanding shares of Preferred Stock
                  entitled to elect such Preferred Director, voting together as
                  a single class without regard to series, at a meeting of the
                  Corporation's stockholders, or of the holders of such shares
                  of Preferred Stock, called for the purpose. Any Preferred
                  Director may be removed for cause by the vote of the holders
                  of outstanding shares of stock of the Corporation entitled to
                  vote for the election of directors. So long as a default in
                  any preference dividends on this Series shall exist, (a) any
                  vacancy in the office of a Preferred Director may be filled
                  (except as provided in the following clause (b)) by an
                  instrument in writing signed by the remaining Preferred
                  Director and filed with the Corporation and (b) in the case of
                  the removal of any Preferred Director, the vacancy may be
                  filled by the vote of the holders of the outstanding shares of
                  Preferred Stock, voting together as a single class without
                  regard to series, at the same meeting at which such removal
                  shall be voted. Each director appointed as aforesaid by the
                  remaining Preferred Director shall be deemed, for all purposes
                  hereof, to be a Preferred Director. Whenever a default in
                  preference dividends shall no longer exist, subject to the
                  rights of the holders of any other series of Preferred Stock,
                  the number of directors constituting the Board of Directors of
                  the Corporation shall be reduced by two. For the purposes
                  hereof, a "default in preference dividends" on this Series
                  shall be deemed to have occurred whenever the amount of
                  accrued dividends upon this Series shall be equivalent to six
                  full quarterly dividends or more (whether or not consecutive),
                  and, having so occurred, such default shall be deemed to exist
                  thereafter until, but only until, all accrued dividends on all
                  shares of this Series shall have been paid to the end of the
                  last preceding dividend period.

                  SECOND: The shares of Common Stock have been reclassified as
         Preferred Stock and the shares of this Series have been reclassified by
         the Board of Directors of the Corporation under the authority contained
         in the Charter of the Corporation. The terms of this Series have been
         fixed by a committee of the Board of Directors pursuant to a general
         formula adopted by the Board of Directors.
<PAGE>   10
                                MBNA CORPORATION

                             ARTICLES SUPPLEMENTARY

                           (Filed September 18, 1996)

                  FIRST: 6,000,000 shares of authorized but unissued Preferred
         Stock of the Corporation have been classified as Adjustable Rate
         Cumulative Preferred Stock, Series B, $.01 par value, of the
         Corporation (the "Series") with the preferences, conversion and other
         rights, voting powers, restrictions, limitations as to dividends,
         qualifications, and terms and conditions of redemption, as follows:

                           Dividends. (a) Dividends shall be payable on the
         shares of the Series for the period from September 23, 1996 to October
         15, 1996 (the "Initial Dividend Period") at the rate of 7.0% per annum
         ($.1069 per share). For each quarterly dividend period after the
         Initial Dividend Period (the Initial Dividend Period and each quarterly
         dividend period thereafter being hereinafter individually referred to
         as a "Dividend Period" and collectively referred to as "Dividend
         Periods"), which Dividend Periods shall commence on January 15, April
         15, July 15 and October 15 of each year, commencing October 15, 1996,
         and shall end on and include the day next preceding the first day of
         the next Dividend Period, dividends payable on the shares of the Series
         shall be payable at a rate per annum of the stated value thereof equal
         to the Applicable Rate (as defined in Section 2) in respect of such
         Dividend Period, expressed as a percentage to the nearest ten
         thousandth of a percentage point. The amount of dividends per share for
         each Dividend Period shall be computed by dividing the Applicable Rate
         for such quarterly Dividend Period by four and applying the resulting
         rate to the stated value per share of the Series. Dividends shall be
         fully cumulative from September 23, 1996 and shall be payable, as, if
         and when declared by the Board of Directors, on January 15, April 15,
         July 15 and October 15 of each year (each, a "Dividend Payment Date"),
         commencing on October 15, 1996. If a Dividend Payment Date is not a
         business day, dividends (if declared) on the shares of the Series will
         be paid on the immediately succeeding business day, without interest.
         Each dividend will be payable to holders of record as they appear on
         the stock books of the Corporation on such record dates as shall be
         fixed by the Board of Directors of the Corporation and shall be not
         more than 60 days preceding the payment date of such dividend. The
         right of the holders of the shares of the Series to receive dividends
         is fully cumulative and, accordingly, all dividends not paid, whether
         or not declared, will accumulate without interest until declared and
         paid, which declaration and payment may be for all or part of the then
         accumulated dividends. The Corporation's ability to pay dividends on
         its Preferred Stock, including the Series, is subject to policies
         established by the Federal Reserve Board.
<PAGE>   11
                           Dividends payable on the Series for any period
         greater or less than a full Dividend Period, including the Initial
         Dividend Period, shall be computed on the basis of a 360-day year
         consisting of twelve 30-day months and the actual number of days
         elapsed in any period less than one month.

