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                                                                     Exhibit 3.1

                                    RESTATED

                          CERTIFICATE OF INCORPORATION

                                       OF

                            NTL HOLDINGS INCORPORATED

        The undersigned, Richard J. Lubasch, certifies that he is the Executive
Vice President, General Counsel and Secretary of NTL Holdings Incorporated, a
corporation organized and existing under the laws of the State of Delaware (the
"Corporation"), and does hereby further certify as follows:

        (1)     The name of the Corporation is NTL Holdings Incorporated.

        (2)     The name under which the Corporation was originally incorporated
    was NTL Holdings Incorporated and the original Certificate of Incorporation
    of the Corporation was filed with the Secretary of State of the State of
    Delaware on December 13, 1999.

        (3)     This Restated Certificate of Incorporation was duly adopted in
    accordance with the provisions of Section 242 and Section 245 of the General
    Corporation Law of the State of Delaware.

        (4)     The text of the Restated Certificate of Incorporation of the
    Corporation as amended hereby is restated to read in its entirety, as
    follows:

FIRST:  The name of the Corporation is NTL Incorporated (hereinafter the
"Corporation").

SECOND: The address of the registered office of the Corporation in the State of
Delaware is 9 Loockerman Street, City of Dover 19901, County of Kent. The name
of its registered agent at that address is National Registered Agents, Inc.


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THIRD: The purpose of the Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
the State of Delaware as set forth in Title 8 of the Delaware Code (the "GCL").

FOURTH: A. Authorized Capital. The total number of shares of stock which the
Corporation shall have the authority to issue is 810,000,000 shares, consisting
of 800,000,000 shares of common stock, par value $0.01 per share (the "Common
Stock"), and 10,000,000 shares of preferred stock, par value $0.01 per share
(the "Preferred Stock").

        B.   Designation of Series. Shares of the Preferred Stock of the
Corporation may be issued from time to time in one or more classes or series,
each of which class or series shall have such distinctive designation or title
as shall be fixed by the Board of Directors of the Corporation (the "Board of
Directors") prior to the issuance of any shares thereof. Each such class or
series of Preferred Stock shall have such voting powers, full or limited, or no
voting powers, and such preferences and relative, participating, optional or
other special rights and such qualifications, limitations or restrictions
thereof, as shall be stated in such resolution or resolutions providing for the
issue of such class or series of Preferred Stock as may be adopted from time to
time by the Board of Directors prior to the issuance of any shares thereof
pursuant to the authority hereby expressly vested in it, all in accordance with
the laws of the State of Delaware.

        C.   Series A Junior Participating Preferred Stock.

             Section 1. Designation and Amount. The shares of this series shall
be designated as "Series A Junior Participating Preferred Stock" and the number
of shares constituting such series shall be 1,000,000.

             Section 2. Dividends and Distributions.

             (A)    Subject to the prior and superior rights of the holders of
        any shares of any series of Preferred Stock ranking prior and superior
        to the shares of Series A Junior Participating Preferred Stock with
        respect to dividends, the holders of shares of Series A Junior
        Participating Preferred Stock shall be entitled to receive, when, as and
        if declared by the Board of Directors out of funds legally available for
        the purpose, quarterly dividends payable in cash on the fifteenth day of
        March, June, September and December in each year (each such date being
        referred to herein as a "Quarterly Dividend Payment Date"),





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        commencing on the first Quarterly Dividend Payment Date after the first
        issuance of a share or fraction of a share of Series A Junior
        Participating Preferred Stock, in an amount per share (rounded to the
        nearest cent) equal to the greater of (a) $0.01 or (b) subject to the
        provision for adjustment hereinafter set forth, 100 times the aggregate
        per share amount of all cash dividends, and 100 times the aggregate per
        share amount (payable in kind) of all non-cash dividends or other
        distributions other than a dividend payable in shares of Common Stock
        or a subdivision of the outstanding shares of Common Stock (by
        reclassification or otherwise), declared on the Common Stock since the
        immediately preceding Quarterly Dividend Payment Date, or, with respect
        to the first Quarterly Dividend Payment Date, since the first issuance
        of any share or fraction of a share of Series A Junior Participating
        Preferred Stock. In the event the Corporation shall at any time after
        September 1, 1993 (the "Rights Declaration Date") (i) declare any
        dividend on Common Stock payable in shares of Common Stock, (ii)
        subdivide the outstanding Common Stock, or (iii) combine the
        outstanding Common Stock into a smaller number of shares, then in each
        such case, the amount to which holders of shares of Series A Junior
        Participating Preferred Stock were entitled immediately prior to such
        event under clause (b) of the preceding sentence shall be adjusted by
        multiplying such amount by a fraction the numerator of which is the
        number of shares of Common Stock outstanding immediately after such
        event and the denominator of which is the number of shares of Common
        Stock that were outstanding immediately prior to such event.

             (B)    The Corporation shall declare a dividend or distribution on
        the Series A Junior Participating Preferred Stock as provided in
        paragraph (A) above immediately after it declares a dividend or
        distribution on the Common Stock (other than a dividend payable in
        shares of Common Stock); provided that, in the event no dividend or
        distribution shall have been declared on the Common Stock during the
        period between any Quarterly Dividend Payment Date and the next
        subsequent Quarterly Dividend Payment Date, a dividend of $0.01 per
        share on the Series A Junior Participating Preferred Stock shall
        nevertheless be payable on such subsequent Quarterly Dividend Payment
        Date.

             (C)    Dividends shall begin to accrue and be cumulative on
        outstanding shares of Series A Junior Participating Preferred Stock from
        the Quarterly Dividend Payment Date next preceding the date of issue of
        such shares of Series A Junior Participating Preferred Stock, unless the
        date of issue of such shares is prior to the record date for the first
        Quarterly Dividend Payment Date, in which case dividends on such shares
        shall begin to accrue from the date of issue of






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        such shares, or unless the date of issue is a Quarterly Dividend
        Payment Date or is a date after the record date for the determination
        of holders of shares of Series A Junior Participating Preferred Stock
        entitled to receive a quarterly dividend and before such Quarterly
        Dividend Payment Date, in either of which events such dividends shall
        begin to accrue and be cumulative from such Quarterly Dividend Payment
        Date. Accrued but unpaid dividends shall not bear interest. Dividends
        paid on the shares of Series A Junior Participating Preferred Stock in
        an amount less than the total amount of such dividends at the time
        accrued and payable on such shares shall be allocated pro rata on a
        share-by-share basis among all such shares at the time outstanding. The
        Board of Directors may fix a record date for the determination of
        holders of shares of Series A Junior Participating Preferred Stock
        entitled to receive payment of a dividend or distribution declared
        thereon, which record date shall be no more than 30 days prior to the
        date fixed for the payment thereof.

             Section 3. Voting Rights.  The holders of shares of Series A
Junior Participating Preferred Stock shall have the following voting rights:

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

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

             (C)    (i) If at any time dividends on any Series A Junior
        Participating Preferred Stock shall be in arrears in an amount equal to
        six (6) quarterly






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        dividends thereon, the occurrence of such contingency shall mark the
        beginning of a period (herein called a "default period") which shall
        extend until such time when all accrued and unpaid dividends for all
        previous quarterly dividend periods and for the current quarterly
        dividend period on all shares of Series A Junior Participating Preferred
        Stock then outstanding shall have been declared and paid or set apart
        for payment. During each default period, all holders of Preferred Stock
        (including holders of the Series A Junior Participating Preferred Stock)
        with dividends in arrears in an amount equal to six (6) quarterly
        dividends thereon, voting as a class, irrespective of series, shall have
        the right to elect two (2) Directors.

             (ii)   During any default period, such voting right of the
holders of Series A Junior Participating Preferred Stock may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of this
Section 3(C) or at any annual meeting of stockholders, and thereafter at annual
meetings of stockholders, provided that neither such voting right nor the right
of the holders of any other series of Preferred Stock, if any, to increase, in
certain cases, the authorized number of Directors shall be exercised unless the
holders of ten percent (10%) in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Preferred Stock
of such voting right. At any meeting at which the holders of Preferred Stock
shall exercise such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as shall be necessary to
permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Junior
Participating Preferred Stock.

            (iii)   Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or stockholders
owning in the aggregate not less than ten percent (10%) of the total number of
shares of Preferred Stock outstanding, irrespective of series, may request, the
calling of special meeting of the holders of





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Preferred Stock, which meeting shall thereupon be called by the President, a
Vice-President or the Secretary of the Corporation. Notice of such meeting and
of any annual meeting at which holders of Preferred Stock are entitled to vote
pursuant to this paragraph (C) (iii) shall be given to each holder of record of
Preferred Stock by mailing a copy of such notice to him at his last address as
the same appears on the books of the Corporation. Such meeting shall be called
for a time not earlier than 20 days and not later than 60 days after such order
or request or in default of the calling of such meeting within 60 days after
such order or request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (C) (iii), no such special
meeting shall be called during the period within 60 days immediately preceding
the date fixed for the next annual meeting of the stockholders.

             (iv)   In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole number of Directors until the holders of Preferred
Stock shall have exercised their right to elect two (2) Directors voting as a
class, after the exercise of which right (x) the Directors so elected by the
holders of Preferred Stock shall continue in office until their successors shall
have been elected by such holders or until the expiration of the default period,
and (y) any vacancy in the Board of Directors may (except as provided in
paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the
remaining Directors theretofore elected by the holders of the class of stock
which elected the Director whose office shall have become vacant. References in
this paragraph (C) to Directors elected by the holders of a particular class of
stock shall include Directors elected by such Directors to fill vacancies as
provided in clause (y) of the foregoing sentence.

             (v)    Immediately upon the expiration of a default period, (x) the
right of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of Directors shall be such number
as may be provided for in the certificate of incorporation or by-laws
irrespective of any increase made pursuant to the provisions of paragraph
(C)(ii) of this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the certificate of incorporation
or bylaws). Any vacancies in the Board of Directors effected by the provisions
of clauses (y) and (z) in the preceding sentence may be filled by a majority of
the remaining Directors.





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             (D)    Except as set forth herein, holders of Series A Junior
        Participating Preferred Stock shall have no special voting rights and
        their consent shall not be required (except to the extent they are
        entitled to vote with holders of Common Stock as set forth herein) for
        taking any corporate action.

             Section 4. Certain Restrictions.

             (A)    Whenever quarterly dividends or other dividends or
        distributions payable on the Series A Junior Participating Preferred
        Stock as provided in Section 2 are in arrears, thereafter and until all
        accrued and unpaid dividends and distributions, whether or not declared,
        on shares of Series A Junior Participating Preferred Stock outstanding
        shall have been paid in full, the Corporation shall not

             (i)    declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock;

             (ii)   declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior Participating
Preferred Stock, except dividends paid ratably on the Series A Junior
Participating Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;

             (iii)  redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior Participating
Preferred Stock, provided that the Corporation may at any time redeem, purchase
or otherwise acquire shares of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior Participating
Preferred Stock;

             (iv)   purchase or otherwise acquire for consideration any shares
of Series A Junior Participating Preferred Stock, or any shares of stock ranking
on a parity with the Series A Junior Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after




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consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series or
classes.

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

             Section 5. Reacquired Shares. Any shares of Series A Junior
Participating Preferred Stock purchased or otherwise acquired by the Corporation
in any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.

             Section 6. Liquidation, Dissolution or Winding Up.

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






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        shares of Common Stock shall receive their ratable and proportionate
        share of the remaining assets to be distributed in the ratio of the
        Adjustment Number to 1 with respect to such Preferred Stock and Common
        Stock, on a per share basis, respectively.

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

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

             Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind) as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior Participating Preferred Stock shall be
adjusted by multiplying







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such amount by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.

             Section 8. No Redemption.  The shares of Series A Junior
Participating Preferred Stock shall not be redeemable.

             Section 9. Ranking. The Series A Junior Participating Preferred
Stock shall rank junior to all other series of the Corporation's Preferred Stock
as to the payment of dividends and the distribution of assets, unless the terms
of any such series shall provide otherwise.

             Section 10. Amendment. The Restated Certificate of Incorporation of
the Corporation shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class.

             Section 11. Fractional Shares. Series A Junior Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating Preferred Stock.

        D.   13% Senior Redeemable Exchangeable Preferred Stock and 13% Series B
Senior Redeemable Exchangeable Preferred Stock. The powers, preferences and
relative, participating, optional and other special rights, and the
qualifications, limitations and restrictions, of the shares of preferred stock
consisting of the series designated the "13% Senior Redeemable Exchangeable
Preferred Stock" and the series designated the "13% Series B Senior Redeemable
Exchangeable Preferred Stock" are as set forth in this Article FOURTH and in
Exhibit A to this Restated Certificate of Incorporation.

        E.   9.90% Non-voting Mandatorily Redeemable Preferred Stock, Series B.
The powers, preferences and relative, participating, optional and other special
rights, and the qualifications, limitations and restrictions, of the shares of
preferred stock designated the "9.90% Non-voting Mandatorily Redeemable
Preferred Stock, Series B"






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are as set forth in this Article FOURTH and in Exhibit B to this Restated
Certificate of Incorporation.

        F.   5% Cumulative Participating Convertible Preferred Stock, Series A.
The powers, preferences and relative, participating, optional and other special
rights, and the qualifications, limitations and restrictions, of the shares of
preferred stock designated the "5% Cumulative Participating Convertible
Preferred Stock, Series A" are as set forth in this Article FOURTH and in
Exhibit C to this Restated Certificate of Incorporation.

        G.   5% Cumulative Participating Convertible Preferred Stock, Series C.
The powers, preferences and relative, participating, optional and other special
rights, and the qualifications, limitations and restrictions, of the shares of
preferred stock designated the "5% Cumulative Participating Convertible
Preferred Stock, Series C" are as set forth in this Article FOURTH and in
Exhibit D to this Restated Certificate of Incorporation.

        H.   5% Cumulative Participating Convertible Preferred Stock, Series D.
The powers, preferences and relative, participating, optional and other special
rights, and the qualifications, limitations and restrictions, of the shares of
preferred stock designated the "5% Cumulative Participating Convertible
Preferred Stock, Series D" are as set forth in this Article FOURTH and in
Exhibit E to this Restated Certificate of Incorporation.

        I.   5% Cumulative Preferred Stock, Series A.  The powers, preferences
and relative, participating, optional and other special rights, and the
qualifications, limitations and restrictions, of the shares of preferred stock
designated the "5% Cumulative Preferred Stock, Series A" are as set forth in
this Article FOURTH and in Exhibit F to this Restated Certificate of
Incorporation.

        J.   5% Cumulative Participating Convertible Preferred Stock, Series E.
The powers, preferences and relative, participating, optional and other special
rights, and the qualifications, limitations and restrictions, of the shares of
preferred stock designated the "5% Cumulative Participating Convertible
Preferred Stock, Series E" are as set forth in this Article FOURTH and in
Exhibit G to this Restated Certificate of Incorporation.

FIFTH: The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors. The number of directors of the
Corporation shall be as from time to time fixed by, or in the manner provided
in, the By-laws of the Corporation. The directors shall be divided into three
classes, designated Class I, Class II and Class III. Each class shall consist,
as nearly as may be possible, of one-third of the total number of directors
constituting the entire Board of Directors. The term of the initial







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Class I directors shall terminate on the date of the 1994 annual meeting of
stockholders; the term of the initial Class II directors shall terminate on the
date of the 1995 annual meeting of stockholders and the term of the initial
Class III directors shall terminate on the date of the 1996 annual meeting of
stockholders. At each annual meeting of stockholders beginning in 1994,
successors to the class of directors whose term expires at that annual meeting
shall be elected for a three-year term. If the number of directors is changed,
any increase or decrease shall be apportioned among the classes so as to
maintain the number of directors in each class as nearly equal as possible, and
any additional directors of any class elected to fill a vacancy resulting from
an increase in such class shall hold office for a term that shall coincide with
the remaining term of that class, but in no case will a decrease in the number
of directors shorten the term of any incumbent director. A director shall hold
office until the annual meeting for the year in which his term expires and until
his successor shall be elected and shall qualify, subject, however, to prior
death, resignation, retirement, disqualification or removal from office. Any
vacancy on the Board of Directors, howsoever resulting, may be filled by a
majority of the directors then in office, even if less than a quorum, or by a
sole remaining director. Any director elected to fill a vacancy shall hold
office for a term that shall coincide with the term of the class to which such
director shall have been elected.

        Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of Preferred Stock issued by the Corporation shall have the
right, voting separately by class or series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate of Incorporation or the resolution or resolutions
adopted by the Board of Directors pursuant to Article FOURTH applicable thereto,
and such directors so elected shall not be divided into classes pursuant to this
Article FIFTH unless expressly provided by such terms.

SIXTH: Subject to the rights, if any, of the holders of shares of Preferred
Stock then outstanding, any or all of the directors of the Corporation may be
removed from office at any time, but only for cause and only by the affirmative
vote of the holders of two-thirds (66 2/3%) of the outstanding shares of the
Corporation then entitled to vote generally in the election of directors,
considered for purposes of this Article SIXTH as one class.

SEVENTH: Any action required or permitted to be taken at any annual or special
meeting of stockholders may be taken only upon the vote of the stockholders at
an annual or special meeting duly noticed and called, as provided in the By-laws
of the






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Corporation, and may not be taken by a written consent of the stockholders
pursuant to the GCL.

EIGHTH: Special meetings of the stockholders of the Corporation for any purpose
or purposes may be called at any time by the Board of Directors, the Chairman of
the Board of Directors or the President. Special meetings of the stockholders of
the Corporation may not be called by any other person or persons.

NINTH:

        A.   In addition to any affirmative vote required by law or this
Certificate of Incorporation or the By-laws of the Corporation, and except as
otherwise expressly provided in Section B of this Article NINTH, a Business
Combination (as hereinafter defined) with, or proposed by or on behalf of, any
Interested Stockholder (as hereinafter defined) or any Affiliate or Associate
(as hereinafter defined) of any Interested Stockholder or any person who
thereafter would be an Affiliate or Associate of such Interested Stockholder
shall require the affirmative vote of not less than sixty-six and two-thirds
percent (66-2/3%) of the votes entitled to be cast by the holders of all the
then outstanding shares of Voting Stock (as hereinafter defined), voting
together as a single class, excluding Voting Stock beneficially owned by any
Interested Stockholder or any Affiliate or Associate of such Interested
Stockholder. Such affirmative vote shall be required notwithstanding the fact
that no vote may be required, or that a lesser percentage or separate class vote
may be specified, by law or in any agreement with any national securities
exchange or otherwise.

        B.   The provisions of Section A of this Article NINTH shall not be
applicable to any particular Business Combination, and such Business Combination
shall require only such affirmative vote, if any, as is required by law or any
other provision of this Certificate of Incorporation or the By-laws of the
Corporation, if all of the conditions specified in either of the following
Paragraphs 1 or 2 are met:

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

             2. All of the following conditions shall have been met:

             a. the aggregate amount of the cash and the Fair Market Value (as
hereinafter defined) as of the date of the consummation of the Business
Combination of consideration other than cash to be received per share by holders
of Common Stock in






                                       13
<PAGE>   14

such Business Combination shall be at least equal to the highest amount
determined under clauses (i) and (ii) below:


                (i)    (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by
or on behalf of the Interested Stockholder for any share of Common Stock in
connection with the acquisition by the Interested Stockholder of beneficial
ownership of shares of Common Stock acquired by it (x) within the two-year
period immediately prior to the first public announcement of the proposed
Business Combination (the "Announcement Date") or (y) in the transaction in
which it became an Interested Stockholder, whichever is higher, in either case
as adjusted for any subsequent stock split, stock dividend, subdivision or
reclassification with respect to the Common Stock; and

                (ii)   the Fair Market Value per share of Common Stock on the
Announcement Date or on the date on which the Interested Stockholder became an
Interested Stockholder (the "Determination Date"), whichever is higher, as
adjusted for any subsequent stock split, stock dividend, subdivision or
reclassification with respect to the Common Stock.

             b. The aggregate amount of the cash and the Fair Market Value as
of the date of the consummation of the Business Combination, of consideration
other than cash to be received per share by holders of shares of any class or
series of outstanding Capital Stock (as hereinafter defined), other than Common
Stock, shall be at least equal to the highest amount determined under clauses
(i), (ii) and (iii) below:

                (i)    (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by
or on behalf of the Interested Stockholder for any share of such class or series
of Capital Stock in connection with the acquisition by the Interested
Stockholder of beneficial ownership of shares of such class or series of Capital
Stock (x) within the two-year period immediately prior to the Announcement Date
or (y) in the transaction in which it became an Interested Stockholder,
whichever is higher, in either case as adjusted for any subsequent stock split,
stock dividend, subdivision or reclassification with respect to such class or
series of Capital Stock;

                (ii)   the Fair Market Value per share of such class or series
of Capital Stock on the Announcement Date or on the Determination Date,
whichever is







                                       14
<PAGE>   15

higher, as adjusted for any subsequent stock split, stock dividend, subdivision
or reclassification with respect to such class or series of Capital Stock; and

                (iii)  (if applicable) the highest preferential amount per share
to which the holders of shares of such class or series of Capital Stock would be
entitled in the event of any voluntary or involuntary liquidation, dissolution
or winding up of the affairs of the Corporation regardless of whether the
Business Combination to be consummated constitutes such an event.

The provisions of this Paragraph 2 shall be required to be met with respect to
every class or series of outstanding Capital Stock, whether or not the
Interested Stockholder has previously acquired beneficial ownership of any
shares of a particular class or series of Capital Stock.

             c. The consideration to be received by holders of a particular
class or series of outstanding Capital Stock shall be in cash or in the same
form as previously has been paid by or on behalf of the Interested Stockholder
in connection with its direct or indirect acquisition of beneficial ownership of
shares of such class or series of Capital Stock. If the consideration so paid
for shares of any class or series of Capital Stock varied as to form, the form
of consideration for such class or series of Capital Stock shall be either cash
or the form used to acquire beneficial ownership of the largest number of shares
of such class or series of Capital Stock previously acquired by the Interested
Stockholder.

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







                                       15
<PAGE>   16

Stockholder and except in a transaction that, after giving effect thereto, would
not result in any increase in the Interested Stockholder's percentage beneficial
ownership of any class or series of Capital Stock.

             e. A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder (the
"Act") (or any subsequent provisions replacing such Act, rules or regulations)
shall be mailed to all stockholders of the Corporation at least 30 days prior to
the consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such Act or
subsequent provisions). The proxy or information statement shall contain on the
first page thereof, in a prominent place, any statement as to the advisability
(or inadvisability) of the Business Combination that the Continuing Directors,
or any of them, may choose to make and, if deemed advisable by a majority of the
Continuing Directors, an opinion of an investment banking firm selected by a
majority of the Continuing Directors as to the fairness (or unfairness) of the
terms of the Business Combination from a financial point of view to the holders
of the outstanding shares of Capital Stock other than the Interested Stockholder
and its Affiliates or Associates, such investment banking firm to be paid a
reasonable fee for its services by the Corporation.

             f. Such Interested Stockholder shall not have made any major change
in the Corporation's business or equity capital structure without the approval
of a majority of the Continuing Directors.

        C. The following definitions shall apply with respect to this Article
NINTH:

             1. The term "Business Combination" shall mean:

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

             b. any sale, lease, exchange, mortgage, pledge, transfer or other
disposition or security arrangement, investment, loan, advance, guarantee,
agreement to purchase, agreement to pay, extension of credit, joint venture
participation or other arrangement (in one transaction or a series of
transactions) with or for the benefit of any Interested Stockholder or any
Affiliate or Associate of any Interested Stockholder




                                       16
<PAGE>   17

involving any assets, securities or commitments of the Corporation, any
Subsidiary or any Interested Stockholder or any Affiliate or Associate of any
Interested Stockholder (except for any arrangement, whether as employee,
consultant or otherwise, other than as a director, pursuant to which any
Interested Stockholder or any Affiliate or Associate thereof shall, directly or
indirectly, have any control over or responsibility for the management of any
aspect of the business or affairs of the Corporation, with respect to which
arrangements the value tests set forth below shall not apply), together with all
other such arrangements (including all contemplated future events), has an
aggregate Fair Market Value and/or involves aggregate commitments of $5,000,000
or more or constitutes more than 5 percent of the book value of the total assets
(in the case of transactions involving assets or commitments other than capital
stock) or 5 percent of the stockholders' equity (in the case of transactions in
capital stock) of the entity in question (the "Substantial Part"), as reflected
in the most recent fiscal year-end consolidated balance sheet of such entity
existing at the time the stockholders of the Corporation would be required to
approve or authorize the Business Combination involving the assets, securities
and/or commitments constituting any Substantial Part; or

             c. the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation or for any amendment to the Corporation's
By-laws; or

             d. any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any other transaction
(whether or not with or into or otherwise involving an Interested Stockholder)
that has the effect, directly or indirectly, of increasing the proportionate
share of any class or series of Capital Stock, or any securities convertible
into Capital Stock or into equity securities of any Subsidiary, that is
beneficially owned by any Interested Stockholder or any Affiliate or Associate
of any Interested Stockholder; or

             e. any agreement, contract or other arrangement providing for any
one or more of the actions specified in the foregoing clauses (a) to (d).

             2. The term "Capital Stock" shall mean all capital stock of the
Corporation authorized to be issued from time to time under Article FOURTH of
this Certificate of Incorporation, and the term "Voting Stock" shall mean all
Capital Stock which by its terms may be voted on all matters submitted to
stockholders of the Corporation generally.






                                       17
<PAGE>   18

             3. The term "person" shall mean any individual, firm, company or
other entity and shall include any group comprised of any person and any other
person with whom such person or any Affiliate or Associate of such person has
any agreement, arrangement or understanding, directly or indirectly, for the
purpose of acquiring, holding, voting or disposing of Capital Stock.

             4. The term "Interested Stockholder" shall mean any person (other
than the Corporation or any Subsidiary and other than any profit-sharing,
employee stock ownership or other employee benefit plan of the Corporation or
any Subsidiary or any trustee of or fiduciary with respect to any such plan when
acting in such capacity who (a) is or has announced or publicly disclosed a plan
or intention to become the beneficial owner of Voting Stock representing fifteen
percent (15%) or more of the votes entitled to be cast by the holders of all
then outstanding shares of Voting Stock; or (b) is an Affiliate or Associate of
the Corporation and at any time within the two-year period immediately prior to
the date in question was the beneficial owner of Voting Stock representing
fifteen percent (15%) or more of the votes entitled to be cast by the holders of
all then outstanding shares of Voting Stock.

             5. A person shall be a "beneficial owner" of any Voting Stock: (a)
which such person or any of its Affiliates or Associates beneficially owns,
directly or indirectly; (b) which such person or any of its Affiliates or
Associates has, directly or indirectly, (i) the right to acquire (whether such
right is exercisable immediately or subject only to the passage of time),
pursuant to any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or understanding; or
(c) which is beneficially owned, directly or indirectly, by any other person
with which such person or any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Capital Stock. For the purposes of determining
whether a person is an Interested Stockholder pursuant to Paragraph 4 of this
Section C, the number of shares of Capital Stock deemed to be outstanding shall
include shares deemed beneficially owned by such person through applications of
this Paragraph 5 of Section C, but shall not include any other shares of Capital
Stock that may be issuable pursuant to an agreement, arrangement or
understanding, or upon exercise of conversion rights, warrants or options, or
otherwise.

             6. The terms "Affiliate" or "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations





                                       18
<PAGE>   19

under the Act, as in effect on April 2, 1993 (the term "registrant" in said Rule
12b-2 meaning in this case the Corporation).

             7. "Subsidiary" means any company of which a majority of any class
of equity security is beneficially owned by the Corporation; provided, however,
that for the purposes of the definition of Interested Stockholder set forth in
Paragraph 4 of this Section C, the term "Subsidiary" shall mean only a company
of which a majority of each class of equity security is beneficially owned by
the Corporation.

             8. The term "Continuing Director" means any member of the Board of
Directors of the Corporation, while such person is a member of the Board of
Directors, who is not an Affiliate or Associate or representative of the
Interested Stockholder and was a member of the Board of Directors prior to the
time that the Interested Stockholder became an Interested Stockholder, and any
successor of a Continuing Director while such successor is a member of the Board
of Directors, who is not an Affiliate or Associate or representative of the
Interested Stockholder and is recommended or elected to succeed the Continuing
Director by a majority of Continuing Directors.

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

             10. In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to be received"
as used in Paragraphs 2.a. and 2.b. of Section B of this Article NINTH shall
include the shares of Common Stock and/or the shares of any other class or
series of Capital Stock retained by the holders of such shares.







                                       19
<PAGE>   20

        D. A majority of the Continuing Directors shall have the power and duty
to determine for the purpose of this Article NINTH, on the basis of information
known to them after reasonable inquiry, all questions arising under this Article
NINTH, including, without limitation, (a) whether a person is an Interested
Stockholder, (b) the number of shares of Capital Stock or other securities
beneficially owned by any person, (c) whether a person is an Affiliate or
Associate of another, (d) whether a Proposed Action (as hereinafter defined) is
with, or proposed by, or on behalf of an Interested Stockholder or an Affiliate
or Associate of an Interested Stockholder, (e) whether the assets that are the
subject of any Business Combination have, or the consideration to be received
for the issuance or transfer of securities by the Corporation or any Subsidiary
in any Business Combination has, an aggregate Fair Market Value of $5,000,000 or
more, and (f) whether the assets or securities that are the subject of any
Business Combination constitute a Substantial Part. Any such determination made
in good faith shall be binding and conclusive on all parties. The good faith
determination of a majority of the Continuing Directors on such matters shall be
conclusive and binding for all purposes of this Article NINTH.

        E. Nothing contained in this Article NINTH shall be construed to relieve
any Interested Stockholder from any fiduciary obligation imposed by law.

        F. The fact that any Business Combination complies with the provisions
of Section B of this Article NINTH shall not be construed to impose any
fiduciary duty, obligation or responsibility on the Board of Directors, or any
member thereof, to approve such Business Combination or recommend its adoption
or approval to the stockholders of the Corporation, nor shall such compliance
limit, prohibit or otherwise restrict in any manner the Board of Directors, or
any member thereof, with respect to evaluations of or actions and responses
taken with respect to such Business Combination.

        G. For the purposes of this Article NINTH, a Business Combination or any
proposal to amend, repeal or adopt any provision of this Certificate of
Incorporation inconsistent with this Article NINTH (collectively, "Proposed
Action") is presumed to have been proposed by, or on behalf of, an Interested
Stockholder or an Affiliate or Associate of an Interested Stockholder or a
person who thereafter would become such if (1) after the Interested Stockholder
became such, the Proposed Action is proposed following the election of any
director of the Corporation who with respect to such Interested Stockholder,
would not qualify to serve as a Continuing Director or (2) such Interested
Stockholder, Affiliate, Associate or person votes for or consents to the
adoption of any such Proposed Action, unless as to such Interested Stockholder,






                                       20
<PAGE>   21

Affiliate, Associate or person a majority of the Continuing Directors makes a
good faith determination that such Proposed Action is not proposed by or on
behalf of such Interested Stockholder, Affiliate, Associate or person, based on
information known to them after reasonable inquiry.

        H. Notwithstanding any other provisions of this Certificate of
Incorporation or the By-laws of the Corporation (and notwithstanding the fact
that a lesser percentage or separate class vote may be specified by law, this
Certificate of Incorporation or the By-laws of the Corporation), any proposal to
amend, repeal or adopt any provision of this Certificate of Incorporation
inconsistent with this Article NINTH which is proposed by or on behalf of an
Interested Stockholder or an Affiliate or Associate of an Interested Stockholder
shall require the affirmative vote of the holders of not less than sixty-six and
two-thirds percent (66-2/3%) of the votes entitled to be cast by the holders of
all the then outstanding shares of Voting Stock, voting together as a single
class, excluding Voting Stock beneficially owned by such Interested Stockholder;
provided, however, that this Section H shall not apply to, and such sixty-six
and two-thirds percent (66-2/3%) vote shall not be required for, any amendment,
repeal or adoption unanimously recommended by the Board of Directors if all of
such directors are persons who would be eligible to serve as Continuing
Directors within the meaning of Section C, Paragraph 8 of this Article NINTH.

TENTH: No director of the Corporation shall be personally liable to the
Corporation or its stockholders for monetary damages for any breach of fiduciary
duty by such a director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law (i) for any
breach of the director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the
GCL or (iv) for any transaction from which the director derived an improper
personal benefit. No amendment to or repeal to this Article TENTH shall apply to
or have any effect on the liability or alleged liability of any director of the
Corporation for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal.

ELEVENTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to adopt, repeal, alter,
amend or rescind the By-laws of the Corporation. In addition, the By-laws of the
Corporation may be adopted, repealed, altered, amended, or rescinded by the
affirmative vote of sixty-six and two-thirds percent (66-2/3%) of the
outstanding stock of the Corporation entitled to vote thereon.






                                       21
<PAGE>   22

TWELFTH: Notwithstanding anything contained in this Certificate of Incorporation
to the contrary, the affirmative vote of the holders of at least sixty-six and
two-thirds percent (66-2/3%) of the Voting Stock, voting together as a single
class, shall be required to amend, repeal or adopt any provision inconsistent
with Articles FIFTH, SEVENTH, EIGHTH, NINTH, TENTH, and ELEVENTH of this
Certificate of Incorporation.

THIRTEENTH: The Corporation reserves the right to repeal, alter, amend, or
rescind any provision contained in this Restated Certificate of Incorporation,
in the manner now or hereafter prescribed by statute, and all rights conferred
on stockholders herein are granted subject to this reservation.

               IN WITNESS WHEREOF, NTL Holdings Incorporated has caused this
Restated Certificate of Incorporation to be signed by Richard J. Lubasch, its
Executive Vice President, General Counsel and Secretary, this 17th day of May,
2000.


                            NTL HOLDINGS INCORPORATED


                             By: /s/ Richard J. Lubasch
                                ------------------------------------------
                                Name:  Richard J. Lubasch
                                Title: Executive Vice President, General Counsel
                                         and Secretary







                                       22
<PAGE>   23
                                                                       Exhibit A

                 13% SENIOR REDEEMABLE EXCHANGEABLE PREFERRED STOCK
                                       AND
                     13% SERIES B SENIOR REDEEMABLE EXCHANGEABLE
                                 PREFERRED STOCK

        (a)  Designation. There is hereby created out of the authorized and
unissued shares of preferred stock of the Corporation a class of preferred stock
consisting of two series, one designated as the "13% Senior Redeemable
Exchangeable Preferred Stock" (the "Series A Preferred") and the other
designated as the "13% Series B Senior Redeemable Exchangeable Preferred Stock"
(the "Series B Preferred"). The number of shares constituting such class shall
be 100,000 plus up to 150,000 shares issued in lieu of cash dividends, and are
referred to as the "Preferred Stock." The liquidation preference of the
Preferred Stock shall be $1,000.00 per share.

        (b)  Rank. The Preferred Stock shall, with respect to dividends and
distributions upon liquidation, winding-up and dissolution of the Corporation,
rank (i) senior to (a) all classes of Common Stock, (b) the Junior Preferred
Stock, (c) the 5% Preferred Stock and (d) each other class of Capital Stock or
series of preferred stock issued by the Corporation after the Issue Date the
terms of which specifically provide that such class or series will rank junior
to the Preferred Stock as to dividend distributions and distributions upon
liquidation, winding-up and dissolution of the Corporation or junior to or on a
parity with any class of common stock of the Corporation or which do not specify
their rank (the securities described in this clause (i), collectively, "Junior
Securities"); (ii) on a parity with each class of Capital Stock or series of
preferred stock issued by the Corporation after the Issue Date the terms of
which specifically provide that such class or series will rank on a parity with
the Preferred Stock as to dividend distributions and distributions upon
liquidation, winding-up and dissolution of the Corporation (the securities
described in this clause (ii), collectively, "Parity Securities"); and (iii)
junior to each other class of Capital Stock or other series of preferred stock
issued by the Corporation after the Issue Date the terms of which specifically
provide that such series will rank senior to the Preferred Stock as to dividend
distributions and distributions upon liquidation, winding-up and dissolution of
the Corporation (the securities described in this clause (iii), collectively,
"Senior Securities").

        (c)  Dividends.

             (i)    Beginning on the Issue Date, the Holders of the outstanding
shares of Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors, out of funds legally available therefor, dividends on
the Preferred





                                      A-1
<PAGE>   24



Stock at a rate equal to 13% per annum ($130 per share). Dividends will accrue
from the Issue Date and will be payable quarterly in arrears on February 15, May
15, August 15 and November 15 of each year (each, a "Dividend Payment Date"),
commencing on May 15, 1997. Dividends, whether or not earned or declared, will
accrue without interest until declared and paid, which declaration may be for
all or part of the accrued dividends. Dividends accruing on or prior to February
15, 2004 may, at the option of the Corporation, be paid (i) in cash, (ii) by the
issuance of such number of additional fully paid and nonassessable shares
(including fractional shares) of Preferred Stock equal to the amount of such
dividends then payable divided by $1,000 or (iii) in any combination of the
foregoing. Each dividend shall be payable to the Holders of record as they
appear on the stock books of the Corporation on such record date as may be fixed
by the Board of Directors, which record date will not be less than 10 nor more
than 60 days prior to the applicable Dividend Payment Date. Dividends shall
cease to accrue in respect of the Preferred Stock on the Exchange Date or on the
date of their earlier redemption or repurchase by the Corporation, unless the
Corporation shall have failed to issue the appropriate aggregate principal
amount of Subordinated Debentures in respect of the Preferred Stock on such
Exchange Date or shall have failed to pay the relevant redemption or repurchase
price on the date fixed for redemption or repurchase. All dividends paid with
respect to shares of the Preferred Stock shall be paid pro rata to the Holders
entitled thereto.

             (ii)   No full dividends may be declared or paid or funds set apart
for the payment of dividends on any Parity Securities for any period unless all
accrued dividends have been or contemporaneously are declared and paid in full
or declared and, if payable in cash, a sum in cash is set apart sufficient for
such payment on the Preferred Stock. If all accrued dividends have not been so
paid, the Preferred Stock shall share dividends pro rata with the Parity
Securities based upon the relative liquidation preferences of the outstanding
shares of the Preferred Stock and such Parity Securities. No dividends may be
declared or paid, nor may funds be set aside for such payment, on Junior
Securities, except dividends on Junior Securities which are paid in additional
Junior Securities (other than Disqualified Capital Stock), and no Parity
Securities or Junior Securities may be repurchased, redeemed or otherwise
retired, nor may funds be set apart for such payment, if all accrued dividends
have not been paid (or deemed to have been paid) on the Preferred Stock.

             (iii)  In the event that (a) the Exchange Offer Registration
Statement is not filed with the Commission on or prior to the 75th day following
the Issue Date, (b) the Exchange Offer Registration Statement is not declared
effective prior to the 120th day following the Issue Date, (c) the Registered
Exchange Offer is not consummated on







                                      A-2
<PAGE>   25

or prior to the 160th day following the Issue Date or (d) if the Corporation is
obligated to file the Shelf Registration Statement under the Registration Rights
Agreement and the Shelf Registration Statement is not declared effective on or
prior to 160 days after the Issue Date (in each of cases (b), (c) and (d), as
such period may be extended in accordance with the proviso of Section 2(a) of
the Registration Rights Agreement) (each such event referred to in clauses (a)
through (d) above, a "Registration Default"), dividends will accrue on the
Preferred Stock (in addition to the stated dividends on the Preferred Stock)
from and including the next day following each of (i) such 75-day period in the
case of clause (a) above, (ii) such 120-day period in the case of clause (b)
above, (iii) such 160-day period in the case of clause (c) above and (iv) such
160-day period in the case of clause (d) above (in each of cases (b), (c) and
(d) as such period is extended, if applicable, in the manner aforesaid) (each
such period referred to in clauses (i) through (iv) above, an "Accrual Period"),
at a rate per annum equal to 0.50% of the liquidation preference of the
Preferred Stock (determined daily). The amount of such additional dividends (the
"Special Dividends") will increase by an additional 0.50% per annum with respect
to each subsequent applicable Accrual Period until all Registration Defaults
have been cured, up to a maximum of Special Dividends of 1.50% per annum of the
liquidation preference (determined daily). In each case, such additional
dividends (the "Special Dividends") will be payable quarterly in arrears each
May 15, August 15, November 15 and February 15, commencing May 15, 1997, to
Holders of record on the immediately preceding May 1, August 1, November 1 and
February 1, respectively.

             In the event that a Shelf Registration Statement is declared
effective pursuant to the Registration Rights Agreement, if the Corporation
fails to keep the Shelf Registration Statement continuously effective for the
period required by the Registration Rights Agreement, then from such time as the
Shelf Registration is no longer effective until the earliest of (i) the date
that the Shelf Registration Statement is again deemed effective, (ii) the date
that is the third anniversary of the Issue Date or (iii) the date as of which
all of the Transfer Restricted Securities are sold pursuant to the Shelf
Registration Statement, Special Dividends shall accrue at a rate per annum equal
to 0.50% of the liquidation preference of the Preferred Stock (1.00% thereof if
the Shelf Registration Statement is no longer effective for 30 days or more) and
shall be payable quarterly in arrears each May 15, August 15, November 15 and
February 15, commencing May 15, 1997, to Holders of record on the immediately
preceding May 1, August 1, November 1 and February 1, respectively.

             (iv)   Nothing herein contained shall in any way or under any
circumstances be construed or deemed to require the Board of Directors to
declare, or the Corporation to pay or set apart for payment, any dividends on
shares of the Preferred






                                      A-3
<PAGE>   26

Stock at any time. In the event that the Corporation fails to pay dividends, the
sole remedy available to Holders will be the election of directors as set forth
in paragraph (f)(ii).

             (v)    Accrued dividends may be declared and paid at any time,
without reference to any regular Dividend Payment Date, to Holders of record,
not more than sixty (60) days prior to payment thereof, as may be fixed by the
Board of Directors of the Corporation.

             (vi)   Dividends payable on the Preferred Stock for any period less
than a year shall be computed on the basis of a 360-day year of twelve 30-day
months and the actual number of days elapsed in the period for which such
dividends are payable.

             (vii)  References in this Resolution to "dividends" include Special
Dividends unless the context requires otherwise.

        (d)  Liquidation Preference.

             (i)    In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, the Holders of
shares of Preferred Stock then outstanding shall be entitled to be paid out of
the assets of the Corporation available for distribution to its stockholders, an
amount in cash equal to the liquidation preference for each share outstanding,
plus an amount in cash equal to accrued and unpaid dividends thereon, if any, to
the date fixed for liquidation, dissolution or winding up (including an amount
in cash equal to a prorated dividend for the period from the last Dividend
Payment Date to the date fixed for liquidation, dissolution or winding up),
before any distribution shall be made or any assets distributed to the holders
of any of the Junior Securities including, without limitation, any Common Stock.
Except as provided in the preceding sentence, Holders shall not be entitled to
any distribution in the event of any liquidation, dissolution or winding up of
the affairs of the Corporation. If the assets of the Corporation are not
sufficient to pay in full the liquidation payments payable to the holders of
outstanding shares of the Preferred Stock and all Parity Securities, then the
holders of all such shares shall share equally and ratably in such distribution
of assets of the Corporation in proportion to the full liquidation preference to
which each is entitled. After payment in full of the liquidation preference to
which Holders are entitled, such Holders will not be entitled to any further
participation in any distribution of assets of the Corporation.







                                      A-4
<PAGE>   27

             (ii)   For the purposes of this paragraph (d), neither the sale,
conveyance, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or assets of the
Corporation nor the consolidation or merger of the Corporation with or into one
or more entities shall be deemed to be a liquidation, dissolution or winding up
of the affairs of the Corporation.

        (e)  Redemption.

             (i)    Optional Redemption. (A) The Corporation may, at the option
of the Board of Directors, redeem in whole at any time or in part from time to
time, in the manner provided for in paragraph (e)(iii) hereof, any or all of the
shares of Preferred Stock, at the redemption prices (expressed as percentages of
the liquidation preference thereof) set forth below plus all accrued and unpaid
dividends (including an amount in cash equal to a prorated dividend for the
period from the Dividend Payment Date immediately prior to the Redemption Date
to the Redemption Date) (the "Optional Redemption Price") if redeemed during the
12-month period beginning February 15 of each of the years set forth below:

<TABLE>
        <S>                                                  <C>
        2002..............................................   106.500%
        2003..............................................   104.333%
        2004..............................................   102.167%
        2005 and thereafter...............................   100.000%
</TABLE>

             (B)    Upon a Change of Control Call Event, the Corporation will
have the option to redeem all (but not less than all) of the outstanding shares
of Preferred Stock at a redemption price (the "Change of Control Call Price")
equal to 100% of the liquidation preference thereof, plus the Applicable
Premium, plus accrued and unpaid dividends to the date of repurchase; provided,
however, no such redemption shall be consummated except contemporaneously with
or after the merger, consolidation or business combination referred to in the
definition of Change of Control Call Event. Notwithstanding anything to the
contrary in paragraph (e)(iii), notice of any such redemption pursuant to this
paragraph must be given no later than 90 days following the date upon which the
Change of Control Call Event occurred (or no later than 10 days after the date
on which a notice of a Change of Control Offer must be mailed pursuant to
paragraph (h) if the events giving rise to the Change of Control Call Event also
give rise to a Change of Control Triggering Event), and the purchase date must
be within 30 days of the date of notice.






                                      A-5
<PAGE>   28

             (C)    In the event of a redemption pursuant to paragraph (e)(i)(A)
or (B) hereof of only a portion of the then outstanding shares of the Preferred
Stock, the Corporation shall effect such redemption on a pro rata basis
according to the number of shares held by each Holder of the Preferred Stock,
except that the Corporation may redeem such shares held by Holders of fewer than
10 shares (or all shares held by Holders who would hold less than 10 shares as a
result of such redemption), as may be determined by the Corporation. No partial
redemption of the Preferred Stock may be authorized or made unless prior thereto
all accrued dividends thereon shall have been paid in cash or declared and a sum
set apart for such payment.

             (ii)   Mandatory Redemption. On February 15, 2009, the Corporation
shall redeem, to the extent of funds legally available therefor, in the manner
provided for in paragraph (e)(iii) hereof, all of the shares of the Preferred
Stock then outstanding at a redemption price equal to 100% of the liquidation
preference per share, plus an amount in cash equal to all accrued and unpaid
dividends per share (including an amount equal to a prorated dividend for the
period from the Dividend Payment Date immediately prior to the Redemption Date
to the Redemption Date) (the "Mandatory Redemption Price").

             (iii)  Procedures for Redemption. (A) At least fifteen (15) days
and not more than sixty (60) days prior to the date fixed for any redemption of
the Preferred Stock, written notice (the "Redemption Notice") shall be given by
first class mail, postage prepaid, to each Holder of record on the record date
fixed for such redemption of the Preferred Stock at such Holder's address as it
appears on the stock books of the Corporation; provided, however, that no
failure to give such notice nor any deficiency therein shall affect the validity
of the procedure for the redemption of any shares of Preferred Stock to be
redeemed except as to the Holder or Holders to whom the Corporation has failed
to give said notice or to whom such notice was defective. If any Preferred Stock
is to be redeemed in part only, the Redemption Notice that relates to such
Preferred Stock will state the number of shares thereof to be redeemed. Shares
of Preferred Stock that have been issued and reacquired in any manner, including
shares purchased or redeemed or exchanged, will (upon compliance with any
applicable provisions of Delaware law) have the status of authorized but
unissued shares of preferred stock of the Corporation undesignated as to series
and may, with any and all other authorized but unissued shares of preferred
stock of the Corporation, be designated or redesignated and issued or reissued,
as the case may be, as part of any series of preferred stock of the Corporation,
except that such shares may not be reissued or sold as shares of the Preferred
Stock (other than in payment of dividends on the Preferred Stock). The
Redemption Notice shall state:






                                      A-6
<PAGE>   29

             (1)    whether the redemption is pursuant to paragraph (e)(i)(A),
(e)(i)(B) or (e)(ii) hereof;

             (2)    the Optional Redemption Price, the Change of Control Call
Price or the Mandatory Redemption Price, as the case may be;

             (3)    whether all or less than all the outstanding shares of the
Preferred Stock are to be redeemed and the total number of shares of the
Preferred Stock being redeemed;

             (4)    the date fixed for redemption;

             (5)    that the Holder is to surrender to the Corporation, in the
manner, at the place or places and at the price designated, such Holder's
certificate or certificates representing the shares of Preferred Stock to be
redeemed; and

             (6)    that dividends on the shares of the Preferred Stock to be
redeemed shall cease to accrue on such Redemption Date unless the Corporation
defaults in the payment of the Optional Redemption Price, the Change of Control
Call Price or the Mandatory Redemption Price, as the case may be.

             (B)    Each Holder of shares of Preferred Stock shall surrender the
certificate or certificates representing such shares to the Corporation, duly
endorsed (or otherwise in proper form for transfer, as determined by the
Corporation), in the manner and at the place designated in the Redemption
Notice, and on the Redemption Date the full Optional Redemption Price, the
Change of Control Call Price or the Mandatory Redemption Price, as the case may
be, for such shares shall be payable in cash to the Person whose name appears on
such certificate or certificates as the owner thereof, and each surrendered
certificate shall be canceled and retired. In the event that less than all of
the shares represented by any such certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares.

             (C)    On the Redemption Date, unless the Corporation defaults in
the payment in full of the applicable redemption price, dividends on the
Preferred Stock called for redemption shall cease to accrue, and all rights of
the Holders of redeemed shares shall terminate with respect thereto, other than
the right to receive the Optional Redemption Price, the Change of Control Call
Price or the Mandatory Redemption Price, as the case may be, without interest;
provided, however, that if a notice of






                                      A-7
<PAGE>   30

redemption shall have been given as provided in paragraph (iii)(A) above and the
funds necessary for redemption (including an amount in respect of all dividends
that will accrue to the Redemption Date) shall have been irrevocably deposited
in trust for the equal and ratable benefit for the Holders of the shares to be
redeemed, then, at the close of business on the day on which such funds are
segregated and set aside, the Holders of the shares to be redeemed shall cease
to be stockholders of the Corporation and shall be entitled only to receive the
Optional Redemption Price, the Change of Control Call Price or the Mandatory
Redemption Price, as the case may be, without interest.

        (f)  Voting Rights.

             (i)    The Holders of Preferred Stock, except as otherwise required
under Delaware law or as set forth in this paragraph (f), shall not be entitled
or permitted to vote on any matter required or permitted to be voted upon by the
stockholders of the Corporation.

             (ii)   If (a) dividends on the Preferred Stock are in arrears and
unpaid (after February 15, 2004, in cash) for six quarterly periods (whether or
not consecutive), (b) the Corporation fails to effect a redemption of the
Preferred Stock when required by, and in accordance with, paragraph (e)(ii) or
(c) the Corporation fails to make an offer to purchase all of the outstanding
shares of Preferred Stock following a Change of Control Triggering Event, if
such offer to purchase is required by paragraph (h), or fails to purchase all of
the shares of Preferred Stock validly tendered pursuant thereto (each such event
described in clauses (a) through (c) above being referred to herein as a "Voting
Rights Triggering Event"), then the number of directors constituting the Board
of Directors of the Corporation will be increased by two and the holders of the
majority of the then outstanding shares of Preferred Stock, voting separately as
a class, will be entitled to elect the two additional directors. Such voting
rights will continue until such time as, in the case of a default under clause
(a), all accrued dividends on the Preferred Stock are paid in full and, in all
other cases, any failure, breach or default referred to in clause (b) or (c) is
remedied, at which time the term of any directors elected pursuant to the
provisions of this paragraph shall immediately terminate. Any vacancy occurring
in the office of a director elected by the Holders may be filled by the
remaining director elected by such holders unless and until such vacancy shall
be filled by such holders. Regardless of the number of Voting Rights Triggering
Events, in no event shall the Holders have the right to elect and have serve
more than two members of the Board of Directors of the Corporation at any one
time.






                                      A-8
<PAGE>   31

             At any time after voting power to elect directors shall have
become vested and be continuing in the Holders of shares of the Preferred Stock
pursuant to this paragraph (f)(ii), or if vacancies shall exist in the offices
of directors elected by the Holders of shares of the Preferred Stock, a proper
officer of the Corporation may, and upon the written request of the Holders of
record of at least 10% of the shares of Preferred Stock then outstanding
addressed to the Secretary of the Corporation shall, call a special meeting of
the Holders of Preferred Stock, for the purpose of electing the directors which
such Holders are entitled to elect. If such meeting shall not be called by the
proper officer of the Corporation within 20 days after personal service of said
written request upon the Secretary of the Corporation, or within 20 days after
mailing the same within the United States by certified mail, addressed to the
Secretary of the Corporation at its principal executive offices, then the
Holders of record of at least 20% of the outstanding shares of the Preferred
Stock may designate in writing one of their number to call such meeting at the
expense of the Corporation, and such meeting may be called by the Person so
designated upon the notice required for the annual meetings of stockholders of
the Corporation and shall be held at the place for holding the annual meetings
of stockholders or such other place in the United States as shall be designated
in such notice. Notwithstanding the foregoing, no such special meeting shall be
called if any such request is received less than 30 days before the date fixed
for the next ensuing annual or special meeting of stockholders of the
Corporation. Any Holder of shares of the Preferred Stock so designated shall
have, and the Corporation shall provide, access to the lists of Holders of
shares of the Preferred Stock for purposes of calling a meeting pursuant to the
provisions of this paragraph (f)(ii).

             (iii)  The Corporation shall not, without the affirmative vote or
consent of Holders of a majority of the shares of Preferred Stock then
outstanding, voting or consenting, as the case may be, separately as one class,
given in person or by proxy, either in writing or by resolution adopted at an
annual or special meeting, (x) create, authorize or issue any class of Senior
Securities or Parity Securities or (y) amend the Certificate of Designation so
as to affect adversely the specified rights, preferences, privileges or voting
rights of holders of Preferred Stock or authorize the issuance of any additional
shares of Preferred Stock (other than in payment of dividends on the Preferred
Stock); provided, however, that the Corporation may, without the approval of any
Holders, issue or have outstanding shares of Parity Securities (other than
Disqualified Capital Stock) issued from time to time in exchange for, or all of
the proceeds of which are used to redeem or repurchase, any or all of the shares
of Preferred Stock. The Holders of a majority of the outstanding shares of
Preferred Stock, voting or consenting, as the case may be, separately as one
class, may waive compliance with any provision of the Certificate of
Designation. Except as set forth in this paragraph (f)(iii), neither (a)






                                     A-9
<PAGE>   32

the creation, authorization or issuance of any shares of Junior Securities,
Parity Securities or Senior Securities, including the designation of a series
thereof within the existing class of Preferred Stock, nor (b) the increase or
decrease in the amount of authorized capital stock of any class, including any
preferred stock, shall require the consent of any Holders or shall be deemed to
affect adversely the rights, preferences, privileges or voting rights of shares
of Preferred Stock.

             (iv)   Without the affirmative vote or consent of Holders of a
majority of the issued and outstanding shares of Preferred Stock, voting or
consenting, as the case may be, as one class, given in person or by proxy,
either in writing or by resolution adopted at an annual or special meeting, the
Corporation shall not, in a single transaction or series of related
transactions, consolidate or merge with or into, or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of its assets to,
another Person or adopt a plan of liquidation unless: (A) either (1) the
Corporation is the surviving or continuing Person or (2) the Person (if other
than the Corporation) formed by such consolidation or into which the Corporation
is merged or the Person that acquires by conveyance, transfer or lease the
properties and assets of the Corporation as an entirety or substantially as an
entirety or in the case of a plan of liquidation, the Person to which assets of
the Corporation have been transferred, shall be a corporation, partnership or
trust organized and existing under the laws of the United States or any State
thereof or the District of Columbia; (B) the Preferred Stock shall be converted
into or exchanged for and shall become shares of such successor, transferee or
resulting Person, having in respect of such successor, transferee or resulting
Person the same powers, preferences and relative, participating, optional or
other special rights and the qualifications, limitations or restrictions thereon
that the Preferred Stock had immediately prior to such transaction, and (C) the
Corporation has delivered to the transfer agent for the Preferred Stock prior to
the consummation of the proposed transaction an Officers' Certificate and an
Opinion of Counsel, each stating that such consolidation, merger or transfer
complies with the terms hereof and that all conditions precedent herein relating
to such transaction have been satisfied. For purposes of the foregoing, the
transfer (by lease, assignment, sale or otherwise, in a single transaction or
series of related transactions) of all or substantially all of the properties or
assets of one or more subsidiaries of the Corporation, the Capital Stock of
which constitutes all or substantially all of the properties and assets of the
Corporation shall be deemed to be the transfer of all or substantially all of
the properties and assets of the Corporation.

             (v)    On or prior to the Exchange Date, the Corporation shall not
amend or modify the form of Indenture (except as expressly provided therein in
respects of amendments without the consent of holders of Subordinated
Debentures) without the





                                      A-10
<PAGE>   33

affirmative vote or consent of Holders of at least a majority of the shares of
Preferred Stock then outstanding, voting or consenting, as the case may be, as
one class, given in person or by proxy, either in writing or by resolution
adopted at an annual or special meeting.

             (vi)   In any case in which the Holders shall be entitled to vote
as described herein or pursuant to Delaware law, each Holder shall be entitled
to one vote for each share of Preferred Stock held by such Holder.

        (g)  Exchange.

             (i)    Requirements. On any Dividend Payment Date, the Corporation
may, at its option, exchange the Preferred Stock, in whole but not in part, for
the Subordinated Debentures; provided, however, that any such exchange may only
be made if on or prior to the date of such exchange (i) the Corporation has paid
all accrued dividends on the Preferred Stock (including the dividends payable on
the Exchange Date) and there shall be no contractual impediment to such
exchange; (ii) there shall be funds legally available sufficient therefor; (iii)
the Indenture has been qualified under the Trust Indenture Act of 1939, as
amended, if required at the time of such exchange for public indentures; and
(iv) the Corporation shall have delivered an Officers' Certificate and an
Opinion of Counsel to the effect that all conditions to be satisfied prior to
such exchange have been satisfied. Holders of Preferred Stock so exchanged will
be entitled to receive $1.00 in principal amount of Subordinated Debentures for
each $1.00 of liquidation preference of Preferred Stock held by such holder at
the time of exchange. In connection with any such exchange, dividends on shares
of Preferred Stock exchanged which have accrued on or prior to February 15, 2004
which have not been paid as of the Exchange Date shall be paid, at the
Corporation's option, in cash, in additional Subordinated Debentures in an
equivalent principal amount of such accrued and unpaid dividends or in a
combination of the foregoing. Dividends on any shares of Preferred Stock
accruing after February 15, 2004 which have not been paid as of the Exchange
Date must be paid in cash on the Exchange Date. On the Exchange Date, all
dividends on the Preferred Stock will cease to accrue. Subordinated Debentures
issued in exchange for Preferred Stock will be issued in principal amounts of
$1,000 and integral multiples thereof to the extent possible, and will also be
issued in principal amounts of less than $1,000 so that each holder of Preferred
Stock will receive certificates representing the entire amount of Subordinated
Debentures to which its shares of Preferred Stock entitle it; provided, however,
that the Corporation may, at its option, pay cash in lieu of issuing a
Subordinated Debenture in a principal amount less than $1,000.






                                      A-11
<PAGE>   34

             (ii)   Procedures. The Corporation shall send by first-class mail,
postage prepaid, to each Holder of record on the record date fixed for such
exchange of Preferred Stock, at such Holder's address as the same appears on the
stock books of the Corporation, written notice (the "Exchange Notice") of its
intention to exchange the Preferred Stock for Subordinated Debentures at least
30 and not more than 60 days prior to the Exchange Date; provided, however, that
no failure to give such notice nor any deficiency therein shall affect the
validity of the procedure for the exchange of any shares of Preferred Stock to
be exchanged except as to the Holder or Holders to whom the Corporation has
failed to give said notice or to whom such notice was defective. Each Exchange
Notice must state (i) the Exchange Date, (ii) the place or places where
certificates for shares of Preferred Stock are to be surrendered for exchange
into Subordinated Debentures, (iii) that dividends on the shares of Preferred
Stock to be exchanged will cease to accrue on the Exchange Date whether or not
certificates for shares of Preferred Stock are surrendered for exchange on such
Exchange Date unless the Corporation shall default in the delivery of
Subordinated Debentures and (iv) that interest on the Subordinated Debentures
shall accrue from the Exchange Date whether or not certificates for shares of
Preferred Stock are surrendered for exchange on such Exchange Date.

             (A)    On or before the Exchange Date, each Holder shall surrender
the certificate or certificates representing such shares of Preferred Stock, in
the manner and at the place designated in the Exchange Notice. The Corporation
shall cause the Subordinated Debentures to be executed on the Exchange Date and,
upon surrender in accordance with the Exchange Notice of the certificates for
any shares of Preferred Stock so exchanged, duly endorsed (or otherwise in
proper form for transfer, as determined by the Corporation), such shares shall
be exchanged by the Corporation for Subordinated Debentures. The Series A
Preferred shall be exchanged for Series A Debentures and the Series B Preferred
shall be exchanged for Series B Debentures. The Corporation shall pay interest
on the Subordinated Debentures at the rate and on the dates specified therein
from the Exchange Date.

             (B)    If notice has been mailed as aforesaid, and if before the
Exchange Date specified in such notice (1) the Indenture shall have been duly
executed and delivered by the Corporation and the trustee thereunder and (2) all
Subordinated Debentures necessary for such exchange shall have been duly
executed by the Corporation and delivered to the trustee under the Indenture
with irrevocable instructions to authenticate the Subordinated Debentures
necessary for such exchange, then the rights of the Holders of Preferred Stock
so exchanged as stockholders of the Corporation shall cease (except the right to
receive Subordinated Debentures, an amount in cash equal to






                                      A-12
<PAGE>   35

the amount of accrued and unpaid dividends to the Exchange Date and, if the
Corporation so elects, cash in lieu of any Subordinated Debenture with a
principal amount not an integral multiple of $1,000), and the Person or Persons
entitled to receive the Subordinated Debentures issuable upon exchange shall be
treated for all purposes as the registered holder or holders of such
Subordinated Debentures as of the Exchange Date.

             (iii)  No Exchange in Certain Cases. Notwithstanding the foregoing
provisions of this paragraph (g), the Corporation shall not be entitled to
exchange the Preferred Stock for Subordinated Debentures if such exchange, or
any term or provision of the Indenture or the Subordinated Debentures, or the
performance of the Corporation's obligations under the Indenture or the
Subordinated Debentures, shall violate any applicable law or if, at the time of
such exchange, the Corporation is insolvent or if it would be rendered insolvent
by such exchange.

        (h)  Change of Control Put.

             (i)    In the event of a Change of Control Triggering Event, the
Corporation shall notify each Holder in writing of such occurrence and shall
make an offer to purchase (the "Change of Control Offer") such Holder's shares
of Preferred Stock at a purchase price in cash equal to 101% of the liquidation
preference thereof plus accrued and unpaid dividends per share (including an
amount in cash equal to a prorated dividend for the period from the Dividend
Payment Date immediately prior to the Change of Control Payment Date to the
Change of Control Payment Date (as defined herein)).

             (ii)   Not later than 90 days following the date upon which the
Change of Control Triggering Event occurred, the Corporation shall send, by
first class mail, postage prepaid, a notice to each Holder of Preferred Stock at
such Holder's last registered address with a copy to the Registrar, which notice
shall govern the terms of the Change of Control Offer. The notice to the Holders
shall contain all instructions and materials necessary to enable such Holders to
tender Preferred Stock pursuant to the Change of Control Offer. Such notice
shall state:

              (A)     that a Change of Control has occurred, that the Change of
       Control Offer is being made pursuant to this paragraph (h) and that all
       Preferred Stock validly tendered and not withdrawn will be accepted for
       payment;

              (B)    the purchase price (including the amount of accumulated and
       unpaid dividends, if any) and the purchase date (which shall be no
       earlier than






                                      A-13
<PAGE>   36

       30 days nor later than 60 days from the date such notice if mailed, other
       than as may be required by law) (the "Change of Control Payment Date");
       provided, however, that there shall be no right of any Holder to require
       the Corporation to purchase such Holder's shares of Preferred Stock until
       the earlier of the date on which all of the Deferred Coupon Notes have
       been repaid or have matured;

              (C)    that any shares of Preferred Stock not tendered will
       continue to accrue dividends;

              (D)    that, unless the Corporation defaults in making payment
       therefor, any share of Preferred Stock accepted for payment pursuant to
       the Change of Control Offer shall cease to accrue dividends after the
       Change of Control Payment Date;

              (E)    that Holders electing to have any shares of Preferred Stock
       purchased pursuant to a Change of Control Offer will be required to
       surrender the certificate or certificates representing such shares,
       properly endorsed for transfer together with such customary documents as
       the Corporation and the transfer agent may reasonably require, in the
       manner and at the place specified in the notice prior to the close of
       business on the Business Day prior to the Change of Control Payment Date;

              (F)    that Holders will be entitled to withdraw their election if
       the Corporation receives, not later than five Business Days prior to the
       Change of Control Payment Date, a telegram, telex, facsimile transmission
       or letter setting forth the name of the Holder, the number of shares of
       Preferred Stock the Holder delivered for purchase and a statement that
       such Holder is withdrawing his election to have such shares of Preferred
       Stock purchased;

              (G)    that Holders whose shares of Preferred Stock are purchased
       only in part will be issued a new certificate representing the
       unpurchased shares of Preferred Stock; and

              (H)    the circumstances and relevant facts regarding such Change
       of Control Triggering Event.

              (iii)  Each Change of Control Offer shall remain open for at least
20 Business Days or such longer period as may be required by law. The
Corporation shall comply with Rules 13e-4 and 14e-4 and 14e-1 under the Exchange
Act and other


                                      A-14
<PAGE>   37

provisions of state and federal securities laws and regulations, to the extent
such laws and regulations are applicable to the repurchase of the Preferred
Stock in connection with a Change of Control Offer.

              (iv)   On the Change of Control Payment Date the Corporation shall
(A) accept for payment the shares of Preferred Stock validly tendered pursuant
to the Change of Control Offer, (B) pay to the Holders of shares so accepted the
purchase price therefor in cash and (C) cancel and retire each surrendered
certificate. Unless the Corporation defaults in the payment for the shares of
Preferred Stock tendered pursuant to the Change of Control Offer, dividends will
cease to accrue with respect to the shares of Preferred Stock tendered and all
rights of Holders of such tendered shares will terminate, except for the right
to receive payment therefor, on the Change of Control Payment Date.

              (v)    Notwithstanding the foregoing, prior to the mailing of the
notice of a Change of Control Offer referred to above, the Corporation shall (i)
within 60 days following a Change of Control Triggering Event, either (a) repay
in full all indebtedness for borrowed money of the Corporation, and terminate
all commitments, under the Potential Credit Facilities, in each case, to the
extent required upon a change of control pursuant to the terms thereof (or offer
to repay in full all such indebtedness and terminate all such commitments and
repay all such indebtedness owed to each lender which has accepted such offer
and terminate all such commitments of each such lender), or (b) obtain the
requisite consents under the Potential Credit Facilities to permit the
repurchase of the Preferred Stock as provided above and (ii) within 90 days
following a Change of Control Triggering Event, purchase all Senior Notes (or
permitted refinancings thereof) which it is required to purchase by reason of
such change of control pursuant to the provisions of the indenture therefor. The
Corporation shall first comply with the covenant described in the immediately
preceding sentence before it shall be required to repurchase Preferred Stock
pursuant to the provisions described above.

       (i)    Conversion or Exchange. The Holders of shares of Preferred Stock
shall not have any rights hereunder to convert such shares into or exchange such
shares for shares of any other class or classes or of any other series of any
class or classes of Capital Stock of the Corporation.

       (j)    Preemptive Rights. No shares of Preferred Stock shall have any
rights of preemption whatsoever as to any securities of the Corporation, or any
warrants, rights or

                                      A-15
<PAGE>   38

options issued or granted with respect thereto, regardless of how such
securities or such warrants, rights or options may be designated, issued or
granted.

       (k)    Reissuance of Preferred Stock. Shares of Preferred Stock that have
been issued and reacquired in any manner, including shares purchased or redeemed
or exchanged, shall (upon compliance with any applicable provisions of the laws
of Delaware) have the status of authorized and unissued shares of Preferred
Stock undesignated as to series and may be redesignated and reissued as part of
any series of Preferred Stock, provided that any issuance of such shares as
Preferred Stock must be in compliance with the terms hereof.

       (l)    Business Day. If any payment, redemption, purchase or exchange
shall be required by the terms hereof to be made on a day that is not a Business
Day, such payment, redemption, purchase or exchange shall be made on the
immediately succeeding Business Day.

       (m)    Reports. Whether or not required by the rules and regulations of
the Commission, so long as any Preferred Stock is outstanding, the Corporation
will file with the Commission and furnish to the Holders of Preferred Stock all
quarterly and annual financial information required to be contained in a filing
with the Commission on Forms 10-Q and 10-K (or the equivalent thereof in the
event the Corporation becomes a corporation organized under the laws of England
and Wales), including a "Management's Discussion and Analysis of Results of
Operations and Financial Condition" and, with respect to the annual information
only, a report thereon by the Corporation's certified independent accountants,
in each case, as required by the rules and regulations of the Commission as in
effect on the Issue Date.

       (n)    Definitions. As used in this Certificate of Designation, the
following terms shall have the following meanings (with terms defined in the
singular having comparable meanings when used in the plural and vice versa),
unless the context otherwise requires:

              "Accrual Period" shall have the meaning ascribed to it in
       paragraph (c)(iii).

              "Applicable Premium" means, with respect to any share of Preferred
       Stock, the greater of (x) 1.0% of the liquidation preference thereof and
       (y) the excess, if any, of (a) the present value of dividends accruing
       until and including February 15, 2002 (assuming payment thereof in cash
       on the applicable Divi-

                                     A-16
<PAGE>   39

       dend Payment Date) and the liquidation preference and any applicable
       optional redemption premium therefor payable on such date for such share
       (in each case assuming payment thereof on February 15, 2002), computed
       using a discount rate equal to the Treasury Rate plus 100 basis points
       over (b) the sum of the liquidation preference of such share plus accrued
       and unpaid dividends to the redemption date.

              "Board of Directors" shall have the meaning ascribed to it in the
       first paragraph of this Resolution.

              "Board Resolution" means a copy of a resolution certified pursuant
       to an Officers' Certificate to have been duly adopted by the Board of
       Directors of the Corporation and to be in full force and effect, and
       delivered to the Holders.

              "Business Day" means any day except a Saturday, a Sunday, or any
       day on which banking institutions in New York, New York are required or
       authorized by law or other governmental action to be closed.

              "Capital Stock" means any and all shares, interests,
       participations or other equivalents (however designated) of capital
       stock of the Corporation.

              "Certificate of Incorporation" shall have the meaning ascribed to
       it in the first paragraph of this Resolution.

              "Change of Control" means (i) the sale, lease or transfer of all
       or substantially all of the assets of the Corporation to any "person" or
       "group" (within the meaning of Sections 13(d)(3) and 14(d)(2) of the
       Exchange Act or any successor provision to either of the foregoing,
       including any group acting for the purpose of acquiring, holding or
       disposing of securities within the meaning of Rule 13d-5(b)(1) under the
       Exchange Act) (other than any Permitted Holder), (ii) the approval by the
       requisite stockholders of the Corporation of a plan of liquidation or
       dissolution of the Corporation, (iii) any "person" or "group" (within the
       meaning of Sections 13(d) and 14(d)(2) of the Exchange Act or any
       successor provision to either of the foregoing, including any group
       acting for the purpose of acquiring, holding or disposing of securities
       within the meaning of Rule 13d-5(b)(1) under the Exchange Act), other
       than any Permitted Holder, becomes the "beneficial owner" (as defined in
       Rule 13d-3 under the Exchange Act) of more than 50% of the total voting
       power of all classes of the voting stock of the Corporation and/or
       warrants or options to acquire such voting stock, calculated


                                      A-17
<PAGE>   40

       on a fully diluted basis, unless, as a result of such transaction, the
       ultimate direct or indirect ownership of the Corporation is substantially
       the same immediately after such transaction as it was immediately prior
       to such transaction, or (iv) during any period of two consecutive years,
       individuals who at the beginning of such period constituted the
       Corporation's Board of Directors (together with any new directors whose
       election or appointment by such board or whose nomination for election by
       the shareholders of the Corporation was approved by a vote of a majority
       of the directors then still in office who were either directors at the
       beginning of such period or whose election or nomination for election was
       previously so approved) cease for any reason to constitute a majority of
       the Corporation's Board of Directors then in office.

              "Change of Control Call Event" means the entering by the
       Corporation into a binding agreement providing for a merger,
       consolidation or business combination of the Corporation with another
       corporation, association or other entity, which agreement provides that
       upon consummation thereof that the holders of the Common Stock will own
       less than 80% of the voting and economic power of the entity, if any, in
       which holders of the Common Stock will hold equity interests immediately
       following consummation of any such transaction.

              "Change of Control Call Price" shall have the meaning ascribed to
       it in paragraph (e)(ii)(B).

              "Change of Control Offer" shall have the meaning ascribed to it in
       paragraph (h)(i).

              "Change of Control Payment Date" shall have the meaning ascribed
       to it in paragraph (h)(ii)(B).

              "Change of Control Triggering Event" means the occurrence of both
       a Change of Control and a Ratings Decline.

              "Commission" means the Securities and Exchange Commission.

              "Common Stock" means any and all shares, interests or other
       participations in, and other equivalents (however designated and whether
       voting or non-voting) of, the Corporation's common stock, whether
       outstanding on the

                                      A-18
<PAGE>   41

       Issue Date or issued after the Issue Date, and includes, without
       limitation, all series and classes of such common stock.

              "Corporation" shall have the meaning ascribed to it in the first
       paragraph of this Resolution.

              "Deferred Coupon Notes" means (i) the Corporation's 10 7/8% Senior
       Deferred Coupon Notes Due 2003, (ii) the Corporation's 12 3/4% Senior
       Deferred Coupon Notes Due 2005 and (iii) the Corporation's 11 1/2% Senior
       Deferred Coupon Notes Due 2006.

              "Disqualified Capital Stock" means any Capital Stock which, by its
       terms (or by the terms of any security into which it is convertible or
       for which it is exchangeable), or upon the happening of any event,
       matures or is mandatorily redeemable, pursuant to a sinking fund
       obligation or otherwise, or redeemable at the option of the holder
       thereof, in whole or in part, on or prior to February 15, 2009.

              "Dividend Payment Date" shall have the meaning ascribed to it in
       paragraph (c)(i).

              "Exchange Act" means the Securities Exchange Act of 1934, as
       amended, and the rules and regulations promulgated thereunder.

              "Exchange Date" means the date of issuance of the Subordinated
       Debentures in accordance with paragraph (g) hereof.

              "Exchange Notice" shall have the meaning ascribed to it in
       paragraph (g)(ii) hereof.

              "Exchange Offer Registration Statement" shall have the meaning
       ascribed to it in the Registration Rights Agreement.

              "5% Preferred Stock" means the 5% Non-voting Convertible Preferred
       Stock, Series A, of the Corporation.

              "GAAP" means generally accepted accounting principles as in effect
       in the United States from time to time.

                                      A-19
<PAGE>   42

              "Holder" means a holder of shares of Preferred Stock as reflected
       in the stock books of the Corporation.

              "Indenture" means the indenture governing the Subordinated
       Debentures to be entered into between the Corporation and The Chase
       Manhattan Bank, as trustee, on the Exchange Date, substantially in the
       form on file with the secretary of the Corporation, which form is
       available to each Holder without charge upon request.

              "Investment Grade" means BBB- or higher by S&P or Baa3 or higher
       by Moody's. In the event that the Corporation shall be permitted to
       select any other Rating Agency, the equivalent of such ratings of S&P and
       Moody's used by such other Rating Agency shall be used.

              "Issue Date" means February 12, 1997, the date of original
       issuance of the Preferred Stock.

              "Junior Preferred Stock" means the 1,000,000 shares of Series A
       Junior Participating Preferred Stock designated and reserved for issuance
       in the Corporation's Certificate of Incorporation.

              "Junior Securities" shall have the meaning ascribed to it in
       paragraph (b) hereof.

              "Mandatory Redemption Price" shall have the meaning ascribed to it
       in paragraph (e)(ii) hereof.

              "Moody's" means Moody's Investors Service, Inc. and its
       successors.

              "Officers' Certificate" means a certificate signed by two officers
       or by an officer and either an Assistant Treasurer or an Assistant
       Secretary of the Corporation which certificate shall include a statement
       that, in the opinion of such signers all conditions precedent to be
       performed by the Corporation prior to the taking of any proposed action
       have been taken. In addition, such certificate shall include (i) a
       statement that the signatories have read the relevant covenant or
       condition, (ii) a brief statement of the nature and scope of such
       examination or investigation upon which the statements are based, (iii) a
       statement that, in the opinion of such signatories, they have made such
       examination or investigation as is reasonably necessary to express an
       informed opinion and (iv) a statement as

                                      A-20
<PAGE>   43

       to whether or not, in the opinion of the signatories, such relevant
       conditions or covenants have been complied with.

              "Opinion of Counsel" means an opinion of counsel that, in such
       counsel's opinion, all conditions precedent to be performed by the
       Corporation prior to the taking of any proposed action have been taken.
       Such opinion shall also include the statements called for in the second
       sentence under the definition of "Officers' Certificate."

              "Optional Redemption Price" shall have the meaning ascribed to it
       in paragraph (e)(i)(A) hereof.

              "Parity Securities" shall have the meaning ascribed to it in
       paragraph (b) hereof.

              "Permitted Designee" means (i) a spouse or a child of a Permitted
       Holder, (ii) trusts for the benefit of a Permitted Holder or a spouse or
       child of a Permitted Holder, (iii) in the event of the death or
       incompetence of a Permitted Holder, his estate, heirs, executor,
       administrator, committee or other personal representative or (iv) any
       Person so long as a Permitted Holder owns at least 50% of the voting
       power of all classes of the voting stock of such Person.

              "Permitted Holders" means George S. Blumenthal, J. Barclay Knapp
       and their Permitted Designees.

              "Person" means an individual, partnership, corporation,
       unincorporated organization, trust or joint venture, or a governmental
       agency or political subdivision thereof.

              "Potential Credit Facilities" has the meaning ascribed to such
       term in Corporation's Offering Memorandum dated February 7, 1997 relating
       to the offering of the Senior Notes and the Preferred Stock.

              "Preferred Stock" shall have the meaning ascribed to it in
       paragraph (a) hereof.

              "Rating Agencies" means (i) S&P, (ii) Moody's and (iii) if S&P or
       Moody's or both shall not make a rating of the Securities publicly
       available, a nationally recognized securities rating agency or agencies,
       as the case may be,
                                      A-21
<PAGE>   44

       selected by the Corporation, which shall be substituted for S&P or
       Moody's or both, as the case may be.

              "Rating Category" means (i) with respect to S&P, any of the
       following categories: BB, B, CCC, CC, C and D (or equivalent successor
       categories), (ii) with respect to Moody's, and of the following
       categories: Ba, B, Caa, Ca, C and D (or equivalent successor categories)
       and (iii) the equivalent of any such category of S&P or Moody's used by
       another Rating Agency. In determining whether the rating of the
       Securities has decreased by one or more gradations, gradations within
       Rating Categories (+ and - for S&P, 1, 2 and 3 for Moody's; or the
       equivalent gradations for another Rating Agency) shall be taken into
       account (e.g., with respect to S&P, a decline in a rating from BB to BB-,
       as well as from BB- to B+, will constitute a decrease of one gradation).

              "Rating Date" means that date which is 90 days prior to the
       earlier of (x) a Change of Control and (y) public notice of the
       occurrence of a Change of Control or of the intention by the Corporation
       or any Permitted Holder to effect a Change of Control.

              "Ratings Decline" means the occurrence of any of the following
       events on, or within six months after, the date of public notice of the
       occurrence of a Change of Control or of the intention of the Corporation
       or any person to effect a Change of Control (which period shall be
       extended so long as the rating of any of the Corporation's debt
       securities is under publicly announced consideration for possible
       downgrade by any of the Rating Agencies): (a) in the event that any of
       the Corporation's debt securities are rated by both of the Rating
       Agencies on the Rating Date as Investment Grade, the rating of such debt
       securities by either of the Rating Agencies shall be below Investment
       Grade, (b) in the event that any of the Corporation's debt securities are
       rated by either, but not both, of the Rating Agencies on the Rating Date
       as Investment Grade, the rating of such debt securities by both of the
       Rating Agencies shall be below Investment Grade, or (c) in the event any
       of the Corporation's debt securities are rated below Investment Grade by
       both of the Rating Agencies on the Rating Date, the rating of such debt
       securities by either Rating Agency shall be decreased by one or more
       gradations (including gradations within Rating Categories as well as
       between Rating Categories).

                                      A-22
<PAGE>   45

              "Redemption Date," with respect to any shares of Preferred Stock,
       means the date on which such shares of Preferred Stock are redeemed by
       the Corporation.

              "Redemption Notice" shall have the meaning ascribed to it in
       paragraph (e)(iii) hereof.

              "Registered Exchange Offer" shall have the meaning ascribed to
       such term in the Registration Rights Agreement.

              "Registrar" means Continental Stock Transfer & Trust Company, as
       transfer agent and Registrar for the Preferred Stock.

              "Registration Defaults" shall have the meaning ascribed to it in
       paragraph (c)(iii).

              "Registration Rights Agreement" means the Registration Rights
       Agreement relating to the Preferred Stock and the Subordinated Debentures
       dated as of February 12, 1997 between the Corporation and Donaldson,
       Lufkin & Jenrette Securities Corporation, Chase Securities Inc. and
       Merrill Lynch, Pierce, Fenner & Smith Incorporated, a copy of which is
       available to each Holder without charge upon request from the secretary
       of the Corporation.

              "S&P" means Standard & Poor's Ratings Group and its successors.

              "Securities Act" means the Securities Act of 1933, as amended, and
       the rules and regulations promulgated thereunder.

              "Senior Notes" means the 10% Senior Notes Due 2007 of the
       Corporation.

              "Senior Securities" shall have the meaning ascribed to it in
       paragraph (b) hereof.

              "Series A Debentures" means the 13% Subordinated Exchange
       Debentures Due 2009 issuable under the Indenture.

              "Series B Debentures" means the 13% Series B Subordinated Exchange
       Debentures Due 2009 issuable under the Indenture.

                                      A-23
<PAGE>   46

              "Series A Preferred" shall have the meaning ascribed to it in
       paragraph (a) hereof.

              "Series B Preferred" shall have the meaning ascribed to it in
       paragraph (a) hereof.

              "Shelf Registration Statement" shall have the meaning ascribed to
       such term in the Registration Rights Agreement.

              "Special Dividends" shall have the meaning ascribed to it in
       paragraph (c)(iii).

              "Subordinated Debentures" means the Series A Debentures and the
       Series B Debentures.

              "Transfer Agent" means Continental Stock Transfer & Trust Company,
       as Transfer Agent for the Preferred Stock.

              "Transfer Restricted Securities" shall have the meaning ascribed
       to it in the Registration Rights Agreement.

              "Treasury Rate" means the yield to maturity at the time of
       computation of United States Treasury securities with a constant maturity
       (as compiled and published in the most recent Federal Reserve Statistical
       Release H.15 (519) which has become publicly available at least two
       business days prior to the date fixed for redemption of the Preferred
       Stock (or, if such Statistical Release is no longer published, any
       publicly available source of similar data)) most nearly equal to the then
       remaining period to the date scheduled for the mandatory redemption of
       the Preferred Stock; provided, however, that if such period is not equal
       to the constant maturity of a United States Treasury security for which a
       weekly average yield is given, the Treasury Rate shall be obtained by
       linear interpolation (calculated to the nearest one-twelfth of a year)
       from the weekly average yields of United States Treasury securities for
       which such yields are given, except that if the period to the date
       scheduled for the mandatory redemption of the Preferred Stock is less
       than one year, the weekly average yield on actually traded United States
       Treasury securities adjusted to a constant maturity of one year shall be
       used.

                                      A-24
<PAGE>   47

              "Voting Rights Triggering Event" shall have the meaning ascribed
       to it in paragraph (f)(i) hereof.


                                      A-25
<PAGE>   48


                                                                       Exhibit B

                     9.9% NON-VOTING MANDATORILY REDEEMABLE
                            PREFERRED STOCK, SERIES B

              (1)    Designation; Number of Shares. The designation of the
series of Preferred Stock, par value $.01 per share, of the Company created
hereby shall be "9.90% Non-voting Mandatorily Redeemable Preferred Stock, Series
B" (including, in the case of any reclassification, recapitalization, or other
change to such Preferred Stock or, in the case of a consolidation or merger of
the Company with or into another Person affecting such Preferred Stock, such
capital stock to which a holder of such Preferred Stock shall be entitled upon
the occurrence of such event, the "Mandatorily Redeemable Preferred Stock"). The
authorized number of shares of Mandatorily Redeemable Preferred Stock shall be
52,217, which number may from time to time be increased or decreased (but not
below the number then outstanding). Each share of Mandatorily Redeemable
Preferred Stock shall have a stated value of $1,000 (the "Stated Value").

              Any shares of Mandatorily Redeemable Preferred Stock redeemed or
otherwise acquired by the Company shall be retired and shall resume the status
of authorized and unissued shares of Preferred Stock, without designation as to
series, until such shares are once more designated as part of a particular
series of Preferred Stock by the Board of Directors.

              (2)    Certain Definitions. Unless the context otherwise requires,
the terms defined in this paragraph (2) shall have, for all purposes of this
Certificate of Designations, the meanings herein specified:

              "Adjustment Date" shall have the meaning set forth in paragraph
(4)(k).

              "Affiliate" of any Person shall mean another Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first person, where "control" shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management policies of a person, whether through the ownership
of voting securities, by contract, as trustee or executor, or otherwise.

              "Applicable Price" shall mean the aggregate of (A) in the event of
a Reorganization in which the holders of Common Stock receive cash, the amount
of such cash receivable by the holder of one share of Common Stock (as such
share is in effect immediately prior to the consummation of such
Reorganization); and (B) in the event of a Reorganization in which the holders
of Common Stock receive securities or other


                                      B-1
<PAGE>   49

property which are traded on an established market (within the meaning of
Treasury Regulation 1.1273-2(f)(1) of the Internal Revenue Code of 1986, as in
effect on September 30, 1990), the average (or if there be more than one
security or item of property the sum of the averages) of the daily Trading
Prices of such securities and/or property receivable by the holder of one share
of Common Stock (as such share is in effect immediately prior to such
consummation) for the period of ten consecutive Trading Days ending on the
Trading Day immediately preceding date of occurrence of the Reorganization,
appropriately adjusted to take into account any stock dividend on such security
or property, or any subdivision, split, combination, reclassification of such
security or property that occurs or the "ex" date for which occurs on or prior
to such date.

              "Average Market Price" on any Determination Date or Adjustment
Date, as applicable, shall mean the average of the daily Closing Prices for the
period of 10 consecutive Trading Days, ending on the Trading Day immediately
preceding such Determination Date or Adjustment Date, as applicable,
appropriately adjusted to take into account any stock dividend on the Common
Stock or any subdivision, split, combination or reclassification of the Common
Stock that occurs, or the date on which "ex-dividend" trading commences, during
the period following the first Trading Day in such ten-Trading Day period to and
including the Determination Date or Adjustment Date, as applicable.

              "Board" shall mean the Board of Directors of the Company, and,
unless the context indicates otherwise, shall also mean, to the extent permitted
by law, any committee thereof authorized, with respect to any particular matter,
to exercise the power of the Board of Directors of the Company with respect to
such matter.

              "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in New York, New York and London, England
are authorized to close or not obligated by law or executive order to open.

              "Closing Price" shall mean, on any day:

              (i)    the average between the high and low reported sale price of
a share of Common Stock on and as reported by the Nasdaq Stock Market's National
Market on such day;

              (ii)   if the primary trading market for the Common Stock on such
day is not the Nasdaq Stock Market's National Market, then the closing sale
price regular

                                      B-2
<PAGE>   50

way on such day, or, in case no such sale takes place on such day, the average
of the reported closing bid and asked prices regular way on such day, in either
case as reported by the Nasdaq System, the National Quotations Bureau, Inc. or
a comparable service;

              (iii)  if the Closing Price on such day is not available pursuant
to one of the methods specified above, then the average of the bid and asked
prices for the Common Stock on such day as furnished by any New York Stock
Exchange member firm selected from time to time by the Board for that purpose;
or

              (iv)   if the Closing Price on such day is not available pursuant
to the method specified in (iii) above, the determination of Closing Price shall
be determined in good faith by the Board exercising its reasonable discretion.

              "Commission" shall have the meaning set forth in paragraph (4)(k).

              "Common Stock" shall mean the shares of common stock, par value
$0.01 per share, of the Company, which term shall include, where appropriate, in
the case of any reclassification, recapitalization or other change in the Common
Stock, or in the case of a consolidation or merger of the Company with or into
another Person affecting the Common Stock, such capital stock to which a holder
of Common Stock shall be entitled upon the occurrence of such event.

              "Common Stock Dividend Amount" shall have the meaning set forth in
paragraph (3) (c).

              "Convertible Securities" shall mean securities, including
evidences of indebtedness or shares of stock, which are, at the option of the
holder thereof, convertible into or exchangeable, directly or indirectly, for
shares of Common Stock.

              "Determination Date" shall mean: (i) in the case of a dividend
payment, the record date for such dividend payment, (ii) in the case of a
redemption payment pursuant to paragraph (4)(a), the Redemption Date, (iii) in
the case of a redemption payment pursuant to paragraph (4)(b), the tenth
anniversary of the Issue Date, (iv) in the case of a redemption payment pursuant
to paragraph (4)(d), the Adjustment Date, and (v) in the case of a
Reorganization, the date the Reorganization occurs.

              "Effectiveness Date" shall have the meaning set forth in paragraph
(4)(k).

                                      B-3
<PAGE>   51

              "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, or any successor statute, and the rules and
regulations promulgated thereunder.

              "Extended Sale Date" shall have the meaning set forth in
paragraph (4)(k).

              "Fixed Price", on any Determination Date with respect to any Other
Equity Security, shall have the meaning assigned to such term in the certificate
of designations relating to, and setting forth the terms of, such Other Equity
Security.

              "Full Consideration Amount" shall have the meaning set forth in
paragraph (4)(k).

              "Issue Date" shall mean December 21, 1998.

              "JPPF" shall mean the Series A Junior Participating Preferred
Stock of the Company issuable upon exercise of the Rights pursuant to the Rights
Agreement.

              "Junior Stock" shall mean:

              (i)    each class or series of common stock of the Company,
including, without limitation, the Common Stock;

              (ii)   the JPPF issuable upon exercise of the Rights;

              (iii)  any other class or series of capital stock of the Company
hereafter created, other than (a) any class or series of Parity Stock (except to
the extent provided under clause (iv) hereof) and (b) any class or series of
Senior Stock, and

              (iv)   any class or series of Senior Stock or Parity Stock to the
extent that it ranks junior to the Mandatorily Redeemable Preferred Stock as to
dividend rights, rights of redemption or rights on liquidation, as the case may
be. For purposes of clause (iii) above, a class or series of Senior Stock or
Parity Stock shall rank junior to the Mandatorily Redeemable Preferred Stock as
to dividend rights, rights of redemption or rights on liquidation if the holders
of shares of Mandatorily Redeemable Preferred Stock shall be entitled to
dividend payments, payments on redemption or payments of amounts distributable
upon dissolution, liquidation or winding up of the Company, as


                                      B-4
<PAGE>   52

the case may be, in preference or priority to the holders of shares of such
class or series of Senior Stock or Parity Stock.

              "Liquidating Payment" shall mean an amount equal to the
Liquidation Preference of a share of Mandatorily Redeemable Preferred Stock or,
if less, the amount payable in respect of one share of Mandatorily Redeemable
Preferred Stock pursuant to paragraph (7)(a) upon the voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Company.

              "Liquidating Payment Date" shall mean the date on which the
Company makes the aggregate Liquidating Payment to all holders of outstanding
shares of Mandatorily Redeemable Preferred Stock.

              "Liquidation Preference" measured per share of the Mandatorily
Redeemable Preferred Stock, shall mean an amount equal to (a) the Stated Value
per share of Mandatorily Redeemable Preferred Stock, plus (b) for purposes of
determining the amount payable pursuant to paragraph (7) only, an amount equal
to all dividends accrued but unpaid on such share, whether or not such unpaid
dividends have been declared or there are funds of the Company legally available
for the payment of dividends, to the Liquidating Payment Date.

              "Mandatorily Redeemable Preferred Stock" shall have the meaning
set forth in paragraph (1).

              "Mandatory Redemption Price" shall have the meaning set forth in
paragraph (4)(b).

              "Option" shall mean any right, option or warrant entitling the
holder thereof to subscribe for, purchase, or otherwise acquire Convertible
Securities or Common Stock in the Company (other than the Rights).

              "Other Equity Security" shall mean any equity security of the
Company, other than Common Stock, issued by the Company to provide funds for the
payment in cash of the Redemption Price or Mandatory Redemption Price in
accordance herewith, with the rights to be determined in the sole discretion of
the Company.

              "Parity Stock" shall mean the Mandatorily Redeemable Preferred
Stock and any class or series of capital stock, whether now existing or
hereafter created, of the Company to the extent ranking on a parity basis with
the Mandatorily Redeemable



                                      B-5
<PAGE>   53



Preferred Stock as to dividend rights, rights of redemption or rights on
liquidation. Capital stock of any class or series, whether now or existing or
hereafter created, shall rank on a parity as to dividend, rights of redemption
or rights on liquidation with the Mandatorily Redeemable Preferred Stock,
whether or not the dividend rates, dividend payment dates, redemption or
liquidation prices per share or sinking fund or mandatory redemption provision,
if any, are different from those of the Mandatorily Redeemable Preferred Stock,
if the holders of shares of such class or series shall be entitled to dividend
payments, payments on redemption or payments of amounts distributable upon
dissolution, liquidation or winding up of the Company, as the case may be, in
proportion to their respective accumulated and accrued and unpaid dividends,
redemption prices or liquidation prices, respectively, without preference or
priority, one over the other, as between the holders of shares of such class or
series and the holders of Mandatorily Redeemable Preferred Stock. No class or
series of capital stock that ranks junior to the Mandatorily Redeemable
Preferred Stock as to rights on liquidation shall rank or be deemed to rank on a
parity basis with the Mandatorily Redeemable Preferred Stock as to dividend
rights or rights of redemption.

              "Payment Record Date" shall have the meaning set forth in

paragraph (12).

              "Permitted Cost" shall mean underwriting costs, brokerage fees and
related costs and expenses not exceeding 3% for Common Stock or 5% for any Other
Equity Security of either the applicable amount of the Redemption Price or
Mandatorily Redemption Price (in the event that any Other Equity Security is
issued in order to provide cash for the redemption), or of gross proceeds (in
any other case).

              "Person" shall mean any individual corporation, partnership, joint
venture, association, joint stock company, limited liability company, trust,
unincorporated organization, government or agency or political subdivision
thereof, or other entity, whether acting in an individual, fiduciary or other
capacity.

              "Redemption Agent" shall have the meaning set forth under
paragraph (4)(h).

              "Redemption Date" as to any share of Mandatorily Redeemable
Preferred Stock, shall mean the date on which such share is redeemed by the
Company pursuant to paragraph (4).

                                      B-6
<PAGE>   54

              "Redemption Notice" shall have the meaning set forth in paragraph

(4)(f).

              "Redemption Price" shall have the meaning set forth in paragraph
(4)(a).

              "Registration Statement" shall have the meaning set forth in
paragraph (4)(k).

              "Reorganization" shall mean any of the following events:

              (i)    any consolidation or merger of the Company with another
entity (other than a merger or consolidation in which the Company is the
surviving or continuing corporation and in which the Common Stock outstanding
immediately prior to the merger or consolidation remains unchanged),

              (ii)    the sale or other transfer of all or substantially all of
its assets to another entity,


              (iii)   any reorganization or reclassification of the Common Stock
or other equity securities of the Company, and

              (iv)  any statutory exchange of any shares of capital stock of
the Company for shares of capital stock of another corporation (other than a
merger or consolidation in which the Company is the surviving or continuing
corporation and in which the Common Stock outstanding immediately prior to the
merger or consolidation remains unchanged).

              "Reorganization Unit" means the kind or amount of securities, cash
or other property receivable upon consummation of a Reorganization in
substitution of or in exchange for a share of Common Stock as such share is in
effect immediately prior to such consummation (provided that if the kind or
amount of securities, cash or other property receivable upon consummation of
such Reorganization is not the same with respect to each such share, then the
kind and amount of securities, cash or other property which shall be deemed
receivable upon consummation of such Reorganization with respect to each such
share for purposes hereof shall be the kind and amount so receivable per share
by a plurality of such shares).

              "Rights" means the rights issuable pursuant to the Rights
Agreement.

                                      B-7
<PAGE>   55

              "Rights Agreement" means the rights agreement, dated as of October
13, 1993, between the Company and Continental Transfer and Trust Company, as
rights agent.

              "Securities Act" shall mean the Securities Act of 1933, as amended
from time to time, or any successor statute, and the rules and regulations
promulgated thereunder.

              "Senior Stock" shall mean any class or series of capital stock of
the Company hereafter created to the extent ranking prior to the Mandatorily
Redeemable Preferred Stock as to dividend rights, rights of redemption or rights
on liquidation. Capital stock of any class or series shall rank prior to the
Mandatorily Redeemable Preferred Stock as to dividend rights, rights of
redemption or rights on liquidation if the holders of shares of such class or
series shall be entitled to dividend payments, payments on redemption or
payments of amounts distributable upon dissolution, liquidation or winding up of
the Company, as the case may be, in preference or priority to the holders of
shares of Mandatorily Redeemable Preferred Stock. No class or series of capital
stock that ranks on a parity basis with or junior to the Mandatorily Redeemable
Preferred Stock as to rights on liquidation shall rank or be deemed to rank
prior to the Mandatorily Redeemable Preferred Stock as to dividend rights or
rights of redemption, notwithstanding that the dividend rate, dividend payment
dates, sinking fund provisions, if any, or mandatory redemption provisions
thereof are different from those of the Mandatorily Redeemable Preferred Stock.

              "Stated Value" shall have the meaning set forth in paragraph (1).

              "Trading Day" shall mean a day on which the Nasdaq Stock Market's
National Market or, if different, the principal exchange on which the Common
Stock is quoted or traded is each open for the transaction of business.

               "Trading Price" of a security or property for any day means the
closing sale price regular way on such day, or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices of such
security or property on such day on the applicable established market on which
such security or property is traded.

              (3)    DIVIDENDS.

              (a)    Payment. The holders of outstanding shares of Mandatorily
Redeemable Preferred Stock shall be entitled to receive, when, as and if
declared by the

                                      B-8
<PAGE>   56

Board out of funds legally available therefor (without prejudice to paragraph
(3)(b)), dividends, in preference to dividends on any Junior Stock, at the rate
per annum of 9.90% of the Stated Value per share, rounded to the nearest cent.
Such dividends shall accrue from the Issue Date and shall be payable on the date
the Mandatorily Redeemable Preferred Stock is redeemed pursuant to paragraph
(4).

              Dividends on the outstanding shares of Mandatorily Redeemable
Preferred Stock will accrue on a daily basis (without interest or compounding)
whether or not there are funds legally available for the payment of such
dividends and whether or not such dividends are declared. Dividends will cease
to accrue in respect of shares of Mandatorily Redeemable Preferred Stock on the
date of their redemption. No interest, or sum of money in lieu of interest,
shall be payable in respect of any accrued dividend payment.

              (b)    Declaration and Manner of Payment of Dividends. Any
dividends may be paid, in the sole discretion of the Board: (i) in cash out of
funds legally available therefor; (ii) through the delivery of shares of Common
Stock; or (iii) through any combination of the foregoing forms of consideration
elected by the Board in its sole discretion. If any dividend declared by the
Board is to be paid, in whole or in part, through the delivery of shares of
Common Stock, each holder of Mandatorily Redeemable Preferred Stock shall
receive the same proportion of cash and/or shares of Common Stock (except for
cash paid in lieu of fractional shares) delivered in payment of such dividend to
other holders of shares of Mandatorily Redeemable Preferred Stock.

              (c)    Payment of Dividends by Delivery of Common Stock. If the
Company elects to pay any dividend payment, in whole or in part, by delivery of
shares of Common Stock, the amount of such dividend payment to be paid per share
of Mandatorily Redeemable Preferred Stock in shares of Common Stock (the "Common
Stock Dividend Amount") shall be paid through the delivery to the holders of
record for such shares of Mandatorily Redeemable Preferred Stock on the record
date for such dividend payment (which shall be not more than 10 days prior to
the payment date) of a number of shares of Common Stock determined by dividing
the Common Stock Dividend Amount by the Average Market Price. No fractional
shares of Common Stock shall be delivered to a holder of shares of Mandatorily
Redeemable Preferred Stock, but the Company shall instead pay a cash adjustment
determined as provided in paragraph (8). Common Stock so payable shall receive
the benefit of customary resale registration rights.


                                      B-9




<PAGE>   57
               (d) Prohibitions on Cash Dividends. Notwithstanding anything
contained in this Certificate to the contrary, but without effect on the accrual
thereof, no cash dividends on shares of Mandatorily Redeemable Preferred Stock
shall be declared by the Board or paid or set apart for payment by the Company
at such time as the terms and provisions of any agreement of the Company,
including, without limitation, any agreement, contract, indenture, bond, note,
debenture, guarantee or other instrument relating to or evidencing its
indebtedness, prohibits such declaration, payment or setting apart for payment
or provides that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder; provided, however, that
nothing contained in this paragraph (d) shall alter, limit or restrict the
Company's obligation to declare and pay accrued dividends, to the extent
permitted by applicable law, through the delivery of shares of Common Stock,
whether permitted by any such agreement or not.

               (e) Pro Rata.  All dividends paid with respect to the shares of
Mandatorily Redeemable Preferred Stock shall be paid pro rata (as nearly as may
be practicable) to the shareholders entitled thereto.

               (f) Priority. Payment of dividends to the holders of shares of
Mandatorily Redeemable Preferred Stock shall be subject to the prior preferences
and other rights of any Senior Stock and to the provisions of paragraph (6).

               (4) REDEMPTION.

               (a) Optional Redemption. At any time during the period beginning
on the Issue Date until the Redemption Date, the Company shall have the right to
redeem the outstanding shares of Mandatorily Redeemable Preferred Stock at a
price equal to $1,000 per share, together with an amount equal to all dividends
accrued but unpaid thereon to the Redemption Date (the "Redemption Price").

               (b) Mandatory Redemption. All outstanding shares of Mandatorily
Redeemable Preferred Stock shall be mandatorily redeemed by the Company out of
funds legally available therefor on the date that is the tenth anniversary of
the Issue Date at a redemption price equal to $1,000 per share, plus an amount
equal to all accrued and unpaid dividends per share to the Redemption Date (the
"Mandatory Redemption Price").

               (c) Event of Reorganization.  All outstanding shares of
Mandatorily Redeemable Preferred Stock shall be mandatorily redeemed by the
Company at the


                                      B-10
<PAGE>   58


Mandatory Redemption Price in the event of a Reorganization, other than a
Reorganization as set forth in paragraph (5)(a) or any other transaction
undertaken for the bona fide purpose of causing the Common Stock of the Company
to be convertible into or exchangeable for, immediately or over time, equity
securities of a public limited company incorporated in England and/or Wales for
the purpose of listing on the London Stock Exchange.

               (d) Early Mandatory Redemption. If by June 15, 2000, the Company
has neither exercised its right to optionally redeem the Mandatorily Redeemable
Preferred Stock pursuant to paragraph (4)(a) nor redeemed the Mandatorily
Redeemable Preferred Stock pursuant to paragraph (4)(c), all outstanding shares
of Mandatorily Redeemable Preferred Stock shall be mandatorily redeemed by the
Company at the Mandatory Redemption Price, less any Permitted Cost. The
Redemption Date for such redemption shall be July 1, 2000.

               (e) Company's Right to Elect Manner of Payment of Redemption
Price or Mandatory Redemption Price. The Company may effect the redemption of
shares of Mandatorily Redeemable Preferred Stock at the Redemption Price or the
Mandatory Redemption Price, in the sole discretion of the Board: (i) in cash out
of funds legally available therefor, (ii) subject to compliance with paragraph
(g), in exchange for and through the delivery of shares of Common Stock, or
(iii) through any combination of the foregoing forms of consideration elected by
the Board in its sole discretion.

               (f) Notice of Redemption. In the event of an offer by the Company
to redeem any shares of Mandatorily Redeemable Preferred Stock pursuant to
paragraph (4)(a) or a redemption of the Mandatorily Redeemable Preferred Stock
pursuant to paragraph (4)(b), (4)(c) or (4)(d), the Company shall provide notice
of such offer to redeem or such redemption to holders of record of Mandatorily
Redeemable Preferred Stock to be redeemed not less than 30 days (not less than
10 days if the Redemption Price or Mandatory Redemption Price is payable in cash
or Common Stock) nor more than 60 days prior to the Redemption Date. Such notice
(a "Redemption Notice") shall, subject to paragraph (4)(h)(z), be provided in
accordance with paragraph (13); provided, however, that neither failure to give
such notice nor any defect therein shall affect the validity of the proceedings
for the redemption of any shares of Mandatorily Redeemable Preferred Stock to be
redeemed.


                                      B-11
<PAGE>   59



               In addition to any information required by law, the Redemption
Notice shall state, as appropriate, the following (and may contain such other
information as the Company deems advisable):

               (A) whether the redemption is pursuant to paragraph (4)(a),
                   (4)(b), (4)(c) or (4)(d);

               (B) the Redemption Date;

               (C) the number of shares of Mandatorily Redeemable Preferred
                   Stock to be redeemed and, if less than all the shares held by
                   such holder are to be redeemed, the number of shares to be
                   redeemed from such holder;

               (D) the Redemption Price or Mandatory Redemption Price and the
                   form or forms of consideration that the Company has elected
                   to pay and/or deliver upon such redemption and, if more than
                   one form of consideration has been elected by the Company,
                   the designated portions of the Redemption Price or Mandatory
                   Redemption Price to be paid in each form of consideration so
                   elected;

               (E) the place or places in the United States or England and Wales
                   where certificates for Mandatorily Redeemable Preferred Stock
                   to be redeemed are to be surrendered for redemption; and

               (F) that dividends on the shares of Mandatorily Redeemable
                   Preferred Stock to be redeemed shall cease to accrue on the
                   Redemption Date (unless the Company defaults in making
                   payment of the Redemption Price).

               (g) Redemption by Delivery of Common Stock. If the Company elects
to pay, in whole or in part, the Redemption Price in respect of shares of
Mandatorily Redeemable Preferred Stock in exchange for and through the delivery
of shares of Common Stock, then the Company shall deliver to each holder of
shares of Mandatorily Redeemable Preferred Stock to be redeemed on the
Redemption Date a number of shares of Common Stock equal to the aggregate
Redemption Price (or designated portion thereof) of such shares of Mandatorily
Redeemable Preferred Stock divided by the Average Market Price. No fractional
shares of Common Stock shall be

                                      B-12
<PAGE>   60

delivered to a holder of shares of Mandatorily Redeemable Preferred Stock in
payment of the Redemption Price, but the Company shall instead pay a cash
adjustment determined as provided in paragraph (8).

               (h) Deposit of Funds and/or Shares. If on or before the
Redemption Date: (x) the Company shall have deposited with any bank or trust
company organized under the laws of the United States of America or any state
thereof having capital, undivided profits and surplus aggregating at least $250
million (the "Redemption Agent"), cash (including cash for any adjustment in
lieu of delivering fractional shares) and/or shares of Common Stock sufficient
to pay in full the aggregate Redemption Price (calculated through the Redemption
Date) for such shares of Mandatorily Redeemable Preferred Stock on such
Redemption Date, (y) such cash and/or shares of Common Stock are readily
available to, but only to, the holders of Mandatorily Redeemable Preferred Stock
in satisfaction of the obligations of the Company with respect to the payment of
the Redemption Price and (z) the Company shall prior to the Redemption Date have
so notified each record holder of Mandatorily Redeemable Preferred Stock, which
notice shall be given to each holder of Mandatorily Redeemable Preferred Stock
by courier and shall identify the Redemption Agent, its address and telephone
and telecopier numbers and the contact person(s) at the Redemption Agent
responsible for administration of the deposit then, effective as of the close of
business on such Redemption Date (and notwithstanding that any certificate
therefor shall not have been surrendered for cancellation): (i) such shares of
Mandatorily Redeemable Preferred Stock shall no longer be deemed outstanding but
any shares of Common Stock so deposited in accordance with this paragraph (h)
for which such Mandatorily Redeemable Preferred Stock was redeemed shall be
deemed to be outstanding; (ii) the holders thereof shall cease to be holders of
Mandatorily Redeemable Preferred Stock but shall be shown on the records of the
Company as holders of the Common Stock so deposited in accordance with this
paragraph (h) in redemption of such Mandatorily Redeemable Preferred Stock;
(iii) dividends with respect to the shares so called for redemption shall cease
to accrue on the Redemption Date but, subject to paragraph (4)(g), such holders
shall be entitled to any dividends which shall thereafter accrue on, and shall
be entitled to exercise all other rights associated with, any shares of Common
Stock so deposited in accordance with this paragraph (h) in redemption of such
Mandatorily Redeemable Preferred Stock; and (iv) all rights whatsoever with
respect to the shares so called for redemption shall forthwith cease and
terminate (except the right of such holders, upon the surrender of certificates
evidencing the shares of Mandatorily Redeemable Preferred Stock so redeemed, to
receive the cash and/or Common Stock payable or deliverable in payment of the
Redemption Price therefor, and the applicable cash adjustment, if any, in lieu
of fractional shares, without interest). Any cash and/or shares of Common Stock
so


                                      B-13
<PAGE>   61

deposited or set apart which shall remain unclaimed at the end of one year after
the Redemption Date shall be returned or released to the Company, after which
time the holders of shares of Mandatorily Redeemable Preferred Stock called for
redemption on such Redemption Date that remain outstanding after such one-year
period shall look only to the Company for the payment of the Redemption Price
for such shares, without interest.

               Subject to compliance with paragraph (4)(k), a deposit made in
compliance with the immediately preceding sentence shall, except to the extent
released or returned to the Company, be deemed to constitute full payment for
the shares of Mandatorily Redeemable Preferred Stock to be redeemed. Any
interest accrued on funds so deposited shall be paid by the Redemption Agent to
the Company from time to time.

               (i) Surrender of Certificates; Status. Each holder of shares of
Mandatorily Redeemable Preferred Stock to be redeemed shall not be entitled to
receive payment of the Redemption Price or Mandatory Redemption Price for such
shares until such holder shall surrender the certificates evidencing such shares
duly endorsed by, or accompanied by, an instrument of transfer (in form
reasonably satisfactory to the Company) duly executed by, the holder or such
holder's duly authorized attorney-in-fact or, if the shares issuable upon
redemption are to be issued in the same name as the name in which such share of
the Mandatorily Redeemable Preferred Stock is registered, in blank to the
Redemption Agent (or to the Company if there is no Redemption Agent) at the
place designated in the Redemption Notice for such redemption and shall
thereupon be entitled to receive the consideration for such shares specified in
the Redemption Notice in an aggregate amount equal to the Redemption Price or
Mandatory Redemption Price for such shares. Holders of shares of Mandatorily
Redeemable Preferred Stock that are redeemed on the Redemption Date shall not be
entitled to receive dividends declared and paid on any shares of Common Stock
exchangeable and deliverable in payment of the Redemption Price or Mandatory
Redemption Price (or designated portion thereof) for such shares of Mandatorily
Redeemable Preferred Stock, and such shares of Common Stock shall not be
entitled to vote, until such shares of Common Stock are delivered upon the
surrender of the certificates representing such shares of Mandatorily Redeemable
Preferred Stock. Upon such surrender, such holders shall be entitled to receive
such dividends declared and paid subsequent to such Redemption Date and prior to
the delivery.

               (j) Priority. The right of the Company to redeem shares of
Mandatorily Redeemable Preferred Stock pursuant to this paragraph (4) shall be
subject

                                      B-14
<PAGE>   62

to the prior preferences and other rights of any Senior Stock and to the
provisions of paragraph (7).

               (k) Full Consideration Amount. If the Company elects to exchange
and deliver shares of Common Stock in payment of the Mandatory Redemption Price
(or a designated portion thereof) pursuant to paragraph (e), the Company shall
be obligated to file (on or prior to April 1, 2000) and cause to be declared
effective by the Securities and Exchange Commission (the "Commission") a resale
"shelf" registration statement (the "Registration Statement"), or such other
successor form of registration statement that may be adopted by the Commission
from time to time, on behalf of the holders of such Common Stock. The Company
may deliver shares of Common Stock having a value (equal to the Average Market
Price as of April 1, 2000) to the holders. When the Registration Statement is
declared effective (the "Effectiveness Date"), the holders shall sell at the
time (but no later than the later to occur of June 15, 2000 and ten Business
Days after the Effectiveness Date (the "Extended Sale Date")) and in a bona fide
manner designated by the Company (but shall not sell or transfer in any other
manner until after June 15, 2000 (if the Effectiveness Date has not theretofore
occurred) and prior to the Effectiveness Date), the shares of Common Stock
received in redemption of the Mandatorily Redeemable Preferred Stock and the
holders shall be required to cooperate fully (including by executing customarily
required documentation) in such process and the holders shall retain the
proceeds of such sale. On or prior to the later to occur of July 1, 2000 and two
Business Days after the Extended Sale Date (either, the "Adjustment Date"), the
Company shall deliver to such holders, on a pro rata per share basis,
consideration (payable as set forth in paragraph (l)) equal to (a) (pound)31
million, together with accrued and unpaid dividends, calculated to the date of
such delivery, as if the Mandatorily Redeemable Preferred Stock had remained
outstanding until the Adjustment Date (the "Full Consideration Amount"), minus
the aggregate of (b) (i) in the event that any such holders have previously sold
all or a portion of their shares of Common Stock pursuant to such Registration
Statement or otherwise by such date, the aggregate amount of proceeds from any
such sale (without deduction of any customary underwriting costs, brokerage fees
and other related costs and expenses not exceeding the Permitted Cost), plus
(ii) in the event that any such holders still retain (by agreement of the
holders and the Company) all or a portion of their shares of Common Stock on
such date, the amount which is equal to the current market value of such shares
of Common Stock, as determined using the Average Market Price, as of the
Adjustment Date, plus (iii) the aggregate amount of any cash previously
delivered in payment of the Redemption Price; provided, however, that (i) in no
event shall any payment be made pursuant to this paragraph if the amount
determined pursuant to subparagraph (b) above exceeds the Full Consideration
Amount and (ii) if for any reason (other than agreement


                                      B-15
<PAGE>   63

of the holders and the Company) shares of Common Stock are not sold by the
Adjustment Date, the Full Consideration Amount shall be adjusted to and
calculated as of the date the shares are actually sold.

               (l) Payments with Respect to Full Consideration Amount. Any
payment required to be made by the Company pursuant to the preceding paragraph
may be paid, in the sole discretion of the Company, (i) in cash out of funds
legally available therefor, (ii) in exchange for and through the delivery of
shares of Common Stock, valued as of the Adjustment Date, or (iii) through any
combination of the foregoing forms of consideration elected by Company in its
sole discretion. Common Stock so payable shall be valued at the Average Market
Price as of the Adjustment Date and shall promptly receive the benefit of
customary resale registration rights.

               (m) Other Equity Security. If the Company elects to sell any
Other Equity Security at any time prior to June 15, 2000 in order to fund the
redemption of the Mandatorily Redeemable Preferred Stock and/or Common Stock
issued in redemption thereof, the holders will deliver such securities to the
Company in exchange for the proceeds of the sale of such Other Equity Security
(less any Permitted Cost).

               (5) REORGANIZATIONS.

               (a) Holding Company. Notwithstanding anything herein to the
contrary, if the Company is reorganized such that the Common Stock is exchanged
for the common stock of a new entity ("Holdco") whose common stock is traded on
NASDAQ or another recognized securities exchange, then the Company, by notice to
the holders of the Mandatorily Redeemable Preferred Stock but without any
required consent on their part, may cause the exchange of this Mandatorily
Redeemable Preferred Stock for mandatorily redeemable preferred stock of Holdco
having the same terms and conditions as set forth herein, provided that where
Holdco is not solely incorporated as a Delaware company or where the Holdco
share structure is not identical to that of the Company, the rights attaching to
the mandatorily redeemable preferred stock of Holdco may be adjusted so as to
comply with the local law of the country of incorporation of Holdco or the new
share structure of Holdco subject to such rights effectively giving the same
economic rights as the Mandatorily Redeemable Preferred Stock (ignoring for
these purposes any resultant change in the tax treatment for the holders of such
stock).

               (b) Notices of Corporate Action.  If:



                                      B-16
<PAGE>   64



               (i) the Company or the Board shall approve any Reorganization to
which the Company is a party and for which approval of any stockholders of the
Company is required; or

               (ii) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;

then, in each case, the Company shall cause to be given to the holders of shares
of the Mandatorily Redeemable Preferred Stock in accordance with paragraph (13),
as promptly as possible, but at least 10 days prior to the applicable date
hereinafter specified, a notice stating the date on which the event giving rise
to an adjustment of the type described in paragraph (6)(a), such a
Reorganization, dissolution, liquidation or winding up may occur, as the case
may be, is expected to become effective or occur, and, if earlier, the date as
of which it is expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for stock of the Company, securities,
cash or other property deliverable upon such Reorganization, dissolution,
liquidation or winding up. Failure to give or receive such notice or any defect
therein shall not affect the legality or validity of the action or transactions
described in sub-paragraphs (i) or (ii) above.

               (c) Listing of Common Stock. The Company will list the shares of
Common Stock required to be delivered as payment of dividends or upon redemption
or conversion of shares of the Mandatorily Redeemable Preferred Stock, prior to
delivery, upon each national securities exchange, the Nasdaq Stock Market's
National Market or any similar system of automated dissemination of securities
prices, if any, upon which the Common Stock is listed at the time of delivery.

               (d) Provision of Information. So long as any shares of
Mandatorily Redeemable Preferred Stock remain outstanding, the Company
undertakes to provide without charge to each record holder of such shares copies
of each: (i) annual report of the Company on Form 10-K filed pursuant to Section
13(a) of the Exchange Act concurrently with such filing; (ii) quarterly reports
of the Company on Form 10-Q and current report of the Company on Form 8-K filed
pursuant to Section 13(a) or 15(d) or the Exchange Act concurrently with such
filing; (iii) definitive proxy or information statement, form of proxy or other
material of the Company filed pursuant to Section 14(a) of the Exchange Act
concurrently with such filing; and (iv) notice, press release and other
information delivered to holders of Common Stock generally concurrently with
such delivery.


                                      B-17
<PAGE>   65



               (6) LIMITATIONS ON DIVIDENDS AND REDEMPTIONS IN RESPECT OF
COMPANY STOCK.

               (a) Limitations on Junior Stock Dividends. As long as any shares
of Mandatorily Redeemable Preferred Stock are outstanding, no dividends shall be
paid or declared in cash on Junior Stock, nor shall any other distributions be
made on any Junior Stock.

               (b) Limitations on Purchase of Junior Stock. As long as any
shares of Mandatorily Redeemable Preferred Stock are outstanding, no shares of
any Junior Stock may be purchased, redeemed, or otherwise acquired by the
Company or any of its subsidiaries (except in connection with a reclassification
of any Junior Stock through the issuance of other Junior Stock and/or
Convertible Securities for shares of Junior Stock and cash in lieu of fractional
shares in connection therewith, or the purchase, redemption or other acquisition
of any Junior Stock from any wholly-owned subsidiary), nor may any funds be set
aside or made available for any sinking fund for the purchase, redemption or
other acquisition of any Junior Stock.

               (c) Limitations on Parity Stock Dividends and Redemptions. As
long as any share of Mandatorily Redeemable Preferred Stock is outstanding,
dividends or other distributions may not be declared or paid on any Parity
Stock, and the Company may not purchase, redeem or otherwise acquire any Parity
Stock (other than any outstanding shares of 9.90% Non-Voting Mandatorily
Redeemable Preferred Stock, Series A, issued pursuant to the Certificate of
Designations of the Company, dated September 21, 1998, or outstanding shares of
13% Series B Senior Redeemable Exchangeable Preferred Stock, issued pursuant to
the Certificate of Designations of the Company, dated February 12, 1997) (except
(x) from any wholly-owned subsidiaries of the Company or (y) in connection with
a mandatory conversion or exchange of such Parity Stock or a conversion or
exchange of such Parity Stock at the option of the holder for securities other
than Parity Stock or Senior Stock and cash in lieu of fractional shares in
connection therewith), unless with respect to the payment of dividends only, any
such dividends are declared and paid pro rata so that the amounts of any
dividends declared and paid per share on shares of Mandatorily Redeemable
Preferred Stock and each other share of such Parity Stock will in all cases bear
to each other the same ratio that accrued and unpaid dividends (including any
accumulation with respect to unpaid dividends for prior dividend periods, if
such dividends are cumulative) per share on shares of Mandatorily Redeemable
Preferred Stock and such other share of Parity Stock bear to each other.


                                      B-18
<PAGE>   66

               (d) Certain Permitted Dividends and Redemptions. Nothing
contained in this paragraph (6) shall prevent: (i) the payment of dividends or
the making of distributions on any Junior Stock solely in shares of Junior Stock
and/or Convertible Securities for shares of Junior Stock (together with a cash
adjustment for fractional shares, if any) or the redemption, purchase or other
acquisition of Junior Stock solely in exchange for (together with a cash
adjustment for fractional shares, if any), or through the application of the
proceeds from the sale of, shares of Junior Stock and/or Convertible Securities
for shares of Junior Stock; (ii) the payment of dividends or the making of
distributions on any class or series of Parity Stock solely in (together with a
cash adjustment for fractional shares, if any) shares of Junior Stock and/or
Convertible Securities for shares of Junior Stock or the redemption, exchange,
purchase or other acquisition of any class or series of Parity Stock solely in
exchange for (together with a cash adjustment for fractional shares, if any),
or through the application of the proceeds from the sale of shares of Junior
Stock and/or Convertible Securities for shares of Junior Stock or (iii) the
conversion or exchange of Mandatorily Redeemable Preferred Stock into or for
shares of Common Stock (together with a cash adjustment for fractional shares,
if any) and other securities, assets or property, if any pursuant to the
provisions of paragraphs (3), (4) or (5).

               (e) Waiver. The provisions of paragraphs (6)(a), (b) and (d) are
for the sole benefit of the holders of Mandatorily Redeemable Preferred Stock
and any other class or series of Parity Stock having the terms described therein
and accordingly, at any time when (i) there are no shares of any such other
class or series of Parity Stock outstanding or if the holders of each such other
class or series of Parity Stock have, by such vote or consent of the holders
thereof as may be provided for in the instrument creating or evidencing such
class or series, waived in whole or in part the benefit of such provisions
(either generally or in the specific instance), and (ii) the holders of shares
of Mandatorily Redeemable Preferred Stock shall have waived (as provided in
paragraph (14)) in whole or in part the benefit of such provision (either
generally or in the specific instance), then the provisions of paragraphs
(6)(a), (b) and (d) shall not (to the extent waived, in the case of any partial
waiver) restrict the payment of dividends or the making of distributions on, or
the redemption, purchase or other acquisition of any shares of, Mandatorily
Redeemable Preferred Stock, any other class or series of Parity Stock or any
Junior Stock.


                                      B-19
<PAGE>   67



               (7) LIQUIDATION RIGHTS.

               (a) Payment of Liquidation Preference. If there is any
liquidation, dissolution, or winding up of the Company, whether voluntary or
involuntary, then the holders of shares of Mandatorily Redeemable Preferred
Stock then outstanding, after payment, or provision for payment of the debts and
other liabilities of the Company and the payment or provision for payment of any
distribution on any shares of Senior Stock, and before any distribution to the
holders of Junior Stock, shall be entitled to be paid out of the assets of the
Company available for distribution to its stockholders an amount per share of
Mandatorily Redeemable Preferred Stock in cash equal to the Liquidation
Preference. If the assets of the Company available for distribution to the
holders of the shares of Mandatorily Redeemable Preferred Stock upon any
dissolution, liquidation or winding up of the Company shall be insufficient to
pay in full the Liquidation Preference payable to the holders of outstanding
shares of Mandatorily Redeemable Preferred Stock and the liquidation preference
payable to all other shares of Parity Stock (as set forth in the instrument or
instruments creating such Parity Stock), then the holders of shares of
Mandatorily Redeemable Preferred Stock and of all other shares of Parity Stock
shall share ratably in such distribution of assets in proportion to the amount
which would be payable on such distribution if the amounts to which the holders
of outstanding shares of Mandatorily Redeemable Preferred Stock and the holders
of outstanding shares of such other Parity Stock were paid in full. Except as
provided in this paragraph (7)(a), holders of Mandatorily Redeemable Preferred
Stock shall not be entitled to any distribution in the event of the liquidation,
dissolution or winding up of the affairs of the Company.

               (b) Certain Events Not Deemed Liquidation,  Etc. For the purposes
of this paragraph (7) a Reorganization shall not be deemed to be a voluntary of
involuntary liquidation, dissolution or winding up of the Company.

               (8) NO FRACTIONAL SHARES. No fractional shares of Common Stock or
scrip shall be issued in connection with the delivery of shares of Common Stock
in payment, in whole or in part, of any dividend, Redemption Price or
Liquidating Payment. Whether or not a fractional share would be delivered to a
holder of Mandatorily Redeemable Preferred Stock shall be based upon, in the
case of the payment, in whole or in part, of dividends, a Redemption Price or a
Liquidating Payment pursuant to paragraphs (3), (4) or (7), respectively, on
the total number of shares of Mandatorily Redeemable Preferred Stock at the time
held by such holder and the total number of shares of Common Stock, otherwise
deliverable in respect thereof. Instead of the issuance of a fraction of a share
of Common Stock or scrip, the Company


                                      B-20
<PAGE>   68



shall pay instead an amount in cash (rounded to the nearest whole cent) equal
to, in the case of Common Stock, the same fraction of the Closing Price of a
share of preceding the Determination Date.

               (9) PAYMENT OF TAXES. The Company shall pay any and all
documentary, stamp or similar transfer taxes payable in respect of the delivery
of shares of Common Stock, pursuant to paragraphs (3), (4) or (7), as
applicable; provided, however, the Company shall not be required to pay any such
tax that may be payable because any such shares are issued in a name other than
the name of the holder of such Mandatorily Redeemable Preferred Stock.

               (10) NO PREEMPTIVE RIGHTS. The holders of shares of Mandatorily
Redeemable Preferred Stock shall have no preemptive rights, including preemptive
rights with respect to any shares of capital stock or other securities of the
Company convertible into or carrying rights or options to purchase any such
shares.

               (11) VOTING RIGHTS. (a) The holders of shares of Mandatorily
Redeemable Preferred Stock shall have no Voting rights, except as otherwise
required by law and except as set forth in this paragraph (11). When and if the
holders of Mandatorily Redeemable Preferred Stock are entitled to vote by law or
pursuant to this paragraph (11), each holder will be entitled to one vote per
share.

               (b) Certain Changes to Charter. For as long as any shares of
Mandatorily Redeemable Preferred Stock remain outstanding, the affirmative vote
of the holders of at least a majority of such outstanding shares (voting
separately as a class) given in Person or by proxy at an annual meeting or a
special meeting called for such purpose, shall be necessary (i) before the
Company may amend any of the provisions of this Certificate of Designations or
the Restated Certificate of Incorporation of the Company which would alter or
change the powers, preferences or special rights of the holders of the shares of
Mandatorily Redeemable Preferred Stock then outstanding so as to affect them
adversely; provided, however, that:

               (x) any such amendment that would authorize, create or increase
               the authorized amount of any additional shares of Junior Stock or
               shares of any other class or series of Parity Stock (whether or
               not already authorized); and

               (y) any such amendment that would increase the number of
               authorized shares of Preferred Stock of the Company (but not the
               number of


                                      B-21
<PAGE>   69



               authorized shares of Mandatorily Redeemable Preferred Stock) or
               that would decrease (but not below the number of shares, then
               outstanding) the number of authorized shares of Preferred Stock
               (but not the number of authorized shares of Mandatorily
               Redeemable Preferred Stock);

shall be deemed not to adversely affect such powers preferences or rights and
shall not be subject to approval by the holders of shares of Mandatorily
Redeemable Preferred Stock; and (ii) before the Company may reclassify the
outstanding shares of Mandatorily Redeemable Preferred Stock into another class
or series of capital stock of the Company; provided further, however, that no
consent described in clause (i) of this paragraph of the holders of the shares
of Mandatorily Redeemable Preferred Stock shall be required if, at or prior to
the time when such amendment is to take effect, provision is made for the
redemption of all shares of Mandatorily Redeemable Preferred Stock at the time
outstanding.

               (c) Creation of Senior Stock. No consent or vote of the holders
of the shares of Mandatorily Redeemable Preferred Stock shall be necessary
before the Company or the Board may authorize, create or issue any class or
series of Senior Stock.

               (d) No Other Vote. Except as otherwise set forth in this
paragraph (11) or as required by law, the holders of Mandatorily Redeemable
Preferred Stock shall not have any relative, participating, optional or other
special voting rights and powers and the consent or vote of such holders shall
not be required for the taking of any corporate action by the Company or the
Board. The provisions of this paragraph (11) are in lieu of, and not in addition
to, any voting rights specified in the Restated Certificate of Incorporation as
applicable to a series of Preferred Stock.

               (12) PAYMENTS. Payment of cash amounts due in respect of the
Mandatorily Redeemable Preferred Stock will be paid to the holders of shares of
Mandatorily Redeemable Preferred Stock (or, in the case of joint holders, the
first- named) as appearing in the stock register of the Company for the
Mandatorily Redeem able Preferred Stock as at opening of business (New York
time) on the date specified in this Certificate for the purpose of determining
the holders of Mandatorily Redeemable Preferred Stock entitled to such payments
or, if no such date is specified, the fifteenth Business Day before the due date
for such payment (the "Payment Record Date").

                Payments of cash amounts due in respect of the Mandatorily
Redeem able Preferred Stock will be made by a check in U.S. dollars drawn on a
bank in New


                                      B-22
<PAGE>   70



York and mailed to the address (as recorded in the stock register of the Company
for the Mandatorily Redeemable Preferred Stock) of the holder thereof (or, in
the case of joint holders, the first-named) not later than the relevant date for
payment unless, prior to the relevant Payment Record Date, the Company has
received from the holder thereof (or, in the case of joint holders, the
first-named) written instructions for payment to be made by wire transfer to a
specified designated account. If the due date for payment of any cash amount in
respect of the Mandatorily Redeemable Preferred Stock is not a Business Day,
then the holder thereof will not be entitled to payment thereof until the next
following day which is a Business Day and, if such payment is to be made by
transfer to a designated account rather than by check, a day on which commercial
banks and foreign exchange markets settle, payments in U.S. dollars in the place
where the relevant designated account is located.

               (13) NOTICES. Any notice or communication by a holder of
Mandatorily Redeemable Preferred Stock to the Company is duly given if in
writing and delivered in person or mailed by first-class mail to the Company at
its address as set forth in its then most recently filed Form 10-K or 10-Q as
the case may be.

               Any notice or communications to a holder of Mandatorily
Redeemable Preferred Stock shall be mailed by first-class mail to his address
shown on the stock register of the Company for the Mandatorily Redeemable
Preferred Stock or, if there are more than 200 holders of record of the
Mandatorily Redeemable Preferred Stock and the Company in its sole discretion so
elects, in a leading daily newspaper having general circulation in New York
(which is expected to be the Wall Street Journal) or England and Wales (which is
expected to be The Financial Times). Failure to mail a notice or communication
to one holder or any defect in it shall not affect its sufficiency with respect
to other holders.

               If a notice or communication is given in the manner provided in
this paragraph (13) within the time prescribed by this Certificate, it shall be
conclusively presumed to have been duly given, whether or not the person
entitled to such notice receives it.

               (14) WAIVER. Any provision of this Certificate of Designations
which, for the benefit of the holders of Mandatorily Redeemable Preferred Stock,
prohibits, limits or restricts actions by the Company may be waived in whole or
in part, or the application of all or any part of such provision in any
particular circumstance or generally may be waived, in each case with the
consent of the holders of at least a majority of the number of shares of
Mandatorily Redeemable Preferred Stock then


                                      B-23
<PAGE>   71

outstanding, either in writing or by vote at a meeting called for such purpose
at which the holders of Mandatorily Redeemable Preferred Stock shall vote as a
separate class.

               (15) REGISTRATION AND NO TRANSFER. The Company will maintain at
its principal executive office a register in which the Company will provide for
the registration of shares of Mandatorily Redeemable Preferred Stock. The shares
of Mandatorily Redeemable Preferred Stock are not transferrable, except to any
Affiliate of any holder thereof, provided, that such shares shall be reconveyed
to any such holder who transfers to an Affiliate in the event that such
Affiliate ceases to be an Affiliate of such transferring holder, and any
certificate representing shares of Mandatorily Redeemable Preferred Stock will
be so legended.

               (16) EXCLUSION OF OTHER RIGHTS. Except as may otherwise be
required by law, the shares of Mandatorily Redeemable Preferred Stock shall not
have any designations, preferences, limitations or relative rights other than
those specifically set forth in this Certificate of Designations.

               (17) SEVERABILITY OF PROVISIONS. Whenever possible, each
provision of this Certificate of Designations shall be interpreted in a manner
as to be effective and valid under applicable law, but if any provision hereof
is held to be prohibited by or invalid under applicable law, such provision
shall be ineffective only to the extent of such prohibition or invalidity,
without invalidating or otherwise adversely affecting the remaining provisions
hereof. If a court of competent jurisdiction should determine that a provision
hereof would be valid or enforceable if a period of time were extended or
shortened or a particular percentage were increased or decreased, then such
court may make such change as shall be necessary to render the provision in
question effective and valid under applicable law.



                                      B-24
<PAGE>   72

                                                                       Exhibit C

                     5% CUMULATIVE PARTICIPATING CONVERTIBLE
                            PREFERRED STOCK, SERIES A

               (1) Number and Designation. 750,000 shares of the Preferred Stock
of the Corporation shall be designated as 5% Cumulative Participating
Convertible Preferred Stock, Series A (the "5% Preferred Stock") and no other
shares of Preferred Stock shall be designated as 5% Preferred Stock.

               (2)  Definitions.  For purposes of the 5% Preferred Stock, the
following terms shall have the meanings indicated:

               "Additional Preferred" shall have the meaning set forth in
        paragraph (4)(a) hereof.

               "All But One Outstanding Share" shall have the meaning set forth
        in paragraph (6)(c) hereof.

               "Bankruptcy Event" shall mean any of the following: (I) a court
        having jurisdiction in the premises enters a decree or order for (A)
        relief in respect of any Major Entity in an involuntary case under any
        applicable bankruptcy, insolvency or other similar law now or
        hereinafter in effect, (B) appointment of a receiver, liquidator,
        assignee, custodian, trustee, sequestrator or similar official of any
        Major Entity or for all or substantially all of the property and assets
        of any Major Entity or (C) the winding up or liquidation of the affairs
        of any Major Entity; or (II) any Major Entity (A) commences a voluntary
        case under any applicable bankruptcy, insolvency or other similar law
        now or hereinafter in effect, or consents to the entry of an order for
        relief in an involuntary case under any such law, (B) consents to the
        appointment of or taking possession by a receiver, liquidator, assignee,
        custodian, trustee, sequestrator or similar official of any Major
        Entity, or for all or substantially all of the property and assets of
        any Major Entity or (C) effects any general assignment for the benefit
        of creditors.

               "Board of Directors" shall mean the board of directors of the
        Corporation. Except as such term is used in paragraph (9), "Board of
        Directors" shall also mean the Executive Committee, if any, of such
        board of directors or any other committee duly authorized by such board
        of directors to perform any of its responsibilities with respect to the
        5% Preferred Stock.


                                       C-1

<PAGE>   73



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

               "Common Stock" shall mean the Corporation's Common Stock, par
        value $.01 per share.

               "Constituent Person" shall have the meaning set forth in
        paragraph (8)(e)(i) hereof.

               "Conversion Rate" shall have the meaning set forth in paragraph
        (8)(a) hereof.

               "Current Market Price" of publicly traded shares of Common Stock
        or any other class of capital stock or other security of the Corporation
        or any other issuer for any day shall mean the last reported sale price
        for such security on the principal exchange or quotation system on which
        such security is listed or traded. If the security is not admitted for
        trading on any national securities exchange or the Nasdaq National
        Market, "Current Market Price" shall mean the average of the last
        reported closing bid and asked prices reported by the Nasdaq as
        furnished by any member in good standing of the National Association of
        Securities Dealers, Inc., selected from time to time by the Corporation
        for that purpose or as quoted by the National Quotation Bureau
        Incorporated. In the event that no such quotation is available for such
        day, the Current Market Price shall be the average of the quotations for
        the last five Trading Days for which a quotation is available within the
        last 30 Trading Days prior to such day. In the event that five such
        quotations are not available within such 30-Trading Day period, the
        Board of Directors shall be entitled to determine the Current Market
        Price on the basis of such quotations as it reasonably considers
        appropriate.

               "Determination Date" shall have the meaning set forth in
        paragraph (8)(d)(ii) hereof.

               "Dividend Payment Date" shall mean September 30, December 31,
        March 31 and June 30 of each year, commencing on September 30, 1999;
        provided, however, that if any Dividend Payment Date falls on any day
        other than a Business Day, the dividend payment due on such Dividend
        Payment Date shall be paid on the Business Day immediately following
        such Dividend Payment Date.


                                       C-2

<PAGE>   74



               "Dividend Periods" shall mean quarterly dividend periods
        commencing on September 30, December 31, March 31 and June 30 of each
        year and ending on and including the day preceding the first day of the
        next succeeding Dividend Period (other than the initial Dividend Period
        which shall commence on the Issue Date and end on and include September
        30, 1999).

               "Exchange Act"" shall mean the Securities Exchange Act of 1934,
        as amended, and the rules and regulation thereunder.

               "Expiration Time" shall have the meaning set forth in paragraph
        (8)(d)(v) hereof.

               "5% Preferred Stock" shall have the meaning set forth in
        paragraph (1) hereof.

               "5 1/4% Preferred" shall have the meaning set forth in paragraph
        (3)(d) hereof.

               "5 1/4% Series A" shall have the meaning set forth in paragraph
        (3)(d) hereof.

               "Investment Securities" shall mean any of the following: (a)
shares of Common Stock, and (b) shares of 5% Preferred Stock. For purposes of
calculating ownership of Investment Securities, each share of Common Stock
equals one Investment Security (adjusted for stock dividends, stock splits,
reclassifications or similar transactions that have occurred since the Issue
Date), and each share of 5% Preferred Stock equals eight Investment Securities,
adjusted in accordance with adjustments to the Conversion Rate as provided in
paragraph (8)(d).

               "Issue Date" shall mean the date on which shares of 5% Preferred
        Stock are first issued.

               "Junior Securities" shall have the meaning set forth in paragraph
        (3)(c) hereof.

               "Junior Securities Distribution" shall have the meaning set forth
        in paragraph (4)(f) hereof.

               "Liquidation Right" shall mean, for each share of 5% Preferred
        Stock, the greater of (i) an amount equal to $1,000 per share, plus an
        amount equal to all dividends (whether or not earned or declared)
        accrued and unpaid thereon to


                                       C-3

<PAGE>   75



        the date of final distribution to such holders, and (ii) the amount that
        would be received in liquidation following conversion of a share of 5%
        Preferred Stock into Common Stock.

               "Major Entity" shall mean any of the Corporation, NTL
        Communications Corp., Diamond Cable Communications Limited, Diamond
        Holdings Limited, NTL (Bermuda) Limited or any Significant Subsidiary.

               "Mandatory Redemption Date" shall have the meaning set forth in
        paragraph (6)(c) hereof.

               "Mandatory Redemption Obligation" shall have the meaning set
        forth in paragraph (6)(d) hereof.

               "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
        securities market regulated by the National Association of Securities
        Dealers, Inc.

               "Nasdaq National Market" shall have the meaning set forth in Rule
        4200(a)(23) of the rules of the National Association of Securities
        Dealers, Inc.

               "9.9% Series A Preferred" shall have the meaning set forth in
        paragraph (3)(d) hereof.

               "9.9% Series B Preferred" shall have the meaning set forth in
        paragraph (3)(d) hereof.

               "non-electing share" shall have the meaning set forth in
        paragraph (8)(e)(i) hereof.

               "NYSE" means the New York Stock Exchange.

               "outstanding", when used with reference to shares of stock, shall
        mean issued shares, excluding shares held by the Corporation or a
        subsidiary.

               "Parity Securities" shall have the meaning set forth in paragraph
        (3)(b) hereof.

               "Person" shall mean any individual, partnership, association,
        joint venture, corporation, business, trust, joint stock company,
        limited liability company, any unincorporated organization, any other
        entity, a "group" of such


                                       C-4

<PAGE>   76



        persons, as that term is defined in Rule 13d-5(b) under the Exchange
        Act, or a government or political subdivision thereof.

               "Preferred Shares" has the meaning set forth in paragraph (9)(c).

               "Preferred Stock" shall have the meaning set forth in the first
        resolution above.

               "Purchase Shares" shall have the meaning set forth in paragraph
        (8)(d)(v) hereof.

               "Qualified Holding Condition" means France Telecom S.A., a
        societe anonyme formed under the laws of France, or an affiliate, is the
        holder of at least 6,527,027 Investment Securities, provided that this
        number shall be adjusted in accordance with the adjustments made to the
        components of Investment Securities, as set forth above.

               "Record Date" shall have the meaning set forth in paragraph
        (8)(d)(iv) hereof.

               "Relevant Compounding Factor" shall mean, with respect to each
        share of 5% Preferred Stock, upon initial issuance 1.00, and shall on
        each Dividend Payment Date be increased to equal the product of the
        Relevant Compounding Factor in effect immediately prior to such Dividend
        Payment Date and 1.0125.

               "Rights" shall have the meaning set forth in paragraph (11)
        hereof.

               "Securities" shall have the meaning set forth in paragraph
        (8)(d)(iii) hereof.

               "Senior Securities" shall have the meaning set forth in paragraph
        (3)(a) hereof.

               "set apart for payment" shall be deemed to include, without any
        action other than the following, the recording by the Corporation in its
        accounting ledgers of any accounting or bookkeeping entry which
        indicates, pursuant to a declaration of dividends or other distribution
        by the Board of Directors, the allocation of funds to be so paid on any
        series or class of capital stock of the Corporation; provided, however,
        that if any funds for any class or series of Junior Securities or any
        class or series of Parity Securities are placed in a separate account of
        the Corporation or delivered to a disbursing, paying or other


                                       C-5

<PAGE>   77



        similar agent, then "set apart for payment" with respect to the 5%
        Preferred Stock shall mean placing such funds in a separate account or
        delivering such funds to a disbursing, paying or other similar agent, as
        the case may be.

               "Significant Subsidiary" shall have the meaning given to such
        term in Regulation S-X under the Exchange Act.

               "13% Preferred" shall have the meaning set forth in paragraph
        (3)(d) hereof.

               "Trading Day" shall mean any day on which the securities in
        question are traded on the NYSE, or if such securities are not listed or
        admitted for trading on the NYSE, on the principal national securities
        exchange on which such securities are listed or admitted, or if not
        listed or admitted for trading on any national securities exchange, on
        the Nasdaq National Market, or if such securities are not quoted
        thereon, in the applicable securities market in which the securities are
        traded.

               "Transaction" shall have the meaning set forth in paragraph
        (8)(e)(i) hereof.

               "Trigger Event" shall have the meaning set forth in paragraph
        (9)(b) hereof.

               "Trigger Event Cure" shall have the meaning set forth in
        paragraph (9)(b) hereof.

               "25-Day Average Market Price" shall mean, for any security, the
        volume-weighted average of the Current Market Prices of that security
        for the twenty-five Trading Days immediately preceding the date of
        determination.

               (3)  Rank.  Any class or series of stock of the Corporation shall
be deemed to rank:

               (a) prior to the 5% Preferred Stock, either as to the payment of
dividends or as to distribution of assets upon liquidation, dissolution or
winding up, or both, if the holders of such class or series shall be entitled by
the terms thereof to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, in preference or priority to the holders
of 5% Preferred Stock ("Senior Securities");


                                       C-6

<PAGE>   78



               (b) on a parity with the 5% Preferred Stock, either as to the
payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and

               (c) junior to the 5% Preferred Stock, either as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, or both, if such stock or series shall be Common Stock or if the
holders of the 5% Preferred Stock shall be entitled to receipt of dividends, and
of amounts distributable upon liquidation, dissolution or winding up, in
preference or priority to the holders of shares of such stock or series ("Junior
Securities").

               (d) Each of (i) the 13% Series B Senior Redeemable Exchangeable
Preferred Stock (the "13% Preferred") and (ii) the 5 1/4% Convertible Preferred
Stock, Series A, (the "5 1/4% Series A") and any dividends paid on the 5 1/4%
Series A in accordance with its terms, to the extent that such dividends are
paid in preferred stock having terms substantially identical to the 5 1/4%
Series A and any dividends paid on preferred stock issued as in-kind dividends
thereon, to the extent such dividends are paid in preferred stock having terms
substantially identical to the 5 1/4% Series A (the 5 1/4% Series A and all such
in-kind dividends being hereinafter referred to as the "5 1/4% Preferred") is a
Senior Security. Each of the 9.9% Non-Voting Mandatorily Redeemable Preferred
Stock, Series A ("9.9% Series A Preferred"), and 9.9% Non-Voting Mandatorily
Redeemable Preferred Stock, Series B ("9.9% Series B Preferred"), is a Junior
Security. One or more classes of Additional Preferred (as defined below) shall
be Parity Securities; provided, however, that there shall be no issue of other
Senior Securities, Parity Securities or rights or options exercisable for or
convertible into any such securities, except as approved by the holders of the
5% Preferred Stock pursuant to paragraph 9(f).

               (e) The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.



                                       C-7

<PAGE>   79



               (4) Dividends. (a) Subject to paragraph (8)(b)(ii), the holders
of shares of 5% Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available for the
payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for such Dividend Payment Date) or additional
shares of Preferred Stock of a class to be designated by the Board of Directors
having terms substantially identical to the 5% Preferred Stock except as
follows: (A) the Conversion Rate (as set forth in Section 8(a)) on such
Preferred Stock initially shall be the quotient resulting from the division of
the Conversion Rate (as then in effect on the 5% Preferred Stock) by the
Relevant Compounding Factor (except that for purposes of additional shares of
Preferred Stock payable as a dividend for the initial Dividend Period, the
Conversion Rate shall be the quotient resulting from the division of the
Conversion Rate (as then in effect) by 1.006667) and (B) the number of shares of
such Preferred Stock payable as a dividend on any Dividend Payment Date shall
increase for each Dividend Payment Date from the first Dividend Payment Date by
the Relevant Compounding Factor (such classes of Preferred Stock singularly and
collectively, the "Additional Preferred"). All dividends on the 5% Preferred
Stock, in whatever form, shall be payable in arrears quarterly on each Dividend
Payment Date and shall be cumulative from the Issue Date (except that dividends
on Additional Preferred shall accrue from the date such Additional Preferred is
issued or would have been issued in accordance with this Certificate of
Designation if such dividends had been declared), whether or not in any Dividend
Period or Dividend Periods there shall be funds of the Corporation legally
available for the payment of such dividends. Each such dividend shall be payable
to the holders of record of shares of the 5% Preferred Stock, as they appear on
the stock records of the Corporation at the close of business on the record date
for such dividend. Upon the declaration of any such dividend, the Board of
Directors shall fix as such record date on the fifth Business Day preceding the
relevant Dividend Payment Date and shall give notice on or prior to the record
date of the form of payment of such dividend. Accrued and unpaid dividends for
any past Dividend Payment Date may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record on such record
date, not more than 45 days nor less than five Business Days preceding the
payment date thereof, as may be fixed by the Board of Directors.

               (b) In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock shall be entitled to
receive an amount equal to the amount (and in the form of consideration) that
such holders would be entitled to receive if, pursuant to paragraph (8), they
had converted such 5% Preferred Stock fully into Common Stock immediately before
the record date for the payment of any such dividends on Common Stock. Each such
dividend shall be payable to the holders of


                                       C-8

<PAGE>   80



record of shares of the 5% Preferred Stock as they appear on the stock records
of the Corporation at the close of business on the record date for such dividend
on Common Stock, and the Corporation shall pay each such dividend on the
applicable payment date for such dividend on the Common Stock.

               (c) For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each such Additional
Preferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).

               (d) The dividends payable for the initial Dividend Period, or any
other period shorter than a full Dividend Period, on the 5% Preferred Stock
shall accrue daily and be computed on the basis of a 360-day year and the actual
number of days in such period. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the 5%
Preferred Stock that may be in arrears except as otherwise provided herein.

               (e) So long as any shares of the 5% Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities 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 such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock for all
Dividend Periods terminating on or prior to the date of such redemption,
repurchase or other acquisition shall have been paid or set apart for payment,
(ii) sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in Common Stock or Additional Preferred or are
not paid in full in cash or a sum sufficient for such payment is not set apart,
as aforesaid, all dividends declared upon shares of the 5% Preferred Stock and
all dividends declared upon Parity Securities shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid on the
5% Preferred Stock and accumulated and unpaid on such Parity Securities.

               (f) So long as any shares of the 5% Preferred Stock are
outstanding, no dividends (other than (i) any rights issued pursuant to a
shareholder rights plan as provided in paragraph (11) and (ii) dividends or
distributions paid in shares of, or


                                       C-9

<PAGE>   81



options, warrants or rights to subscribe for or purchase shares of, Junior
Securities) shall be declared or paid or set apart for payment or other
distribution declared or made upon Junior Securities, nor shall any Junior
Securities be redeemed, purchased or otherwise acquired (other than a
redemption, purchase, or other acquisition of shares of Common Stock made for
purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") 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, directly or
indirectly (except by conversion into or exchange for Junior Securities,
including pursuant to paragraph 4(c) of the 9.9% Series A Preferred and
paragraph 4(d) of the 9.9% Series B Preferred), unless in each case (A) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock and all
other Parity Securities shall have been paid or set apart for payment for all
past Dividend Periods and dividend periods for such other stock, (B) sufficient
funds shall have been paid or set apart for the payment of the dividend for the
current Dividend Period with respect to the 5% Preferred Stock and all other
Parity Securities, (C) the Corporation is not in default with respect to any
redemption of shares of 5% Preferred Stock by the Corporation pursuant to
paragraph (6) below, (D) the Corporation has fully performed its obligations
under paragraphs (4)(b) and (6) hereof.

               (5) Liquidation Preference. (a) In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
before any payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of Junior
Securities, the holders of the shares of 5% Preferred Stock shall be entitled to
receive the Liquidation Right. If, upon any liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of the shares of 5% Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any Parity Securities, then such assets, or the proceeds thereof,
shall be distributed among the holders of shares of 5% Preferred Stock and any
such other Parity Securities ratably in accordance with the respective amounts
that would be payable on such shares of 5% Preferred Stock and any such other
stock if all amounts payable thereon were paid in full. For the purposes of this
paragraph (5), (i) a consolidation or merger of the Corporation with one or more
corporations, or (ii) a sale or transfer of all or substantially all of the
Corporation's assets, shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation.

               (b) Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or classes
of Junior Securities shall, subject to the respec-


                                      C-10
<PAGE>   82


tive terms and provisions (if any) applying thereto, be entitled to receive any
and all assets remaining to be paid or distributed, and the holders of the 5%
Preferred Stock shall not be entitled to share therein.

               (6) Redemption. (a) On and after the first Business Day following
the earlier to occur of (i) the seventh anniversary of the Issue Date or (ii)
the date on which both (A) the 25-Day Average Market Price of the Common Stock
shall have exceeded $150.00 and (B) the fourth anniversary of the Issue Date, to
the extent the Corporation shall have funds legally available for such payment,
the Corporation may redeem at its option shares of 5% Preferred Stock, from time
to time in part, All But One Outstanding Share or, if the Qualified Holding
Condition is not satisfied, in whole, payable at the option of the Corporation
in (A) cash, at a redemption price of $1,000.00 per share, (B) in shares of
Common Stock, at a redemption price of $1,000.00 per share, or (C) in a
combination of cash and Common Stock, at a redemption price based on the respec
tive combination of consideration, together in each case with accrued and unpaid
dividends thereon, whether or not declared, to, but excluding, the date fixed
for redemption, without interest. For purposes of determining the number of
shares of Common Stock to be issued pursuant to this paragraph (6)(a), the price
per share of Common Stock shall be the 25-Day Average Market Price.

               (b) On and after the first Business Day following the tenth
anniversary of the Issue Date, each holder of shares of 5% Preferred Stock
shall have the right to require the Corporation, to the extent the Corporation
shall have funds legally available therefor, to redeem such holder's shares of
5% Preferred Stock, from time to time in part, All But One Outstanding Share or,
if the Qualified Holding Condition is not satisfied, in whole, at a redemption
price of $1,000.00 per share, payable at the option of the Corporation in cash,
shares of Common Stock or a combination thereof, together with accrued and
unpaid dividends thereon to, but excluding, the date fixed for redemption,
without interest. For purposes of determining the number of shares of the Common
Stock to be issued pursuant to this paragraph (6)(b), the price per share of
Common Stock shall equal the 25-Day Average Market Price. Any holder of shares
of 5% Preferred Stock who elects to exercise its rights pursuant to this
paragraph (6)(b) shall deliver to the Corporation a written notice of election
not less than 20 days prior to the date on which such holder demands redemption
pursuant to this paragraph 6(b), which notice shall set forth the name of the
Holder, the number of shares of 5% Preferred Stock to be redeemed and a
statement that the election to exercise a redemption right is being made
thereby; and, subject to paragraph (10)(d), shall deliver to the Corporation on
or before the date of redemption certificates evidencing the shares of 5%
Preferred Stock to be redeemed, duly endorsed for transfer to the Corporation.

               (c) If the Corporation shall not have redeemed all outstanding
shares of 5% Preferred Stock pursuant to paragraphs (6)(a) or (6)(b), on the
twentieth anniversary of the Issue Date (the "Mandatory Redemption Date"), to
the extent the Corpora-

                                      C-11
<PAGE>   83

tion shall have funds legally available for such payment, the Corporation shall
redeem All But One Outstanding Share of 5% Preferred Stock, or, if the Qualified
Holding Condition is not satisfied, all outstanding shares of 5% Preferred
Stock, at a redemption price of $1,000.00 per share, payable at the option of
the Corporation in cash, shares of Common Stock or a combination thereof,
together with accrued and unpaid dividends thereon to, but excluding, the
Mandatory Redemption Date, without interest. For purposes of determining the
number of shares of the Common Stock to be issued pursuant to this paragraph
(6)(c), the price per share of Common Stock shall be the 25-Day Average Market
Price. For purposes of the 5% Preferred Stock, "All But One Outstanding Share"
means all but one share of 5% Preferred Stock outstanding at the relevant time.
For the avoidance of doubt, so long as the Qualified Holding Condition is
satisfied, at least one share of 5% Preferred Stock shall remain outstanding in
perpetuity. As soon as (i) the Qualified Holding Condition is no longer
satisfied, and (ii) there is only one share of 5% Preferred Stock that has not
been redeemed pursuant to this paragraph (6) or converted pursuant to paragraph
(8), that one outstanding share of 5% Preferred Stock shall be redeemed,
payable, at the option of the holder, in cash or in Common Stock.

               (d) If the Corporation is unable or shall fail to discharge its
obligation to redeem all outstanding shares or All But One Outstanding Share of
5% Preferred Stock pursuant to paragraphs 6(b) or 6(c) (each, a "Mandatory
Redemption Obligation"), the Mandatory Redemption Obligation shall be
discharged as soon as the Corporation is able to discharge such Mandatory
Redemption Obligation. If and so long as any Mandatory Redemption Obligation
with respect to the 5% Preferred Stock shall not be fully discharged, the
Corporation shall not (i) directly or indirectly, redeem, purchase, or otherwise
acquire any Parity Security or discharge any mandatory or optional redemption,
sinking fund or other similar obligation in respect of any Parity Securities
(except in connection with a redemption, sinking fund or other similar
obligation to be satisfied pro rata with the 5% Preferred Stock) or (ii) declare
or make any Junior Securities Distribution (other than dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Junior Securities), or, directly or indirectly,
discharge any mandatory or optional redemption, sinking fund or other similar
obligation in respect of the Junior Securities.

               (e) Upon any redemption of 5% Preferred Stock, the Corporation
shall pay the redemption price and any accrued and unpaid dividends in arrears
to, but excluding, the applicable redemption date.

               (f) For purposes of paragraph (6)(a) only, unless full cumulative
dividends (whether or not declared) on all outstanding shares of 5% Preferred
Stock and any Parity Securities shall have been paid or contemporaneously are
declared and paid or set apart for payment for all Dividend Periods terminating
on or prior to the applicable redemption date and notice has been given in
accordance with paragraph (7), none


                                      C-12
<PAGE>   84




of the shares of 5% Preferred Stock shall be redeemed, and no sum shall be set
aside for such redemption, unless shares of 5% Preferred Stock are redeemed pro
rata and notice has previously been given in accordance with paragraph (7).

               (7) Procedure for Redemption. (a) If the Corporation shall redeem
shares of 5% Preferred Stock pursuant to paragraph 6(a), notice of such
redemption shall be given by certified mail, return receipt requested, postage
prepaid, mailed not less than 30 days nor 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
and confirmed by facsimile transmission to each holder of record if the
Corporation has been furnished with such facsimile address by the holder(s);
provided, however, that neither the failure to give such notice nor
confirmation nor any defect therein or in the mailing thereof, to any particular
holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice that
was mailed in the manner herein provided shall be conclusively presumed to have
been duly given on the date mailed whether or not the holder receives the
notice. Each such notice shall state: (i) the redemption date; (ii) the number
of shares of 5% Preferred Stock to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of shares to be redeemed from
such holder; (iii) the amount payable, whether such amount shall be paid in
Common Stock or in cash and if the payment is in Common Stock an explanation of
the determination of the amount to be paid; (iv) the place or places where
certificates for such shares are to be surrendered or the notice under paragraph
(10)(d) should be sent for payment of the redemption price; and (v) that
dividends on the shares to be re deemed will cease to accrue on such redemption
date, except as otherwise provided herein.

               (b) If notice has been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
for the payment of the redemption price of the shares called for redemption and
dividends accrued and unpaid thereon, if any), (i) except as otherwise provided
herein, dividends on the shares of 5% Preferred Stock so called for redemption
shall cease to accrue, (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of the 5%
Preferred Stock shall cease (except the right to receive from the Corporation
the redemption price without interest thereon, upon surrender and endorsement
(or a constructive surrender under paragraph (10)(d)) of their certificates if
so required, and to receive any dividends payable thereon).

               (c) Upon surrender (including a constructive surrender under
paragraph (10)(d)) in accordance with notice given pursuant to this paragraph
(7) of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid, plus any


                                      C-13
<PAGE>   85


dividends payable thereon. If fewer than all the outstanding shares of 5%
Preferred Stock are to be redeemed, the number of shares to be redeemed shall be
determined by the Board of Directors and the shares to be redeemed shall be
selected pro rata (with any fractional shares being rounded to the nearest whole
share). In case fewer than all the shares represented by any such certificate
are redeemed, a new certificate shall be issued, subject to a holder's election
under paragraph (10)(d), representing the surrendered shares without cost to
the holder thereof.

               (8) Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock shall
have the right, at any time and from time to time, at such holder's option, to
convert any or All But One Outstanding Share or, if the Qualified Holding
Condition is not satisfied, all outstanding shares, of 5% Preferred Stock held
by such holder, but not fractions of shares, into fully paid and non-assessable
shares of Common Stock by surrendering such shares to be converted, such
surrender to be made in the manner provided in paragraph (8)(b) hereof. The
number of shares of Common Stock deliverable upon conversion of each share of 5%
Preferred Stock shall be equal to $1,000.00 divided by 125.00 (such quotient, as
adjusted as provided herein, the "Conversion Rate"). The Conversion Rate is
subject to adjustment from time to time pursuant to paragraph (8)(d) hereof. The
right to convert shares called for redemption pursuant to paragraph 6(a) shall
terminate at the close of business on the date immediately preceding the date
fixed for such redemption unless the Corporation shall default in making payment
of the amount payable upon such redemption, in which case such right of
conversion shall be reinstated. Upon conversion, any accrued and unpaid
dividends on the 5% Preferred Stock at the date of conversion shall be paid to
the holder thereof in accordance with the provisions of paragraph (4), except
that, upon conversion of All But One Outstanding Share or, if the Qualified
Holding Condition is not satisfied, all outstanding shares, of 5% Preferred
Stock held by such holder, all such accrued and unpaid dividends at the date of
conversion shall be paid in Common Stock at the applicable Conversion Rate.

               (b) (i) In order to exercise the conversion privilege, the holder
of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (10)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976; provided, however, that the Corporation
shall use its best efforts in cooperating with such holder to obtain such legal
or regulatory approvals to the extent its cooperation is necessary. Such notice
shall also state the name or names (with address and social security or other
taxpayer identification number, if applicable)


                                      C-14
<PAGE>   86



in which the certificate or certificates for Common Stock are to be issued.
Unless the shares issuable on conversion are to be issued in the same name as
the name in which such share of 5% Preferred Stock is registered, each share
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder or the
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates representing
shares of 5% Preferred Stock surrendered for conversion shall be canceled by the
Corporation or the transfer agent.

               (ii) Subject to the last sentence of paragraph (8)(a), holders of
shares of 5% Preferred Stock at the close of business on a dividend payment
record date shall not be entitled to receive the dividend payable on such shares
on the corresponding Dividend Payment Date if such holder shall have surrendered
(or made a constructive surrender under paragraph (10)(d)) for conversion such
shares at any time following the preceding Dividend Payment Date and prior to
such Dividend Payment Date.

               (iii) Subject to a holder's election under paragraph (10)(d), as
promptly as practicable after the surrender (including a constructive surrender
under paragraph (10)(d)) by a holder of the certificates for shares of 5%
Preferred Stock as aforesaid, the Corporation shall issue and shall deliver to
such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (8), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (8)(c). Upon conversion of
only a portion of the shares of 5% Preferred Stock represented by any
certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (10)(d), upon the surrender
(including a constructive surrender under paragraph (10)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be outstanding and all rights of a holder with respect to
such shares so surrendered shall immediately terminate except the right to
receive the Common Stock and other amounts payable pursuant to this paragraph
(8).

               (iv) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered pursuant to an election under paragraph (10)(d)) and such notice
received by the Corporation as aforesaid, and the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock


                                      C-15
<PAGE>   87



represented thereby at such time on such date and such conversion shall be into
a number of shares of Common Stock equal to the product of the number of shares
of 5% Preferred Stock surrendered times the Conversion Rate in effect at such
time on such date, unless the stock transfer books of the Corporation shall be
closed on that date, in which event such Person or Persons shall be deemed to
have become such holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are open, but such
conversion shall be based upon the Conversion Rate in effect on the date upon
which such shares shall have been surrendered and such notice received by the
Corporation.

               (c) (i) No fractional shares or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion (or deemed surrendered under paragraph (10)(d)) at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of 5% Preferred Stock surrendered (or deemed surrendered under paragraph
(10)(d)) for conversion by such holder.

               (ii) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered under paragraph (10)(d)) and such notice received by the Corporation
as aforesaid, and the Person or Persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of the
shares of Common Stock represented thereby at such time on such date and such
conversion shall be into a number of shares of Common Stock equal to the product
of the number of shares of 5% Preferred Stock surrendered times the Conversion
Rate in effect at such time on such date, unless the stock transfer books of the
Corporation shall be closed on that date, in which event such Person or Persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer books are open,
but such conversion shall be based upon the Conversion Rate in effect on the
date upon which such shares shall have been surrendered (or deemed surrendered
under paragraph (10)(d)) and such notice received by the Corporation.

               (d)    The Conversion Rate shall be adjusted from time to time as
follows:


                                      C-16
<PAGE>   88



               (i) If the Corporation shall after the Issue Date (A) declare a
dividend or make a distribution on its Common Stock in shares of its Common
Stock, (B) subdivide its outstanding Common Stock into a greater number of
shares, (C) combine its outstanding Common Stock into a smaller number of
shares, or (D) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification. An
adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (8)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case of a
subdivision, combination or reclassification. Adjustments in accordance with
this paragraph (8)(d)(i) shall be made whenever any event listed above shall
occur.

               (ii) If the Corporation shall after the Issue Date fix a record
date for the issuance of rights or warrants (in each case, other than any rights
issued pursuant to a shareholder rights plan) to all holders of Common Stock
entitling them (for a period expiring within 45 days after such record date) to
subscribe for or purchase Common Stock (or securities convertible into Common
Stock) at a price per share (or, in the case of a right or warrant to purchase
securities convertible into Common Stock, having an effective exercise price per
share of Common Stock, computed on the basis of the maximum number of shares of
Common Stock issuable upon conversion of such convertible securities, plus the
amount of additional consideration payable, if any, to receive one share of
Common Stock upon conversion of such securities) less than the 25-Day Average
Market Price on the date on which such issuance was declared or otherwise
announced by the Corporation (the "Determination Date"), then the Conversion
Rate in effect at the opening of business on the Business Day next following
such record date shall be adjusted so that the holder of each share of 5%
Preferred Stock shall be entitled to receive, upon the conversion thereof, the
number of shares of Common Stock determined by multiplying (I) the Conversion
Rate in effect immediately prior to such record date by (II) a fraction, the
numerator of which shall be the sum of (A) the



                                      C-17
<PAGE>   89

number of shares of Common Stock outstanding on the close of business on the
Determination Date and (B) the number of additional shares of Common Stock
offered for subscription or purchase pursuant to such rights or warrants (or in
the case of a right or warrant to purchase securities convertible into Common
Stock, the aggregate number of additional shares of Common Stock into which the
convertible securities so offered are initially convertible), and the
denominator of which shall be the sum of (A) the number of shares of Common
Stock outstanding on the close of business on the Determination Date and (B) the
number of shares that the aggregate proceeds to the Corporation from the
exercise of such rights or warrants for Common Stock would purchase at such
25-Day Average Market Price on such date (or, in the case of a right of warrant
to purchase securities convertible into Common Stock, the number of shares of
Common Stock obtained by dividing the aggregate exercise price of such rights or
warrants for the maximum number of shares of Common Stock issuable upon
conversion of such convertible securities, plus the aggregate amount of
additional consideration payable, if any, to convert such securities into
Common Stock, by such 25-Day Average Market Price). Such adjustment shall become
effective immediately after the opening of business on the Business Day next
following such record date (except as provided in paragraph (8)(h)). Such
adjustment shall be made successively whenever such a record date is fixed. In
the event that after fixing a record date such rights or warrants are not so
issued, the Conversion Rate shall be readjusted to the Conversion Rate which
would then be in effect if such record date had not been fixed. In determining
whether any rights or warrants entitle the holders of Common Stock to subscribe
for or purchase shares of Common Stock at less than such 25-Day Average Market
Price, there shall be taken into account any consideration received by the
Corporation upon issuance and upon exercise of such rights or warrants, the
value of such consideration, if other than cash, to be determined by the Board
of Directors in good faith. In case any rights or warrants referred to in this
subparagraph (ii) shall expire unexercised after the same have been distributed
or issued by the Corporation (or, in the case of rights or warrants to purchase
securities convertible into Common Stock once exercised, the conversion right of
such securities shall expire), the Conversion Rate shall be readjusted at the
time of such expiration to the Conversion Rate that would have been in effect if
no adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.

               (iii) If the Corporation shall fix a record date for the making
of a distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (8)(d)(i)) or rights or warrants (in each case, other than
any rights issued pursuant to a shareholder rights plan) to subscribe for or
purchase any of its securities (excluding those rights and warrants issued to
all holders of Common Stock entitling them (for a period expiring within 45 days
after such record date) to subscribe for or purchase Common Stock or securities
convertible into shares of Common Stock, which rights and warrants are referred
to in and treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) called the "Securities"), then in each
such case the Conversion Rate shall be adjusted so that the holder of each share
of 5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immedi-



                                      C-18
<PAGE>   90

ately prior to the close of business on such record date by (II) a fraction, the
numerator of which shall be the 25-Day Average Market Price per share of the
Common Stock on such record date, and the denominator of which shall be the
25-Day Average Market Price per share of the Common Stock on such record date
less the then-fair market value (as determined by the Board of Directors in good
faith, whose determinations shall be conclusive) of the portion of the assets,
shares of its capital stock or evidences of indebtedness so distributed or of
such rights or warrants applicable to one share of Common Stock. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that after fixing a record date such distribution is not so made, the
Conversion Rate shall be readjusted to the Conversion Rate which would then be
in effect if such record date had not been fixed. Such adjustment shall become
effective immediately at the opening of business on the Business Day next
following (except as provided in paragraph (8)(h)) the record date for the
determination of shareholders entitled to receive such distribution. For the
purposes of this subparagraph (iii), the distribution of a Security, which is
distributed not only to the holders of the Common Stock on the date fixed for
the determination of shareholders entitled to such distribution of such
Security, but also is distributed with each share of Common Stock delivered to a
Person converting a share of 5% Preferred Stock after such determination date,
shall not require an adjustment of the Conversion Rate pursuant to this
subparagraph (iii); provided, however, that on the date, if any, on which a
Person converting a share of 5% Preferred Stock would no longer be entitled to
receive such Security with a share of Common Stock (other than as a result of
the termination of all such Securities), a distribution of such Securities shall
be deemed to have occurred and the Conversion Rate shall be adjusted as provided
in this subparagraph (iii) (and such day shall be deemed to be "the date fixed
for the determination of shareholders entitled to receive such distribution" and
"the record date" within the meaning of the three preceding sentences). If any
rights or warrants referred to in this subparagraph (iii) shall expire
unexercised after the same shall have been distributed or issued by the
Corporation, the Conversion Rate shall be readjusted at the time of such
expiration to the Conversion Rate that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.

               (iv) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
8(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall



                                      C-19
<PAGE>   91

equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on the Record Date for the cash
dividend or distribution by a fraction the numerator of which shall be the
Current Market Price of a share of the Common Stock on the Record Date and the
denominator shall be such Current Market Price less the per share amount of cash
so distributed during the 12-month period applicable to one share of Common
Stock, such adjustment to be effective immediately prior to the opening of
business on the Business Day following the Record Date; provided, however, that
in the event the denominator of the foregoing fraction is zero or negative, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
holder of 5% Preferred Stock shall have the right to receive upon conversion, in
addition to the shares of Common Stock to which the holder is entitled, the
amount of cash such holder would have received had such holder converted each
share of 5% Preferred Stock at the beginning of the 12-month period. In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect if such dividend or distribution had not been declared. Notwithstanding
the foregoing, if any adjustment is required to be made as set forth in this
paragraph (8)(d)(iv), the calculation of any such adjustment shall include the
amount of the quarterly cash dividends paid during the 12-month reference
period only to the extent such dividends exceed the regular quarterly cash
dividends paid during the 12 months preceding the 12-month reference period. For
purposes of this paragraph (8)(d)(iv), "Record Date" shall mean, with respect to
any dividend or distribution in which the holders of Common Stock have the right
to receive cash, the date fixed for determination of shareholders entitled to
receive such cash.

               In the event that at any time cash distributions to holders of
Common Stock are not paid equally on all series of Common Stock, the provisions
of this paragraph 8(d)(iv) will apply to any cash dividend or cash distribution
on any series of Common Stock otherwise meeting the requirements of this
paragraph, and shall be deemed amended to the extent necessary so that any
adjustment required will be made on the basis of the cash dividend or cash
distribution made on any such series.

               (v) In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Corporation or any subsidiary
of the Corporation for all or any portion of the outstanding shares of Common
Stock to the extent that the cash and fair market value (as determined in good
faith by the Board of Directors of the Corporation, whose determination shall be
conclusive and shall be described in a resolution of such Board) of any other
consideration included in such payment per share of Common Stock at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as amended) exceed by more than 5.0%, with any smaller
excess being disregarded in computing the adjustment to the Conversion Rate
provided in this paragraph (8)(d)(v), the first reported sale price per share of
the Common Stock on the Trading Day next succeeding the Expiration Time, then
the Conversion Rate shall be adjusted so that the same shall equal the rate
deter-


                                      C-20
<PAGE>   92

mined by multiplying the Conversion Rate in effect immediately prior to
the Expiration Time by a fraction the numerator of which shall be the sum of (x)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchase Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchase Shares) on the Expiration Time and the first reported sale price of
the Common Stock on the Trading Day next succeeding the Expiration Time, and the
denominator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time multiplied
by the first reported sale price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such adjustment to become effective immediately
prior to the opening of business on the day following the Expiration Time.

               (vi) No adjustment in the Conversion Rate shall be required
unless such adjustment would require a cumulative increase or decrease of at
least 1% in the Conversion Rate; provided, however, that any adjustments that by
reason of this subparagraph (vi) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment until made, and
provided further that any adjustment shall be required and made in accordance
with the provisions of this paragraph (8) (other than this subparagraph (vi))
not later than such time as may be required in order to preserve the tax-free
nature of a distribution for United States income tax purposes to the holders of
shares of 5% Preferred Stock or Common Stock. Notwithstanding any other
provisions of this paragraph (8), the Corporation shall not be required to make
any adjustment of the Conversion Rate for the issuance of any shares of Common
Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and the investment of
additional optional amounts in shares of Common Stock under such plan. All
calculations under this paragraph (8) shall be made to the nearest dollar or to
the nearest 1/1,000 of a share, as the case may be. Anything in this paragraph
(8)(d) to the contrary notwithstanding, the Corporation shall be entitled, to
the extent permitted by law, to make such adjustments in the Conversion Rate,
in addition to those required by this paragraph (8)(d), as it in its discretion
shall determine to be advisable in order that any stock dividends subdivision of
shares, reclassification or combination of shares, distribution or rights or
warrants to purchase stock or securities, or a distribution of other assets
(other than cash dividends) hereafter made by the Corporation to its
shareholders shall not be taxable.

               (vii) In the event that, at any time as a result of shares of any
other class of capital stock becoming issuable in exchange or substitution for
or in lieu of shares of Common Stock or as a result of an adjustment made
pursuant to the provisions of this paragraph (8)(d), the holder of 5% Preferred
Stock upon subsequent conversion shall become entitled to receive any shares of
capital stock of the Corporation other than


                                      C-21
<PAGE>   93


Common Stock, the number of such other shares so receivable upon conversion of
any shares of 5% Preferred Stock shall thereafter be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions contained herein.

               (e) (i) If the Corporation shall be a party to any transaction
(including without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (8)(d)(i) applies)
(each of the foregoing being referred to herein as a "Transaction"), in each
case as a result of which shares of Common Stock shall be converted into the
right to receive stock, securities or other property (including cash or any
combination thereof), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that number
of shares or fraction thereof of Common Stock into which one share of 5%
Preferred Stock was convertible immediately prior to such Transaction, assuming
such holder of Common Stock (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be
("Constituent Person"), or an affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of stock
securities and other property (including cash) receivable upon such Transaction
(provided that if the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction is not the same for each
share of Common Stock of the Corporation held immediately prior to such
Transaction by other than a Constituent Person or an affiliate thereof and in
respect of which such rights of election shall not have been exercised ("non-
electing share"), then for the purpose of this paragraph (8)(e) the kind and
amount of stock, securities and other property (including cash) receivable upon
such Transaction by each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares). The
provisions of this paragraph (8)(e) shall similarly apply to successive
Transactions.