                           Holders of shares of the Series shall not be entitled
         to any dividend, whether payable in cash, property or stock, in excess
         of full cumulative dividends, as herein provided, on the Series. No
         interest, or sum of money in lieu of interest, shall be payable in
         respect of any dividend payment or payments on the Series which may be
         in arrears.

                           No full dividends shall be declared or paid or set
         apart for payment on any stock ranking, as to dividends, on a parity
         with the Series for any period unless full cumulative dividends have
         been or contemporaneously are declared and paid or declared and a sum
         sufficient for the payment thereof set apart for such payment on the
         Series for all Dividend Periods terminating on or prior to the date of
         payment of such full cumulative dividends. When dividends are not paid
         in full, as aforesaid, upon the shares of the Series and any other
         stock ranking on a parity as to dividends with the Series, all
         dividends declared upon shares of the Series and any other series of
         stock ranking on a parity as to dividends with the Series shall be
         declared pro rata so that the amount of dividends declared per share on
         the Series and such other stock shall in all cases bear to each other
         the same ratio that accrued and unpaid dividends per share on the
         shares of the Series and such other stock bear to each other.

                           So long as any shares of the Series are outstanding,
         no dividend (other than a dividend payable in common stock or in any
         other stock ranking junior to the Series as to dividends and upon
         liquidation) shall be declared or paid or set aside for payment or
         other distribution declared or made upon the common stock or upon any
         other stock ranking junior to the Series as to dividends or upon
         liquidation, nor shall any common stock or any other stock of the
         Corporation ranking junior to the Series as to dividends or upon
         liquidation be redeemed, purchased or otherwise acquired for any
         consideration (or any moneys be paid to or made available for a sinking
         fund for the redemption of any shares of any such stock) by the
         Corporation (except by conversion into or exchange for stock of the
         Corporation ranking junior to the Series as to dividends and upon
         liquidation) unless, in each case, the full cumulative dividends on all
         outstanding shares of the Series shall have been paid or declared and
         set aside for payment for all past Dividend Periods.
<PAGE>   12
                           Definition of Applicable Rate, etc. (a) Except as
         provided below in this paragraph, the "Applicable Rate" for any
         Dividend Period (other than the Initial Dividend Period) will be equal
         to 99.0% of the Effective Rate (as defined below), but not less than
         5.5% per annum or more than 11.5% per annum. The "Effective Rate" for
         any Dividend Period will be equal to the highest of the Treasury Bill
         Rate, the Ten Year Constant Maturity Rate and the Thirty Year Constant
         Maturity Rate (each as defined below) for such Dividend Period. In the
         event that the Corporation determines in good faith that for any
         reason:

                           any one of the Treasury Bill Rate, the Ten Year
                  Constant Maturity Rate or the Thirty Year Constant Maturity
                  Rate cannot be determined for any Dividend Period, the
                  Effective Rate for such Dividend Period will be equal to the
                  higher of whichever two of such rates can be so determined;

                           only one of the Treasury Bill Rate, the Ten Year
                  Constant Maturity Rate or the Thirty Year Constant Maturity
                  Rate can be determined for any Dividend Period, the Effective
                  Rate for such Dividend Period will be equal to whichever such
                  rate can be so determined; or

                           none of the Treasury Bill Rate, the Ten Year Constant
                  Maturity Rate or the Thirty Year Constant Maturity Rate can be
                  determined for any Dividend Period, the Effective Rate for the
                  preceding dividend period will be continued for such Dividend
                  Period.