               (ii) Notwithstanding anything herein to the contrary , if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation, by notice to and consultation with the
holders of the 5% Preferred Stock, may cause the exchange of this 5% Preferred
Stock for preferred stock of Holdco having the same terms and conditions as set
forth herein; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such


                                      C-22
<PAGE>   94



rights effectively giving the same economic rights as the 5% Preferred Stock
(including for these purposes any resultant change in the tax treatment for the
holders of such stock).

               (f)  If:

               (i)  the Corporation shall declare a dividend (or any other
distribution) on the Common Stock; or

               (ii) the Corporation shall authorize the granting to the holders
of the Common Stock of rights or warrants to subscribe for or purchase any
shares of any class or any other rights or warrants; or

               (iii) there shall be any subdivision, combination or
reclassification of the Common Stock or any consolidation or merger to which the
Corporation is a party and for which approval of any shareholders of the
Corporation is required, or the sale or transfer of all or substantially all of
the assets of the Corporation as an entirety; or

               (iv)   there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation;

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applicable date hereinafter specified, a notice stating (A)
the date on which a record is to be taken for the purpose of such dividend (or
such other distribution) or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or warrants are to be determined or (B)
the date on which such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up or
other action is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up.
Failure to give or receive such notice or any defect therein shall not affect
the legality or validity of any distribution, right, warrant subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, winding up or other action, or the vote upon any of
the foregoing.


                                      C-23
<PAGE>   95




               (g) Whenever the Conversion Rate is adjusted as herein provided,
the Corporation shall prepare an officer's certificate with respect to such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the effective date of such adjustment and shall mail a copy of such officer's
certificate to the holder of each share of 5% Preferred Stock at such holder's
last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (8)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be conclusive evidence of the correctness of such adjustment.

               (h) In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (8)(c).

               (i) For purposes of this paragraph (8), the number of shares of
Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.

               (j) There shall be no adjustment of the Conversion Rate in case
of the issuance of any stock of the Corporation in a reorganization, acquisition
or other similar transaction except as specifically set forth in this paragraph
(8). If any single action would require adjustment of the Conversion Rate
pursuant to more than one subparagraph of this paragraph (8), only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value.

               (k) If the Corporation shall take any action affecting the Common
Stock, other than action described in this paragraph (8), that in the opinion of
the Board of Directors materially adversely affects the conversion rights of the
holders of the shares of 5% Preferred Stock, the Conversion Rate may be
adjusted, to the extent permitted by law, in such manner, if any, and at such
time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (8)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.


                                      C-24
<PAGE>   96




               (l) (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of 5% Preferred Stock
not theretofore converted. For purposes of this paragraph (8)(l) the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.

               (ii) The Corporation covenants that any shares of Common Stock
issued upon conversion of the 5% Preferred Stock shall be duly authorized,
validly issued, fully paid and non-assessable. Before taking any action that
would cause an adjustment increasing the Conversion Rate such that the quotient
of $1,000.00 and the Conversion Rate (which quotient initially shall be $125.00)
would be reduced below the then-par value of the shares of Common Stock
deliverable upon conversion of the 5% Preferred Stock, the Corporation will take
any corporate action that, in the opinion of its counsel, may be necessary in
order that the Corporation may validly and legally issue fully paid and
non-assessable shares of Common Stock based upon such adjusted Conversion Rate.

               (iii) Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 5% Preferred
Stock, the Corporation shall comply with all applicable federal and state laws
and regulations which required action to be taken by the Corporation.

               (m) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the 5%
Preferred Stock pursuant hereto; provided, however, that the Corporation shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or other securities
or property in a name other than that of the holder of the 5% Preferred Stock to
be converted and no such issue or delivery shall be made unless and until the
Person requesting such issue or delivery has paid to the Corporation the amount
of any such tax or established, to the satisfaction of the Corporation, that
such tax has been paid.

               (n) No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock are entitled to participate in such
transaction pursuant to paragraph 4(b).


                                      C-25
<PAGE>   97



               (9) Voting Rights. (a) The holders of record or shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (9) or as otherwise provided by law.

               (b) If and whenever either (i) six quarterly dividends (whether
or not consecutive) payable on the 5% Preferred Stock have not been paid in
full, (ii) the Corporation shall have failed to discharge its Mandatory
Redemption Obligation, or (iii) there occurs a Bankruptcy Event (any such event
described in the preceding subparagraphs (i) through (iii) being hereinafter
referred to as a "Trigger Event"), a vote of the holders of shares of 5%
Preferred Stock, voting as a single class, will be required on all matters
brought to shareholders of the Corporation. Whenever all arrears in dividends on
the 5% Preferred Stock then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, the Corporation shall have fulfilled its
Mandatory Redemption Obligation, and all Bankruptcy Events shall have been
cured (the "Trigger Event Cure"), then the right of the holders of the 5%
Preferred Stock to vote as described in the this paragraph 9(b) shall cease (but
subject always to the same provisions for the vesting of such voting rights if
any Trigger Event occurs).

               (c) In addition to the power to elect a director in accordance
with paragraph (9)(d), upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, together with the holders of shares
of every other series of preferred stock (including, without limitation,
Additional Preferred) upon which like rights to vote for the election of two
additional directors have been conferred and are exercisable (resulting from
either the failure to pay dividends or the failure to redeem) (any such other
series is referred to as the "Preferred Shares"), voting as a single class
regardless of series, shall be entitled to elect the two additional directors to
serve on the Board of Directors at any annual meeting of stockholders or special
meeting held in place thereof, or at a special meeting of the holders of 5%
Preferred Stock and the Preferred Shares, called as hereinafter provided.
Whenever all arrears in dividends on the Preferred Shares then outstanding shall
have been paid and dividends thereon for the current quarterly dividend period
shall have been paid or declared and set apart for payment, the Corporation
shall have fulfilled any redemption obligation in respect of the Preferred
Shares, and the Trigger Event Cure has occurred, then the right of the holders
of the 5% Preferred Stock and the Preferred Shares to elect such additional two
directors shall cease (but subject always to the same provisions for the vesting
of such voting rights if any Trigger Event occurs), and the terms of office of
all persons elected as directors by the holders of 5% Preferred Stock and the
Preferred Shares shall forthwith terminate and the number of members of the
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in holders of shares of 5% Preferred Stock and
the Preferred Shares, the Secretary of the Corporation may, and upon the written
request of any holder of 5% Preferred Stock


                                      C-26
<PAGE>   98



(addressed to the secretary at the principal office of the Corporation) shall,
call a special meeting of the holders of the 5% Preferred Stock and of the
Preferred Shares for the election of the two directors to be elected by them as
herein provided, such call to be made by notice similar to that provided in the
Bylaws of the Corporation for a special meeting of the stockholders or as
required by law. If any such special meeting required to be called as above
provided shall not be called by the Secretary of the Corporation within 20 days
after receipt of any such request, then any holder of shares of 5% Preferred
Stock may call such meeting, upon the notice above provided, and for that
purpose shall have access to the stock books of the Corporation. The directors
elected at any such special meeting shall hold office until the next annual
meeting of the stockholders or special meeting held in lieu thereof if such
office shall not have previously terminated as above provided. If any vacancy
shall occur among the directors elected by the holders of the 5% Preferred Stock
and the Preferred Shares, a successor shall be elected by the Board of
Directors, upon the nomination of the then-remaining director elected by the
holders of the 5% Preferred Stock and the Preferred Shares or the successor of
such remaining director, to serve until the next annual meeting of the
stockholders or special meeting held in place thereof if such office shall not
have previously terminated as provided above.

               (d) (i) In addition to any other rights granted in this paragraph
(9) to elect directors or to vote on any matter submitted to stockholders, all
holders of shares of 5% Preferred Stock, voting separately as a class, shall
have the right to elect one director to serve on the Board of Directors, so long
as the Qualified Holding Condition is satisfied. Immediately upon failure of the
Qualified Holding Condition, this paragraph (9)(d) shall be of no further effect
and the rights granted herein to the holders of the 5% Preferred Stock shall
cease to apply.

               (ii) The holders of shares of 5% Preferred Stock may appoint,
remove or replace such director by way of a written notice by holders of a
majority of such shares to the Corporation, at a special meeting called pursuant
to subparagraph (iii) of this paragraph (9)(d) or at any annual meeting of
stockholders, provided that such voting rights may not be exercised at any
meeting unless holders of one-third of the outstanding shares of 5% Preferred
Stock shall be present at such meeting in person or by proxy. The absence of a
quorum of the holders of Common Stock shall not affect the exercise by the
holders of shares of 5% Preferred Stock of such rights. At any meeting at which
the holders of shares of 5% Preferred Stock shall exercise such voting rights
initially, they shall have the right, voting separately as a class, to elect one
director to fill one vacancy in the Board of Directors, if any such vacancy may
then exist, or, if such right is exercised at an annual meeting, to elect one
director. If necessary, the holders of the shares of 5% Preferred Stock shall
have the right to make such increase in the number of members of the Board of
Directors as shall be necessary to permit them to so elect one director. If the
holders of a majority of the shares of 5% Preferred Stock outstanding exercise
their right to appoint, remove or replace a director by way of a


                                      C-27
<PAGE>   99


written notice to the Corporation, any such appointment, removal or replacement
shall be effective immediately upon the sending of such written notice to the
Corporation.

               (iii) Unless the holders of shares of 5% Preferred Stock shall
have previously exercised their right to elect one director, the Board of
Directors shall order, and any stockholder or stockholders owning in the
aggregate not less than 25% of the total number of the shares of 5% Preferred
Stock outstanding may request, the calling of a special meeting of the holders
of shares of 5% Preferred Stock, which meeting shall thereupon promptly be
called by the Secretary of the Corporation. Notice of such meeting and of any
annual meeting at which holders of shares of 5% Preferred Stock are entitled to
vote pursuant to this paragraph (9)(d) shall be given to each holder of record
of shares of 5% Preferred Stock by mailing a copy of such notice to him at his
last address as the same appears on the books of the Corporation. Such meeting
shall be called for a time not earlier than 20 days and not later then 60 days
after such order or request or in default of the calling of such meeting within
60 days after such order or request, such meeting may be called on similar
notice by any stockholder or stockholders owning in the aggregate not less than
25% of the total number of outstanding shares of 5% Preferred Stock.

               (iv) The holders of shares of Common Stock and shares of 5%
Preferred Stock, and other classes or series of stock of the Corporation, if
applicable, shall continue to be entitled to elect all the directors until
holders of the shares of 5% Preferred Stock shall have exercised their right to
elect one director, voting as a separate class (or exercised such right pursuant
to a written notice as set forth under paragraph (9)(d)(ii)), after the exercise
of which right (x) the director so elected by the holders of shares of 5%
Preferred Stock shall continue in office until his successor shall have been
elected by such holders (or appointed pursuant to a written notice as set forth
under paragraph (9)(d)(ii)), and (y) any vacancy in the Board of Directors may
(except as provided in paragraph (9)(d)(ii)) be filled by vote of a majority of
the remaining directors theretofore elected by the holders of the class of
capital stock which elected the director whose office shall have become vacant.
References in this paragraph (9)(d)(iv) to directors elected by the holders of a
particular class of capital stock shall include directors elected by such
directors to fill vacancies as provided in clause (y) of the foregoing sentence.

               (e) Without the written consent of the holders of at least
66 2/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 66 2/3% in liquidation preference of
the outstanding shares of 5% Preferred Stock at a meeting of the holders of 5%
Preferred Stock called for such purpose, the Corporation will not amend, alter
or repeal any provision of the Certificate of Incorporation (by merger or
otherwise) so as to adversely affect the preferences, rights or powers of the 5%
Preferred Stock; provided that any such amendment that changes the dividend
payable on, the Conversion Rate with respect to, or the liquidation


                                      C-28
<PAGE>   100



preference of the 5% Preferred Stock shall require the affirmative vote at a
meeting of holders of 5% Preferred Stock called for such purpose or written
consent of the holder of each share of 5% Preferred Stock.

               (f) Without the written consent of the holders of at least
66 2/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 66 2/3% in liquidation preference of
the outstanding shares of 5% Preferred Stock at a meeting of such holders called
for such purpose, the Corporation will not issue any additional 5% Preferred
Stock or create, authorize or issue any Parity Securities or Senior Securities
or increase the authorized amount of any such other class or series; provided
that this paragraph 9(f) shall not limit the right of the Corporation to (i)
issue Additional Preferred as dividends pursuant to paragraph 4 or (ii) to issue
Parity Securities or Senior Securities in order to refinance, redeem or refund
the 13% Preferred or the 5 1/4% Preferred, provided that the maximum accrual
value (i.e., the sum of stated value and maximum amount payable in kind over the
term from issuance to first date of mandatory redemption or redemption at the
option of the holder) of such Parity Securities may not exceed the maximum
accrual value of the 13% Preferred or the 5 1/4% Preferred, respectively.

               (g) In exercising the voting rights set forth in this paragraph
(9), each share of 5% Preferred Stock shall have one vote per share, except that
when any other series of preferred stock shall have the right to vote with the
5% Preferred Stock as a single class on any matter, then the 5% Preferred Stock
and other series shall have with respect to such matters one vote per $1,000 of
stated liquidation preference. Except as otherwise required by applicable law or
as set forth herein, the shares of 5% Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers and
the consent of the holders thereof shall not be required for the taking of any
corporate action.

               (h) So long as the Qualified Holding Condition is satisfied, the
Corporation shall not increase the total number of its directors to a number
that is greater than ten if such increase would cause the number of such
directors that the holders of the 5% Preferred Stock are entitled to elect to be
less than ten percent of the total number of members of the Board of Directors.

               (i) Nothing in this paragraph (9) shall be in derogation of any
rights that a holder of shares of 5% Preferred Stock may have in his capacity as
a holder of shares of Common Stock.

               (10) General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are
for convenience of reference only and shall not define, limit or affect any of
the provisions hereof.


                                      C-29
<PAGE>   101



               (b) If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) hereof or shall have failed to
discharge any obligation to redeem shares of 5% Preferred Stock pursuant to
paragraph (6) hereof, the holders of shares of 5% Preferred Stock shall be
entitled to receive, in addition to all other amounts required to be paid
hereunder, when, as and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, cash dividends on the aggregate
dividends which the Corporation shall have failed to declare or pay or the
redemption price, together with accrued and unpaid dividends thereon, as the
case may be, at a rate of 2% per quarter, compounded quarterly, for the period
during which the failure to pay dividends or failure to discharge an obligation
to redeem shares of 5% Preferred Stock shall continue.

               (c) The shares of 5% Preferred Stock shall bear the following
legend:

               THE SHARES OF PREFERRED STOCK, PAR VALUE $.01, OF THE CORPORATION
               (THE "PREFERRED STOCK") (AND THE SHARES OF COMMON STOCK, PAR
               VALUE $.01, OF THE CORPORATION (THE "COMMON STOCK") INTO WHICH
               THE PREFERRED STOCK MAY BE CONVERTED) REPRESENTED BY THIS
               CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
               ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
               (THE "ACT") AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
               APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS. THE TRANSFER
               OF THE PREFERRED STOCK (OR COMMON STOCK, IF THE PREFERRED STOCK
               HAS BEEN CONVERTED) EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO
               THE RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE PURCHASE
               AGREEMENT, DATED JULY 15, 1999, AS MAY BE AMENDED, AMONG THE
               CORPORATION AND FRANCE TELECOM, A COPY OF WHICH IS ON FILE AT
               THE EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE FURNISHED
               WITHOUT CHARGE TO THE HOLDER OF SUCH PREFERRED STOCK UPON WRITTEN
               REQUEST TO THE CORPORATION.

               THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY
               BE CONVERTED INTO COMMON STOCK, PAR VALUE $.01, OF THE
               CORPORATION (THE "COMMON STOCK") OR REDEEMED IN EXCHANGE FOR
               COMMON STOCK WITHOUT THE SURRENDER AND EXCHANGE OF THIS
               CERTIFICATE FOR CERTIFICATES REPRESENTING SUCH COMMON STOCK. A
               NOTICE OF SUCH CONVERSION EVENT, IF ANY, IS ON FILE AT THE
               EXECUTIVE OFFICES OF THE CORPORATION


                                      C-30
<PAGE>   102
               AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS
               CERTIFICATE UPON WRITTEN REQUEST TO THE CORPORATION.

               The shares of Common Stock issuable upon conversion of the 5%
Preferred Stock shall bear the following legend:

               THE SHARES OF COMMON STOCK, PAR VALUE $.01, OF THE CORPORATION
               (THE "COMMON STOCK") REPRESENTED BY THIS CERTIFICATE MAY NOT BE
               OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER
               THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND ANY
               APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM
               REGISTRATION REQUIREMENTS. THE TRANSFER OF THE COMMON STOCK
               EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON
               TRANSFER PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED JULY 15,
               1999, AS MAY BE AMENDED, AMONG THE CORPORATION AND FRANCE
               TELECOM, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF
               THE CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE
               HOLDER OF SUCH COMMON STOCK UPON WRITTEN REQUEST TO THE
               CORPORATION.



               (d) (i) Whenever in connection with any conversion or redemption
of the 5% Preferred Stock in exchange for Common Stock the holder is required to
surrender certificates representing such shares of 5% Preferred Stock, such
holder may, by written notice to the Corporation and its transfer agent, elect
to retain such certificates. In such case, the certificates so retained by the
holder thereof shall be deemed to represent, at and from the date of such
conversion or redemption, the number of shares of Common Stock issuable upon
such conversion or redemption (subject to paragraph (8)(c), if applicable), and
shall be so reflected upon the books of the Corporation and its transfer agent.

               (ii) (A) A holder who has previously elected to retain
certificates representing the 5% Preferred Stock in accordance with paragraph
(10)(d)(i) upon conversion or redemption may subsequently elect to receive
certificates representing the shares of Common Stock issued upon such conversion
or redemption. To receive certificates representing such shares of Common Stock,
the holder of such certificate shall surrender it, duly endorsed or assigned to
the Corporation or in blank, at the office of the Corporation, or to any
transfer agent of the Corporation previously designated by the Corporation for
such purposes, with a written notice of that election.

                                      C-31

<PAGE>   103

               (B) Unless the certificates to be issued shall be registered in
the same name as the name in which such surrendered certificates are registered,
each certificate so surrendered shall be accompanied by instruments of transfer,
in form satisfactory to the Corporation, duly executed by the holder or the
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates so surrendered
shall be canceled by the Corporation or the transfer agent.

               (C) As promptly as practicable after the surrender by a holder of
such certificates, the Corporation shall issue and shall deliver to such holder,
or on the holder's written order, a certificate or certificates (which
certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock represented by the certificates so
surrendered.

               (11) Shareholder Rights Plan. The shares of 5% Preferred Stock
shall be entitled to the benefits of a number of rights issuable under the
Rights Agreement, dated as of October 1, 1993, as amended, between the Company
and Continental Stock Transfer & Trust Company or any successor plan of similar
purpose and effect ("Rights") equal to the number of shares of Common Stock then
issuable upon conversion of the 5% Preferred Stock at the prevailing Conversion
Rate. Any shares of Common Stock deliverable upon conversion of a share of 5%
Preferred Stock or upon payment of a dividend shall be accomplished by a Right.


                                      C-32

<PAGE>   104

                                                                       Exhibit D

                     5% CUMULATIVE PARTICIPATING CONVERTIBLE
                            PREFERRED STOCK, SERIES C

               (1) Number and Designation. 5,000 shares of the Preferred Stock
of the Corporation shall be designated as 5% Cumulative Participating
Convertible Preferred Stock, Series C (the "5% Preferred Stock") and no other
shares of Preferred Stock shall be designated as 5% Preferred Stock.

               (2)  Definitions.  For purposes of the 5% Preferred Stock, the
following terms shall have the meanings indicated:

               "Additional Preferred" shall have the meaning set forth in
        paragraph (4)(a) hereof.

               "Bankruptcy Event" shall mean any of the following: (I) a court
        having jurisdiction in the premises enters a decree or order for (A)
        relief in respect of any Major Entity in an involuntary case under any
        applicable bankruptcy, insolvency or other similar law now or
        hereinafter in effect, (B) appointment of a receiver, liquidator,
        assignee, custodian, trustee, sequestrator or similar official of any
        Major Entity or for all or substantially all of the property and assets
        of any Major Entity or (C) the winding up or liquidation of the affairs
        of any Major Entity; or (II) any Major Entity (A) commences a voluntary
        case under any applicable bankruptcy, insolvency or other similar law
        now or hereinafter in effect, or consents to the entry of an order for
        relief in an involuntary case under any such law, (B) consents to the
        appointment of or taking possession by a receiver, liquidator, assignee,
        custodian, trustee, sequestrator or similar official of any Major
        Entity, or for all or substantially all of the property and assets of
        any Major Entity or (C) effects any general assignment for the benefit
        of creditors.

               "Board of Directors" shall mean the board of directors of the
        Corporation. Except as such term is used in paragraph (9), "Board of
        Directors" shall also mean the Executive Committee, if any, of such
        board of directors or any other committee duly authorized by such board
        of directors to perform any of its responsibilities with respect to the
        5% Preferred Stock.

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

                                       D-1

<PAGE>   105

               "Common Stock" shall mean the Corporation's Common Stock, par
        value $.01 per share.

               "Constituent Person" shall have the meaning set forth in
        paragraph (8)(e)(i) hereof.

               "Conversion Rate" shall have the meaning set forth in paragraph
        (8)(a) hereof.

               "Current Market Price" of publicly traded shares of Common Stock
        or any other class of capital stock or other security of the Corporation
        or any other issuer for any day shall mean the last reported sale price
        for such security on the principal exchange or quotation system on which
        such security is listed or traded. If the security is not admitted for
        trading on any national securities exchange or the Nasdaq National
        Market, "Current Market Price" shall mean the average of the last
        reported closing bid and asked prices reported by the Nasdaq as
        furnished by any member in good standing of the National Association of
        Securities Dealers, Inc., selected from time to time by the Corporation
        for that purpose or as quoted by the National Quotation Bureau
        Incorporated. In the event that no such quotation is available for such
        day, the Current Market Price shall be the average of the quotations for
        the last five Trading Days for which a quotation is available within the
        last 30 Trading Days prior to such day. In the event that five such
        quotations are not available within such 30-Trading Day period, the
        Board of Directors shall be entitled to determine the Current Market
        Price on the basis of such quotations as it reasonably considers
        appropriate.

               "Determination Date" shall have the meaning set forth in
        paragraph (8)(d)(ii) hereof.

               "Dividend Payment Date" shall mean September 30, December 31,
        March 31 and June 30 of each year, commencing on December 31, 1999;
        provided, however, that if any Dividend Payment Date falls on any day
        other than a Business Day, the dividend payment due on such Dividend
        Payment Date shall be paid on the Business Day immediately following
        such Dividend Payment Date.

               "Dividend Periods" shall mean quarterly dividend periods
        commencing on September 30, December 31, March 31 and June 30 of each
        year and ending on and including the day preceding the first day of the
        next succeeding Dividend Period.


                                       D-2

<PAGE>   106

               "Exchange Act" shall mean the Securities Exchange Act of 1934, as
        amended, and the rules and regulations thereunder.

               "Expiration Time" shall have the meaning set forth in paragraph
        (8)(d)(v) hereof.

               "5% Preferred Stock" shall have the meaning set forth in
        paragraph (1) hereof.

               "5 1/4% Preferred" shall have the meaning set forth in paragraph
        (3)(d) hereof.

               "5 1/4% Series A" shall have the meaning set forth in paragraph
        (3)(d) hereof.

               "Issue Date" shall mean the date on which shares of 5% Preferred
        Stock are first issued.

               "Junior Securities" shall have the meaning set forth in paragraph
        (3)(c) hereof.

               "Junior Securities Distribution" shall have the meaning set forth
        in paragraph (4)(f) hereof.

               "Liquidation Right" shall mean, for each share of 5% Preferred
        Stock, the greater of (i) an amount equal to $1,000 per share, plus an
        amount equal to all dividends (whether or not earned or declared)
        accrued and unpaid thereon to the date of final distribution to such
        holders, and (ii) the amount that would be received in liquidation
        following conversion of a share of 5% Preferred Stock into Common Stock.

               "Major Entity" shall mean any of the Corporation, NTL
        Communications Corp., Diamond Cable Communications Limited, Diamond
        Holdings Limited, NTL (Bermuda) Limited or any Significant Subsidiary.

               "Mandatory Redemption Date" shall have the meaning set forth in
        paragraph (6)(c) hereof.

               "Mandatory Redemption Obligation" shall have the meaning set
        forth in paragraph (6)(d) hereof.


                                       D-3

<PAGE>   107

               "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
        securities market regulated by the National Association of Securities
        Dealers, Inc.

               "Nasdaq National Market" shall have the meaning set forth in Rule
        4200(a)(23) of the rules of the National Association of Securities
        Dealers, Inc.

               "9.9% Series A Preferred" shall have the meaning set forth in
        paragraph (3)(d) hereof.

               "9.9% Series B Preferred" shall have the meaning set forth in
        paragraph (3)(d) hereof.

               "non-electing share" shall have the meaning set forth in
        paragraph (8)(e)(i) hereof.

               "NYSE" means the New York Stock Exchange.

               "outstanding", when used with reference to shares of stock, shall
        mean issued shares, excluding shares held by the Corporation or a
        subsidiary.

               "Parity Securities" shall have the meaning set forth in paragraph
        (3)(b) hereof.

               "Person" shall mean any individual, partnership, association,
        joint venture, corporation, business, trust, joint stock company,
        limited liability company, any unincorporated organization, any other
        entity, a "group" of such persons, as that term is defined in Rule
        13d-5(b) under the Exchange Act, or a government or political
        subdivision thereof.

               "Preferred Shares" has the meaning set forth in paragraph (9)(c).

               "Preferred Stock" shall have the meaning set forth in the first
        resolution above.

               "Purchase Shares" shall have the meaning set forth in paragraph
        (8)(d)(v) hereof.

               "Record Date" shall have the meaning set forth in paragraph
        (8)(d)(iv) hereof.


                                       D-4

<PAGE>   108

               "Relevant Compounding Factor" shall mean, with respect to each
        share of 5% Preferred Stock, upon initial issuance 1.00, and shall on
        each Dividend Payment Date be increased to equal the product of the
        Relevant Compounding Factor in effect immediately prior to such Dividend
        Payment Date and 1.0125.

               "Rights" shall have the meaning set forth in paragraph (11)
        hereof.

               "Securities" shall have the meaning set forth in paragraph
        (8)(d)(iii) hereof.

               "Senior Securities" shall have the meaning set forth in paragraph
        (3)(a) hereof.

               "set apart for payment" shall be deemed to include, without any
        action other than the following, the recording by the Corporation in its
        accounting ledgers of any accounting or bookkeeping entry which
        indicates, pursuant to a declaration of dividends or other distribution
        by the Board of Directors, the allocation of funds to be so paid on any
        series or class of capital stock of the Corporation; provided, however,
        that if any funds for any class or series of Junior Securities or any
        class or series of Parity Securities are placed in a separate account of
        the Corporation or delivered to a disbursing, paying or other similar
        agent, then "set apart for payment" with respect to the 5% Preferred
        Stock shall mean placing such funds in a separate account or delivering
        such funds to a disbursing, paying or other similar agent, as the case
        may be.

               "Significant Subsidiary" shall have the meaning given to such
        term in Regulation S-X under the Exchange Act.

               "13% Preferred" shall have the meaning set forth in paragraph
        (3)(d) hereof.

               "Trading Day" shall mean any day on which the securities in
        question are traded on the NYSE, or if such securities are not listed or
        admitted for trading on the NYSE, on the principal national securities
        exchange on which such securities are listed or admitted, or if not
        listed or admitted for trading on any national securities exchange, on
        the Nasdaq National Market, or if such securities are not quoted
        thereon, in the applicable securities market in which the securities are
        traded.

               "Transaction" shall have the meaning set forth in paragraph
        (8)(e)(i) hereof.

                                       D-5

<PAGE>   109

               "Trigger Event" shall have the meaning set forth in paragraph
        (9)(b) hereof.

               "Trigger Event Cure" shall have the meaning set forth in
        paragraph (9)(b) hereof.

               "25-Day Average Market Price" shall mean, for any security, the
        volume-weighted average of the Current Market Prices of that security
        for the twenty-five Trading Days immediately preceding the date of
        determination.

               (3) Rank. Any class or series of stock of the Corporation shall
        be deemed to rank:

               (a) prior to the 5% Preferred Stock, either as to the payment of
dividends or as to distribution of assets upon liquidation, dissolution or
winding up, or both, if the holders of such class or series shall be entitled by
the terms thereof to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, in preference or priority to the holders
of 5% Preferred Stock ("Senior Securities");

               (b) on a parity with the 5% Preferred Stock, either as to the
payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and

               (c) junior to the 5% Preferred Stock, either as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, or both, if such stock or series shall be Common Stock or if the
holders of the 5% Preferred Stock shall be entitled to receipt of dividends, and
of amounts distributable upon liquidation, dissolution or winding up, in
preference or priority to the holders of shares of such stock or series ("Junior
Securities").

               (d) Each of (i) the 13% Series B Senior Redeemable Exchangeable
Preferred Stock (the "13% Preferred") and (ii) the 5 1/4% Convertible Preferred
Stock, Series A, (the "5 1/4% Series A") and any dividends paid on the 5 1/4%
Series A in

                                       D-6

<PAGE>   110

accordance with its terms, to the extent that such dividends are paid in
preferred stock having terms substantially identical to the 5 1/4% Series A and
any dividends paid on preferred stock issued as in-kind dividends thereon, to
the extent such dividends are paid in preferred stock having terms substantially
identical to the 5 1/4% Series A (the 5 1/4% Series A and all such in-kind
dividends being hereinafter referred to as the "5 1/4% Preferred") is a Senior
Security. Each of the 9.9% Non-Voting Mandatorily Redeemable Preferred Stock,
Series A ("9.9% Series A Preferred"), and 9.9% Non-Voting Mandatorily Redeemable
Preferred Stock, Series B ("9.9% Series B Preferred"), is a Junior Security. The
5% Cumulative Participating Convertible Preferred Stock, Series A and one or
more classes of Additional Preferred (as defined below) shall be Parity
Securities; provided, however, that there shall be no issue of other Senior
Securities, Parity Securities or rights or options exercisable for or
convertible into any such securities, except as approved by the holders of the
5% Preferred Stock pursuant to paragraph 9(e).

               (e) The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.

               (4) Dividends. (a) Subject to paragraph (8)(b)(ii), the holders
of shares of 5% Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available for the
payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for such Dividend Payment Date) or additional
shares of Preferred Stock of a class to be designated by the Board of Directors
having terms substantially identical to the 5% Preferred Stock except as
follows: (A) the Conversion Rate (as set forth in Section 8(a)) on such
Preferred Stock initially shall be the quotient resulting from the division of
the Conversion Rate (as then in effect on the 5% Preferred Stock) by the
Relevant Compounding Factor and (B) the number of shares of such Preferred Stock
payable as a dividend on any Dividend Payment Date shall increase for each
Dividend Payment Date from the first Dividend Payment Date by the Relevant
Compounding Factor (such classes of Preferred Stock singularly and collectively,
the "Additional Preferred"). All dividends on the 5% Preferred Stock, in
whatever form, shall be payable in arrears quarterly on each Dividend Payment
Date and shall be cumulative from the Issue Date (except that dividends on
Additional Preferred shall accrue from the date such Additional Preferred is
issued or would have been issued in accordance with this Certificate of
Designation if such dividends had been declared), whether or not in any Dividend
Period or Dividend

                                       D-7

<PAGE>   111

Periods there shall be funds of the Corporation legally available for the
payment of such dividends. Each such dividend shall be payable to the holders of
record of shares of the 5% Preferred Stock, as they appear on the stock records
of the Corporation at the close of business on the record date for such
dividend. Upon the declaration of any such dividend, the Board of Directors
shall fix as such record date on the fifth Business Day preceding the relevant
Dividend Payment Date and shall give notice on or prior to the record date of
the form of payment of such dividend. Accrued and unpaid dividends for any past
Dividend Payment Date may be declared and paid at any time, without reference to
any Dividend Payment Date, to holders of record on such record date, not more
than 45 days nor less than five Business Days preceding the payment date
thereof, as may be fixed by the Board of Directors.

               (b) In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock shall be entitled to
receive an amount equal to the amount (and in the form of consideration) that
such holders would be entitled to receive if, pursuant to paragraph (8), they
had converted such 5% Preferred Stock fully into Common Stock immediately before
the record date for the payment of any such dividends on Common Stock. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock as they appear on the stock records of the Corporation at the close of
business on the record date for such dividend on Common Stock, and the
Corporation shall pay each such dividend on the applicable payment date for such
dividend on the Common Stock.

               (c) For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each such Additional
Preferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).

               (d) The dividends payable for any period shorter than a full
Dividend Period on the 5% Preferred Stock shall accrue daily and be computed on
the basis of a 360-day year and the actual number of days in such period. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the 5% Preferred Stock that may be in
arrears except as otherwise provided herein.

               (e) So long as any shares of the 5% Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities 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 such Parity Securities or Junior Securities) by

                                       D-8

<PAGE>   112

the Corporation (except for conversion into or exchange into other Parity
Securities or Junior Securities, as the case may be) unless, in each case, (i)
full cumulative dividends on all outstanding shares of the 5% Preferred Stock
for all Dividend Periods terminating on or prior to the date of such redemption,
repurchase or other acquisition shall have been paid or set apart for payment,
(ii) sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in Common Stock or Additional Preferred or are
not paid in full in cash or a sum sufficient for such payment is not set apart,
as aforesaid, all dividends declared upon shares of the 5% Preferred Stock and
all dividends declared upon Parity Securities shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid on the
5% Preferred Stock and accumulated and unpaid on such Parity Securities.

               (f) So long as any shares of the 5% Preferred Stock are
outstanding, no dividends (other than (i) any rights issued pursuant to a
shareholder rights plan as provided in paragraph (11) and (ii) dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Junior Securities) shall be declared or paid or set apart
for payment or other distribution declared or made upon Junior Securities, nor
shall any Junior Securities be redeemed, purchased or otherwise acquired (other
than a redemption, purchase, or other acquisition of shares of Common Stock made
for purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") 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, directly or
indirectly (except by conversion into or exchange for Junior Securities,
including pursuant to paragraph 4(c) of the 9.9% Series A Preferred and
paragraph 4(d) of the 9.9% Series B Preferred), unless in each case (A) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock and all
other Parity Securities shall have been paid or set apart for payment for all
past Dividend Periods and dividend periods for such other stock, (B) sufficient
funds shall have been paid or set apart for the payment of the dividend for the
current Dividend Period with respect to the 5% Preferred Stock and all other
Parity Securities, (C) the Corporation is not in default with respect to any
redemption of shares of 5% Preferred Stock by the Corporation pursuant to
paragraph (6) below, (D) the Corporation has fully performed its obligations
under paragraphs (4)(b) and (6) hereof.

               (5)  Liquidation Preference.  (a)  In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, before any payment or distribution of the assets of the Corporation
(whether capital or surplus)

                                       D-9

<PAGE>   113

shall be made to or set apart for the holders of Junior Securities, the holders
of the shares of 5% Preferred Stock shall be entitled to receive the Liquidation
Right. If, upon any liquidation, dissolution or winding up of the Corporation,
the assets of the Corporation, or proceeds thereof, distributable among the
holders of the shares of 5% Preferred Stock shall be insufficient to pay in full
the preferential amount aforesaid and liquidating payments on any Parity
Securities, then such assets, or the proceeds thereof, shall be distributed
among the holders of shares of 5% Preferred Stock and any such other Parity
Securities ratably in accordance with the respective amounts that would be
payable on such shares of 5% Preferred Stock and any such other stock if all
amounts payable thereon were paid in full. For the purposes of this paragraph
(5), (i) a consolidation or merger of the Corporation with one or more
corporations, or (ii) a sale or transfer of all or substantially all of the
Corporation's assets, shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation.

               (b) Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or classes
of Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the 5% Preferred Stock shall not be
entitled to share therein.

               (6) Redemption. (a) On and after the first Business Day following
the earlier to occur of (i) August 13, 2006 or (ii) the date on which both (A)
the 25-Day Average Market Price of the Common Stock shall have exceeded $150.00
and (B) August 13, 2003, to the extent the Corporation shall have funds legally
available for such payment, the Corporation may redeem at its option shares of
5% Preferred Stock, from time to time in part, or in whole, payable at the
option of the Corporation in (A) cash, at a redemption price of $1,000.00 per
share, (B) in shares of Common Stock, at a redemption price of $1,000.00 per
share, or (C) in a combination of cash and Common Stock, at a redemption price
based on the respective combination of consideration, together in each case
with accrued and unpaid dividends thereon, whether or not declared, to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(a), the price per share of Common Stock shall be the 25-Day
Average Market Price.

               (b) On and after the first Business Day following August 13,
2009, each holder of shares of 5% Preferred Stock shall have the right to
require the Corporation, to the extent the Corporation shall have funds legally
available therefor, to redeem such holder's shares of 5% Preferred Stock, from
time to time in part, or in whole, at a

                                      D-10

<PAGE>   114
redemption price of $1,000.00 per share, payable at the option of the
Corporation in cash, shares of Common Stock or a combination thereof, together
with accrued and unpaid dividends thereon to, but excluding, the date fixed for
redemption, without interest. For purposes of determining the number of shares
of the Common Stock to be issued pursuant to this paragraph (6)(b), the price
per share of Common Stock shall equal the 25-Day Average Market Price. Any
holder of shares of 5% Preferred Stock who elects to exercise its rights
pursuant to this paragraph (6)(b) shall deliver to the Corporation a written
notice of election not less than 20 days prior to the date on which such holder
demands redemption pursuant to this paragraph 6(b), which notice shall set forth
the name of the Holder, the number of shares of 5% Preferred Stock to be
redeemed and a statement that the election to exercise a redemption right is
being made thereby; and, subject to paragraph (10)(d), shall deliver to the
Corporation on or before the date of redemption certificates evidencing the
shares of 5% Preferred Stock to be redeemed, duly endorsed for transfer to the
Corporation.

               (c) If the Corporation shall not have redeemed all outstanding
shares of 5% Preferred Stock pursuant to paragraphs (6)(a) or (6)(b), on August
13, 2019 (the "Mandatory Redemption Date"), to the extent the Corporation shall
have funds legally available for such payment, the Corporation shall redeem all
outstanding shares of 5% Preferred Stock, at a redemption price of $1,000.00 per
share, payable at the option of the Corporation in cash, shares of Common Stock
or a combination thereof, together with accrued and unpaid dividends thereon to,
but excluding, the Mandatory Redemption Date, without interest. For purposes of
determining the number of shares of the Common Stock to be issued pursuant to
this paragraph (6)(c), the price per share of Common Stock shall be the 25-Day
Average Market Price.

               (d) If the Corporation is unable or shall fail to discharge its
obligation to redeem all outstanding shares of 5% Preferred Stock pursuant to
paragraphs 6(b) or 6(c) (each, a "Mandatory Redemption Obligation"), the
Mandatory Redemption Obligation shall be discharged as soon as the Corporation
is able to discharge such Mandatory Redemption Obligation. If and so long as any
Mandatory Redemption Obligation with respect to the 5% Preferred Stock shall not
be fully discharged, the Corporation shall not (i) directly or indirectly,
redeem, purchase, or otherwise acquire any Parity Security or discharge any
mandatory or optional redemption, sinking fund or other similar obligation in
respect of any Parity Securities (except in connection with a redemption,
sinking fund or other similar obligation to be satisfied pro rata with the 5%
Preferred Stock) or (ii) declare or make any Junior Securities Distribution
(other than dividends or distributions paid in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Junior Securities), or,
directly or indirectly, discharge any mandatory or optional redemption, sinking
fund or other similar obligation in respect of the Junior Securities.

                                      D-11

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               (e) Upon any redemption of 5% Preferred Stock, the Corporation
shall pay the redemption price and any accrued and unpaid dividends in arrears
to, but excluding, the applicable redemption date.

               (f) For purposes of paragraph (6)(a) only, unless full cumulative
dividends (whether or not declared) on all outstanding shares of 5% Preferred
Stock and any Parity Securities shall have been paid or contemporaneously are
declared and paid or set apart for payment for all Dividend Periods terminating
on or prior to the applicable redemption date and notice has been given in
accordance with paragraph (7), none of the shares of 5% Preferred Stock shall be
redeemed, and no sum shall be set aside for such redemption, unless shares of 5%
Preferred Stock are redeemed pro rata and notice has previously been given in
accordance with paragraph (7).

               (7) Procedure for Redemption. (a) If the Corporation shall redeem
shares of 5% Preferred Stock pursuant to paragraph 6(a), notice of such
redemption shall be given by certified mail, return receipt requested, postage
prepaid, mailed not less than 30 days nor 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
and confirmed by facsimile transmission to each holder of record if the
Corporation has been furnished with such facsimile address by the holder(s);
provided, however, that neither the failure to give such notice nor confirmation
nor any defect therein or in the mailing thereof, to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice that was mailed in
the manner herein provided shall be conclusively presumed to have been duly
given on the date mailed whether or not the holder receives the notice. Each
such notice shall state: (i) the redemption date; (ii) the number of shares of
5% Preferred Stock to be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of shares to be redeemed from such holder;
(iii) the amount payable, whether such amount shall be paid in Common Stock or
in cash and if the payment is in Common Stock an explanation of the
determination of the amount to be paid; (iv) the place or places where
certificates for such shares are to be surrendered or the notice under paragraph
(10)(d) should be sent for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date, except as otherwise provided herein.

               (b) If notice has been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
for the payment of the redemption price of the shares called for redemption and
dividends accrued and unpaid thereon, if any), (i) except as otherwise provided
herein, dividends on the shares

                                      D-12

<PAGE>   116

of 5% Preferred Stock so called for redemption shall cease to accrue, (ii) said
shares shall no longer be deemed to be outstanding, and (iii) all rights of the
holders thereof as holders of the 5% Preferred Stock shall cease (except the
right to receive from the Corporation the redemption price without interest
thereon, upon surrender and endorsement (or a constructive surrender under
paragraph (10)(d)) of their certificates if so required, and to receive any
dividends payable thereon).

               (c) Upon surrender (including a constructive surrender under
paragraph (10)(d)) in accordance with notice given pursuant to this paragraph
(7) of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid, plus any dividends payable
thereon. If fewer than all the outstanding shares of 5% Preferred Stock are to
be redeemed, the number of shares to be redeemed shall be determined by the
Board of Directors and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded to the nearest whole share). In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued, subject to a holder's election under paragraph
(10)(d), representing the surrendered shares without cost to the holder
thereof.

               (8) Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock shall
have the right, at any time and from time to time, at such holder's option, to
convert any or all outstanding shares of 5% Preferred Stock held by such holder,
but not fractions of shares, into fully paid and non-assessable shares of Common
Stock by surrendering such shares to be converted, such surrender to be made in
the manner provided in paragraph (8)(b) hereof. The number of shares of Common
Stock deliverable upon conversion of each share of 5% Preferred Stock shall be
equal to 7.947017, as adjusted as provided herein (the "Conversion Rate"). The
Conversion Rate is subject to adjustment from time to time pursuant to paragraph
(8)(d) hereof. The right to convert shares called for redemption pursuant to
paragraph 6(a) shall terminate at the close of business on the date immediately
preceding the date fixed for such redemption unless the Corporation shall
default in making payment of the amount payable upon such redemption, in which
case such right of conversion shall be reinstated. Upon conversion, any accrued
and unpaid dividends on the 5% Preferred Stock at the date of conversion shall
be paid to the holder thereof in accordance with the provisions of paragraph
(4).

               (b) (i) In order to exercise the conversion privilege, the holder
of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (10)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corpora-

                                      D-13
<PAGE>   117
tion, or to any transfer agent of the Corporation previously designated by the
Corporation to the holders of the 5% Preferred Stock for such purposes, with a
written notice of election to convert completed and signed, specifying the
number of shares to be converted. Such notice shall state that the holder has
satisfied any legal or regulatory requirement for conversion, including
compliance with the Hart-Scott-Rodino Antitrust Improvements Act of 1976;
provided, however, that the Corporation shall use its best efforts in
cooperating with such holder to obtain such legal or regulatory approvals to the
extent its cooperation is necessary. Such notice shall also state the name or
names (with address and social security or other taxpayer identification number,
if applicable) in which the certificate or certificates for Common Stock are to
be issued. Unless the shares issuable on conversion are to be issued in the same
name as the name in which such share of 5% Preferred Stock is registered, each
share surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation, duly executed by the holder
or the holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates representing
shares of 5% Preferred Stock surrendered for conversion shall be canceled by the
Corporation or the transfer agent.

               (ii) Subject to the last sentence of paragraph (8)(a), holders of
shares of 5% Preferred Stock at the close of business on a dividend payment
record date shall not be entitled to receive the dividend payable on such shares
on the corresponding Dividend Payment Date if such holder shall have surrendered
(or made a constructive surrender under paragraph (10)(d)) for conversion such
shares at any time following the preceding Dividend Payment Date and prior to
such Dividend Payment Date.

               (iii) Subject to a holder's election under paragraph (10)(d), as
promptly as practicable after the surrender (including a constructive surrender
under paragraph (10)(d)) by a holder of the certificates for shares of 5%
Preferred Stock as aforesaid, the Corporation shall issue and shall deliver to
such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (8), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (8)(c). Upon conversion of
only a portion of the shares of 5% Preferred Stock represented by any
certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (10)(d), upon the surrender
(including a constructive surrender under paragraph (10)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares

                                      D-14

<PAGE>   118

shall no longer be deemed to be outstanding and all rights of a holder with
respect to such shares so surrendered shall immediately terminate except the
right to receive the Common Stock and other amounts payable pursuant to this
paragraph (8).

               (iv) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered pursuant to an election under paragraph (10)(d)) and such notice
received by the Corporation as aforesaid, and the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby at such time
on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock
surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered and such notice received by the Corporation.

               (c) (i) No fractional shares or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion (or deemed surrendered under paragraph (10)(d)) at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of 5% Preferred Stock surrendered (or deemed surrendered under paragraph
(10)(d)) for conversion by such holder.

               (ii) Each conversion shall be deemed to have been effected immedi
ately prior to the close of business on the date on which the certificates for
shares of 5% Preferred Stock shall have been surrendered (or deemed surrendered
under paragraph (10)(d)) and such notice received by the Corporation as
aforesaid, and the Person or Persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of the shares of
Common Stock represented thereby at such time on such date and such conversion
shall be into a number of shares of Common

                                      D-15

<PAGE>   119

Stock equal to the product of the number of shares of 5% Preferred Stock
surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered (or deemed surrendered under paragraph (10)(d)) and such notice
received by the Corporation.

               (d) The Conversion Rate shall be adjusted from time to time as
follows:

               (i) If the Corporation shall after the Issue Date (A) declare a
dividend or make a distribution on its Common Stock in shares of its Common
Stock, (B) subdivide its outstanding Common Stock into a greater number of
shares, (C) combine its outstanding Common Stock into a smaller number of
shares, or (D) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification. An
adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (8)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case of a
subdivision, combination or reclassification. Adjustments in accordance with
this paragraph (8)(d)(i) shall be made whenever any event listed above shall
occur.

               (ii) If the Corporation shall after the Issue Date fix a record
date for the issuance of rights or warrants (in each case, other than any rights
issued pursuant to a shareholder rights plan) to all holders of Common Stock
entitling them (for a period expiring within 45 days after such record date) to
subscribe for or purchase Common Stock (or securities convertible into Common
Stock) at a price per share (or, in the case of a right or warrant to purchase
securities convertible into Common Stock, having an effective exercise price per
share of Common Stock, computed on the basis of the maximum number of shares of
Common Stock issuable upon conversion of such convertible securities, plus the
amount of additional consideration payable, if any, to

                                      D-16

<PAGE>   120

receive one share of Common Stock upon conversion of such securities) less than
the 25-Day Average Market Price on the date on which such issuance was declared
or otherwise announced by the Corporation (the "Determination Date"), then the
Conversion Rate in effect at the opening of business on the Business Day next
following such record date shall be adjusted so that the holder of each share of
5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to such record date by (II) a
fraction, the numerator of which shall be the sum of (A) the number of shares of
Common Stock outstanding on the close of business on the Determination Date and
(B) the number of additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants (or in the case of a right or
warrant to purchase securities convertible into Common Stock, the aggregate
number of additional shares of Common Stock into which the convertible
securities so offered are initially convertible), and the denominator of which
shall be the sum of (A) the number of shares of Common Stock outstanding on the
close of business on the Determination Date and (B) the number of shares that
the aggregate proceeds to the Corporation from the exercise of such rights or
warrants for Common Stock would purchase at such 25-Day Average Market Price on
such date (or, in the case of a right of warrant to purchase securities
convertible into Common Stock, the number of shares of Common Stock obtained by
dividing the aggregate exercise price of such rights or warrants for the maximum
number of shares of Common Stock issuable upon conversion of such convertible
securities, plus the aggregate amount of additional consideration payable, if
any, to convert such securities into Common Stock, by such 25-Day Average Market
Price). Such adjustment shall become effective immediately after the opening of
business on the Business Day next following such record date (except as provided
in paragraph (8)(h)). Such adjustment shall be made successively whenever such a
record date is fixed. In the event that after fixing a record date such rights
or warrants are not so issued, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect if such record date had not been
fixed. In determining whether any rights or warrants entitle the holders of
Common Stock to subscribe for or purchase shares of Common Stock at less than
such 25-Day Average Market Price, there shall be taken into account any
consideration received by the Corporation upon issuance and upon exercise of
such rights or warrants, the value of such consideration, if other than cash, to
be determined by the Board of Directors in good faith. In case any rights or
warrants referred to in this subparagraph (ii) shall expire unexercised after
the same have been distributed or issued by the Corporation (or, in the case of
rights or warrants to purchase securities convertible into Common Stock once
exercised, the conversion right of such securities shall expire), the Conversion
Rate shall be readjusted at the time of such expiration to the Conversion Rate
that would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.

                                      D-17

<PAGE>   121

               (iii) If the Corporation shall fix a record date for the making
of a distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (8)(d)(i)) or rights or warrants (in each case, other than
any rights issued pursuant to a shareholder rights plan) to subscribe for or
purchase any of its securities (excluding those rights and warrants issued to
all holders of Common Stock entitling them (for a period expiring within 45 days
after such record date) to subscribe for or purchase Common Stock or securities
convertible into shares of Common Stock, which rights and warrants are referred
to in and treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) called the "Securities"), then in each
such case the Conversion Rate shall be adjusted so that the holder of each share
of 5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to the close of business on such
record date by (II) a fraction, the numerator of which shall be the 25-Day
Average Market Price per share of the Common Stock on such record date, and the
denominator of which shall be the 25-Day Average Market Price per share of the
Common Stock on such record date less the then-fair market value (as determined
by the Board of Directors in good faith, whose determinations shall be
conclusive) of the portion of the assets, shares of its capital stock or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that after
fixing a record date such distribution is not so made, the Conversion Rate shall
be readjusted to the Conversion Rate which would then be in effect if such
record date had not been fixed. Such adjustment shall become effective
immediately at the opening of business on the Business Day next following
(except as provided in paragraph (8)(h)) the record date for the determination
of shareholders entitled to receive such distribution. For the purposes of this
subparagraph (iii), the distribution of a Security, which is distributed not
only to the holders of the Common Stock on the date fixed for the determination
of shareholders entitled to such distribution of such Security, but also is
distributed with each share of Common Stock delivered to a Person converting a
share of 5% Preferred Stock after such determination date, shall not require an
adjustment of the Conversion Rate pursuant to this subparagraph (iii);
provided, however, that on the date, if any, on which a Person converting a
share of 5% Preferred Stock would no longer be entitled to receive such Security
with a share of Common Stock (other than as a result of the termination of all
such Securities), a distribution of such Securities shall be deemed to have
occurred and the Conversion Rate shall be adjusted as provided in this
subparagraph (iii) (and such day shall be deemed to be "the date fixed for the
determination of shareholders entitled to receive

                                      D-18

<PAGE>   122

such distribution" and "the record date" within the meaning of the three
preceding sentences). If any rights or warrants referred to in this subparagraph
(iii) shall expire unexercised after the same shall have been distributed or
issued by the Corporation, the Conversion Rate shall be readjusted at the time
of such expiration to the Conversion Rate that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.

               (iv) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
8(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date for the
cash dividend or distribution by a fraction the numerator of which shall be the
Current Market Price of a share of the Common Stock on the Record Date and the
denominator shall be such Current Market Price less the per share amount of cash
so distributed during the 12-month period applicable to one share of Common
Stock, such adjustment to be effective immediately prior to the opening of
business on the Business Day following the Record Date; provided, however, that
in the event the denominator of the foregoing fraction is zero or negative, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
holder of 5% Preferred Stock shall have the right to receive upon conversion, in
addition to the shares of Common Stock to which the holder is entitled, the
amount of cash such holder would have received had such holder converted each
share of 5% Preferred Stock at the beginning of the 12-month period. In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect if such dividend or distribution had not been declared. Notwithstanding
the foregoing, if any adjustment is required to be made as set forth in this
paragraph (8)(d)(iv), the calculation of any such adjustment shall include the
amount of the quarterly cash dividends paid during the 12-month reference
period only to the extent such dividends exceed the regular quarterly cash
dividends paid during the 12 months preceding the 12-month reference period. For
purposes of this paragraph (8)(d)(iv), "Record Date" shall mean, with respect to
any dividend or distribution in which the holders of Common Stock have the right
to receive cash, the date fixed for determination of shareholders entitled to
receive such cash.

                                      D-19

<PAGE>   123

               In the event that at any time cash distributions to holders of
Common Stock are not paid equally on all series of Common Stock, the provisions
of this paragraph 8(d)(iv) will apply to any cash dividend or cash distribution
on any series of Common Stock otherwise meeting the requirements of this
paragraph, and shall be deemed amended to the extent necessary so that any
adjustment required will be made on the basis of the cash dividend or cash
distribution made on any such series.

               (v) In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Corporation or any subsidiary
of the Corporation for all or any portion of the outstanding shares of Common
Stock to the extent that the cash and fair market value (as determined in good
faith by the Board of Directors of the Corporation, whose determination shall be
conclusive and shall be described in a resolution of such Board) of any other
consideration included in such payment per share of Common Stock at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as amended) exceed by more than 5.0%, with any smaller
excess being disregarded in computing the adjustment to the Conversion Rate
provided in this paragraph (8)(d)(v), the first reported sale price per share of
the Common Stock on the Trading Day next succeeding the Expiration Time, then
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to
the Expiration Time by a fraction the numerator of which shall be the sum of (x)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchase Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchase Shares) on the Expiration Time and the first reported sale price of
the Common Stock on the Trading Day next succeeding the Expiration Time, and the
denominator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time multiplied
by the first reported sale price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such adjustment to become effective immediately
prior to the opening of business on the day following the Expiration Time.

               (vi) No adjustment in the Conversion Rate shall be required
unless such adjustment would require a cumulative increase or decrease of at
least 1% in the Conversion Rate; provided, however, that any adjustments that by
reason of this subparagraph (vi) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment until made, and
provided further that any adjustment shall be required and made in accordance
with the provisions of this

                                      D-20

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paragraph (8) (other than this subparagraph (vi)) not later than such time as
may be required in order to preserve the tax-free nature of a distribution for
United States income tax purposes to the holders of shares of 5% Preferred Stock
or Common Stock. Notwithstanding any other provisions of this paragraph (8), the
Corporation shall not be required to make any adjustment of the Conversion Rate
for the issuance of any shares of Common Stock pursuant to any plan providing
for the reinvestment of dividends or interest payable on securities of the
Corporation and the investment of additional optional amounts in shares of
Common Stock under such plan. All calculations under this paragraph (8) shall be
made to the nearest dollar or to the nearest 1/1,000 of a share, as the case may
be. Anything in this paragraph (8)(d) to the contrary notwithstanding, the
Corporation shall be entitled, to the extent permitted by law, to make such
adjustments in the Conversion Rate, in addition to those required by this
paragraph (8)(d), as it in its discretion shall determine to be advisable in
order that any stock dividends subdivision of shares, reclassification or
combination of shares, distribution or rights or warrants to purchase stock or
securities, or a distribution of other assets (other than cash dividends)
hereafter made by the Corporation to its shareholders shall not be taxable.

               (vii) In the event that, at any time as a result of shares of any
other class of capital stock becoming issuable in exchange or substitution for
or in lieu of shares of Common Stock or as a result of an adjustment made
pursuant to the provisions of this paragraph (8)(d), the holder of 5% Preferred
Stock upon subsequent conversion shall become entitled to receive any shares of
capital stock of the Corporation other than Common Stock, the number of such
other shares so receivable upon conversion of any shares of 5% Preferred Stock
shall thereafter be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained herein.

               (e) (i) If the Corporation shall be a party to any transaction
(including without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (8)(d)(i) applies)
(each of the foregoing being referred to herein as a "Transaction"), in each
case as a result of which shares of Common Stock shall be converted into the
right to receive stock, securities or other property (including cash or any
combination thereof), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that number
of shares or fraction thereof of Common Stock into which one share of 5%
Preferred Stock was convertible immediately prior to such Transaction, assuming
such holder of Common Stock (i) is not a Person with which the

                                      D-21

<PAGE>   125

Corporation consolidated or into which the Corporation merged or which merged
into the Corporation or to which such sale or transfer was made, as the case may
be ("Constituent Person"), or an affiliate of a Constituent Person and (ii)
failed to exercise his rights of election, if any, as to the kind or amount of
stock securities and other property (including cash) receivable upon such
Transaction (provided that if the kind or amount of stock, securities and other
property (including cash) receivable upon such Transaction is not the same for
each share of Common Stock of the Corporation held immedi ately prior to such
Transaction by other than a Constituent Person or an affiliate thereof and in
respect of which such rights of election shall not have been exercised ("non-
electing share"), then for the purpose of this paragraph (8)(e) the kind and
amount of stock, securities and other property (including cash) receivable upon
such Transaction by each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares). The
provisions of this paragraph (8)(e) shall similarly apply to successive
Transactions.

               (ii) Notwithstanding anything herein to the contrary , if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation, by notice to and consultation with the
holders of the 5% Preferred Stock, may cause the exchange of this 5% Preferred
Stock for preferred stock of Holdco having the same terms and conditions as set
forth herein; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 5% Preferred Stock
(including for these purposes any resultant change in the tax treatment for the
holders of such stock).

               (f) If:

               (i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock; or

               (ii) the Corporation shall authorize the granting to the holders
of the Common Stock of rights or warrants to subscribe for or purchase any
shares of any class or any other rights or warrants; or

               (iii) there shall be any subdivision, combination or
reclassification of the Common Stock or any consolidation or merger to which the
Corporation is a party and for which approval of any shareholders of the
Corporation is required, or the sale or transfer of all or substantially all of
the assets of the Corporation as an entirety; or

                                      D-22

<PAGE>   126

               (iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applicable date hereinafter specified, a notice stating (A)
the date on which a record is to be taken for the purpose of such dividend (or
such other distribution) or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or warrants are to be determined or (B)
the date on which such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up or
other action is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up.
Failure to give or receive such notice or any defect therein shall not affect
the legality or validity of any distribution, right, warrant subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, winding up or other action, or the vote upon any of
the foregoing.

               (g) Whenever the Conversion Rate is adjusted as herein provided,
the Corporation shall prepare an officer's certificate with respect to such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the effective date of such adjustment and shall mail a copy of such officer's
certificate to the holder of each share of 5% Preferred Stock at such holder's
last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (8)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be conclusive evidence of the correctness of such adjustment.

               (h) In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock

                                      D-23

<PAGE>   127

issuable upon such conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash in lieu of any fraction pursuant to
paragraph (8)(c).

               (i) For purposes of this paragraph (8), the number of shares of
Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.

               (j) There shall be no adjustment of the Conversion Rate in case
of the issuance of any stock of the Corporation in a reorganization, acquisition
or other similar transaction except as specifically set forth in this paragraph
(8). If any single action would require adjustment of the Conversion Rate
pursuant to more than one subparagraph of this paragraph (8), only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value.

               (k) If the Corporation shall take any action affecting the Common
Stock, other than action described in this paragraph (8), that in the opinion of
the Board of Directors materially adversely affects the conversion rights of the
holders of the shares of 5% Preferred Stock, the Conversion Rate may be
adjusted, to the extent permitted by law, in such manner, if any, and at such
time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (8)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.

               (l) (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of 5% Preferred Stock
not theretofore converted. For purposes of this paragraph (8)(l) the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.

               (ii) The Corporation covenants that any shares of Common Stock
issued upon conversion of the 5% Preferred Stock shall be duly authorized,
validly issued, fully paid and non-assessable. Before taking any action that
would cause an adjustment increasing the Conversion Rate such that the quotient
of $1,000.00 and the Conversion Rate (which quotient initially shall be
$125.8333) would be reduced below the then-par value of the shares of Common
Stock deliverable upon conversion of the

                                      D-24

<PAGE>   128

5% Preferred Stock, the Corporation will take any corporate action that, in the
opinion of its counsel, may be necessary in order that the Corporation may
validly and legally issue fully paid and non-assessable shares of Common Stock
based upon such adjusted Conversion Rate.

               (iii) Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 5% Preferred
Stock, the Corporation shall comply with all applicable federal and state laws
and regulations which required action to be taken by the Corporation.

               (m) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the 5%
Preferred Stock pursuant hereto; provided, however, that the Corporation shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or other securities
or property in a name other than that of the holder of the 5% Preferred Stock to
be converted and no such issue or delivery shall be made unless and until the
Person requesting such issue or delivery has paid to the Corporation the amount
of any such tax or established, to the satisfaction of the Corporation, that
such tax has been paid.

               (n) No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock are entitled to participate in such
transaction pursuant to paragraph 4(b).

               (9) Voting Rights. (a) The holders of record or shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (9) or as otherwise provided by law.

               (b) If and whenever either (i) six quarterly dividends (whether
or not consecutive) payable on the 5% Preferred Stock have not been paid in
full, (ii) the Corporation shall have failed to discharge its Mandatory
Redemption Obligation, or (iii) there occurs a Bankruptcy Event (any such event
described in the preceding subparagraphs (i) through (iii) being hereinafter
referred to as a "Trigger Event"), a vote of the holders of shares of 5%
Preferred Stock, voting as a single class, will be required on all matters
brought to shareholders of the Corporation. Whenever all arrears in dividends on
the 5% Preferred Stock then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, the Corporation shall have fulfilled its
Mandatory Redemption Obligation, and all Bankruptcy Events shall have been
cured (the "Trigger Event

                                      D-25

<PAGE>   129

Cure"), then the right of the holders of the 5% Preferred Stock to vote as
described in this paragraph 9(b) shall cease (but subject always to the same
provisions for the vesting of such voting rights if any Trigger Event occurs).

               (c) Upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, together with the holders of shares
of every other series of preferred stock (including, without limitation,
Additional Preferred) upon which like rights to vote for the election of two
additional directors have been conferred and are exercisable (resulting from
either the failure to pay dividends or the failure to redeem) (any such other
series is referred to as the "Preferred Shares"), voting as a single class
regardless of series, shall be entitled to elect the two additional directors to
serve on the Board of Directors at any annual meeting of stockholders or special
meeting held in place thereof, or at a special meeting of the holders of 5%
Preferred Stock and the Preferred Shares, called as hereinafter provided.
Whenever all arrears in dividends on the Preferred Shares then outstanding shall
have been paid and dividends thereon for the current quarterly dividend period
shall have been paid or declared and set apart for payment, the Corporation
shall have fulfilled any redemption obligation in respect of the Preferred
Shares, and the Trigger Event Cure has occurred, then the right of the holders
of the 5% Preferred Stock and the Preferred Shares to elect such additional two
directors shall cease (but subject always to the same provisions for the vesting
of such voting rights if any Trigger Event occurs), and the terms of office of
all persons elected as directors by the holders of 5% Preferred Stock and the
Preferred Shares shall forthwith terminate and the number of members of the
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in holders of shares of 5% Preferred Stock and
the Preferred Shares, the Secretary of the Corporation may, and upon the
written request of any holder of 5% Preferred Stock (addressed to the secretary
at the principal office of the Corporation) shall, call a special meeting of the
holders of the 5% Preferred Stock and of the Preferred Shares for the election
of the two directors to be elected by them as herein provided, such call to be
made by notice similar to that provided in the Bylaws of the Corporation for a
special meeting of the stockholders or as required by law. If any such special
meeting required to be called as above provided shall not be called by the
Secretary of the Corporation within 20 days after receipt of any such request,
then any holder of shares of 5% Preferred Stock may call such meeting, upon the
notice above provided, and for that purpose shall have access to the stock books
of the Corporation. The directors elected at any such special meeting shall hold
office until the next annual meeting of the stockholders or special meeting held
in lieu thereof if such office shall not have previously terminated as above
provided. If any vacancy shall occur among the directors elected by the holders
of the 5% Preferred Stock and the Preferred Shares, a successor shall be elected
by the Board of Directors, upon the nomination of the then-

                                      D-26
<PAGE>   130

remaining director elected by the holders of the 5% Preferred Stock and the
Preferred Shares or the successor of such remaining director, to serve until the
next annual meeting of the stockholders or special meeting held in place thereof
if such office shall not have previously terminated as provided above.

               (d) Without the written consent of the holders of at least 66
2/3% in liquidation preference of the outstanding shares of 5% Preferred Stock
or the vote of holders of at least 66 2/3% in liquidation preference of the
outstanding shares of 5% Preferred Stock at a meeting of the holders of 5%
Preferred Stock called for such purpose, the Corporation will not amend, alter
or repeal any provision of the Certificate of Incorporation (by merger or
otherwise) so as to adversely affect the preferences, rights or powers of the 5%
Preferred Stock; provided that any such amendment that changes the dividend
payable on, the Conversion Rate with respect to, or the liquidation preference
of the 5% Preferred Stock shall require the affirmative vote at a meeting of
holders of 5% Preferred Stock called for such purpose or written consent of the
holder of each share of 5% Preferred Stock.

               (e) Without the written consent of the holders of at least 66
2/3% in liquidation preference of the outstanding shares of 5% Preferred Stock
or the vote of holders of at least 66 2/3% in liquidation preference of the
outstanding shares of 5% Preferred Stock at a meeting of such holders called for
such purpose, the Corporation will not issue any additional 5% Preferred Stock
or create, authorize or issue any Parity Securities or Senior Securities or
increase the authorized amount of any such other class or series; provided that
this paragraph 9(e) shall not limit the right of the Corporation to (i) issue
Additional Preferred as dividends pursuant to paragraph 4 or (ii) to issue
Parity Securities or Senior Securities in order to refinance, redeem or refund
the 13% Preferred or the 5 1/4% Preferred, provided that the maximum accrual
value (i.e., the sum of stated value and maximum amount payable in kind over the
term from issuance to first date of mandatory redemption or redemption at the
option of the holder) of such Parity Securities may not exceed the maximum
accrual value of the 13% Preferred or the 5 1/4% Preferred, respectively.

               (f) In exercising the voting rights set forth in this paragraph
(9), each share of 5% Preferred Stock shall have one vote per share, except that
when any other series of preferred stock shall have the right to vote with the
5% Preferred Stock as a single class on any matter, then the 5% Preferred Stock
and other series shall have with respect to such matters one vote per $1,000 of
stated liquidation preference. Except as otherwise required by applicable law or
as set forth herein, the shares of 5% Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers and
the consent of the holders thereof shall not be required for the taking of any
corporate action.

                                      D-27

<PAGE>   131

               (g) Nothing in this paragraph (9) shall be in derogation of any
rights that a holder of shares of 5% Preferred Stock may have in his capacity as
a holder of shares of Common Stock.

               (10) General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are
for convenience of reference only and shall not define, limit or affect any of
the provisions hereof.

               (b) If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) hereof or shall have failed to
discharge any obligation to redeem shares of 5% Preferred Stock pursuant to
paragraph (6) hereof, the holders of shares of 5% Preferred Stock shall be
entitled to receive, in addition to all other amounts required to be paid
hereunder, when, as and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, cash dividends on the aggregate
dividends which the Corporation shall have failed to declare or pay or the
redemption price, together with accrued and unpaid dividends thereon, as the
case may be, at a rate of 2% per quarter, compounded quarterly, for the period
during which the failure to pay dividends or failure to discharge an obligation
to redeem shares of 5% Preferred Stock shall continue.

               (c) The shares of 5% Preferred Stock shall bear the following
legend:

               THE SHARES OF PREFERRED STOCK, PAR VALUE $.01, OF THE CORPORATION
               (THE "PREFERRED STOCK") (AND THE SHARES OF COMMON STOCK, PAR
               VALUE $.01, OF THE CORPORATION (THE "COMMON STOCK") INTO WHICH
               THE PREFERRED STOCK MAY BE CONVERTED) REPRESENTED BY THIS
               CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
               ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED
               (THE "ACT") AND ANY APPLICABLE STATE SECURITIES LAWS OR AN
               APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS. THE TRANSFER
               OF THE PREFERRED STOCK (OR COMMON STOCK, IF THE PREFERRED STOCK
               HAS BEEN CONVERTED) EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO
               THE RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE PURCHASE
               AGREEMENT, DATED JULY 15, 1999, AS MAY BE AMENDED, AMONG THE
               CORPORATION AND FRANCE TELECOM, A COPY OF WHICH IS ON FILE AT THE
               EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE FURNISHED
               WITHOUT CHARGE TO THE HOLDER OF

                                      D-28

<PAGE>   132

               SUCH PREFERRED STOCK UPON WRITTEN REQUEST TO THE
               CORPORATION.

               THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY
               BE CONVERTED INTO COMMON STOCK, PAR VALUE $.01, OF THE
               CORPORATION (THE "COMMON STOCK") OR REDEEMED IN EXCHANGE FOR
               COMMON STOCK WITHOUT THE SURRENDER AND EXCHANGE OF THIS
               CERTIFICATE FOR CERTIFICATES REPRESENTING SUCH COMMON STOCK. A
               NOTICE OF SUCH CONVERSION EVENT, IF ANY, IS ON FILE AT THE
               EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE FURNISHED
               WITHOUT CHARGE TO THE HOLDER OF THIS CERTIFICATE UPON WRITTEN
               REQUEST TO THE CORPORATION.

               The shares of Common Stock issuable upon conversion of the 5%
Preferred Stock shall bear the following legend:

               THE SHARES OF COMMON STOCK, PAR VALUE $.01, OF THE CORPORATION
               (THE "COMMON STOCK") REPRESENTED BY THIS CERTIFICATE MAY NOT BE
               OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER
               THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND ANY
               APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM
               REGISTRATION REQUIREMENTS. THE TRANSFER OF THE COMMON STOCK
               EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON
               TRANSFER PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED JULY 15,
               1999, AS MAY BE AMENDED, AMONG THE CORPORATION AND FRANCE
               TELECOM, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF
               THE CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE
               HOLDER OF SUCH COMMON STOCK UPON WRITTEN REQUEST TO THE
               CORPORATION.


               (d) (i) Whenever in connection with any conversion or redemption
of the 5% Preferred Stock in exchange for Common Stock the holder is required to
surrender certificates representing such shares of 5% Preferred Stock, such
holder may, by written notice to the Corporation and its transfer agent, elect
to retain such certificates. In such case, the certificates so retained by the
holder thereof shall be deemed to

                                      D-29

<PAGE>   133

represent, at and from the date of such conversion or redemption, the number of
shares of Common Stock issuable upon such conversion or redemption (subject to
paragraph (8)(c), if applicable), and shall be so reflected upon the books of
the Corporation and its transfer agent.

               (ii) (A) A holder who has previously elected to retain
certificates representing the 5% Preferred Stock in accordance with paragraph
(10)(d)(i) upon conversion or redemption may subsequently elect to receive
certificates representing the shares of Common Stock issued upon such conversion
or redemption. To receive certificates representing such shares of Common Stock,
the holder of such certificate shall surrender it, duly endorsed or assigned to
the Corporation or in blank, at the office of the Corporation, or to any
transfer agent of the Corporation previously designated by the Corporation for
such purposes, with a written notice of that election.

               (B) Unless the certificates to be issued shall be registered in
the same name as the name in which such surrendered certificates are registered,
each certificate so surrendered shall be accompanied by instruments of transfer,
in form satisfactory to the Corporation, duly executed by the holder or the
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates so surrendered
shall be canceled by the Corporation or the transfer agent.

               (C) As promptly as practicable after the surrender by a holder of
such certificates, the Corporation shall issue and shall deliver to such holder,
or on the holder's written order, a certificate or certificates (which
certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock represented by the certificates so
surrendered.

               (11) Shareholder Rights Plan. The shares of 5% Preferred Stock
shall be entitled to the benefits of a number of rights issuable under the
Rights Agreement, dated as of October 13, 1993, as amended, between the Company
and Continental Stock Transfer & Trust Company or any successor plan of similar
purpose and effect ("Rights") equal to the number of shares of Common Stock then
issuable upon conversion of the 5% Preferred Stock at the prevailing Conversion
Rate. Any shares of Common Stock deliverable upon conversion of a share of 5%
Preferred Stock or upon payment of a dividend shall be accompanied by a Right.

                                      D-30

<PAGE>   134

                                                                       Exhibit E

                     5% CUMULATIVE PARTICIPATING CONVERTIBLE
                            PREFERRED STOCK, SERIES D

               (1) Number and Designation. 9,437.50 shares of the Preferred
Stock of the Corporation shall be designated as 5% Cumulative Participating
Convertible Preferred Stock, Series D (the "5% Preferred Stock") and no other
shares of Preferred Stock shall be designated as 5% Preferred Stock.

               (2)  Definitions.  For purposes of the 5% Preferred Stock, the
following terms shall have the meanings indicated:

               "Additional Preferred" shall have the meaning set forth in
        paragraph (4)(a) hereof.

               "Bankruptcy Event" shall mean any of the following: (I) a court
        having jurisdiction in the premises enters a decree or order for (A)
        relief in respect of any Major Entity in an involuntary case under any
        applicable bankruptcy, insolvency or other similar law now or
        hereinafter in effect, (B) appointment of a receiver, liquidator,
        assignee, custodian, trustee, sequestrator or similar official of any
        Major Entity or for all or substantially all of the property and assets
        of any Major Entity or (C) the winding up or liquidation of the affairs
        of any Major Entity; or (II) any Major Entity (A) commences a voluntary
        case under any applicable bankruptcy, insolvency or other similar law
        now or hereinafter in effect, or consents to the entry of an order for
        relief in an involuntary case under any such law, (B) consents to the
        appointment of or taking possession by a receiver, liquidator, assignee,
        custodian, trustee, sequestrator or similar official of any Major
        Entity, or for all or substantially all of the property and assets of
        any Major Entity or (C) effects any general assignment for the benefit
        of creditors.

               "Board of Directors" shall mean the board of directors of the
        Corporation. Except as such term is used in paragraph (9), "Board of
        Directors" shall also mean the Executive Committee, if any, of such
        board of directors or any other committee duly authorized by such board
        of directors to perform any of its responsibilities with respect to the
        5% Preferred Stock.

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


                                       E-1

<PAGE>   135

               "Common Stock" shall mean the Corporation's Common Stock, par
        value $.01 per share.

               "Constituent Person" shall have the meaning set forth in
        paragraph (8)(e)(i) hereof.

               "Conversion Rate" shall have the meaning set forth in paragraph
        (8)(a) hereof.

               "Current Market Price" of publicly traded shares of Common Stock
        or any other class of capital stock or other security of the Corporation
        or any other issuer for any day shall mean the last reported sale price
        for such security on the principal exchange or quotation system on which
        such security is listed or traded. If the security is not admitted for
        trading on any national securities exchange or the Nasdaq National
        Market, "Current Market Price" shall mean the average of the last
        reported closing bid and asked prices reported by the Nasdaq as
        furnished by any member in good standing of the National Association of
        Securities Dealers, Inc., selected from time to time by the Corporation
        for that purpose or as quoted by the National Quotation Bureau
        Incorporated. In the event that no such quotation is available for such
        day, the Current Market Price shall be the average of the quotations for
        the last five Trading Days for which a quotation is available within the
        last 30 Trading Days prior to such day. In the event that five such
        quotations are not available within such 30-Trading Day period, the
        Board of Directors shall be entitled to determine the Current Market
        Price on the basis of such quotations as it reasonably considers
        appropriate.

               "Determination Date" shall have the meaning set forth in
        paragraph (8)(d)(ii) hereof.

               "Dividend Payment Date" shall mean September 30, December 31,
        March 31 and June 30 of each year, commencing on March 31, 2000;
        provided, however, that if any Dividend Payment Date falls on any day
        other than a Business Day, the dividend payment due on such Dividend
        Payment Date shall be paid on the Business Day immediately following
        such Dividend Payment Date.

               "Dividend Periods" shall mean quarterly dividend periods
        commencing on September 30, December 31, March 31 and June 30 of each
        year and ending on and including the day preceding the first day of the
        next succeeding Dividend Period.

               "Exchange Act" shall mean the Securities Exchange Act of 1934, as
        amended, and the rules and regulations thereunder.

                                       E-2

<PAGE>   136

               "Expiration Time" shall have the meaning set forth in paragraph
        (8)(d)(v) hereof.

               "5% Preferred Stock" shall have the meaning set forth in
        paragraph (1) hereof.

               "5 1/4% Preferred" shall have the meaning set forth in paragraph
        (3)(d) hereof.

               "5 1/4% Series A" shall have the meaning set forth in paragraph
        (3)(d) hereof.

               "Issue Date" shall mean the date on which shares of 5% Preferred
        Stock are first issued.

               "Junior Securities" shall have the meaning set forth in paragraph
        (3)(c) hereof.

               "Junior Securities Distribution" shall have the meaning set forth
        in paragraph (4)(f) hereof.

               "Liquidation Right" shall mean, for each share of 5% Preferred
        Stock, the greater of (i) an amount equal to $1,000 per share, plus an
        amount equal to all dividends (whether or not earned or declared)
        accrued and unpaid thereon to the date of final distribution to such
        holders, and (ii) the amount that would be received in liquidation
        following conversion of a share of 5% Preferred Stock into Common Stock.

               "Major Entity" shall mean any of the Corporation, NTL
        Communications Corp., Diamond Cable Communications Limited, Diamond
        Holdings Limited, NTL (Bermuda) Limited or any Significant Subsidiary.

               "Mandatory Redemption Date" shall have the meaning set forth in
        paragraph (6)(c) hereof.

               "Mandatory Redemption Obligation" shall have the meaning set
        forth in paragraph (6)(d) hereof.

               "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
        securities market regulated by the National Association of Securities
        Dealers, Inc.

               "Nasdaq National Market" shall have the meaning set forth in Rule
        4200(a)(23) of the rules of the National Association of Securities
        Dealers, Inc.

                                       E-3

<PAGE>   137

               "9.9% Series A Preferred" shall have the meaning set forth in
        paragraph (3)(d) hereof.

               "9.9% Series B Preferred" shall have the meaning set forth in
        paragraph (3)(d) hereof.

               "non-electing share" shall have the meaning set forth in
        paragraph (8)(e)(i) hereof.

               "NYSE" means the New York Stock Exchange.

               "outstanding", when used with reference to shares of stock, shall
        mean issued shares, excluding shares held by the Corporation or a
        subsidiary.

               "Parity Securities" shall have the meaning set forth in paragraph
        (3)(b) hereof.

               "Person" shall mean any individual, partnership, association,
        joint venture, corporation, business, trust, joint stock company,
        limited liability company, any unincorporated organization, any other
        entity, a "group" of such persons, as that term is defined in Rule
        13d-5(b) under the Exchange Act, or a government or political
        subdivision thereof.

               "Preferred Shares" has the meaning set forth in paragraph (9)(c).

               "Preferred Stock" shall have the meaning set forth in the first
        resolution above.

               "Purchase Shares" shall have the meaning set forth in paragraph
        (8)(d)(v) hereof.

               "Record Date" shall have the meaning set forth in paragraph
        (8)(d)(iv) hereof.

               "Relevant Compounding Factor" shall mean, with respect to each
        share of 5% Preferred Stock, upon initial issuance 1.00, and shall on
        each Dividend Payment Date be increased to equal the product of the
        Relevant Compounding Factor in effect immediately prior to such Dividend
        Payment Date and 1.0125.

               "Rights" shall have the meaning set forth in paragraph (11)
hereof.

               "Securities" shall have the meaning set forth in paragraph
        (8)(d)(iii) hereof.

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               "Senior Securities" shall have the meaning set forth in paragraph
        (3)(a) hereof.

               "set apart for payment" shall be deemed to include, without any
        action other than the following, the recording by the Corporation in its
        accounting ledgers of any accounting or bookkeeping entry which
        indicates, pursuant to a declaration of dividends or other distribution
        by the Board of Directors, the allocation of funds to be so paid on any
        series or class of capital stock of the Corporation; provided, however,
        that if any funds for any class or series of Junior Securities or any
        class or series of Parity Securities are placed in a separate account of
        the Corporation or delivered to a disbursing, paying or other similar
        agent, then "set apart for payment" with respect to the 5% Preferred
        Stock shall mean placing such funds in a separate account or delivering
        such funds to a disbursing, paying or other similar agent, as the case
        may be.

               "Significant Subsidiary" shall have the meaning given to such
        term in Regulation S-X under the Exchange Act.

               "13% Preferred" shall have the meaning set forth in paragraph
        (3)(d) hereof.

               "Trading Day" shall mean any day on which the securities in
        question are traded on the NYSE, or if such securities are not listed or
        admitted for trading on the NYSE, on the principal national securities
        exchange on which such securities are listed or admitted, or if not
        listed or admitted for trading on any national securities exchange, on
        the Nasdaq National Market, or if such securities are not quoted
        thereon, in the applicable securities market in which the securities are
        traded.

               "Transaction" shall have the meaning set forth in paragraph
        (8)(e)(i) hereof.

               "Trigger Event" shall have the meaning set forth in paragraph
        (9)(b) hereof.

               "Trigger Event Cure" shall have the meaning set forth in
        paragraph (9)(b) hereof.

               "25-Day Average Market Price" shall mean, for any security, the
        volume-weighted average of the Current Market Prices of that security
        for the twenty-five Trading Days immediately preceding the date of
        determination.


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               (3) Rank. Any class or series of stock of the Corporation shall
be deemed to rank:

               (a) prior to the 5% Preferred Stock, either as to the payment of
dividends or as to distribution of assets upon liquidation, dissolution or
winding up, or both, if the holders of such class or series shall be entitled by
the terms thereof to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, in preference or priority to the holders
of 5% Preferred Stock ("Senior Securities");

               (b) on a parity with the 5% Preferred Stock, either as to the
payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and

               (c) junior to the 5% Preferred Stock, either as to the payment of
dividends or as to the distribution of assets upon liquidation, dissolution or
winding up, or both, if such stock or series shall be Common Stock or if the
holders of the 5% Preferred Stock shall be entitled to receipt of dividends, and
of amounts distributable upon liquidation, dissolution or winding up, in
preference or priority to the holders of shares of such stock or series ("Junior
Securities").

               (d) Each of (i) the 13% Series B Senior Redeemable Exchangeable
Preferred Stock (the "13% Preferred") and (ii) the 5 1/4% Convertible Preferred
Stock, Series A, (the "5 1/4% Series A") and any dividends paid on the 5 1/4%
Series A in accordance with its terms, to the extent that such dividends are
paid in preferred stock having terms substantially identical to the 5 1/4%
Series A and any dividends paid on preferred stock issued as in-kind dividends
thereon, to the extent such dividends are paid in preferred stock having terms
substantially identical to the 5 1/4% Series A (the 5 1/4% Series A and all such
in-kind dividends being hereinafter referred to as the "5 1/4% Preferred") is a
Senior Security. Each of the 9.9% Non-Voting Mandatorily Redeemable Preferred
Stock, Series A ("9.9% Series A Preferred"), and 9.9% Non-Voting Mandatorily
Redeemable Preferred Stock, Series B ("9.9% Series B Preferred"), is a Junior
Security. The 5% Cumulative Participating Convertible Preferred Stock, Series A,
the 5% Cumulative Participating Convertible Preferred Stock, Series C, and one
or more classes of Additional Preferred (as defined below) shall be Parity
Securities; provided, however, that there shall be no issue of other Senior
Securities, Parity

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<PAGE>   140

Securities or rights or options exercisable for or convertible into any such
securities, except as approved by the holders of the 5% Preferred Stock pursuant
to paragraph 9(e).

               (e) The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.

               (4) Dividends. (a) Subject to paragraph (8)(b)(ii), the holders
of shares of 5% Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available for the
payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for such Dividend Payment Date) or additional
shares of Preferred Stock of a class to be designated by the Board of Directors
having terms substantially identical to the 5% Preferred Stock except as
follows: (A) the Conversion Rate (as set forth in Section 8(a)) on such
Preferred Stock initially shall be the quotient resulting from the division of
the Conversion Rate (as then in effect on the 5% Preferred Stock) by the
Relevant Compounding Factor and (B) the number of shares of such Preferred Stock
payable as a dividend on any Dividend Payment Date shall increase for each
Dividend Payment Date from the first Dividend Payment Date by the Relevant
Compounding Factor (such classes of Preferred Stock singularly and collectively,
the "Additional Preferred"). All dividends on the 5% Preferred Stock, in
whatever form, shall be payable in arrears quarterly on each Dividend Payment
Date and shall be cumulative from the Issue Date (except that dividends on
Additional Preferred shall accrue from the date such Additional Preferred is
issued or would have been issued in accordance with this Certificate of
Designation if such dividends had been declared), whether or not in any Dividend
Period or Dividend Periods there shall be funds of the Corporation legally
available for the payment of such dividends. Each such dividend shall be payable
to the holders of record of shares of the 5% Preferred Stock, as they appear on
the stock records of the Corporation at the close of business on the record date
for such dividend. Upon the declaration of any such dividend, the Board of
Directors shall fix as such record date on the fifth Business Day preceding the
relevant Dividend Payment Date and shall give notice on or prior to the record
date of the form of payment of such dividend. Accrued and unpaid dividends for
any past Dividend Payment Date may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record on such record
date, not more than 45 days nor less than five Business Days preceding the
payment date thereof, as may be fixed by the Board of Directors.

               (b) In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock shall be entitled to
receive an amount equal

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<PAGE>   141

to the amount (and in the form of consideration) that such holders would be
entitled to receive if, pursuant to paragraph (8), they had converted such 5%
Preferred Stock fully into Common Stock immediately before the record date for
the payment of any such dividends on Common Stock. Each such dividend shall be
payable to the holders of record of shares of the 5% Preferred Stock as they
appear on the stock records of the Corporation at the close of business on the
record date for such dividend on Common Stock, and the Corporation shall pay
each such dividend on the applicable payment date for such dividend on the
Common Stock.

               (c) For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each such Additional
Preferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).

               (d) The dividends payable for any period shorter than a full
Dividend Period on the 5% Preferred Stock shall accrue daily and be computed on
the basis of a 360-day year and the actual number of days in such period. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the 5% Preferred Stock that may be in
arrears except as otherwise provided herein.

               (e) So long as any shares of the 5% Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities 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 such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock for all
Dividend Periods terminating on or prior to the date of such redemption,
repurchase or other acquisition shall have been paid or set apart for payment,
(ii) sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in Common Stock or Additional Preferred or are
not paid in full in cash or a sum sufficient for such payment is not set apart,
as aforesaid, all dividends declared upon shares of the 5% Preferred Stock and
all dividends declared upon Parity Securities shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid on the
5% Preferred Stock and accumulated and unpaid on such Parity Securities.