                           Except as described below in this paragraph, the 
         "Treasury Bill Rate" for each Dividend Period will be the arithmetic 
         average of the two most recent weekly per annum market discount rates
         (or the one weekly per annum market discount rate, if only one such 
         rate is published during the relevant Calendar Period (as defined 
         below)) for three-month U.S. Treasury bills, as published weekly by 
         the Federal Reserve Board (as defined below) during the Calendar 
         Period immediately preceding the last ten calendar days preceding the
         Dividend Period for which the dividend rate on the Series is being 
         determined. In the event that the Federal Reserve Board does not 
         publish such a weekly per annum market discount rate during any such 
         Calendar Period, the Treasury Bill Rate for such Dividend Period will
         be the arithmetic average of the two most
<PAGE>   13
         recent weekly per annum market discount rates (or the one weekly per
         annum market discount rate, if only one such rate is published during
         the relevant Calendar Period) for three-month U.S. Treasury bills, as
         published weekly during such Calendar Period by any Federal Reserve
         Bank or by any U.S. Government department or agency selected by the
         Corporation. In the event that a per annum market discount rate for
         three-month U.S. Treasury bills is not published by the Federal Reserve
         Board or by any Federal Reserve Bank or by any U.S. Government
         department or agency during such Calendar Period, the Treasury Bill
         Rate for such Dividend Period will be the arithmetic average of the two
         most recent weekly per annum market discount rates (or the one weekly
         per annum market discount rate, if only one such rate is published
         during the relevant Calendar Period) for all of the U.S. Treasury bills
         then having remaining maturities of not less than 80 nor more than 100
         days, as published during such Calendar Period by the Federal Reserve
         Board or, if the Federal Reserve Board does not publish such rates, by
         any Federal Reserve Bank or by any U.S. Government department or agency
         selected by the Corporation. In the event that the Corporation
         determines in good faith that for any reason no such U.S. Treasury bill
         rates are published as provided above during such Calendar Period, the
         Treasury Bill Rate for such Dividend Period will be the arithmetic
         average of the per annum market discount rates based upon the closing
         bids during such Calendar Period for each of the issues of marketable
         non-interest-bearing U.S. Treasury securities with a remaining maturity
         of not less than 80 nor more than 100 days from the date of each such
         quotation, as chosen and quoted daily for each business day in New York
         City (or less frequently if daily quotations are not generally
         available) to the Corporation by at least three recognized dealers in
         U.S. Government securities selected by the Corporation. In the event
         that the Corporation determines in good faith that for any reason the
         Corporation cannot determine the Treasury Bill Rate for any Dividend
         Period as provided above in this paragraph, the Treasury Bill Rate for
         such Dividend Period will be the arithmetic average of the per annum
         market discount rates based upon the closing bids during such Calendar
         Period for each of the issues of marketable interest-bearing U.S.
         Treasury securities with a remaining maturity of not less than 80 nor
         more than 100 days from the date of each such quotation, as chosen and
         quoted daily for each business day in New York City (or less frequently
         if daily quotations are not generally available) to the Corporation by
         at least three recognized dealers in U.S. Government securities
         selected by the Corporation.

                           Except as described below in this paragraph, the "Ten
         Year Constant Maturity Rate" for each Dividend Period will be the
         arithmetic average of the two most recent weekly per annum Ten Year
         Average Yields (as defined below) (or the one weekly per annum Ten Year
         Average Yield, if only one such yield is published during the relevant
         Calendar Period), as published weekly by the Federal Reserve Board
         during the Calendar Period immediately preceding the last ten calendar
         days preceding the Dividend Period for which the dividend rate on the
         Series is being determined. In the event that the Federal Reserve Board
         does not publish such a weekly per annum Ten Year Average Yield during
         any such Calendar Period, the Ten Year Constant Maturity Rate for such
         Dividend Period will be the arithmetic average of the two most recent
         weekly per annum Ten Year Average Yields (or the one weekly per annum
         Ten Year Average Yield, if only one such yield is published during the
         relevant Calendar Period), as published weekly during such Calendar
         Period by any Federal Reserve Bank or by any U.S. Government
<PAGE>   14
         department or agency selected by the Corporation. In the event that a
         per annum Ten Year Average Yield is not published by the Federal
         Reserve Board or by any Federal Reserve Bank or by any U.S. Government
         department or agency during such Calendar Period, the Ten Year Constant
         Maturity Rate for such Dividend Period will be the arithmetic average
         of the two most recent weekly per annum average yields to maturity (or
         the one weekly per annum average yield to maturity, if only one such
         yield is published during the relevant Calendar Period) for all of the
         actively traded marketable U.S. Treasury fixed interest rate securities
         (other than Special Securities (as defined below)) then having
         remaining maturities of not less than eight nor more than twelve years,
         as published during such Calendar Period by the Federal Reserve Board
         or, if the Federal Reserve Board does not publish such yields, by any
         Federal Reserve Bank or by any U.S. Government department or agency
         selected by the Corporation. In the event that the Corporation
         determines in good faith that for any reason the Corporation cannot
         determine the Ten Year Constant Maturity Rate for any Dividend Period
         as provided above in this paragraph, then the Ten Year Constant
         Maturity Rate for such Dividend Period will be the arithmetic average
         of the per annum average yields to maturity based upon the closing bids
         during such Calendar Period for each of the issues of actively traded
         marketable U.S. Treasury fixed interest rate securities (other than
         Special Securities) with a final maturity date not less than eight nor
         more than twelve years from the date of each such quotation, as chosen
         and quoted daily for each business day in New York City (or less
         frequently if daily quotations are not generally available) to the
         Corporation by at least three recognized dealers in U.S. Government
         securities selected by the Corporation.

                           Except as described below in this paragraph, the
         "Thirty Year Constant Maturity Rate" for each Dividend Period will be
         the arithmetic average of the two most recent weekly per annum Thirty
         Year Average Yields (as defined below) (or the one weekly per annum
         Thirty Year Average yield, if only one such yield is published during
         the relevant Calendar Period), as published weekly by the Federal
         Reserve Board during the Calendar Period immediately preceding the last
         ten calendar days preceding the Dividend Period for which the dividend
         rate on the Series is being determined. In the event that the Federal
         Reserve Board does not publish such a weekly per annum Thirty Year
         Average Yield during any such Calendar Period, the Thirty Year Constant
         Maturity Rate for such Dividend Period will be the arithmetic average
         of the two most recent weekly per annum Thirty Year Average Yields (or
         the one weekly per annum Thirty Year Average Yield, if only one such
         yield is published during the relevant Calendar Period), as published
         weekly during such Calendar Period by any Federal Reserve Bank or by
         any U.S. Government department or agency selected by the Corporation.
         In the event that a per annum Thirty Year Average Yield is not
         published by the Federal Reserve Board or by any Federal Reserve Bank
         or by any U.S. Government department or agency during such Calendar
         Period, the Thirty Year Constant Maturity Rate for such Dividend Period
         will be the arithmetic average of the two most recent weekly per annum
         average yields to maturity (or the one weekly per annum average yield
         to maturity, if only one such yield is published during the relevant
         Calendar Period) for all of the actively traded marketable U.S.
         Treasury
<PAGE>   15
         fixed interest rate securities (other than Special Securities) then
         having remaining maturities of not less than 28 nor more than 30 years,
         as published during such Calendar Period by the Federal Reserve Board
         or, if the Federal Reserve Board does not publish such yields, by any
         Federal Reserve Bank or by any U.S. Government department or agency
         selected by the Corporation. In the event that the Corporation
         determines in good faith that for any reason the Corporation cannot
         determine the Thirty Year Constant Maturity Rate for any Dividend
         Period as provided above in this paragraph, then the Thirty Year
         Constant Maturity Rate for such Dividend Period will be the arithmetic
         average of the per annum average yields to maturity based upon the
         closing bids during such Calendar Period for each of the issues of
         actively traded marketable U.S. Treasury fixed interest rate securities
         (other than Special Securities) with a final maturity date not less
         than 28 nor more than 30 years from the date of each such quotation, as
         chosen and quoted daily for each business day in New York City (or less
         frequently if daily quotations are not generally available) to the
         Corporation by at least three recognized dealers in U.S. Government
         securities selected by the Corporation.

                           The Treasury Bill Rate, the Ten Year Constant
         Maturity Rate and the Thirty Year Constant Maturity Rate shall each be
         rounded to the nearest five hundredths of a percent.