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               (f) So long as any shares of the 5% Preferred Stock are
outstanding, no dividends (other than (i) any rights issued pursuant to a
shareholder rights plan as provided in paragraph (11) and (ii) dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Junior Securities) shall be declared or paid or set apart
for payment or other distribution declared or made upon Junior Securities, nor
shall any Junior Securities be redeemed, purchased or otherwise acquired (other
than a redemption, purchase, or other acquisition of shares of Common Stock made
for purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") 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, directly or
indirectly (except by conversion into or exchange for Junior Securities,
including pursuant to paragraph 4(c) of the 9.9% Series A Preferred and
paragraph 4(d) of the 9.9% Series B Preferred), unless in each case (A) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock and all
other Parity Securities shall have been paid or set apart for payment for all
past Dividend Periods and dividend periods for such other stock, (B) sufficient
funds shall have been paid or set apart for the payment of the dividend for the
current Dividend Period with respect to the 5% Preferred Stock and all other
Parity Securities, (C) the Corporation is not in default with respect to any
redemption of shares of 5% Preferred Stock by the Corporation pursuant to
paragraph (6) below, (D) the Corporation has fully performed its obligations
under paragraphs (4)(b) and (6) hereof.

               (5) Liquidation Preference. (a) In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
before any payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of Junior
Securities, the holders of the shares of 5% Preferred Stock shall be entitled to
receive the Liquidation Right. If, upon any liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of the shares of 5% Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any Parity Securities, then such assets, or the proceeds thereof,
shall be distributed among the holders of shares of 5% Preferred Stock and any
such other Parity Securities ratably in accordance with the respective amounts
that would be payable on such shares of 5% Preferred Stock and any such other
stock if all amounts payable thereon were paid in full. For the purposes of this
paragraph (5), (i) a consolidation or merger of the Corporation with one or more
corporations, or (ii) a sale or transfer of all or substantially all of the
Corporation's assets, shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation.

               (b) Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph

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<PAGE>   143

(5), any other series or class or classes of Junior Securities shall, subject to
the respective terms and provisions (if any) applying thereto, be entitled to
receive any and all assets remaining to be paid or distributed, and the holders
of the 5% Preferred Stock shall not be entitled to share therein.

               (6) Redemption. (a) On and after the first Business Day following
the earlier to occur of (i) August 13, 2006 or (ii) the date on which both (A)
the 25-Day Average Market Price of the Common Stock shall have exceeded $150.00
and (B) August 13, 2003, to the extent the Corporation shall have funds legally
available for such payment, the Corporation may redeem at its option shares of
5% Preferred Stock, from time to time in part, or in whole, payable at the
option of the Corporation in (A) cash, at a redemption price of $1,000.00 per
share, (B) in shares of Common Stock, at a redemption price of $1,000.00 per
share, or (C) in a combination of cash and Common Stock, at a redemption price
based on the respective combination of consideration, together in each case
with accrued and unpaid dividends thereon, whether or not declared, to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(a), the price per share of Common Stock shall be the 25-Day
Average Market Price.

               (b) On and after the first Business Day following August 13,
2009, each holder of shares of 5% Preferred Stock shall have the right to
require the Corporation, to the extent the Corporation shall have funds legally
available therefor, to redeem such holder's shares of 5% Preferred Stock, from
time to time in part, or in whole, at a redemption price of $1,000.00 per share,
payable at the option of the Corporation in cash, shares of Common Stock or a
combination thereof, together with accrued and unpaid dividends thereon to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of the Common Stock to be issued pursuant to
this paragraph (6)(b), the price per share of Common Stock shall equal the
25-Day Average Market Price. Any holder of shares of 5% Preferred Stock who
elects to exercise its rights pursuant to this paragraph (6)(b) shall deliver to
the Corporation a written notice of election not less than 20 days prior to the
date on which such holder demands redemption pursuant to this paragraph 6(b),
which notice shall set forth the name of the Holder, the number of shares of 5%
Preferred Stock to be redeemed and a statement that the election to exercise a
redemption right is being made thereby; and, subject to paragraph (10)(d), shall
deliver to the Corporation on or before the date of redemption certificates
evidencing the shares of 5% Preferred Stock to be redeemed, duly endorsed for
transfer to the Corporation.

               (c) If the Corporation shall not have redeemed all outstanding
shares of 5% Preferred Stock pursuant to paragraphs (6)(a) or (6)(b), on August
13, 2019 (the "Mandatory Redemption Date"), to the extent the Corporation shall
have funds legally available for such payment, the Corporation shall redeem all
outstanding shares of 5%

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Preferred Stock, at a redemption price of $1,000.00 per share, payable at the
option of the Corporation in cash, shares of Common Stock or a combination
thereof, together with accrued and unpaid dividends thereon to, but excluding,
the Mandatory Redemption Date, without interest. For purposes of determining
the number of shares of the Common Stock to be issued pursuant to this paragraph
(6)(c), the price per share of Common Stock shall be the 25-Day Average Market
Price.

               (d) If the Corporation is unable or shall fail to discharge its
obligation to redeem all outstanding shares of 5% Preferred Stock pursuant to
paragraphs 6(b) or 6(c) (each, a "Mandatory Redemption Obligation"), the
Mandatory Redemption Obligation shall be discharged as soon as the Corporation
is able to discharge such Mandatory Redemption Obligation. If and so long as any
Mandatory Redemption Obligation with respect to the 5% Preferred Stock shall not
be fully discharged, the Corporation shall not (i) directly or indirectly,
redeem, purchase, or otherwise acquire any Parity Security or discharge any
mandatory or optional redemption, sinking fund or other similar obligation in
respect of any Parity Securities (except in connection with a redemption,
sinking fund or other similar obligation to be satisfied pro rata with the 5%
Preferred Stock) or (ii) declare or make any Junior Securities Distribution
(other than dividends or distributions paid in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Junior Securities), or,
directly or indirectly, discharge any mandatory or optional redemption, sinking
fund or other similar obligation in respect of the Junior Securities.

               (e) Upon any redemption of 5% Preferred Stock, the Corporation
shall pay the redemption price and any accrued and unpaid dividends in arrears
to, but excluding, the applicable redemption date.

               (f) For purposes of paragraph (6)(a) only, unless full cumulative
dividends (whether or not declared) on all outstanding shares of 5% Preferred
Stock and any Parity Securities shall have been paid or contemporaneously are
declared and paid or set apart for payment for all Dividend Periods terminating
on or prior to the applicable redemption date and notice has been given in
accordance with paragraph (7), none of the shares of 5% Preferred Stock shall be
redeemed, and no sum shall be set aside for such redemption, unless shares of 5%
Preferred Stock are redeemed pro rata and notice has previously been given in
accordance with paragraph (7).

               (7) Procedure for Redemption. (a) If the Corporation shall redeem
shares of 5% Preferred Stock pursuant to paragraph 6(a), notice of such
redemption shall be given by certified mail, return receipt requested, postage
prepaid, mailed not less than 30 days nor 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
and confirmed by facsimile transmission to each holder of record if the
Corporation has been furnished with such facsimile address by the

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holder(s); provided, however, that neither the failure to give such notice nor
confirmation nor any defect therein or in the mailing thereof, to any
particular holder, shall affect the sufficiency of the notice or the validity of
the proceedings for redemption with respect to the other holders. Any notice
that was mailed in the manner herein provided shall be conclusively presumed to
have been duly given on the date mailed whether or not the holder receives the
notice. Each such notice shall state: (i) the redemption date; (ii) the number
of shares of 5% Preferred Stock to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of shares to be redeemed from
such holder; (iii) the amount payable, whether such amount shall be paid in
Common Stock or in cash and if the payment is in Common Stock an explanation of
the determination of the amount to be paid; (iv) the place or places where
certificates for such shares are to be surrendered or the notice under paragraph
(10)(d) should be sent for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date, except as otherwise provided herein.

               (b) If notice has been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
for the payment of the redemption price of the shares called for redemption and
dividends accrued and unpaid thereon, if any), (i) except as otherwise provided
herein, dividends on the shares of 5% Preferred Stock so called for redemption
shall cease to accrue, (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of the 5%
Preferred Stock shall cease (except the right to receive from the Corporation
the redemption price without interest thereon, upon surrender and endorsement
(or a constructive surrender under paragraph (10)(d)) of their certificates if
so required, and to receive any dividends payable thereon).

               (c) Upon surrender (including a constructive surrender under
paragraph (10)(d)) in accordance with notice given pursuant to this paragraph
(7) of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid, plus any dividends payable
thereon. If fewer than all the outstanding shares of 5% Preferred Stock are to
be redeemed, the number of shares to be redeemed shall be determined by the
Board of Directors and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded to the nearest whole share). In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued, subject to a holder's election under paragraph
(10)(d), representing the surrendered shares without cost to the holder
thereof.

               (8) Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock shall
have the right, at any time and from time to time, at such holder's option, to
convert any or all outstanding

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shares of 5% Preferred Stock held by such holder, but not fractions of shares,
into fully paid and non-assessable shares of Common Stock by surrendering such
shares to be converted, such surrender to be made in the manner provided in
paragraph (8)(b) hereof. The number of shares of Common Stock deliverable upon
conversion of each share of 5% Preferred Stock shall be equal to 9.811136, as
adjusted as provided herein (the "Conversion Rate"). The Conversion Rate is
subject to adjustment from time to time pursuant to paragraph (8)(d) hereof. The
right to convert shares called for redemption pursuant to paragraph 6(a) shall
terminate at the close of business on the date immediately preceding the date
fixed for such redemption unless the Corporation shall default in making payment
of the amount payable upon such redemption, in which case such right of
conversion shall be reinstated. Upon conversion, any accrued and unpaid
dividends on the 5% Preferred Stock at the date of conversion shall be paid to
the holder thereof in accordance with the provisions of paragraph (4).

               (b) (i) In order to exercise the conversion privilege, the holder
of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (10)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976; provided, however, that the Corporation
shall use its best efforts in cooperating with such holder to obtain such legal
or regulatory approvals to the extent its cooperation is necessary. Such notice
shall also state the name or names (with address and social security or other
taxpayer identification number, if applicable) in which the certificate or
certificates for Common Stock are to be issued. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such share of
5% Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder or the holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Corporation demonstrating that such taxes have been paid).
All certificates representing shares of 5% Preferred Stock surrendered for
conversion shall be canceled by the Corporation or the transfer agent.

               (ii) Subject to the last sentence of paragraph (8)(a), holders of
shares of 5% Preferred Stock at the close of business on a dividend payment
record date shall not be entitled to receive the dividend payable on such shares
on the corresponding Dividend Payment Date if such holder shall have surrendered
(or made a constructive surrender under paragraph (10)(d)) for conversion such
shares at any time following the preceding Dividend Payment Date and prior to
such Dividend Payment Date.

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<PAGE>   147

               (iii) Subject to a holder's election under paragraph (10)(d), as
promptly as practicable after the surrender (including a constructive surrender
under paragraph (10)(d)) by a holder of the certificates for shares of 5%
Preferred Stock as aforesaid, the Corporation shall issue and shall deliver to
such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (8), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (8)(c). Upon conversion of
only a portion of the shares of 5% Preferred Stock represented by any
certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (10)(d), upon the surrender
(including a constructive surrender under paragraph (10)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be outstanding and all rights of a holder with respect to
such shares so surrendered shall immediately terminate except the right to
receive the Common Stock and other amounts payable pursuant to this paragraph
(8).

               (iv) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered pursuant to an election under paragraph (10)(d)) and such notice
received by the Corporation as aforesaid, and the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby at such time
on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock
surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered and such notice received by the Corporation.

               (c) (i) No fractional shares or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If

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more than one share shall be surrendered for conversion (or deemed surrendered
under paragraph (10)(d)) at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on
the basis of the aggregate number of shares of 5% Preferred Stock surrendered
(or deemed surrendered under paragraph (10)(d)) for conversion by such holder.

               (ii) Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered under paragraph (10)(d)) and such notice received by the Corporation
as aforesaid, and the Person or Persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of the
shares of Common Stock represented thereby at such time on such date and such
conversion shall be into a number of shares of Common Stock equal to the product
of the number of shares of 5% Preferred Stock surrendered times the Conversion
Rate in effect at such time on such date, unless the stock transfer books of the
Corporation shall be closed on that date, in which event such Person or Persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer books are open,
but such conversion shall be based upon the Conversion Rate in effect on the
date upon which such shares shall have been surrendered (or deemed surrendered
under paragraph (10)(d)) and such notice received by the Corporation.

               (d)    The Conversion Rate shall be adjusted from time to time as
follows:

               (i) If the Corporation shall after the Issue Date (A) declare a
dividend or make a distribution on its Common Stock in shares of its Common
Stock, (B) subdivide its outstanding Common Stock into a greater number of
shares, (C) combine its outstanding Common Stock into a smaller number of
shares, or (D) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification. An
adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (8)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in

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the case of a subdivision, combination or reclassification. Adjustments in
accordance with this paragraph (8)(d)(i) shall be made whenever any event listed
above shall occur.

               (ii) If the Corporation shall after the Issue Date fix a record
date for the issuance of rights or warrants (in each case, other than any rights
issued pursuant to a shareholder rights plan) to all holders of Common Stock
entitling them (for a period expiring within 45 days after such record date) to
subscribe for or purchase Common Stock (or securities convertible into Common
Stock) at a price per share (or, in the case of a right or warrant to purchase
securities convertible into Common Stock, having an effective exercise price per
share of Common Stock, computed on the basis of the maximum number of shares of
Common Stock issuable upon conversion of such convertible securities, plus the
amount of additional consideration payable, if any, to receive one share of
Common Stock upon conversion of such securities) less than the 25-Day Average
Market Price on the date on which such issuance was declared or otherwise
announced by the Corporation (the "Determination Date"), then the Conversion
Rate in effect at the opening of business on the Business Day next following
such record date shall be adjusted so that the holder of each share of 5%
Preferred Stock shall be entitled to receive, upon the conversion thereof, the
number of shares of Common Stock determined by multiplying (I) the Conversion
Rate in effect immediately prior to such record date by (II) a fraction, the
numerator of which shall be the sum of (A) the number of shares of Common Stock
outstanding on the close of business on the Determination Date and (B) the
number of additional shares of Common Stock offered for subscription or purchase
pursuant to such rights or warrants (or in the case of a right or warrant to
purchase securities convertible into Common Stock, the aggregate number of
additional shares of Common Stock into which the convertible securities so
offered are initially convertible), and the denominator of which shall be the
sum of (A) the number of shares of Common Stock outstanding on the close of
business on the Determination Date and (B) the number of shares that the
aggregate proceeds to the Corporation from the exercise of such rights or
warrants for Common Stock would purchase at such 25-Day Average Market Price on
such date (or, in the case of a right of warrant to purchase securities
convertible into Common Stock, the number of shares of Common Stock obtained by
dividing the aggregate exercise price of such rights or warrants for the maximum
number of shares of Common Stock issuable upon conversion of such convertible
securities, plus the aggregate amount of additional consideration payable, if
any, to convert such securities into Common Stock, by such 25-Day Average Market
Price). Such adjustment shall become effective immediately after the opening of
business on the Business Day next following such record date (except as provided
in paragraph (8)(h)). Such adjustment shall be made successively whenever such a
record date is fixed. In the event that after fixing a record date such rights
or warrants are not so issued, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect if such record date had not been
fixed. In determining whether any rights or warrants entitle the holders of
Common Stock to subscribe for or purchase shares of Common Stock at less than
such 25-Day Average Market Price,

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<PAGE>   150

there shall be taken into account any consideration received by the Corporation
upon issuance and upon exercise of such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Board of Directors in
good faith. In case any rights or warrants referred to in this subparagraph (ii)
shall expire unexercised after the same have been distributed or issued by the
Corporation (or, in the case of rights or warrants to purchase securities
convertible into Common Stock once exercised, the conversion right of such
securities shall expire), the Conversion Rate shall be readjusted at the time of
such expiration to the Conversion Rate that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.

               (iii) If the Corporation shall fix a record date for the making
of a distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (8)(d)(i)) or rights or warrants (in each case, other than
any rights issued pursuant to a shareholder rights plan) to subscribe for or
purchase any of its securities (excluding those rights and warrants issued to
all holders of Common Stock entitling them (for a period expiring within 45 days
after such record date) to subscribe for or purchase Common Stock or securities
convertible into shares of Common Stock, which rights and warrants are referred
to in and treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) called the "Securities"), then in each
such case the Conversion Rate shall be adjusted so that the holder of each share
of 5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to the close of business on such
record date by (II) a fraction, the numerator of which shall be the 25-Day
Average Market Price per share of the Common Stock on such record date, and the
denominator of which shall be the 25-Day Average Market Price per share of the
Common Stock on such record date less the then-fair market value (as determined
by the Board of Directors in good faith, whose determinations shall be
conclusive) of the portion of the assets, shares of its capital stock or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that after
fixing a record date such distribution is not so made, the Conversion Rate shall
be readjusted to the Conversion Rate which would then be in effect if such
record date had not been fixed. Such adjustment shall become effective
immediately at the opening of business on the Business Day next following
(except as provided in paragraph (8)(h)) the record date for the determination
of shareholders entitled to receive such distribution. For the purposes of this
subparagraph (iii), the distribution of a Security, which is distributed not
only to the holders of the Common Stock on the date fixed for the determination
of shareholders entitled to such distribution of such Security, but also is
distributed with each share of Common Stock

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<PAGE>   151

delivered to a Person converting a share of 5% Preferred Stock after such
determination date, shall not require an adjustment of the Conversion Rate
pursuant to this subparagraph (iii); provided, however, that on the date, if
any, on which a Person converting a share of 5% Preferred Stock would no longer
be entitled to receive such Security with a share of Common Stock (other than as
a result of the termination of all such Securities), a distribution of such
Securities shall be deemed to have occurred and the Conversion Rate shall be
adjusted as provided in this subparagraph (iii) (and such day shall be deemed to
be "the date fixed for the determination of shareholders entitled to receive
such distribution" and "the record date" within the meaning of the three
preceding sentences). If any rights or warrants referred to in this subparagraph
(iii) shall expire unexercised after the same shall have been distributed or
issued by the Corporation, the Conversion Rate shall be readjusted at the time
of such expiration to the Conversion Rate that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.

               (iv) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
8(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date for the
cash dividend or distribution by a fraction the numerator of which shall be the
Current Market Price of a share of the Common Stock on the Record Date and the
denominator shall be such Current Market Price less the per share amount of cash
so distributed during the 12-month period applicable to one share of Common
Stock, such adjustment to be effective immediately prior to the opening of
business on the Business Day following the Record Date; provided, however, that
in the event the denominator of the foregoing fraction is zero or negative, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
holder of 5% Preferred Stock shall have the right to receive upon conversion, in
addition to the shares of Common Stock to which the holder is entitled, the
amount of cash such holder would have received had such holder converted each
share of 5% Preferred Stock at the beginning of the 12-month period. In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect if such dividend or distribution had not been declared. Notwithstanding
the foregoing, if any adjustment is required to be made as set forth in this
paragraph (8)(d)(iv), the calculation of any such

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<PAGE>   152

adjustment shall include the amount of the quarterly cash dividends paid during
the 12-month reference period only to the extent such dividends exceed the
regular quarterly cash dividends paid during the 12 months preceding the
12-month reference period. For purposes of this paragraph (8)(d)(iv), "Record
Date" shall mean, with respect to any dividend or distribution in which the
holders of Common Stock have the right to receive cash, the date fixed for
determination of shareholders entitled to receive such cash.

               In the event that at any time cash distributions to holders of
Common Stock are not paid equally on all series of Common Stock, the provisions
of this paragraph 8(d)(iv) will apply to any cash dividend or cash distribution
on any series of Common Stock otherwise meeting the requirements of this
paragraph, and shall be deemed amended to the extent necessary so that any
adjustment required will be made on the basis of the cash dividend or cash
distribution made on any such series.

               (v) In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Corporation or any subsidiary
of the Corporation for all or any portion of the outstanding shares of Common
Stock to the extent that the cash and fair market value (as determined in good
faith by the Board of Directors of the Corporation, whose determination shall be
conclusive and shall be described in a resolution of such Board) of any other
consideration included in such payment per share of Common Stock at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as amended) exceed by more than 5.0%, with any smaller
excess being disregarded in computing the adjustment to the Conversion Rate
provided in this paragraph (8)(d)(v), the first reported sale price per share of
the Common Stock on the Trading Day next succeeding the Expiration Time, then
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to
the Expiration Time by a fraction the numerator of which shall be the sum of (x)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchase Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchase Shares) on the Expiration Time and the first reported sale price of
the Common Stock on the Trading Day next succeeding the Expiration Time, and the
denominator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time multiplied
by the first reported sale price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such adjustment to become effective immediately
prior to the opening of business on the day following the Expiration Time.

               (vi) No adjustment in the Conversion Rate shall be required
unless such adjustment would require a cumulative increase or decrease of at
least 1% in the

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<PAGE>   153

Conversion Rate; provided, however, that any adjustments that by reason of this
subparagraph (vi) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment until made, and provided further that
any adjustment shall be required and made in accordance with the provisions of
this paragraph (8) (other than this subparagraph (vi)) not later than such time
as may be required in order to preserve the tax-free nature of a distribution
for United States income tax purposes to the holders of shares of 5% Preferred
Stock or Common Stock. Notwithstanding any other provisions of this paragraph
(8), the Corporation shall not be required to make any adjustment of the
Conversion Rate for the issuance of any shares of Common Stock pursuant to any
plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional amounts
in shares of Common Stock under such plan. All calculations under this paragraph
(8) shall be made to the nearest dollar or to the nearest 1/1,000 of a share, as
the case may be. Anything in this paragraph (8)(d) to the contrary
notwithstanding, the Corporation shall be entitled, to the extent permitted by
law, to make such adjustments in the Conversion Rate, in addition to those
required by this paragraph (8)(d), as it in its discretion shall determine to be
advisable in order that any stock dividends subdivision of shares,
reclassification or combination of shares, distribution or rights or warrants to
purchase stock or securities, or a distribution of other assets (other than cash
dividends) hereafter made by the Corporation to its shareholders shall not be
taxable.

               (vii) In the event that, at any time as a result of shares of any
other class of capital stock becoming issuable in exchange or substitution for
or in lieu of shares of Common Stock or as a result of an adjustment made
pursuant to the provisions of this paragraph (8)(d), the holder of 5% Preferred
Stock upon subsequent conversion shall become entitled to receive any shares of
capital stock of the Corporation other than Common Stock, the number of such
other shares so receivable upon conversion of any shares of 5% Preferred Stock
shall thereafter be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained herein.

               (e) (i) If the Corporation shall be a party to any transaction
(including without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (8)(d)(i) applies)
(each of the foregoing being referred to herein as a "Transaction"), in each
case as a result of which shares of Common Stock shall be converted into the
right to receive stock, securities or other property (including cash or any
combination thereof), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that number
of shares or fraction thereof of Common Stock

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<PAGE>   154

into which one share of 5% Preferred Stock was convertible immediately prior to
such Transaction, assuming such holder of Common Stock (i) is not a Person with
which the Corporation consolidated or into which the Corporation merged or which
merged into the Corporation or to which such sale or transfer was made, as the
case may be ("Constituent Person"), or an affiliate of a Constituent Person and
(ii) failed to exercise his rights of election, if any, as to the kind or amount
of stock securities and other property (including cash) receivable upon such
Transaction (provided that if the kind or amount of stock, securities and other
property (including cash) receivable upon such Transaction is not the same for
each share of Common Stock of the Corporation held immediately prior to such
Transaction by other than a Constituent Person or an affiliate thereof and in
respect of which such rights of election shall not have been exercised ("non-
electing share"), then for the purpose of this paragraph (8)(e) the kind and
amount of stock, securities and other property (including cash) receivable upon
such Transaction by each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares). The
provisions of this paragraph (8)(e) shall similarly apply to successive
Transactions.

               (ii) Notwithstanding anything herein to the contrary , if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation, by notice to and consultation with the
holders of the 5% Preferred Stock, may cause the exchange of this 5% Preferred
Stock for preferred stock of Holdco having the same terms and conditions as set
forth herein; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 5% Preferred Stock
(including for these purposes any resultant change in the tax treatment for the
holders of such stock).

               (f) If:

               (i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock; or

               (ii) the Corporation shall authorize the granting to the holders
of the Common Stock of rights or warrants to subscribe for or purchase any
shares of any class or any other rights or warrants; or

               (iii) there shall be any subdivision, combination or
reclassification of the Common Stock or any consolidation or merger to which the
Corporation is a party and for which approval of any shareholders of the
Corporation is required, or the sale or transfer of all or substantially all of
the assets of the Corporation as an entirety; or

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<PAGE>   155

               (iv) there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applicable date hereinafter specified, a notice stating (A)
the date on which a record is to be taken for the purpose of such dividend (or
such other distribution) or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or warrants are to be determined or (B)
the date on which such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up or
other action is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up.
Failure to give or receive such notice or any defect therein shall not affect
the legality or validity of any distribution, right, warrant subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, winding up or other action, or the vote upon any of
the foregoing.

               (g) Whenever the Conversion Rate is adjusted as herein provided,
the Corporation shall prepare an officer's certificate with respect to such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the effective date of such adjustment and shall mail a copy of such officer's
certificate to the holder of each share of 5% Preferred Stock at such holder's
last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (8)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be conclusive evidence of the correctness of such adjustment.

               (h) In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (8)(c).

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<PAGE>   156

               (i) For purposes of this paragraph (8), the number of shares of
Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.

               (j) There shall be no adjustment of the Conversion Rate in case
of the issuance of any stock of the Corporation in a reorganization, acquisition
or other similar transaction except as specifically set forth in this paragraph
(8). If any single action would require adjustment of the Conversion Rate
pursuant to more than one subparagraph of this paragraph (8), only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value.

               (k) If the Corporation shall take any action affecting the Common
Stock, other than action described in this paragraph (8), that in the opinion of
the Board of Directors materially adversely affects the conversion rights of the
holders of the shares of 5% Preferred Stock, the Conversion Rate may be
adjusted, to the extent permitted by law, in such manner, if any, and at such
time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (8)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.

               (l) (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of 5% Preferred Stock
not theretofore converted. For purposes of this paragraph (8)(l) the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.

               (ii) The Corporation covenants that any shares of Common Stock
issued upon conversion of the 5% Preferred Stock shall be duly authorized,
validly issued, fully paid and non-assessable. Before taking any action that
would cause an adjustment increasing the Conversion Rate such that the quotient
of $1,000.00 and the Conversion Rate (which quotient initially shall be
$101.9250) would be reduced below the then-par value of the shares of Common
Stock deliverable upon conversion of the 5% Preferred Stock, the Corporation
will take any corporate action that, in the opinion of its counsel, may be
necessary in order that the Corporation may validly and legally issue fully paid
and non-assessable shares of Common Stock based upon such adjusted Conversion
Rate.

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<PAGE>   157

               (iii) Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 5% Preferred
Stock, the Corporation shall comply with all applicable federal and state laws
and regulations which required action to be taken by the Corporation.

               (m) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the 5%
Preferred Stock pursuant hereto; provided, however, that the Corporation shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or other securities
or property in a name other than that of the holder of the 5% Preferred Stock to
be converted and no such issue or delivery shall be made unless and until the
Person requesting such issue or delivery has paid to the Corporation the amount
of any such tax or established, to the satisfaction of the Corporation, that
such tax has been paid.

               (n) No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock are entitled to participate in such
transaction pursuant to paragraph 4(b).

               (9) Voting Rights. (a) The holders of record or shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (9) or as otherwise provided by law.

               (b) If and whenever either (i) six quarterly dividends (whether
or not consecutive) payable on the 5% Preferred Stock have not been paid in
full, (ii) the Corporation shall have failed to discharge its Mandatory
Redemption Obligation, or (iii) there occurs a Bankruptcy Event (any such event
described in the preceding subparagraphs (i) through (iii) being hereinafter
referred to as a "Trigger Event"), a vote of the holders of shares of 5%
Preferred Stock, voting as a single class, will be required on all matters
brought to shareholders of the Corporation. Whenever all arrears in dividends on
the 5% Preferred Stock then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, the Corporation shall have fulfilled its
Mandatory Redemption Obligation, and all Bankruptcy Events shall have been
cured (the "Trigger Event Cure"), then the right of the holders of the 5%
Preferred Stock to vote as described in this paragraph 9(b) shall cease (but
subject always to the same provisions for the vesting of such voting rights if
any Trigger Event occurs).

               (c) Upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, together with the holders of shares
of every

                                      E-24
<PAGE>   158

other series of preferred stock (including, without limitation, Additional
Preferred) upon which like rights to vote for the election of two additional
directors have been conferred and are exercisable (resulting from either the
failure to pay dividends or the failure to redeem) (any such other series is
referred to as the "Preferred Shares"), voting as a single class regardless of
series, shall be entitled to elect the two additional directors to serve on the
Board of Directors at any annual meeting of stockholders or special meeting held
in place thereof, or at a special meeting of the holders of 5% Preferred Stock
and the Preferred Shares, called as hereinafter provided. Whenever all arrears
in dividends on the Preferred Shares then outstanding shall have been paid and
dividends thereon for the current quarterly dividend period shall have been paid
or declared and set apart for payment, the Corporation shall have fulfilled any
redemption obligation in respect of the Preferred Shares, and the Trigger Event
Cure has occurred, then the right of the holders of the 5% Preferred Stock and
the Preferred Shares to elect such additional two directors shall cease (but
subject always to the same provisions for the vesting of such voting rights if
any Trigger Event occurs), and the terms of office of all persons elected as
directors by the holders of 5% Preferred Stock and the Preferred Shares shall
forthwith terminate and the number of members of the Board of Directors shall be
reduced accordingly. At any time after such voting power shall have been so
vested in holders of shares of 5% Preferred Stock and the Preferred Shares, the
Secretary of the Corporation may, and upon the written request of any holder of
5% Preferred Stock (addressed to the secretary at the principal office of the
Corporation) shall, call a special meeting of the holders of the 5% Preferred
Stock and of the Preferred Shares for the election of the two directors to be
elected by them as herein provided, such call to be made by notice similar to
that provided in the Bylaws of the Corporation for a special meeting of the
stockholders or as required by law. If any such special meeting required to be
called as above provided shall not be called by the Secretary of the Corporation
within 20 days after receipt of any such request, then any holder of shares of
5% Preferred Stock may call such meeting, upon the notice above provided, and
for that purpose shall have access to the stock books of the Corporation. The
directors elected at any such special meeting shall hold office until the next
annual meeting of the stockholders or special meeting held in lieu thereof if
such office shall not have previously terminated as above provided. If any
vacancy shall occur among the directors elected by the holders of the 5%
Preferred Stock and the Preferred Shares, a successor shall be elected by the
Board of Directors, upon the nomination of the then-remaining director elected
by the holders of the 5% Preferred Stock and the Preferred Shares or the
successor of such remaining director, to serve until the next annual meeting of
the stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.

               (d) Without the written consent of the holders of at least 66
2/3% in liquidation preference of the outstanding shares of 5% Preferred Stock
or the vote of holders of at least 66 2/3% in liquidation preference of the
outstanding shares of 5% Preferred Stock at a meeting of the holders of 5%
Preferred Stock called for such E-25

<PAGE>   159


purpose, the Corporation will not amend, alter or repeal any provision of the
Certificate of Incorporation (by merger or otherwise) so as to adversely affect
the preferences, rights or powers of the 5% Preferred Stock; provided that any
such amendment that changes the dividend payable on, the Conversion Rate with
respect to, or the liquidation preference of the 5% Preferred Stock shall
require the affirmative vote at a meeting of holders of 5% Preferred Stock
called for such purpose or written consent of the holder of each share of 5%
Preferred Stock.

               (e) Without the written consent of the holders of at least 66
2/3% in liquidation preference of the outstanding shares of 5% Preferred Stock
or the vote of holders of at least 66 2/3% in liquidation preference of the
outstanding shares of 5% Preferred Stock at a meeting of such holders called for
such purpose, the Corporation will not issue any additional 5% Preferred Stock
or create, authorize or issue any Parity Securities or Senior Securities or
increase the authorized amount of any such other class or series; provided that
this paragraph 9(e) shall not limit the right of the Corporation to (i) issue
Additional Preferred as dividends pursuant to paragraph 4 or (ii) to issue
Parity Securities or Senior Securities in order to refinance, redeem or refund
the 13% Preferred or the 5 1/4% Preferred, provided that the maximum accrual
value (i.e., the sum of stated value and maximum amount payable in kind over the
term from issuance to first date of mandatory redemption or redemption at the
option of the holder) of such Parity Securities may not exceed the maximum
accrual value of the 13% Preferred or the 5 1/4% Preferred, respectively.

               (f) In exercising the voting rights set forth in this paragraph
(9), each share of 5% Preferred Stock shall have one vote per share, except that
when any other series of preferred stock shall have the right to vote with the
5% Preferred Stock as a single class on any matter, then the 5% Preferred Stock
and other series shall have with respect to such matters one vote per $1,000 of
stated liquidation preference. Except as otherwise required by applicable law or
as set forth herein, the shares of 5% Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers and
the consent of the holders thereof shall not be required for the taking of any
corporate action.

               (g) Nothing in this paragraph (9) shall be in derogation of any
rights that a holder of shares of 5% Preferred Stock may have in his capacity as
a holder of shares of Common Stock.

               (10) General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are
for convenience of reference only and shall not define, limit or affect any of
the provisions hereof.

               (b) If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) hereof or shall have failed to
discharge any obliga-


                                      E-26
<PAGE>   160

tion to redeem shares of 5% Preferred Stock pursuant to paragraph (6) hereof,
the holders of shares of 5% Preferred Stock shall be entitled to receive, in
addition to all other amounts required to be paid hereunder, when, as and if
declared by the Board of Directors, out of funds legally available for the
payment of dividends, cash dividends on the aggregate dividends which the
Corporation shall have failed to declare or pay or the redemption price,
together with accrued and unpaid dividends thereon, as the case may be, at a
rate of 2% per quarter, compounded quarterly, for the period during which the
failure to pay dividends or failure to discharge an obligation to redeem shares
of 5% Preferred Stock shall continue.

               (c)    The shares of 5% Preferred Stock shall bear the following
                      legend:

               THE SHARES OF PREFERRED STOCK, PAR VALUE $.01, OF THE CORPORATION
               (THE "PREFERRED STOCK") (AND THE SHARES OF COMMON STOCK, PAR
               VALUE $.01, OF THE CORPORATION (THE "COMMON STOCK") INTO WHICH
               THE PREFERRED STOCK MAY BE CONVERTED) REPRESENTED BY THIS
               CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
               ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
               AMENDED (THE "ACT") AND ANY APPLICABLE STATE SECURITIES LAWS OR
               AN APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS. THE
               TRANSFER OF THE PREFERRED STOCK (OR COMMON STOCK, IF THE
               PREFERRED STOCK HAS BEEN CONVERTED) EVIDENCED BY THIS
               CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER
               PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED JULY 15, 1999, AS
               MAY BE AMENDED, AMONG THE CORPORATION AND FRANCE TELECOM, A
               COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF THE
               CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER
               OF SUCH PREFERRED STOCK UPON WRITTEN REQUEST TO THE
               CORPORATION.

               THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY
               BE CONVERTED INTO COMMON STOCK, PAR VALUE $.01, OF THE
               CORPORATION (THE "COMMON STOCK") OR REDEEMED IN EXCHANGE FOR
               COMMON STOCK WITHOUT THE SURRENDER AND EXCHANGE OF THIS
               CERTIFICATE FOR CERTIFICATES REPRESENTING SUCH COMMON STOCK. A
               NOTICE OF SUCH CONVERSION EVENT, IF ANY, IS ON FILE AT THE
               EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE FURNISHED
               WITHOUT CHARGE TO THE



                                      E-27
<PAGE>   161

               HOLDER OF THIS CERTIFICATE UPON WRITTEN REQUEST TO
               THE CORPORATION.

               The shares of Common Stock issuable upon conversion of the 5%
Preferred Stock shall bear the following legend:

               THE SHARES OF COMMON STOCK, PAR VALUE $.01, OF THE CORPORATION
               (THE "COMMON STOCK") REPRESENTED BY THIS CERTIFICATE MAY NOT BE
               OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER
               THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND ANY
               APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM
               REGISTRATION REQUIREMENTS. THE TRANSFER OF THE COMMON STOCK
               EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON
               TRANSFER PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED JULY 15,
               1999, AS MAY BE AMENDED, AMONG THE CORPORATION AND FRANCE
               TELECOM, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF
               THE CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE
               HOLDER OF SUCH COMMON STOCK UPON WRITTEN REQUEST TO THE
               CORPORATION.


               (d) (i) Whenever in connection with any conversion or redemption
of the 5% Preferred Stock in exchange for Common Stock the holder is required to
surrender certificates representing such shares of 5% Preferred Stock, such
holder may, by written notice to the Corporation and its transfer agent, elect
to retain such certificates. In such case, the certificates so retained by the
holder thereof shall be deemed to represent, at and from the date of such
conversion or redemption, the number of shares of Common Stock issuable upon
such conversion or redemption (subject to paragraph (8)(c), if applicable), and
shall be so reflected upon the books of the Corporation and its transfer agent.

               (ii) (A) A holder who has previously elected to retain
certificates representing the 5% Preferred Stock in accordance with paragraph
(10)(d)(i) upon conversion or redemption may subsequently elect to receive
certificates representing the shares of Common Stock issued upon such conversion
or redemption. To receive certificates representing such shares of Common Stock,
the holder of such certificate shall surrender it, duly endorsed or assigned to
the Corporation or in blank, at the office of the Corporation, or to any
transfer agent of the Corporation previously designated by the Corporation for
such purposes, with a written notice of that election.



                                      E-28
<PAGE>   162



               (B) Unless the certificates to be issued shall be registered in
the same name as the name in which such surrendered certificates are registered,
each certificate so surrendered shall be accompanied by instruments of transfer,
in form satisfactory to the Corporation, duly executed by the holder or the
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates so surrendered
shall be canceled by the Corporation or the transfer agent.

               (C) As promptly as practicable after the surrender by a holder of
such certificates, the Corporation shall issue and shall deliver to such holder,
or on the holder's written order, a certificate or certificates (which
certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock represented by the certificates so
surrendered.

               (11) Shareholder Rights Plan. The shares of 5% Preferred Stock
shall be entitled to the benefits of a number of rights issuable under the
Rights Agreement, dated as of October 13, 1993, as amended, between the Company
and Continental Stock Transfer & Trust Company or any successor plan of similar
purpose and effect ("Rights") equal to the number of shares of Common Stock then
issuable upon conversion of the 5% Preferred Stock at the prevailing Conversion
Rate. Any shares of Common Stock deliverable upon conversion of a share of 5%
Preferred Stock or upon payment of a dividend shall be accompanied by a Right.



                                      E-29
<PAGE>   163


                                                                       Exhibit F

                             5% CUMULATIVE PREFERRED
                                 STOCK, SERIES A

              (1) Number and Designation. 1,850,000 shares of the Preferred
Stock of the Corporation shall be designated as 5% Cumulative Preferred Stock,
Series A (the "5% Preferred Stock"), and no other shares of Preferred Stock
shall be designated as 5% Preferred Stock.

              (2) Definitions. For purposes of the 5% Preferred Stock, the
following terms shall have the meanings indicated:

              "Bankruptcy Event" shall mean any of the following: (i) a court
       having jurisdiction in the premises enters a decree or order for (A)
       relief in respect of any Major Entity in an involuntary case under any
       applicable bankruptcy, insolvency or other similar law now or hereinafter
       in effect, (B) appointment of a receiver, liquidator, assignee,
       custodian, trustee, sequestrator or similar official of any Major Entity
       or for all or substantially all of the property and assets of any Major
       Entity or (C) the winding up or liquidation of the affairs of any Major
       Entity; or (ii) any Major Entity (A) commences a voluntary case under any
       applicable bankruptcy, insolvency or other similar law now or hereinafter
       in effect, or consents to the entry of an order for relief in an
       involuntary case under any such law, (B) consents to the appointment of
       or taking possession by a receiver, liquidator, assignee, custodian,
       trustee, sequestrator or similar official of any Major Entity, or for all
       or substantially all of the property and assets of any Major Entity or
       (C) effects any general assignment for the benefit of creditors.

              "Board of Directors" shall mean the board of directors of the
       Corporation. "Board of Directors" shall also mean the Executive
       Committee, if any, of such board of directors or any other committee duly
       authorized by such board of directors to perform any of its
       responsibilities with respect to the 5% Preferred Stock.

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

              "Common Stock" shall mean the Corporation's Common Stock, par
       value $0.01 per share.


                                       F-1

<PAGE>   164



              "Constituent Person" shall have the meaning set forth in paragraph
       (9)(e) hereof.

              "Conversion Rate" shall have the meaning set forth in paragraph
       (9)(a) hereof.

              "Corporation" shall have the meaning set forth in the preamble.

              "Current Market Price" of publicly traded shares of Common Stock
       or any other class of capital stock or other security of the Corporation
       or any other issuer for any day shall mean the last reported sale price
       for such security on the principal exchange or quotation system on which
       such security is listed or traded. If the security is not admitted for
       trading on any national securities exchange or the Nasdaq National
       Market, "Current Market Price" shall mean the average of the last
       reported closing bid and asked prices reported by the Nasdaq as furnished
       by any member in good standing of the National Association of Securities
       Dealers, Inc., selected from time to time by the Corporation for that
       purpose or as quoted by the National Quotation Bureau Incorporated. In
       the event that no such quotation is available for such day, the Current
       Market Price shall be the average of the quotations for the last five
       Trading Days for which a quotation is available within the last 30
       Trading Days prior to such day. In the event that five such quotations
       are not available within such 30-Trading Day period, the Board of
       Directors shall be entitled to determine the Current Market Price on the
       basis of such quotations as it reasonably considers appropriate.

              "Determination Date" shall have the meaning set forth in paragraph
       (9)(a) hereof.

              "Dividend Payment Date" shall mean the applicable redemption date
       of the 5% Preferred Stock as set forth in paragraph 6(a).

              "Dividend Periods" shall mean quarterly dividend periods
       commencing on March 31, June 30, September 30 and December 31 of each
       year and ending on and including the day preceding the first day of the
       next succeeding Dividend Period (except that the initial Dividend Period
       shall commence on the Issue Date and the final Dividend Period shall end
       on but exclude the Dividend Payment Date.

              "Eurotel" shall mean an entity which is or will be a direct or
       indirect, wholly-owned subsidiary of the Corporation, which entity owns
       all of the outstanding capital stock of entities that are primarily
       engaged in the broadband communications, broadcasting and cable
       television business in Continental Europe (outside of France).


                                       F-2

<PAGE>   165



              "Eurotel Stock" shall mean capital stock of Eurotel with the
       greatest voting power and the power to control or direct the management
       of Eurotel of the type and class held, directly or through any of its
       subsidiaries, by the Corporation.

              "Exchange Act"" shall mean the Securities Exchange Act of 1934, as
       amended, and the rules and regulation thereunder.

              "Exchange Date" shall have the meaning set forth in paragraph
       (9)(a) hereof.

              "Expiration Time" shall have the meaning set forth in paragraph
       (9)(d)(v) hereof.

              "5% Preferred Stock" shall have the meaning set forth in paragraph
       (1) hereof.

              "5% Convertible Preferred" shall have the meaning set forth in
       paragraph (3)(d) hereof.

              "5% Convertible Series A" shall have the meaning set forth in
       paragraph (3)(d) hereof.

              "5% Convertible Series B" shall have the meaning set forth in
       paragraph (3)(d) hereof.

              "GAAP" shall mean United States generally accepted accounting
       principles and practices as in effect from time to time and applied
       consistently throughout the periods involved.

              "Holdco" shall have the meaning set forth in paragraph (11)
       hereof.

              "Issue Date" shall mean the date on which shares of 5% Preferred
       Stock are first issued.

              "Investment Agreement" means the agreement, dated July 26, 1999,
       between France Telecom and the Corporation.

              "Junior Securities" shall have the meaning set forth in paragraph
       (3)(c) hereof.

              "Junior Securities Distribution" shall have the meaning set forth
       in paragraph (4)(e) hereof.


                                       F-3

<PAGE>   166


              "Liquidation Right" shall mean, for each share of 5% Preferred
       Stock, an amount equal to US$1,000 per share, plus an amount equal to all
       dividends (whether or not earned or declared) accrued and unpaid thereon
       to the date of final distribution to such holders.

              "Major Entity" shall mean any of the Corporation, NTL
       Communications Corp., Diamond Cable Communications Limited, Diamond
       Holdings Limited, NTL (Triangle) LLC or any Significant Subsidiary.

              "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
       securities market regulated by the National Association of Securities
       Dealers, Inc.

              "Nasdaq National Market" shall have the meaning set forth in Rule
       4200(a)(23) of the rules of the National Association of Securities
       Dealers, Inc.

              "9.9% Series B Preferred" shall have the meaning set forth in
       paragraph (3)(d) hereof.

              "NYSE" means the New York Stock Exchange.

              "outstanding", when used with reference to shares of stock, shall
       mean issued shares, excluding shares held by the Corporation or a
       subsidiary.

              "Parity Securities" shall have the meaning set forth in paragraph
       (3)(b) hereof.

              "Person" shall mean any individual, partnership, association,
       joint venture, corporation, business, trust, joint stock company, limited
       liability company, any unincorporated organization, any other entity, a
       "group" of such persons, as that term is defined in Rule 13d-5(b) under
       the Exchange Act, or a government or political subdivision thereof.

              "Preferred Stock" shall have the meaning set forth in the first
       resolution above.

              "Purchase Agreement" shall mean the Purchase Agreement, dated
       February 17, 2000, among the Corporation and certain parties identified
       therein with respect to the 5% Preferred Stock.

              "Purchase Shares" shall have the meaning set forth in (9)(d)(v)
       hereof.

              "Qualified Holder" shall mean any holder other than a commercial
       bank or an affiliate of a commercial bank.


                                       F-4

<PAGE>   167



              "Record Date" shall have the meaning set forth in paragraph
       (9)(d)(iv) hereof.

              "Redemption Date" shall have the meaning set forth in paragraph
       (6)(a) hereof.

              "Redemption Obligation" shall have the meaning set forth in
       paragraph (6)(b) hereof.

              "Redemption Price" shall have the meaning set forth in paragraph
       (6)(a) hereof.

              "Senior Securities" shall have the meaning set forth in paragraph
       (3)(a) hereof.

              "set apart for payment" shall be deemed to include, without any
       action other than the following, the recording by the Corporation in its
       accounting ledgers of any accounting or bookkeeping entry which
       indicates, pursuant to a declaration of dividends or other distribution
       by the Board of Directors, the allocation of funds to be so paid on any
       series or class of capital stock of the Corporation; provided, however,
       that if any funds for any class or series of Junior Securities or any
       class or series of Parity Securities are placed in a separate account of
       the Corporation or delivered to a disbursing, paying or other similar
       agent, then "set apart for payment" with respect to the 5% Preferred
       Stock shall mean placing such funds in a separate account or delivering
       such funds to a disbursing, paying or other similar agent, as the case
       may be.

              "Significant Subsidiary" shall have the meaning given to such term
       in Regulation S-X under the Exchange Act.

              "13% Preferred" shall have the meaning set forth in paragraph
       (3)(d) hereof.

              "Trading Day" shall mean any day on which the securities in
       question are traded on the NYSE, or if such securities are not listed or
       admitted for trading on the NYSE, on the principal national securities
       exchange on which such securities are listed or admitted, or if not
       listed or admitted for trading on any national securities exchange, on
       the Nasdaq National Market, or if such securities are not quoted thereon,
       in the applicable securities market in which the securities are traded.

              "Transaction" shall have the meaning set forth in paragraph (9)(e)
       hereof.


                                       F-5

<PAGE>   168



              "25-Day Average Market Price" shall mean, for any security, the
       volume-weighted average of the Current Market Prices of that security for
       the twenty-five Trading Days immediately preceding the date of
       determination.

              (3) Rank. Any class or series of stock of the Corporation shall be
deemed to rank:

              (a)    prior to the 5% Preferred Stock, either as to the payment
of dividends or as to distribution of assets upon liquidation, dissolution or
winding up, or both, if the holders of such class or series shall be entitled by
the terms thereof to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, in preference or priority to the holders
of 5% Preferred Stock ("Senior Securities");

              (b)    on a parity with the 5% Preferred Stock, either as to the
payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and

              (c)    junior to the 5% Preferred Stock, either as to the payment
of dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, or both, if such stock or series shall be Common Stock or if the
holders of the 5% Preferred Stock shall be entitled to receipt of dividends, and
of amounts distributable upon liquidation, dissolution or winding up, in
preference or priority to the holders of shares of such stock or series ("Junior
Securities").

              (d)    Each of the 13% Senior Redeemable Exchangeable Preferred
Stock and the 13% Series B Senior Redeemable Exchangeable Preferred Stock
(collectively, the "13% Preferred") is a Senior Security. Each of the 5%
Cumulative Participating Convertible Preferred Stock, Series A (the "5%
Convertible Series A") and any dividends paid on the 5% Convertible Series A in
accordance with its terms, to the extent that such dividends are paid in
preferred stock having terms substantially identical to the 5% Convertible
Series A and any dividends paid on preferred stock issued as in-kind dividends
thereon, to the extent such dividends are paid in preferred stock having terms
substantially identical to the 5% Convertible Series A (the 5% Convertible
Series A and all such in-kind dividends being hereinafter referred to as the "5%
Convertible Preferred"), is a Parity Security. Each of the 9.9% Non-Voting


                                       F-6

<PAGE>   169



Mandatorily Redeemable Preferred Stock, Series B ("9.9% Series B Preferred") and
the Series A Junior Participating Preferred Stock is a Junior Security. Except
for the Preferred Stock proposed to be issued under the terms of the Investment
Agreement (and collectively with any dividends paid thereon in preferred stock,
the "5% Convertible Series B"), each of which would be a Parity Security, there
shall be no issue of other Senior Securities, Parity Securities or rights or
options exercisable for or convertible into any such securities, except as
approved by the holders of the 5% Preferred Stock, or as otherwise permitted,
pursuant to paragraph 9(c).

              (e)    The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.

              (4)    Dividends. (a) The holders of shares of 5% Preferred Stock
shall be entitled to receive, when, as and if declared by the Board of
Directors, out of funds legally available for the payment of dividends (after
taking into account revaluation of the assets and liabilities of the Corporation
to the extent deemed reasonable by the Board of Directors of the Corporation
after consultation with legal and financial advisors) but without regard to any
contractual or other restrictions with respect thereto, dividends at the
quarterly rate of US$12.50 per share (assuming a US$1,000 face amount) payable
in additional shares of the 5% Preferred Stock. All dividends on the 5%
Preferred Stock shall be payable in arrears on the Dividend Payment Date and
shall be cumulative from the Issue Date (except that dividends on additional
shares of the 5% Preferred Stock issued as dividends on 5% Preferred Stock shall
accrue from the date such additional shares of 5% Preferred Stock are issued or
would have been issued in accordance with this Certificate of Designation if
such dividends had been declared), whether or not in any Dividend Period or
Dividend Periods there shall be funds of the Corporation legally available for
the payment of such dividends. The total accumulative dividends for all
Dividend Periods terminating on or prior to the applicable redemption date shall
be payable to the holders of record of shares of the 5% Preferred Stock, as they
appear on the stock records of the Corporation at the close of business on the
record date for such dividend. Upon receipt by the Company of notice from the
holders of the 5% Preferred Stock that they have elected to require the Company
to discharge its Redemption Obligation, the Board of Directors shall fix as such
record date the fifth Business Day preceding the Dividend Payment Date and shall
give notice on or prior to the record date of the number of additional shares of
5% Preferred Stock payable in respect of the dividends accrued up to but
excluding the Dividend Payment Date.

              (b)    For the purpose of determining the number of additional
shares of 5% Preferred Stock to be issued as dividends pursuant to paragraph
(4)(a), each such


                                       F-7

<PAGE>   170



share of additional 5% Preferred Stock shall be valued at US$1,000. Holders of
such additional shares of 5% Preferred Stock shall be entitled to receive
dividends payable at the rates specified in paragraph (4)(a).

              (c)    The dividends payable for the initial Dividend Period, or
any other period shorter than a full Dividend Period, on the 5% Preferred Stock
shall accrue daily and be computed on the basis of a 360-day year and the actual
number of days in such period. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the 5%
Preferred Stock that may be in arrears except as otherwise provided herein.

              (d)    So long as any shares of the 5% Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities 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 such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock for all
Dividend Periods terminating on or prior to the date of such redemption,
repurchase or other acquisition shall have been paid or set apart for payment
(together with any payments that may be required under paragraph (12)(c)), (ii)
sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in additional shares of 5% Preferred Stock or
a sum sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon shares of the 5% Preferred Stock and all dividends declared upon
Parity Securities shall be declared ratably in proportion to the respective
amounts of dividends accumulated and unpaid on the 5% Preferred Stock and
accumulated and unpaid on such Parity Securities.

              (e)    So long as any shares of the 5% Preferred Stock are
outstanding, no dividends (other than (i) any rights issued pursuant to the
Rights Agreement and (ii) dividends or distributions paid in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Junior
Securities) shall be declared or paid or set apart for payment or other
distribution declared or made upon Junior Securities, nor shall any Junior
Securities be redeemed, purchased or otherwise acquired (other than a
redemption, purchase, or other acquisition of shares of Common Stock made for
purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") for any
consideration (or any moneys be paid to or


                                       F-8

<PAGE>   171



made available for a sinking fund for the redemption of any shares of any such
stock) by the Corporation, directly or indirectly (except by conversion into or
exchange for Junior Securities, including pursuant to paragraph 4(d) of the 9.9%
Series B Preferred), unless in each case (A) full cumulative dividends on all
outstanding shares of the 5% Preferred Stock and all other Parity Securities
shall have been paid or set apart for payment for all past Dividend Periods and
dividend periods for such other stock, (B) sufficient funds shall have been paid
or set apart for the payment of the dividend for the current Dividend Period
with respect to the 5% Preferred Stock and all other Parity Securities, (C) the
Corporation is not in default with respect to any redemption of shares of 5%
Preferred Stock by the Corporation pursuant to paragraph (6) below and (D) the
Corporation has fully performed its obligations under paragraphs (4)(a) and (6)
hereof.

              (f)    Notwithstanding the provisions of Section 6(b) of the
Purchase Agreement, all payments by the Corporation of dividends on 5% Preferred
Stock to a holder thereof that is not a Qualified Holder (a "Non-Qualified
Holder") will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments or
other charges of whatever nature now or hereafter imposed by the United States
of America or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in the
second succeeding sentence, any tax imposed on or measured by the net income or
net profits of a Non-Qualified Holder pursuant to the laws of the jurisdiction
in which it is organized or the jurisdiction in which the principal office or
applicable lending office of such Non-Qualified Holder is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect to such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges (all such non-excluded taxes, levies,
imposts, duties, fees, assessments or other charges being referred to
collectively as "Taxes"). If any Taxes are so levied or imposed, the Corporation
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due under the 5% Preferred
Stock, after withholding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein or in such 5% Preferred Stock. If
any amounts are payable in respect of Taxes pursuant to the preceding sentence,
the Corporation agrees to reimburse each Non-Qualified Holder, upon the written
request of such Non-Qualified Holder, for taxes imposed on or measured by the
net income or net profits of such Non-Qualified Holder pursuant to the laws of
the jurisdiction in which such Non-Qualified Holder is organized or in which the
principal office or applicable lending office of such Non-Qualified Holder is
located or under the laws of any political subdivision or taxing authority of
any such jurisdiction in which such Non-Qualified Holder is organized or in
which the principal office or applicable lending office of such Non-Qualified
Holder is located and for any withholding of taxes as such Non-Qualified Holder
shall determine are payable by, or withheld from, such Non-Qualified Holder, in
respect of such amounts so paid to or on behalf of such Non-Qualified Holder
pursuant to the preceding sentence and in respect of any amounts paid to or on
behalf of such Non-Qualified


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Holder pursuant to this sentence. The Corporation will furnish to each
Non-Qualified Holder within 45 days after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Corporation. The Corporation agrees to indemnify and hold
harmless each Non-Qualified Holder, and reimburse such Non-Qualified Holder upon
its written request, for the amount of any Taxes so levied or imposed and paid
by such Non-Qualified Holder.

              (5) Liquidation Preference. (a) In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
before any payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of Junior
Securities, the holders of the shares of 5% Preferred Stock shall be entitled to
receive the Liquidation Right. If, upon any liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of the shares of 5% Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any Parity Securities, then such assets, or the proceeds thereof,
shall be distributed among the holders of shares of 5% Preferred Stock and any
such other Parity Securities ratably in accordance with the respective amounts
that would be payable on such shares of 5% Preferred Stock and any such other
stock if all amounts payable thereon were paid in full. For the purposes of this
paragraph (5), (i) a consolidation or merger of the Corporation with one or more
corporations, or (ii) a sale or transfer of all or substantially all of the
Corporation's assets, shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation.

              (b)    Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or classes
of Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the 5% Preferred Stock shall not be
entitled to share therein.

              (6) Redemption. (a) On and after the date that is the second
anniversary of the Issue Date (the "Redemption Date"), each holder of shares of
5% Preferred Stock that is a Qualified Holder shall have the right to require
the Corporation, to the extent the Corporation shall have funds legally
available therefor (after taking into account revaluation of the assets and
liabilities of the Corporation to the extent deemed reasonable by the Board of
Directors of the Corporation after consultation with legal and financial
advisors) but without regard to any contractual or other restrictions with
respect thereto, to redeem all or some of such Qualified Holder's shares of 5%
Preferred Stock, from time to time in part, or in whole, at US$1,000 per share
(the "Redemption Price"), payable in cash, together with accrued and unpaid
dividends thereon to, but excluding, the date fixed for redemption, without
interest. Any holder of shares of 5%


                                      F-10

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Preferred Stock that is a Qualified Holder which elects to exercise its rights
pursuant to this paragraph (6)(a) shall deliver to the Corporation a written
notice of election not less than 20 days prior to the date on which such
Qualified Holder demands redemption pursuant to this paragraph (6)(a), which
notice shall set forth the name of the Qualified Holder, the number of shares of
5% Preferred Stock to be redeemed and a statement that the election to exercise
a redemption right is being made thereby, and shall deliver to the Corporation
on or before the date of redemption certificates evidencing the shares of 5%
Preferred Stock to be redeemed, duly endorsed for transfer to the Corporation.

              (b)    If the Corporation is unable to redeem all outstanding
shares of 5% Preferred Stock requested by any holder of 5% Preferred Stock to be
redeemed pursuant to paragraph (6)(a) (the "Redemption Obligation") because the
Corporation does not have funds legally available therefor, the Redemption
Obligation shall be discharged as soon as the Corporation has funds legally
available to discharge such Redemption Obligation and its obligations under
paragraph (12)(c). So long as the Corporation fails to discharge the Redemption
Obligation for any reason, dividends shall continue to accrue on the Redemption
Price in accordance with paragraph (4) in addition to dividends that accrue
pursuant to paragraph (12)(c). If and so long as any Redemption Obligation with
respect to the 5% Preferred Stock shall not be fully discharged, the Corporation
shall not (i) directly or indirectly, redeem, purchase, or otherwise acquire any
Parity Security or discharge any mandatory or optional redemption, sinking fund
or other similar obligation in respect of any Parity Securities (except in
connection with a redemption, sinking fund or other similar obligation to be
satisfied pro rata with the 5% Preferred Stock) or (ii) declare or make any
Junior Securities Distribution (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Securities), or, directly or indirectly, discharge any mandatory or
optional redemption, sinking fund or other similar obligation in respect of the
Junior Securities.

              (c)    On and after the date that is the earlier of (i) the second
anniversary of the Issue Date or (ii) the date an exchange is consummated
pursuant to paragraph (8)(a), the Corporation shall have the right to redeem
from any Qualified Holder, upon not less than five days' nor more than ten days'
notice of the redemption date, from time to time in part, or in whole, shares of
5% Preferred Stock, at the Redemption Price, payable in cash, together with
accrued and unpaid dividends thereon, including any dividend required under
paragraph (12)(c), to, but excluding, the date fixed for redemption, without
interest.

              (d)    Upon the redemption of 5% Preferred Stock, the Corporation
shall pay the Redemption Price, any accrued and unpaid dividends in arrears to,
but excluding, the Dividend Payment Date, and any other dividend required under
paragraph (12)(c).


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              (e)    For purposes of paragraph (6)(a), unless full cumulative
dividends (whether or not declared) on all outstanding shares of 5% Preferred
Stock and any Parity Securities shall have been paid or contemporaneously are
declared and paid or set apart for payment for all Dividend Periods terminating
on or prior to the applicable redemption date and notice has been given in
accordance with paragraph (7), none of the shares of 5% Preferred Stock shall be
redeemed, and no sum shall be set aside for such redemption, unless shares of 5%
Preferred Stock are redeemed pro rata and notice has previously been given in
accordance with paragraph (7).

              (7) Procedure for Redemption. (a) When the Corporation is
requested to redeem shares of 5% Preferred Stock pursuant to paragraph (6),
notice of the request for such redemption shall be given by certified mail,
return receipt requested, postage prepaid, mailed not less than 20 days prior to
the redemption date, by each requesting holder to the Corporation at the
following address and confirmed by facsimile transmission:

                      NTL Incorporated
                      110 East 59th Street
                      New York, New York 10022
                      Facsimile: (212) 906-8497

              Each such notice shall state (i) the redemption date and (ii) if
the holder is requiring the Corporation to redeem fewer than all the shares of
5% Preferred Stock held by such holder, the number of shares that the
Corporation is being required to redeem from such holder.

              Within 10 days of receipt of any such notice from a holder of the
5% Preferred Stock, the Corporation shall respond to each requesting holder with
a notice sent by certified mail, return receipt requested, postage prepaid, to
each requesting holder at such holder's address as the same appears on the stock
register of the Corporation and confirmed by facsimile transmission to each
requesting holder of record if the Corporation has been furnished with such
facsimile address by the holder(s); provided, however, that neither the failure
to give such notice nor confirmation nor any defect therein or in the mailing
thereof, to any particular holder, shall affect the sufficiency of the notice or
the validity of the proceedings for redemption with respect to the other
holders. Each such notice shall (i) confirm the redemption date and the number
of shares of 5% Preferred Stock to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of shares to be redeemed from
such holder and (ii) state (A) the amount payable, (B) the place or places where
certificates for such shares are to be surrendered or the notice should be sent
for payment of the redemption price, and (C) that dividends on the shares to be
redeemed will cease to accrue at and from such redemption date, except as
otherwise provided herein. Any notice that was


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<PAGE>   175



mailed in the manner herein provided shall be conclusively presumed to have been
duly given on the date mailed whether or not the holder receives the notice.

              (b)    If notice has been mailed by the Corporation in response to
any holder who has given the Corporation notice requesting redemption of any of
its shares of 5% Preferred Stock, as aforesaid, from and after the redemption
date (unless default shall be made by the Corporation in providing for the
payment of the redemption price of the shares called for redemption and
dividends accrued and unpaid thereon, if any), (i) except as otherwise provided
herein, dividends on the shares of 5% Preferred Stock so called for redemption
shall cease to accrue, (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of the 5%
Preferred Stock shall cease (except the right to receive from the Corporation
the Redemption Price without interest thereon, upon surrender and endorsement
of the certificates for any shares so redeemed, and to receive any dividends
payable thereon, including any amounts payable pursuant to paragraph (12)(c)).

              (c)    Upon surrender of the certificates for any shares so
redeemed (properly endorsed or assigned for transfer, if the Board of Directors
of the Corporation shall so require and the notice shall so state), such shares
shall be redeemed by the Corporation at the Redemption Price aforesaid, plus any
dividends payable thereon, including any amounts payable pursuant to paragraph
12(c). If fewer than all the outstanding shares of 5% Preferred Stock are to be
redeemed due to the restriction set forth in paragraph (6)(b), the number of
shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be selected pro rata (with any fractional shares
being rounded to the nearest whole share). In case fewer than all the shares
represented by any such certificate are redeemed, without cost to the holder
thereof either (i) a new certificate shall be issued representing the
non-surrendered shares, or (ii) at the option of the holder, the holder shall be
entitled to retain its existing certificates, which shall be deemed to represent
the number of shares of 5% Preferred Stock that have not been redeemed.

              (8) Exchange. (a) Upon at least 30 days' written notice to the
Corporation, a Qualified Holder shall have the right, at such Qualified
Holder's option, to exchange all or any part of such shares of 5% Preferred
Stock for shares of Eurotel Stock (or to effect a constructive exchange in
accordance with paragraph (12)(d)) having a value (calculated pursuant to
paragraph 8(c) below) equal to the Redemption Price of the shares of 5%
Preferred Stock with respect to which the exchange right is being exercised,
together with accrued and unpaid dividends thereon to, but excluding, the date
fixed for exchange, of such shares of 5% Preferred Stock.

              (b)    Any exchange pursuant to paragraph 8(a) shall be subject to
the following requirements:


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              (i)    The 5% Preferred Stock shall have been outstanding for at
least six months.

              (ii)   Consummation of the exchange will not cause the
Corporation, any subsidiary of the Corporation, or Eurotel to become in breach
or contravention of, or give rise to a right to terminate or otherwise cause a
loss of any material right under, any material agreement, contract, instrument
or obligation of or binding on such entity; and the Corporation covenants and
agrees not to enter into any such agreement, contract or instrument or incur
such obligation after the date of issuance of the 5% Preferred Stock.

              (iii)  All necessary approvals of any governmental competition or
other regulatory bodies or authorities having jurisdiction over the exchange or
any matters arising as a result thereof shall have been received, and the
exchange will have no material negative effect on any material governmental
license, permit or authorization held by Eurotel or any subsidiary of Eurotel;
provided that after receipt of a notice from a Qualified Holder under paragraph
8(a) the Corporation shall, subject to receiving in the case of competition
approvals full cooperation from the Qualified Holder, promptly take all
reasonable steps necessary to receive all such governmental competition and
regulatory approvals and to avoid any such material negative effect.

              (iv)   The maximum amount of Eurotel Stock that may be acquired
upon an exchange shall be 50% of the outstanding amount thereof. Any shares of
5% Preferred Stock remaining outstanding after acquisition of the maximum amount
of Eurotel Stock shall be subject to redemption in accordance with paragraph
6(a) hereof.

              (c)    The aggregate value at any time of the Eurotel Stock shall
equal the aggregate amount expended by the Corporation and its subsidiaries in
the acquisition of the entities that comprise Eurotel (less the aggregate
amount of debt, as reflected on the consolidated balance sheet of Eurotel
prepared in conformity with GAAP, which is incurred or assumed by Eurotel or any
of its subsidiaries or entities comprising Eurotel or its predecessors in
connection therewith (the "Acquisition Debt")), together with any amounts
invested in Eurotel or any of its subsidiaries (other than by Eurotel or its
subsidiaries) after such acquisition and prior to the exchange, reduced by any
dividends, distribution or transfers of any assets from Eurotel to any other
Person increasing at a rate of 5% per annum from the date of such acquisition or
investment to the date the value of Eurotel is being calculated. The value of
each share of Eurotel Stock shall be pro rata to the aggregate value of Eurotel.

              (d)    If at the time of any exchange of all of the 5% Preferred
Stock, the Eurotel Stock acquired as a result of such exchange does not
constitute 50% of the outstanding shares of Eurotel Stock, the Qualified Holder
shall have the right (subject to the conditions set forth in paragraph (b)
above) to acquire from the Corporation an


                                      F-14

<PAGE>   177



additional amount of Eurotel Stock (the "Additional Amount") such that the
amount of Eurotel Stock held by such Qualified Holder as a result of the
exchange and the acquisition of the Additional Amount equals 50% of the
outstanding shares of Eurotel Stock. The Additional Amount shall be acquired for
cash at the same per share value calculated pursuant to paragraph (c) above.

              (e)    If Eurotel shall issue to the Corporation any option,
warrant or right to acquire Eurotel Stock, or if the issued Eurotel Stock shall
be comprised of more than one class, the rights of the Qualified Holder under
this paragraph (8) shall be equitably adjusted so as to maintain the intent of
this paragraph (8) that the Qualified Holder may acquire 50% of the Eurotel
Stock from the Corporation at a value reflecting the provisions of paragraph
8(c).

              (f)    If any of the requirements set forth in paragraph (8)(b)
cannot be satisfied upon a Qualified Holder's exchange for Eurotel Stock under
paragraph 8(a) or acquisition of Eurotel Stock under paragraph 8(d) of 50% of
the outstanding amount of Eurotel Stock, as determined in good faith by such
Qualified Holder and the Corporation, the Qualified Holder shall have the right
to acquire, upon exchange under paragraph 8(a) of any part of the 5% Preferred
Stock held by the Qualified Holder or acquisition under paragraph 8(d), such
amount of Eurotel Stock as would allow the requirements set forth in paragraph
(8)(b) to be satisfied. If the Qualified Holder exercises the right described in
the previous sentence, it shall have the right (i) to exchange or acquire the
remaining amount of Eurotel Stock as soon as possible after the restrictions on
the exchange or acquisition of the entire amount of Eurotel Stock permitted
hereunder shall cease to exist or (ii) to require redemption of any amount of
Preferred Shares that such Qualified Holder shall hold after exercising its
rights under the first sentence of this paragraph (8)(f).

              (g)    The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Eurotel Stock upon exchange of the 5% Preferred Stock pursuant hereto;
provided, however, that the Corporation shall not be required to pay any tax
that may be payable in respect of any transfer involved in the issue or delivery
of shares of Eurotel Stock in a name other than that of the holder of the 5%
Preferred Stock to be exchanged and no such issue or delivery shall be made
unless and until the Person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or established, to the satisfaction of
the Corporation, that such tax has been paid.

              (9) Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (9), each holder of shares of 5% Preferred Stock
which is a Qualified Holder shall have the right, at any time and from time to
time after the date which is six months from the consummation of an exchange
pursuant to paragraph (8)(a), at such holder's option, to convert any or all
outstanding shares of 5% Preferred Stock held by


                                      F-15

<PAGE>   178



such holder, but not fractions of shares, into fully paid and non-assessable
shares of Common Stock by surrendering such shares to be converted, such
surrender to be made in the manner provided in paragraph (9)(b) hereof. The
number of shares of Common Stock deliverable upon conversion of each share of 5%
Preferred Stock shall be equal to $1,000 divided by the 25-Day Average Market
Price as of the date the exchange is consummated (the "Exchange Date"), as
adjusted as provided herein, provided that such conversion rate (the "Conversion
Rate") shall not be less than the price that would cause an adjustment pursuant
to Schedule 25, Section 2(c) of the Restated Transaction Agreement, dated July
26, 1999, by and among Bell Atlantic Corporation, Cable and Wireless plc, Cable
& Wireless Communications plc and the Corporation. The Conversion Rate is
subject to adjustment from time to time pursuant to paragraph (9)(d) hereof. The
right to convert shares called for redemption pursuant to paragraph 6(c) shall
terminate at the close of business on the date immediately preceding the date
fixed for such redemption unless the Corporation shall default in making payment
of the amount payable upon such redemption, in which case such right of
conversion shall be reinstated. Upon conversion, any accrued and unpaid
dividends, including any dividends required under paragraph (12)(c), on the 5%
Preferred Stock at the date of conversion shall be paid to the holder thereof in
accordance with the provisions of paragraph (4).

              (b)    (i) In order to exercise the conversion privilege, the
holder of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (12)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976; provided, however, that the Corporation
shall use its best efforts in cooperating with such holder to obtain such legal
or regulatory approvals to the extent its cooperation is necessary. Such notice
shall also state the name or names (with address and social security or other
taxpayer identification number, if applicable) in which the certificate or
certificates for Common Stock are to be issued. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such share of
5% Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder or the holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Corporation demonstrating that such taxes have been paid).
All certificates representing shares of 5% Preferred Stock surrendered for
conversion shall be canceled by the Corporation or the transfer agent.


                                      F-16

<PAGE>   179



              (ii)   Subject to the last sentence of paragraph (9)(a), holders
of shares of 5% Preferred Stock at the close of business on a dividend payment
record date shall not be entitled to receive the dividend payable on such shares
on the corresponding Dividend Payment Date if such holder shall have surrendered
(or made a constructive surrender under paragraph (12)(d)) for conversion such
shares at any time following the preceding Dividend Payment Date and prior to
such Dividend Payment Date.

              (iii)  Subject to a holder's election under paragraph (12)(d), as
promptly as practicable after the surrender (including a constructive surrender
under paragraph (12)(d)) by a holder of the certificates for shares of 5%
Preferred Stock as aforesaid, the Corporation shall issue and shall deliver to
such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(12)(d)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (9), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (9)(c). Upon conversion of
only a portion of the shares of 5% Preferred Stock represented by any
certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (12)(d), upon the surrender
(including a constructive surrender under paragraph (12)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be outstanding and all rights of a holder with respect to
such shares so surrendered shall immediately terminate except the right to
receive the Common Stock and other amounts payable pursuant to this paragraph
(9).

              (iv)   Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered pursuant to an election under paragraph (12)(d)) and such notice
received by the Corporation as aforesaid, and the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby at such time
on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock
surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered and such notice received by the Corporation.


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              (c)    (i) No fractional shares or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion (or deemed surrendered under paragraph (12)(d)) at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of 5% Preferred Stock surrendered (or deemed surrendered under paragraph
(12)(d)) for conversion by such holder.

              (ii)   Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered under paragraph (12)(d)) and such notice received by the Corporation
as aforesaid, and the Person or Persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of the
shares of Common Stock represented thereby at such time on such date and such
conversion shall be into a number of shares of Common Stock equal to the product
of the number of shares of 5% Preferred Stock surrendered times the Conversion
Rate in effect at such time on such date, unless the stock transfer books of the
Corporation shall be closed on that date, in which event such Person or Persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer books are open,
but such conversion shall be based upon the Conversion Rate in effect on the
date upon which such shares shall have been surrendered (or deemed surrendered
under paragraph (12)(d)) and such notice received by the Corporation.

              (d)    The Conversion Rate shall be adjusted from time to time as
follows:

              (i)    If the Corporation shall after the Exchange Date (A)
declare a dividend or make a distribution on its Common Stock in shares of its
Common Stock, (B) subdivide its outstanding Common Stock into a greater number
of shares, (C) combine its outstanding Common Stock into a smaller number of
shares, or (D) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior


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to the record date in the case of a dividend or distribution or the effective
date in the case of a subdivision, combination or reclassification. An
adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (9)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case of a
subdivision, combination or reclassification. Adjustments in accordance with
this paragraph (9)(d)(i) shall be made whenever any event listed above shall
occur.

              (ii)   If the Corporation shall after the Exchange Date fix a
record date for the issuance of rights or warrants (in each case, other than any
rights issued pursuant to a shareholder rights plan) to all holders of Common
Stock entitling them (for a period expiring within 45 days after such record
date) to subscribe for or purchase Common Stock (or securities convertible into
Common Stock) at a price per share (or, in the case of a right or warrant to
purchase securities convertible into Common Stock, having an effective exercise
price per share of Common Stock, computed on the basis of the maximum number of
shares of Common Stock issuable upon conversion of such convertible securities,
plus the amount of additional consideration payable, if any, to receive one
share of Common Stock upon conversion of such securities) less than the 25-Day
Average Market Price on the date on which such issuance was declared or
otherwise announced by the Corporation (the "Determination Date"), then the
Conversion Rate in effect at the opening of business on the Business Day next
following such record date shall be adjusted so that the holder of each share of
5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to such record date by (II) a
fraction, the numerator of which shall be the sum of (A) the number of shares of
Common Stock outstanding on the close of business on the Determination Date and
(B) the number of additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants (or in the case of a right or
warrant to purchase securities convertible into Common Stock, the aggregate
number of additional shares of Common Stock into which the convertible
securities so offered are initially convertible), and the denominator of which
shall be the sum of (A) the number of shares of Common Stock outstanding on the
close of business on the Determination Date and (B) the number of shares that
the aggregate proceeds to the Corporation from the exercise of such rights or
warrants for Common Stock would purchase at such 25-Day Average Market Price on
such date (or, in the case of a right of warrant to purchase securities
convertible into Common Stock, the number of shares of Common Stock obtained by
dividing the aggregate exercise price of such rights or warrants for the maximum
number of shares of Common Stock issuable upon conversion of such convertible
securities, plus the aggregate amount of additional consideration payable, if
any, to convert such securities into Common Stock, by such 25-Day Average Market
Price). Such adjustment shall become effective immediately after the opening of
business on the Business Day next following such record date (except as


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provided in paragraph (9)(h)). Such adjustment shall be made successively
whenever such a record date is fixed. In the event that after fixing a record
date such rights or warrants are not so issued, the Conversion Rate shall be
readjusted to the Conversion Rate which would then be in effect if such record
date had not been fixed. In determining whether any rights or warrants entitle
the holders of Common Stock to subscribe for or purchase shares of Common Stock
at less than such 25-Day Average Market Price, there shall be taken into account
any consideration received by the Corporation upon issuance and upon exercise of
such rights or warrants, the value of such consideration, if other than cash, to
be determined by the Board of Directors in good faith. In case any rights or
warrants referred to in this subparagraph (ii) shall expire unexercised after
the same have been distributed or issued by the Corporation (or, in the case of
rights or warrants to purchase securities convertible into Common Stock once
exercised, the conversion right of such securities shall expire), the Conversion
Rate shall be readjusted at the time of such expiration to the Conversion Rate
that would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.

              (iii)  If the Corporation shall fix a record date for the making
of a distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (9)(d)(i)) or rights or warrants (in each case, other than
any rights issued pursuant to a shareholder rights plan) to subscribe for or
purchase any of its securities (excluding those rights and warrants issued to
all holders of Common Stock entitling them (for a period expiring within 45 days
after such record date) to subscribe for or purchase Common Stock or securities
convertible into shares of Common Stock, which rights and warrants are referred
to in and treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) called the "Securities"), then in each
such case the Conversion Rate shall be adjusted so that the holder of each share
of 5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to the close of business on such
record date by (II) a fraction, the numerator of which shall be the 25-Day
Average Market Price per share of the Common Stock on such record date, and the
denominator of which shall be the 25-Day Average Market Price per share of the
Common Stock on such record date less the then-fair market value (as determined
by the Board of Directors in good faith, whose determinations shall be
conclusive) of the portion of the assets, shares of its capital stock or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that after
fixing a record date such distribution is not so made, the Conversion Rate shall
be readjusted to the Conversion Rate which would then be in effect if such
record date had not been fixed. Such adjustment shall become


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effective immediately at the opening of business on the Business Day next
following (except as provided in paragraph (9)(h)) the record date for the
determination of shareholders entitled to receive such distribution. For the
purposes of this subparagraph (iii), the distribution of a Security, which is
distributed not only to the holders of the Common Stock on the date fixed for
the determination of shareholders entitled to such distribution of such
Security, but also is distributed with each share of Common Stock delivered to a
Person converting a share of 5% Preferred Stock after such determination date,
shall not require an adjustment of the Conversion Rate pursuant to this
subparagraph (iii); provided, however, that on the date, if any, on which a
Person converting a share of 5% Preferred Stock would no longer be entitled to
receive such Security with a share of Common Stock (other than as a result of
the termination of all such Securities), a distribution of such Securities shall
be deemed to have occurred and the Conversion Rate shall be adjusted as provided
in this subparagraph (iii) (and such day shall be deemed to be "the date fixed
for the determination of shareholders entitled to receive such distribution" and
"the record date" within the meaning of the three preceding sentences). If any
rights or warrants referred to in this subparagraph (iii) shall expire
unexercised after the same shall have been distributed or issued by the
Corporation, the Conversion Rate shall be readjusted at the time of such
expiration to the Conversion Rate that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.

              (iv)   In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
9(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date for the
cash dividend or distribution by a fraction the numerator of which shall be the
Current Market Price of a share of the Common Stock on the Record Date and the
denominator shall be such Current Market Price less the per share amount of cash
so distributed during the 12-month period applicable to one share of Common
Stock, such adjustment to be effective immediately prior to the opening of
business on the Business Day following the Record Date; provided, however, that
in the event the denominator of the foregoing fraction is zero or negative, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
holder of 5% Preferred Stock shall have the right to receive upon conversion, in
addition to the shares of Common Stock to which the holder is entitled, the
amount of


                                      F-21

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cash such holder would have received had such holder converted each share of 5%
Preferred Stock at the beginning of the 12-month period. In the event that such
dividend or distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate which would then be in effect if such
dividend or distribution had not been declared. Notwithstanding the foregoing,
if any adjustment is required to be made as set forth in this paragraph
(9)(d)(iv), the calculation of any such adjustment shall include the amount of
the quarterly cash dividends paid during the 12-month reference period only to
the extent such dividends exceed the regular quarterly cash dividends paid
during the 12 months preceding the 12-month reference period. For purposes of
this paragraph (9)(d)(iv), "Record Date" shall mean, with respect to any
dividend or distribution in which the holders of Common Stock have the right to
receive cash, the date fixed for determination of shareholders entitled to
receive such cash.

              In the event that at any time cash distributions to holders of
Common Stock are not paid equally on all series of Common Stock, the provisions
of this paragraph 9(d)(iv) will apply to any cash dividend or cash distribution
on any series of Common Stock otherwise meeting the requirements of this
paragraph, and shall be deemed amended to the extent necessary so that any
adjustment required will be made on the basis of the cash dividend or cash
distribution made on any such series.

              (v)    In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Corporation or any subsidiary
of the Corporation for all or any portion of the outstanding shares of Common
Stock to the extent that the cash and fair market value (as determined in good
faith by the Board of Directors of the Corporation, whose determination shall be
conclusive and shall be described in a resolution of such Board) of any other
consideration included in such payment per share of Common Stock at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as amended) exceed by more than 5.0%, with any smaller
excess being disregarded in computing the adjustment to the Conversion Rate
provided in this paragraph (9)(d)(v), the first reported sale price per share of
the Common Stock on the Trading Day next succeeding the Expiration Time, then
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to
the Expiration Time by a fraction the numerator of which shall be the sum of (x)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchase Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchase Shares) on the Expiration Time and the first reported sale price of
the Common Stock on the Trading Day next succeeding the Expiration Time, and the
denominator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time


                                      F-22

<PAGE>   185



multiplied by the first reported sale price of the Common Stock on the Trading
Day next succeeding the Expiration Time, such adjustment to become effective
immediately prior to the opening of business on the day following the Expiration
Time.

              (vi)   No adjustment in the Conversion Rate shall be required
unless such adjustment would require a cumulative increase or decrease of at
least 1% in the Conversion Rate; provided, however, that any adjustments that by
reason of this subparagraph (vi) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment until made, and
provided further that any adjustment shall be required and made in accordance
with the provisions of this paragraph (9) (other than this subparagraph (vi))
not later than such time as may be required in order to preserve the tax-free
nature of a distribution for United States income tax purposes to the holders of
shares of 5% Preferred Stock or Common Stock. Notwithstanding any other
provisions of this paragraph (9), the Corporation shall not be required to make
any adjustment of the Conversion Rate for the issuance of any shares of Common
Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and the investment of
additional optional amounts in shares of Common Stock under such plan. All
calculations under this paragraph (9) shall be made to the nearest dollar or to
the nearest 1/1,000 of a share, as the case may be. Anything in this paragraph
(9)(d) to the contrary notwithstanding, the Corporation shall be entitled, to
the extent permitted by law, to make such adjustments in the Conversion Rate,
in addition to those required by this paragraph (9)(d), as it in its discretion
shall determine to be advisable in order that any stock dividends subdivision of
shares, reclassification or combination of shares, distribution or rights or
warrants to purchase stock or securities, or a distribution of other assets
(other than cash dividends) hereafter made by the Corporation to its
shareholders shall not be taxable.

              (vii)  In the event that, at any time as a result of shares of any
other class of capital stock becoming issuable in exchange or substitution for
or in lieu of shares of Common Stock or as a result of an adjustment made
pursuant to the provisions of this paragraph (9)(d), the holder of 5% Preferred
Stock upon subsequent conversion shall become entitled to receive any shares of
capital stock of the Corporation other than Common Stock, the number of such
other shares so receivable upon conversion of any shares of 5% Preferred Stock
shall thereafter be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained herein.

              (e)    If the Corporation shall be a party to any transaction
(including without limitation, a merger, consolidation, sale of all or
substantially all of the Corpo ration's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (9)(d)(i) applies)
(each of the foregoing being referred to herein as a "Transaction"), in each
case as a result of which shares of Common Stock shall be converted into the
right to receive stock, securities or other property (including cash or


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<PAGE>   186



any combination thereof), there shall be no adjustment to the Conversion Rate
but each share of 5% Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that number
of shares or fraction thereof of Common Stock into which one share of 5%
Preferred Stock was convertible immediately prior to such Transaction, assuming
such holder of Common Stock (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be
("Constituent Person"), or an affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of stock
securities and other property (including cash) receivable upon such Transaction
(provided that if the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction is not the same for each
share of Common Stock of the Corporation held immediately prior to such
Transaction by other than a Constituent Person or an affiliate thereof and in
respect of which such rights of election shall not have been exercised ("non-
electing share"), then for the purpose of this paragraph (9)(e) the kind and
amount of stock, securities and other property (including cash) receivable upon
such Transaction by each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares). The
provisions of this paragraph (9)(e) shall similarly apply to successive
Transactions.

              (f)    If:

              (i)    the Corporation shall declare a dividend (or any other
distribution) on the Common Stock; or

              (ii)   the Corporation shall authorize the granting to the holders
of the Common Stock of rights or warrants to subscribe for or purchase any
shares of any class or any other rights or warrants; or

              (iii)  there shall be any subdivision, combination or
reclassification of the Common Stock or any consolidation or merger to which the
Corporation is a party and for which approval of any shareholders of the
Corporation is required, or the sale or transfer of all or substantially all of
the assets of the Corporation as an entirety; or

              (iv)   there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (9)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the


                                      F-24

<PAGE>   187



Corporation, as promptly as possible, but at least ten days prior to the
applicable date hereinafter specified, a notice stating (A) the date on which a
record is to be taken for the purpose of such dividend (or such other
distribution) or rights or warrants, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to be entitled to such
dividend, distribution or rights or warrants are to be determined or (B) the
date on which such subdivision, combination, reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution or winding up or other action
is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property, if any, deliverable upon such
subdivision, combination, reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up. Failure to give or receive
such notice or any defect therein shall not affect the legality or validity of
any distribution, right, warrant subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, winding up or
other action, or the vote upon any of the foregoing.

              (g)    Whenever the Conversion Rate is adjusted as herein
provided, the Corporation shall prepare an officer's certificate with respect to
such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the effective date of such adjustment and shall mail a copy of such
officer's certificate to the holder of each share of 5% Preferred Stock at such
holder's last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (9)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be conclusive evidence of the correctness of such adjustment.

              (h)    In any case in which paragraph (9)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (9)(c).

              (i)    For purposes of this paragraph (9), the number of shares of
Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.


                                      F-25

<PAGE>   188



              (j)    There shall be no adjustment of the Conversion Rate in case
of the issuance of any stock of the Corporation in a reorganization, acquisition
or other similar transaction except as specifically set forth in this paragraph
(9). If any single action would require adjustment of the Conversion Rate
pursuant to more than one subparagraph of this paragraph (9), only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value.

              (k)    If the Corporation shall take any action affecting the
Common Stock, other than action described in this paragraph (9), that in the
opinion of the Board of Directors materially adversely affects the conversion
rights of the holders of the shares of 5% Preferred Stock, the Conversion Rate
may be adjusted, to the extent permitted by law, in such manner, if any, and at
such time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (9)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.

              (l)    (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of 5% Preferred Stock
not theretofore converted. For purposes of this paragraph (9)(l) the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.

              (ii)   The Corporation covenants that any shares of Common Stock
issued upon conversion of the 5% Preferred Stock shall be duly authorized,
validly issued, fully paid and non-assessable. Before taking any action that
would cause an adjustment increasing the Conversion Rate such that the quotient
of $1,000.00 and the Conversion Rate would be reduced below the then-par value
of the shares of Common Stock deliverable upon conversion of the 5% Preferred
Stock, the Corporation will take any corporate action that, in the opinion of
its counsel, may be necessary in order that the Corporation may validly and
legally issue fully paid and non-assessable shares of Common Stock based upon
such adjusted Conversion Rate.

              (iii)  Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 5% Preferred
Stock, the Corporation shall comply with all applicable federal and state laws
and regulations which required action to be taken by the Corporation.

              (m)    The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of


                                      F-26

<PAGE>   189



Common Stock or other securities or property on conversion of the 5% Preferred
Stock pursuant hereto; provided, however, that the Corporation shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issue or delivery of shares of Common Stock or other securities or
property in a name other than that of the holder of the 5% Preferred Stock to be
converted and no such issue or delivery shall be made unless and until the
Person requesting such issue or delivery has paid to the Corporation the amount
of any such tax or established, to the satisfaction of the Corporation, that
such tax has been paid.

              (10) Voting Rights. (a) The holders of record of shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (10) or as otherwise provided by law. When and if the
holders of 5% Preferred Stock are entitled to vote by law or pursuant to this
paragraph (10), each holder will be entitled to one vote per share except that
when any other series of preferred stock shall have the right to vote with the
5% Preferred Stock as a single class on any matter, then the 5% Preferred Stock
and other series shall have with respect to such matters one vote per $1,000 of
stated liquidation preference.

              (b)    Without the written consent of the holders of at least 66
2/3% of aggregate Liquidation Rights of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 66 2/3% of aggregate Liquidation Rights
of the outstanding shares of 5% Preferred Stock at a meeting of the holders of
5% Preferred Stock called for such purpose, the Corporation will not amend,
alter or repeal any provision of the Restated Certificate of Incorporation (by
merger or otherwise) so as to adversely affect the preferences, rights or powers
of the 5% Preferred Stock; provided that any such amendment that changes the
dividend payable on, or the aggregate Liquidation Rights of, the 5% Preferred
Stock shall require the affirmative vote at a meeting of holders of 5% Preferred
Stock called for such purpose or written consent of the holder of each share of
5% Preferred Stock.

              (c)    Without the written consent of the holders of at least 66
2/3% of aggregate Liquidation Rights of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 66 2/3% of aggregate Liquidation Rights
of the outstanding shares of 5% Preferred Stock at a meeting of such holders
called for such purpose, the Corporation will not issue any additional 5%
Preferred Stock or create, authorize or issue any Parity Securities or Senior
Securities or increase the authorized amount of any such other class or series;
provided that this paragraph (9)(c) shall not limit the right of the Corporation
to (i) issue additional shares of 5% Preferred Stock as dividends pursuant to
paragraph (4) or (ii) to issue Parity Securities or Senior Securities in order
to refinance, redeem or refund the 13% Preferred, the 5% Convertible Preferred
or the 5% Convertible Series B, provided that in the case of a refinancing,
redemption or refund of the 13% Preferred, the 5% Convertible Preferred or the
5% Convertible Series B, the maximum accrual value (i.e., the sum of stated
value and maximum amount payable in


                                      F-27

<PAGE>   190



kind over the term from issuance to first date of mandatory redemption or
redemption at the option of the holder) of such Parity Securities or Senior
Securities issued by the Corporation in such refinancing, as shall be reflected
on the Corporation's consolidated balance sheet prepared in accordance with GAAP
applied on a basis consistent with the Corporation's prior practice, may not
exceed the maximum accrual value of the 13% Preferred, the 5% Convertible
Preferred or the 5% Convertible Series B, respectively, as reflected on the
Corporation's consolidated balance sheet as contained in the report filed by the
Corporation with the United States Securities and Exchange Commission pursuant
to the Exchange Act that is most recent prior to such refinancing.

              (d)    Nothing in this paragraph (10) shall be in derogation of
any rights that a holder of shares of 5% Preferred Stock may have in his
capacity as a holder of shares of Common Stock.

              (e)    Except as otherwise set forth in this paragraph (10) or as
required by law, the holders of 5% Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers, except as
provided by this Certificate or in any agreement the Corporation and a holder
and the consent or vote of such holders shall not be required for the taking of
any corporate action by the Corporation or the Board of Directors. The
provisions of this paragraph (10) are in lieu of, and not in addition to, any
voting rights specified in the Restated Certificate of Incorporation as
applicable to a series of Preferred Stock.

              (11) Holding Company. Notwithstanding anything herein to the
contrary, if the Corporation is reorganized such that the Common Stock is
exchanged for the common stock of a new entity ("Holdco") whose common stock is
traded on NASDAQ or another recognized securities exchange, then the
Corporation, by notice to the holders of the 5% Preferred Stock but without any
required consent on their part, may cause the exchange of this 5% Preferred
Stock for 5% preferred stock of Holdco having the same terms, conditions,
ranking and other rights as set forth herein, provided that (i) Holdco shall be
incorporated under the Delaware General Corporation Law and be based in the
United States and (ii) to the extent permitted by applicable law, the
certificates representing shares of the 5% Preferred Stock prior to the
formation of Holdco shall be deemed to represent shares of the new 5% preferred
stock, and the holder thereof shall not be required to surrender or exchange its
certificates representing shares of 5% Preferred Stock.

              (12) General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are
for convenience of reference only and shall not define, limit or affect any of
the provisions hereof.

              (b)    The shares of 5% Preferred Stock shall bear the following
legend:


                                      F-28

<PAGE>   191



       THE SHARES OF PREFERRED STOCK, PAR VALUE $0.01, OF THE CORPORATION (THE
       "PREFERRED STOCK") REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED OR
       SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF
       1933, AS AMENDED (THE "ACT") AND ANY APPLICABLE STATE SECURITIES LAWS OR
       IN ACCORDANCE WITH ANY APPLICABLE EXEMPTION FROM, OR TRANSACTION NOT
       SUBJECT TO, THE REGISTRATION REQUIREMENTS UNDER THE ACT. THE TRANSFER OF
       THE PREFERRED STOCK EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE
       RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED
       FEBRUARY 17, 2000, AS MAY BE AMENDED, AMONG THE CORPORATION AND CERTAIN
       PURCHASERS, A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF THE
       CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH
       PREFERRED STOCK UPON WRITTEN REQUEST TO THE CORPORATION.

       SO LONG AS ANY OF THE PREFERRED STOCK ARE RESTRICTED SECURITIES WITHIN
       THE MEANING OF RULE 144(a)(3) UNDER THE ACT, THE CORPORATION WILL, DURING
       ANY PERIOD IN WHICH (A) THE CORPORATION IS NOT SUBJECT TO AND IN
       COMPLIANCE WITH SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
       1934, AS AMENDED (THE "EXCHANGE ACT"), OR (B) THE CORPORATION IS NOT
       EXEMPT FROM THE REPORTING OBLIGATIONS OF RULE 12g3-2(B) OF THE EXCHANGE
       ACT, PROVIDE TO EACH HOLDER OF SUCH RESTRICTED SECURITIES AND TO EACH
       PROSPECTIVE PURCHASER (AS DESIGNATED BY SUCH HOLDER) OF SUCH RESTRICTED
       SECURITIES, UPON THE REQUEST OF SUCH HOLDER OR PROSPECTIVE PURCHASER, ANY
       INFORMATION REQUIRED TO BE PROVIDED BY SUBJECTION (d)(4)(i) OF RULE
       144(A) UNDER THE ACT.

              (c)    If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) hereof or shall have failed to
discharge the Redemption Obligation pursuant to paragraph (6) hereof, the
holders of shares of 5% Preferred Stock shall be entitled to receive, in
addition to all other amounts required to be paid hereunder, when, as and if
declared by the Board of Directors, out of funds legally available for the
payment of dividends (after taking into account revaluation of the assets and
liabilities of the Corporation to the extent deemed reasonable by the Board of
Directors of the Corporation after consultation with legal and financial
advisors) but without regard to any contractual or other restrictions with
respect thereto, cash


                                      F-29

<PAGE>   192



dividends on (i) the aggregate dividends which the Corporation shall have failed
to declare or pay or (ii) the aggregate Redemption Price together with accrued
and unpaid dividends on the 5% Preferred Stock, as applicable, in each case at a
rate of 2% per quarter, compounded quarterly, for the period during which the
failure to pay dividends or failure to discharge the Redemption Obligation shall
continue.

              (d)    (i) Whenever in connection with any exchange or conversion
of the 5% Preferred Stock for Eurotel Stock or Common Stock, as applicable, the
Qualified Holder is required to surrender certificates representing such shares
of 5% Preferred Stock, the Qualified Holder may, by written notice to the
Corporation and its transfer agent, elect to retain such certificates. In such
case, the certificates so retained by the Qualified Holder shall be deemed (as
and to the extent permitted by the law of the jurisdiction of incorporation of
Eurotel and with respect to Common Stock, Delaware) to represent, at and from
the date of such exchange, the number of shares of Eurotel Stock or the Common
Stock, as the case may be, issuable upon such exchange pursuant to paragraph (8)
or conversion pursuant to paragraph (9).

              (ii)   A Qualified Holder which has previously elected to retain
certificates representing the 5% Preferred Stock in accordance with paragraph
(12)(d)(i) upon exchange or conversion may subsequently elect to receive
certificates representing the shares of Eurotel Stock or the Common Stock issued
upon such exchange or conversion. To receive certificates representing such
shares of Eurotel Stock or the Common Stock, as applicable, the holder of such
certificates shall surrender it, duly endorsed or assigned to the Corporation or
in blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation for such purposes, with a
written notice of that election.

              Unless the certificates to be issued shall be registered in the
same name as the name in which such surrendered certificates are registered,
each certificate so surrendered shall be accompanied by instruments of transfer,
in form satisfactory to the Corporation, duly executed by the Qualified Holder
or the Qualified Holder's duly authorized attorney and an amount sufficient to
pay any transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid). All certificates so
surrendered shall be canceled by the Corporation or the transfer agent.

              As promptly as practicable after the surrender by the Qualified
Holder of such certificates, the Corporation shall issue and shall deliver to
such Qualified Holder, or on the Qualified Holder's written order, a certificate
or certificates for the number of duly authorized, validly issued, fully paid
and non-assessable shares of Eurotel Stock or the Common Stock, as applicable,
represented by the certificates so surrendered."


                                      F-30

<PAGE>   193


                                                                       Exhibit G

                     5% CUMULATIVE PARTICIPATING CONVERTIBLE
                            PREFERRED STOCK, SERIES E

              (1)    Number and Designation. 9,555.47 shares of the Preferred
Stock of the Corporation shall be designated as 5% Cumulative Participating
Convertible Preferred Stock, Series E (the "5% Preferred Stock") and no other
shares of Preferred Stock shall be designated as 5% Preferred Stock.

              (2)    Definitions. For purposes of the 5% Preferred Stock, the
following terms shall have the meanings indicated:

              "Additional Preferred" shall have the meaning set forth in
       paragraph (4)(a) hereof.

              "Bankruptcy Event" shall mean any of the following: (I) a court
       having jurisdiction in the premises enters a decree or order for (A)
       relief in respect of any Major Entity in an involuntary case under any
       applicable bankruptcy, insolvency or other similar law now or hereinafter
       in effect, (B) appointment of a receiver, liquidator, assignee,
       custodian, trustee, sequestrator or similar official of any Major Entity
       or for all or substantially all of the property and assets of any Major
       Entity or (C) the winding up or liquidation of the affairs of any Major
       Entity; or (II) any Major Entity (A) commences a voluntary case under any
       applicable bankruptcy, insolvency or other similar law now or hereinafter
       in effect, or consents to the entry of an order for relief in an
       involuntary case under any such law, (B) consents to the appointment of
       or taking possession by a receiver, liquidator, assignee, custodian,
       trustee, sequestrator or similar official of any Major Entity, or for all
       or substantially all of the property and assets of any Major Entity or
       (C) effects any general assignment for the benefit of creditors.

              "Board of Directors" shall mean the board of directors of the
       Corporation. Except as such term is used in paragraph (9), "Board of
       Directors" shall also mean the Executive Committee, if any, of such board
       of directors or any other committee duly authorized by such board of
       directors to perform any of its responsibilities with respect to the 5%
       Preferred Stock.

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


                                       G-1

<PAGE>   194



              "Common Stock" shall mean the Corporation's Common Stock, par
       value $.01 per share.

              "Constituent Person" shall have the meaning set forth in paragraph
       (8)(e)(i) hereof.

              "Conversion Rate" shall have the meaning set forth in paragraph
       (8)(a) hereof.

              "Current Market Price" of publicly traded shares of Common Stock
       or any other class of capital stock or other security of the Corporation
       or any other issuer for any day shall mean the last reported sale price
       for such security on the principal exchange or quotation system on which
       such security is listed or traded. If the security is not admitted for
       trading on any national securities exchange or the Nasdaq National
       Market, "Current Market Price" shall mean the average of the last
       reported closing bid and asked prices reported by the Nasdaq as furnished
       by any member in good standing of the National Association of Securities
       Dealers, Inc., selected from time to time by the Corporation for that
       purpose or as quoted by the National Quotation Bureau Incorporated. In
       the event that no such quotation is available for such day, the Current
       Market Price shall be the average of the quotations for the last five
       Trading Days for which a quotation is available within the last 30
       Trading Days prior to such day. In the event that five such quotations
       are not available within such 30-Trading Day period, the Board of
       Directors shall be entitled to determine the Current Market Price on the
       basis of such quotations as it reasonably considers appropriate.

              "Determination Date" shall have the meaning set forth in paragraph
       (8)(d)(ii) hereof.

              "Dividend Payment Date" shall mean September 30, December 31,
       March 31 and June 30 of each year, commencing on June 30, 2000; provided,
       however, that if any Dividend Payment Date falls on any day other than a
       Business Day, the dividend payment due on such Dividend Payment Date
       shall be paid on the Business Day immediately following such Dividend
       Payment Date.

              "Dividend Periods" shall mean quarterly dividend periods
       commencing on September 30, December 31, March 31 and June 30 of each
       year and ending on and including the day preceding the first day of the
       next succeeding Dividend Period.

              "Exchange Act" shall mean the Securities Exchange Act of 1934, as
       amended, and the rules and regulations thereunder.


                                       G-2

<PAGE>   195



              "Expiration Time" shall have the meaning set forth in paragraph
       (8)(d)(v) hereof.

              "5% Preferred Stock" shall have the meaning set forth in paragraph
       (1) hereof.

              "Issue Date" shall mean the date on which shares of 5% Preferred
       Stock are first issued.

              "Junior Securities" shall have the meaning set forth in paragraph
       (3)(c) hereof.

              "Junior Securities Distribution" shall have the meaning set forth
       in paragraph (4)(f) hereof.

              "Liquidation Right" shall mean, for each share of 5% Preferred
       Stock, the greater of (i) an amount equal to $1,000 per share, plus an
       amount equal to all dividends (whether or not earned or declared) accrued
       and unpaid thereon to the date of final distribution to such holders, and
       (ii) the amount that would be received in liquidation following
       conversion of a share of 5% Preferred Stock into Common Stock.

              "Major Entity" shall mean any of the Corporation, NTL
       Communications  Corp., Diamond Cable Communications Limited, Diamond
       Holdings Limited, NTL (Triangle) LLC or any Significant Subsidiary.

              "Mandatory Redemption Date" shall have the meaning set forth in
       paragraph (6)(c) hereof.

              "Mandatory Redemption Obligation" shall have the meaning set forth
       in paragraph (6)(d) hereof.

              "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
       securities market regulated by the National Association of Securities
       Dealers, Inc.

              "Nasdaq National Market" shall have the meaning set forth in Rule
       4200(a)(23) of the rules of the National Association of Securities
       Dealers, Inc.

              "9.9% Series B Preferred" shall have the meaning set forth in
       paragraph (3)(d) hereof.

              "non-electing share" shall have the meaning set forth in paragraph
       (8)(e)(i) hereof.


                                       G-3

<PAGE>   196



              "NYSE" means the New York Stock Exchange.

              "outstanding", when used with reference to shares of stock, shall
       mean issued shares, excluding shares held by the Corporation or a
       subsidiary.

              "Parity Securities" shall have the meaning set forth in paragraph
       (3)(b) hereof.

              "Person" shall mean any individual, partnership, association,
       joint venture, corporation, business, trust, joint stock company, limited
       liability company, any unincorporated organization, any other entity, a
       "group" of such persons, as that term is defined in Rule 13d-5(b) under
       the Exchange Act, or a government or political subdivision thereof.

              "Preferred Shares" has the meaning set forth in paragraph (9)(c).

              "Preferred Stock" shall have the meaning set forth in the first
       resolution above.

              "Purchase Shares" shall have the meaning set forth in paragraph
       (8)(d)(v) hereof.

              "Record Date" shall have the meaning set forth in paragraph
       (8)(d)(iv) hereof.

              "Relevant Compounding Factor" shall mean, with respect to each
       share of 5% Preferred Stock, upon initial issuance 1.00, and shall on
       each Dividend Payment Date be increased to equal the product of the
       Relevant Compounding Factor in effect immediately prior to such Dividend
       Payment Date and 1.0125.

              "Rights" shall have the meaning set forth in paragraph (11)
       hereof.

              "Securities" shall have the meaning set forth in paragraph
       (8)(d)(iii) hereof.

              "Senior Securities" shall have the meaning set forth in paragraph
       (3)(a) hereof.

              "set apart for payment" shall be deemed to include, without any
       action other than the following, the recording by the Corporation in its
       accounting ledgers of any accounting or bookkeeping entry which
       indicates, pursuant to a declaration of dividends or other distribution
       by the Board of Directors, the allocation of funds to be so paid on any
       series or class of capital stock of the


                                       G-4

<PAGE>   197



       Corporation; provided, however, that if any funds for any class or series
       of Junior Securities or any class or series of Parity Securities are
       placed in a separate account of the Corporation or delivered to a
       disbursing, paying or other similar agent, then "set apart for payment"
       with respect to the 5% Preferred Stock shall mean placing such funds in a
       separate account or delivering such funds to a disbursing, paying or
       other similar agent, as the case may be.

              "Significant Subsidiary" shall have the meaning given to such term
       in Regulation S-X under the Exchange Act.

              "13% Preferred" shall have the meaning set forth in paragraph
       (3)(d) hereof.

              "Trading Day" shall mean any day on which the securities in
       question are traded on the NYSE, or if such securities are not listed or
       admitted for trading on the NYSE, on the principal national securities
       exchange on which such securities are listed or admitted, or if not
       listed or admitted for trading on any national securities exchange, on
       the Nasdaq National Market, or if such securities are not quoted thereon,
       in the applicable securities market in which the securities are traded.

              "Transaction" shall have the meaning set forth in paragraph
       (8)(e)(i) hereof.

              "Trigger Event" shall have the meaning set forth in paragraph
       (9)(b) hereof.

              "Trigger Event Cure" shall have the meaning set forth in paragraph
       (9)(b) hereof.

              "25-Day Average Market Price" shall mean, for any security, the
       volume-weighted average of the Current Market Prices of that security for
       the twenty-five Trading Days immediately preceding the date of
       determination.

              (3)    Rank. Any class or series of stock of the Corporation shall
be deemed to rank:

              (a)    prior to the 5% Preferred Stock, either as to the payment
of dividends or as to distribution of assets upon liquidation, dissolution or
winding up, or both, if the holders of such class or series shall be entitled by
the terms thereof to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, in preference or priority to the holders
of 5% Preferred Stock ("Senior Securities");


                                       G-5

<PAGE>   198



              (b)    on a parity with the 5% Preferred Stock, either as to the
payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and

              (c)    junior to the 5% Preferred Stock, either as to the payment
of dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, or both, if such stock or series shall be Common Stock or if the
holders of the 5% Preferred Stock shall be entitled to receipt of dividends, and
of amounts distributable upon liquidation, dissolution or winding up, in
preference or priority to the holders of shares of such stock or series ("Junior
Securities").

              (d)    Each of the 13% Senior Redeemable Exchangeable Preferred
Stock and the 13% Series B Senior Redeemable Exchangeable Preferred Stock
(collectively, the "13% Preferred") is a Senior Security. Each of the 9.9%
Non-Voting Mandatorily Redeemable Preferred Stock, Series B ("9.9% Series B
Preferred") and the Series A Junior Participating Preferred Stock, is a Junior
Security. The 5% Cumulative Participating Convertible Preferred Stock, Series A,
the 5% Cumulative Participating Convertible Preferred Stock, Series C, the 5%
Cumulative Participating Convertible Preferred Stock, Series D, the 5%
Cumulative Preferred Stock, Series A, and one or more classes of Additional
Preferred (as defined below) shall be Parity Securities; provided, however, that
there shall be no issue of other Senior Securities, Parity Securities or rights
or options exercisable for or convertible into any such securities, except as
approved by the holders of the 5% Preferred Stock pursuant to paragraph 9(e).

              (e)    The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.

              (4)    Dividends. (a) Subject to paragraph (8)(b)(ii), the holders
of shares of 5% Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available for the
payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for


                                       G-6

<PAGE>   199



such Dividend Payment Date) or additional shares of Preferred Stock of a class
to be designated by the Board of Directors having terms substantially identical
to the 5% Preferred Stock except as follows: (A) the Conversion Rate (as set
forth in Section 8(a)) on such Preferred Stock initially shall be the quotient
resulting from the division of the Conversion Rate (as then in effect on the 5%
Preferred Stock) by the Relevant Compounding Factor and (B) the number of shares
of such Preferred Stock payable as a dividend on any Dividend Payment Date shall
increase for each Dividend Payment Date from the first Dividend Payment Date by
the Relevant Compounding Factor (such classes of Preferred Stock singularly and
collectively, the "Additional Preferred"). All dividends on the 5% Preferred
Stock, in whatever form, shall be payable in arrears quarterly on each Dividend
Payment Date and shall be cumulative from the Issue Date (except that dividends
on Additional Preferred shall accrue from the date such Additional Preferred is
issued or would have been issued in accordance with this Certificate of
Designation if such dividends had been declared), whether or not in any Dividend
Period or Dividend Periods there shall be funds of the Corporation legally
available for the payment of such dividends. Each such dividend shall be payable
to the holders of record of shares of the 5% Preferred Stock, as they appear on
the stock records of the Corporation at the close of business on the record date
for such dividend. Upon the declaration of any such dividend, the Board of
Directors shall fix as such record date on the fifth Business Day preceding the
relevant Dividend Payment Date and shall give notice on or prior to the record
date of the form of payment of such dividend. Accrued and unpaid dividends for
any past Dividend Payment Date may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record on such record
date, not more than 45 days nor less than five Business Days preceding the
payment date thereof, as may be fixed by the Board of Directors.

              (b)    In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock shall be entitled to
receive an amount equal to the amount (and in the form of consideration) that
such holders would be entitled to receive if, pursuant to paragraph (8), they
had converted such 5% Preferred Stock fully into Common Stock immediately before
the record date for the payment of any such dividends on Common Stock. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock as they appear on the stock records of the Corporation at the close of
business on the record date for such dividend on Common Stock, and the
Corporation shall pay each such dividend on the applicable payment date for such
dividend on the Common Stock.

              (c)    For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each such Additional
Preferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).


                                       G-7

<PAGE>   200



              (d)    The dividends payable for any period shorter than a full
Dividend Period on the 5% Preferred Stock shall accrue daily and be computed on
the basis of a 360-day year and the actual number of days in such period. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the 5% Preferred Stock that may be in
arrears except as otherwise provided herein.

              (e)    So long as any shares of the 5% Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities 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 such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock for all
Dividend Periods terminating on or prior to the date of such redemption,
repurchase or other acquisition shall have been paid or set apart for payment,
(ii) sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in Common Stock or Additional Preferred or are
not paid in full in cash or a sum sufficient for such payment is not set apart,
as aforesaid, all dividends declared upon shares of the 5% Preferred Stock and
all dividends declared upon Parity Securities shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid on the
5% Preferred Stock and accumulated and unpaid on such Parity Securities.

              (f)    So long as any shares of the 5% Preferred Stock are
outstanding, no dividends (other than (i) any rights issued pursuant to a
shareholder rights plan as provided in paragraph (11) and (ii) dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Junior Securities) shall be declared or paid or set apart
for payment or other distribution declared or made upon Junior Securities, nor
shall any Junior Securities be redeemed, purchased or otherwise acquired (other
than a redemption, purchase, or other acquisition of shares of Common Stock made
for purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") 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, directly or
indirectly (except by conversion into or exchange for Junior Securities,
including pursuant to paragraph 4(d) of the 9.9% Series B Preferred), unless in
each case (A) full cumulative dividends on all outstanding shares of the 5%
Preferred Stock and all other Parity Securities shall have been paid or


                                       G-8

<PAGE>   201



set apart for payment for all past Dividend Periods and dividend periods for
such other stock, (B) sufficient funds shall have been paid or set apart for the
payment of the dividend for the current Dividend Period with respect to the 5%
Preferred Stock and all other Parity Securities, (C) the Corporation is not in
default with respect to any redemption of shares of 5% Preferred Stock by the
Corporation pursuant to paragraph (6) below, (D) the Corporation has fully
performed its obligations under paragraphs (4)(b) and (6) hereof.

              (5)    Liquidation Preference. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, before any payment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set apart for the holders of
Junior Securities, the holders of the shares of 5% Preferred Stock shall be
entitled to receive the Liquidation Right. If, upon any liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of 5% Preferred Stock
shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any Parity Securities, then such assets, or the
proceeds thereof, shall be distributed among the holders of shares of 5%
Preferred Stock and any such other Parity Securities ratably in accordance with
the respective amounts that would be payable on such shares of 5% Preferred
Stock and any such other stock if all amounts payable thereon were paid in full.
For the purposes of this paragraph (5), (i) a consolidation or merger of the
Corporation with one or more corporations, or (ii) a sale or transfer of all or
substantially all of the Corporation's assets, shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary, of the
Corporation.

              (b)    Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or classes
of Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the 5% Preferred Stock shall not be
entitled to share therein.

              (6)    Redemption. (a) On and after the first Business Day
following the earlier to occur of (i) August 13, 2006 or (ii) the date on which
both (A) the 25-Day Average Market Price of the Common Stock shall have exceeded
$96.00 and (B) August 13, 2003, to the extent the Corporation shall have funds
legally available for such payment, the Corporation may redeem at its option
shares of 5% Preferred Stock, from time to time in part, or in whole, payable at
the option of the Corporation in (A) cash, at a redemption price of $1,000.00
per share, (B) in shares of Common Stock, at a redemption price of $1,000.00 per
share, or (C) in a combination of cash and Common Stock, at a redemption price
based on the respective combination of consideration, together in each case
with accrued and unpaid dividends thereon, whether or not


                                       G-9

<PAGE>   202



declared, to, but excluding, the date fixed for redemption, without interest.
For purposes of determining the number of shares of Common Stock to be issued
pursuant to this paragraph (6)(a), the price per share of Common Stock shall be
the 25-Day Average Market Price.

              (b)    On and after the first Business Day following August 13,
2009, each holder of shares of 5% Preferred Stock shall have the right to
require the Corporation, to the extent the Corporation shall have funds legally
available therefor, to redeem such holder's shares of 5% Preferred Stock, from
time to time in part, or in whole, at a redemption price of $1,000.00 per share,
payable at the option of the Corporation in cash, shares of Common Stock or a
combination thereof, together with accrued and unpaid dividends thereon to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of the Common Stock to be issued pursuant to
this paragraph (6)(b), the price per share of Common Stock shall equal the
25-Day Average Market Price. Any holder of shares of 5% Preferred Stock who
elects to exercise its rights pursuant to this paragraph (6)(b) shall deliver to
the Corporation a written notice of election not less than 20 days prior to the
date on which such holder demands redemption pursuant to this paragraph 6(b),
which notice shall set forth the name of the Holder, the number of shares of 5%
Preferred Stock to be redeemed and a statement that the election to exercise a
redemption right is being made thereby; and, subject to paragraph (10)(d), shall
deliver to the Corporation on or before the date of redemption certificates
evidencing the shares of 5% Preferred Stock to be redeemed, duly endorsed for
transfer to the Corporation.

              (c)    If the Corporation shall not have redeemed all outstanding
shares of 5% Preferred Stock pursuant to paragraphs (6)(a) or (6)(b), on August
13, 2019 (the "Mandatory Redemption Date"), to the extent the Corporation shall
have funds legally available for such payment, the Corporation shall redeem all
outstanding shares of 5% Preferred Stock, at a redemption price of $1,000.00 per
share, payable at the option of the Corporation in cash, shares of Common Stock
or a combination thereof, together with accrued and unpaid dividends thereon to,
but excluding, the Mandatory Redemption Date, without interest. For purposes of
determining the number of shares of the Common Stock to be issued pursuant to
this paragraph (6)(c), the price per share of Common Stock shall be the 25-Day
Average Market Price.

              (d)    If the Corporation is unable or shall fail to discharge its
obligation to redeem all outstanding shares of 5% Preferred Stock pursuant to
paragraphs 6(b) or 6(c) (each, a "Mandatory Redemption Obligation"), the
Mandatory Redemption Obligation shall be discharged as soon as the Corporation
is able to discharge such Mandatory Redemption Obligation. If and so long as any
Mandatory Redemption Obligation with respect to the 5% Preferred Stock shall not
be fully discharged, the Corporation shall not (i) directly or indirectly,
redeem, purchase, or otherwise acquire


                                      G-10

<PAGE>   203



any Parity Security or discharge any mandatory or optional redemption, sinking
fund or other similar obligation in respect of any Parity Securities (except in
connection with a redemption, sinking fund or other similar obligation to be
satisfied pro rata with the 5% Preferred Stock) or (ii) declare or make any
Junior Securities Distribution (other than dividends or distributions paid in
shares of, or options, warrants or rights to subscribe for or purchase shares
of, Junior Securities), or, directly or indirectly, discharge any mandatory or
optional redemption, sinking fund or other similar obligation in respect of the
Junior Securities.

              (e)    Upon any redemption of 5% Preferred Stock, the Corporation
shall pay the redemption price and any accrued and unpaid dividends in arrears
to, but excluding, the applicable redemption date.

              (f)    For purposes of paragraph (6)(a) only, unless full
cumulative dividends (whether or not declared) on all outstanding shares of 5%
Preferred Stock and any Parity Securities shall have been paid or
contemporaneously are declared and paid or set apart for payment for all
Dividend Periods terminating on or prior to the applicable redemption date and
notice has been given in accordance with paragraph (7), none of the shares of 5%
Preferred Stock shall be redeemed, and no sum shall be set aside for such
redemption, unless shares of 5% Preferred Stock are redeemed pro rata and notice
has previously been given in accordance with paragraph (7).

              (7)    Procedure for Redemption. (a) If the Corporation shall
redeem shares of 5% Preferred Stock pursuant to paragraph 6(a), notice of such
redemption shall be given by certified mail, return receipt requested, postage
prepaid, mailed not less than 30 days nor 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
and confirmed by facsimile transmission to each holder of record if the
Corporation has been furnished with such facsimile address by the holder(s);
provided, however, that neither the failure to give such notice nor
confirmation nor any defect therein or in the mailing thereof, to any particular
holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice that
was mailed in the manner herein provided shall be conclusively presumed to have
been duly given on the date mailed whether or not the holder receives the
notice. Each such notice shall state: (i) the redemption date; (ii) the number
of shares of 5% Preferred Stock to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of shares to be redeemed from
such holder; (iii) the amount payable, whether such amount shall be paid in
Common Stock or in cash and if the payment is in Common Stock an explanation of
the determination of the amount to be paid; (iv) the place or places where
certificates for such shares are to be surrendered or the notice under paragraph
(10)(d) should be sent


                                      G-11

<PAGE>   204



for payment of the redemption price; and (v) that dividends on the shares to be
redeemed will cease to accrue on such redemption date, except as otherwise
provided herein.

              (b)    If notice has been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
for the payment of the redemption price of the shares called for redemption and
dividends accrued and unpaid thereon, if any), (i) except as otherwise provided
herein, dividends on the shares of 5% Preferred Stock so called for redemption
shall cease to accrue, (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of the 5%
Preferred Stock shall cease (except the right to receive from the Corporation
the redemption price without interest thereon, upon surrender and endorsement
(or a constructive surrender under paragraph (10)(d)) of their certificates if
so required, and to receive any dividends payable thereon).

              (c)    Upon surrender (including a constructive surrender under
paragraph (10)(d)) in accordance with notice given pursuant to this paragraph
(7) of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid, plus any dividends payable
thereon. If fewer than all the outstanding shares of 5% Preferred Stock are to
be redeemed, the number of shares to be redeemed shall be determined by the
Board of Directors and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded to the nearest whole share). In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued, subject to a holder's election under paragraph
(10)(d), representing the surrendered shares without cost to the holder
thereof.

              (8)    Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock shall
have the right, at any time and from time to time, at such holder's option, to
convert any or all outstanding shares of 5% Preferred Stock held by such holder,
but not fractions of shares, into fully paid and non-assessable shares of Common
Stock by surrendering such shares to be converted, such surrender to be made in
the manner provided in paragraph (8)(b) hereof. The number of shares of Common
Stock deliverable upon conversion of each share of 5% Preferred Stock shall be
equal to 12.112506, as adjusted as provided herein (the "Conversion Rate"). The
Conversion Rate is subject to adjustment from time to time pursuant to
paragraph (8)(d) hereof. The right to convert shares called for redemption
pursuant to paragraph 6(a) shall terminate at the close of business on the date
immediately preceding the date fixed for such redemption unless the Corporation
shall default in making payment of the amount payable upon such redemp-


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tion, in which case such right of conversion shall be reinstated. Upon
conversion, any accrued and unpaid dividends on the 5% Preferred Stock at the
date of conversion shall be paid to the holder thereof in accordance with the
provisions of paragraph (4).

              (b)    (i) In order to exercise the conversion privilege, the
holder of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (10)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976; provided, however, that the Corporation
shall use its best efforts in cooperating with such holder to obtain such legal
or regulatory approvals to the extent its cooperation is necessary. Such notice
shall also state the name or names (with address and social security or other
taxpayer identification number, if applicable) in which the certificate or
certificates for Common Stock are to be issued. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such share of
5% Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder or the holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Corporation demonstrating that such taxes have been paid).
All certificates representing shares of 5% Preferred Stock surrendered for
conversion shall be canceled by the Corporation or the transfer agent.

              (ii)   Subject to the last sentence of paragraph (8)(a), holders
of shares of 5% Preferred Stock at the close of business on a dividend payment
record date shall not be entitled to receive the dividend payable on such shares
on the corresponding Dividend Payment Date if such holder shall have surrendered
(or made a constructive surrender under paragraph (10)(d)) for conversion such
shares at any time following the preceding Dividend Payment Date and prior to
such Dividend Payment Date.

              (iii)  Subject to a holder's election under paragraph (10)(d), as
promptly as practicable after the surrender (including a constructive surrender
under paragraph (10)(d)) by a holder of the certificates for shares of 5%
Preferred Stock as aforesaid, the Corporation shall issue and shall deliver to
such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the



                                      G-13
<PAGE>   206


conversion of such shares in accordance with the provisions of this paragraph
(8), and any fractional interest in respect of a share of Common Stock arising
on such conversion shall be settled as provided in paragraph (8)(c). Upon
conversion of only a portion of the shares of 5% Preferred Stock represented by
any certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (10)(d), upon the surrender
(including a constructive surrender under paragraph (10)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be outstanding and all rights of a holder with respect to
such shares so surrendered shall immediately terminate except the right to
receive the Common Stock and other amounts payable pursuant to this paragraph
(8).

              (iv)   Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered pursuant to an election under paragraph (10)(d)) and such notice
received by the Corporation as aforesaid, and the person or persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby at such time
on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock
surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered and such notice received by the Corporation.

              (c)    (i) No fractional shares or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion (or deemed surrendered under paragraph (10)(d)) at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of 5% Preferred Stock surrendered (or deemed surrendered under paragraph
(10)(d)) for conversion by such holder.

              (ii)   Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5%


                                      G-14

<PAGE>   207



Preferred Stock shall have been surrendered (or deemed surrendered under
paragraph (10)(d)) and such notice received by the Corporation as aforesaid, and
the Person or Persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares of Common Stock
represented thereby at such time on such date and such conversion shall be into
a number of shares of Common Stock equal to the product of the number of shares
of 5% Preferred Stock surrendered times the Conversion Rate in effect at such
time on such date, unless the stock transfer books of the Corporation shall be
closed on that date, in which event such Person or Persons shall be deemed to
have become such holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are open, but such
conversion shall be based upon the Conversion Rate in effect on the date upon
which such shares shall have been surrendered (or deemed surrendered under
paragraph (10)(d)) and such notice received by the Corporation.

              (d)    The Conversion Rate shall be adjusted from time to time as
follows:

              (i)    If the Corporation shall after the Issue Date (A) declare a
dividend or make a distribution on its Common Stock in shares of its Common
Stock, (B) subdivide its outstanding Common Stock into a greater number of
shares, (C) combine its outstanding Common Stock into a smaller number of
shares, or (D) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification. An
adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (8)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case of a
subdivision, combination or reclassification. Adjustments in accordance with
this paragraph (8)(d)(i) shall be made whenever any event listed above shall
occur.

       (ii)   If the Corporation shall after the Issue Date fix a record date
for the issuance of rights or warrants (in each case, other than any rights
issued pursuant to a shareholder rights plan) to all holders of Common Stock
entitling them (for a period


                                      G-15

<PAGE>   208


expiring within 45 days after such record date) to subscribe for or purchase
Common Stock (or securities convertible into Common Stock) at a price per share
(or, in the case of a right or warrant to purchase securities convertible into
Common Stock, having an effective exercise price per share of Common Stock,
computed on the basis of the maximum number of shares of Common Stock issuable
upon conversion of such convertible securities, plus the amount of additional
consideration payable, if any, to receive one share of Common Stock upon
conversion of such securities) less than the 25-Day Average Market Price on the
date on which such issuance was declared or otherwise announced by the
Corporation (the "Determination Date"), then the Conversion Rate in effect at
the opening of business on the Business Day next following such record date
shall be adjusted so that the holder of each share of 5% Preferred Stock shall
be entitled to receive, upon the conversion thereof, the number of shares of
Common Stock determined by multiplying (I) the Conversion Rate in effect
immediately prior to such record date by (II) a fraction, the numerator of which
shall be the sum of (A) the number of shares of Common Stock outstanding on the
close of business on the Determination Date and (B) the number of additional
shares of Common Stock offered for subscription or purchase pursuant to such
rights or warrants (or in the case of a right or warrant to purchase securities
convertible into Common Stock, the aggregate number of additional shares of
Common Stock into which the convertible securities so offered are initially
convertible), and the denominator of which shall be the sum of (A) the number of
shares of Common Stock outstanding on the close of business on the Determination
Date and (B) the number of shares that the aggregate proceeds to the Corporation
from the exercise of such rights or warrants for Common Stock would purchase at
such 25-Day Average Market Price on such date (or, in the case of a right of
warrant to purchase securities convertible into Common Stock, the number of
shares of Common Stock obtained by dividing the aggregate exercise price of such
rights or warrants for the maximum number of shares of Common Stock issuable
upon conversion of such convertible securities, plus the aggregate amount of
additional consideration payable, if any, to convert such securities into
Common Stock, by such 25-Day Average Market Price). Such adjustment shall become
effective immediately after the opening of business on the Business Day next
following such record date (except as provided in paragraph (8)(h)). Such
adjustment shall be made successively whenever such a record date is fixed. In
the event that after fixing a record date such rights or warrants are not so
issued, the Conversion Rate shall be readjusted to the Conversion Rate which
would then be in effect if such record date had not been fixed. In determining
whether any rights or warrants entitle the holders of Common Stock to subscribe
for or purchase shares of Common Stock at less than such 25-Day Average Market
Price, there shall be taken into account any consideration received by the
Corporation upon issuance and upon exercise of such rights or warrants, the
value of such consideration, if other than cash, to be determined by the Board
of Directors in good faith. In case any rights or warrants referred to in this
subparagraph (ii) shall expire unexercised after the


                                      G-16

<PAGE>   209


same have been distributed or issued by the Corporation (or, in the case of
rights or warrants to purchase securities convertible into Common Stock once
exercised, the conversion right of such securities shall expire), the Conversion
Rate shall be readjusted at the time of such expiration to the Conversion Rate
that would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.

       (iii)  If the Corporation shall fix a record date for the making of a
distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (8)(d)(i)) or rights or warrants (in each case, other than
any rights issued pursuant to a shareholder rights plan) to subscribe for or
purchase any of its securities (excluding those rights and warrants issued to
all holders of Common Stock entitling them (for a period expiring within 45 days
after such record date) to subscribe for or purchase Common Stock or securities
convertible into shares of Common Stock, which rights and warrants are referred
to in and treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) called the "Securities"), then in each
such case the Conversion Rate shall be adjusted so that the holder of each share
of 5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to the close of business on such
record date by (II) a fraction, the numerator of which shall be the 25- Day
Average Market Price per share of the Common Stock on such record date, and the
denominator of which shall be the 25-Day Average Market Price per share of the
Common Stock on such record date less the then-fair market value (as determined
by the Board of Directors in good faith, whose determinations shall be
conclusive) of the portion of the assets, shares of its capital stock or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that after
fixing a record date such distribution is not so made, the Conversion Rate shall
be readjusted to the Conversion Rate which would then be in effect if such
record date had not been fixed. Such adjustment shall become effective
immediately at the opening of business on the Business Day next following
(except as provided in paragraph (8)(h)) the record date for the determination
of shareholders entitled to receive such distribution. For the purposes of this
subparagraph (iii), the distribution of a Security, which is distributed not
only to the holders of the Common Stock on the date fixed for the determination
of shareholders entitled to such distribution of such Security, but also is
distributed with each share of Common Stock delivered to a Person converting a
share of 5% Preferred Stock after such determination date, shall not require an
adjustment of the Conversion Rate pursuant to this subparagraph (iii); provided,


                                      G-17

<PAGE>   210


however, that on the date, if any, on which a Person converting a share of 5%
Preferred Stock would no longer be entitled to receive such Security with a
share of Common Stock (other than as a result of the termination of all such
Securities), a distribution of such Securities shall be deemed to have occurred
and the Conversion Rate shall be adjusted as provided in this subparagraph (iii)
(and such day shall be deemed to be "the date fixed for the determination of
shareholders entitled to receive such distribution" and "the record date" within
the meaning of the three preceding sentences). If any rights or warrants
referred to in this subparagraph (iii) shall expire unexercised after the same
shall have been distributed or issued by the Corporation, the Conversion Rate
shall be readjusted at the time of such expiration to the Conversion Rate that
would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.

       (iv)   In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
8(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date for the
cash dividend or distribution by a fraction the numerator of which shall be the
Current Market Price of a share of the Common Stock on the Record Date and the
denominator shall be such Current Market Price less the per share amount of cash
so distributed during the 12-month period applicable to one share of Common
Stock, such adjustment to be effective immediately prior to the opening of
business on the Business Day following the Record Date; provided, however, that
in the event the denominator of the foregoing fraction is zero or negative, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
holder of 5% Preferred Stock shall have the right to receive upon conversion, in
addition to the shares of Common Stock to which the holder is entitled, the
amount of cash such holder would have received had such holder converted each
share of 5% Preferred Stock at the beginning of the 12-month period. In the
event that such dividend or distribution is not so paid or made, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be in
effect if such dividend or distribution had not been declared. Notwithstanding
the foregoing, if any adjustment is required to be made as set forth in this
paragraph (8)(d)(iv), the calculation of any such


                                      G-18

<PAGE>   211



adjustment shall include the amount of the quarterly cash dividends paid during
the 12-month reference period only to the extent such dividends exceed the
regular quarterly cash dividends paid during the 12 months preceding the
12-month reference period. For purposes of this paragraph (8)(d)(iv), "Record
Date" shall mean, with respect to any dividend or distribution in which the
holders of Common Stock have the right to receive cash, the date fixed for
determination of shareholders entitled to receive such cash.

       In the event that at any time cash distributions to holders of Common
Stock are not paid equally on all series of Common Stock, the provisions of this
paragraph 8(d)(iv) will apply to any cash dividend or cash distribution on any
series of Common Stock otherwise meeting the requirements of this paragraph, and
shall be deemed amended to the extent necessary so that any adjustment required
will be made on the basis of the cash dividend or cash distribution made on any
such series.

       (v)    In case of the consummation of a tender or exchange offer (other
than an odd-lot tender offer) made by the Corporation or any subsidiary of the
Corporation for all or any portion of the outstanding shares of Common Stock to
the extent that the cash and fair market value (as determined in good faith by
the Board of Directors of the Corporation, whose determination shall be
conclusive and shall be described in a resolution of such Board) of any other
consideration included in such payment per share of Common Stock at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as amended) exceed by more than 5.0%, with any smaller
excess being disregarded in computing the adjustment to the Conversion Rate
provided in this paragraph (8)(d)(v), the first reported sale price per share of
the Common Stock on the Trading Day next succeeding the Expiration Time, then
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to
the Expiration Time by a fraction the numerator of which shall be the sum of (x)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchase Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchase Shares) on the Expiration Time and the first reported sale price of
the Common Stock on the Trading Day next succeeding the Expiration Time, and the
denominator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time multiplied
by the first reported sale price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such adjustment to become effective immediately
prior to the opening of business on the day following the Expiration Time.


                                      G-19

<PAGE>   212


       (vi)   No adjustment in the Conversion Rate shall be required unless such
adjustment would require a cumulative increase or decrease of at least 1% in the
Conversion Rate; provided, however, that any adjustments that by reason of this
subparagraph (vi) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment until made, and provided further that
any adjustment shall be required and made in accordance with the provisions of
this paragraph (8) (other than this subparagraph (vi)) not later than such time
as may be required in order to preserve the tax-free nature of a distribution
for United States income tax purposes to the holders of shares of 5% Preferred
Stock or Common Stock. Notwithstanding any other provisions of this paragraph
(8), the Corporation shall not be required to make any adjustment of the
Conversion Rate for the issuance of any shares of Common Stock pursuant to any
plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional amounts
in shares of Common Stock under such plan. All calculations under this paragraph
(8) shall be made to the nearest dollar or to the nearest 1/1,000 of a share, as
the case may be. Anything in this paragraph (8)(d) to the contrary
notwithstanding, the Corporation shall be entitled, to the extent permitted by
law, to make such adjustments in the Conversion Rate, in addition to those
required by this paragraph (8)(d), as it in its discretion shall determine to be
advisable in order that any stock dividends subdivision of shares,
reclassification or combination of shares, distribution or rights or warrants to
purchase stock or securities, or a distribution of other assets (other than cash
dividends) hereafter made by the Corporation to its shareholders shall not be
taxable.

       (vii)  In the event that, at any time as a result of shares of any other
class of capital stock becoming issuable in exchange or substitution for or in
lieu of shares of Common Stock or as a result of an adjustment made pursuant to
the provisions of this paragraph (8)(d), the holder of 5% Preferred Stock upon
subsequent conversion shall become entitled to receive any shares of capital
stock of the Corporation other than Common Stock, the number of such other
shares so receivable upon conversion of any shares of 5% Preferred Stock shall
thereafter be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions contained herein.

              (viii) The $96.00 required stock price threshold set forth in
paragraph (6)(a)(ii) shall be adjusted from time to time in a manner consistent
with the provisions of this paragraph (8)(d).

              (e) (i) If the Corporation shall be a party to any transaction
(including without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (8)(d)(i) applies)
(each of the foregoing being referred to herein as a


                                      G-20

<PAGE>   213



"Transaction"), in each case as a result of which shares of Common Stock shall
be converted into the right to receive stock, securities or other property
(including cash or any combination thereof), there shall be no adjustment to the
Conversion Rate but each share of 5% Preferred Stock which is not converted into
the right to receive stock, securities or other property in connection with such
Transaction shall thereafter be convertible into the kind and amount of shares
of stock, securities and other property (including cash or any combination
thereof) receivable upon the consummation of such Transaction by a holder of
that number of shares or fraction thereof of Common Stock into which one share
of 5% Preferred Stock was convertible immediately prior to such Transaction,
assuming such holder of Common Stock (i) is not a Person with which the
Corporation consolidated or into which the Corporation merged or which merged
into the Corporation or to which such sale or transfer was made, as the case may
be ("Constituent Person"), or an affiliate of a Constituent Person and (ii)
failed to exercise his rights of election, if any, as to the kind or amount of
stock securities and other property (including cash) receivable upon such
Transaction (provided that if the kind or amount of stock, securities and other
property (including cash) receivable upon such Transaction is not the same for
each share of Common Stock of the Corporation held immediately prior to such
Transaction by other than a Constituent Person or an affiliate thereof and in
respect of which such rights of election shall not have been exercised ("non-
electing share"), then for the purpose of this paragraph (8)(e) the kind and
amount of stock, securities and other property (including cash) receivable upon
such Transaction by each non-electing share shall be deemed to be the kind and
amount so receivable per share by a plurality of the non-electing shares). The
provisions of this paragraph (8)(e) shall similarly apply to successive
Transactions.

              (ii)   Notwithstanding anything herein to the contrary, if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation, by notice to and consultation with the
holders of the 5% Preferred Stock, may cause the exchange of this 5% Preferred
Stock for preferred stock of Holdco having the same terms and conditions as set
forth herein; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 5% Preferred Stock
(including for these purposes any resultant change in the tax treatment for the
holders of such stock).

              (f)    If:


                                      G-21

<PAGE>   214



              (i)    the Corporation shall declare a dividend (or any other
       distribution) on the Common Stock; or

              (ii)   the Corporation shall authorize the granting to the holders
       of the Common Stock of rights or warrants to subscribe for or purchase
       any shares of any class or any other rights or warrants; or

              (iii)  there shall be any subdivision, combination or
       reclassification of the Common Stock or any consolidation or merger to
       which the Corporation is a party and for which approval of any
       shareholders of the Corporation is required, or the sale or transfer of
       all or substantially all of the assets of the Corporation as an entirety;
       or

              (iv)   there shall occur the voluntary or involuntary liquidation,
       dissolution or winding up of the Corporation;

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applicable date hereinafter specified, a notice stating (A)
the date on which a record is to be taken for the purpose of such dividend (or
such other distribution) or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or warrants are to be determined or (B)
the date on which such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up or
other action is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up.
Failure to give or receive such notice or any defect therein shall not affect
the legality or validity of any distribution, right, warrant subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, winding up or other action, or the vote upon any of
the foregoing.

              (g)    Whenever the Conversion Rate is adjusted as herein
provided, the Corporation shall prepare an officer's certificate with respect to
such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the effective date of such adjustment and shall mail a copy of such
officer's certificate to the holder of each share of 5% Preferred Stock at such
holder's last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to


                                      G-22

<PAGE>   215



paragraph (8)(b), it shall also promptly file with such transfer agent an
officer's certificate setting forth the Conversion Rate after such adjustment
and setting forth a brief statement of the facts requiring such adjustment which
certificate shall be conclusive evidence of the correctness of such adjustment.

              (h)    In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (8)(c).

              (i)    For purposes of this paragraph (8), the number of shares of
Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.

              (j)    There shall be no adjustment of the Conversion Rate in
case of the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth in
this paragraph (8). If any single action would require adjustment of the
Conversion Rate pursuant to more than one subparagraph of this paragraph (8),
only one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value.

              (k)    If the Corporation shall take any action affecting the
Common Stock, other than action described in this paragraph (8), that in the
opinion of the Board of Directors materially adversely affects the conversion
rights of the holders of the shares of 5% Preferred Stock, the Conversion Rate
may be adjusted, to the extent permitted by law, in such manner, if any, and at
such time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (8)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.

              (l)    (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all out-

                                      G-23

<PAGE>   216
standing shares of 5% Preferred Stock not theretofore converted. For purposes
of this paragraph (8)(l) the number of shares of Common Stock that shall be
deliverable upon the conversion of all outstanding shares of 5% Preferred
Stock shall be computed as if at the time of computation all such outstanding
shares were held by a single holder.

              (ii)   The Corporation covenants that any shares of Common Stock
issued upon conversion of the 5% Preferred Stock shall be duly authorized,
validly issued, fully paid and non-assessable. Before taking any action that
would cause an adjustment increasing the Conversion Rate such that the quotient
of $1,000.00 and the Conversion Rate (which quotient initially shall be
$82.5593) would be reduced below the then-par value of the shares of Common
Stock deliverable upon conversion of the 5% Preferred Stock, the Corporation
will take any corporate action that, in the opinion of its counsel, may be
necessary in order that the Corporation may validly and legally issue fully paid
and non-assessable shares of Common Stock based upon such adjusted Conversion
Rate.

              (iii)  Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 5% Preferred
Stock, the Corporation shall comply with all applicable federal and state laws
and regulations which required action to be taken by the Corporation.

              (m)    The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the 5%
Preferred Stock pursuant hereto; provided, however, that the Corporation shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or other securities
or property in a name other than that of the holder of the 5% Preferred Stock to
be converted and no such issue or delivery shall be made unless and until the
Person requesting such issue or delivery has paid to the Corporation the amount
of any such tax or established, to the satisfaction of the Corporation, that
such tax has been paid.

              (n)    No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock are entitled to participate in such
transaction pursuant to paragraph 4(b).

              (9)    Voting Rights. (a) The holders of record or shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (9) or as otherwise provided by law.



                                      G-24
<PAGE>   217



              (b)    If and whenever either (i) six quarterly dividends (whether
or not consecutive) payable on the 5% Preferred Stock have not been paid in
full, (ii) the Corporation shall have failed to discharge its Mandatory
Redemption Obligation, or (iii) there occurs a Bankruptcy Event (any such event
described in the preceding subparagraphs (i) through (iii) being hereinafter
referred to as a "Trigger Event"), a vote of the holders of shares of 5%
Preferred Stock, voting as a single class, will be required on all matters
brought to shareholders of the Corporation. Whenever all arrears in dividends on
the 5% Preferred Stock then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, the Corporation shall have fulfilled its
Mandatory Redemption Obligation, and all Bankruptcy Events shall have been
cured (the "Trigger Event Cure"), then the right of the holders of the 5%
Preferred Stock to vote as described in this paragraph 9(b) shall cease (but
subject always to the same provisions for the vesting of such voting rights if
any Trigger Event occurs).

              (c)    Upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, together with the holders of shares
of every other series of preferred stock (including, without limitation,
Additional Preferred) upon which like rights to vote for the election of two
additional directors have been conferred and are exercisable (resulting from
either the failure to pay dividends or the failure to redeem) (any such other
series is referred to as the "Preferred Shares"), voting as a single class
regardless of series, shall be entitled to elect the two additional directors to
serve on the Board of Directors at any annual meeting of stockholders or special
meeting held in place thereof, or at a special meeting of the holders of 5%
Preferred Stock and the Preferred Shares, called as hereinafter provided.
Whenever all arrears in dividends on the Preferred Shares then outstanding shall
have been paid and dividends thereon for the current quarterly dividend period
shall have been paid or declared and set apart for payment, the Corporation
shall have fulfilled any redemption obligation in respect of the Preferred
Shares, and the Trigger Event Cure has occurred, then the right of the holders
of the 5% Preferred Stock and the Preferred Shares to elect such additional two
directors shall cease (but subject always to the same provisions for the vesting
of such voting rights if any Trigger Event occurs), and the terms of office of
all persons elected as directors by the holders of 5% Preferred Stock and the
Preferred Shares shall forthwith terminate and the number of members of the
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in holders of shares of 5% Preferred Stock and
the Preferred Shares, the Secretary of the Corporation may, and upon the
written request of any holder of 5% Preferred Stock (addressed to the secretary
at the principal office of the Corporation) shall, call a special meeting of the
holders of the 5% Preferred Stock and of the Preferred Shares for the election
of the two directors to be elected by them as herein provided, such call to be


                                      G-25

<PAGE>   218



made by notice similar to that provided in the Bylaws of the Corporation for a
special meeting of the stockholders or as required by law. If any such special
meeting required to be called as above provided shall not be called by the
Secretary of the Corporation within 20 days after receipt of any such request,
then any holder of shares of 5% Preferred Stock may call such meeting, upon the
notice above provided, and for that purpose shall have access to the stock books
of the Corporation. The directors elected at any such special meeting shall hold
office until the next annual meeting of the stockholders or special meeting held
in lieu thereof if such office shall not have previously terminated as above
provided. If any vacancy shall occur among the directors elected by the holders
of the 5% Preferred Stock and the Preferred Shares, a successor shall be elected
by the Board of Directors, upon the nomination of the then-remaining director
elected by the holders of the 5% Preferred Stock and the Preferred Shares or the
successor of such remaining director, to serve until the next annual meeting of
the stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.

              (d)    Without the written consent of the holders of at least 66
2/3% in liquidation preference of the outstanding shares of 5% Preferred Stock
or the vote of holders of at least 66 2/3% in liquidation preference of the
outstanding shares of 5% Preferred Stock at a meeting of the holders of 5%
Preferred Stock called for such purpose, the Corporation will not amend, alter
or repeal any provision of the Certificate of Incorporation (by merger or
otherwise) so as to adversely affect the preferences, rights or powers of the 5%
Preferred Stock; provided that any such amendment that changes the dividend
payable on, the Conversion Rate with respect to, or the liquidation preference
of the 5% Preferred Stock shall require the affirmative vote at a meeting of
holders of 5% Preferred Stock called for such purpose or written consent of the
holder of each share of 5% Preferred Stock.

              (e)    Without the written consent of the holders of at least 66
2/3% in liquidation preference of the outstanding shares of 5% Preferred Stock
or the vote of holders of at least 66 2/3% in liquidation preference of the
outstanding shares of 5% Preferred Stock at a meeting of such holders called for
such purpose, the Corporation will not issue any additional 5% Preferred Stock
or create, authorize or issue any Parity Securities or Senior Securities or
increase the authorized amount of any such other class or series; provided that
this paragraph 9(e) shall not limit the right of the Corporation to (i) issue
Additional Preferred as dividends pursuant to paragraph 4 or (ii) to issue
Parity Securities or Senior Securities in order to refinance, redeem or refund
the 13% Preferred, provided that the maximum accrual value (i.e., the sum of
stated value and maximum amount payable in kind over the term from issuance to
first date of mandatory redemption or redemption at the option of the holder) of
such Parity Securities may not exceed the maximum accrual value of the 13%
Preferred.


                                      G-26

<PAGE>   219



              (f)    In exercising the voting rights set forth in this paragraph
(9), each share of 5% Preferred Stock shall have one vote per share, except that
when any other series of preferred stock shall have the right to vote with the
5% Preferred Stock as a single class on any matter, then the 5% Preferred Stock
and other series shall have with respect to such matters one vote per $1,000 of
stated liquidation preference. Except as otherwise required by applicable law or
as set forth herein, the shares of 5% Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers and
the consent of the holders thereof shall not be required for the taking of any
corporate action.

              (g)    Nothing in this paragraph (9) shall be in derogation of any
rights that a holder of shares of 5% Preferred Stock may have in his capacity as
a holder of shares of Common Stock.

              (10)   General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are for
convenience of reference only and shall not define, limit or affect any of the
provisions hereof.

              (b)    If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) hereof or shall have failed to
discharge any obligation to redeem shares of 5% Preferred Stock pursuant to
paragraph (6) hereof, the holders of shares of 5% Preferred Stock shall be
entitled to receive, in addition to all other amounts required to be paid
hereunder, when, as and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, cash dividends on the aggregate
dividends which the Corporation shall have failed to declare or pay or the
redemption price, together with accrued and unpaid dividends thereon, as the
case may be, at a rate of 2% per quarter, compounded quarterly, for the period
during which the failure to pay dividends or failure to discharge an obligation
to redeem shares of 5% Preferred Stock shall continue.

              (c)    The shares of 5% Preferred Stock shall bear the following
legend:

              THE SHARES OF PREFERRED STOCK, PAR VALUE $.01, OF THE CORPORATION
              (THE "PREFERRED STOCK") (AND THE SHARES OF COMMON STOCK, PAR VALUE
              $.01, OF THE CORPORATION (THE "COMMON STOCK") INTO WHICH THE
              PREFERRED STOCK MAY BE CONVERTED) REPRESENTED BY THIS CERTIFICATE
              MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT
              REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
              "ACT") AND ANY APPLICABLE


                                      G-27

<PAGE>   220



              STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM REGISTRATION
              REQUIREMENTS. THE TRANSFER OF THE PREFERRED STOCK (OR COMMON
              STOCK, IF THE PREFERRED STOCK HAS BEEN CONVERTED) EVIDENCED BY
              THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER
              PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED JULY 15, 1999, AS
              MAY BE AMENDED, AMONG THE CORPORATION AND FRANCE TELECOM, A COPY
              OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF THE CORPORATION
              AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH
              PREFERRED STOCK UPON WRITTEN REQUEST TO THE CORPORATION.

              THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY
              BE CONVERTED INTO COMMON STOCK, PAR VALUE $.01, OF THE CORPORATION
              (THE "COMMON STOCK") OR REDEEMED IN EXCHANGE FOR COMMON STOCK
              WITHOUT THE SURRENDER AND EXCHANGE OF THIS CERTIFICATE FOR
              CERTIFICATES REPRESENTING SUCH COMMON STOCK. A NOTICE OF SUCH
              CONVERSION EVENT, IF ANY, IS ON FILE AT THE EXECUTIVE OFFICES OF
              THE CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER
              OF THIS CERTIFICATE UPON WRITTEN REQUEST TO THE CORPORATION.

              The shares of Common Stock issuable upon conversion of the 5%
Preferred Stock shall bear the following legend:

              THE SHARES OF COMMON STOCK, PAR VALUE $.01, OF THE CORPORATION
              (THE "COMMON STOCK") REPRESENTED BY THIS CERTIFICATE MAY NOT BE
              OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE
              SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND ANY
              APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM
              REGISTRATION REQUIREMENTS. THE TRANSFER OF THE COMMON STOCK
              EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON
              TRANSFER PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED JULY 15,
              1999, AS MAY BE AMENDED, AMONG THE CORPORATION AND FRANCE TELECOM,
              A COPY OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF THE
              CORPORATION AND WILL BE


                                      G-28

<PAGE>   221



              FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH COMMON STOCK UPON
              WRITTEN REQUEST TO THE CORPORATION.


              (d)(i) Whenever in connection with any conversion or redemption
of the 5% Preferred Stock in exchange for Common Stock the holder is required to
surrender certificates representing such shares of 5% Preferred Stock, such
holder may, by written notice to the Corporation and its transfer agent, elect
to retain such certificates. In such case, the certificates so retained by the
holder thereof shall be deemed to represent, at and from the date of such
conversion or redemption, the number of shares of Common Stock issuable upon
such conversion or redemption (subject to paragraph (8)(c), if applicable), and
shall be so reflected upon the books of the Corporation and its transfer agent.

              (ii)   (A) A holder who has previously elected to retain
certificates representing the 5% Preferred Stock in accordance with paragraph
(10)(d)(i) upon conversion or redemption may subsequently elect to receive
certificates representing the shares of Common Stock issued upon such conversion
or redemption. To receive certificates representing such shares of Common Stock,
the holder of such certificate shall surrender it, duly endorsed or assigned to
the Corporation or in blank, at the office of the Corporation, or to any
transfer agent of the Corporation previously designated by the Corporation for
such purposes, with a written notice of that election.

              (B)    Unless the certificates to be issued shall be registered in
the same name as the name in which such surrendered certificates are registered,
each certificate so surrendered shall be accompanied by instruments of transfer,
in form satisfactory to the Corporation, duly executed by the holder or the
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates so surrendered
shall be canceled by the Corporation or the transfer agent.

              (C)    As promptly as practicable after the surrender by a holder
of such certificates, the Corporation shall issue and shall deliver to such
holder, or on the holder's written order, a certificate or certificates (which
certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock represented by the certificates so
surrendered.

              (11)   Shareholder Rights Plan. The shares of 5% Preferred Stock
shall be entitled to the benefits of a number of rights issuable under the
Rights Agreement,


                                      G-29
<PAGE>   222


dated as of October 13, 1993, as amended, between the Company and Continental
Stock Transfer & Trust Company or any successor plan of similar purpose and
effect ("Rights") equal to the number of shares of Common Stock then issuable
upon conversion of the 5% Preferred Stock at the prevailing Conversion Rate.
Any shares of Common Stock deliverable upon conversion of a share of 5%
Preferred Stock or upon payment of a dividend shall be accompanied by a Right.


                                      G-30

<PAGE>   223
                            CERTIFICATE OF AMENDMENT
                                     TO THE
                      RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                                NTL INCORPORATED

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

                     Pursuant to Section 242 of the General
                    Corporation Law of the State of Delaware
                    -----------------------------------------


                     NTL Incorporated (formerly known as NTL Holdings
Incorporated), a Delaware corporation (hereinafter called the "Corporation"),
does hereby certify as follows:

                     FIRST:  The following language regarding the qualifica
tion for directors of the Corporation be inserted immediately following the
first paragraph of Article FIFTH of the Restated Certificate of Incorporation of
the Corporation as set forth below:

                     For so long as Cable and Wireless plc shall hold in the
                     aggregate at least 7.5% of the shares of Common Stock
                     outstanding on a fully diluted basis, it shall be a
                     qualification that at least one director of the Corpo
                     ration shall be a person approved in writing by Cable and
                     Wireless plc in its sole discretion. The initial director
                     so approved and qualified shall be designated as a Class
                     III director who shall serve in such capac ity until the
                     date of the 2000 annual meeting and until his successor is
                     duly elected and qualified, subject, however, to that
                     director's prior death, resignation, retirement,
                     disqualification or removal from office.

                     SECOND:  The foregoing amendment was duly adopted in
accordance with Section 242 of the General Corporation Law of the State of
Delaware on April 11, 2000.

                     IN WITNESS WHEREOF, NTL Incorporated has caused this
Certificate to be duly executed in its corporate name this 26th day of May,
2000.

                                          NTL INCORPORATED


                                          By:
                                             ---------------------------
                                             Name:  Richard J. Lubasch
                                             Title: Executive Vice President,
                                                      General Counsel and
                                                      Secretary






<PAGE>   224
                           CERTIFICATE OF DESIGNATION
                       OF THE VOTING POWERS, DESIGNATION,
                    PREFERENCES AND RELATIVE, PARTICIPATING,
              OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
                       LIMITATIONS AND RESTRICTIONS OF THE
                     5% CUMULATIVE PARTICIPATING CONVERTIBLE
                          PREFERRED STOCK, SERIES H OF
                                NTL INCORPORATED

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


                        PURSUANT TO SECTION 151(g) OF THE
                GENERAL CORPORATION LAW OF THE STATE OF DELAWARE

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


                The undersigned, Executive Vice President, General Counsel and
Secretary of NTL Incorporated, a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that the Board of Directors, in accordance with Article FOURTH,
Section B of the Corporation's Restated Certificate of Incorporation (the
"Certificate of Incorporation") and Section 151(g) of the Delaware General
Corporation Law (the "DGCL"), has authorized the creation of the series of
Preferred Stock (as defined below) hereinafter provided for and has established
the dividend, redemption, conversion and voting rights thereof and has adopted
the following resolution, creating the following new series of Preferred Stock:

                "BE IT RESOLVED that, pursuant to authority expressly granted to
the Board of Directors by the provisions of Article FOURTH, Section B of the
Certificate of Incorporation and Section 151(g) of the DGCL, there is hereby
created and authorized the issuance of a new series of Preferred Stock, par
value $0.01 per share (the "Preferred Stock"), with the following powers,
designations, dividend rights, voting powers, rights on liquidation, conversion
rights, redemption rights and other preferences and relative, participating,
optional or other special rights and with the qualifications, limitations or
restrictions on the shares of such series (in addition to the powers,
designations, preferences and relative, participating, optional or other special
rights and the qualifications, limitations and restrictions thereof set forth in
the Certificate of Incorporation that are applicable to each series of Preferred
Stock) hereinafter set forth.



<PAGE>   225
                (1)     Number and Designation. 9,410.75 shares of Preferred
Stock shall be designated as "5% Cumulative Participating Convertible Preferred
Stock, Series H of NTL Incorporated" (the "5% Preferred Stock") and no other
shares of Preferred Stock shall be designated as 5% Preferred Stock.

                (2)     Definitions. For purposes of the 5% Preferred Stock, the
following terms shall have the meanings indicated:

                "Additional Preferred" shall have the meaning set forth in
        paragraph (4)(a).

                "Bankruptcy Event" shall mean any of the following: (I) a court
        having jurisdiction in the premises enters a decree or order for (A)
        relief in respect of any Major Entity in an involuntary case under any
        applicable bankruptcy, insolvency or other similar law now or
        hereinafter in effect, (B) appointment of a receiver, liquidator,
        assignee, custodian, trustee, sequestrator or similar official of any
        Major Entity or for all or substantially all of the property and assets
        of any Major Entity or (C) the winding up or liquidation of the affairs
        of any Major Entity; or (II) any Major Entity (A) commences a voluntary
        case under any applicable bankruptcy, insolvency or other similar law
        now or hereinafter in effect, or consents to the entry of an order for
        relief in an involuntary case under any such law, (B) consents to the
        appointment of or taking possession by a receiver, liquidator, assignee,
        custodian, trustee, sequestrator or similar official of any Major
        Entity, or for all or substantially all of the property and assets of
        any Major Entity or (C) effects any general assignment for the benefit
        of creditors.

                "Board of Directors" shall mean the board of directors of the
        Corporation. Except as such term is used in paragraph (9), "Board of
        Directors" shall also mean the Executive Committee, if any, of such
        board of directors or any other committee duly authorized by such board
        of directors to perform any of its responsibilities with respect to the
        5% Preferred Stock.

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

                "Certificate of Incorporation" shall have the meaning set forth
        in the preamble.



                                       2
<PAGE>   226
                "Common Stock" shall mean the common stock, par value $0.01 per
        share, of the Corporation.

                "Constituent Person" shall have the meaning set forth in
        paragraph (8)(e)(i).

                "Conversion Rate" shall have the meaning set forth in paragraph
        (8)(a).

                "Corporation" shall have the meaning set forth in the preamble.

                "Current Market Price" of publicly traded shares of Common Stock
        or any other class of capital stock or other security of the Corporation
        or any other issuer for any day shall mean the last reported sale price
        for such security on the principal exchange or quotation system on which
        such security is listed or traded. If the security is not admitted for
        trading on any national securities exchange or the Nasdaq National
        Market, "Current Market Price" shall mean the average of the last
        reported closing bid and asked prices reported by the Nasdaq as
        furnished by any member in good standing of the National Association of
        Securities Dealers, Inc., selected from time to time by the Corporation
        for that purpose or as quoted by the National Quotation Bureau
        Incorporated. In the event that no such quotation is available for such
        day, the Current Market Price shall be the average of the quotations for
        the last five Trading Days for which a quotation is available within the
        last 30 Trading Days prior to such day. In the event that five such
        quotations are not available within such 30-Trading Day period, the
        Board of Directors shall be entitled to determine the Current Market
        Price on the basis of such quotations as it reasonably considers
        appropriate.

                "Determination Date" shall have the meaning set forth in
        paragraph (8)(d)(ii).

                "DGCL" shall have the meaning set forth in the preamble.

                "Dividend Payment Date" shall mean September 30, December 31,
        March 31 and June 30 of each year, commencing on March 31, 2001;
        provided, however, that if any Dividend Payment Date falls on any day
        other than a Business Day, the dividend payment due on such Dividend
        Payment



                                       3
<PAGE>   227
        Date shall be paid on the Business Day immediately following such
        Dividend Payment Date.

                "Dividend Periods" shall mean quarterly dividend periods
        commencing on September 30, December 31, March 31 and June 30 of each
        year and ending on and including the day preceding the first day of the
        next succeeding Dividend Period.

                "Exchange Act" shall mean the Securities Exchange Act of 1934,
        as amended, and the rules and regulations thereunder.

                "Expiration Time" shall have the meaning set forth in paragraph
        (8)(d)(v).

                "5% Preferred Stock" shall have the meaning set forth in
        paragraph (1).

                "Holdco" shall have the meaning set forth in paragraph
        (8)(e)(ii).

                "Issue Date" shall mean the date on which shares of 5% Preferred
        Stock are first issued by the Corporation.

                "Junior Securities" shall have the meaning set forth in
        paragraph (3)(c).

                "Junior Securities Distributions" shall have the meaning set
        forth in paragraph (4)(f).

                "Liquidation Right" shall mean, for each share of 5% Preferred
        Stock, the greater of (i) an amount equal to $1,000.00 per share, plus
        an amount equal to all dividends (whether or not earned or declared)
        accrued and unpaid thereon to the date of final distribution to such
        holders, and (ii) the amount that would be received in liquidation
        following conversion of a share of 5% Preferred Stock into Common Stock.

                "Major Entity" shall mean any of the Corporation, NTL
        (Delaware), Inc., NTL Communications Corp., Diamond Cable Communications
        Limited, Diamond Holdings Limited, NTL (Triangle) LLC or any Significant
        Subsidiary.


                                       4
<PAGE>   228
                "Mandatory Redemption Date" shall have the meaning set forth in
        paragraph (6)(c).

                "Mandatory Redemption Obligation" shall have the meaning set
        forth in paragraph (6)(d).

                "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
        securities market regulated by the National Association of Securities
        Dealers, Inc.

                "Nasdaq National Market" shall have the meaning set forth in
        Rule 4200(a)(23) of the rules of the National Association of Securities
        Dealers, Inc.

                "Non-electing share" shall have the meaning set forth in
        paragraph (8)(e)(i).

                "NYSE" means the New York Stock Exchange.

                "Outstanding", when used with reference to shares of stock,
        shall mean issued shares, excluding shares held by the Corporation or a
        subsidiary of the Corporation.

                "Parity Securities" shall have the meaning set forth in
        paragraph (3)(b).

                "Person" shall mean any individual, partnership, association,
        joint venture, corporation, business, trust, joint stock company,
        limited liability company, any unincorporated organization, any other
        entity, a "group" of such persons, as that term is defined in Rule
        13d-5(b) under the Exchange Act, or a government or political
        subdivision thereof.

                "Preferred Shares" has the meaning set forth in paragraph
        (9)(c).

                "Preferred Stock" shall have the meaning set forth in the first
        paragraph of this resolution.

                "Purchase Shares" shall have the meaning set forth in paragraph
        (8)(d)(v).



                                       5
<PAGE>   229

                "Record Date" shall have the meaning set forth in paragraph
        (8)(d)(iv).

                "Relevant Compounding Factor" shall mean, with respect to each
        share of 5% Preferred Stock, upon initial issuance 1.00, and shall on
        each Dividend Payment Date be increased to equal the product of the
        Relevant Compounding Factor in effect immediately prior to such Dividend
        Payment Date and 1.0125.

                "Rights" shall have the meaning set forth in paragraph (11).

                "Securities" shall have the meaning set forth in paragraph
        (8)(d)(iii).

                "Senior Securities" shall have the meaning set forth in
        paragraph (3)(a).

                "set apart for payment" shall be deemed to include, without any
        action other than the following, the recording by the Corporation in its
        accounting ledgers of any accounting or bookkeeping entry which
        indicates, pursuant to a declaration of dividends or other distribution
        by the Board of Directors, the allocation of funds to be so paid on any
        series or class of capital stock of the Corporation; provided, however,
        that if any funds for any class or series of Junior Securities or any
        class or series of Parity Securities are placed in a separate account of
        the Corporation or delivered to a disbursing, paying or other similar
        agent, then "set apart for payment" with respect to the 5% Preferred
        Stock shall mean placing such funds in a separate account or delivering
        such funds to a disbursing, paying or other similar agent, as the case
        may be.

                "Significant Subsidiary" shall have the meaning given to such
        term in Regulation S-X under the Exchange Act.

                "13% Preferred" shall have the meaning set forth in paragraph
        (3)(d).

                "Trading Day" shall mean any day on which the securities in
        question are traded on the NYSE, or if such securities are not listed or
        admitted for trading on the NYSE, on the principal national securities
        exchange on which such securities are listed or admitted, or if not
        listed or admitted for trading on any national securities exchange, on
        the Nasdaq National Market, or if



                                       6
<PAGE>   230

        such securities are not quoted thereon, in the applicable securities
        market in which the securities are traded.

                "Transaction" shall have the meaning set forth in paragraph
        (8)(e)(i).

                "Trigger Event" shall have the meaning set forth in paragraph
        (9)(b).

                "Trigger Event Cure" shall have the meaning set forth in
        paragraph (9)(b).

                "25-Day Average Market Price" shall mean, for any security, the
        volume-weighted average of the Current Market Prices of that security
        for the twenty-five Trading Days immediately preceding the date of
        determination.

                (3)     Rank. Any class or series of stock of the Corporation
shall be deemed to rank:

                (a)     prior to the 5% Preferred Stock, either as to the
payment of dividends or as to distribution of assets upon liquidation,
dissolution or winding up, or both, if the holders of such class or series shall
be entitled by the terms thereof to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up, in preference or
priority to the holders of 5% Preferred Stock ("Senior Securities");

                (b)     on a parity with the 5% Preferred Stock, either as to
the payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and

                (c)     junior to the 5% Preferred Stock, either as to the
payment of dividends or as to the distribution of assets upon liquidation,
dissolution or winding up, or both, if such stock or series shall be Common
Stock or if the holders of the 5% Preferred Stock shall be entitled to receipt
of dividends, and of amounts distributable



                                       7
<PAGE>   231

upon liquidation, dissolution or winding up, in preference or priority to the
holders of shares of such stock or series ("Junior Securities").

                (d)     Each of the 13% Senior Redeemable Exchangeable Preferred
Stock of the Corporation and the 13% Series B Senior Redeemable Exchangeable
Preferred Stock of the Corporation (collectively, the "13% Preferred") is a
Senior Security. Each of the Series A Junior Participating Preferred Stock of
the Corporation and Common Stock is a Junior Security. The 5% Cumulative
Participating Convertible Preferred Stock, Series A of the Corporation, the 5%
Cumulative Participating Convertible Preferred Stock, Series C of the
Corporation, the 5% Cumulative Participating Convertible Preferred Stock, Series
D of the Corporation, the 5% Cumulative Preferred Stock, Series A of the
Corporation, the 5% Cumulative Participating Convertible Preferred Stock, Series
E of the Corporation, the 5% Cumulative Participating Convertible Preferred
Stock, Series B of the Corporation, the 5% Cumulative Participating Convertible
Preferred Stock, Series B-1 of the Corporation, the 5% Cumulative Participating
Convertible Preferred Stock, Series F of the Corporation, the 5% Cumulative
Participating Convertible Preferred Stock, Series B-2 of the Corporation, the 5%
Cumulative Participating Convertible Preferred Stock, Series G of the
Corporation, the 5% Cumulative Participating Convertible Preferred Stock, Series
B-3 of the Corporation and one or more classes of Additional Preferred shall be
Parity Securities; provided, however, that there shall be no issue of other
Senior Securities, Parity Securities or rights or options exercisable for or
convertible into any such securities, except as approved by the holders of the
5% Preferred Stock pursuant to paragraph 9(e).

                (e)     The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.

                (4)     Dividends. (a) Subject to paragraph (8)(b)(ii), the
holders of shares of 5% Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for such Dividend Payment Date) or additional
shares of Preferred Stock of a class to be designated by the Board of Directors
having terms substantially



                                       8
<PAGE>   232

identical to the 5% Preferred Stock except as follows: (A) the Conversion Rate
(as set forth in Section 8(a)) on such Preferred Stock initially shall be the
quotient resulting from the division of the Conversion Rate (as then in effect
on the 5% Preferred Stock) by the Relevant Compounding Factor and (B) the number
of shares of such Preferred Stock payable as a dividend on any Dividend Payment
Date shall increase for each Dividend Payment Date from the first Dividend
Payment Date by the Relevant Compounding Factor (such classes of Preferred Stock
singularly and collectively, the "Additional Preferred"). All dividends on the
5% Preferred Stock, in whatever form, shall be payable in arrears quarterly on
each Dividend Payment Date and shall be cumulative from the Issue Date (except
that dividends on Additional Preferred shall accrue from the date such
Additional Preferred is issued or would have been issued in accordance with this
Certificate of Designation if such dividends had been declared), whether or not
in any Dividend Period or Dividend Periods there shall be funds of the
Corporation legally available for the payment of such dividends. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock, as they appear on the stock records of the Corporation at the close of
business on the record date for such dividend. Upon the declaration of any such
dividend, the Board of Directors shall fix as such record date the fifth
Business Day preceding the relevant Dividend Payment Date and shall give notice
on or prior to the record date of the form of payment of such dividend. Accrued
and unpaid dividends for any past Dividend Payment Date may be declared and paid
at any time, without reference to any Dividend Payment Date, to holders of
record on such record date, not more than 45 days nor less than five Business
Days preceding the payment date thereof, as may be fixed by the Board of
Directors.

                (b)     In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock shall be entitled to
receive an amount equal to the amount (and in the form of consideration) that
such holders would be entitled to receive if, pursuant to paragraph (8), they
had converted such 5% Preferred Stock fully into Common Stock immediately before
the record date for the payment of any such dividends on Common Stock. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock as they appear on the stock records of the Corporation at the close of
business on the record date for such dividend on Common Stock, and the
Corporation shall pay each such dividend on the applicable payment date for such
dividend on the Common Stock.

               (c)      For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each share of Additional
Pre-


                                       9
<PAGE>   233

ferred shall be valued at $1,000.00. Holders of such Additional Preferred shall
be entitled to receive dividends payable at the rates specified in paragraph
(4)(a).

                (d)     The dividends payable for any period shorter than a full
Dividend Period on the 5% Preferred Stock shall accrue daily and be computed on
the basis of a 360-day year and the actual number of days in such period. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the 5% Preferred Stock that may be in
arrears except as otherwise provided herein.

                (e)     So long as any shares of the 5% Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities 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 such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock for all
Dividend Periods terminating on or prior to the date of such redemption,
repurchase or other acquisition shall have been paid or set apart for payment,
(ii) sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in Common Stock or Additional Preferred or are
not paid in full in cash or a sum sufficient for such payment is not set apart,
as aforesaid, all dividends declared upon shares of the 5% Preferred Stock and
all dividends declared upon Parity Securities shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid on the
5% Preferred Stock and accumulated and unpaid on such Parity Securities.

                (f)     So long as any shares of the 5% Preferred Stock are
outstanding, no dividends (other than (i) any Rights issued pursuant to the
stockholder rights plan as provided in paragraph (11) and (ii) dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Junior Securities) shall be declared or paid or set apart
for payment or other distribution declared or made upon Junior Securities, nor
shall any Junior Securities be redeemed, purchased or otherwise acquired (other
than a redemption, purchase, or



                                       10
<PAGE>   234

other acquisition of shares of Common Stock made for purposes of an employee
incentive or benefit plan of the Corporation or any subsidiary of the
Corporation) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") 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, directly or
indirectly (except by conversion into or exchange for Junior Securities), unless
in each case (A) full cumulative dividends on all outstanding shares of the 5%
Preferred Stock and all Parity Securities shall have been paid or set apart for
payment for all past Dividend Periods and dividend periods for such Parity
Securities, (B) sufficient funds shall have been paid or set apart for the
payment of the dividend for the current Dividend Period with respect to the 5%
Preferred Stock and all Parity Securities, (C) the Corporation is not in default
with respect to any redemption of shares of 5% Preferred Stock by the
Corporation pursuant to paragraph (6) below and (D) the Corporation has fully
performed its obligations under paragraphs (4)(b) and (6).

                (5)     Liquidation Preference. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, before any payment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set apart for the holders of
Junior Securities, the holders of the shares of 5% Preferred Stock shall be
entitled to receive the Liquidation Right. If, upon any liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of 5% Preferred Stock
shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any Parity Securities, then such assets, or the proceeds
thereof, shall be distributed among the holders of shares of 5% Preferred Stock
and any such other Parity Securities ratably in accordance with the respective
amounts that would be payable on such shares of 5% Preferred Stock and any such
other stock if all amounts payable thereon were paid in full. For the purposes
of this paragraph (5), (i) a consolidation or merger of the Corporation with one
or more corporations, or (ii) a sale or transfer of all or substantially all of
the Corporation's assets, shall not be deemed to be a liquidation, dissolution
or winding up, voluntary or involuntary, of the Corporation.

                (b)     Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or classes
of Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to

                                       11
<PAGE>   235

receive any and all assets remaining to be paid or distributed, and the holders
of the 5% Preferred Stock shall not be entitled to share therein.

                (6)     Redemption. (a) On and after the first Business Day
following the earlier to occur of (i) August 13, 2006 or (ii) the date on which
both (A) the 25-Day Average Market Price of the Common Stock shall have exceeded
$96.00 and (B) August 13, 2003, to the extent the Corporation shall have funds
legally available for such payment, the Corporation may redeem at its option
shares of 5% Preferred Stock, from time to time in part, or in whole, payable at
the option of the Corporation in (A) cash, at a redemption price of $1,000.00
per share, (B) in shares of Common Stock, at a redemption price of $1,000.00 per
share, or (C) in a combination of cash and Common Stock, at a redemption price
based on the respective combination of consideration, together in each case with
accrued and unpaid dividends thereon, whether or not declared, to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(a), the price per share of Common Stock shall be the 25-Day
Average Market Price.

                (b)     On and after the first Business Day following August 13,
2009, each holder of shares of 5% Preferred Stock shall have the right to
require the Corporation, to the extent the Corporation shall have funds legally
available therefor, to redeem such holder's shares of 5% Preferred Stock, from
time to time in part, or in whole, at a redemption price of $1,000.00 per share,
payable at the option of the Corporation in cash, shares of Common Stock or a
combination thereof, together with accrued and unpaid dividends thereon to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(b), the price per share of Common Stock shall equal the 25-Day
Average Market Price. Any holder of shares of 5% Preferred Stock who elects to
exercise its rights pursuant to this paragraph (6)(b) shall deliver to the
Corporation a written notice of election not less than 20 days prior to the date
on which such holder demands redemption pursuant to this paragraph 6(b), which
written notice shall set forth the name of the Holder, the number of shares of
5% Preferred Stock to be redeemed and a statement that the election to exercise
a redemption right is being made thereby; and, subject to paragraph (10)(d),
shall deliver to the Corporation on or before the date of redemption
certificates evidencing the shares of 5% Preferred Stock to be redeemed, duly
endorsed for transfer to the Corporation.

               (c)      If the Corporation shall not have redeemed all
outstanding shares of 5% Preferred Stock pursuant to paragraphs (6)(a) or
(6)(b), on August 13,



                                       12
<PAGE>   236

2019 (the "Mandatory Redemption Date"), to the extent the Corporation shall have
funds legally available for such payment, the Corporation shall redeem all
outstanding shares of 5% Preferred Stock, at a redemption price of $1,000.00 per
share, payable at the option of the Corporation in cash, shares of Common Stock
or a combination thereof, together with accrued and unpaid dividends thereon to,
but excluding, the Mandatory Redemption Date, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(c), the price per share of Common Stock shall be the 25-Day
Average Market Price.

                (d)     If the Corporation is unable or shall fail to discharge
its obligation to redeem all outstanding shares of 5% Preferred Stock pursuant
to paragraphs 6(b) or 6(c) (each, a "Mandatory Redemption Obligation"), the
Mandatory Redemption Obligation shall be discharged as soon as the Corporation
is able to discharge such Mandatory Redemption Obligation. If and so long as any
Mandatory Redemption Obligation with respect to the 5% Preferred Stock shall not
be fully discharged, the Corporation shall not (i) directly or indirectly,
redeem, purchase, or otherwise acquire any Parity Security or discharge any
mandatory or optional redemption, sinking fund or other similar obligation in
respect of any Parity Securities (except in connection with a redemption,
sinking fund or other similar obligation to be satisfied pro rata with the 5%
Preferred Stock) or (ii) declare or make any Junior Securities Distribution
(other than dividends or distributions paid in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Junior Securities), or,
directly or indirectly, discharge any mandatory or optional redemption, sinking
fund or other similar obligation in respect of the Junior Securities.