                           The Applicable Rate with respect to each Dividend
         Period (other than the Initial Dividend Period) will be calculated as
         promptly as practicable by the Corporation according to the appropriate
         method described above. The Corporation will cause each Applicable Rate
         to be published in a newspaper of general circulation in New York City
         before the commencement of the Dividend Period to which it applies and
         will cause notice of such Applicable Rate to be enclosed with the
         dividend payment checks next mailed to the holders of the shares of the
         Series.

                           For purposes of this Section,

                           "Calendar Period" means a period of fourteen calendar
                  days;

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

                           "Special Securities" means securities which can, at
                  the option of the holder, be surrendered at face value in
                  payment of any Federal estate tax or which provide tax
                  benefits to the holder and are priced to reflect such tax
                  benefits or which were originally issued at a deep or
                  substantial discount;
<PAGE>   16
                           "Ten Year Average Yield" means the average yield to
                  maturity for actively traded marketable U.S. Treasury fixed
                  interest rate securities (adjusted to constant maturities of
                  ten years); and

                           "Thirty Year Average Yield" means the average yield
                  to maturity for actively traded marketable U.S. Treasury fixed
                  interest rate securities (adjusted to constant maturities of
                  thirty years).

                           Changes in the Dividends-Received Percentage. (a) If
         one or more amendments to the Internal Revenue Code of 1986, as amended
         (the "Code") are enacted that reduce the percentage of the
         dividends-received deduction (currently 70%) as specified in Section
         243(a)(1) of the Code or any successor provision (the
         "Dividends-Received Percentage"), certain adjustments may be made in
         respect of the dividends payable by the Corporation and Post
         Declaration Date Dividends (as defined below) may become payable, as
         described below.

                           The amount of each dividend payable (if declared) per
         share of the Series for dividend payments made on or after the
         effective date of enactment of such change in the Code will be adjusted
         by multiplying the amount of the dividend payable determined as
         described in Section 1 above (before adjustment) by a factor which
         shall be the number determined in accordance with the following formula
         (the "DRD Formula"), and rounding the result to the nearest cent (with
         one-half cent rounded up):

                                  1-.35(1-.70)
                                  ------------
                                  1-.35(1-DRP)

                           For the purposes of the DRD Formula, "DRP" means the
         Dividends-Received Percentage (expressed as a decimal) applicable to
         the dividend in question. No amendment to the Code, other than a change
         in the percentage of the dividends-received deduction set forth in
         Section 243(a)(1) of the Code or any successor provision thereto, will
         give rise to an adjustment. Notwithstanding the foregoing provisions,
         if, with respect to any such amendment, the Corporation receives either
         an unqualified opinion of nationally recognized independent tax counsel
         selected by the Corporation or a private letter ruling or similar form
         of authorization from the Internal Revenue Service (the "IRS") to the
         effect that such an amendment would not apply to a dividend payable on
         the shares of the Series, then such amendment will not result in the
         adjustment provided for pursuant to the DRD Formula with respect to
         such dividend. The opinion referenced in the previous sentence shall be
         based upon the legislation amending or establishing the DRP or upon a
         published pronouncement of the IRS addressing such legislation. The
         Corporation's calculation of the dividends payable as so adjusted shall
         be final and not subject to review.
<PAGE>   17
                           Notwithstanding the foregoing, if any amendment to
         the Code is enacted and effected after a dividend payable on a Dividend
         Payment Date has been declared but not paid, the amount of the dividend
         payable on such Dividend Payment Date will not be increased; instead,
         additional dividends (the "Post Declaration Date Dividends"), equal to
         the excess, if any, of (x) the product of the dividend paid by the
         Corporation on such Dividend Payment Date and the DRD Formula over (y)
         the dividend paid by the Corporation on such Dividend Payment Date,
         will be payable (if declared) to holders of shares of the Series on the
         record date applicable to the next succeeding Dividend Payment Date or,
         if the Series is called for redemption prior to such record date, to
         holders of shares of the Series on the applicable redemption date, as
         the case may be, in addition to any other amounts payable on such date.

                           In the event that the amount of dividends payable per
         share of the Series is adjusted pursuant to the DRD Formula and/or Post
         Declaration Date Dividends are to be paid, the Corporation will give
         notice of each such adjustment and, if applicable, any Post Declaration
         Date Dividends to the holders of the shares of the Series.