                (e)     Upon any redemption of 5% Preferred Stock, the
Corporation shall pay the redemption price and any accrued and unpaid dividends
in arrears to, but excluding, the applicable redemption date.

                (f)     For purposes of paragraph (6)(a) only, unless full
cumulative dividends (whether or not declared) on all outstanding shares of 5%
Preferred Stock and any Parity Securities shall have been paid or
contemporaneously are declared and paid or set apart for payment for all
Dividend Periods terminating on or prior to the applicable redemption date and
notice has been given in accordance with paragraph (7), none of the shares of 5%
Preferred Stock shall be redeemed, and no sum shall be set aside for such
redemption, unless shares of 5% Preferred Stock are redeemed pro rata and notice
has previously been given in accordance with paragraph (7).



                                       13
<PAGE>   237

                (7)     Procedure for Redemption. (a) If the Corporation shall
redeem shares of 5% Preferred Stock pursuant to paragraph 6(a), notice of such
redemption shall be given by certified mail, return receipt requested, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
applicable 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 and confirmed by facsimile transmission to each holder of record
if the Corporation has been furnished with such facsimile address by the
holder(s); provided, however, that neither the failure to give such notice nor
confirmation nor any defect therein or in the mailing thereof, to any particular
holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice that
was mailed in the manner herein provided shall be conclusively presumed to have
been duly given on the date mailed whether or not the holder receives the
notice. Each such notice shall state: (i) the redemption date; (ii) the number
of shares of 5% Preferred Stock to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of shares to be redeemed from
such holder; (iii) the amount payable, whether such amount shall be paid in
Common Stock or in cash and if the payment is in Common Stock an explanation of
the determination of the amount to be paid; (iv) the place or places where
certificates for such shares are to be surrendered or the notice under paragraph
(10)(d) should be sent for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date, except as otherwise provided herein.

                (b)     If notice has been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the Corporation in
providing for the payment of the redemption price of the shares called for
redemption and dividends accrued and unpaid thereon, if any), (i) except as
otherwise provided herein, dividends on the shares of 5% Preferred Stock so
called for redemption shall cease to accrue, (ii) said shares shall no longer be
deemed to be outstanding and (iii) all rights of the holders thereof as holders
of the 5% Preferred Stock shall cease (except the right to receive from the
Corporation the redemption price without interest thereon, upon surrender and
endorsement (or a constructive surrender under paragraph (10)(d)) of their
certificates if so required, and to receive any dividends payable thereon).

                (c)     Upon surrender (including a constructive surrender under
paragraph (10)(d)) in accordance with notice given pursuant to this paragraph
(7) of



                                       14
<PAGE>   238

the certificates for any shares so redeemed (properly endorsed or assigned for
transfer, if the Board of Directors of the Corporation shall so require and the
notice shall so state), such shares shall be redeemed by the Corporation at the
redemption price aforesaid, plus any dividends payable thereon. If fewer than
all the outstanding shares of 5% Preferred Stock are to be redeemed, the number
of shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be selected pro rata (with any fractional shares
being rounded to the nearest whole share). In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued, subject to a holder's election under paragraph (10)(d), representing the
surrendered shares without cost to the holder thereof.

                (8)     Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock shall
have the right, at any time and from time to time, at such holder's option, to
convert any or all outstanding shares of 5% Preferred Stock held by such holder,
but not fractions of shares, into fully paid and non-assessable shares of Common
Stock by surrendering such shares to be converted, such surrender to be made in
the manner provided in paragraph (8)(b). The number of shares of Common Stock
deliverable upon conversion of each share of 5% Preferred Stock shall be equal
to 11.669415 as adjusted as provided herein (the "Conversion Rate"). The
Conversion Rate is subject to adjustment from time to time pursuant to paragraph
(8)(d). The right to convert shares called for redemption pursuant to paragraph
6(a) shall terminate at the close of business on the date immediately preceding
the date fixed for such redemption unless the Corporation shall default in
making payment of the amount payable upon such redemption, in which case such
right of conversion shall be reinstated. Upon conversion, any accrued and unpaid
dividends on the 5% Preferred Stock at the date of conversion shall be paid to
the holder thereof in accordance with the provisions of paragraph (4).

                (b)     (i) In order to exercise the conversion privilege, the
holder of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (10)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the



                                       15
<PAGE>   239

Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; provided,
however, that the Corporation shall use its best efforts in cooperating with
such holder to obtain such legal or regulatory approvals to the extent its
cooperation is necessary. Such notice shall also state the name or names (with
address and social security or other taxpayer identification number, if
applicable) in which the certificate or certificates for Common Stock are to be
issued. Unless the shares issuable on conversion are to be issued in the same
name as the name in which such share of 5% Preferred Stock is registered, each
share surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation, duly executed by the holder
or the holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates representing
shares of 5% Preferred Stock surrendered for conversion shall be canceled by the
Corporation or the transfer agent.

                (ii)    Subject to the last sentence of paragraph (8)(a),
holders of shares of 5% Preferred Stock at the close of business on a dividend
payment record date shall not be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date if such holder shall have
surrendered (or made a constructive surrender under paragraph (10)(d)) for
conversion such shares at any time following the preceding Dividend Payment Date
and prior to such Dividend Payment Date.

                (iii)   Subject to a holder's election under paragraph (10)(d),
as promptly as practicable after the surrender (including a constructive
surrender under paragraph (10)(d)) by a holder of the certificates for shares of
5% Preferred Stock as aforesaid, the Corporation shall issue and shall deliver
to such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (8), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (8)(c). Upon conversion of
only a portion of the shares of 5% Preferred Stock represented by any
certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (10)(d), upon the surrender
(including a constructive surrender under paragraph (10)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be



                                       16
<PAGE>   240

outstanding and all rights of a holder with respect to such shares so
surrendered shall immediately terminate except the right to receive the Common
Stock and other amounts payable pursuant to this paragraph (8).

                (iv)    Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered pursuant to an election under paragraph (10)(d)) and such notice
received by the Corporation as aforesaid, and the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby at such time
on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock
surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered and such notice received by the Corporation.

                (c)     (i) No fractional shares or scrip representing fractions
of shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion (or deemed surrendered under paragraph (10)(d)) at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of 5% Preferred Stock surrendered (or deemed surrendered under paragraph
(10)(d)) for conversion by such holder.

                (ii)    Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered under paragraph (10)(d)) and such notice received by the Corporation
as aforesaid, and the Person or Persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to



                                       17
<PAGE>   241

have become the holder or holders of record of the shares of Common Stock
represented thereby at such time on such date and such conversion shall be into
a number of shares of Common Stock equal to the product of the number of shares
of 5% Preferred Stock surrendered times the Conversion Rate in effect at such
time on such date, unless the stock transfer books of the Corporation shall be
closed on that date, in which event such Person or Persons shall be deemed to
have become such holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are open, but such
conversion shall be based upon the Conversion Rate in effect on the date upon
which such shares shall have been surrendered (or deemed surrendered under
paragraph (10)(d)) and such notice received by the Corporation.

                (d)     The Conversion Rate shall be adjusted from time to time
as follows:

                (i)     If the Corporation shall after the Issue Date (A)
declare a dividend or make a distribution on its Common Stock in shares of its
Common Stock, (B) subdivide its outstanding Common Stock into a greater number
of shares, (C) combine its outstanding Common Stock into a smaller number of
shares or (D) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification. An
adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (8)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case of a
subdivision, combination or reclassification. Adjustments in accordance with
this paragraph (8)(d)(i) shall be made whenever any event listed above shall
occur.

                (ii)    If the Corporation shall after the Issue Date fix a
record date for the issuance of rights or warrants (in each case, other than any
Rights issued pursuant to the stockholder rights plan as provided in paragraph
(11)) to all holders



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<PAGE>   242

of Common Stock entitling them (for a period expiring within 45 days after such
record date) to subscribe for or purchase Common Stock (or securities
convertible into Common Stock) at a price per share (or, in the case of a right
or warrant to purchase securities convertible into Common Stock, having an
effective exercise price per share of Common Stock, computed on the basis of the
maximum number of shares of Common Stock issuable upon conversion of such
convertible securities, plus the amount of additional consideration payable, if
any, to receive one share of Common Stock upon conversion of such securities)
less than the 25-Day Average Market Price on the date on which such issuance was
declared or otherwise announced by the Corporation (the "Determination Date"),
then the Conversion Rate in effect at the opening of business on the Business
Day next following such record date shall be adjusted so that the holder of each
share of 5% Preferred Stock shall be entitled to receive, upon the conversion
thereof, the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to such record date by (II) a
fraction, the numerator of which shall be the sum of (A) the number of shares of
Common Stock outstanding on the close of business on the Determination Date and
(B) the number of additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants (or in the case of a right or
warrant to purchase securities convertible into Common Stock, the aggregate
number of additional shares of Common Stock into which the convertible
securities so offered are initially convertible), and the denominator of which
shall be the sum of (A) the number of shares of Common Stock outstanding on the
close of business on the Determination Date and (B) the number of shares that
the aggregate proceeds to the Corporation from the exercise of such rights or
warrants for Common Stock would purchase at such 25-Day Average Market Price on
such date (or, in the case of a right or warrant to purchase securities
convertible into Common Stock, the number of shares of Common Stock obtained by
dividing the aggregate exercise price of such rights or warrants for the maximum
number of shares of Common Stock issuable upon conversion of such convertible
securities, plus the aggregate amount of additional consideration payable, if
any, to convert such securities into Common Stock, by such 25-Day Average Market
Price). Such adjustment shall become effective immediately after the opening of
business on the Business Day next following such record date (except as provided
in paragraph (8)(h)). Such adjustment shall be made successively whenever such a
record date is fixed. In the event that after fixing a record date such rights
or warrants are not so issued, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect if such record date had not been
fixed. In determining whether any rights or warrants entitle the holders of
Common Stock to subscribe for or purchase shares of Common Stock at less than
such 25-Day Average Market Price, there shall be taken



                                       19
<PAGE>   243

into account any consideration received by the Corporation upon issuance and
upon exercise of such rights or warrants, the value of such consideration, if
other than cash, to be determined by the Board of Directors in good faith. In
case any rights or warrants referred to in this subparagraph (ii) shall expire
unexercised after the same have been distributed or issued by the Corporation
(or, in the case of rights or warrants to purchase securities convertible into
Common Stock once exercised, the conversion right of such securities shall
expire), the Conversion Rate shall be readjusted at the time of such expiration
to the Conversion Rate that would have been in effect if no adjustment had been
made on account of the distribution or issuance of such expired rights or
warrants.

                (iii)   If the Corporation shall fix a record date for the
making of a distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (8)(d)(i)) or rights or warrants (in each case, other than
any Rights issued pursuant to the stockholder rights plan as provided in
paragraph (11)) to subscribe for or purchase any of its securities (excluding
those rights and warrants issued to all holders of Common Stock entitling them
(for a period expiring within 45 days after such record date) to subscribe for
or purchase Common Stock or securities convertible into shares of Common Stock,
which rights and warrants are referred to in and treated under subparagraph (ii)
above) (any of the foregoing being hereinafter in this subparagraph (iii) called
the "Securities"), then in each such case the Conversion Rate shall be adjusted
so that the holder of each share of 5% Preferred Stock shall be entitled to
receive, upon the conversion thereof, the number of shares of Common Stock
determined by multiplying (I) the Conversion Rate in effect immediately prior to
the close of business on such record date by (II) a fraction, the numerator of
which shall be the 25-Day Average Market Price per share of the Common Stock on
such record date, and the denominator of which shall be the 25-Day Average
Market Price per share of the Common Stock on such record date less the
then-fair market value (as determined by the Board of Directors in good faith,
whose determinations shall be conclusive) of the portion of the assets, shares
of its capital stock or evidences of indebtedness so distributed or of such
rights or warrants applicable to one share of Common Stock. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that after fixing a record date such distribution is not so made, the
Conversion Rate shall be readjusted to the Conversion Rate which would then be
in effect if such record date had not been fixed. Such adjustment shall become
effective immediately at the opening of business on the Business



                                       20
<PAGE>   244

Day next following (except as provided in paragraph (8)(h)) the record date for
the determination of stockholders entitled to receive such distribution. For the
purposes of this subparagraph (iii), the distribution of a Security, which is
distributed not only to the holders of the Common Stock on the date fixed for
the determination of stockholders entitled to such distribution of such
Security, but also is distributed with each share of Common Stock delivered to a
Person converting a share of 5% Preferred Stock after such determination date,
shall not require an adjustment of the Conversion Rate pursuant to this
subparagraph (iii); provided, however, that on the date, if any, on which a
Person converting a share of 5% Preferred Stock would no longer be entitled to
receive such Security with a share of Common Stock (other than as a result of
the termination of all such Securities), a distribution of such Securities shall
be deemed to have occurred and the Conversion Rate shall be adjusted as provided
in this subparagraph (iii) (and such day shall be deemed to be "the date fixed
for the determination of stockholders entitled to receive such distribution" and
"the record date" within the meaning of the three preceding sentences). If any
rights or warrants referred to in this subparagraph (iii) shall expire
unexercised after the same shall have been distributed or issued by the
Corporation, the Conversion Rate shall be readjusted at the time of such
expiration to the Conversion Rate that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.

                (iv)    In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
8(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date for the
cash dividend or distribution by a fraction the numerator of which shall be the
Current Market Price of a share of the Common Stock on the Record Date and the
denominator shall be such Current Market Price less the per share amount of cash
so distributed during the 12-month period applicable to one share of Common
Stock, such adjustment to be effective immediately prior to the opening of
business on the



                                       21
<PAGE>   245

Business Day following the Record Date; provided, however, that in the event the
denominator of the foregoing fraction is zero or negative, in lieu of the
foregoing adjustment, adequate provision shall be made so that each holder of 5%
Preferred Stock shall have the right to receive upon conversion, in addition to
the shares of Common Stock to which the holder is entitled, the amount of cash
such holder would have received had such holder converted each share of 5%
Preferred Stock at the beginning of the 12-month period. In the event that such
dividend or distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate which would then be in effect if such
dividend or distribution had not been declared. Notwithstanding the foregoing,
if any adjustment is required to be made as set forth in this paragraph
(8)(d)(iv), the calculation of any such adjustment shall include the amount of
the quarterly cash dividends paid during the 12-month reference period only to
the extent such dividends exceed the regular quarterly cash dividends paid
during the 12 months preceding the 12-month reference period. For purposes of
this paragraph (8)(d)(iv), "Record Date" shall mean, with respect to any
dividend or distribution in which the holders of Common Stock have the right to
receive cash, the date fixed for determination of stockholders entitled to
receive such cash. In the event that at any time cash distributions to holders
of Common Stock are not paid equally on all series of Common Stock, the
provisions of this paragraph 8(d)(iv) will apply to any cash dividend or cash
distribution on any series of Common Stock otherwise meeting the requirements of
this paragraph, and shall be deemed amended to the extent necessary so that any
adjustment required will be made on the basis of the cash dividend or cash
distribution made on any such series.

                (v)     In case of the consummation of a tender or exchange
offer (other than an odd-lot tender offer) made by the Corporation or any
subsidiary of the Corporation for all or any portion of the outstanding shares
of Common Stock to the extent that the cash and fair market value (as determined
in good faith by the Board of Directors of the Corporation, whose determination
shall be conclusive and shall be described in a resolution of such Board) of any
other consideration included in such payment per share of Common Stock at the
last time (the "Expiration Time") tenders or exchanges may be made pursuant to
such tender or exchange offer (as amended) exceed by more than 5.0%, with any
smaller excess being disregarded in computing the adjustment to the Conversion
Rate provided in this paragraph (8)(d)(v), the first reported sale price per
share of the Common Stock on the Trading Day next succeeding the Expiration
Time, then the Conversion Rate shall be adjusted so that the same shall equal
the rate determined by multiplying the Conversion Rate in effect immediately
prior to the Expiration Time by a fraction the numerator of which shall be the
sum of (x) the fair market value (determined as aforesaid) of the aggregate
consider-



                                       22
<PAGE>   246

ation payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares validly
tendered or exchanged and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the "Purchase
Shares") and (y) the product of the number of shares of Common Stock outstanding
(less any Purchase Shares) on the Expiration Time and the first reported sale
price of the Common Stock on the Trading Day next succeeding the Expiration
Time, and the denominator of which shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) on the Expiration Time
multiplied by the first reported sale price of the Common Stock on the Trading
Day next succeeding the Expiration Time, such adjustment to become effective
immediately prior to the opening of business on the day following the Expiration
Time.

                (vi)    No adjustment in the Conversion Rate shall be required
unless such adjustment would require a cumulative increase or decrease of at
least 1% in the Conversion Rate; provided, however, that any adjustments that by
reason of this subparagraph (vi) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment until made, and
provided further that any adjustment shall be required and made in accordance
with the provisions of this paragraph (8) (other than this subparagraph (vi))
not later than such time as may be required in order to preserve the tax-free
nature of a distribution for United States income tax purposes to the holders of
shares of 5% Preferred Stock or Common Stock. Notwithstanding any other
provisions of this paragraph (8), the Corporation shall not be required to make
any adjustment of the Conversion Rate for the issuance of any shares of Common
Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and the investment of
additional optional amounts in shares of Common Stock under such plan. All
calculations under this paragraph (8) shall be made to the nearest dollar or to
the nearest 1/1,000 of a share, as the case may be. Anything in this paragraph
(8)(d) to the contrary notwithstanding, the Corporation shall be entitled, to
the extent permitted by law, to make such adjustments in the Conversion Rate, in
addition to those required by this paragraph (8)(d), as it in its discretion
shall determine to be advisable in order that any stock dividends, subdivision
of shares, reclassification or combination of shares, distribution of rights or
warrants to purchase stock or securities, or a distribution of other assets
(other than cash dividends) hereafter made by the Corporation to its
stockholders shall not be taxable.

                (vii)   In the event that, at any time as a result of shares of
any other class of capital stock becoming issuable in exchange or substitution
for or in lieu of



                                       23
<PAGE>   247

shares of Common Stock or as a result of an adjustment made pursuant to the
provisions of this paragraph (8)(d), the holder of 5% Preferred Stock upon
subsequent conversion shall become entitled to receive any shares of capital
stock of the Corporation other than Common Stock, the number of such other
shares so receivable upon conversion of any shares of 5% Preferred Stock shall
thereafter be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions contained herein.

                (viii)  The $96.00 required stock price threshold set forth in
paragraph (6)(a)(ii) shall be adjusted from time to time in a manner consistent
with the provisions of this paragraph (8)(d).

                (e)     (i) If the Corporation shall be a party to any
transaction (including without limitation, a merger, consolidation, sale of all
or substantially all of the Corporation's assets or recapitalization of the
Common Stock and excluding any transaction as to which paragraph (8)(d)(i)
applies) (each of the foregoing being referred to herein as a "Transaction"), in
each case as a result of which shares of Common Stock shall be converted into
the right to receive stock, securities or other property (including cash or any
combination thereof), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that number
of shares or fraction thereof of Common Stock into which one share of 5%
Preferred Stock was convertible immediately prior to such Transaction, assuming
such holder of Common Stock (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be (a
"Constituent Person"), or an affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of stock,
securities and other property (including cash) receivable upon such Transaction
(provided that if the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction is not the same for each share
of Common Stock held immediately prior to such Transaction by other than a
Constituent Person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purpose of this paragraph (8)(e) the kind and amount of stock, securities and
other property (including cash) receivable upon such Transaction by each non-
electing share shall be deemed to be the kind and amount so receivable per share
by a



                                       24
<PAGE>   248

plurality of the non-electing shares). The provisions of this paragraph (8)(e)
shall similarly apply to successive Transactions.

                (ii)    Notwithstanding anything herein to the contrary, if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation, by notice to and consultation with the
holders of the 5% Preferred Stock, may cause the exchange of the 5% Preferred
Stock for preferred stock of Holdco having the same terms and conditions as set
forth herein; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 5% Preferred Stock
(including for these purposes any resultant change in the tax treatment for the
holders of such stock).

                (f)     If:

                (i)     the Corporation shall declare a dividend (or any other
distribution) on the Common Stock; or

                (ii)    the Corporation shall authorize the granting to the
holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of any class or any other rights or warrants; or

                (iii)   there shall be any subdivision, combination or
reclassification of the Common Stock or any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of the
Corporation is required, or the sale or transfer of all or substantially all of
the assets of the Corporation as an entirety; or

                (iv)    there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation,

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applicable date hereinafter specified, a notice stating (A)
the date on which a record is to be



                                       25
<PAGE>   249

taken for the purpose of such dividend (or such other distribution) or rights or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution of
rights or warrants are to be determined or (B) the date on which such
subdivision, combination, reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up or other action is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities or other property, if any, deliverable upon such subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up. Failure to give or receive such notice
or any defect therein shall not affect the legality or validity of any
distribution, right, warrant, subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, winding up or
other action, or the vote upon any of the foregoing.

                (g)     Whenever the Conversion Rate is adjusted as herein
provided, the Corporation shall prepare an officer's certificate with respect to
such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the effective date of such adjustment and shall mail a copy of such
officer's certificate to the holder of each share of 5% Preferred Stock at such
holder's last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (8)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be conclusive evidence of the correctness of such adjustment.

                (h)     In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (8)(c).

                (i)     For purposes of this paragraph (8), the number of shares
of Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation



                                       26
<PAGE>   250

shall not pay a dividend or make any distribution on shares of Common Stock held
in the treasury of the Corporation.

                (j)     There shall be no adjustment of the Conversion Rate in
case of the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth in
this paragraph (8). If any single action would require adjustment of the
Conversion Rate pursuant to more than one subparagraph of this paragraph (8),
only one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value.

                (k)     If the Corporation shall take any action affecting the
Common Stock, other than action described in this paragraph (8), that in the
opinion of the Board of Directors materially adversely affects the conversion
rights of the holders of the shares of 5% Preferred Stock, the Conversion Rate
may be adjusted, to the extent permitted by law, in such manner, if any, and at
such time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (8)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.

                (l)     (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of 5% Preferred Stock
not theretofore converted. For purposes of this paragraph (8)(l) the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.

                (ii)    The Corporation covenants that any shares of Common
Stock issued upon conversion of the 5% Preferred Stock shall be duly authorized,
validly issued, fully paid and non-assessable. Before taking any action that
would cause an adjustment increasing the Conversion Rate such that the quotient
of $1,000.00 and the Conversion Rate (which quotient initially shall be
$85.6941) would be reduced below the then-par value of the shares of Common
Stock deliverable upon conversion of the 5% Preferred Stock, the Corporation
will take any corporate action that, in the opinion of its counsel, may be
necessary in order that the Corporation may



                                       27
<PAGE>   251

validly and legally issue fully paid and non-assessable shares of Common Stock
based upon such adjusted Conversion Rate.

                (iii)   Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 5% Preferred
Stock, the Corporation shall comply with all applicable federal and state laws
and regulations which require action to be taken by the Corporation.

                (m)     The Corporation will pay any and all documentary, stamp
or similar issue or transfer taxes payable in respect of the issue or delivery
of shares of Common Stock or other securities or property on conversion of the
5% Preferred Stock pursuant hereto; provided, however, that the Corporation
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issue or delivery of shares of Common Stock or other
securities or property in a name other than that of the holder of the 5%
Preferred Stock to be converted and no such issue or delivery shall be made
unless and until the Person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or established, to the satisfaction of
the Corporation, that such tax has been paid.

                (n)     No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock are entitled to participate in such
transaction pursuant to paragraph 4(b).

                (9)     Voting Rights. (a) The holders of record of shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (9) or as otherwise provided by law.

                (b)     If and whenever either (i) six quarterly dividends
(whether or not consecutive) payable on the 5% Preferred Stock have not been
paid in full, (ii) the Corporation shall have failed to discharge its Mandatory
Redemption Obligation or (iii) there occurs a Bankruptcy Event (any such event
described in the preceding subparagraphs (i) through (iii) being hereinafter
referred to as a "Trigger Event"), a vote of the holders of shares of 5%
Preferred Stock, voting as a single class, will be required on all matters
brought to stockholders of the Corporation. Whenever all arrears in dividends on
the 5% Preferred Stock then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, the Corporation shall have fulfilled its
Mandatory Redemption Obligation and all Bankruptcy Events shall have been cured
(the



                                       28
<PAGE>   252
"Trigger Event Cure"), then the right of the holders of the 5% Preferred Stock
to vote as described in this paragraph 9(b) shall cease (but subject always to
the same provisions for the vesting of such voting rights if any Trigger Event
occurs).

                (c)     Upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, together with the holders of shares
of every other series of preferred stock (including, without limitation,
Additional Preferred) upon which like rights to vote for the election of two
additional directors have been conferred and are exercisable (resulting from
either the failure to pay dividends or the failure to redeem) (any such other
series is referred to as the "Preferred Shares"), voting as a single class
regardless of series, shall be entitled to elect the two additional directors to
serve on the Board of Directors at any annual meeting of stockholders or special
meeting held in place thereof, or at a special meeting of the holders of 5%
Preferred Stock and the Preferred Shares, called as hereinafter provided.
Whenever all arrears in dividends on the Preferred Shares then outstanding shall
have been paid and dividends thereon for the current quarterly dividend period
shall have been paid or declared and set apart for payment, the Corporation
shall have fulfilled any redemption obligation in respect of the Preferred
Shares, and the Trigger Event Cure has occurred, then the right of the holders
of the 5% Preferred Stock and the Preferred Shares to elect such additional two
directors shall cease (but subject always to the same provisions for the vesting
of such voting rights if any Trigger Event occurs), and the terms of office of
all persons elected as directors by the holders of 5% Preferred Stock and the
Preferred Shares shall forthwith terminate and the number of members of the
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in holders of shares of 5% Preferred Stock and
the Preferred Shares, the Secretary of the Corporation may, and upon the written
request of any holder of 5% Preferred Stock (addressed to the secretary at the
principal office of the Corporation) shall, call a special meeting of the
holders of the 5% Preferred Stock and of the Preferred Shares for the election
of the two directors to be elected by them as herein provided, such call to be
made by notice similar to that provided in the By-laws of the Corporation for a
special meeting of the stockholders or as required by law. If any such special
meeting required to be called as above provided shall not be called by the
Secretary of the Corporation within 20 days after receipt of any such request,
then any holder of shares of 5% Preferred Stock may call such meeting, upon the
notice above provided, and for that purpose shall have access to the stock books
of the Corporation. The directors elected at any such special meeting shall hold
office until the next annual meeting of the stockholders or special meeting held
in lieu thereof if such office shall



                                       29
<PAGE>   253

not have previously terminated as above provided. If any vacancy shall occur
among the directors elected by the holders of the 5% Preferred Stock and the
Preferred Shares, a successor shall be elected by the Board of Directors, upon
the nomination of the then-remaining director elected by the holders of the 5%
Preferred Stock and the Preferred Shares or the successor of such remaining
director, to serve until the next annual meeting of the stockholders or special
meeting held in place thereof if such office shall not have previously
terminated as provided above.

                (d)     Without the written consent of the holders of at least
6 62/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 662/3% in liquidation preference of the
outstanding shares of 5% Preferred Stock at a meeting of the holders of 5%
Preferred Stock called for such purpose, the Corporation will not amend, alter
or repeal any provision of the Certificate of Incorporation (by merger or
otherwise) so as to adversely affect the preferences, rights or powers of the 5%
Preferred Stock; provided that any such amendment that changes the dividend
payable on, the Conversion Rate with respect to, or the liquidation preference
of the 5% Preferred Stock shall require the affirmative vote at a meeting of
holders of 5% Preferred Stock called for such purpose or written consent of the
holder of each share of 5% Preferred Stock.

                (e)     Without the written consent of the holders of at least
66 2/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 66 2/3% in liquidation preference of
the outstanding shares of 5% Preferred Stock at a meeting of such holders called
for such purpose, the Corporation will not issue any additional 5% Preferred
Stock or create, authorize or issue any Parity Securities or Senior Securities
or increase the authorized amount of any such other class or series; provided
that this paragraph 9(e) shall not limit the right of the Corporation to (i)
issue Additional Preferred as dividends pursuant to paragraph 4 or (ii) to issue
Parity Securities or Senior Securities in order to refinance, redeem or refund
the 13% Preferred, provided that the maximum accrual value (i.e., the sum of
stated value and maximum amount payable in kind over the term from issuance to
first date of mandatory redemption or redemption at the option of the holder) of
such Parity Securities may not exceed the maximum accrual value of the 13%
Preferred.

                (f)     In exercising the voting rights set forth in this
paragraph (9), each share of 5% Preferred Stock shall have one vote per share,
except that when any other series of preferred stock shall have the right to
vote with the 5% Preferred Stock as a single class on any matter, then the 5%
Preferred Stock and other series shall have with respect to such matters one
vote per $1,000 of stated liquidation



                                       30
<PAGE>   254

preference. Except as otherwise required by applicable law or as set forth
herein, the shares of 5% Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers and the
consent of the holders thereof shall not be required for the taking of any
corporate action.

                (g)     Nothing in this paragraph (9) shall be in derogation of
any rights that a holder of shares of 5% Preferred Stock may have in his
capacity as a holder of shares of Common Stock.

                (10)    General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are for
convenience of reference only and shall not define, limit or affect any of the
provisions hereof.

                (b)     If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) or shall have failed to
discharge any obligation to redeem shares of 5% Preferred Stock pursuant to
paragraph (6), the holders of shares of 5% Preferred Stock shall be entitled to
receive, in addition to all other amounts required to be paid hereunder, when,
as and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, cash dividends on the aggregate dividends which the
Corporation shall have failed to declare or pay or the redemption price,
together with accrued and unpaid dividends thereon, as the case may be, at a
rate of 2% per quarter, compounded quarterly, for the period during which the
failure to pay dividends or failure to discharge an obligation to redeem shares
of 5% Preferred Stock shall continue.

                (c)     The shares of 5% Preferred Stock shall bear the
following legend:

                THE SHARES OF PREFERRED STOCK (THE "PREFERRED STOCK"), PAR VALUE
                $0.01 PER SHARE, OF NTL INCORPORATED (THE "CORPORATION") AND THE
                SHARES OF COMMON STOCK (THE "COMMON STOCK"), PAR VALUE $0.01 PER
                SHARE, OF THE CORPORATION INTO WHICH THE PREFERRED STOCK MAY BE
                CONVERTED OR REDEEMED REPRESENTED BY THIS CERTIFICATE MAY NOT BE
                OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER
                THE SECURITIES ACT OF 1933, AND ANY APPLICABLE STATE SECURITIES
                LAWS OR AN APPLICABLE EXEMP-


                                       31
<PAGE>   255

                TION FROM REGISTRATION REQUIREMENTS. THE TRANSFER OF THE
                PREFERRED STOCK, OR COMMON STOCK IF THE PREFERRED STOCK HAS BEEN
                CONVERTED OR REDEEMED, EVIDENCED BY THIS CERTIFICATE, IS SUBJECT
                TO THE RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE PURCHASE
                AGREEMENT, DATED JULY 15, 1999, AS MAY BE AMENDED, BETWEEN NTL
                (DELAWARE), INC. ("NTL DELAWARE") AND FRANCE TELECOM S.A.
                ("FRANCE TELECOM") AND THE INVESTMENT AGREEMENT, DATED JULY 26,
                1999, AS AMENDED, BETWEEN NTL DELAWARE AND FRANCE TELECOM. A
                COPY OF EACH OF THESE AGREEMENTS IS ON FILE AT THE EXECUTIVE
                OFFICES OF THE CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE
                TO THE HOLDER OF SUCH PREFERRED STOCK OR COMMON STOCK UPON
                WRITTEN REQUEST TO THE CORPORATION.

                THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE
                MAY BE CONVERTED INTO COMMON STOCK OR REDEEMED IN EXCHANGE FOR
                COMMON STOCK WITHOUT THE SURRENDER AND EXCHANGE OF THIS
                CERTIFICATE FOR CERTIFICATES REPRESENTING SUCH COMMON STOCK. A
                NOTICE OF SUCH CONVERSION OR REDEMPTION EVENT, IF ANY, IS ON
                FILE AT THE EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE
                FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS CERTIFICATE UPON
                WRITTEN REQUEST TO THE CORPORATION.

                THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF
                THE PREFERRED STOCK WHO SO REQUESTS THE POWERS, DESIGNATION,
                PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
                SPECIAL RIGHTS OF THE PREFERRED STOCK.

                The shares of Common Stock issuable upon conversion or
redemption of the 5% Preferred Stock shall bear the following legend:



                                       32
<PAGE>   256

                THE SHARES OF COMMON STOCK (THE "COMMON STOCK"), PAR VALUE $0.01
                PER SHARE, OF NTL INCORPORATED (THE "CORPORATION") REPRESENTED
                BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED
                STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AND
                ANY APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION
                FROM REGISTRATION REQUIREMENTS. THE TRANSFER OF THE COMMON STOCK
                EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON
                TRANSFER PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED JULY 15,
                1999, AS MAY BE AMENDED, BETWEEN NTL (DELAWARE), INC. ("NTL
                DELAWARE") AND FRANCE TELECOM S.A. ("FRANCE TELECOM") AND THE
                INVESTMENT AGREEMENT, DATED JULY 26, 1999, AS AMENDED, BETWEEN
                NTL DELAWARE AND FRANCE TELECOM. A COPY OF EACH OF THESE
                AGREEMENTS IS ON FILE AT THE EXECUTIVE OFFICES OF THE
                CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER
                OF SUCH COMMON STOCK UPON WRITTEN REQUEST TO THE CORPORATION.

                (d)     (i) Whenever in connection with any conversion or
redemption of the 5% Preferred Stock in exchange for Common Stock the holder is
required to surrender certificates representing such shares of 5% Preferred
Stock, such holder may, by written notice to the Corporation and its transfer
agent, elect to retain such certificates. In such case, the certificates so
retained by the holder thereof shall be deemed to represent, at and from the
date of such conversion or redemption, the number of shares of Common Stock
issuable upon such conversion or redemption (subject to paragraph (8)(c), if
applicable), and shall be so reflected upon the books of the Corporation and its
transfer agent.

                (ii)    (A) A holder who has previously elected to retain
certificates representing the 5% Preferred Stock in accordance with paragraph
(10)(d)(i) upon conversion or redemption may subsequently elect to receive
certificates representing the shares of Common Stock issued upon such conversion
or redemption. To receive certificates representing such shares of Common Stock,
the holder of such certificate shall surrender it, duly endorsed or assigned to
the Corporation or in blank, at the office of the Corporation, or to any
transfer agent of the Corporation previously



                                       33
<PAGE>   257

designated by the Corporation for such purposes, with a written notice of that
election.

                (B)     Unless the certificates to be issued shall be registered
in the same name as the name in which such surrendered certificates are
registered, each certificate so surrendered shall be accompanied by instruments
of transfer, in form satisfactory to the Corporation, duly executed by the
holder or the holder's duly authorized attorney and an amount sufficient to pay
any transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid). All certificates so
surrendered shall be canceled by the Corporation or the transfer agent.

                (C)     As promptly as practicable after the surrender by a
holder of such certificates, the Corporation shall issue and shall deliver to
such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock represented by the certificates so
surrendered.

                (11)    Stockholder Rights Plan. The shares of 5% Preferred
Stock shall be entitled to the benefits of a number of rights issuable under the
Rights Agreement, dated as of October 13, 1993, as amended, between the
Corporation and Continental Stock Transfer & Trust Company or any successor plan
of similar purpose and effect (the "Rights") equal to the number of shares of
Common Stock then issuable upon conversion of the 5% Preferred Stock at the
prevailing Conversion Rate. Any shares of Common Stock deliverable upon
conversion or redemption of a share of 5% Preferred Stock or upon payment of a
dividend shall be accompanied by a Right."


                                       34
<PAGE>   258
                IN WITNESS WHEREOF, NTL Incorporated has caused this Certificate
of Designation to be signed by the undersigned this 2nd day of January 2001.

                                NTL INCORPORATED

                                By:/s/ Richard J. Lubasch
                                   -----------------------------
                                   Name:  Richard J. Lubasch
                                   Title: Executive Vice President, General
                                          Counsel and Secretary


                                       35
<PAGE>   259

                           CERTIFICATE OF DESIGNATION
                       OF THE VOTING POWERS, DESIGNATION,
                    PREFERENCES AND RELATIVE, PARTICIPATING,
              OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
                       LIMITATIONS AND RESTRICTIONS OF THE
                     5% CUMULATIVE PARTICIPATING CONVERTIBLE
                          PREFERRED STOCK, SERIES G OF
                                NTL INCORPORATED

                         ------------------------------
                        PURSUANT TO SECTION 151(g) OF THE
                GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
                         ------------------------------

                The undersigned, Executive Vice President, General Counsel and
Secretary of NTL Incorporated, a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that the Board of Directors, in accordance with Article FOURTH,
Section B of the Corporation's Restated Certificate of Incorporation (the
"Certificate of Incorporation") and Section 151(g) of the Delaware General
Corporation Law (the "DGCL"), has authorized the creation of the series of
Preferred Stock (as defined below) hereinafter provided for and has established
the dividend, redemption, conversion and voting rights thereof and has adopted
the following resolution, creating the following new series of Preferred Stock:

                "BE IT RESOLVED that, pursuant to authority expressly granted to
the Board of Directors by the provisions of Article FOURTH, Section B of the
Restated Certificate of Incorporation of the Corporation and Section 151(g) of
the DGCL, there is hereby created and authorized the issuance of a new series of
Preferred Stock, par value $0.01 per share (the "Preferred Stock"), with the
following powers, designations, dividend rights, voting powers, rights on
liquidation, conversion rights, redemption rights and other preferences and
relative, participating, optional or other special rights and with the
qualifications, limitations or restrictions on the shares of such series (in
addition to the powers, designations, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereof set forth in the Certificate of Incorporation that are
applicable to each series of Preferred Stock) hereinafter set forth.



<PAGE>   260

                (1)     Number and Designation. 9,300.31 shares of Preferred
Stock shall be designated as "5% Cumulative Participating Convertible Preferred
Stock, Series G of NTL Incorporated" (the "5% Preferred Stock") and no other
shares of Preferred Stock shall be designated as 5% Preferred Stock.

                (2)     Definitions. For purposes of the 5% Preferred Stock, the
following terms shall have the meanings indicated:

                "Additional Preferred" shall have the meaning set forth in
        paragraph (4)(a).

                "Bankruptcy Event" shall mean any of the following: (I) a court
        having jurisdiction in the premises enters a decree or order for (A)
        relief in respect of any Major Entity in an involuntary case under any
        applicable bankruptcy, insolvency or other similar law now or
        hereinafter in effect, (B) appointment of a receiver, liquidator,
        assignee, custodian, trustee, sequestrator or similar official of any
        Major Entity or for all or substantially all of the property and assets
        of any Major Entity or (C) the winding up or liquidation of the affairs
        of any Major Entity; or (II) any Major Entity (A) commences a voluntary
        case under any applicable bankruptcy, insolvency or other similar law
        now or hereinafter in effect, or consents to the entry of an order for
        relief in an involuntary case under any such law, (B) consents to the
        appointment of or taking possession by a receiver, liquidator, assignee,
        custodian, trustee, sequestrator or similar official of any Major
        Entity, or for all or substantially all of the property and assets of
        any Major Entity or (C) effects any general assignment for the benefit
        of creditors.

                "Board of Directors" shall mean the board of directors of the
        Corporation. Except as such term is used in paragraph (9), "Board of
        Directors" shall also mean the Executive Committee, if any, of such
        board of directors or any other committee duly authorized by such board
        of directors to perform any of its responsibilities with respect to the
        5% Preferred Stock.

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

                "Certificate of Incorporation" shall have the meaning set forth
        in the preamble.

                                       2
<PAGE>   261


                "Common Stock" shall mean the common stock, par value $0.01 per
        share, of the Corporation.

                "Constituent Person" shall have the meaning set forth in
        paragraph (8)(e)(i).

                "Conversion Rate" shall have the meaning set forth in paragraph
        (8)(a).

                "Corporation" shall have the meaning set forth in the preamble.

                "Current Market Price" of publicly traded shares of Common Stock
        or any other class of capital stock or other security of the Corporation
        or any other issuer for any day shall mean the last reported sale price
        for such security on the principal exchange or quotation system on which
        such security is listed or traded. If the security is not admitted for
        trading on any national securities exchange or the Nasdaq National
        Market, "Current Market Price" shall mean the average of the last
        reported closing bid and asked prices reported by the Nasdaq as
        furnished by any member in good standing of the National Association of
        Securities Dealers, Inc., selected from time to time by the Corporation
        for that purpose or as quoted by the National Quotation Bureau
        Incorporated. In the event that no such quotation is available for such
        day, the Current Market Price shall be the average of the quotations for
        the last five Trading Days for which a quotation is available within the
        last 30 Trading Days prior to such day. In the event that five such
        quotations are not available within such 30-Trading Day period, the
        Board of Directors shall be entitled to determine the Current Market
        Price on the basis of such quotations as it reasonably considers
        appropriate.

                "Determination Date" shall have the meaning set forth in
        paragraph (8)(d)(ii).

                "DGCL" shall have the meaning set forth in the preamble.

                "Dividend Payment Date" shall mean September 30, December 31,
        March 31 and June 30 of each year, commencing December 31, 2000;
        provided, however, that if any Dividend Payment Date falls on any day
        other than a Business Day, the dividend payment due on such Dividend
        Payment

                                       3
<PAGE>   262

        Date shall be paid on the Business Day immediately following such
        Dividend Payment Date.

                "Dividend Periods" shall mean quarterly dividend periods
        commencing on September 30, December 31, March 31 and June 30 of each
        year and ending on and including the day preceding the first day of the
        next succeeding Dividend Period.

                "Exchange Act" shall mean the Securities Exchange Act of 1934,
        as amended, and the rules and regulations thereunder.

                "Expiration Time" shall have the meaning set forth in paragraph
        (8)(d)(v).

                "5% Preferred Stock" shall have the meaning set forth in
        paragraph (1).

                "Holdco" shall have the meaning set forth in paragraph
        (8)(e)(ii) .

                "Issue Date" shall mean the date on which shares of 5% Preferred
        Stock are first issued by the Corporation.

                "Junior Securities" shall have the meaning set forth in
        paragraph (3)(c).

                "Junior Securities Distributions" shall have the meaning set
        forth in paragraph (4)(f).

                "Liquidation Right" shall mean, for each share of 5% Preferred
        Stock, the greater of (i) an amount equal to $1,000.00 per share, plus
        an amount equal to all dividends (whether or not earned or declared)
        accrued and unpaid thereon to the date of final distribution to such
        holders, and (ii) the amount that would be received in liquidation
        following conversion of a share of 5% Preferred Stock into Common Stock.

                "Major Entity" shall mean any of the Corporation, NTL
        (Delaware), Inc., NTL Communications Corp., Diamond Cable Communications
        Limited, Diamond Holdings Limited, NTL (Triangle) LLC or any Significant
        Subsidiary.

                                       4
<PAGE>   263


                "Mandatory Redemption Date" shall have the meaning set forth in
        paragraph (6)(c).

                "Mandatory Redemption Obligation" shall have the meaning set
        forth in paragraph (6)(d).

                "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
        securities market regulated by the National Association of Securities
        Dealers, Inc.

                "Nasdaq National Market" shall have the meaning set forth in
        Rule 4200(a)(23) of the rules of the National Association of Securities
        Dealers, Inc.

                "non-electing share" shall have the meaning set forth in
        paragraph (8)(e)(i).

                "NYSE" means the New York Stock Exchange.

                "outstanding", when used with reference to shares of stock,
        shall mean issued shares, excluding shares held by the Corporation or a
        subsidiary of the Corporation.

                "Parity Securities" shall have the meaning set forth in
        paragraph (3)(b).

                "Person" shall mean any individual, partnership, association,
        joint venture, corporation, business, trust, joint stock company,
        limited liability company, any unincorporated organization, any other
        entity, a "group" of such persons, as that term is defined in Rule
        13d-5(b) under the Exchange Act, or a government or political
        subdivision thereof.

                "Preferred Shares" has the meaning set forth in paragraph
        (9)(c).

                "Preferred Stock" shall have the meaning set forth in the first
        paragraph of this resolution.

                "Purchase Shares" shall have the meaning set forth in paragraph
        (8)(d)(v).

                                       5
<PAGE>   264


                "Record Date" shall have the meaning set forth in paragraph
        (8)(d)(iv).

                "Relevant Compounding Factor" shall mean, with respect to each
        share of 5% Preferred Stock, upon initial issuance 1.00, and shall on
        each Dividend Payment Date be increased to equal the product of the
        Relevant Compounding Factor in effect immediately prior to such Dividend
        Payment Date and 1.0125.

                "Rights" shall have the meaning set forth in paragraph (11).

                "Securities" shall have the meaning set forth in paragraph
        (8)(d)(iii).

                "Senior Securities" shall have the meaning set forth in
        paragraph (3)(a).

                "set apart for payment" shall be deemed to include, without any
        action other than the following, the recording by the Corporation in its
        accounting ledgers of any accounting or bookkeeping entry which
        indicates, pursuant to a declaration of dividends or other distribution
        by the Board of Directors, the allocation of funds to be so paid on any
        series or class of capital stock of the Corporation; provided, however,
        that if any funds for any class or series of Junior Securities or any
        class or series of Parity Securities are placed in a separate account of
        the Corporation or delivered to a disbursing, paying or other similar
        agent, then "set apart for payment" with respect to the 5% Preferred
        Stock shall mean placing such funds in a separate account or delivering
        such funds to a disbursing, paying or other similar agent, as the case
        may be.

                "Significant Subsidiary" shall have the meaning given to such
        term in Regulation S-X under the Exchange Act.

                "13% Preferred" shall have the meaning set forth in paragraph
        (3)(d).

                "Trading Day" shall mean any day on which the securities in
        question are traded on the NYSE, or if such securities are not listed or
        admitted for trading on the NYSE, on the principal national securities
        exchange on which such securities are listed or admitted, or if not
        listed or admitted for trading on any national securities exchange, on
        the Nasdaq National Market, or if

                                       6
<PAGE>   265

        such securities are not quoted thereon, in the applicable securities
        market in which the securities are traded.

                "Transaction" shall have the meaning set forth in paragraph
        (8)(e)(i).

                "Trigger Event" shall have the meaning set forth in paragraph
        (9)(b).

                "Trigger Event Cure" shall have the meaning set forth in
        paragraph (9)(b).

                "25-Day Average Market Price" shall mean, for any security, the
        volume-weighted average of the Current Market Prices of that security
        for the twenty-five Trading Days immediately preceding the date of
        determination.

                (3)     Rank. Any class or series of stock of the Corporation
shall be deemed to rank:

                (a)     prior to the 5% Preferred Stock, either as to the
payment of dividends or as to distribution of assets upon liquidation,
dissolution or winding up, or both, if the holders of such class or series shall
be entitled by the terms thereof to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up, in preference or
priority to the holders of 5% Preferred Stock ("Senior Securities");

                (b)     on a parity with the 5% Preferred Stock, either as to
the payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and

               (c)      junior to the 5% Preferred Stock, either as to the
payment of dividends or as to the distribution of assets upon liquidation,
dissolution or winding up, or both, if such stock or series shall be Common
Stock or if the holders of the 5% Preferred Stock shall be entitled to receipt
of dividends, and of amounts distributable

                                       7
<PAGE>   266

upon liquidation, dissolution or winding up, in preference or priority to the
holders of shares of such stock or series ("Junior Securities").

                (d)     Each of the 13% Senior Redeemable Exchangeable Preferred
Stock of the Corporation and the 13% Series B Senior Redeemable Exchangeable
Preferred Stock of the Corporation (collectively, the "13% Preferred") is a
Senior Security. Each of the Series A Junior Participating Preferred Stock of
the Corporation is a Junior Security. The 5% Cumulative Participating
Convertible Preferred Stock, Series A of the Corporation, the 5% Cumulative
Participating Convertible Preferred Stock, Series C of the Corporation, the 5%
Cumulative Participating Convertible Preferred Stock, Series D of the
Corporation, the 5% Cumulative Preferred Stock, Series A of the Corporation, the
5% Cumulative Participating Convertible Preferred Stock, Series E of the
Corporation, the 5% Cumulative Participating Convertible Preferred Stock, Series
B of the Corporation, the 5% Cumulative Participating Convertible Preferred
Stock, Series B-1 of the Corporation, the 5% Cumulative Participating
Convertible Preferred Stock, Series F of the Corporation, the 5% Cumulative
Participating Convertible Preferred Stock, Series B-2 of the Corporation and one
or more classes of Additional Preferred shall be Parity Securities; provided,
however, that there shall be no issue of other Senior Securities, Parity
Securities or rights or options exercisable for or convertible into any such
securities, except as approved by the holders of the 5% Preferred Stock pursuant
to paragraph 9(e).

                (e)     The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.

                (4)     Dividends. (a) Subject to paragraph (8)(b)(ii), the
holders of shares of 5% Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for such Dividend Payment Date) or additional
shares of Preferred Stock of a class to be designated by the Board of Directors
having terms substantially identical to the 5% Preferred Stock except as
follows: (A) the Conversion Rate (as set forth in Section 8(a)) on such
Preferred Stock initially shall be the quotient

                                       8
<PAGE>   267

resulting from the division of the Conversion Rate (as then in effect on the 5%
Preferred Stock) by the Relevant Compounding Factor and (B) the number of shares
of such Preferred Stock payable as a dividend on any Dividend Payment Date shall
increase for each Dividend Payment Date from the first Dividend Payment Date by
the Relevant Compounding Factor (such classes of Preferred Stock singularly and
collectively, the "Additional Preferred"). All dividends on the 5% Preferred
Stock, in whatever form, shall be payable in arrears quarterly on each Dividend
Payment Date and shall be cumulative from the Issue Date (except that dividends
on Additional Preferred shall accrue from the date such Additional Preferred is
issued or would have been issued in accordance with this Certificate of
Designation if such dividends had been declared), whether or not in any Dividend
Period or Dividend Periods there shall be funds of the Corporation legally
available for the payment of such dividends. Each such dividend shall be payable
to the holders of record of shares of the 5% Preferred Stock, as they appear on
the stock records of the Corporation at the close of business on the record date
for such dividend. Upon the declaration of any such dividend, the Board of
Directors shall fix as such record date the fifth Business Day preceding the
relevant Dividend Payment Date and shall give notice on or prior to the record
date of the form of payment of such dividend. Accrued and unpaid dividends for
any past Dividend Payment Date may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record on such record
date, not more than 45 days nor less than five Business Days preceding the
payment date thereof, as may be fixed by the Board of Directors.

                (b)     In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock shall be entitled to
receive an amount equal to the amount (and in the form of consideration) that
such holders would be entitled to receive if, pursuant to paragraph (8), they
had converted such 5% Preferred Stock fully into Common Stock immediately before
the record date for the payment of any such dividends on Common Stock. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock as they appear on the stock records of the Corporation at the close of
business on the record date for such dividend on Common Stock, and the
Corporation shall pay each such dividend on the applicable payment date for such
dividend on the Common Stock.

                (c)     For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each share of Additional
Preferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).


                                       9
<PAGE>   268


                (d)     The dividends payable for any period shorter than a full
Dividend Period on the 5% Preferred Stock shall accrue daily and be computed on
the basis of a 360-day year and the actual number of days in such period. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the 5% Preferred Stock that may be in
arrears except as otherwise provided herein.

                (e)     So long as any shares of the 5% Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities 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 such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock for all
Dividend Periods terminating on or prior to the date of such redemption,
repurchase or other acquisition shall have been paid or set apart for payment,
(ii) sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in Common Stock or Additional Preferred or are
not paid in full in cash or a sum sufficient for such payment is not set apart,
as aforesaid, all dividends declared upon shares of the 5% Preferred Stock and
all dividends declared upon Parity Securities shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid on the
5% Preferred Stock and accumulated and unpaid on such Parity Securities.

                (f)     So long as any shares of the 5% Preferred Stock are
outstanding, no dividends (other than (i) any Rights issued pursuant to the
stockholder rights plan as provided in paragraph (11) and (ii) dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Junior Securities) shall be declared or paid or set apart
for payment or other distribution declared or made upon Junior Securities, nor
shall any Junior Securities be redeemed, purchased or otherwise acquired (other
than a redemption, purchase, or other acquisition of shares of Common Stock made
for purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary of the Corporation) (all such dividends, distributions, redemptions
or purchases being hereinafter referred to

                                       10
<PAGE>   269

as "Junior Securities Distributions") 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, directly or indirectly (except by conversion
into or exchange for Junior Securities), unless in each case (A) full cumulative
dividends on all outstanding shares of the 5% Preferred Stock and all Parity
Securities shall have been paid or set apart for payment for all past Dividend
Periods and dividend periods for such Parity Securities, (B) sufficient funds
shall have been paid or set apart for the payment of the dividend for the
current Dividend Period with respect to the 5% Preferred Stock and all Parity
Securities, (C) the Corporation is not in default with respect to any redemption
of shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6)
below and (D) the Corporation has fully performed its obligations under
paragraphs (4)(b) and (6).

                (5)     Liquidation Preference. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, before any payment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set apart for the holders of
Junior Securities, the holders of the shares of 5% Preferred Stock shall be
entitled to receive the Liquidation Right. If, upon any liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of 5% Preferred Stock
shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any Parity Securities, then such assets, or the proceeds
thereof, shall be distributed among the holders of shares of 5% Preferred Stock
and any such other Parity Securities ratably in accordance with the respective
amounts that would be payable on such shares of 5% Preferred Stock and any such
other stock if all amounts payable thereon were paid in full. For the purposes
of this paragraph (5), (i) a consolidation or merger of the Corporation with one
or more corporations, or (ii) a sale or transfer of all or substantially all of
the Corporation's assets, shall not be deemed to be a liquidation, dissolution
or winding up, voluntary or involuntary, of the Corporation.

                (b)     Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or classes
of Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the 5% Preferred Stock shall not be
entitled to share therein.


                                       11
<PAGE>   270


                (6)     Redemption. (a) On and after the first Business Day
following the earlier to occur of (i) August 13, 2006 or (ii) the date on which
both (A) the 25-Day Average Market Price of the Common Stock shall have exceeded
$96.00 and (B) August 13, 2003, to the extent the Corporation shall have funds
legally available for such payment, the Corporation may redeem at its option
shares of 5% Preferred Stock, from time to time in part, or in whole, payable at
the option of the Corporation in (A) cash, at a redemption price of $1,000.00
per share, (B) in shares of Common Stock, at a redemption price of $1,000.00 per
share, or (C) in a combination of cash and Common Stock, at a redemption price
based on the respective combination of consideration, together in each case with
accrued and unpaid dividends thereon, whether or not declared, to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(a), the price per share of Common Stock shall be the 25-Day
Average Market Price.

                (b)     On and after the first Business Day following August 13,
2009, each holder of shares of 5% Preferred Stock shall have the right to
require the Corporation, to the extent the Corporation shall have funds legally
available therefor, to redeem such holder's shares of 5% Preferred Stock, from
time to time in part, or in whole, at a redemption price of $1,000.00 per share,
payable at the option of the Corporation in cash, shares of Common Stock or a
combination thereof, together with accrued and unpaid dividends thereon to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(b), the price per share of Common Stock shall equal the 25-Day
Average Market Price. Any holder of shares of 5% Preferred Stock who elects to
exercise its rights pursuant to this paragraph (6)(b) shall deliver to the
Corporation a written notice of election not less than 20 days prior to the date
on which such holder demands redemption pursuant to this paragraph 6(b), which
written notice shall set forth the name of the Holder, the number of shares of
5% Preferred Stock to be redeemed and a statement that the election to exercise
a redemption right is being made thereby; and, subject to paragraph (10)(d),
shall deliver to the Corporation on or before the date of redemption
certificates evidencing the shares of 5% Preferred Stock to be redeemed, duly
endorsed for transfer to the Corporation.

                (c)     If the Corporation shall not have redeemed all
outstanding shares of 5% Preferred Stock pursuant to paragraphs (6)(a) or
(6)(b), on August 13, 2019 (the "Mandatory Redemption Date"), to the extent the
Corporation shall have funds legally available for such payment, the Corporation
shall redeem all outstanding shares of 5% Preferred Stock, at a redemption price
of $1,000.00 per share,

                                       12
<PAGE>   271

payable at the option of the Corporation in cash, shares of Common Stock or a
combination thereof, together with accrued and unpaid dividends thereon to, but
excluding, the Mandatory Redemption Date, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(c), the price per share of Common Stock shall be the 25-Day
Average Market Price.

                (d)     If the Corporation is unable or shall fail to discharge
its obligation to redeem all outstanding shares of 5% Preferred Stock pursuant
to paragraphs 6(b) or 6(c) (each, a "Mandatory Redemption Obligation"), the
Mandatory Redemption Obligation shall be discharged as soon as the Corporation
is able to discharge such Mandatory Redemption Obligation. If and so long as any
Mandatory Redemption Obligation with respect to the 5% Preferred Stock shall not
be fully discharged, the Corporation shall not (i) directly or indirectly,
redeem, purchase, or otherwise acquire any Parity Security or discharge any
mandatory or optional redemption, sinking fund or other similar obligation in
respect of any Parity Securities (except in connection with a redemption,
sinking fund or other similar obligation to be satisfied pro rata with the 5%
Preferred Stock) or (ii) declare or make any Junior Securities Distribution
(other than dividends or distributions paid in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Junior Securities), or,
directly or indirectly, discharge any mandatory or optional redemption, sinking
fund or other similar obligation in respect of the Junior Securities.

                (e)     Upon any redemption of 5% Preferred Stock, the
Corporation shall pay the redemption price and any accrued and unpaid dividends
in arrears to, but excluding, the applicable redemption date.

                (f)     For purposes of paragraph (6)(a) only, unless full
cumulative dividends (whether or not declared) on all outstanding shares of 5%
Preferred Stock and any Parity Securities shall have been paid or
contemporaneously are declared and paid or set apart for payment for all
Dividend Periods terminating on or prior to the applicable redemption date and
notice has been given in accordance with paragraph (7), none of the shares of 5%
Preferred Stock shall be redeemed, and no sum shall be set aside for such
redemption, unless shares of 5% Preferred Stock are redeemed pro rata and notice
has previously been given in accordance with paragraph (7).

                (7)     Procedure for Redemption. (a) If the Corporation shall
redeem shares of 5% Preferred Stock pursuant to paragraph 6(a), notice of such

                                       13
<PAGE>   272

redemption shall be given by certified mail, return receipt requested, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
applicable 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 and confirmed by facsimile transmission to each holder of record
if the Corporation has been furnished with such facsimile address by the
holder(s); provided, however, that neither the failure to give such notice nor
confirmation nor any defect therein or in the mailing thereof, to any particular
holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice that
was mailed in the manner herein provided shall be conclusively presumed to have
been duly given on the date mailed whether or not the holder receives the
notice. Each such notice shall state: (i) the redemption date; (ii) the number
of shares of 5% Preferred Stock to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of shares to be redeemed from
such holder; (iii) the amount payable, whether such amount shall be paid in
Common Stock or in cash and if the payment is in Common Stock an explanation of
the determination of the amount to be paid; (iv) the place or places where
certificates for such shares are to be surrendered or the notice under paragraph
(10)(d) should be sent for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date, except as otherwise provided herein.

                (b)     If notice has been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the Corporation in
providing for the payment of the redemption price of the shares called for
redemption and dividends accrued and unpaid thereon, if any), (i) except as
otherwise provided herein, dividends on the shares of 5% Preferred Stock so
called for redemption shall cease to accrue, (ii) said shares shall no longer be
deemed to be outstanding and (iii) all rights of the holders thereof as holders
of the 5% Preferred Stock shall cease (except the right to receive from the
Corporation the redemption price without interest thereon, upon surrender and
endorsement (or a constructive surrender under paragraph (10)(d)) of their
certificates if so required, and to receive any dividends payable thereon).

                (c)     Upon surrender (including a constructive surrender under
paragraph (10)(d)) in accordance with notice given pursuant to this paragraph
(7) of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption

                                       14
<PAGE>   273

price aforesaid, plus any dividends payable thereon. If fewer than all the
outstanding shares of 5% Preferred Stock are to be redeemed, the number of
shares to be redeemed shall be determined by the Board of Directors and the
shares to be redeemed shall be selected pro rata (with any fractional shares
being rounded to the nearest whole share). In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued, subject to a holder's election under paragraph (10)(d), representing the
surrendered shares without cost to the holder thereof.

                (8)     Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock shall
have the right, at any time and from time to time, at such holder's option, to
convert any or all outstanding shares of 5% Preferred Stock held by such holder,
but not fractions of shares, into fully paid and non-assessable shares of Common
Stock by surrendering such shares to be converted, such surrender to be made in
the manner provided in paragraph (8)(b). The number of shares of Common Stock
deliverable upon conversion of each share of 5% Preferred Stock shall be equal
to 11.815289 as adjusted as provided herein (the "Conversion Rate"). The
Conversion Rate is subject to adjustment from time to time pursuant to paragraph
(8)(d). The right to convert shares called for redemption pursuant to paragraph
6(a) shall terminate at the close of business on the date immediately preceding
the date fixed for such redemption unless the Corporation shall default in
making payment of the amount payable upon such redemption, in which case such
right of conversion shall be reinstated. Upon conversion, any accrued and unpaid
dividends on the 5% Preferred Stock at the date of conversion shall be paid to
the holder thereof in accordance with the provisions of paragraph (4).

                (b)     (i) In order to exercise the conversion privilege, the
holder of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (10)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended; provided, however, that the
Corporation shall use its best efforts in cooperating with such holder to obtain
such legal or regulatory approvals to the extent its cooperation is

                                       15
<PAGE>   274

necessary. Such notice shall also state the name or names (with address and
social security or other taxpayer identification number, if applicable) in which
the certificate or certificates for Common Stock are to be issued. Unless the
shares issuable on conversion are to be issued in the same name as the name in
which such share of 5% Preferred Stock is registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form satisfactory
to the Corporation, duly executed by the holder or the holder's duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation demonstrating that such
taxes have been paid). All certificates representing shares of 5% Preferred
Stock surrendered for conversion shall be canceled by the Corporation or the
transfer agent.

                (ii)    Subject to the last sentence of paragraph (8)(a),
holders of shares of 5% Preferred Stock at the close of business on a dividend
payment record date shall not be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date if such holder shall have
surrendered (or made a constructive surrender under paragraph (10)(d)) for
conversion such shares at any time following the preceding Dividend Payment Date
and prior to such Dividend Payment Date.

                (iii)   Subject to a holder's election under paragraph (10)(d),
as promptly as practicable after the surrender (including a constructive
surrender under paragraph (10)(d)) by a holder of the certificates for shares of
5% Preferred Stock as aforesaid, the Corporation shall issue and shall deliver
to such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (8), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (8)(c). Upon conversion of
only a portion of the shares of 5% Preferred Stock represented by any
certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (10)(d), upon the surrender
(including a constructive surrender under paragraph (10)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be outstanding and all rights of a holder with respect to
such shares so surrendered shall immediately terminate except the right to
receive the Common Stock and other amounts payable pursuant to this paragraph
(8).

                                       16
<PAGE>   275


                (iv)    Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered pursuant to an election under paragraph (10)(d)) and such notice
received by the Corporation as aforesaid, and the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby at such time
on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock
surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered and such notice received by the Corporation.

                (c)     (i) No fractional shares or scrip representing fractions
of shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion (or deemed surrendered under paragraph (10)(d)) at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of 5% Preferred Stock surrendered (or deemed surrendered under paragraph
(10)(d)) for conversion by such holder.

                (ii)    Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered under paragraph (10)(d)) and such notice received by the Corporation
as aforesaid, and the Person or Persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of the
shares of Common Stock represented thereby at such time on such date and such
conversion shall be into a number of shares of Common Stock equal to the product
of the number of shares of 5% Preferred Stock surrendered times the Conversion
Rate in effect at such time on such

                                       17
<PAGE>   276

date, unless the stock transfer books of the Corporation shall be closed on that
date, in which event such Person or Persons shall be deemed to have become such
holder or holders of record at the close of business on the next succeeding day
on which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered (or deemed surrendered under paragraph (10)(d)) and such notice
received by the Corporation.

                (d)     The Conversion Rate shall be adjusted from time to time
as follows:

                (i)     If the Corporation shall after the Issue Date (A)
declare a dividend or make a distribution on its Common Stock in shares of its
Common Stock, (B) subdivide its outstanding Common Stock into a greater number
of shares, (C) combine its outstanding Common Stock into a smaller number of
shares or (D) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification. An
adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (8)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case of a
subdivision, combination or reclassification. Adjustments in accordance with
this paragraph (8)(d)(i) shall be made whenever any event listed above shall
occur.

                (ii)    If the Corporation shall after the Issue Date fix a
record date for the issuance of rights or warrants (in each case, other than any
Rights issued pursuant to the stockholder rights plan as provided in paragraph
(11)) to all holders of Common Stock entitling them (for a period expiring
within 45 days after such record date) to subscribe for or purchase Common Stock
(or securities convertible into Common Stock) at a price per share (or, in the
case of a right or warrant to purchase securities convertible into Common Stock,
having an effective exercise

                                       18
<PAGE>   277

price per share of Common Stock, computed on the basis of the maximum number of
shares of Common Stock issuable upon conversion of such convertible securities,
plus the amount of additional consideration payable, if any, to receive one
share of Common Stock upon conversion of such securities) less than the 25-Day
Average Market Price on the date on which such issuance was declared or
otherwise announced by the Corporation (the "Determination Date"), then the
Conversion Rate in effect at the opening of business on the Business Day next
following such record date shall be adjusted so that the holder of each share of
5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to such record date by (II) a
fraction, the numerator of which shall be the sum of (A) the number of shares of
Common Stock outstanding on the close of business on the Determination Date and
(B) the number of additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants (or in the case of a right or
warrant to purchase securities convertible into Common Stock, the aggregate
number of additional shares of Common Stock into which the convertible
securities so offered are initially convertible), and the denominator of which
shall be the sum of (A) the number of shares of Common Stock outstanding on the
close of business on the Determination Date and (B) the number of shares that
the aggregate proceeds to the Corporation from the exercise of such rights or
warrants for Common Stock would purchase at such 25-Day Average Market Price on
such date (or, in the case of a right of warrant to purchase securities
convertible into Common Stock, the number of shares of Common Stock obtained by
dividing the aggregate exercise price of such rights or warrants for the maximum
number of shares of Common Stock issuable upon conversion of such convertible
securities, plus the aggregate amount of additional consideration payable, if
any, to convert such securities into Common Stock, by such 25-Day Average Market
Price). Such adjustment shall become effective immediately after the opening of
business on the Business Day next following such record date (except as provided
in paragraph (8)(h)). Such adjustment shall be made successively whenever such a
record date is fixed. In the event that after fixing a record date such rights
or warrants are not so issued, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect if such record date had not been
fixed. In determining whether any rights or warrants entitle the holders of
Common Stock to subscribe for or purchase shares of Common Stock at less than
such 25-Day Average Market Price, there shall be taken into account any
consideration received by the Corporation upon issuance and upon exercise of
such rights or warrants, the value of such consideration, if other than cash, to
be determined by the Board of Directors in good faith. In case any rights or
warrants referred to in this subparagraph (ii) shall expire unexercised after
the same

                                       19
<PAGE>   278

have been distributed or issued by the Corporation (or, in the case of rights or
warrants to purchase securities convertible into Common Stock once exercised,
the conversion right of such securities shall expire), the Conversion Rate shall
be readjusted at the time of such expiration to the Conversion Rate that would
have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.

               (iii) If the Corporation shall fix a record date for the making
of a distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (8)(d)(i)) or rights or warrants (in each case, other than
any Rights issued pursuant to the stockholder rights plan as provided in
paragraph (11)) to subscribe for or purchase any of its securities (excluding
those rights and warrants issued to all holders of Common Stock entitling them
(for a period expiring within 45 days after such record date) to subscribe for
or purchase Common Stock or securities convertible into shares of Common Stock,
which rights and warrants are referred to in and treated under subparagraph (ii)
above) (any of the foregoing being hereinafter in this subparagraph (iii) called
the "Securities"), then in each such case the Conversion Rate shall be adjusted
so that the holder of each share of 5% Preferred Stock shall be entitled to
receive, upon the conversion thereof, the number of shares of Common Stock
determined by multiplying (I) the Conversion Rate in effect immediately prior to
the close of business on such record date by (II) a fraction, the numerator of
which shall be the 25-Day Average Market Price per share of the Common Stock on
such record date, and the denominator of which shall be the 25-Day Average
Market Price per share of the Common Stock on such record date less the
then-fair market value (as determined by the Board of Directors in good faith,
whose determinations shall be conclusive) of the portion of the assets, shares
of its capital stock or evidences of indebtedness so distributed or of such
rights or warrants applicable to one share of Common Stock. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that after fixing a record date such distribution is not so made, the
Conversion Rate shall be readjusted to the Conversion Rate which would then be
in effect if such record date had not been fixed. Such adjustment shall become
effective immediately at the opening of business on the Business Day next
following (except as provided in paragraph (8)(h)) the record date for the
determination of stockholders entitled to receive such distribution. For the
purposes of this subparagraph (iii), the distribution of a Security, which is
distributed not only to the holders of the Common Stock on the date fixed for
the determination of
                                       20
<PAGE>   279
stockholders entitled to such distribution of such Security, but also is
distributed with each share of Common Stock delivered to a Person converting a
share of 5% Preferred Stock after such determination date, shall not require an
adjustment of the Conversion Rate pursuant to this subparagraph (iii); provided,
however, that on the date, if any, on which a Person converting a share of 5%
Preferred Stock would no longer be entitled to receive such Security with a
share of Common Stock (other than as a result of the termination of all such
Securities), a distribution of such Securities shall be deemed to have occurred
and the Conversion Rate shall be adjusted as provided in this subparagraph (iii)
(and such day shall be deemed to be "the date fixed for the determination of
stockholders entitled to receive such distribution" and "the record date" within
the meaning of the three preceding sentences). If any rights or warrants
referred to in this subparagraph (iii) shall expire unexercised after the same
shall have been distributed or issued by the Corporation, the Conversion Rate
shall be readjusted at the time of such expiration to the Conversion Rate that
would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.

                (iv)    In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
8(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date for the
cash dividend or distribution by a fraction the numerator of which shall be the
Current Market Price of a share of the Common Stock on the Record Date and the
denominator shall be such Current Market Price less the per share amount of cash
so distributed during the 12-month period applicable to one share of Common
Stock, such adjustment to be effective immediately prior to the opening of
business on the Business Day following the Record Date; provided, however, that
in the event the denominator of the foregoing fraction is zero or negative, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
holder of 5% Preferred Stock shall have the right to receive upon conversion, in
addition to the shares of

                                       21
<PAGE>   280

Common Stock to which the holder is entitled, the amount of cash such holder
would have received had such holder converted each share of 5% Preferred Stock
at the beginning of the 12-month period. In the event that such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted
to be the Conversion Rate which would then be in effect if such dividend or
distribution had not been declared. Notwithstanding the foregoing, if any
adjustment is required to be made as set forth in this paragraph (8)(d)(iv), the
calculation of any such adjustment shall include the amount of the quarterly
cash dividends paid during the 12-month reference period only to the extent such
dividends exceed the regular quarterly cash dividends paid during the 12 months
preceding the 12-month reference period. For purposes of this paragraph
(8)(d)(iv), "Record Date" shall mean, with respect to any dividend or
distribution in which the holders of Common Stock have the right to receive
cash, the date fixed for determination of stockholders entitled to receive such
cash. In the event that at any time cash distributions to holders of Common
Stock are not paid equally on all series of Common Stock, the provisions of this
paragraph 8(d)(iv) will apply to any cash dividend or cash distribution on any
series of Common Stock otherwise meeting the requirements of this paragraph, and
shall be deemed amended to the extent necessary so that any adjustment required
will be made on the basis of the cash dividend or cash distribution made on any
such series.

                (v)     In case of the consummation of a tender or exchange
offer (other than an odd-lot tender offer) made by the Corporation or any
subsidiary of the Corporation for all or any portion of the outstanding shares
of Common Stock to the extent that the cash and fair market value (as determined
in good faith by the Board of Directors of the Corporation, whose determination
shall be conclusive and shall be described in a resolution of such Board) of any
other consideration included in such payment per share of Common Stock at the
last time (the "Expiration Time") tenders or exchanges may be made pursuant to
such tender or exchange offer (as amended) exceed by more than 5.0%, with any
smaller excess being disregarded in computing the adjustment to the Conversion
Rate provided in this paragraph (8)(d)(v), the first reported sale price per
share of the Common Stock on the Trading Day next succeeding the Expiration
Time, then the Conversion Rate shall be adjusted so that the same shall equal
the rate determined by multiplying the Conversion Rate in effect immediately
prior to the Expiration Time by a fraction the numerator of which shall be the
sum of (x) the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares validly
tendered or exchanged and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the "Purchase
Shares") and

                                       22
<PAGE>   281

(y) the product of the number of shares of Common Stock outstanding (less any
Purchase Shares) on the Expiration Time and the first reported sale price of the
Common Stock on the Trading Day next succeeding the Expiration Time, and the
denominator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time multiplied
by the first reported sale price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such adjustment to become effective immediately
prior to the opening of business on the day following the Expiration Time.

                (vi)    No adjustment in the Conversion Rate shall be required
unless such adjustment would require a cumulative increase or decrease of at
least 1% in the Conversion Rate; provided, however, that any adjustments that by
reason of this subparagraph (vi) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment until made, and
provided further that any adjustment shall be required and made in accordance
with the provisions of this paragraph (8) (other than this subparagraph (vi))
not later than such time as may be required in order to preserve the tax-free
nature of a distribution for United States income tax purposes to the holders of
shares of 5% Preferred Stock or Common Stock. Notwithstanding any other
provisions of this paragraph (8), the Corporation shall not be required to make
any adjustment of the Conversion Rate for the issuance of any shares of Common
Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and the investment of
additional optional amounts in shares of Common Stock under such plan. All
calculations under this paragraph (8) shall be made to the nearest dollar or to
the nearest 1/1,000 of a share, as the case may be. Anything in this paragraph
(8)(d) to the contrary notwithstanding, the Corporation shall be entitled, to
the extent permitted by law, to make such adjustments in the Conversion Rate, in
addition to those required by this paragraph (8)(d), as it in its discretion
shall determine to be advisable in order that any stock dividends, subdivision
of shares, reclassification or combination of shares, distribution or rights or
warrants to purchase stock or securities, or a distribution of other assets
(other than cash dividends) hereafter made by the Corporation to its
stockholders shall not be taxable.

                (vii)   In the event that, at any time as a result of shares of
any other class of capital stock becoming issuable in exchange or substitution
for or in lieu of shares of Common Stock or as a result of an adjustment made
pursuant to the provisions of this paragraph (8)(d), the holder of 5% Preferred
Stock upon subsequent conversion shall become entitled to receive any shares of
capital stock of the Corporation other than Common Stock, the number of such
other shares so receiv-

                                       23
<PAGE>   282

able upon conversion of any shares of 5% Preferred Stock shall thereafter be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions contained herein.

               (viii) The $96.00 required stock price threshold set forth in
paragraph (6)(a)(ii) shall be adjusted from time to time in a manner consistent
with the provisions of this paragraph (8)(d).

               (e) (i) If the Corporation shall be a party to any transaction
(including without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (8)(d)(i) applies)
(each of the foregoing being referred to herein as a "Transaction"), in each
case as a result of which shares of Common Stock shall be converted into the
right to receive stock, securities or other property (including cash or any
combination thereof), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that number
of shares or fraction thereof of Common Stock into which one share of 5%
Preferred Stock was convertible immediately prior to such Transaction, assuming
such holder of Common Stock (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be (a
"Constituent Person"), or an affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of stock,
securities and other property (including cash) receivable upon such Transaction
(provided that if the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction is not the same for each share
of Common Stock held immediately prior to such Transaction by other than a
Constituent Person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purpose of this paragraph (8)(e) the kind and amount of stock, securities and
other property (including cash) receivable upon such Transaction by each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). The provisions of this
paragraph (8)(e) shall similarly apply to successive Transactions.


                                       24
<PAGE>   283


                (ii)    Notwithstanding anything herein to the contrary, if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation, by notice to and consultation with the
holders of the 5% Preferred Stock, may cause the exchange of the 5% Preferred
Stock for preferred stock of Holdco having the same terms and conditions as set
forth herein; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 5% Preferred Stock
(including for these purposes any resultant change in the tax treatment for the
holders of such stock).

                (f)     If:

                (i)     the Corporation shall declare a dividend (or any other
        distribution) on the Common Stock; or

                (ii)    the Corporation shall authorize the granting to the
        holders of the Common Stock of rights or warrants to subscribe for or
        purchase any shares of any class or any other rights or warrants; or

                (iii)   there shall be any subdivision, combination or
        reclassification of the Common Stock or any consolidation or merger to
        which the Corporation is a party and for which approval of any
        stockholders of the Corporation is required, or the sale or transfer of
        all or substantially all of the assets of the Corporation as an
        entirety; or

                (iv)    there shall occur the voluntary or involuntary
        liquidation, dissolution or winding up of the Corporation,

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applicable date hereinafter specified, a notice stating (A)
the date on which a record is to be taken for the purpose of such dividend (or
such other distribution) or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or


                                       25
<PAGE>   284
warrants are to be determined or (B) the date on which such subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up or other action is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities or other property, if any, deliverable upon such subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up. Failure to give or receive such notice
or any defect therein shall not affect the legality or validity of any
distribution, right, warrant, subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, winding up or
other action, or the vote upon any of the foregoing.

                (g)     Whenever the Conversion Rate is adjusted as herein
provided, the Corporation shall prepare an officer's certificate with respect to
such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the effective date of such adjustment and shall mail a copy of such
officer's certificate to the holder of each share of 5% Preferred Stock at such
holder's last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (8)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be conclusive evidence of the correctness of such adjustment.

                (h)     In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (8)(c).

                (i)     For purposes of this paragraph (8), the number of shares
of Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.


                                       26
<PAGE>   285


                (j)     There shall be no adjustment of the Conversion Rate in
case of the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth in
this paragraph (8). If any single action would require adjustment of the
Conversion Rate pursuant to more than one subparagraph of this paragraph (8),
only one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value.

                (k)     If the Corporation shall take any action affecting the
Common Stock, other than action described in this paragraph (8), that in the
opinion of the Board of Directors materially adversely affects the conversion
rights of the holders of the shares of 5% Preferred Stock, the Conversion Rate
may be adjusted, to the extent permitted by law, in such manner, if any, and at
such time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (8)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.

                (l)     (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of 5% Preferred Stock
not theretofore converted. For purposes of this paragraph (8)(l) the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.

                (ii)    The Corporation covenants that any shares of Common
Stock issued upon conversion of the 5% Preferred Stock shall be duly authorized,
validly issued, fully paid and non-assessable. Before taking any action that
would cause an adjustment increasing the Conversion Rate such that the quotient
of $1,000.00 and the Conversion Rate (which quotient initially shall be
$84.6361) would be reduced below the then-par value of the shares of Common
Stock deliverable upon conversion of the 5% Preferred Stock, the Corporation
will take any corporate action that, in the opinion of its counsel, may be
necessary in order that the Corporation may validly and legally issue fully paid
and non-assessable shares of Common Stock based upon such adjusted Conversion
Rate.


                                       27
<PAGE>   286


                (iii)   Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 5% Preferred
Stock, the Corporation shall comply with all applicable federal and state laws
and regulations which require action to be taken by the Corporation.

                (m)     The Corporation will pay any and all documentary, stamp
or similar issue or transfer taxes payable in respect of the issue or delivery
of shares of Common Stock or other securities or property on conversion of the
5% Preferred Stock pursuant hereto; provided, however, that the Corporation
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issue or delivery of shares of Common Stock or other
securities or property in a name other than that of the holder of the 5%
Preferred Stock to be converted and no such issue or delivery shall be made
unless and until the Person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or established, to the satisfaction of
the Corporation, that such tax has been paid.

                (n)     No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock are entitled to participate in such
transaction pursuant to paragraph 4(b).

                (9)     Voting Rights. (a) The holders of record of shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (9) or as otherwise provided by law.

                (b)     If and whenever either (i) six quarterly dividends
(whether or not consecutive) payable on the 5% Preferred Stock have not been
paid in full, (ii) the Corporation shall have failed to discharge its Mandatory
Redemption Obligation or (iii) there occurs a Bankruptcy Event (any such event
described in the preceding subparagraphs (i) through (iii) being hereinafter
referred to as a "Trigger Event"), a vote of the holders of shares of 5%
Preferred Stock, voting as a single class, will be required on all matters
brought to stockholders of the Corporation. Whenever all arrears in dividends on
the 5% Preferred Stock then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, the Corporation shall have fulfilled its
Mandatory Redemption Obligation and all Bankruptcy Events shall have been cured
(the "Trigger Event Cure"), then the right of the holders of the 5% Preferred
Stock to vote as described in this paragraph 9(b) shall cease (but subject
always to the same provisions for the vesting of such voting rights if any
Trigger Event occurs).

                                       28
<PAGE>   287


                (c)     Upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, together with the holders of shares
of every other series of preferred stock (including, without limitation,
Additional Preferred) upon which like rights to vote for the election of two
additional directors have been conferred and are exercisable (resulting from
either the failure to pay dividends or the failure to redeem) (any such other
series is referred to as the "Preferred Shares"), voting as a single class
regardless of series, shall be entitled to elect the two additional directors to
serve on the Board of Directors at any annual meeting of stockholders or special
meeting held in place thereof, or at a special meeting of the holders of 5%
Preferred Stock and the Preferred Shares, called as hereinafter provided.
Whenever all arrears in dividends on the Preferred Shares then outstanding shall
have been paid and dividends thereon for the current quarterly dividend period
shall have been paid or declared and set apart for payment, the Corporation
shall have fulfilled any redemption obligation in respect of the Preferred
Shares, and the Trigger Event Cure has occurred, then the right of the holders
of the 5% Preferred Stock and the Preferred Shares to elect such additional two
directors shall cease (but subject always to the same provisions for the vesting
of such voting rights if any Trigger Event occurs), and the terms of office of
all persons elected as directors by the holders of 5% Preferred Stock and the
Preferred Shares shall forthwith terminate and the number of members of the
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in holders of shares of 5% Preferred Stock and
the Preferred Shares, the Secretary of the Corporation may, and upon the written
request of any holder of 5% Preferred Stock (addressed to the secretary at the
principal office of the Corporation) shall, call a special meeting of the
holders of the 5% Preferred Stock and of the Preferred Shares for the election
of the two directors to be elected by them as herein provided, such call to be
made by notice similar to that provided in the By-laws of the Corporation for a
special meeting of the stockholders or as required by law. If any such special
meeting required to be called as above provided shall not be called by the
Secretary of the Corporation within 20 days after receipt of any such request,
then any holder of shares of 5% Preferred Stock may call such meeting, upon the
notice above provided, and for that purpose shall have access to the stock books
of the Corporation. The directors elected at any such special meeting shall hold
office until the next annual meeting of the stockholders or special meeting held
in lieu thereof if such office shall not have previously terminated as above
provided. If any vacancy shall occur among the directors elected by the holders
of the 5% Preferred Stock and the Preferred Shares, a successor shall be elected
by the Board of Directors, upon the nomination of the then-remaining director
elected by the holders of the 5% Preferred Stock and

                                       29
<PAGE>   288

the Preferred Shares or the successor of such remaining director, to serve until
the next annual meeting of the stockholders or special meeting held in place
thereof if such office shall not have previously terminated as provided above.

                (d)     Without the written consent of the holders of at least
66 2/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 66 2/3% in liquidation preference of
the outstanding shares of 5% Preferred Stock at a meeting of the holders of 5%
Preferred Stock called for such purpose, the Corporation will not amend, alter
or repeal any provision of the Certificate of Incorporation (by merger or
otherwise) so as to adversely affect the preferences, rights or powers of the 5%
Preferred Stock; provided that any such amendment that changes the dividend
payable on, the Conversion Rate with respect to, or the liquidation preference
of the 5% Preferred Stock shall require the affirmative vote at a meeting of
holders of 5% Preferred Stock called for such purpose or written consent of the
holder of each share of 5% Preferred Stock.

                (e)     Without the written consent of the holders of at least
66 2/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 66 2/3% in liquidation preference of
the outstanding shares of 5% Preferred Stock at a meeting of such holders called
for such purpose, the Corporation will not issue any additional 5% Preferred
Stock or create, authorize or issue any Parity Securities or Senior Securities
or increase the authorized amount of any such other class or series; provided
that this paragraph 9(e) shall not limit the right of the Corporation to (i)
issue Additional Preferred as dividends pursuant to paragraph 4 or (ii) to issue
Parity Securities or Senior Securities in order to refinance, redeem or refund
the 13% Preferred, provided that the maximum accrual value (i.e., the sum of
stated value and maximum amount payable in kind over the term from issuance to
first date of mandatory redemption or redemption at the option of the holder) of
such Parity Securities may not exceed the maximum accrual value of the 13%
Preferred.

                (f)     In exercising the voting rights set forth in this
paragraph (9), each share of 5% Preferred Stock shall have one vote per share,
except that when any other series of preferred stock shall have the right to
vote with the 5% Preferred Stock as a single class on any matter, then the 5%
Preferred Stock and other series shall have with respect to such matters one
vote per $1,000 of stated liquidation preference. Except as otherwise required
by applicable law or as set forth herein, the shares of 5% Preferred Stock shall
not have any relative, participating, optional or other special voting rights
and powers and the consent of the holders thereof shall not be required for the
taking of any corporate action.

                                       30
<PAGE>   289


                (g)     Nothing in this paragraph (9) shall be in derogation of
any rights that a holder of shares of 5% Preferred Stock may have in his
capacity as a holder of shares of Common Stock.

                (10)    General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are for
convenience of reference only and shall not define, limit or affect any of the
provisions hereof.

                (b)     If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) or shall have failed to
discharge any obligation to redeem shares of 5% Preferred Stock pursuant to
paragraph (6), the holders of shares of 5% Preferred Stock shall be entitled to
receive, in addition to all other amounts required to be paid hereunder, when,
as and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, cash dividends on the aggregate dividends which the
Corporation shall have failed to declare or pay or the redemption price,
together with accrued and unpaid dividends thereon, as the case may be, at a
rate of 2% per quarter, compounded quarterly, for the period during which the
failure to pay dividends or failure to discharge an obligation to redeem shares
of 5% Preferred Stock shall continue.

                (c)     The shares of 5% Preferred Stock shall bear the
following legend:

                THE SHARES OF PREFERRED STOCK (THE "PREFERRED STOCK"), PAR VALUE
                $0.01 PER SHARE, OF NTL INCORPORATED (THE "CORPORATION") AND THE
                SHARES OF COMMON STOCK (THE "COMMON STOCK"), PAR VALUE $0.01 PER
                SHARE, OF THE CORPORATION INTO WHICH THE PREFERRED STOCK MAY BE
                CONVERTED OR REDEEMED REPRESENTED BY THIS CERTIFICATE MAY NOT BE
                OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER
                THE SECURITIES ACT OF 1933, AND ANY APPLICABLE STATE SECURITIES
                LAWS OR AN APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS.
                THE TRANSFER OF THE PREFERRED STOCK, OR COMMON STOCK IF THE
                PREFERRED STOCK HAS BEEN CONVERTED OR REDEEMED EVIDENCED BY THIS
                CERTIFICATE, IS SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED
                FOR IN THE PURCHASE AGREEMENT, DATED JULY 15, 1999, AS

                                       31
<PAGE>   290

                MAY BE AMENDED, BETWEEN NTL (DELAWARE), INC. AND FRANCE TELECOM
                S.A. A COPY OF THIS AGREEMENT IS ON FILE AT THE EXECUTIVE
                OFFICES OF THE CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE
                TO THE HOLDER OF SUCH PREFERRED STOCK OR COMMON STOCK UPON
                WRITTEN REQUEST TO THE CORPORATION.

                THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE
                MAY BE CONVERTED INTO COMMON STOCK OR REDEEMED IN EXCHANGE FOR
                COMMON STOCK WITHOUT THE SURRENDER AND EXCHANGE OF THIS
                CERTIFICATE FOR CERTIFICATES REPRESENTING SUCH COMMON STOCK. A
                NOTICE OF SUCH CONVERSION OR REDEMPTION EVENT, IF ANY, IS ON
                FILE AT THE EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE
                FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS CERTIFICATE UPON
                WRITTEN REQUEST TO THE CORPORATION.

                THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF
                THE PREFERRED STOCK WHO SO REQUESTS THE POWERS, DESIGNATION,
                PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
                SPECIAL RIGHTS OF THE PREFERRED STOCK.

                The shares of Common Stock issuable upon conversion or
redemption of the 5% Preferred Stock shall bear the following legend:

                THE SHARES OF COMMON STOCK (THE "COMMON STOCK"), PAR VALUE $0.01
                PER SHARE, OF NTL INCORPORATED (THE "CORPORATION") REPRESENTED
                BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED
                STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AND
                ANY APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION
                FROM REGISTRATION REQUIREMENTS. THE TRANSFER OF THE COMMON STOCK
                EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON
                TRANSFER PROVIDED FOR IN THE PURCHASE AGREEMENT, DATED JULY 15,
                1999,

                                       32
<PAGE>   291

                AS MAY BE AMENDED, BETWEEN NTL (DELAWARE), INC. AND FRANCE
                TELECOM S.A. A COPY OF THIS AGREEMENT IS ON FILE AT THE
                EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE FURNISHED
                WITHOUT CHARGE TO THE HOLDER OF SUCH COMMON STOCK UPON WRITTEN
                REQUEST TO THE CORPORATION.

                (d)     (i)Whenever in connection with any conversion or
redemption of the 5% Preferred Stock in exchange for Common Stock the holder is
required to surrender certificates representing such shares of 5% Preferred
Stock, such holder may, by written notice to the Corporation and its transfer
agent, elect to retain such certificates. In such case, the certificates so
retained by the holder thereof shall be deemed to represent, at and from the
date of such conversion or redemption, the number of shares of Common Stock
issuable upon such conversion or redemption (subject to paragraph (8)(c), if
applicable), and shall be so reflected upon the books of the Corporation and its
transfer agent.

                (ii)    (A) A holder who has previously elected to retain
certificates representing the 5% Preferred Stock in accordance with paragraph
(10)(d)(i) upon conversion or redemption may subsequently elect to receive
certificates representing the shares of Common Stock issued upon such conversion
or redemption. To receive certificates representing such shares of Common Stock,
the holder of such certificate shall surrender it, duly endorsed or assigned to
the Corporation or in blank, at the office of the Corporation, or to any
transfer agent of the Corporation previously designated by the Corporation for
such purposes, with a written notice of that election.

                (B)     Unless the certificates to be issued shall be registered
in the same name as the name in which such surrendered certificates are
registered, each certificate so surrendered shall be accompanied by instruments
of transfer, in form satisfactory to the Corporation, duly executed by the
holder or the holder's duly authorized attorney and an amount sufficient to pay
any transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid). All certificates so
surrendered shall be canceled by the Corporation or the transfer agent.

                (C)     As promptly as practicable after the surrender by a
holder of such certificates, the Corporation shall issue and shall deliver to
such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates

                                       33
<PAGE>   292

shall have the legend set forth in paragraph (10)(c)) for the number of duly
authorized, validly issued, fully paid and non-assessable shares of Common Stock
represented by the certificates so surrendered.

                (11)    Stockholder Rights Plan. The shares of 5% Preferred
Stock shall be entitled to the benefits of a number of rights issuable under the
Rights Agreement, dated as of October 13, 1993, as amended, between the
Corporation and Continental Stock Transfer & Trust Company or any successor plan
of similar purpose and effect (the "Rights") equal to the number of shares of
Common Stock then issuable upon conversion of the 5% Preferred Stock at the
prevailing Conversion Rate. Any shares of Common Stock deliverable upon
conversion or redemption of a share of 5% Preferred Stock or upon payment of a
dividend shall be accompanied by a Right."


                                       34
<PAGE>   293


                IN WITNESS WHEREOF, NTL Incorporated has caused this Certificate
of Designation to be signed by the undersigned this 2nd day of October, 2000.

                                NTL INCORPORATED

                                By: /s/ Richard J. Lubasch
                                    -----------------------------
                                    Name:  Richard J. Lubasch
                                    Title: Executive Vice President, General
                                             Counsel and Secretary




                                       35
<PAGE>   294

                           CERTIFICATE OF DESIGNATION
                       OF THE VOTING POWERS, DESIGNATION,
                    PREFERENCES AND RELATIVE, PARTICIPATING,
              OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
                       LIMITATIONS AND RESTRICTIONS OF THE
                     5% CUMULATIVE PARTICIPATING CONVERTIBLE
                         PREFERRED STOCK, SERIES B-3 OF
                                NTL INCORPORATED

                         ------------------------------
                        PURSUANT TO SECTION 151(g) OF THE
                GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
                         ------------------------------

               The undersigned, Executive Vice President, General Counsel and
Secretary of NTL Incorporated, a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that the Board of Directors, in accordance with Article FOURTH,
Section B of the Corporation's Restated Certificate of Incorporation (the
"Certificate of Incorporation") and Section 151(g) of the Delaware General
Corporation Law (the "DGCL"), has authorized the creation of the series of
Preferred Stock (as defined below) hereinafter provided for and has established
the dividend, redemption, conversion and voting rights thereof and has adopted
the following resolution, creating the following new series of Preferred Stock:

               "BE IT RESOLVED that, pursuant to authority expressly granted to
the Board of Directors by the provisions of Article FOURTH, Section B of the
Certificate of Incorporation and Section 151(g) of the DGCL, there is hereby
created and authorized the issuance of a new series of Preferred Stock, par
value $0.01 per share (the "Preferred Stock"), with the following powers,
designations, dividend rights, voting powers, rights on liquidation, conversion
rights, redemption rights and other preferences and relative, participating,
optional or other special rights and with the qualifications, limitations or
restrictions on the shares of such series (in addition to the powers,
designations, preferences and relative, participating, optional or other special
rights and the qualifications, limitations and restrictions thereof set forth in
the Certificate of Incorporation that are applicable to each series of Preferred
Stock) hereinafter set forth.



<PAGE>   295



                (1)     Number and Designation. 24,130.33 shares of Preferred
Stock shall be designated as "5% Cumulative Participating Convertible Preferred
Stock, Series B-3 of NTL Incorporated" (the "5% Preferred Stock") and no other
shares of Preferred Stock shall be designated as 5% Preferred Stock.

                (2)     Definitions. For purposes of the 5% Preferred Stock, the
following terms shall have the meanings indicated:

                "Additional Preferred" shall have the meaning set forth in
        paragraph (4)(a).

                "Bankruptcy Event" shall mean any of the following: (I) a court
        having jurisdiction in the premises enters a decree or order for (A)
        relief in respect of any Major Entity in an involuntary case under any
        applicable bankruptcy, insolvency or other similar law now or
        hereinafter in effect, (B) appointment of a receiver, liquidator,
        assignee, custodian, trustee, sequestrator or similar official of any
        Major Entity or for all or substantially all of the property and assets
        of any Major Entity or (C) the winding up or liquidation of the affairs
        of any Major Entity; or (II) any Major Entity (A) commences a voluntary
        case under any applicable bankruptcy, insolvency or other similar law
        now or hereinafter in effect, or consents to the entry of an order for
        relief in an involuntary case under any such law, (B) consents to the
        appointment of or taking possession by a receiver, liquidator, assignee,
        custodian, trustee, sequestrator or similar official of any Major
        Entity, or for all or substantially all of the property and assets of
        any Major Entity or (C) effects any general assignment for the benefit
        of creditors.

                "Board of Directors" shall mean the board of directors of the
        Corporation. Except as such term is used in paragraph (9), "Board of
        Directors" shall also mean the Executive Committee, if any, of such
        board of directors or any other committee duly authorized by such board
        of directors to perform any of its responsibilities with respect to the
        5% Preferred Stock.

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

                "Certificate of Incorporation" shall have the meaning set forth
        in the preamble.


                                       2
<PAGE>   296


                "Common Stock" shall mean the common stock, par value $0.01 per
        share, of the Corporation.

                "Constituent Person" shall have the meaning set forth in
        paragraph (8)(e)(i).

                "Conversion Rate" shall have the meaning set forth in paragraph
        (8)(a).

                "Corporation" shall have the meaning set forth in the preamble.

                "Current Market Price" of publicly traded shares of Common Stock
        or any other class of capital stock or other security of the Corporation
        or any other issuer for any day shall mean the last reported sale price
        for such security on the principal exchange or quotation system on which
        such security is listed or traded. If the security is not admitted for
        trading on any national securities exchange or the Nasdaq National
        Market, "Current Market Price" shall mean the average of the last
        reported closing bid and asked prices reported by the Nasdaq as
        furnished by any member in good standing of the National Association of
        Securities Dealers, Inc., selected from time to time by the Corporation
        for that purpose or as quoted by the National Quotation Bureau
        Incorporated. In the event that no such quotation is available for such
        day, the Current Market Price shall be the average of the quotations for
        the last five Trading Days for which a quotation is available within the
        last 30 Trading Days prior to such day. In the event that five such
        quotations are not available within such 30-Trading Day period, the
        Board of Directors shall be entitled to determine the Current Market
        Price on the basis of such quotations as it reasonably considers
        appropriate.

                "Determination Date" shall have the meaning set forth in
        paragraph (8)(d)(ii).

                "DGCL" shall have the meaning set forth in the preamble.

                "Dividend Payment Date" shall mean September 30, December 31,
        March 31 and June 30 of each year, commencing on March 31, 2001;
        provided, however, that if any Dividend Payment Date falls on any day
        other than a Business Day, the dividend payment due on such Dividend
        Payment

                                       3
<PAGE>   297

        Date shall be paid on the Business Day immediately following such
        Dividend Payment Date.

                "Dividend Periods" shall mean quarterly dividend periods
        commencing on September 30, December 31, March 31 and June 30 of each
        year and ending on and including the day preceding the first day of the
        next succeeding Dividend Period.

                "Exchange Act" shall mean the Securities Exchange Act of 1934,
        as amended, and the rules and regulations thereunder.

                "Expiration Time" shall have the meaning set forth in paragraph
        (8)(d)(v).

                "5% Preferred Stock" shall have the meaning set forth in
        paragraph (1).

                "Holdco" shall have the meaning set forth in paragraph
        (8)(e)(ii).

                "Issue Date" shall mean the date on which shares of 5% Preferred
        Stock are first issued by the Corporation.

                "Junior Securities" shall have the meaning set forth in
        paragraph (3)(c).

                "Junior Securities Distributions" shall have the meaning set
        forth in paragraph (4)(f).

                "Liquidation Right" shall mean, for each share of 5% Preferred
        Stock, the greater of (i) an amount equal to $1,000.00 per share, plus
        an amount equal to all dividends (whether or not earned or declared)
        accrued and unpaid thereon to the date of final distribution to such
        holders, and (ii) the amount that would be received in liquidation
        following conversion of a share of 5% Preferred Stock into Common Stock.

                "Major Entity" shall mean any of the Corporation, NTL
        (Delaware), Inc., NTL Communications Corp., Diamond Cable Communications
        Limited, Diamond Holdings Limited, NTL (Triangle) LLC or any Significant
        Subsidiary.


                                       4
<PAGE>   298


                "Mandatory Redemption Date" shall have the meaning set forth in
        paragraph (6)(c).

                "Mandatory Redemption Obligation" shall have the meaning set
        forth in paragraph (6)(d).

                "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
        securities market regulated by the National Association of Securities
        Dealers, Inc.

                "Nasdaq National Market" shall have the meaning set forth in
        Rule 4200(a)(23) of the rules of the National Association of Securities
        Dealers, Inc.

                "non-electing share" shall have the meaning set forth in
        paragraph (8)(e)(i).

                "NYSE" means the New York Stock Exchange.

                "outstanding", when used with reference to shares of stock,
        shall mean issued shares, excluding shares held by the Corporation or a
        subsidiary of the Corporation.

                "Parity Securities" shall have the meaning set forth in
        paragraph (3)(b).

                "Person" shall mean any individual, partnership, association,
        joint venture, corporation, business, trust, joint stock company,
        limited liability company, any unincorporated organization, any other
        entity, a "group" of such persons, as that term is defined in Rule
        13d-5(b) under the Exchange Act, or a government or political
        subdivision thereof.

                "Preferred Shares" has the meaning set forth in paragraph
        (9)(c).

                "Preferred Stock" shall have the meaning set forth in the first
        paragraph of this resolution.

                "Purchase Shares" shall have the meaning set forth in paragraph
        (8)(d)(v).


                                       5
<PAGE>   299


                "Record Date" shall have the meaning set forth in paragraph
        (8)(d)(iv).

                "Relevant Compounding Factor" shall mean, with respect to each
        share of 5% Preferred Stock, upon initial issuance 1.00, and shall on
        each Dividend Payment Date be increased to equal the product of the
        Relevant Compounding Factor in effect immediately prior to such Dividend
        Payment Date and 1.0125.

                "Rights" shall have the meaning set forth in paragraph (11).

                "Securities" shall have the meaning set forth in paragraph
        (8)(d)(iii).

                "Senior Securities" shall have the meaning set forth in
        paragraph (3)(a).

                "set apart for payment" shall be deemed to include, without any
        action other than the following, the recording by the Corporation in its
        accounting ledgers of any accounting or bookkeeping entry which
        indicates, pursuant to a declaration of dividends or other distribution
        by the Board of Directors, the allocation of funds to be so paid on any
        series or class of capital stock of the Corporation; provided, however,
        that if any funds for any class or series of Junior Securities or any
        class or series of Parity Securities are placed in a separate account of
        the Corporation or delivered to a disbursing, paying or other similar
        agent, then "set apart for payment" with respect to the 5% Preferred
        Stock shall mean placing such funds in a separate account or delivering
        such funds to a disbursing, paying or other similar agent, as the case
        may be.

                "Significant Subsidiary" shall have the meaning given to such
        term in Regulation S-X under the Exchange Act.

                "13% Preferred" shall have the meaning set forth in paragraph
        (3)(d).

                "Trading Day" shall mean any day on which the securities in
        question are traded on the NYSE, or if such securities are not listed or
        admitted for trading on the NYSE, on the principal national securities
        exchange on which such securities are listed or admitted, or if not
        listed or admitted for trading on any national securities exchange, on
        the Nasdaq National Market, or if

                                       6
<PAGE>   300

        such securities are not quoted thereon, in the applicable securities
        market in which the securities are traded.

                "Transaction" shall have the meaning set forth in paragraph
        (8)(e)(i).

                "Trigger Event" shall have the meaning set forth in paragraph
        (9)(b).

                "Trigger Event Cure" shall have the meaning set forth in
        paragraph (9)(b).

                "25-Day Average Market Price" shall mean, for any security, the
        volume-weighted average of the Current Market Prices of that security
        for the twenty-five Trading Days immediately preceding the date of
        determination.

                (3)     Rank. Any class or series of stock of the Corporation
shall be deemed to rank:

                (a)     prior to the 5% Preferred Stock, either as to the
payment of dividends or as to distribution of assets upon liquidation,
dissolution or winding up, or both, if the holders of such class or series shall
be entitled by the terms thereof to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up, in preference or
priority to the holders of 5% Preferred Stock ("Senior Securities");

                (b)     on a parity with the 5% Preferred Stock, either as to
the payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and

                (c)     junior to the 5% Preferred Stock, either as to the
payment of dividends or as to the distribution of assets upon liquidation,
dissolution or winding up, or both, if such stock or series shall be Common
Stock or if the holders of the 5% Preferred Stock shall be entitled to receipt
of dividends, and of amounts distributable

                                       7
<PAGE>   301


upon liquidation, dissolution or winding up, in preference or priority to the
holders of shares of such stock or series ("Junior Securities").

                (d)     Each of the 13% Senior Redeemable Exchangeable Preferred
Stock of the Corporation and the 13% Series B Senior Redeemable Exchangeable
Preferred Stock of the Corporation (collectively, the "13% Preferred") is a
Senior Security. Each of the Series A Junior Participating Preferred Stock of
the Corporation is a Junior Security. The 5% Cumulative Participating
Convertible Preferred Stock, Series A of the Corporation, the 5% Cumulative
Participating Convertible Preferred Stock, Series C of the Corporation, the 5%
Cumulative Participating Convertible Preferred Stock, Series D of the
Corporation, the 5% Cumulative Preferred Stock, Series A of the Corporation, the
5% Cumulative Participating Convertible Preferred Stock, Series E of the
Corporation, the 5% Cumulative Participating Convertible Preferred Stock, Series
B of the Corporation, the 5% Cumulative Participating Convertible Preferred
Stock, Series F of the Corporation, the 5% Cumulative Participating Convertible
Preferred Stock, Series B-1 of the Corporation, the 5% Cumulative Participating
Convertible Preferred Stock, Series G of the Corporation, the 5% Cumulative
Participating Convertible Preferred Stock, Series B-2 of the Corporation, the 5%
Cumulative Participating Convertible Preferred Stock, Series H of the
Corporation and one or more classes of Additional Preferred shall be Parity
Securities; provided, however, that there shall be no issue of other Senior
Securities, Parity Securities or rights or options exercisable for or
convertible into any such securities, except as approved by the holders of the
5% Preferred Stock pursuant to paragraph 9(e).

                (e)     The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.

                (4)     Dividends. (a) Subject to paragraph (8)(b)(ii), the
holders of shares of 5% Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for such Dividend Payment Date) or additional
shares of Preferred Stock of a class to be designated by the Board of Directors
having terms substantially

                                       8
<PAGE>   302

identical to the 5% Preferred Stock except as follows: (A) the Conversion Rate
(as set forth in Section 8(a)) on such Preferred Stock initially shall be the
quotient resulting from the division of the Conversion Rate (as then in effect
on the 5% Preferred Stock) by the Relevant Compounding Factor and (B) the number
of shares of such Preferred Stock payable as a dividend on any Dividend Payment
Date shall increase for each Dividend Payment Date from the first Dividend
Payment Date by the Relevant Compounding Factor (such classes of Preferred Stock
singularly and collectively, the "Additional Preferred"). All dividends on the
5% Preferred Stock, in whatever form, shall be payable in arrears quarterly on
each Dividend Payment Date and shall be cumulative from the Issue Date (except
that dividends on Additional Preferred shall accrue from the date such
Additional Preferred is issued or would have been issued in accordance with this
Certificate of Designation if such dividends had been declared), whether or not
in any Dividend Period or Dividend Periods there shall be funds of the
Corporation legally available for the payment of such dividends. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock, as they appear on the stock records of the Corporation at the close of
business on the record date for such dividend. Upon the declaration of any such
dividend, the Board of Directors shall fix as such record date the fifth
Business Day preceding the relevant Dividend Payment Date and shall give notice
on or prior to the record date of the form of payment of such dividend. Accrued
and unpaid dividends for any past Dividend Payment Date may be declared and paid
at any time, without reference to any Dividend Payment Date, to holders of
record on such record date, not more than 45 days nor less than five Business
Days preceding the payment date thereof, as may be fixed by the Board of
Directors.

                (b)     In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock shall be entitled to
receive an amount equal to the amount (and in the form of consideration) that
such holders would be entitled to receive if, pursuant to paragraph (8), they
had converted such 5% Preferred Stock fully into Common Stock immediately before
the record date for the payment of any such dividends on Common Stock. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock as they appear on the stock records of the Corporation at the close of
business on the record date for such dividend on Common Stock, and the
Corporation shall pay each such dividend on the applicable payment date for such
dividend on the Common Stock.

                (c)     For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each share of Additional
Pre-

                                       9
<PAGE>   303

ferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).

                (d)     The dividends payable for any period shorter than a full
Dividend Period on the 5% Preferred Stock shall accrue daily and be computed on
the basis of a 360-day year and the actual number of days in such period. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the 5% Preferred Stock that may be in
arrears except as otherwise provided herein.

                (e)     So long as any shares of the 5% Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities 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 such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock for all
Dividend Periods terminating on or prior to the date of such redemption,
repurchase or other acquisition shall have been paid or set apart for payment,
(ii) sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in Common Stock or Additional Preferred or are
not paid in full in cash or a sum sufficient for such payment is not set apart,
as aforesaid, all dividends declared upon shares of the 5% Preferred Stock and
all dividends declared upon Parity Securities shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid on the
5% Preferred Stock and accumulated and unpaid on such Parity Securities.

                (f)     So long as any shares of the 5% Preferred Stock are
outstanding, no dividends (other than (i) any Rights issued pursuant to the
stockholder rights plan as provided in paragraph (11) and (ii) dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Junior Securities) shall be declared or paid or set apart
for payment or other distribution declared or made upon Junior Securities, nor
shall any Junior Securities be redeemed, purchased or otherwise acquired (other
than a redemption, purchase, or

                                       10
<PAGE>   304

other acquisition of shares of Common Stock made for purposes of an employee
incentive or benefit plan of the Corporation or any subsidiary of the
Corporation) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") 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, directly or
indirectly (except by conversion into or exchange for Junior Securities), unless
in each case (A) full cumulative dividends on all outstanding shares of the 5%
Preferred Stock and all Parity Securities shall have been paid or set apart for
payment for all past Dividend Periods and dividend periods for such Parity
Securities, (B) sufficient funds shall have been paid or set apart for the
payment of the dividend for the current Dividend Period with respect to the 5%
Preferred Stock and all Parity Securities, (C) the Corporation is not in default
with respect to any redemption of shares of 5% Preferred Stock by the
Corporation pursuant to paragraph (6) below and (D) the Corporation has fully
performed its obligations under paragraphs (4)(b) and (6).

                (5)     Liquidation Preference. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, before any payment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set apart for the holders of
Junior Securities, the holders of the shares of 5% Preferred Stock shall be
entitled to receive the Liquidation Right. If, upon any liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of 5% Preferred Stock
shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any Parity Securities, then such assets, or the proceeds
thereof, shall be distributed among the holders of shares of 5% Preferred Stock
and any such other Parity Securities ratably in accordance with the respective
amounts that would be payable on such shares of 5% Preferred Stock and any such
other stock if all amounts payable thereon were paid in full. For the purposes
of this paragraph (5), (i) a consolidation or merger of the Corporation with one
or more corporations, or (ii) a sale or transfer of all or substantially all of
the Corporation's assets, shall not be deemed to be a liquidation, dissolution
or winding up, voluntary or involuntary, of the Corporation.

                (b)     Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or classes
of Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to

                                       11
<PAGE>   305

receive any and all assets remaining to be paid or distributed, and the holders
of the 5% Preferred Stock shall not be entitled to share therein.

                (6)     Redemption. (a) On and after the first Business Day
following the earlier to occur of (i) May 30, 2007 or (ii) the date on which
both (A) the 25-Day Average Market Price of the Common Stock shall have exceeded
$96.00 and (B) May 30, 2004, to the extent the Corporation shall have funds
legally available for such payment, the Corporation may redeem at its option
shares of 5% Preferred Stock, from time to time in part, or in whole, payable at
the option of the Corporation in (A) cash, at a redemption price of $1,000.00
per share, (B) in shares of Common Stock, at a redemption price of $1,000.00 per
share, or (C) in a combination of cash and Common Stock, at a redemption price
based on the respective combination of consideration, together in each case with
accrued and unpaid dividends thereon, whether or not declared, to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(a), the price per share of Common Stock shall be the 25-Day
Average Market Price.

                (b)     On and after the first Business Day following May 30,
2010, each holder of shares of 5% Preferred Stock shall have the right to
require the Corporation, to the extent the Corporation shall have funds legally
available therefor, to redeem such holder's shares of 5% Preferred Stock, from
time to time in part, or in whole, at a redemption price of $1,000.00 per share,
payable at the option of the Corporation in cash, shares of Common Stock or a
combination thereof, together with accrued and unpaid dividends thereon to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(b), the price per share of Common Stock shall equal the 25-Day
Average Market Price. Any holder of shares of 5% Preferred Stock who elects to
exercise its rights pursuant to this paragraph (6)(b) shall deliver to the
Corporation a written notice of election not less than 20 days prior to the date
on which such holder demands redemption pursuant to this paragraph 6(b), which
written notice shall set forth the name of the Holder, the number of shares of
5% Preferred Stock to be redeemed and a statement that the election to exercise
a redemption right is being made thereby; and, subject to paragraph (10)(d),
shall deliver to the Corporation on or before the date of redemption
certificates evidencing the shares of 5% Preferred Stock to be redeemed, duly
endorsed for transfer to the Corporation.


                (c)     If the Corporation shall not have redeemed all
outstanding shares of 5% Preferred Stock pursuant to paragraphs (6)(a) or
(6)(b), on May 30,

<PAGE>   306

2020 (the "Mandatory Redemption Date"), to the extent the Corporation shall have
funds legally available for such payment, the Corporation shall redeem all
outstanding shares of 5% Preferred Stock, at a redemption price of $1,000.00 per
share, payable at the option of the Corporation in cash, shares of Common Stock
or a combination thereof, together with accrued and unpaid dividends thereon to,
but excluding, the Mandatory Redemption Date, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(c), the price per share of Common Stock shall be the 25-Day
Average Market Price.

                (d)     If the Corporation is unable or shall fail to discharge
its obligation to redeem all outstanding shares of 5% Preferred Stock pursuant
to paragraphs 6(b) or 6(c) (each, a "Mandatory Redemption Obligation"), the
Mandatory Redemption Obligation shall be discharged as soon as the Corporation
is able to discharge such Mandatory Redemption Obligation. If and so long as any
Mandatory Redemption Obligation with respect to the 5% Preferred Stock shall not
be fully discharged, the Corporation shall not (i) directly or indirectly,
redeem, purchase, or otherwise acquire any Parity Security or discharge any
mandatory or optional redemption, sinking fund or other similar obligation in
respect of any Parity Securities (except in connection with a redemption,
sinking fund or other similar obligation to be satisfied pro rata with the 5%
Preferred Stock) or (ii) declare or make any Junior Securities Distribution
(other than dividends or distributions paid in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Junior Securities), or,
directly or indirectly, discharge any mandatory or optional redemption, sinking
fund or other similar obligation in respect of the Junior Securities.

                (e)     Upon any redemption of 5% Preferred Stock, the
Corporation shall pay the redemption price and any accrued and unpaid dividends
in arrears to, but excluding, the applicable redemption date.

                (f)     For purposes of paragraph (6)(a) only, unless full
cumulative dividends (whether or not declared) on all outstanding shares of 5%
Preferred Stock and any Parity Securities shall have been paid or
contemporaneously are declared and paid or set apart for payment for all
Dividend Periods terminating on or prior to the applicable redemption date and
notice has been given in accordance with paragraph (7), none of the shares of 5%
Preferred Stock shall be redeemed, and no sum shall be set aside for such
redemption, unless shares of 5% Preferred Stock are redeemed pro rata and notice
has previously been given in accordance with paragraph (7).

                                       13
<PAGE>   307



                (7)     Procedure for Redemption. (a) If the Corporation shall
redeem shares of 5% Preferred Stock pursuant to paragraph 6(a), notice of such
redemption shall be given by certified mail, return receipt requested, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
applicable 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 and confirmed by facsimile transmission to each holder of record
if the Corporation has been furnished with such facsimile address by the
holder(s); provided, however, that neither the failure to give such notice nor
confirmation nor any defect therein or in the mailing thereof, to any particular
holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice that
was mailed in the manner herein provided shall be conclusively presumed to have
been duly given on the date mailed whether or not the holder receives the
notice. Each such notice shall state: (i) the redemption date; (ii) the number
of shares of 5% Preferred Stock to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of shares to be redeemed from
such holder; (iii) the amount payable, whether such amount shall be paid in
Common Stock or in cash and if the payment is in Common Stock an explanation of
the determination of the amount to be paid; (iv) the place or places where
certificates for such shares are to be surrendered or the notice under paragraph
(10)(d) should be sent for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date, except as otherwise provided herein.

                (b)     If notice has been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the Corporation in
providing for the payment of the redemption price of the shares called for
redemption and dividends accrued and unpaid thereon, if any), (i) except as
otherwise provided herein, dividends on the shares of 5% Preferred Stock so
called for redemption shall cease to accrue, (ii) said shares shall no longer be
deemed to be outstanding and (iii) all rights of the holders thereof as holders
of the 5% Preferred Stock shall cease (except the right to receive from the
Corporation the redemption price without interest thereon, upon surrender and
endorsement (or a constructive surrender under paragraph (10)(d)) of their
certificates if so required, and to receive any dividends payable thereon).

                (c)     Upon surrender (including a constructive surrender under
paragraph (10)(d)) in accordance with notice given pursuant to this paragraph
(7) of

                                       14
<PAGE>   308

the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid, plus any dividends payable
thereon. If fewer than all the outstanding shares of 5% Preferred Stock are to
be redeemed, the number of shares to be redeemed shall be determined by the
Board of Directors and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded to the nearest whole share). In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued, subject to a holder's election under paragraph
(10)(d), representing the surrendered shares without cost to the holder thereof.

                (8)     Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock shall
have the right, at any time and from time to time, at such holder's option, to
convert any or all outstanding shares of 5% Preferred Stock held by such holder,
but not fractions of shares, into fully paid and non-assessable shares of Common
Stock by surrendering such shares to be converted, such surrender to be made in
the manner provided in paragraph (8)(b). The number of shares of Common Stock
deliverable upon conversion of each share of 5% Preferred Stock shall be equal
to 12.140991, as adjusted as provided herein (the "Conversion Rate"). The
Conversion Rate is subject to adjustment from time to time pursuant to paragraph
(8)(d). The right to convert shares called for redemption pursuant to paragraph
6(a) shall terminate at the close of business on the date immediately preceding
the date fixed for such redemption unless the Corporation shall default in
making payment of the amount payable upon such redemption, in which case such
right of conversion shall be reinstated. Upon conversion, any accrued and unpaid
dividends on the 5% Preferred Stock at the date of conversion shall be paid to
the holder thereof in accordance with the provisions of paragraph (4).


                (b)     (i) In order to exercise the conversion privilege, the
holder of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (10)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the

                                       15
<PAGE>   309

Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; provided,
however, that the Corporation shall use its best efforts in cooperating with
such holder to obtain such legal or regulatory approvals to the extent its
cooperation is necessary. Such notice shall also state the name or names (with
address and social security or other taxpayer identification number, if
applicable) in which the certificate or certificates for Common Stock are to be
issued. Unless the shares issuable on conversion are to be issued in the same
name as the name in which such share of 5% Preferred Stock is registered, each
share surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation, duly executed by the holder
or the holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates representing
shares of 5% Preferred Stock surrendered for conversion shall be canceled by the
Corporation or the transfer agent.

                (ii)    Subject to the last sentence of paragraph (8)(a),
holders of shares of 5% Preferred Stock at the close of business on a dividend
payment record date shall not be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date if such holder shall have
surrendered (or made a constructive surrender under paragraph (10)(d)) for
conversion such shares at any time following the preceding Dividend Payment Date
and prior to such Dividend Payment Date.



                (iii)   Subject to a holder's election under paragraph (10)(d),
as promptly as practicable after the surrender (including a constructive
surrender under paragraph (10)(d)) by a holder of the certificates for shares of
5% Preferred Stock as aforesaid, the Corporation shall issue and shall deliver
to such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (8), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (8)(c). Upon conversion of
only a portion of the shares of 5% Preferred Stock represented by any
certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (10)(d), upon the surrender
(including a constructive surrender under paragraph (10)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be

                                       16
<PAGE>   310

outstanding and all rights of a holder with respect to such shares so
surrendered shall immediately terminate except the right to receive the Common
Stock and other amounts payable pursuant to this paragraph (8).

                (iv)    Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered pursuant to an election under paragraph (10)(d)) and such notice
received by the Corporation as aforesaid, and the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby at such time
on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock
surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered and such notice received by the Corporation.

                (c)     (i) No fractional shares or scrip representing fractions
of shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion (or deemed surrendered under paragraph (10)(d)) at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of 5% Preferred Stock surrendered (or deemed surrendered under paragraph
(10)(d)) for conversion by such holder.

                (ii)    Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered under paragraph (10)(d)) and such notice received by the Corporation
as aforesaid, and the Person or Persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to

                                       17
<PAGE>   311

have become the holder or holders of record of the shares of Common Stock
represented thereby at such time on such date and such conversion shall be into
a number of shares of Common Stock equal to the product of the number of shares
of 5% Preferred Stock surrendered times the Conversion Rate in effect at such
time on such date, unless the stock transfer books of the Corporation shall be
closed on that date, in which event such Person or Persons shall be deemed to
have become such holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are open, but such
conversion shall be based upon the Conversion Rate in effect on the date upon
which such shares shall have been surrendered (or deemed surrendered under
paragraph (10)(d)) and such notice received by the Corporation.

                (d)     The Conversion Rate shall be adjusted from time to time
as follows:

                (i)     If the Corporation shall after the Issue Date (A)
declare a dividend or make a distribution on its Common Stock in shares of its
Common Stock, (B) subdivide its outstanding Common Stock into a greater number
of shares, (C) combine its outstanding Common Stock into a smaller number of
shares or (D) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification. An
adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (8)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case of a
subdivision, combination or reclassification. Adjustments in accordance with
this paragraph (8)(d)(i) shall be made whenever any event listed above shall
occur.

                (ii)    If the Corporation shall after the Issue Date fix a
record date for the issuance of rights or warrants (in each case, other than any
Rights issued pursuant to the stockholder rights plan as provided in paragraph
(11) ) to all holders


                                       18
<PAGE>   312

of Common Stock entitling them (for a period expiring within 45 days after such
record date) to subscribe for or purchase Common Stock (or securities
convertible into Common Stock) at a price per share (or, in the case of a right
or warrant to purchase securities convertible into Common Stock, having an
effective exercise price per share of Common Stock, computed on the basis of the
maximum number of shares of Common Stock issuable upon conversion of such
convertible securities, plus the amount of additional consideration payable, if
any, to receive one share of Common Stock upon conversion of such securities)
less than the 25-Day Average Market Price on the date on which such issuance was
declared or otherwise announced by the Corporation (the "Determination Date"),
then the Conversion Rate in effect at the opening of business on the Business
Day next following such record date shall be adjusted so that the holder of each
share of 5% Preferred Stock shall be entitled to receive, upon the conversion
thereof, the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to such record date by (II) a
fraction, the numerator of which shall be the sum of (A) the number of shares of
Common Stock outstanding on the close of business on the Determination Date and
(B) the number of additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants (or in the case of a right or
warrant to purchase securities convertible into Common Stock, the aggregate
number of additional shares of Common Stock into which the convertible
securities so offered are initially convertible), and the denominator of which
shall be the sum of (A) the number of shares of Common Stock outstanding on the
close of business on the Determination Date and (B) the number of shares that
the aggregate proceeds to the Corporation from the exercise of such rights or
warrants for Common Stock would purchase at such 25-Day Average Market Price on
such date (or, in the case of a right of warrant to purchase securities
convertible into Common Stock, the number of shares of Common Stock obtained by
dividing the aggregate exercise price of such rights or warrants for the maximum
number of shares of Common Stock issuable upon conversion of such convertible
securities, plus the aggregate amount of additional consideration payable, if
any, to convert such securities into Common Stock, by such 25-Day Average Market
Price). Such adjustment shall become effective immediately after the opening of
business on the Business Day next following such record date (except as provided
in paragraph (8)(h)). Such adjustment shall be made successively whenever such a
record date is fixed. In the event that after fixing a record date such rights
or warrants are not so issued, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect if such record date had not been
fixed. In determining whether any rights or warrants entitle the holders of
Common Stock to subscribe for or purchase shares of Common Stock at less than
such 25-Day Average Market Price, there shall be taken

                                       19
<PAGE>   313

into account any consideration received by the Corporation upon issuance and
upon exercise of such rights or warrants, the value of such consideration, if
other than cash, to be determined by the Board of Directors in good faith. In
case any rights or warrants referred to in this subparagraph (ii) shall expire
unexercised after the same have been distributed or issued by the Corporation
(or, in the case of rights or warrants to purchase securities convertible into
Common Stock once exercised, the conversion right of such securities shall
expire), the Conversion Rate shall be readjusted at the time of such expiration
to the Conversion Rate that would have been in effect if no adjustment had been
made on account of the distribution or issuance of such expired rights or
warrants.


                (iii)   If the Corporation shall fix a record date for the
making of a distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (8)(d)(i)) or rights or warrants (in each case, other than
any Rights issued pursuant to the stockholder rights plan as provided in
paragraph (11)) to subscribe for or purchase any of its securities (excluding
those rights and warrants issued to all holders of Common Stock entitling them
(for a period expiring within 45 days after such record date) to subscribe for
or purchase Common Stock or securities convertible into shares of Common Stock,
which rights and warrants are referred to in and treated under subparagraph (ii)
above) (any of the foregoing being hereinafter in this subparagraph (iii) called
the "Securities"), then in each such case the Conversion Rate shall be adjusted
so that the holder of each share of 5% Preferred Stock shall be entitled to
receive, upon the conversion thereof, the number of shares of Common Stock
determined by multiplying (I) the Conversion Rate in effect immediately prior to
the close of business on such record date by (II) a fraction, the numerator of
which shall be the 25-Day Average Market Price per share of the Common Stock on
such record date, and the denominator of which shall be the 25-Day Average
Market Price per share of the Common Stock on such record date less the
then-fair market value (as determined by the Board of Directors in good faith,
whose determinations shall be conclusive) of the portion of the assets, shares
of its capital stock or evidences of indebtedness so distributed or of such
rights or warrants applicable to one share of Common Stock. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that after fixing a record date such distribution is not so made, the
Conversion Rate shall be readjusted to the Conversion Rate which would then be
in effect if such record date had not been fixed. Such adjustment shall become
effective immediately at the opening of business on the Business

                                       20
<PAGE>   314

Day next following (except as provided in paragraph (8)(h)) the record date for
the determination of stockholders entitled to receive such distribution. For the
purposes of this subparagraph (iii), the distribution of a Security, which is
distributed not only to the holders of the Common Stock on the date fixed for
the determination of stockholders entitled to such distribution of such
Security, but also is distributed with each share of Common Stock delivered to a
Person converting a share of 5% Preferred Stock after such determination date,
shall not require an adjustment of the Conversion Rate pursuant to this
subparagraph (iii); provided, however, that on the date, if any, on which a
Person converting a share of 5% Preferred Stock would no longer be entitled to
receive such Security with a share of Common Stock (other than as a result of
the termination of all such Securities), a distribution of such Securities shall
be deemed to have occurred and the Conversion Rate shall be adjusted as provided
in this subparagraph (iii) (and such day shall be deemed to be "the date fixed
for the determination of stockholders entitled to receive such distribution" and
"the record date" within the meaning of the three preceding sentences). If any
rights or warrants referred to in this subparagraph (iii) shall expire
unexercised after the same shall have been distributed or issued by the
Corporation, the Conversion Rate shall be readjusted at the time of such
expiration to the Conversion Rate that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.

                (iv)    In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
8(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date for the
cash dividend or distribution by a fraction the numerator of which shall be the
Current Market Price of a share of the Common Stock on the Record Date and the
denominator shall be such Current Market Price less the per share amount of cash
so distributed during the 12-month period applicable to one share of Common
Stock, such adjustment to be effective immediately prior to the opening of
business on the

                                       21
<PAGE>   315

Business Day following the Record Date; provided, however, that in the event the
denominator of the foregoing fraction is zero or negative, in lieu of the
foregoing adjustment, adequate provision shall be made so that each holder of 5%
Preferred Stock shall have the right to receive upon conversion, in addition to
the shares of Common Stock to which the holder is entitled, the amount of cash
such holder would have received had such holder converted each share of 5%
Preferred Stock at the beginning of the 12-month period. In the event that such
dividend or distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate which would then be in effect if such
dividend or distribution had not been declared. Notwithstanding the foregoing,
if any adjustment is required to be made as set forth in this paragraph
(8)(d)(iv), the calculation of any such adjustment shall include the amount of
the quarterly cash dividends paid during the 12-month reference period only to
the extent such dividends exceed the regular quarterly cash dividends paid
during the 12 months preceding the 12-month reference period. For purposes of
this paragraph (8)(d)(iv), "Record Date" shall mean, with respect to any
dividend or distribution in which the holders of Common Stock have the right to
receive cash, the date fixed for determination of stockholders entitled to
receive such cash. In the event that at any time cash distributions to holders
of Common Stock are not paid equally on all series of Common Stock, the
provisions of this paragraph 8(d)(iv) will apply to any cash dividend or cash
distribution on any series of Common Stock otherwise meeting the requirements of
this paragraph, and shall be deemed amended to the extent necessary so that any
adjustment required will be made on the basis of the cash dividend or cash
distribution made on any such series.


                (v)     In case of the consummation of a tender or exchange
offer (other than an odd-lot tender offer) made by the Corporation or any
subsidiary of the Corporation for all or any portion of the outstanding shares
of Common Stock to the extent that the cash and fair market value (as determined
in good faith by the Board of Directors of the Corporation, whose determination
shall be conclusive and shall be described in a resolution of such Board) of any
other consideration included in such payment per share of Common Stock at the
last time (the "Expiration Time") tenders or exchanges may be made pursuant to
such tender or exchange offer (as amended) exceed by more than 5.0%, with any
smaller excess being disregarded in computing the adjustment to the Conversion
Rate provided in this paragraph (8)(d)(v), the first reported sale price per
share of the Common Stock on the Trading Day next succeeding the Expiration
Time, then the Conversion Rate shall be adjusted so that the same shall equal
the rate determined by multiplying the Conversion Rate in effect immediately
prior to the Expiration Time by a fraction the numerator of which shall be the
sum of (x) the fair market value (determined as aforesaid) of the aggregate
consider-

                                       22
<PAGE>   316


ation payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all shares validly
tendered or exchanged and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the "Purchase
Shares") and (y) the product of the number of shares of Common Stock outstanding
(less any Purchase Shares) on the Expiration Time and the first reported sale
price of the Common Stock on the Trading Day next succeeding the Expiration
Time, and the denominator of which shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) on the Expiration Time
multiplied by the first reported sale price of the Common Stock on the Trading
Day next succeeding the Expiration Time, such adjustment to become effective
immediately prior to the opening of business on the day following the Expiration
Time.

                (vi)    No adjustment in the Conversion Rate shall be required
unless such adjustment would require a cumulative increase or decrease of at
least 1% in the Conversion Rate; provided, however, that any adjustments that by
reason of this subparagraph (vi) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment until made, and
provided further that any adjustment shall be required and made in accordance
with the provisions of this paragraph (8) (other than this subparagraph (vi))
not later than such time as may be required in order to preserve the tax-free
nature of a distribution for United States income tax purposes to the holders of
shares of 5% Preferred Stock or Common Stock. Notwithstanding any other
provisions of this paragraph (8), the Corporation shall not be required to make
any adjustment of the Conversion Rate for the issuance of any shares of Common
Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and the investment of
additional optional amounts in shares of Common Stock under such plan. All
calculations under this paragraph (8) shall be made to the nearest dollar or to
the nearest 1/1,000 of a share, as the case may be. Anything in this paragraph
(8)(d) to the contrary notwithstanding, the Corporation shall be entitled, to
the extent permitted by law, to make such adjustments in the Conversion Rate, in
addition to those required by this paragraph (8)(d), as it in its discretion
shall determine to be advisable in order that any stock dividends, subdivision
of shares, reclassification or combination of shares, distribution or rights or
warrants to purchase stock or securities, or a distribution of other assets
(other than cash dividends) hereafter made by the Corporation to its
stockholders shall not be taxable.

                (vii)   In the event that, at any time as a result of shares of
any other class of capital stock becoming issuable in exchange or substitution
for or in lieu of

                                       23
<PAGE>   317

shares of Common Stock or as a result of an adjustment made pursuant to the
provisions of this paragraph (8)(d), the holder of 5% Preferred Stock upon
subsequent conversion shall become entitled to receive any shares of capital
stock of the Corporation other than Common Stock, the number of such other
shares so receivable upon conversion of any shares of 5% Preferred Stock shall
thereafter be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions contained herein.

                (viii)  The $96.00 required stock price threshold set forth in
paragraph (6)(a)(ii) shall be adjusted from time to time in a manner consistent
with the provisions of this paragraph (8)(d).

                (e)     (i) If the Corporation shall be a party to any
transaction (including without limitation, a merger, consolidation, sale of all
or substantially all of the Corporation's assets or recapitalization of the
Common Stock and excluding any transaction as to which paragraph (8)(d)(i)
applies) (each of the foregoing being referred to herein as a "Transaction"), in
each case as a result of which shares of Common Stock shall be converted into
the right to receive stock, securities or other property (including cash or any
combination thereof), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that number
of shares or fraction thereof of Common Stock into which one share of 5%
Preferred Stock was convertible immediately prior to such Transaction, assuming
such holder of Common Stock (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be (a
"Constituent Person"), or an affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of stock,
securities and other property (including cash) receivable upon such Transaction
(provided that if the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction is not the same for each share
of Common Stock held immediately prior to such Transaction by other than a
Constituent Person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purpose of this paragraph (8)(e) the kind and amount of stock, securities and
other property (including cash) receivable upon such Transaction by each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a

                                       24
<PAGE>   318

plurality of the non-electing shares). The provisions of this paragraph (8)(e)
shall similarly apply to successive Transactions.

                (ii)    Notwithstanding anything herein to the contrary , if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation, by notice to and consultation with the
holders of the 5% Preferred Stock, may cause the exchange of the 5% Preferred
Stock for preferred stock of Holdco having the same terms and conditions as set
forth herein; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 5% Preferred Stock
(including for these purposes any resultant change in the tax treatment for the
holders of such stock).

                (f)     If:

                (i)     the Corporation shall declare a dividend (or any other
distribution) on the Common Stock; or

                (ii)    the Corporation shall authorize the granting to the
holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of any class or any other rights or warrants; or

                (iii)   there shall be any subdivision, combination or
reclassification of the Common Stock or any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders of the
Corporation is required, or the sale or transfer of all or substantially all of
the assets of the Corporation as an entirety; or

                (iv)    there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation,

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applicable date hereinafter specified, a notice stating (A)
the date on which a record is to be

                                       25
<PAGE>   319

taken for the purpose of such dividend (or such other distribution) or rights
or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution
or rights or warrants are to be determined or (B) the date on which such
subdivision, combination, reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up or other action is expected to
become effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities or other property, if any, deliverable upon such
subdivision, combination, reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up. Failure to give or receive
such notice or any defect therein shall not affect the legality or validity of
any distribution, right, warrant, subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, winding up or
other action, or the vote upon any of the foregoing.

                (g)     Whenever the Conversion Rate is adjusted as herein
provided, the Corporation shall prepare an officer's certificate with respect to
such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the effective date of such adjustment and shall mail a copy of such
officer's certificate to the holder of each share of 5% Preferred Stock at such
holder's last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (8)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be conclusive evidence of the correctness of such adjustment.

                (h)     In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (8)(c).

                (i)     For purposes of this paragraph (8), the number of shares
of Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation

                                       26
<PAGE>   320

shall not pay a dividend or make any distribution on shares of Common Stock held
in the treasury of the Corporation.

                (j)     There shall be no adjustment of the Conversion Rate in
case of the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth in
this paragraph (8). If any single action would require adjustment of the
Conversion Rate pursuant to more than one subparagraph of this paragraph (8),
only one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value.

                (k)     If the Corporation shall take any action affecting the
Common Stock, other than action described in this paragraph (8), that in the
opinion of the Board of Directors materially adversely affects the conversion
rights of the holders of the shares of 5% Preferred Stock, the Conversion Rate
may be adjusted, to the extent permitted by law, in such manner, if any, and at
such time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (8)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.

                (l)     (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of 5% Preferred Stock
not theretofore converted. For purposes of this paragraph (8)(l) the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.

                (ii)    The Corporation covenants that any shares of Common
Stock issued upon conversion of the 5% Preferred Stock shall be duly authorized,
validly issued, fully paid and non-assessable. Before taking any action that
would cause an adjustment increasing the Conversion Rate such that the quotient
of $1,000.00 and the Conversion Rate (which quotient initially shall be
$82.3656) would be reduced below the then-par value of the shares of Common
Stock deliverable upon conversion of the 5% Preferred Stock, the Corporation
will take any corporate action that, in the opinion of its counsel, may be
necessary in order that the Corporation may

                                       27
<PAGE>   321

validly and legally issue fully paid and non-assessable shares of Common Stock
based upon such adjusted Conversion Rate.

                (iii)   Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 5% Preferred
Stock, the Corporation shall comply with all applicable federal and state laws
and regulations which require action to be taken by the Corporation.

                (m)     The Corporation will pay any and all documentary, stamp
or similar issue or transfer taxes payable in respect of the issue or delivery
of shares of Common Stock or other securities or property on conversion of the
5% Preferred Stock pursuant hereto; provided, however, that the Corporation
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issue or delivery of shares of Common Stock or other
securities or property in a name other than that of the holder of the 5%
Preferred Stock to be converted and no such issue or delivery shall be made
unless and until the Person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or established, to the satisfaction of
the Corporation, that such tax has been paid.

                (n)     No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock are entitled to participate in such
transaction pursuant to paragraph 4(b).

                (9)     Voting Rights. (a) The holders of record of shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (9) or as otherwise provided by law.

                (b)     If and whenever either (i) six quarterly dividends
(whether or not consecutive) payable on the 5% Preferred Stock have not been
paid in full, (ii) the Corporation shall have failed to discharge its Mandatory
Redemption Obligation or (iii) there occurs a Bankruptcy Event (any such event
described in the preceding subparagraphs (i) through (iii) being hereinafter
referred to as a "Trigger Event"), a vote of the holders of shares of 5%
Preferred Stock, voting as a single class, will be required on all matters
brought to stockholders of the Corporation. Whenever all arrears in dividends on
the 5% Preferred Stock then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, the Corporation shall have fulfilled its
Mandatory Redemption Obligation and all Bankruptcy Events shall have been cured
(the

                                       28
<PAGE>   322

"Trigger Event Cure"), then the right of the holders of the 5% Preferred Stock
to vote as described in this paragraph 9(b) shall cease (but subject always to
the same provisions for the vesting of such voting rights if any Trigger Event
occurs).

                (c)     Upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, together with the holders of shares
of every other series of preferred stock (including, without limitation,
Additional Preferred) upon which like rights to vote for the election of two
additional directors have been conferred and are exercisable (resulting from
either the failure to pay dividends or the failure to redeem) (any such other
series is referred to as the "Preferred Shares"), voting as a single class
regardless of series, shall be entitled to elect the two additional directors to
serve on the Board of Directors at any annual meeting of stockholders or special
meeting held in place thereof, or at a special meeting of the holders of 5%
Preferred Stock and the Preferred Shares, called as hereinafter provided.
Whenever all arrears in dividends on the Preferred Shares then outstanding shall
have been paid and dividends thereon for the current quarterly dividend period
shall have been paid or declared and set apart for payment, the Corporation
shall have fulfilled any redemption obligation in respect of the Preferred
Shares, and the Trigger Event Cure has occurred, then the right of the holders
of the 5% Preferred Stock and the Preferred Shares to elect such additional two
directors shall cease (but subject always to the same provisions for the vesting
of such voting rights if any Trigger Event occurs), and the terms of office of
all persons elected as directors by the holders of 5% Preferred Stock and the
Preferred Shares shall forthwith terminate and the number of members of the
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in holders of shares of 5% Preferred Stock and
the Preferred Shares, the Secretary of the Corporation may, and upon the written
request of any holder of 5% Preferred Stock (addressed to the secretary at the
principal office of the Corporation) shall, call a special meeting of the
holders of the 5% Preferred Stock and of the Preferred Shares for the election
of the two directors to be elected by them as herein provided, such call to be
made by notice similar to that provided in the By-laws of the Corporation for a
special meeting of the stockholders or as required by law. If any such special
meeting required to be called as above provided shall not be called by the
Secretary of the Corporation within 20 days after receipt of any such request,
then any holder of shares of 5% Preferred Stock may call such meeting, upon the
notice above provided, and for that purpose shall have access to the stock books
of the Corporation. The directors elected at any such special meeting shall hold
office until the next annual meeting of the stockholders or special meeting held
in lieu thereof if such office shall

                                       29
<PAGE>   323

not have previously terminated as above provided. If any vacancy shall occur
among the directors elected by the holders of the 5% Preferred Stock and the
Preferred Shares, a successor shall be elected by the Board of Directors, upon
the nomination of the then-remaining director elected by the holders of the 5%
Preferred Stock and the Preferred Shares or the successor of such remaining
director, to serve until the next annual meeting of the stockholders or special
meeting held in place thereof if such office shall not have previously
terminated as provided above.

                (d)     Without the written consent of the holders of at least
66 2/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 66 2/3% in liquidation preference of
the outstanding shares of 5% Preferred Stock at a meeting of the holders of 5%
Preferred Stock called for such purpose, the Corporation will not amend, alter
or repeal any provision of the Certificate of Incorporation (by merger or
otherwise) so as to adversely affect the preferences, rights or powers of the
5% Preferred Stock; provided that any such amendment that changes the dividend
payable on, the Conversion Rate with respect to, or the liquidation preference
of the 5% Preferred Stock shall require the affirmative vote at a meeting of
holders of 5% Preferred Stock called for such purpose or written consent of the
holder of each share of 5% Preferred Stock.

                (e)     Without the written consent of the holders of at least
66 2/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 66 2/3% in liquidation preference of
the outstanding shares of 5% Preferred Stock at a meeting of such holders
called for such purpose, the Corporation will not issue any additional 5%
Preferred Stock or create, authorize or issue any Parity Securities or Senior
Securities or increase the authorized amount of any such other class or series;
provided that this paragraph 9(e) shall not limit the right of the Corporation
to (i) issue Additional Preferred as dividends pursuant to paragraph 4 or (ii)
to issue Parity Securities or Senior Securities in order to refinance, redeem
or refund the 13% Preferred, provided that the maximum accrual value (i.e. the
sum of stated value and maximum amount payable in kind over the term from
issuance to first date of mandatory redemption or redemption at the option of
the holder) of such Parity Securities may not exceed the maximum accrual value
of the 13% Preferred.

                (f)     In exercising the voting rights set forth in this
paragraph (9), each share of 5% Preferred Stock shall have one vote per share,
except that when any other series of preferred stock shall have the right to
vote with the 5% Preferred Stock as a single class on any matter, then the 5%
Preferred Stock and other series shall have with respect to such matters one
vote per $1,000 of stated liquidation

                                       30
<PAGE>   324

preference. Except as otherwise required by applicable law or as set forth
herein, the shares of 5% Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers and the
consent of the holders thereof shall not be required for the taking of any
corporate action.

                (g)     Nothing in this paragraph (9) shall be in derogation of
any rights that a holder of shares of 5% Preferred Stock may have in his
capacity as a holder of shares of Common Stock.

                (10)    General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are for
convenience of reference only and shall not define, limit or affect any of the
provisions hereof.

                (b)     If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) or shall have failed to
discharge any obligation to redeem shares of 5% Preferred Stock pursuant to
paragraph (6), the holders of shares of 5% Preferred Stock shall be entitled to
receive, in addition to all other amounts required to be paid hereunder, when,
as and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, cash dividends on the aggregate dividends which the
Corporation shall have failed to declare or pay or the redemption price,
together with accrued and unpaid dividends thereon, as the case may be, at a
rate of 2% per quarter, compounded quarterly, for the period during which the
failure to pay dividends or failure to discharge an obligation to redeem shares
of 5% Preferred Stock shall continue.

                (c)     The shares of 5% Preferred Stock shall bear the
following legend:


                THE SHARES OF PREFERRED STOCK (THE "PREFERRED STOCK"), PAR VALUE
                $0.01 PER SHARE, OF NTL INCORPORATED (THE "CORPORATION") AND THE
                SHARES OF COMMON STOCK (THE "COMMON STOCK"), PAR VALUE $0.01 PER
                SHARE, OF THE CORPORATION INTO WHICH THE PREFERRED STOCK MAY BE
                CONVERTED OR REDEEMED REPRESENTED BY THIS CERTIFICATE MAY NOT BE
                OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER
                THE SECURITIES ACT OF 1933, AND ANY APPLICABLE STATE SECURITIES
                LAWS OR AN APPLICABLE EXEMP-

                                       31
<PAGE>   325

                TION FROM REGISTRATION REQUIREMENTS. THE TRANSFER OF THE
                PREFERRED STOCK, OR COMMON STOCK IF THE PREFERRED STOCK HAS BEEN
                CONVERTED OR REDEEMED, EVIDENCED BY THIS CERTIFICATE, IS SUBJECT
                TO THE RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE INVESTMENT
                AGREEMENT, DATED JULY 26, 1999, AS AMENDED, BETWEEN NTL
                (DELAWARE), INC. AND FRANCE TELECOM S.A. A COPY OF THIS
                AGREEMENT IS ON FILE AT THE EXECUTIVE OFFICES OF THE CORPORATION
                AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH
                PREFERRED STOCK OR COMMON STOCK UPON WRITTEN REQUEST TO THE
                CORPORATION.

                THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE
                MAY BE CONVERTED INTO COMMON STOCK OR REDEEMED IN EXCHANGE FOR
                COMMON STOCK WITHOUT THE SURRENDER AND EXCHANGE OF THIS
                CERTIFICATE FOR CERTIFICATES REPRESENTING SUCH COMMON STOCK. A
                NOTICE OF SUCH CONVERSION OR REDEMPTION EVENT, IF ANY, IS ON
                FILE AT THE EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE
                FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS CERTIFICATE UPON
                WRITTEN REQUEST TO THE CORPORATION.

                THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF
                THE PREFERRED STOCK WHO SO REQUESTS THE POWERS, DESIGNATION,
                PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
                SPECIAL RIGHTS OF THE PREFERRED STOCK.

                The shares of Common Stock issuable upon conversion or
redemption of the 5% Preferred Stock shall bear the following legend:


                THE SHARES OF COMMON STOCK (THE "COMMON STOCK"), PAR VALUE $0.01
                PER SHARE, OF NTL INCORPORATED (THE "CORPORATION") REPRESENTED
                BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED
                STATES ABSENT REGISTRATION UNDER THE SE-

                                       32
<PAGE>   326

                CURITIES ACT OF 1933, AND ANY APPLICABLE STATE SECURITIES LAWS
                OR AN APPLICABLE EXEMPTION FROM REGISTRATION REQUIREMENTS. THE
                TRANSFER OF THE COMMON STOCK EVIDENCED BY THIS CERTIFICATE IS
                SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE
                INVESTMENT AGREEMENT, DATED JULY 26, 1999, AS AMENDED, BETWEEN
                NTL (DELAWARE), INC. AND FRANCE TELECOM S.A. A COPY OF THIS
                AGREEMENT IS ON FILE AT THE EXECUTIVE OFFICES OF THE CORPORATION
                AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH
                COMMON STOCK UPON WRITTEN REQUEST TO THE CORPORATION.

                (d)     (i) Whenever in connection with any conversion or
redemption of the 5% Preferred Stock in exchange for Common Stock the holder is
required to surrender certificates representing such shares of 5% Preferred
Stock, such holder may, by written notice to the Corporation and its transfer
agent, elect to retain such certificates. In such case, the certificates so
retained by the holder thereof shall be deemed to represent, at and from the
date of such conversion or redemption, the number of shares of Common Stock
issuable upon such conversion or redemption (subject to paragraph (8)(c), if
applicable), and shall be so reflected upon the books of the Corporation and its
transfer agent.

                (ii)    (AA) A holder who has previously elected to retain
certificates representing the 5% Preferred Stock in accordance with paragraph
(10)(d)(i) upon conversion or redemption may subsequently elect to receive
certificates representing the shares of Common Stock issued upon such conversion
or redemption. To receive certificates representing such shares of Common Stock,
the holder of such certificate shall surrender it, duly endorsed or assigned to
the Corporation or in blank, at the office of the Corporation, or to any
transfer agent of the Corporation previously designated by the Corporation for
such purposes, with a written notice of that election.

                (B)     Unless the certificates to be issued shall be registered
in the same name as the name in which such surrendered certificates are
registered, each certificate so surrendered shall be accompanied by instruments
of transfer, in form satisfactory to the Corporation, duly executed by the
holder or the holder's duly authorized attorney and an amount sufficient to pay
any transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes

                                       33
<PAGE>   327

have been paid). All certificates so surrendered shall be canceled by the
Corporation or the transfer agent.

                (C)     As promptly as practicable after the surrender by a
holder of such certificates, the Corporation shall issue and shall deliver to
such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock represented by the certificates so
surrendered.

                (ll)    Stockholder Rights Plan. The shares of 5% Preferred
Stock shall be entitled to the benefits of a number of rights issuable under the
Rights Agreement, dated as of October 13, 1993, as amended, between the
Corporation and Continental Stock Transfer & Trust Company or any successor plan
of similar purpose and effect (the "Rights") equal to the number of shares of
Common Stock then issuable upon conversion of the 5% Preferred Stock at the
prevailing Conversion Rate. Any shares of Common Stock deliverable upon
conversion or redemption of a share of 5% Preferred Stock or upon payment of a
dividend shall be accompanied by a Right."

                                       34
<PAGE>   328


               IN WITNESS WHEREOF, NTL Incorporated has caused this Certificate
of Designation to be signed by the undersigned this 2nd day of January 2001.

                                   NTL INCORPORATED

                                   By:/s/ Richard J. Lubasch
                                      -----------------------------
                                      Name: Richard J. Lubasch
                                      Title:Executive Vice President, General
                                                Counsel and Secretary



                                       35


<PAGE>   329


                           CERTIFICATE OF DESIGNATION
                       OF THE VOTING POWERS, DESIGNATION,
                    PREFERENCES AND RELATIVE, PARTICIPATING,
              OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
                       LIMITATIONS AND RESTRICTIONS OF THE
                     5% CUMULATIVE PARTICIPATING CONVERTIBLE
                         PREFERRED STOCK, SERIES B-2 OF
                                NTL INCORPORATED

                         ------------------------------
                        PURSUANT TO SECTION 151(g) OF THE
                GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
                         ------------------------------

                The undersigned, Executive Vice President, General Counsel and
Secretary of NTL Incorporated, a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that the Board of Directors, in accordance with Article FOURTH,
Section B of the Corporation's Restated Certificate of Incorporation (the
"Certificate of Incorporation") and Section 151(g) of the Delaware General
Corporation Law (the "DGCL"), has authorized the creation of the series of
Preferred Stock (as defined below) hereinafter provided for and has established
the dividend, redemption, conversion and voting rights thereof and has adopted
the following resolution, creating the following new series of Preferred Stock:

                "BE IT RESOLVED that, pursuant to authority expressly granted to
the Board of Directors by the provisions of Article FOURTH, Section B of the
Restated Certificate of Incorporation of the Corporation and Section 151(g) of
the DGCL, there is hereby created and authorized the issuance of a new series of
Preferred Stock, par value $0.01 per share (the "Preferred Stock"), with the
following powers, designations, dividend rights, voting powers, rights on
liquidation, conversion rights, redemption rights and other preferences and
relative, participating, optional or other special rights and with the
qualifications, limitations or restrictions on the shares of such series (in
addition to the powers, designations, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereof set forth in the Certificate of Incorporation that are
applicable to each series of Preferred Stock) hereinafter set forth.



                                       1
<PAGE>   330



                (1)     Number and Designation. 23,847.14 shares of Preferred
Stock shall be designated as "5% Cumulative Participating Convertible Preferred
Stock, Series B-2 of NTL Incorporated" (the "5% Preferred Stock") and no other
shares of Preferred Stock shall be designated as 5% Preferred Stock.

                (2)     Definitions. For purposes of the 5% Preferred Stock, the
following terms shall have the meanings indicated:

                "Additional Preferred" shall have the meaning set forth in
        paragraph (4)(a).

                "Bankruptcy Event" shall mean any of the following: (I) a court
        having jurisdiction in the premises enters a decree or order for (A)
        relief in respect of any Major Entity in an involuntary case under any
        applicable bankruptcy, insolvency or other similar law now or
        hereinafter in effect, (B) appointment of a receiver, liquidator,
        assignee, custodian, trustee, sequestrator or similar official of any
        Major Entity or for all or substantially all of the property and assets
        of any Major Entity or (C) the winding up or liquidation of the affairs
        of any Major Entity; or (II) any Major Entity (A) commences a voluntary
        case under any applicable bankruptcy, insolvency or other similar law
        now or hereinafter in effect, or consents to the entry of an order for
        relief in an involuntary case under any such law, (B) consents to the
        appointment of or taking possession by a receiver, liquidator, assignee,
        custodian, trustee, sequestrator or similar official of any Major
        Entity, or for all or substantially all of the property and assets of
        any Major Entity or (C) effects any general assignment for the benefit
        of creditors.

                "Board of Directors" shall mean the board of directors of the
        Corporation. Except as such term is used in paragraph (9), "Board of
        Directors" shall also mean the Executive Committee, if any, of such
        board of directors or any other committee duly authorized by such board
        of directors to perform any of its responsibilities with respect to the
        5% Preferred Stock.

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

                "Certificate of Incorporation" shall have the meaning set forth
        in the preamble.



                                       2
<PAGE>   331


                "Common Stock" shall mean the common stock, par value $0.01 per
        share, of the Corporation.

                "Constituent Person" shall have the meaning set forth in
        paragraph (8)(e)(i).

                "Conversion Rate" shall have the meaning set forth in paragraph
        (8)(a).

                "Corporation" shall have the meaning set forth in the preamble.

                "Current Market Price" of publicly traded shares of Common Stock
        or any other class of capital stock or other security of the Corporation
        or any other issuer for any day shall mean the last reported sale price
        for such security on the principal exchange or quotation system on which
        such security is listed or traded. If the security is not admitted for
        trading on any national securities exchange or the Nasdaq National
        Market, "Current Market Price" shall mean the average of the last
        reported closing bid and asked prices reported by the Nasdaq as
        furnished by any member in good standing of the National Association of
        Securities Dealers, Inc., selected from time to time by the Corporation
        for that purpose or as quoted by the National Quotation Bureau
        Incorporated. In the event that no such quotation is available for such
        day, the Current Market Price shall be the average of the quotations for
        the last five Trading Days for which a quotation is available within the
        last 30 Trading Days prior to such day. In the event that five such
        quotations are not available within such 30-Trading Day period, the
        Board of Directors shall be entitled to determine the Current Market
        Price on the basis of such quotations as it reasonably considers
        appropriate.

                "Determination Date" shall have the meaning set forth in
        paragraph (8)(d)(ii).

                "DGCL" shall have the meaning set forth in the preamble.

                "Dividend Payment Date" shall mean September 30, December 31,
        March 31 and June 30 of each year, commencing on December 31, 2000;
        provided, however, that if any Dividend Payment Date falls on any day
        other than a Business Day, the dividend payment due on such Dividend
        Payment




                                       3
<PAGE>   332


        Date shall be paid on the Business Day immediately following such
        Dividend Payment Date.

                "Dividend Periods" shall mean quarterly dividend periods
        commencing on September 30, December 31, March 31 and June 30 of each
        year and ending on and including the day preceding the first day of the
        next succeeding Dividend Period.

                "Exchange Act" shall mean the Securities Exchange Act of 1934,
        as amended, and the rules and regulations thereunder.

                "Expiration Time" shall have the meaning set forth in paragraph
        (8)(d)(v).

                "5% Preferred Stock" shall have the meaning set forth in
        paragraph (1).

                "Holdco" shall have the meaning set forth in paragraph
        (8)(e)(ii).

                "Issue Date" shall mean the date on which shares of 5% Preferred
        Stock are first issued by the Corporation.

                "Junior Securities" shall have the meaning set forth in
        paragraph (3)(c).

                "Junior Securities Distributions" shall have the meaning set
        forth in paragraph (4)(f).

                "Liquidation Right" shall mean, for each share of 5% Preferred
        Stock, the greater of (i) an amount equal to $1,000.00 per share, plus
        an amount equal to all dividends (whether or not earned or declared)
        accrued and unpaid thereon to the date of final distribution to such
        holders, and (ii) the amount that would be received in liquidation
        following conversion of a share of 5% Preferred Stock into Common Stock.

                "Major Entity" shall mean any of the Corporation, NTL
        (Delaware), Inc., NTL Communications Corp., Diamond Cable Communications
        Limited, Diamond Holdings Limited, NTL (Triangle) LLC or any
        Significant Subsidiary.




                                       4
<PAGE>   333


                "Mandatory Redemption Date" shall have the meaning set forth in
        paragraph (6)(c).

                "Mandatory Redemption Obligation" shall have the meaning set
        forth in paragraph (6)(d).

                "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
        securities market regulated by the National Association of Securities
        Dealers, Inc.

                "Nasdaq National Market" shall have the meaning set forth in
        Rule 4200(a)(23) of the rules of the National Association of Securities
        Dealers, Inc.

                "non-electing share" shall have the meaning set forth in
        paragraph (8)(e)(i).

                "NYSE" means the New York Stock Exchange.

                "outstanding", when used with reference to shares of stock,
        shall mean issued shares, excluding shares held by the Corporation or a
        subsidiary of the Corporation.

                "Parity Securities" shall have the meaning set forth in
        paragraph (3)(b).

                "Person" shall mean any individual, partnership, association,
        joint venture, corporation, business, trust, joint stock company,
        limited liability company, any unincorporated organization, any other
        entity, a "group" of such persons, as that term is defined in Rule
        13d-5(b) under the Exchange Act, or a government or political
        subdivision thereof.

                "Preferred Shares" has the meaning set forth in paragraph
        (9)(c).

                "Preferred Stock" shall have the meaning set forth in the first
        paragraph of this resolution.

                "Purchase Shares" shall have the meaning set forth in paragraph
        (8)(d)(v).



                                       5
<PAGE>   334


                "Record Date" shall have the meaning set forth in paragraph
        (8)(d)(iv).

                "Relevant Compounding Factor" shall mean, with respect to each
        share of 5% Preferred Stock, upon initial issuance 1.00, and shall on
        each Dividend Payment Date be increased to equal the product of the
        Relevant Compounding Factor in effect immediately prior to such Dividend
        Payment Date and 1.0125.

                "Rights" shall have the meaning set forth in paragraph (11).

                "Securities" shall have the meaning set forth in paragraph
        (8)(d)(iii).

                "Senior Securities" shall have the meaning set forth in
        paragraph (3)(a).

                "set apart for payment" shall be deemed to include, without any
        action other than the following, the recording by the Corporation in its
        accounting ledgers of any accounting or bookkeeping entry which
        indicates, pursuant to a declaration of dividends or other distribution
        by the Board of Directors, the allocation of funds to be so paid on any
        series or class of capital stock of the Corporation; provided, however,
        that if any funds for any class or series of Junior Securities or any
        class or series of Parity Securities are placed in a separate account of
        the Corporation or delivered to a disbursing, paying or other similar
        agent, then "set apart for payment" with respect to the 5% Preferred
        Stock shall mean placing such funds in a separate account or delivering
        such funds to a disbursing, paying or other similar agent, as the case
        may be.

                "Significant Subsidiary" shall have the meaning given to such
        term in Regulation S-X under the Exchange Act.

                "13% Preferred" shall have the meaning set forth in paragraph
        (3)(d).

                "Trading Day" shall mean any day on which the securities in
        question are traded on the NYSE, or if such securities are not listed or
        admitted for trading on the NYSE, on the principal national securities
        exchange on which such securities are listed or admitted, or if not
        listed or admitted for trading on any national securities exchange, on
        the Nasdaq National Market, or if



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<PAGE>   335



        such securities are not quoted thereon, in the applicable securities
        market in which the securities are traded.

                "Transaction" shall have the meaning set forth in paragraph
        (8)(e)(i).

                "Trigger Event" shall have the meaning set forth in paragraph
        (9)(b).

                "Trigger Event Cure" shall have the meaning set forth in
        paragraph (9)(b).

                "25-Day Average Market Price" shall mean, for any security, the
        volume-weighted average of the Current Market Prices of that security
        for the twenty-five Trading Days immediately preceding the date of
        determination.

                (3)     Rank. Any class or series of stock of the Corporation
shall be deemed to rank:

                (a)     prior to the 5% Preferred Stock, either as to the
payment of dividends or as to distribution of assets upon liquidation,
dissolution or winding up, or both, if the holders of such class or series shall
be entitled by the terms thereof to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up, in preference or
priority to the holders of 5% Preferred Stock ("Senior Securities");

                (b)     on a parity with the 5% Preferred Stock, either as to
the payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and

                (c)     junior to the 5% Preferred Stock, either as to the
payment of dividends or as to the distribution of assets upon liquidation,
dissolution or winding up, or both, if such stock or series shall be Common
Stock or if the holders of the 5% Preferred Stock shall be entitled to receipt
of dividends, and of amounts distributable




                                       7
<PAGE>   336


upon liquidation, dissolution or winding up, in preference or priority to the
holders of shares of such stock or series ("Junior Securities").

                (d)     Each of the 13% Senior Redeemable Exchangeable Preferred
Stock of the Corporation and the 13% Series B Senior Redeemable Exchangeable
Preferred Stock of the Corporation (collectively, the "13% Preferred") is a
Senior Security. Each of the Series A Junior Participating Preferred Stock of
the Corporation is a Junior Security. The 5% Cumulative Participating
Convertible Preferred Stock, Series A of the Corporation, the 5% Cumulative
Participating Convertible Preferred Stock, Series C of the Corporation, the 5%
Cumulative Participating Convertible Preferred Stock, Series D of the
Corporation, the 5% Cumulative Preferred Stock, Series A of the Corporation, the
5% Cumulative Participating Convertible Preferred Stock, Series E of the
Corporation, the 5% Cumulative Participating Convertible Preferred Stock, Series
B of the Corporation, the 5% Cumulative Participating Convertible Preferred
Stock, Series F of the Corporation, the 5% Cumulative Participating Convertible
Preferred Stock, Series B-1 of the Corporation, the 5% Cumulative Participating
Convertible Preferred Stock, Series G of the Corporation and one or more classes
of Additional Preferred shall be Parity Securities; provided, however, that
there shall be no issue of other Senior Securities, Parity Securities or rights
or options exercisable for or convertible into any such securities, except as
approved by the holders of the 5% Preferred Stock pursuant to paragraph 9(e).

                (e)     The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.

                (4)     Dividends. (a) Subject to paragraph (8)(b)(ii), the
holders of shares of 5% Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for such Dividend Payment Date) or additional
shares of Preferred Stock of a class to be designated by the Board of Directors
having terms substantially identical to the 5% Preferred Stock except as
follows: (A) the Conversion Rate (as set forth in Section 8(a)) on such
Preferred Stock initially shall be the quotient




                                       8
<PAGE>   337


resulting from the division of the Conversion Rate (as then in effect on the 5%
Preferred Stock) by the Relevant Compounding Factor and (B) the number of shares
of such Preferred Stock payable as a dividend on any Dividend Payment Date shall
increase for each Dividend Payment Date from the first Dividend Payment Date by
the Relevant Compounding Factor (such classes of Preferred Stock singularly and
collectively, the "Additional Preferred"). All dividends on the 5% Preferred
Stock, in whatever form, shall be payable in arrears quarterly on each Dividend
Payment Date and shall be cumulative from the Issue Date (except that dividends
on Additional Preferred shall accrue from the date such Additional Preferred is
issued or would have been issued in accordance with this Certificate of
Designation if such dividends had been declared), whether or not in any Dividend
Period or Dividend Periods there shall be funds of the Corporation legally
available for the payment of such dividends. Each such dividend shall be payable
to the holders of record of shares of the 5% Preferred Stock, as they appear on
the stock records of the Corporation at the close of business on the record
date for such dividend. Upon the declaration of any such dividend, the Board of
Directors shall fix as such record date the fifth Business Day preceding the
relevant Dividend Payment Date and shall give notice on or prior to the record
date of the form of payment of such dividend. Accrued and unpaid dividends for
any past Dividend Payment Date may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record on such record
date, not more than 45 days nor less than five Business Days preceding the
payment date thereof, as may be fixed by the Board of Directors.

                (b)     In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock shall be entitled to
receive an amount equal to the amount (and in the form of consideration) that
such holders would be entitled to receive if, pursuant to paragraph (8), they
had converted such 5% Preferred Stock fully into Common Stock immediately before
the record date for the payment of any such dividends on Common Stock. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock as they appear on the stock records of the Corporation at the close of
business on the record date for such dividend on Common Stock, and the
Corporation shall pay each such dividend on the applicable payment date for such
dividend on the Common Stock.

                (c)     For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each share of Additional
Preferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).



                                       9
<PAGE>   338


                (d)     The dividends payable for any period shorter than a full
Dividend Period on the 5% Preferred Stock shall accrue daily and be computed on
the basis of a 360-day year and the actual number of days in such period. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the 5% Preferred Stock that may be in
arrears except as otherwise provided herein.

                (e)     So long as any shares of the 5% Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities 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 such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock for all
Dividend Periods terminating on or prior to the date of such redemption,
repurchase or other acquisition shall have been paid or set apart for payment,
(ii) sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in Common Stock or Additional Preferred or are
not paid in full in cash or a sum sufficient for such payment is not set apart,
as aforesaid, all dividends declared upon shares of the 5% Preferred Stock and
all dividends declared upon Parity Securities shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid on the
5% Preferred Stock and accumulated and unpaid on such Parity Securities.

                (f)     So long as any shares of the 5% Preferred Stock are
outstanding, no dividends (other than (i) any Rights issued pursuant to the
stockholder rights plan as provided in paragraph (11) and (ii) dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Junior Securities) shall be declared or paid or set apart
for payment or other distribution declared or made upon Junior Securities, nor
shall any Junior Securities be re deemed, purchased or otherwise acquired (other
than a redemption, purchase, or other acquisition of shares of Common Stock made
for purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary of the Corporation) (all such dividends, distributions, redemptions
or purchases being hereinafter referred to




                                       10
<PAGE>   339


as "Junior Securities Distributions") 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, directly or indirectly (except by conversion
into or exchange for Junior Securities), unless in each case (A) full cumulative
dividends on all outstanding shares of the 5% Preferred Stock and all Parity
Securities shall have been paid or set apart for payment for all past Dividend
Periods and dividend periods for such Parity Securities, (B) sufficient funds
shall have been paid or set apart for the payment of the dividend for the
current Dividend Period with respect to the 5% Preferred Stock and all Parity
Securities, (C) the Corporation is not in default with respect to any redemption
of shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6)
below and (D) the Corporation has fully performed its obligations under
paragraphs (4)(b) and (6).

                (5)     Liquidation Preference. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, before any payment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set apart for the holders of
Junior Securities, the holders of the shares of 5% Preferred Stock shall be
entitled to receive the Liquidation Right. If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation, or
proceeds thereof, distributable among the holders of the shares of 5% Preferred
Stock shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any Parity Securities, then such assets, or the proceeds
thereof, shall be distributed among the holders of shares of 5% Preferred Stock
and any such other Parity Securities ratably in accordance with the respective
amounts that would be payable on such shares of 5% Preferred Stock and any such
other stock if all amounts payable thereon were paid in full. For the purposes
of this paragraph (5), (i) a consolidation or merger of the Corporation with one
or more corporations, or (ii) a sale or transfer of all or substantially all of
the Corporation's assets, shall not be deemed to be a liquidation, dissolution
or winding up, voluntary or involuntary, of the Corporation.

                (b)     Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or classes
of Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the 5% Preferred Stock shall not be
entitled to share therein.




                                       11
<PAGE>   340


                (6)     Redemption. (a) On and after the first Business Day
following the earlier to occur of (i) May 30, 2007 or (ii) the date on which
both (A) the 25-Day Average Market Price of the Common Stock shall have exceeded
$96.00 and (B) May 30, 2004, to the extent the Corporation shall have funds
legally available for such payment, the Corporation may redeem at its option
shares of 5% Preferred Stock, from time to time in part, or in whole, payable at
the option of the Corporation in (A) cash, at a redemption price of $1,000.00
per share, (B) in shares of Common Stock, at a redemption price of $1,000.00 per
share, or (C) in a combination of cash and Common Stock, at a redemption price
based on the respective combination of consideration, together in each case with
accrued and unpaid dividends thereon, whether or not declared, to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(a), the price per share of Common Stock shall be the 25-Day
Average Market Price.

                (b)     On and after the first Business Day following May 30,
2010, each holder of shares of 5% Preferred Stock shall have the right to
require the Corporation, to the extent the Corporation shall have funds legally
available therefor, to redeem such holder's shares of 5% Preferred Stock, from
time to time in part, or in whole, at a redemption price of $1,000.00 per share,
payable at the option of the Corporation in cash, shares of Common Stock or a
combination thereof, together with accrued and unpaid dividends thereon to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(b), the price per share of Common Stock shall equal the 25-Day
Average Market Price. Any holder of shares of 5% Preferred Stock who elects to
exercise its rights pursuant to this paragraph (6)(b) shall deliver to the
Corporation a written notice of election not less than 20 days prior to the date
on which such holder demands redemption pursuant to this paragraph 6(b), which
written notice shall set forth the name of the Holder, the number of shares of
5% Preferred Stock to be redeemed and a statement that the election to exercise
a redemption right is being made thereby; and, subject to paragraph (10)(d),
shall deliver to the Corporation on or before the date of redemption
certificates evidencing the shares of 5% Preferred Stock to be redeemed, duly
endorsed for transfer to the Corporation.

                (c)     If the Corporation shall not have redeemed all
outstanding shares of 5% Preferred Stock pursuant to paragraphs (6)(a) or
(6)(b), on May 30, 2020 (the "Mandatory Redemption Date"), to the extent the
Corporation shall have funds legally available for such payment, the Corporation
shall redeem all outstanding shares of 5% Preferred Stock, at a redemption
price of $1,000.00 per share,



                                       12
<PAGE>   341


payable at the option of the Corporation in cash, shares of Common Stock or a
combination thereof, together with accrued and unpaid dividends thereon to, but
excluding, the Mandatory Redemption Date, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(c), the price per share of Common Stock shall be the 25-Day
Average Market Price.

                (d)     If the Corporation is unable or shall fail to discharge
its obligation to redeem all outstanding shares of 5% Preferred Stock pursuant
to paragraphs 6(b) or 6(c) (each, a "Mandatory Redemption Obligation"), the
Mandatory Redemption Obligation shall be discharged as soon as the Corporation
is able to discharge such Mandatory Redemption Obligation. If and so long as any
Mandatory Redemption Obligation with respect to the 5% Preferred Stock shall not
be fully discharged, the Corporation shall not (i) directly or indirectly,
redeem, purchase, or otherwise acquire any Parity Security or discharge any
mandatory or optional redemption, sinking fund or other similar obligation in
respect of any Parity Securities (except in connection with a redemption,
sinking fund or other similar obligation to be satisfied pro rata with the 5%
Preferred Stock) or (ii) declare or make any Junior Securities Distribution
(other than dividends or distributions paid in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Junior Securities), or,
directly or indirectly, discharge any mandatory or optional redemption, sinking
fund or other similar obligation in respect of the Junior Securities.

                (e)     Upon any redemption of 5% Preferred Stock, the
Corporation shall pay the redemption price and any accrued and unpaid dividends
in arrears to, but excluding, the applicable redemption date.

                (f)     For purposes of paragraph (6)(a) only, unless full
cumulative dividends (whether or not declared) on all outstanding shares of 5%
Preferred Stock and any Parity Securities shall have been paid or
contemporaneously are declared and paid or set apart for payment for all
Dividend Periods terminating on or prior to the applicable redemption date and
notice has been given in accordance with paragraph (7), none of the shares of 5%
Preferred Stock shall be redeemed, and no sum shall be set aside for such
redemption, unless shares of 5% Preferred Stock are redeemed pro rata and notice
has previously been given in accordance with paragraph (7).

                (7)     Procedure for Redemption. (a) If the Corporation shall
redeem shares of 5% Preferred Stock pursuant to paragraph 6(a), notice of such



                                       13
<PAGE>   342


redemption shall be given by certified mail, return receipt requested, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
applicable 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 and confirmed by facsimile transmission to each holder of record
if the Corporation has been furnished with such facsimile address by the
holder(s); provided, however, that neither the failure to give such notice nor
confirmation nor any defect therein or in the mailing thereof, to any particular
holder, shall affect the sufficiency of the notice or the validity of the
proceedings for redemption with respect to the other holders. Any notice that
was mailed in the manner herein provided shall be conclusively presumed to have
been duly given on the date mailed whether or not the holder receives the
notice. Each such notice shall state: (i) the redemption date; (ii) the number
of shares of 5% Preferred Stock to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of shares to be redeemed from
such holder; (iii) the amount payable, whether such amount shall be paid in
Common Stock or in cash and if the payment is in Common Stock an explanation of
the determination of the amount to be paid; (iv) the place or places where
certificates for such shares are to be surrendered or the notice under paragraph
(10)(d) should be sent for payment of the redemption price; and (v) that
dividends on the shares to be redeemed will cease to accrue on such redemption
date, except as otherwise provided herein.

                (b)     If notice has been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the Corporation in
providing for the payment of the redemption price of the shares called for
redemption and dividends accrued and unpaid thereon, if any), (i) except as
otherwise provided herein, dividends on the shares of 5% Preferred Stock so
called for redemption shall cease to accrue, (ii) said shares shall no longer be
deemed to be outstanding and (iii) all rights of the holders thereof as holders
of the 5% Preferred Stock shall cease (except the right to receive from the
Corporation the redemption price without interest thereon, upon surrender and
endorsement (or a constructive surrender under paragraph (10)(d)) of their
certificates if so required, and to receive any dividends payable thereon).

                (c)     Upon surrender (including a constructive surrender under
paragraph (10)(d)) in accordance with notice given pursuant to this paragraph
(7) of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption




                                       14
<PAGE>   343


price aforesaid, plus any dividends payable thereon. If fewer than all the
outstanding shares of 5% Preferred Stock are to be redeemed, the number of
shares to be re deemed shall be determined by the Board of Directors and the
shares to be redeemed shall be selected pro rata (with any fractional shares
being rounded to the nearest whole share). In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued, subject to a holder's election under paragraph (10)(d), representing the
surrendered shares without cost to the holder thereof.

                (8)     Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock shall
have the right, at any time and from time to time, at such holder's option, to
convert any or all outstanding shares of 5% Preferred Stock held by such holder,
but not fractions of shares, into fully paid and non-assessable shares of Common
Stock by surrendering such shares to be converted, such surrender to be made in
the manner provided in paragraph (8)(b). The number of shares of Common Stock
deliverable upon conversion of each share of 5% Preferred Stock shall be equal
to 12.292744, as adjusted as provided herein (the "Conversion Rate"). The
Conversion Rate is subject to adjustment from time to time pursuant to paragraph
(8)(d). The right to convert shares called for redemption pursuant to paragraph
6(a) shall terminate at the close of business on the date immediately preceding
the date fixed for such redemption unless the Corporation shall default in
making payment of the amount payable upon such redemption, in which case such
right of conversion shall be reinstated. Upon conversion, any accrued and unpaid
dividends on the 5% Preferred Stock at the date of conversion shall be paid to
the holder thereof in accordance with the provisions of paragraph (4).