                           Redemption. (a) The holders of the shares of the
         Series may not require the Corporation to redeem any shares of the
         Series. The Corporation, at its option, may redeem shares of the
         Series, in whole or in part, at any time and from time to time, on or
         after October 15, 2001, at a redemption price of $25 per share, plus
         accrued and unpaid dividends thereon (whether or not declared) to the
         date fixed for redemption.

                           In the event that fewer than all the outstanding
         shares of the Series are to be redeemed, the number of shares to be
         redeemed shall be determined by lot or pro rata as may be determined by
         the Corporation or by any other method as may be determined by the
         Corporation in its sole discretion to be equitable, provided that such
         method satisfies any applicable requirements of any securities exchange
         on which the Series is listed.
<PAGE>   18
                           In the event the Corporation shall redeem shares of
         the Series, notice of such redemption shall be given by first class
         mail, postage prepaid, mailed not less than 30 nor more than 60 days
         prior to the redemption date, to each holder of record of the shares of
         the Series to be redeemed, at such holder's address as the same appears
         on the stock register of the Corporation. Each such notice shall state:
         (i) the redemption date; (ii) the number of shares of the Series 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; and (v) that dividends on the shares of the Series to be
         redeemed cease to accrue on the redemption date.

                           Notice having been mailed as aforesaid, from and
         after the redemption date (unless default shall be made by the
         Corporation in providing money for the payment of the redemption price)
         dividends on the shares of the Series so called for redemption shall
         cease to accrue, and said shares shall no longer be deemed to be
         outstanding, and all rights of the holders thereof as stockholders of
         the Corporation (except the right to receive from the Corporation the
         redemption price) shall cease. Upon surrender in accordance with said
         notice of the certificates for any shares so redeemed (properly
         endorsed or assigned for transfer, if the Corporation shall so require
         and the notice shall so state), such shares shall be redeemed by the
         Corporation at the redemption price aforesaid. In case fewer than all
         the shares represented by any such certificate are redeemed, a new
         certificate shall be issued representing the unredeemed shares without
         cost to the holder thereof.

                           Any shares of the Series which shall at any time have
         been redeemed shall, after such redemption, have the status of
         authorized but unissued shares of Preferred Stock, without designation
         as to series.

                           Notwithstanding the foregoing provisions of this
         Section 4, if any dividends on the shares of the Series or any other
         series of cumulative Preferred Stock ranking on a parity with the
         Series are in arrears, no shares of the Series or any such parity
         series shall be redeemed unless all outstanding shares of the Series or
         any such parity series are simultaneously redeemed, and the Corporation
         shall not purchase or otherwise acquire any shares of the Series or any
         such parity series; provided, however, that the foregoing shall not
         prevent the purchase or acquisition of shares of the Series or any such
         parity series pursuant to a purchase or exchange offer made on the same
         terms to holders of all outstanding shares of the Series.
<PAGE>   19
                           Notwithstanding the foregoing provisions of this
         Section 4, if the Dividends-Received Percentage is less than 50% and,
         as a result, the amount of dividends on the Series payable on any
         Dividend Payment Date will be or is adjusted upwards as described in
         Section 3 above, the Corporation, at its option, may redeem all, but
         not less than all, of the outstanding shares of the Series, provided,
         that within 60 days of the date on which an amendment to the Code is
         enacted which reduces the Dividends-Received Percentage to less than
         50%, the Corporation sends notice to holders of the Series of such
         redemption pursuant to paragraph (c) of this Section 4. Any redemption
         of the Series pursuant to this paragraph will take place on the date
         specified in the notice, which shall not be less than 30 nor more than
         60 days from the date such notice is sent to holders of the Series. Any
         redemption of the Series in accordance with this paragraph shall be on
         notice as aforesaid at the applicable redemption price set forth in the
         following table, in each case plus accrued and unpaid dividends
         (whether or not declared) thereon to the date fixed for the redemption,
         including any changes in dividends payable due to changes in the
         Dividends-Received Percentage and Post Declaration Date Dividends, if
         any:

<TABLE>
<CAPTION>
Redemption Period                                        Redemption Price
-----------------                                        ----------------
<S>                                                      <C>
September 23, 1996 to October 14, 1997.............                $26.25
October 15, 1997 to October 14, 1998...............                $26.00
October 15, 1998 to October 14, 1999...............                $25.75
October 15, 1999 to October 14, 2000...............                $25.50
October 15, 2000 to October 14, 2001...............                $25.25
On or after October 15, 2001.......................                $25.00
</TABLE>

                           Conversion. The holders of shares of the Series shall
         not have any rights to convert such shares into shares of any other
         class or series of capital stock of the Corporation.

                           Liquidation Rights. (a) Upon the voluntary or
         involuntary liquidation, dissolution or winding up of the Corporation,
         the holders of the shares of the Series shall be entitled to receive
         and to be paid out of the assets of the Corporation available for
         distribution to its stockholders, before any payment or distribution
         shall be made on the common stock or on any other class of stock
         ranking junior to the Series, a liquidating distribution in the amount
         of $25 per share plus an amount equal to accrued and unpaid dividends
         thereon (whether or not declared).
<PAGE>   20
                           After the payment to the holders of the shares of the
         Series of the full preferential amounts provided for in this Section 6,
         the holders of the Series as such shall have no right or claim to any
         of the remaining assets of the Corporation.

                           If, upon any voluntary or involuntary liquidation,
         dissolution or winding up of the Corporation, the amounts payable with
         respect to the shares of the Series and any other shares of stock of
         the Corporation ranking as to any such distribution on a parity with
         the shares of the Series are not paid in full, the holders of the
         shares of the Series and of such other shares will share ratably in any
         such distribution of assets of the Corporation in proportion to the
         full preferential amounts to which they are entitled.

                           Neither the sale of all or substantially all of the
         assets of the Corporation, nor the merger or consolidation or share
         exchange of the Corporation into or with any other corporation or the
         merger or consolidation or share exchange of any other corporation into
         or with the Corporation, shall be deemed to be a liquidation,
         dissolution or winding up, voluntary or involuntary, for the purposes
         of this Section 6.

                           Ranking. Any stock of any class or classes of the
         Corporation shall be deemed to rank:

                           senior to the shares of the Series, either as to
         dividends or upon liquidation, if the holders of such class or classes
         shall be entitled to the receipt of dividends or of amounts
         distributable upon liquidation, dissolution or winding up of the
         Corporation, as the case may be, in preference or priority to the
         holders of shares of the Series;

                           on a parity with shares of the Series, either as to
         dividends or upon liquidation, whether or not the dividend rates,
         dividend payment dates or redemption or liquidation prices per share or
         sinking fund provisions, if any, be different from those of the Series,
         if the holders of such stock shall be entitled to the receipt of
         dividends or of amounts distributable upon liquidation, dissolution or
         winding up of the Corporation, as the case may be, without preference
         or priority, one over the other, as between the holders of such stock
         and the holders of shares of the Series; and

                           junior to shares of the Series, either as to
         dividends or upon liquidation, if such class shall be common stock or
         if the holders of shares of the Series shall be entitled to receipt of
         dividends or of amounts distributable upon liquidation, dissolution or
         winding up of the Corporation, as the case may be, in preference or
         priority to the holders of shares of such class or classes.
<PAGE>   21
                           Voting Rights. (a) Except as indicated below, the
         shares of the Series shall not be entitled to vote on any matter
         including, but not limited to:

                           Any merger, consolidation, share exchange or sale of
                  all or substantially all of the assets of the Corporation
                  except to the extent such action amends, alters or repeals the
                  preferences, conversion and other rights, voting powers,
                  restrictions, limitation as to dividends, qualifications and
                  terms and conditions of the redemption of the Series as
                  expressly set forth herein in a manner adverse to the holders
                  of the Series, or,

                           An increase in the authorized amount of the Series or
                  the creation, authorization or issuance of an additional
                  series ranking on a parity with the shares of the Series as to
                  dividends or upon liquidation, or to reclassify any authorized
                  stock of the Corporation into any such shares ranking on a
                  parity with, or to authorize or issue any obligation or
                  security convertible into or evidencing the right to purchase
                  any such pari passu shares.

                           Notwithstanding the foregoing:

                           The affirmative vote of at least two-thirds of the
                  votes entitled to be cast by holders of shares of the Series
                  and all other series of Preferred Stock ranking on a parity
                  with shares of the Series as to dividends or upon liquidation
                  upon which like voting rights have been conferred and are
                  exercisable, voting together as a single class without regard
                  to series, shall be necessary for any amendment, alteration or
                  repeal, whether by merger, consolidation, share exchange or
                  otherwise, of the Charter of the Corporation, including any
                  articles supplementary thereto, which adversely affects the
                  preferences, conversion and other rights, voting powers,
                  restrictions, limitations as to dividends, qualifications and
                  terms and conditions of the redemption of the Series as
                  expressly set forth herein in a manner adverse to the holders
                  of the Series;

                           The affirmative vote of at least two-thirds of the
                  votes entitled to be cast by the holders of the shares of the
                  Series and all other series of Preferred Stock ranking on a
                  parity with shares of the Series as to dividends or upon
                  liquidation upon which like voting rights have been conferred
                  and are exercisable, voting together as a single class without
                  regard to series, shall be necessary to authorize or issue any
                  shares of any class of stock of the Corporation ranking prior
                  to the shares of the Series as to dividends or upon
                  liquidation, or to reclassify any authorized stock
<PAGE>   22
                  of the Corporation into any such prior shares, or authorize or
                  issue any obligation or security convertible into or
                  evidencing the right to purchase any such prior shares; and

                           If at the time of any annual meeting of the
                  Corporation's stockholders for the election of directors there
                  is a default in preference dividends (as defined below) on the
                  Series, the number of directors constituting the Board of
                  Directors of the Corporation shall be increased by two, and
                  the holders of the shares of the Series (together with the
                  holders of the Preferred Stock of all other series upon which
                  like voting rights have been conferred and are exercisable),
                  shall have the right at such meeting, voting together as a
                  single class without regard to series, to the exclusion of the
                  holders of common stock, to elect two directors of the
                  Corporation (each a "Preferred Director") to fill such newly
                  created directorships. Each holder of shares of the Series
                  will have one vote for each share of stock held and each
                  holder of each other series of Preferred Stock with like
                  voting rights will have such number of rights, if any, for
                  each share of stock held as may be granted to such holder.
                  Such right shall continue until there are no dividends in
                  arrears upon the Series, subject to re-vesting in the event of
                  each and every subsequent default in preference dividends on
                  the Series. Any Preferred Director may be removed with or
                  without cause by the vote of the holders of record of the
                  outstanding shares of Preferred Stock entitled to elect such
                  Preferred Director, voting together as a single class without
                  regard to series, at a meeting of the Corporation's
                  stockholders, or of the holders of such shares of Preferred
                  Stock, called for that purpose. Any Preferred Director may be
                  removed for cause by the vote of the holders of outstanding
                  shares of stock of the Corporation entitled to vote for the
                  election of directors. So long as a default in any preference
                  dividends on the Series shall exist, (a) any vacancy in the
                  office of a Preferred Director may be filled (except as
                  provided in the following clause (b)) by an instrument in
                  writing signed by the remaining Preferred Director and filed
                  with the Corporation and (b) in the case of the removal of any
                  Preferred Director, the vacancy may be filled by the vote of
                  the holders of the outstanding shares of Preferred Stock,
                  voting together as a single class without regard to series, at
                  the same meeting at which such removal shall be voted. Each
                  director appointed as aforesaid by the remaining Preferred
                  Director shall be deemed, for all purposes hereof, to be a
                  Preferred Director. Whenever a default in preference dividends
                  shall no longer exist, subject to the rights of the holders of
                  any other series of Preferred Stock, the number of directors
                  constituting the Board of Directors of the Corporation
<PAGE>   23
                  shall be reduced by two. For the purposes hereof, a "default
                  in preference dividends" on the Series shall be deemed to have
                  occurred whenever the amount of accrued dividends upon the
                  Series shall be equivalent to six full quarterly dividends or
                  more (whether or not consecutive), and, having so occurred,
                  such default shall be deemed to exist thereafter until, but
                  only until, all accrued dividends on all shares of the Series
                  shall have been paid to the end of the last preceding dividend
                  period.

                  SECOND: The shares of the Series have been classified and the
         terms of the Series have been fixed by a committee of the Board of
         Directors pursuant to a general formula adopted by the Board of
         Directors under authority set forth in the Charter of the Corporation.