                (b)     (i) In order to exercise the conversion privilege, the
holder of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (10)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended; provided, however, that the
Corporation shall use its best efforts in cooperating with such holder to obtain
such legal or regulatory approvals to the extent its cooperation is




                                       15
<PAGE>   344


necessary. Such notice shall also state the name or names (with address and
social security or other taxpayer identification number, if applicable) in which
the certificate or certificates for Common Stock are to be issued. Unless the
shares issuable on conversion are to be issued in the same name as the name in
which such share of 5% Preferred Stock is registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder or the holder's
duly authorized attorney and an amount sufficient to pay any transfer or similar
tax (or evidence reasonably satisfactory to the Corporation demonstrating that
such taxes have been paid). All certificates representing shares of 5%
Preferred Stock surrendered for conversion shall be canceled by the Corporation
or the transfer agent.

                (ii)    Subject to the last sentence of paragraph (8)(a),
holders of shares of 5% Preferred Stock at the close of business on a dividend
payment record date shall not be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date if such holder shall have
surrendered (or made a constructive surrender under paragraph (10)(d)) for
conversion such shares at any time following the preceding Dividend Payment Date
and prior to such Dividend Payment Date.

                (iii)   Subject to a holder's election under paragraph (10)(d),
as promptly as practicable after the surrender (including a constructive
surrender under paragraph (10)(d)) by a holder of the certificates for shares of
5% Preferred Stock as aforesaid, the Corporation shall issue and shall deliver
to such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (8), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (8)(c). Upon conversion of
only a portion of the shares of 5% Preferred Stock represented by any
certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (10)(d), upon the surrender
(including a constructive surrender under paragraph (10)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be outstanding and all rights of a holder with respect to
such shares so surrendered shall immediately terminate except the right to
receive the Common Stock and other amounts payable pursuant to this paragraph
(8).




                                       16
<PAGE>   345


                (iv)    Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered pursuant to an election under paragraph (10)(d)) and such notice
received by the Corporation as aforesaid, and the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock shall
be issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby at such time
on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock
surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered and such notice received by the Corporation.

                (c)     (i) No fractional shares or scrip representing fractions
of shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion (or deemed surrendered under paragraph (10)(d)) at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of 5% Preferred Stock surrendered (or deemed surrendered under paragraph
(10)(d)) for conversion by such holder.

                (ii)    Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered under paragraph (10)(d)) and such notice received by the Corporation
as aforesaid, and the Person or Persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of the
shares of Common Stock represented thereby at such time on such date and such
conversion shall be into a number of shares of Common Stock equal to the product
of the number of shares of 5% Preferred Stock surrendered times the Conversion
Rate in effect at such time on such




                                       17
<PAGE>   346


date, unless the stock transfer books of the Corporation shall be closed on that
date, in which event such Person or Persons shall be deemed to have become such
holder or holders of record at the close of business on the next succeeding day
on which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered (or deemed surrendered under paragraph (10)(d)) and such notice
received by the Corporation.

                (d)     The Conversion Rate shall be adjusted from time to time
as follows:

                (i)     If the Corporation shall after the Issue Date (A)
declare a dividend or make a distribution on its Common Stock in shares of its
Common Stock, (B) subdivide its outstanding Common Stock into a greater number
of shares, (C) combine its outstanding Common Stock into a smaller number of
shares or (D) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification.
An adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (8)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case of a
subdivision, combination or reclassification. Adjustments in accordance with
this paragraph (8)(d)(i) shall be made whenever any event listed above shall
occur.

        (ii)    If the Corporation shall after the Issue Date fix a record date
for the issuance of rights or warrants (in each case, other than any Rights
issued pursuant to the stockholder rights plan as provided in paragraph (11) )
to all holders of Common Stock entitling them (for a period expiring within 45
days after such record date) to subscribe for or purchase Common Stock (or
securities convertible into Common Stock) at a price per share (or, in the case
of a right or warrant to purchase securities convertible into Common Stock,
having an effective exercise price per share of



                                       18
<PAGE>   347


Common Stock, computed on the basis of the maximum number of shares of Common
Stock issuable upon conversion of such convertible securities, plus the amount
of additional consideration payable, if any, to receive one share of Common
Stock upon conversion of such securities) less than the 25-Day Average Market
Price on the date on which such issuance was declared or otherwise announced by
the Corporation (the "Determination Date"), then the Conversion Rate in effect
at the opening of business on the Business Day next following such record date
shall be adjusted so that the holder of each share of 5% Preferred Stock shall
be entitled to receive, upon the conversion thereof, the number of shares of
Common Stock determined by multiplying (I) the Conversion Rate in effect
immediately prior to such record date by (II) a fraction, the numerator of which
shall be the sum of (A) the number of shares of Common Stock outstanding on the
close of business on the Determination Date and (B) the number of additional
shares of Common Stock offered for subscription or purchase pursuant to such
rights or warrants (or in the case of a right or warrant to purchase securities
convertible into Common Stock, the aggregate number of additional shares of
Common Stock into which the convertible securities so offered are initially
convertible), and the denominator of which shall be the sum of (A) the number of
shares of Common Stock outstanding on the close of business on the Determination
Date and (B) the number of shares that the aggregate proceeds to the Corporation
from the exercise of such rights or warrants for Common Stock would purchase at
such 25-Day Average Market Price on such date (or, in the case of a right of
warrant to purchase securities convertible into Common Stock, the number of
shares of Common Stock obtained by dividing the aggregate exercise price of such
rights or warrants for the maximum number of shares of Common Stock issuable
upon conversion of such convertible securities, plus the aggregate amount of
additional consideration payable, if any, to convert such securities into Common
Stock, by such 25-Day Average Market Price). Such adjustment shall become
effective immediately after the opening of business on the Business Day next
following such record date (except as provided in paragraph (8)(h)). Such
adjustment shall be made successively whenever such a record date is fixed. In
the event that after fixing a record date such rights or warrants are not so
issued, the Conversion Rate shall be readjusted to the Conversion Rate which
would then be in effect if such record date had not been fixed. In determining
whether any rights or warrants entitle the holders of Common Stock to subscribe
for or purchase shares of Common Stock at less than such 25-Day Average Market
Price, there shall be taken into account any consideration received by the
Corporation upon issuance and upon exercise of such rights or warrants, the
value of such consideration, if other than cash, to be determined by the Board
of Directors in good faith. In case any rights or warrants referred to in this
subparagraph (ii) shall expire unexercised after the same




                                       19
<PAGE>   348


have been distributed or issued by the Corporation (or, in the case of rights or
warrants to purchase securities convertible into Common Stock once exercised,
the conversion right of such securities shall expire), the Conversion Rate shall
be readjusted at the time of such expiration to the Conversion Rate that would
have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.

        (iii)   If the Corporation shall fix a record date for the making of a
distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (8)(d)(i)) or rights or warrants (in each case, other than
any Rights issued pursuant to the stockholder rights plan as provided in
paragraph (11)) to subscribe for or purchase any of its securities (excluding
those rights and warrants issued to all holders of Common Stock entitling them
(for a period expiring within 45 days after such record date) to subscribe for
or purchase Common Stock or securities convertible into shares of Common Stock,
which rights and warrants are referred to in and treated under subparagraph (ii)
above) (any of the foregoing being hereinafter in this subparagraph (iii) called
the "Securities"), then in each such case the Conversion Rate shall be adjusted
so that the holder of each share of 5% Preferred Stock shall be entitled to
receive, upon the conversion thereof, the number of shares of Common Stock
determined by multiplying (I) the Conversion Rate in effect immediately prior to
the close of business on such record date by (II) a fraction, the numerator of
which shall be the 25-Day Average Market Price per share of the Common Stock on
such record date, and the denominator of which shall be the 25-Day Average
Market Price per share of the Common Stock on such record date less the
then-fair market value (as determined by the Board of Directors in good faith,
whose determinations shall be conclusive) of the portion of the assets, shares
of its capital stock or evidences of indebtedness so distributed or of such
rights or warrants applicable to one share of Common Stock. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that after fixing a record date such distribution is not so made, the
Conversion Rate shall be readjusted to the Conversion Rate which would then be
in effect if such record date had not been fixed. Such adjustment shall become
effective immediately at the opening of business on the Business Day next
following (except as provided in paragraph (8)(h)) the record date for the
determination of stockholders entitled to receive such distribution. For the
purposes of this subparagraph (iii), the distribution of a Security, which is
distributed not only to the holders of the Common Stock on the date fixed for
the determination of




                                       20
<PAGE>   349


stockholders entitled to such distribution of such Security, but also is
distributed with each share of Common Stock delivered to a Person converting a
share of 5% Preferred Stock after such determination date, shall not require an
adjustment of the Conversion Rate pursuant to this subparagraph (iii); provided,
however, that on the date, if any, on which a Person converting a share of 5%
Preferred Stock would no longer be entitled to receive such Security with a
share of Common Stock (other than as a result of the termination of all such
Securities), a distribution of such Securities shall be deemed to have occurred
and the Conversion Rate shall be adjusted as provided in this subparagraph (iii)
(and such day shall be deemed to be "the date fixed for the determination of
stockholders entitled to receive such distribution" and "the record date" within
the meaning of the three preceding sentences). If any rights or warrants
referred to in this subparagraph (iii) shall expire unexercised after the same
shall have been distributed or issued by the Corporation, the Conversion Rate
shall be readjusted at the time of such expiration to the Conversion Rate that
would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.

        (iv)    In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
8(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date for the
cash dividend or distribution by a fraction the numerator of which shall be the
Current Market Price of a share of the Common Stock on the Record Date and the
denominator shall be such Current Market Price less the per share amount of
cash so distributed during the 12-month period applicable to one share of
Common Stock, such adjustment to be effective immediately prior to the opening
of business on the Business Day following the Record Date; provided, however,
that in the event the denominator of the foregoing fraction is zero or negative,
in lieu of the foregoing adjustment, adequate provision shall be made so that
each holder of 5% Preferred Stock shall have the right to receive upon
conversion, in addition to the shares of




                                       21
<PAGE>   350


Common Stock to which the holder is entitled, the amount of cash such holder
would have received had such holder converted each share of 5% Preferred Stock
at the beginning of the 12-month period. In the event that such dividend or
distribution is not so paid or made, the Conversion Rate shall again be adjusted
to be the Conversion Rate which would then be in effect if such dividend or
distribution had not been declared. Notwithstanding the foregoing, if any
adjustment is required to be made as set forth in this paragraph (8)(d)(iv), the
calculation of any such adjustment shall include the amount of the quarterly
cash dividends paid during the 12-month reference period only to the extent such
dividends exceed the regular quarterly cash dividends paid during the 12 months
preceding the 12-month reference period. For purposes of this paragraph
(8)(d)(iv), "Record Date" shall mean, with respect to any dividend or
distribution in which the holders of Common Stock have the right to receive
cash, the date fixed for determination of stockholders entitled to receive such
cash. In the event that at any time cash distributions to holders of Common
Stock are not paid equally on all series of Common Stock, the provisions of this
paragraph 8(d)(iv) will apply to any cash dividend or cash distribution on any
series of Common Stock otherwise meeting the requirements of this paragraph,
and shall be deemed amended to the extent necessary so that any adjustment
required will be made on the basis of the cash dividend or cash distribution
made on any such series.

        (v)     In case of the consummation of a tender or exchange offer (other
than an odd-lot tender offer) made by the Corporation or any subsidiary of the
Corporation for all or any portion of the outstanding shares of Common Stock to
the extent that the cash and fair market value (as determined in good faith by
the Board of Directors of the Corporation, whose determination shall be
conclusive and shall be described in a resolution of such Board) of any other
consideration included in such payment per share of Common Stock at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as amended) exceed by more than 5.0%, with any smaller
excess being disregarded in computing the adjustment to the Conversion Rate
provided in this paragraph (8)(d)(v), the first reported sale price per share of
the Common Stock on the Trading Day next succeeding the Expiration Time, then
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to
the Expiration Time by a fraction the numerator of which shall be the sum of (x)
the fair market value (determined as aforesaid) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or ex
changed and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchase Shares")
and




                                       22
<PAGE>   351



(y) the product of the number of shares of Common Stock outstanding (less any
Purchase Shares) on the Expiration Time and the first reported sale price of the
Common Stock on the Trading Day next succeeding the Expiration Time, and the
denominator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time multiplied
by the first reported sale price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such adjustment to become effective immediately
prior to the opening of business on the day following the Expiration Time.

        (vi)    No adjustment in the Conversion Rate shall be required unless
such adjustment would require a cumulative increase or decrease of at least 1%
in the Conversion Rate; provided, however, that any adjustments that by reason
of this subparagraph (vi) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment until made, and provided
further that any adjustment shall be required and made in accordance with the
provisions of this paragraph (8) (other than this subparagraph (vi)) not later
than such time as may be required in order to preserve the tax-free nature of a
distribution for United States income tax purposes to the holders of shares of
5% Preferred Stock or Common Stock. Notwithstanding any other provisions of this
paragraph (8), the Corporation shall not be required to make any adjustment of
the Conversion Rate for the issuance of any shares of Common Stock pursuant to
any plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional amounts
in shares of Common Stock under such plan. All calculations under this paragraph
(8) shall be made to the nearest dollar or to the nearest 1/1,000 of a share, as
the case may be. Anything in this paragraph (8)(d) to the contrary
notwithstanding, the Corporation shall be entitled, to the extent permitted by
law, to make such adjustments in the Conversion Rate, in addition to those
required by this paragraph (8)(d), as it in its discretion shall determine to be
advisable in order that any stock dividends, subdivision of shares,
reclassification or combination of shares, distribution or rights or warrants to
purchase stock or securities, or a distribution of other assets (other than
cash dividends) hereafter made by the Corporation to its stockholders shall not
be taxable.

        (vii)   In the event that, at any time as a result of shares of any
other class of capital stock becoming issuable in exchange or substitution for
or in lieu of shares of Common Stock or as a result of an adjustment made
pursuant to the provisions of this paragraph (8)(d), the holder of 5% Preferred
Stock upon subsequent conversion shall become entitled to receive any shares of
capital stock of the Corporation other than Common Stock, the number of such
other shares so receivable upon conversion




                                       23
<PAGE>   352


of any shares of 5% Preferred Stock shall thereafter be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions contained herein.

                (viii)  The $96.00 required stock price threshold set forth in
paragraph (6)(a)(ii) shall be adjusted from time to time in a manner consistent
with the provisions of this paragraph (8)(d).

                (e) (i) If the Corporation shall be a party to any transaction
(including without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (8)(d)(i) applies)
(each of the foregoing being referred to herein as a "Transaction"), in each
case as a result of which shares of Common Stock shall be converted into the
right to receive stock, securities or other property (including cash or any
combination thereof), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that number
of shares or fraction thereof of Common Stock into which one share of 5%
Preferred Stock was convertible immediately prior to such Transaction, assuming
such holder of Common Stock (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be (a
"Constituent Person"), or an affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of stock,
securities and other property (including cash) receivable upon such Transaction
(provided that if the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction is not the same for each share
of Common Stock held immediately prior to such Transaction by other than a
Constituent Person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purpose of this paragraph (8)(e) the kind and amount of stock, securities and
other property (including cash) receivable upon such Transaction by each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). The provisions of this
paragraph (8)(e) shall similarly apply to successive Transactions.



                                       24
<PAGE>   353


                (ii)    Notwithstanding anything herein to the contrary, if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation, by notice to and consultation with the
holders of the 5% Preferred Stock, may cause the exchange of the 5% Preferred
Stock for preferred stock of Holdco having the same terms and conditions as set
forth herein; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 5% Preferred Stock
(including for these purposes any resultant change in the tax treatment for the
holders of such stock).

                (f)     If:

                (i)     the Corporation shall declare a dividend (or any other
        distribution) on the Common Stock; or

                (ii)    the Corporation shall authorize the granting to the
        holders of the Common Stock of rights or warrants to subscribe for or
        purchase any shares of any class or any other rights or warrants; or

                (iii)   there shall be any subdivision, combination or
        reclassification of the Common Stock or any consolidation or merger to
        which the Corporation is a party and for which approval of any
        stockholders of the Corporation is required, or the sale or transfer of
        all or substantially all of the assets of the Corporation as an
        entirety; or

                (iv)    there shall occur the voluntary or involuntary
        liquidation, dissolution or winding up of the Corporation,

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applicable date hereinafter specified, a notice stating (A)
the date on which a record is to be taken for the purpose of such dividend (or
such other distribution) or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or



                                       25
<PAGE>   354


warrants are to be determined or (B) the date on which such subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up or other action is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities or other property, if any, deliverable upon such subdivision,
combination, reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up. Failure to give or receive such notice
or any defect therein shall not affect the legality or validity of any
distribution, right, warrant, subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, winding up or
other action, or the vote upon any of the foregoing.

                (g)     Whenever the Conversion Rate is adjusted as herein
provided, the Corporation shall prepare an officer's certificate with respect to
such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the effective date of such adjustment and shall mail a copy of such
officer's certificate to the holder of each share of 5% Preferred Stock at such
holder's last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (8)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be conclusive evidence of the correctness of such adjustment.

                (h)     In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (8)(c).

                (i)     For purposes of this paragraph (8), the number of shares
of Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.



                                       26
<PAGE>   355


                (j)     There shall be no adjustment of the Conversion Rate in
case of the issuance of any stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth in
this paragraph (8). If any single action would require adjustment of the
Conversion Rate pursuant to more than one subparagraph of this paragraph (8),
only one adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value.

                (k)     If the Corporation shall take any action affecting the
Common Stock, other than action described in this paragraph (8), that in the
opinion of the Board of Directors materially adversely affects the conversion
rights of the holders of the shares of 5% Preferred Stock, the Conversion Rate
may be adjusted, to the extent permitted by law, in such manner, if any, and at
such time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (8)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.

                (l)     (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of 5% Preferred Stock
not theretofore converted. For purposes of this paragraph (8)(l) the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.

                (ii)    The Corporation covenants that any shares of Common
Stock issued upon conversion of the 5% Preferred Stock shall be duly authorized,
validly issued, fully paid and non-assessable. Before taking any action that
would cause an adjustment increasing the Conversion Rate such that the quotient
of $1,000.00 and the Conversion Rate (which quotient initially shall be
$81.3488) would be reduced below the then-par value of the shares of Common
Stock deliverable upon conversion of the 5% Preferred Stock, the Corporation
will take any corporate action that, in the opinion of its counsel, may be
necessary in order that the Corporation may validly and legally issue fully paid
and non-assessable shares of Common Stock based upon such adjusted Conversion
Rate.



                                       27
<PAGE>   356


                (iii)   Prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the 5% Preferred
Stock, the Corporation shall comply with all applicable federal and state laws
and regulations which require action to be taken by the Corporation.

                (m)     The Corporation will pay any and all documentary, stamp
or similar issue or transfer taxes payable in respect of the issue or delivery
of shares of Common Stock or other securities or property on conversion of the
5% Preferred Stock pursuant hereto; provided, however, that the Corporation
shall not be required to pay any tax that may be payable in respect of any
transfer involved in the issue or delivery of shares of Common Stock or other
securities or property in a name other than that of the holder of the 5%
Preferred Stock to be converted and no such issue or delivery shall be made
unless and until the Person requesting such issue or delivery has paid to the
Corporation the amount of any such tax or established, to the satisfaction of
the Corporation, that such tax has been paid.

                (n)     No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock are entitled to participate in such
transaction pursuant to paragraph 4(b).

                (9)     Voting Rights. (a) The holders of record of shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (9) or as otherwise provided by law.

                (b)     If and whenever either (i) six quarterly dividends
(whether or not consecutive) payable on the 5% Preferred Stock have not been
paid in full, (ii) the Corporation shall have failed to discharge its Mandatory
Redemption Obligation or (iii) there occurs a Bankruptcy Event (any such event
described in the preceding subparagraphs (i) through (iii) being hereinafter
referred to as a "Trigger Event"), a vote of the holders of shares of 5%
Preferred Stock, voting as a single class, will be required on all matters
brought to stockholders of the Corporation. Whenever all arrears in dividends on
the 5% Preferred Stock then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, the Corporation shall have fulfilled its
Mandatory Redemption Obligation and all Bankruptcy Events shall have been cured
(the "Trigger Event Cure"), then the right of the holders of the 5% Preferred
Stock to vote as described in this paragraph 9(b) shall cease (but subject
always to the same provisions for the vesting of such voting rights if any
Trigger Event occurs).




                                       28
<PAGE>   357


                (c)     Upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, together with the holders of shares
of every other series of preferred stock (including, without limitation,
Additional Preferred) upon which like rights to vote for the election of two
additional directors have been conferred and are exercisable (resulting from
either the failure to pay dividends or the failure to redeem) (any such other
series is referred to as the "Preferred Shares"), voting as a single class
regardless of series, shall be entitled to elect the two additional directors
to serve on the Board of Directors at any annual meeting of stock holders or
special meeting held in place thereof, or at a special meeting of the holders of
5% Preferred Stock and the Preferred Shares, called as hereinafter provided.
Whenever all arrears in dividends on the Preferred Shares then outstanding shall
have been paid and dividends thereon for the current quarterly dividend period
shall have been paid or declared and set apart for payment, the Corporation
shall have fulfilled any redemption obligation in respect of the Preferred
Shares, and the Trigger Event Cure has occurred, then the right of the holders
of the 5% Preferred Stock and the Preferred Shares to elect such additional two
directors shall cease (but subject always to the same provisions for the vesting
of such voting rights if any Trigger Event occurs), and the terms of office of
all persons elected as directors by the holders of 5% Preferred Stock and the
Preferred Shares shall forthwith terminate and the number of members of the
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in holders of shares of 5% Preferred Stock and
the Preferred Shares, the Secretary of the Corporation may, and upon the written
request of any holder of 5% Preferred Stock (addressed to the secretary at the
principal office of the Corporation) shall, call a special meeting of the
holders of the 5% Preferred Stock and of the Preferred Shares for the election
of the two directors to be elected by them as herein provided, such call to be
made by notice similar to that provided in the By-laws of the Corporation for a
special meeting of the stockholders or as required by law. If any such special
meeting required to be called as above provided shall not be called by the
Secretary of the Corporation within 20 days after receipt of any such request,
then any holder of shares of 5% Preferred Stock may call such meeting, upon the
notice above provided, and for that purpose shall have access to the stock books
of the Corporation. The directors elected at any such special meeting shall hold
office until the next annual meeting of the stockholders or special meeting held
in lieu thereof if such office shall not have previously terminated as above
provided. If any vacancy shall occur among the directors elected by the holders
of the 5% Preferred Stock and the Preferred Shares, a successor shall be elected
by the Board of Directors, upon the nomination of the then-remaining director
elected by the holders of the 5% Preferred Stock and




                                       29
<PAGE>   358


the Preferred Shares or the successor of such remaining director, to serve until
the next annual meeting of the stockholders or special meeting held in place
thereof if such office shall not have previously terminated as provided above.

                (d)     Without the written consent of the holders of at least
66 2/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 66 2/3% in liquidation preference of
the outstanding shares of 5% Preferred Stock at a meeting of the holders of 5%
Preferred Stock called for such purpose, the Corporation will not amend, alter
or repeal any provision of the Certificate of Incorporation (by merger or
otherwise) so as to adversely affect the preferences, rights or powers of the
5% Preferred Stock; provided that any such amendment that changes the dividend
payable on, the Conversion Rate with respect to, or the liquidation preference
of the 5% Preferred Stock shall require the affirmative vote at a meeting of
holders of 5% Preferred Stock called for such purpose or written consent of the
holder of each share of 5% Preferred Stock.

                (e)     Without the written consent of the holders of at least
662/3% in liquidation preference of the outstanding shares of 5% Preferred Stock
or the vote of holders of at least 66 2/3% in liquidation preference of the
outstanding shares of 5% Preferred Stock at a meeting of such holders called for
such purpose, the Corporation will not issue any additional 5% Preferred Stock
or create, authorize or issue any Parity Securities or Senior Securities or
increase the authorized amount of any such other class or series; provided that
this paragraph 9(e) shall not limit the right of the Corporation to (i) issue
Additional Preferred as dividends pursuant to paragraph 4 or (ii) to issue
Parity Securities or Senior Securities in order to refinance, redeem or refund
the 13% Preferred, provided that the maximum accrual value (i.e. the sum of
stated value and maximum amount payable in kind over the term from issuance to
first date of mandatory redemption or redemption at the option of the holder) of
such Parity Securities may not exceed the maximum accrual value of the 13%
Preferred.

                (f)     In exercising the voting rights set forth in this
paragraph (9), each share of 5% Preferred Stock shall have one vote per share,
except that when any other series of preferred stock shall have the right to
vote with the 5% Preferred Stock as a single class on any matter, then the 5%
Preferred Stock and other series shall have with respect to such matters one
vote per $1,000 of stated liquidation preference. Except as otherwise required
by applicable law or as set forth herein, the shares of 5% Preferred Stock shall
not have any relative, participating, optional or other special voting rights
and powers and the consent of the holders thereof shall not be required for the
taking of any corporate action.




                                       30
<PAGE>   359


                (g)     Nothing in this paragraph (9) shall be in derogation of
any rights that a holder of shares of 5% Preferred Stock may have in his
capacity as a holder of shares of Common Stock.

                (10)    General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are for
convenience of reference only and shall not define, limit or affect any of the
provisions hereof.

                (b)     If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) or shall have failed to
discharge any obligation to redeem shares of 5% Preferred Stock pursuant to
paragraph (6), the holders of shares of 5% Preferred Stock shall be entitled to
receive, in addition to all other amounts required to be paid hereunder, when,
as and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, cash dividends on the aggregate dividends which the
Corporation shall have failed to declare or pay or the redemption price,
together with accrued and unpaid dividends thereon, as the case may be, at a
rate of 2% per quarter, compounded quarterly, for the period during which the
failure to pay dividends or failure to discharge an obligation to redeem shares
of 5% Preferred Stock shall continue.

                (c)     The shares of 5% Preferred Stock shall bear the
following legend:

                THE SHARES OF PREFERRED STOCK (THE "PREFERRED STOCK"), PAR VALUE
                $0.01 PER SHARE, OF NTL INCORPORATED (THE "CORPORATION") AND
                THE SHARES OF COMMON STOCK (THE "COMMON STOCK"), PAR VALUE
                $0.01 PER SHARE, OF THE CORPORATION INTO WHICH THE PREFERRED
                STOCK MAY BE CONVERTED OR REDEEMED REPRESENTED BY THIS
                CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES
                ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AND ANY
                APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION
                FROM REGISTRATION REQUIREMENTS. THE TRANSFER OF THE PREFERRED
                STOCK, OR COMMON STOCK IF THE PREFERRED STOCK HAS BEEN CONVERTED
                OR RE DEEMED EVIDENCED BY THIS CERTIFICATE, IS SUBJECT TO THE
                RESTRICTIONS ON TRANSFER PROVIDED FOR IN




                                       31
<PAGE>   360


                THE INVESTMENT AGREEMENT, DATED JULY 26, 1999, AS AMENDED,
                BETWEEN NTL (DELAWARE), INC. AND FRANCE TELECOM S.A. A COPY OF
                THIS AGREEMENT IS ON FILE AT THE EXECUTIVE OFFICES OF THE
                CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER
                OF SUCH PREFERRED STOCK OR COMMON STOCK UPON WRITTEN REQUEST TO
                THE CORPORATION.

                THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE
                MAY BE CONVERTED INTO COMMON STOCK OR REDEEMED IN EXCHANGE FOR
                COMMON STOCK WITHOUT THE SURRENDER AND EXCHANGE OF THIS
                CERTIFICATE FOR CERTIFICATES REPRESENTING SUCH COMMON STOCK. A
                NOTICE OF SUCH CONVERSION OR REDEMPTION EVENT, IF ANY, IS ON
                FILE AT THE EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE
                FURNISHED WITHOUT CHARGE TO THE HOLDER OF THIS CERTIFICATE
                UPON WRITTEN REQUEST TO THE CORPORATION.

                THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF
                THE PREFERRED STOCK WHO SO RE QUESTS THE POWERS, DESIGNATION,
                PREFERENCES AND RELATIVE PARTICIPATING, OPTIONAL OR OTHER
                SPECIAL RIGHTS OF THE PREFERRED STOCK.

                The shares of Common Stock issuable upon conversion or
redemption of the 5% Preferred Stock shall bear the following legend:

                THE SHARES OF COMMON STOCK (THE "COMMON STOCK"), PAR VALUE $0.01
                PER SHARE, OF NTL INCORPORATED (THE "CORPORATION") REPRESENTED
                BY THIS CERTIFICATE MAY NOT BE OFFERED OR SOLD IN THE UNITED
                STATES ABSENT REGISTRATION UNDER THE SECURITIES ACT OF 1933,
                AND ANY APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE
                EXEMPTION FROM REGISTRATION REQUIREMENTS. THE TRANSFER OF THE
                COMMON STOCK EVIDENCED BY THIS CERTIFICATE IS SUBJECT TO THE
                RESTRICTIONS ON TRANSFER PROVIDED




                                       32
<PAGE>   361


                FOR IN THE INVESTMENT AGREEMENT, DATED JULY 26, 1999, AS
                AMENDED, BETWEEN NTL (DELAWARE), INC. AND FRANCE TELECOM S.A. A
                COPY OF THIS AGREEMENT IS ON FILE AT THE EXECUTIVE OFFICES OF
                THE CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE
                HOLDER OF SUCH COMMON STOCK UPON WRITTEN RE QUEST TO THE
                CORPORATION.

                (d) (i) Whenever in connection with any conversion or redemption
of the 5% Preferred Stock in exchange for Common Stock the holder is required to
surrender certificates representing such shares of 5% Preferred Stock, such
holder may, by written notice to the Corporation and its transfer agent, elect
to retain such certificates. In such case, the certificates so retained by the
holder thereof shall be deemed to represent, at and from the date of such
conversion or redemption, the number of shares of Common Stock issuable upon
such conversion or redemption (subject to paragraph (8)(c), if applicable), and
shall be so reflected upon the books of the Corporation and its transfer agent.

                (ii)    (A) A holder who has previously elected to retain
certificates representing the 5% Preferred Stock in accordance with paragraph
(10)(d)(i) upon conversion or redemption may subsequently elect to receive
certificates representing the shares of Common Stock issued upon such conversion
or redemption. To receive certificates representing such shares of Common Stock,
the holder of such certificate shall surrender it, duly endorsed or assigned to
the Corporation or in blank, at the office of the Corporation, or to any
transfer agent of the Corporation previously designated by the Corporation for
such purposes, with a written notice of that election.

                (B)     Unless the certificates to be issued shall be registered
in the same name as the name in which such surrendered certificates are
registered, each certificate so surrendered shall be accompanied by instruments
of transfer, in form satisfactory to the Corporation, duly executed by the
holder or the holder's duly authorized attorney and an amount sufficient to pay
any transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid). All certificates so
surrendered shall be canceled by the Corporation or the transfer agent.

                (C)     As promptly as practicable after the surrender by a
holder of such certificates, the Corporation shall issue and shall deliver to
such holder, or on




                                       33
<PAGE>   362


the holder's written order, a certificate or certificates (which certificate or
certificates shall have the legend set forth in paragraph (10)(c)) for the
number of duly authorized, validly issued, fully paid and non-assessable shares
of Common Stock represented by the certificates so surrendered.

                (11)    Stockholder Rights Plan. The shares of 5% Preferred
Stock shall be entitled to the benefits of a number of rights issuable under the
Rights Agreement, dated as of October 13, 1993, as amended, between the
Corporation and Continental Stock Transfer & Trust Company or any successor plan
of similar purpose and effect (the "Rights") equal to the number of shares of
Common Stock then issuable upon conversion of the 5% Preferred Stock at the
prevailing Conversion Rate. Any shares of Common Stock deliverable upon
conversion or redemption of a share of 5% Preferred Stock or upon payment of a
dividend shall be accompanied by a Right."




                                       34
<PAGE>   363


                IN WITNESS WHEREOF, NTL Incorporated has caused this Certificate
of Designation to be signed by the undersigned this 2nd day of October, 2000.


                                NTL INCORPORATED

                                By: /s/ Richard J. Lubasch
                                   ------------------------------
                                   Name:  Richard J. Lubasch
                                   Title: Executive Vice President, General
                                            Counsel and Secretary




                                       35

<PAGE>   364
                           CERTIFICATE OF DESIGNATION
                       OF THE VOTING POWERS, DESIGNATION,
                    PREFERENCES AND RELATIVE, PARTICIPATING,
              OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
                       LIMITATIONS AND RESTRICTIONS OF THE
                     5% CUMULATIVE PARTICIPATING CONVERTIBLE
                         PREFERRED STOCK, SERIES B-1 OF
                                NTL INCORPORATED

                         ------------------------------
                        PURSUANT TO SECTION 151(g) OF THE
                GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
                         ------------------------------

                The undersigned, Executive Vice President, General Counsel and
Secretary of NTL Incorporated, a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that the Board of Directors, in accordance with Article FOURTH,
Section B of the Corporation's Restated Certificate of Incorporation and Section
151(g) of the Delaware General Corporation Law (the "DGCL"), has authorized the
creation of the series of Preferred Stock (as defined below) hereinafter
provided for and has established the dividend, redemption, conversion and voting
rights thereof and has adopted the following resolution, creating the following
new series of Preferred Stock:

                "BE IT RESOLVED that, pursuant to authority expressly granted to
the Board of Directors by the provisions of Article FOURTH, Section B of the
Restated Certificate of Incorporation of the Corporation and Section 151(g) of
the DGCL, there is hereby created and authorized the issuance of a new series of
Preferred Stock, par value $0.01 per share (the "Preferred Stock"), with the
following powers, designations, dividend rights, voting powers, rights on
liquidation, conversion rights, redemption rights and other preferences and
relative, participating, optional or other special rights and with the
qualifications, limitations or restrictions on the shares of such series (in
addition to the powers, designations, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereof set forth in the Certificate of Incorporation of the
Corporation that are applicable to each series of Preferred Stock) hereinafter
set forth.

<PAGE>   365

                (1)     Number and Designation. 8,180.56 shares of Preferred
Stock shall be designated as "5% Cumulative Participating Convertible Preferred
Stock, Series B-1 of NTL Incorporated" (the "5% Preferred Stock") and no other
shares of Preferred Stock shall be designated as 5% Preferred Stock.

                (2)     Definitions. For purposes of the 5% Preferred Stock, the
following terms shall have the meanings indicated:

                "Additional Preferred" shall have the meaning set forth in
        paragraph (4)(a) hereof.

                "Bankruptcy Event" shall mean any of the following: (I) a court
        having jurisdiction in the premises enters a decree or order for (A)
        relief in respect of any Major Entity in an involuntary case under any
        applicable bankruptcy, insolvency or other similar law now or
        hereinafter in effect, (B) appointment of a receiver, liquidator,
        assignee, custodian, trustee, sequestrator or similar official of any
        Major Entity or for all or substantially all of the property and assets
        of any Major Entity or (C) the winding up or liquidation of the affairs
        of any Major Entity; or (II) any Major Entity (A) commences a voluntary
        case under any applicable bankruptcy, insolvency or other similar law
        now or hereinafter in effect, or consents to the entry of an order for
        relief in an involuntary case under any such law, (B) consents to the
        appointment of or taking possession by a receiver, liquidator, assignee,
        custodian, trustee, sequestrator or similar official of any Major
        Entity, or for all or substantially all of the property and assets of
        any Major Entity or (C) effects any general assignment for the benefit
        of creditors.

                "Board of Directors" shall mean the board of directors of the
        Corporation. Except as such term is used in paragraph (9), "Board of
        Directors" shall also mean the Executive Committee, if any, of such
        board of directors or any other committee duly authorized by such board
        of directors to perform any of its responsibilities with respect to the
        5% Preferred Stock.

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

                "Common Stock" shall mean the Corporation's Common Stock, par
        value $0.01 per share.


                                        2
<PAGE>   366

                "Constituent Person" shall have the meaning set forth in
        paragraph (8)(e)(i) hereof.

                "Conversion Rate" shall have the meaning set forth in paragraph
        (8)(a) hereof.

                "Current Market Price" of publicly traded shares of Common Stock
        or any other class of capital stock or other security of the Corporation
        or any other issuer for any day shall mean the last reported sale price
        for such security on the principal exchange or quotation system on which
        such security is listed or traded. If the security is not admitted for
        trading on any national securities exchange or the Nasdaq National
        Market, "Current Market Price" shall mean the average of the last
        reported closing bid and asked prices reported by the Nasdaq as
        furnished by any member in good standing of the National Association of
        Securities Dealers, Inc., selected from time to time by the Corporation
        for that purpose or as quoted by the National Quotation Bureau
        Incorporated. In the event that no such quotation is available for such
        day, the Current Market Price shall be the average of the quotations for
        the last five Trading Days for which a quotation is available within the
        last 30 Trading Days prior to such day. In the event that five such
        quotations are not available within such 30-Trading Day period, the
        Board of Directors shall be entitled to determine the Current Market
        Price on the basis of such quotations as it reasonably considers
        appropriate.

                "Determination Date" shall have the meaning set forth in
        paragraph (8)(d)(ii) hereof.

                "Dividend Payment Date" shall mean September 30, December 31,
        March 31 and June 30 of each year, commencing on September 30, 2000;
        provided, however, that if any Dividend Payment Date falls on any day
        other than a Business Day, the dividend payment due on such Dividend
        Payment Date shall be paid on the Business Day immediately following
        such Dividend Payment Date.

                "Dividend Periods" shall mean quarterly dividend periods
        commencing on September 30, December 31, March 31 and June 30 of each
        year and ending on and including the day preceding the first day of the
        next succeeding Dividend Period.


                                        3
<PAGE>   367

                "Exchange Act" shall mean the Securities Exchange Act of 1934,
        as amended, and the rules and regulations thereunder.

                "Expiration Time" shall have the meaning set forth in paragraph
        (8)(d)(v) hereof.

                "5% Preferred Stock" shall have the meaning set forth in
        paragraph (1) hereof.

                "Holdco" shall have the meaning set forth in paragraph
        (8)(e)(ii) hereof.

                "Issue Date" shall mean the date on which shares of 5% Preferred
        Stock are first issued.

                "Junior Securities" shall have the meaning set forth in
        paragraph (3)(c) hereof.

                "Junior Securities Distribution" shall have the meaning set
        forth in paragraph (4)(f) hereof.

                "Liquidation Right" shall mean, for each share of 5% Preferred
        Stock, the greater of (i) an amount equal to $1,000 per share, plus an
        amount equal to all dividends (whether or not earned or declared)
        accrued and unpaid thereon to the date of final distribution to such
        holders, and (ii) the amount that would be received in liquidation
        following conversion of a share of 5% Preferred Stock into Common Stock.

                "Major Entity" shall mean any of the Corporation, NTL
        (Delaware), Inc., NTL Communications Corp., Diamond Cable Communications
        Limited, Diamond Holdings Limited, NTL (Triangle) LLC or any Significant
        Subsidiary.

                "Mandatory Redemption Date" shall have the meaning set forth in
        paragraph (6)(c) hereof.

                "Mandatory Redemption Obligation" shall have the meaning set
        forth in paragraph (6)(d) hereof.


                                        4
<PAGE>   368

                "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
        securities market regulated by the National Association of Securities
        Dealers, Inc.

                "Nasdaq National Market" shall have the meaning set forth in
        Rule 4200(a)(23) of the rules of the National Association of Securities
        Dealers, Inc.

                "non-electing share" shall have the meaning set forth in
        paragraph (8)(e)(i) hereof.

                "NYSE" means the New York Stock Exchange.

                "outstanding", when used with reference to shares of stock,
        shall mean issued shares, excluding shares held by the Corporation or a
        subsidiary.

                "Parity Securities" shall have the meaning set forth in
        paragraph (3)(b) hereof.

                "Person" shall mean any individual, partnership, association,
        joint venture, corporation, business, trust, joint stock company,
        limited liability company, any unincorporated organization, any other
        entity, a "group" of such persons, as that term is defined in Rule
        13d-5(b) under the Exchange Act, or a government or political
        subdivision thereof.

                "Preferred Shares" has the meaning set forth in paragraph
        (9)(c).

                "Preferred Stock" shall have the meaning set forth in the
        introductory resolution above.

                "Purchase Shares" shall have the meaning set forth in paragraph
        (8)(d)(v) hereof.

                "Record Date" shall have the meaning set forth in paragraph
        (8)(d)(iv) hereof.

                "Relevant Compounding Factor" shall mean, with respect to each
        share of 5% Preferred Stock, upon initial issuance 1.00, and shall on
        each Dividend Payment Date be increased to equal the product of the
        Relevant


                                        5
<PAGE>   369

        Compounding Factor in effect immediately prior to such Dividend Payment
        Date and 1.0125.

                "Rights" shall have the meaning set forth in paragraph (11)
        hereof.

                "Securities" shall have the meaning set forth in paragraph
        (8)(d)(iii) hereof.

                "Senior Securities" shall have the meaning set forth in
        paragraph (3)(a) hereof.

                "set apart for payment" shall be deemed to include, without any
        action other than the following, the recording by the Corporation in its
        accounting ledgers of any accounting or bookkeeping entry which
        indicates, pursuant to a declaration of dividends or other distribution
        by the Board of Directors, the allocation of funds to be so paid on any
        series or class of capital stock of the Corporation; provided, however,
        that if any funds for any class or series of Junior Securities or any
        class or series of Parity Securities are placed in a separate account of
        the Corporation or delivered to a disbursing, paying or other similar
        agent, then "set apart for payment" with respect to the 5% Preferred
        Stock shall mean placing such funds in a separate account or delivering
        such funds to a disbursing, paying or other similar agent, as the case
        may be.

                "Significant Subsidiary" shall have the meaning given to such
        term in Regulation S-X under the Exchange Act.

                "13% Preferred" shall have the meaning set forth in paragraph
        (3)(d) hereof.

                "Trading Day" shall mean any day on which the securities in
        question are traded on the NYSE, or if such securities are not listed or
        admitted for trading on the NYSE, on the principal national securities
        exchange on which such securities are listed or admitted, or if not
        listed or admitted for trading on any national securities exchange, on
        the Nasdaq National Market, or if such securities are not quoted
        thereon, in the applicable securities market in which the securities are
        traded.


                                        6
<PAGE>   370

                "Transaction" shall have the meaning set forth in paragraph
        (8)(e)(i) hereof.

                "Trigger Event" shall have the meaning set forth in paragraph
        (9)(b) hereof.

                "Trigger Event Cure" shall have the meaning set forth in
        paragraph (9)(b) hereof.

                "25-Day Average Market Price" shall mean, for any security, the
        volume-weighted average of the Current Market Prices of that security
        for the twenty-five Trading Days immediately preceding the date of
        determination.

                (3)     Rank. Any class or series of stock of the Corporation
shall be deemed to rank:

                (a)     prior to the 5% Preferred Stock, either as to the
payment of dividends or as to distribution of assets upon liquidation,
dissolution or winding up, or both, if the holders of such class or series shall
be entitled by the terms thereof to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up, in preference or
priority to the holders of 5% Preferred Stock ("Senior Securities");

                (b)     on a parity with the 5% Preferred Stock, either as to
the payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and

                (c)     junior to the 5% Preferred Stock, either as to the
payment of dividends or as to the distribution of assets upon liquidation,
dissolution or winding up, or both, if such stock or series shall be Common
Stock or if the holders of the 5% Preferred Stock shall be entitled to receipt
of dividends, and of amounts distributable


                                        7
<PAGE>   371

upon liquidation, dissolution or winding up, in preference or priority to the
holders of shares of such stock or series ("Junior Securities").

                (d)     Each of the 13% Senior Redeemable Exchangeable Preferred
Stock and the 13% Series B Senior Redeemable Exchangeable Preferred Stock
(collectively, the "13% Preferred") is a Senior Security. Each of the Series A
Junior Participating Preferred Stock of the Corporation is a Junior Security.
The 5% Cumulative Participating Convertible Preferred Stock, Series A, the 5%
Cumulative Participating Convertible Preferred Stock, Series C, the 5%
Cumulative Participating Convertible Preferred Stock, Series D, the 5%
Cumulative Preferred Stock, Series A, the 5% Cumulative Participating
Convertible Preferred Stock, Series E, the 5% Cumulative Participating
Convertible Preferred Stock, Series B, the 5% Cumulative Participating
Convertible Preferred Stock, Series F, and one or more classes of Additional
Preferred shall be Parity Securities; provided, however, that there shall be no
issue of other Senior Securities, Parity Securities or rights or options
exercisable for or convertible into any such securities, except as approved by
the holders of the 5% Preferred Stock pursuant to paragraph 9(e).

                (e)     The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.

                (4)     Dividends. (a) Subject to paragraph (8)(b)(ii), the
holders of shares of 5% Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for such Dividend Payment Date) or additional
shares of Preferred Stock of a class to be designated by the Board of Directors
having terms substantially identical to the 5% Preferred Stock except as
follows: (A) the Conversion Rate (as set forth in Section 8(a)) on such
Preferred Stock initially shall be the quotient resulting from the division of
the Conversion Rate (as then in effect on the 5% Preferred Stock) by the
Relevant Compounding Factor and (B) the number of shares of such Preferred Stock
payable as a dividend on any Dividend Payment Date shall increase for each
Dividend Payment Date from the first Dividend Payment Date by the Relevant
Compounding Factor (such classes of Preferred Stock singularly and


                                        8
<PAGE>   372

collectively, the "Additional Preferred"). All dividends on the 5% Preferred
Stock, in whatever form, shall be payable in arrears quarterly on each Dividend
Payment Date and shall be cumulative from the Issue Date (except that dividends
on Additional Preferred shall accrue from the date such Additional Preferred is
issued or would have been issued in accordance with this Certificate of
Designation if such dividends had been declared), whether or not in any Dividend
Period or Dividend Periods there shall be funds of the Corporation legally
available for the payment of such dividends. Each such dividend shall be payable
to the holders of record of shares of the 5% Preferred Stock, as they appear on
the stock records of the Corporation at the close of business on the record date
for such dividend. Upon the declaration of any such dividend, the Board of
Directors shall fix as such record date the fifth Business Day preceding the
relevant Dividend Payment Date and shall give notice on or prior to the record
date of the form of payment of such dividend. Accrued and unpaid dividends for
any past Dividend Payment Date may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record on such record
date, not more than 45 days nor less than five Business Days preceding the
payment date thereof, as may be fixed by the Board of Directors.

                (b)     In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock shall be entitled to
receive an amount equal to the amount (and in the form of consideration) that
such holders would be entitled to receive if, pursuant to paragraph (8), they
had converted such 5% Preferred Stock fully into Common Stock immediately before
the record date for the payment of any such dividends on Common Stock. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock as they appear on the stock records of the Corporation at the close of
business on the record date for such dividend on Common Stock, and the
Corporation shall pay each such dividend on the applicable payment date for such
dividend on the Common Stock.

                (c)     For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each share of Additional
Preferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).

                (d)     The dividends payable for any period shorter than a full
Dividend Period on the 5% Preferred Stock shall accrue daily and be computed on
the basis of a 360-day year and the actual number of days in such period. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any


                                        9
<PAGE>   373

dividend payment or payments on the 5% Preferred Stock that may be in arrears
except as otherwise provided herein.

                (e)     So long as any shares of the 5% Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities 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 such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock for all
Dividend Periods terminating on or prior to the date of such redemption,
repurchase or other acquisition shall have been paid or set apart for payment,
(ii) sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in Common Stock or Additional Preferred or are
not paid in full in cash or a sum sufficient for such payment is not set apart,
as aforesaid, all dividends declared upon shares of the 5% Preferred Stock and
all dividends declared upon Parity Securities shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid on the
5% Preferred Stock and accumulated and unpaid on such Parity Securities.

                (f)     So long as any shares of the 5% Preferred Stock are
outstanding, no dividends (other than (i) any rights issued pursuant to a
shareholder rights plan as provided in paragraph (11) and (ii) dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Junior Securities) shall be declared or paid or set apart
for payment or other distribution declared or made upon Junior Securities, nor
shall any Junior Securities be re deemed, purchased or otherwise acquired (other
than a redemption, purchase, or other acquisition of shares of Common Stock made
for purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") 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, directly or
indirectly (except by conversion into or exchange for Junior Securities), unless
in each case (A) full cumulative dividends on all outstand-


                                       10
<PAGE>   374

ing shares of the 5% Preferred Stock and all other Parity Securities shall have
been paid or set apart for payment for all past Dividend Periods and dividend
periods for such Parity Securities, (B) sufficient funds shall have been paid or
set apart for the payment of the dividend for the current Dividend Period with
respect to the 5% Preferred Stock and all other Parity Securities, (C) the
Corporation is not in default with respect to any redemption of shares of 5%
Preferred Stock by the Corporation pursuant to paragraph (6) below and (D) the
Corporation has fully performed its obligations under paragraphs (4)(b) and (6)
hereof.

                (5)     Liquidation Preference. (a) In the event of any
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, before any payment or distribution of the assets of the Corporation
(whether capital or surplus) shall be made to or set apart for the holders of
Junior Securities, the holders of the shares of 5% Preferred Stock shall be
entitled to receive the Liquidation Right. If, upon any liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of 5% Preferred Stock
shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any Parity Securities, then such assets, or the proceeds
thereof, shall be distributed among the holders of shares of 5% Preferred Stock
and any such other Parity Securities ratably in accordance with the respective
amounts that would be payable on such shares of 5% Preferred Stock and any such
other stock if all amounts payable thereon were paid in full. For the purposes
of this paragraph (5), (i) a consolidation or merger of the Corporation with one
or more corporations, or (ii) a sale or transfer of all or substantially all of
the Corporation's assets, shall not be deemed to be a liquidation, dissolution
or winding up, voluntary or involuntary, of the Corporation.

                (b)     Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or classes
of Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the 5% Preferred Stock shall not be
entitled to share therein.

                (6)     Redemption. (a) On and after the first Business Day
follow ing the earlier to occur of (i) May 30, 2007 or (ii) the date on which
both (A) the 25-Day Average Market Price of the Common Stock shall have exceeded
$96.00 and (B) May 30, 2004, to the extent the Corporation shall have funds
legally available for


                                       11
<PAGE>   375

such payment, the Corporation may redeem at its option shares of 5% Preferred
Stock, from time to time in part, or in whole, payable at the option of the
Corporation in (A) cash, at a redemption price of $1,000.00 per share, (B) in
shares of Common Stock, at a redemption price of $1,000.00 per share, or (C) in
a combination of cash and Common Stock, at a redemption price based on the
respective combination of consideration, together in each case with accrued and
unpaid dividends thereon, whether or not declared, to, but excluding, the date
fixed for redemption, without interest. For purposes of determining the number
of shares of Common Stock to be issued pursuant to this paragraph (6)(a), the
price per share of Common Stock shall be the 25-Day Average Market Price.

                (b)     On and after the first Business Day following May 30,
2010, each holder of shares of 5% Preferred Stock shall have the right to
require the Corporation, to the extent the Corporation shall have funds legally
available therefor, to redeem such holder's shares of 5% Preferred Stock, from
time to time in part, or in whole, at a redemption price of $1,000.00 per share,
payable at the option of the Corporation in cash, shares of Common Stock or a
combination thereof, together with accrued and unpaid dividends thereon to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(b), the price per share of Common Stock shall equal the 25-Day
Average Market Price. Any holder of shares of 5% Preferred Stock who elects to
exercise its rights pursuant to this paragraph (6)(b) shall deliver to the
Corporation a written notice of election not less than 20 days prior to the date
on which such holder demands redemption pursuant to this paragraph 6(b), which
written notice shall set forth the name of the Holder, the number of shares of
5% Preferred Stock to be redeemed and a statement that the election to exercise
a redemption right is being made thereby; and, subject to paragraph (10)(d),
shall deliver to the Corporation on or before the date of redemption
certificates evidencing the shares of 5% Preferred Stock to be redeemed, duly
endorsed for transfer to the Corporation.

                (c)     If the Corporation shall not have redeemed all
outstanding shares of 5% Preferred Stock pursuant to paragraphs (6)(a) or
(6)(b), on May 30, 2020 (the "Mandatory Redemption Date"), to the extent the
Corporation shall have funds legally available for such payment, the Corporation
shall redeem all outstand ing shares of 5% Preferred Stock, at a redemption
price of $1,000.00 per share, payable at the option of the Corporation in cash,
shares of Common Stock or a combination thereof, together with accrued and
unpaid dividends thereon to, but excluding, the Mandatory Redemption Date,
without interest. For purposes of determining the number of shares of Common
Stock to be issued pursuant to this


                                       12
<PAGE>   376

paragraph (6)(c), the price per share of Common Stock shall be the 25-Day
Average Market Price.

                (d)     If the Corporation is unable or shall fail to discharge
its obligation to redeem all outstanding shares of 5% Preferred Stock pursuant
to paragraphs 6(b) or 6(c) (each, a "Mandatory Redemption Obligation"), the
Mandatory Redemption Obligation shall be discharged as soon as the Corporation
is able to discharge such Mandatory Redemption Obligation. If and so long as any
Mandatory Redemption Obligation with respect to the 5% Preferred Stock shall not
be fully discharged, the Corporation shall not (i) directly or indirectly,
redeem, purchase, or otherwise acquire any Parity Security or discharge any
mandatory or optional redemption, sinking fund or other similar obligation in
respect of any Parity Securities (except in connection with a redemption,
sinking fund or other similar obligation to be satisfied pro rata with the 5%
Preferred Stock) or (ii) declare or make any Junior Securities Distribution
(other than dividends or distributions paid in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Junior Securities), or,
directly or indirectly, discharge any mandatory or optional redemption, sinking
fund or other similar obligation in respect of the Junior Securities.

                (e)     Upon any redemption of 5% Preferred Stock, the
Corporation shall pay the redemption price and any accrued and unpaid dividends
in arrears to, but excluding, the applicable redemption date.

                (f)     For purposes of paragraph (6)(a) only, unless full
cumulative dividends (whether or not declared) on all outstanding shares of 5%
Preferred Stock and any Parity Securities shall have been paid or
contemporaneously are declared and paid or set apart for payment for all
Dividend Periods terminating on or prior to the applicable redemption date and
notice has been given in accordance with paragraph (7), none of the shares of 5%
Preferred Stock shall be redeemed, and no sum shall be set aside for such
redemption, unless shares of 5% Preferred Stock are redeemed pro rata and notice
has previously been given in accordance with paragraph (7).

                (7)     Procedure for Redemption. (a) If the Corporation shall
redeem shares of 5% Preferred Stock pursuant to paragraph 6(a), notice of such
redemption shall be given by certified mail, return receipt requested, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
applicable 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 and confirmed


                                       13
<PAGE>   377

by facsimile transmission to each holder of record if the Corporation has been
furnished with such facsimile address by the holder(s); provided, however, that
neither the failure to give such notice nor confirmation nor any defect therein
or in the mailing thereof, to any particular holder, shall affect the
sufficiency of the notice or the validity of the proceedings for redemption with
respect to the other holders. Any notice that was mailed in the manner herein
provided shall be conclusively presumed to have been duly given on the date
mailed whether or not the holder receives the notice. Each such notice shall
state: (i) the redemption date; (ii) the number of shares of 5% Preferred Stock
to be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of shares to be redeemed from such holder; (iii) the amount
payable, whether such amount shall be paid in Common Stock or in cash and if the
payment is in Common Stock an explanation of the determination of the amount to
be paid; (iv) the place or places where certificates for such shares are to be
surrendered or the notice under paragraph (10)(d) should be sent for payment of
the redemption price; and (v) that dividends on the shares to be redeemed will
cease to accrue on such redemption date, except as otherwise provided herein.

                (b)     If notice has been mailed as aforesaid, from and after
the redemption date (unless default shall be made by the Corporation in
providing for the payment of the redemption price of the shares called for
redemption and dividends accrued and unpaid thereon, if any), (i) except as
otherwise provided herein, dividends on the shares of 5% Preferred Stock so
called for redemption shall cease to accrue, (ii) said shares shall no longer be
deemed to be outstanding and (iii) all rights of the holders thereof as holders
of the 5% Preferred Stock shall cease (except the right to receive from the
Corporation the redemption price without interest thereon, upon surrender and
endorsement (or a constructive surrender under paragraph (10)(d)) of their
certificates if so required, and to receive any dividends payable thereon).

                (c)     Upon surrender (including a constructive surrender under
paragraph (10)(d)) in accordance with notice given pursuant to this paragraph
(7) of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid, plus any dividends payable
thereon. If fewer than all the outstanding shares of 5% Preferred Stock are to
be redeemed, the number of shares to be re deemed shall be determined by the
Board of Directors and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded to the nearest


                                       14
<PAGE>   378

whole share). In case fewer than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued, subject to a
holder's election under paragraph (10)(d), representing the surrendered shares
without cost to the holder thereof.

                (8)     Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock shall
have the right, at any time and from time to time, at such holder's option, to
convert any or all outstanding shares of 5% Preferred Stock held by such holder,
but not fractions of shares, into fully paid and non-assessable shares of Common
Stock by surrendering such shares to be converted, such surrender to be made in
the manner provided in paragraph (8)(b) hereof. The number of shares of Common
Stock deliverable upon conversion of each share of 5% Preferred Stock shall be
equal to 12.446418, as adjusted as provided herein (the "Conversion Rate"). The
Conversion Rate is subject to adjustment from time to time pursuant to paragraph
(8)(d) hereof. The right to convert shares called for redemption pursuant to
paragraph 6(a) shall terminate at the close of business on the date immediately
preceding the date fixed for such redemption unless the Corporation shall
default in making payment of the amount payable upon such redemption, in which
case such right of conversion shall be reinstated. Upon conversion, any accrued
and unpaid dividends on the 5% Preferred Stock at the date of conversion shall
be paid to the holder thereof in accordance with the provisions of paragraph
(4).

                (b)     (i) In order to exercise the conversion privilege, the
holder of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (10)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended; provided, however, that the
Corporation shall use its best efforts in cooperating with such holder to obtain
such legal or regulatory approvals to the extent its cooperation is necessary.
Such notice shall also state the name or names (with address and social security
or other taxpayer identification number, if applicable) in which the
certificate or certificates for Common Stock are to be issued. Unless the shares
issuable on conversion are to be issued in the same name as the name in which
such share of 5%


                                       15
<PAGE>   379

Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the Corporation,
duly executed by the holder or the holder's duly authorized attorney and an
amount sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Corporation demonstrating that such taxes have been paid).
All certificates representing shares of 5% Preferred Stock surrendered for
conversion shall be canceled by the Corporation or the transfer agent.

                (ii)    Subject to the last sentence of paragraph (8)(a),
holders of shares of 5% Preferred Stock at the close of business on a dividend
payment record date shall not be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date if such holder shall have
surrendered (or made a constructive surrender under paragraph (10)(d)) for
conversion such shares at any time following the preceding Dividend Payment Date
and prior to such Dividend Payment Date.

                (iii)   Subject to a holder's election under paragraph (10)(d),
as promptly as practicable after the surrender (including a constructive
surrender under paragraph (10)(d)) by a holder of the certificates for shares of
5% Preferred Stock as aforesaid, the Corporation shall issue and shall deliver
to such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (8), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (8)(c). Upon conversion of
only a portion of the shares of 5% Preferred Stock represented by any
certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (10)(d), upon the surrender
(including a constructive surrender under paragraph (10)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be outstanding and all rights of a holder with respect to
such shares so surrendered shall immediately terminate except the right to
receive the Common Stock and other amounts payable pursuant to this paragraph
(8).

                (iv)    Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered


                                       16
<PAGE>   380

pursuant to an election under paragraph (10)(d)) and such notice received by the
Corporation as aforesaid, and the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares of Common Stock represented thereby at such time on such date and
such conversion shall be into a number of shares of Common Stock equal to the
product of the number of shares of 5% Preferred Stock surrendered times the
Conversion Rate in effect at such time on such date, unless the stock transfer
books of the Corporation shall be closed on that date, in which event such
Person or Persons shall be deemed to have become such holder or holders of
record at the close of business on the next succeeding day on which such stock
transfer books are open, but such conversion shall be based upon the Conversion
Rate in effect on the date upon which such shares shall have been surrendered
and such notice received by the Corporation.

                (c)     (i) No fractional shares or scrip representing fractions
of shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion (or deemed surrendered under paragraph (10)(d)) at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of 5% Preferred Stock surrendered (or deemed surrendered under paragraph
(10)(d)) for conversion by such holder.

                (ii)    Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered under paragraph (10)(d)) and such notice received by the Corporation
as aforesaid, and the Person or Persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of the
shares of Common Stock represented thereby at such time on such date and such
conversion shall be into a number of shares of Common Stock equal to the product
of the number of shares of 5% Preferred Stock surrendered times the Conversion
Rate in effect at such time on such date, unless the stock transfer books of the
Corporation shall be closed on that date, in which event such Person or Persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which


                                       17
<PAGE>   381

such stock transfer books are open, but such conversion shall be based upon the
Conversion Rate in effect on the date upon which such shares shall have been
surrendered (or deemed surrendered under paragraph (10)(d)) and such notice
received by the Corporation.

                (d)     The Conversion Rate shall be adjusted from time to time
as follows:

                (i)     If the Corporation shall after the Issue Date (A)
declare a dividend or make a distribution on its Common Stock in shares of its
Common Stock, (B) subdivide its outstanding Common Stock into a greater number
of shares, (C) combine its outstanding Common Stock into a smaller number of
shares or (D) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification.
An adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (8)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case of a
subdivision, combination or reclassification. Adjustments in accordance with
this paragraph (8)(d)(i) shall be made whenever any event listed above shall
occur.

        (ii)    If the Corporation shall after the Issue Date fix a record date
for the issuance of rights or warrants (in each case, other than any rights
issued pursuant to a shareholder rights plan) to all holders of Common Stock
entitling them (for a period expiring within 45 days after such record date) to
subscribe for or purchase Common Stock (or securities convertible into Common
Stock) at a price per share (or, in the case of a right or warrant to purchase
securities convertible into Common Stock, having an effective exercise price per
share of Common Stock, computed on the basis of the maximum number of shares of
Common Stock issuable upon conversion of such convertible securities, plus the
amount of additional consideration payable, if any, to receive one share of
Common Stock upon conversion of such securities) less


                                       18
<PAGE>   382

than the 25-Day Average Market Price on the date on which such issuance was
declared or otherwise announced by the Corporation (the "Determination Date"),
then the Conversion Rate in effect at the opening of business on the Business
Day next following such record date shall be adjusted so that the holder of each
share of 5% Preferred Stock shall be entitled to receive, upon the conversion
thereof, the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to such record date by (II) a
fraction, the numerator of which shall be the sum of (A) the number of shares of
Common Stock outstanding on the close of business on the Determination Date and
(B) the number of additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants (or in the case of a right or
warrant to purchase securities convertible into Common Stock, the aggregate
number of additional shares of Common Stock into which the convertible
securities so offered are initially convertible), and the denominator of which
shall be the sum of (A) the number of shares of Common Stock outstanding on the
close of business on the Determination Date and (B) the number of shares that
the aggregate proceeds to the Corporation from the exercise of such rights or
warrants for Common Stock would purchase at such 25-Day Average Market Price on
such date (or, in the case of a right of warrant to purchase securities
convertible into Common Stock, the number of shares of Common Stock obtained by
dividing the aggregate exercise price of such rights or warrants for the maximum
number of shares of Common Stock issuable upon conversion of such convertible
securities, plus the aggregate amount of additional consideration payable, if
any, to convert such securities into Common Stock, by such 25-Day Average Market
Price). Such adjustment shall become effective immediately after the opening of
business on the Business Day next following such record date (except as provided
in paragraph (8)(h)). Such adjustment shall be made successively whenever such a
record date is fixed. In the event that after fixing a record date such rights
or warrants are not so issued, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect if such record date had not been
fixed. In determining whether any rights or warrants entitle the holders of
Common Stock to subscribe for or purchase shares of Common Stock at less than
such 25-Day Average Market Price, there shall be taken into account any
consideration received by the Corporation upon issuance and upon exercise of
such rights or warrants, the value of such consideration, if other than cash, to
be determined by the Board of Directors in good faith. In case any rights or
warrants referred to in this subparagraph (ii) shall expire unexercised after
the same have been distributed or issued by the Corporation (or, in the case of
rights or warrants to purchase securities convertible into Common Stock once
exercised, the conversion right of such securities shall expire), the Conversion
Rate shall be readjusted at the time of such expiration to the Conversion Rate
that would have


                                       19
<PAGE>   383

been in effect if no adjustment had been made on account of the distribution or
issuance of such expired rights or warrants.

        (iii)   If the Corporation shall fix a record date for the making of a
distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (8)(d)(i)) or rights or warrants (in each case, other than
any rights issued pursuant to a shareholder rights plan) to subscribe for or
purchase any of its securities (excluding those rights and warrants issued to
all holders of Common Stock entitling them (for a period expiring within 45 days
after such record date) to subscribe for or purchase Common Stock or securities
convertible into shares of Common Stock, which rights and warrants are referred
to in and treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) called the "Securities"), then in each
such case the Conversion Rate shall be adjusted so that the holder of each share
of 5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to the close of business on such
record date by (II) a fraction, the numerator of which shall be the 25-Day
Average Market Price per share of the Common Stock on such record date, and the
denominator of which shall be the 25- Day Average Market Price per share of the
Common Stock on such record date less the then-fair market value (as determined
by the Board of Directors in good faith, whose determinations shall be
conclusive) of the portion of the assets, shares of its capital stock or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that after
fixing a record date such distribution is not so made, the Conversion Rate shall
be readjusted to the Conversion Rate which would then be in effect if such
record date had not been fixed. Such adjustment shall become effective
immediately at the opening of business on the Business Day next following
(except as provided in paragraph (8)(h)) the record date for the determination
of shareholders entitled to receive such distribution. For the purposes of this
subparagraph (iii), the distribution of a Security, which is distributed not
only to the holders of the Common Stock on the date fixed for the determination
of shareholders entitled to such distribution of such Security, but also is
distributed with each share of Common Stock delivered to a Person converting a
share of 5% Preferred Stock after such determination date, shall not require an
adjustment of the Conversion Rate pursuant to this subparagraph (iii); provided,
however, that on the date, if any, on which a Person converting a share of 5%


                                       20
<PAGE>   384

Preferred Stock would no longer be entitled to receive such Security with a
share of Common Stock (other than as a result of the termination of all such
Securities), a distribution of such Securities shall be deemed to have occurred
and the Conversion Rate shall be adjusted as provided in this subparagraph (iii)
(and such day shall be deemed to be "the date fixed for the determination of
shareholders entitled to receive such distribution" and "the record date" within
the meaning of the three preceding sentences). If any rights or warrants
referred to in this subparagraph (iii) shall expire unexercised after the same
shall have been distributed or issued by the Corporation, the Conversion Rate
shall be readjusted at the time of such expiration to the Conversion Rate that
would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.

        (iv)    In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
8(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date (as defined
below) for the cash dividend or distribution by a fraction the numerator of
which shall be the Current Market Price of a share of the Common Stock on the
Record Date and the denominator shall be such Current Market Price less the per
share amount of cash so distributed during the 12-month period applicable to one
share of Common Stock, such adjustment to be effective immediately prior to the
opening of business on the Business Day following the Record Date; provided,
however, that in the event the denominator of the foregoing fraction is zero or
negative, in lieu of the foregoing adjustment, adequate provision shall be made
so that each holder of 5% Preferred Stock shall have the right to receive upon
conversion, in addition to the shares of Common Stock to which the holder is
entitled, the amount of cash such holder would have received had such holder
converted each share of 5% Preferred Stock at the beginning of the 12-month
period. In the event that such dividend or distribution is not so paid or made,
the Conversion Rate shall again be adjusted to be the Conversion Rate which
would then be in effect if such dividend or distribution


                                       21
<PAGE>   385

had not been declared. Notwithstanding the foregoing, if any adjustment is
required to be made as set forth in this paragraph (8)(d)(iv), the calculation
of any such adjustment shall include the amount of the quarterly cash dividends
paid during the 12-month reference period only to the extent such dividends
exceed the regular quarterly cash dividends paid during the 12 months preceding
the 12-month reference period. For purposes of this paragraph (8)(d)(iv),
"Record Date" shall mean, with respect to any dividend or distribution in which
the holders of Common Stock have the right to receive cash, the date fixed for
determination of shareholders entitled to receive such cash.

        In the event that at any time cash distributions to holders of Common
Stock are not paid equally on all series of Common Stock, the provisions of this
paragraph 8(d)(iv) will apply to any cash dividend or cash distribution on any
series of Common Stock otherwise meeting the requirements of this paragraph, and
shall be deemed amended to the extent necessary so that any adjustment required
will be made on the basis of the cash dividend or cash distribution made on any
such series.

        (v)     In case of the consummation of a tender or exchange offer (other
than an odd-lot tender offer) made by the Corporation or any subsidiary of the
Corporation for all or any portion of the outstanding shares of Common Stock to
the extent that the cash and fair market value (as determined in good faith by
the Board of Directors of the Corporation, whose determination shall be
conclusive and shall be described in a resolution of such Board) of any other
consideration included in such payment per share of Common Stock at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as amended) exceed by more than 5.0%, with any smaller
excess being disregarded in computing the adjustment to the Conversion Rate
provided in this paragraph (8)(d)(v), the first reported sale price per share of
the Common Stock on the Trading Day next succeed ing the Expiration Time, then
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
Expiration Time by a fraction the numerator of which shall be the sum of (x) the
fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or ex
changed and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchase Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchase Shares) on the Expiration Time and the first reported sale price of
the Common Stock on the Trading Day next succeeding the Expiration Time, and the


                                       22
<PAGE>   386

denominator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time multiplied
by the first reported sale price of the Common Stock on the Trading Day next
succeed ing the Expiration Time, such adjustment to become effective immediately
prior to the opening of business on the day following the Expiration Time.

        (vi)    No adjustment in the Conversion Rate shall be required unless
such adjustment would require a cumulative increase or decrease of at least 1%
in the Conversion Rate; provided, however, that any adjustments that by reason
of this subparagraph (vi) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment until made, and provided
further that any adjustment shall be required and made in accordance with the
provisions of this paragraph (8) (other than this subparagraph (vi)) not later
than such time as may be required in order to preserve the tax-free nature of a
distribution for United States income tax purposes to the holders of shares of
5% Preferred Stock or Common Stock. Notwithstanding any other provisions of this
paragraph (8), the Corporation shall not be required to make any adjustment of
the Conversion Rate for the issuance of any shares of Common Stock pursuant to
any plan providing for the reinvestment of dividends or interest payable on
securities of the Corporation and the investment of additional optional amounts
in shares of Common Stock under such plan. All calculations under this paragraph
(8) shall be made to the nearest dollar or to the nearest 1/1,000 of a share, as
the case may be. Anything in this paragraph (8)(d) to the contrary
notwithstanding, the Corporation shall be entitled, to the extent permitted by
law, to make such adjustments in the Conversion Rate, in addition to those
required by this paragraph (8)(d), as it in its discretion shall determine to be
advisable in order that any stock dividends, subdivision of shares,
reclassification or combination of shares, distribution or rights or warrants to
purchase stock or securities, or a distribution of other assets (other than cash
dividends) hereafter made by the Corporation to its shareholders shall not be
taxable.

        (vii)   In the event that, at any time as a result of shares of any
other class of capital stock becoming issuable in exchange or substitution for
or in lieu of shares of Common Stock or as a result of an adjustment made
pursuant to the provisions of this paragraph (8)(d), the holder of 5% Preferred
Stock upon subsequent conversion shall become entitled to receive any shares of
capital stock of the Corporation other than Common Stock, the number of such
other shares so receivable upon conversion of any shares of 5% Preferred Stock
shall thereafter be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained herein.


                                       23
<PAGE>   387

                (viii)  The $96.00 required stock price threshold set forth in
paragraph (6)(a)(ii) shall be adjusted from time to time in a manner consistent
with the provisions of this paragraph (8)(d).

                (e) (i) If the Corporation shall be a party to any transaction
(including without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (8)(d)(i) applies)
(each of the foregoing being referred to herein as a "Transaction"), in each
case as a result of which shares of Common Stock shall be converted into the
right to receive stock, securities or other property (including cash or any
combination thereof), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that number
of shares or fraction thereof of Common Stock into which one share of 5%
Preferred Stock was convertible immediately prior to such Transaction, assuming
such holder of Common Stock (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be (a
"Constituent Person"), or an affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of stock,
securities and other property (including cash) receivable upon such Transaction
(provided that if the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction is not the same for each share
of Common Stock held immediately prior to such Transaction by other than a
Constituent Person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purpose of this paragraph (8)(e) the kind and amount of stock, securities and
other property (including cash) receivable upon such Transaction by each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares). The provisions of this
paragraph (8)(e) shall similarly apply to successive Transactions.

                (ii)    Notwithstanding anything herein to the contrary, if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation, by notice to and consultation with the


                                       24
<PAGE>   388

holders of the 5% Preferred Stock, may cause the exchange of this 5% Preferred
Stock for preferred stock of Holdco having the same terms and conditions as set
forth herein; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 5% Preferred Stock
(including for these purposes any resultant change in the tax treatment for the
holders of such stock).

                (f)     If:

                (i)     the Corporation shall declare a dividend (or any other
        distribution) on the Common Stock; or

                (ii)    the Corporation shall authorize the granting to the
        holders of the Common Stock of rights or warrants to subscribe for or
        purchase any shares of any class or any other rights or warrants; or

                (iii)   there shall be any subdivision, combination or
        reclassification of the Common Stock or any consolidation or merger to
        which the Corporation is a party and for which approval of any
        shareholders of the Corporation is required, or the sale or transfer of
        all or substantially all of the assets of the Corporation as an
        entirety; or

                (iv)    there shall occur the voluntary or involuntary
        liquidation, dissolution or winding up of the Corporation;

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applicable date hereinafter specified, a notice stating (A)
the date on which a record is to be taken for the purpose of such dividend (or
such other distribution) or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or warrants are to be determined or (B)
the date on which such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up or
other action is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable


                                       25
<PAGE>   389

                           CERTIFICATE OF DESIGNATION
                       OF THE VOTING POWERS, DESIGNATION,
                    PREFERENCES AND RELATIVE, PARTICIPATING,
              OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
                       LIMITATIONS AND RESTRICTIONS OF THE
                     5% CUMULATIVE PARTICIPATING CONVERTIBLE
                          PREFERRED STOCK, SERIES B OF
                                NTL INCORPORATED

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

                        PURSUANT TO SECTION 151(g) OF THE
                GENERAL CORPORATION LAW OF THE STATE OF DELAWARE

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

              The undersigned, Executive Vice President, General Counsel and
Secretary of NTL Incorporated, a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that the Board of Directors, in accordance with Article FOURTH,
Section B of the Corporation's Restated Certificate of Incorporation and Section
151(g) of the Delaware General Corporation Law (the "DGCL"), has authorized the
creation of the series of Preferred Stock hereinafter provided for and has
established the dividend, redemption, conversion and voting rights thereof and
has adopted the following resolution, creating the following new series of the
Corporation's Preferred Stock:

              "BE IT RESOLVED that, pursuant to authority expressly granted to
the Board of Directors by the provisions of Article FOURTH, Section B of the
Restated Certificate of Incorporation of the Corporation and Section 151(g) of
the DGCL, there is hereby created and authorized the issuance of a new series of
the Corporation's Preferred Stock, par value $.01 per share ("Preferred Stock"),
with the following powers, designations, dividend rights, voting powers, rights
on liquidation, conversion rights, redemption rights and other preferences and
relative, participating, optional or other special rights and with the
qualifications, limitations or restrictions on the shares of such series (in
addition to the powers, designations, preferences and relative, participating,
optional or other special rights and the qualifications, limitations or
restrictions thereof set forth in the Restated Certificate of Incorporation that
are applicable to each series of Preferred Stock) hereinafter set forth.

              (1)   Number and Designation. 2,000,000 shares of the Preferred
Stock of the Corporation shall be designated as 5% Cumulative Participating
Convertible Preferred Stock, Series B (the "5% Preferred Stock, Series B"), and
no other shares of Preferred Stock shall be designated as 5% Preferred Stock,
Series B.

              (2)   Definitions. For purposes of the 5% Preferred Stock, Series
B, the following terms shall have the meanings indicated:




<PAGE>   390



              "Action" means any claim, action, suit, arbitration, inquiry,
       proceeding or investigation by or before any Governmental Authority.

              "Additional Preferred" shall have the meaning set forth in
       paragraph (4)(a) hereof.

              "Affiliate" means, with respect to any specified Person, any other
       Person that directly, or indirectly through one or more intermediaries,
       controls, is controlled by, or is under common control with such
       specified Person.

              "All But One Outstanding Share" shall have the meaning set forth
       in paragraph (6)(c) hereof.

              "Alliance" means any joint venture, co-ownership or cooperation
       agreement or similar relationship with any telecommunications provider.

              "Authorized Officer" includes any of the following officers of
       France Telecom S.A.: the Chief Executive Officer, the Chief Financial
       Officer, the General Counsel, the Executive Director - Finance and Human
       Resources, or the Treasurer.

              "Bankruptcy Event" shall mean either of the following: (I) a court
       having jurisdiction in the premises entering a decree or order for (A)
       relief in respect of any Major Entity in an involuntary case under any
       applicable bankruptcy, insolvency or other similar law now or hereinafter
       in effect, (B) appointment of a receiver, liquidator, assignee,
       custodian, trustee, sequestrator or similar official of any Major Entity
       or for all or substantially all of the property and assets of any Major
       Entity or (C) the winding up or liquidation of the affairs of any Major
       Entity; or (II) any Major Entity (A) commencing a voluntary case under
       any applicable bankruptcy, insolvency or other similar law now or
       hereinafter in effect, or consenting to the entry of an order for relief
       in an involuntary case under any such law, (B) consenting to the
       appointment of or taking possession by a receiver, liquidator, assignee,
       custodian, trustee, sequestrator or similar official of any Major Entity,
       or for all or substantially all of the property and assets of any Major
       Entity or (C) effecting any general assignment for the benefit of
       creditors.

              "Benefit Plan" means each of the Company's and Significant
       Subsidiaries' plan, program, policy, payroll practice, contract,
       agreement or other arrangement providing for compensation, retirement
       benefits, severance, termination pay, performance awards, stock or
       stock-related awards, fringe benefits or other employee benefits of any
       kind, whether formal or informal, funded or unfunded, written or oral and
       whether or not legally binding, including, without limitation, each
       "employee benefit plan", within the meaning of Section 3(3) of ERISA, and
       each "multi-employer plan", within the meaning of Section 3(37) of
       4001(a)(3) of ERISA.



                                        2

<PAGE>   391



              "Board of Directors" shall mean the board of directors of the
       Corporation. Except as such term is used in paragraph (9), "Board of
       Directors" shall also mean the Executive Committee, if any, of such board
       of directors or any other committee duly authorized by such board of
       directors to perform any of its responsibilities with respect to the 5%
       Preferred Stock, Series B.

              "Business Day" shall mean any day other than a Saturday, Sunday or
       a day on which state or federally chartered banking institutions in New
       York, New York or Paris, France are not required to be open.

              "By-laws" means the by-laws of the Corporation as amended as of
       the date hereof and as may be amended from time to time, provided that
       such amendment does not adversely affect the rights of the holders of the
       5% Preferred Stock, Series B.

              "Common Stock" shall mean the Corporation's Common Stock, par
       value $.01 per share.

              "Conflicting Investment" means any investment of funds or assets
       of the Corporation or any Corporation Subsidiary directly or indirectly
       in any French Operator or in any joint venture entity which is partly
       owned by any French Operator (the joint venture entity being known as the
       "Entity"), in connection with operations in France of such French
       Operator or Entity other than any purchase (either in a stock or asset
       purchase transaction) for cash by the Corporation and/or any Corporation
       Subsidiary of not less than 51% (based on the fair market value and
       voting power) of any company or business from any French Operator or the
       investment of funds or assets in any Entity in which the Corporation
       and/or any Corporation Subsidiary will, following such investment, own at
       least 51% (based on fair market value and voting power) of such Entity.

               "Constituent Person" shall have the meaning set forth in
        paragraph (8)(e)(i) hereof.

              "Conversion Rate" shall have the meaning set forth in paragraph
       (8)(a) hereof.

              "Convertible Debentures" means the 7% Convertible Subordinated
       Notes due 2008 of the Corporation and NTL Communications Corp., a
       Delaware corporation, and the 5 3/4% Convertible Subordinated Notes due
       2009 of the Corporation and NTL (Delaware), Inc., a Delaware corporation.

              "Core Business Assets" means assets that are used in a business
       that operates directly or indirectly, or holds a license to operate (i) a
       cable system or service, (ii) a fixed-line telephone or
       telecommunications system or service or (iii) a broadcasting transmission
       system or service.


                                        3

<PAGE>   392



              "Corporation" shall have the meaning set forth in the preamble.

              "Corporation Subsidiary" or "Corporation Subsidiaries" means any
       Subsidiary or all of the Subsidiaries of the Corporation, respectively.

              "Corporation Systems" means all computers, hardware, software,
       systems, facilities and equipment (including, without limitation, cable,
       wireline, wireless, microwave, satellite and any other telecommunications
       equipment and facilities, and embedded microcontrollers in noncomputer
       equipment) owned, leased or licensed by the Corporation or any
       Significant Subsidiary and material to, or necessary for, the Corporation
       or any Significant Subsidiary to carry on its business as currently
       conducted or intended to be conducted.

              "Current Market Price" of publicly traded shares of Common Stock
       or any other class of capital stock or other security of the Corporation
       or any other issuer for any day shall mean the last reported sale price
       for such security on the principal exchange or quotation system on which
       such security is listed or traded. If the security is not admitted for
       trading on any national securities exchange or the Nasdaq National
       Market, "Current Market Price" shall mean the average of the last
       reported closing bid and asked prices reported by the Nasdaq as furnished
       by any member in good standing of the National Association of Securities
       Dealers, Inc., selected from time to time by the Corporation for that
       purpose or as quoted by the National Quotation Bureau Incorporated. In
       the event that no such quotation is available for such day, the Current
       Market Price shall be the average of the quotations for the last five
       Trading Days for which a quotation is available within the last 30
       Trading Days prior to such day. In the event that five such quotations
       are not available within such 30-Trading Day period, the Board of
       Directors shall be entitled to determine the Current Market Price on the
       basis of such quotations as it reasonably considers appropriate.

              "Determination Date" shall have the meaning set forth in paragraph
       (8)(d)(ii) hereof.

              "DGCL" shall have the meaning set forth in the preamble.

              "Diluted Shares" means, as of any applicable time, shares of
       Common Stock issued and outstanding as of such time plus shares of Common
       Stock issuable upon conversion, redemption, exchange, exercise of, or as
       a dividend declared as of the time of measurement with respect to, any
       shares of preferred stock, options, warrants, debentures and other
       securities or any subscription rights.

              "Dividend Payment Date" shall mean September 30, December 31,
       March 31 and June 30 of each year, commencing on June 30, 2000; provided,
       however, that, if any Dividend Payment Date falls on any day other than a
       Business Day, the dividend


                                        4

<PAGE>   393



       payment due on such Dividend Payment Date shall be paid on the Business
       Day immediately following such Dividend Payment Date.

              "Dividend Periods" shall mean quarterly dividend periods
       commencing on and including September 30, December 31, March 31 and June
       30 of each year and ending on and including the day preceding the first
       day of the next succeeding Dividend Period (other than the initial
       Dividend Period which shall commence on the Issue Date and end on and
       include June 29, 2000).

              "Encumbrance" means any security interest, pledge, mortgage, lien
       (including, without limitation, environmental and tax liens), charge,
       encumbrance, adverse claim, preferential arrangement or restriction of
       any kind, including, without limitation, any restriction on the use,
       voting, transfer, receipt of income or other exercise of any attributes
       of ownership, but excluding Permitted Encumbrances.

              "Equity Securities" shall have the meaning set forth in paragraph
       (10).

              "ERISA" means Employee Retirement Income Security Act of 1974, as
       amended.

              "Exchange Act" shall mean the Securities Exchange Act of 1934, as
       amended, and the rules and regulations thereunder.

              "Expiration Time" shall have the meaning set forth in paragraph
       (8)(d)(v) hereof.

              "5% Cumulative Preferred, Series A" shall have the meaning set
       forth in paragraph (3)(d) hereof.

              "5% Preferred Stock, Series A" shall have the meaning set forth in
       paragraph (3)(d) hereof.

              "5% Preferred Stock, Series B" shall have the meaning set forth in
       paragraph (1) hereof.

              "5% Series A" shall have the meaning set forth in paragraph (3)(d)
       hereof.

              "French Operator" means any significant provider of
       telecommunications services in France (or that provider's Affiliates) or
       any Person whose primary line of business in France is to provide
       telecommunications services (or such Person's Affiliates) other than the
       Corporation or its Affiliates.

              "GAAP" means United States generally accepted accounting
       principles and practices as in effect from time to time and applied
       consistently throughout the periods involved.


                                        5

<PAGE>   394



              "Governmental Authority" means any United States or foreign
       federal, state, provincial, local, supranational government,
       governmental, regulatory or administrative authority, agency or
       commission or any court, tribunal, or judicial or arbitral body.

              "Governmental Order" means any order, writ, judgment, injunction,
       decree, stipulation, determination or award entered by or with any
       Governmental Authority.

              "Holdco" shall have the meaning set forth in paragraph 8(e)(ii)
       hereof.

              "Indebtedness" means (a) indebtedness for borrowed money, (b)
       obligations evidenced by bonds, notes, debentures or other similar
       instruments or by letters of credit, including purchase money obligations
       or other obligations relating to the deferred purchase price of property
       (other than trade payables incurred in the ordinary course of business),
       (c) obligations as lessee under leases which have been or should have
       been, in accordance with GAAP, recorded as capital leases, (d)
       obligations under direct or indirect guaranties in respect of Liabilities
       of others, including indebtedness of others secured by an Encumbrance on
       any asset of such Person, whether or not such indebtedness is assumed by
       such Person, (e) obligations in respect of outstanding or unpaid checks
       or drafts or overdraft obligations and (f) accrued interest, if any, on
       and all other amounts owed in respect of any of the foregoing.

              "Investment Agreement" means the agreement, dated July 26, 1999,
       between France Telecom S.A. and NTL (Delaware), Inc., a Delaware
       corporation (f/k/a NTL Incorporated), as amended by the letter agreement,
       dated as of August 6, 1999, between NTL (Delaware), Inc. and France
       Telecom S.A., as further amended by the second letter agreement, dated
       October 8, 1999, between NTL (Delaware), Inc. and France Telecom S.A.,
       and as further amended by the third letter agreement, dated February 8,
       2000 between NTL (Delaware), Inc. and France Telecom S.A., to which an
       agreed form of this Certificate of Designation has been attached as
       Attachment I.

              "Issue Date" shall mean the date on which shares of 5% Preferred
       Stock, Series B are first issued.

              "Junior Securities" shall have the meaning set forth in paragraph
       (3)(c) hereof.

              "Junior Securities Distributions" shall have the meaning set forth
       in paragraph (4)(f) hereof.

              "Law" means any supranational, United States or foreign federal,
       national, state, regional or local statute, law, ordinance, regulation,
       rule, code, order, other requirement or rule of law.



                                        6

<PAGE>   395



              "Liabilities" means any and all debts, liabilities and
       obligations, whether accrued or fixed, absolute or contingent, matured or
       unmatured or determined or determinable, including, without limitation,
       those arising under any Law, Action or Governmental Order and those
       arising under any contract, agreement, arrangement, commitment or
       undertaking.

              "Liquidation Right" shall mean, for each share of 5% Preferred
       Stock, Series B, the greater of (i) an amount equal to $1,000 per share,
       plus an amount equal to all dividends (whether or not earned or declared)
       accrued and unpaid thereon to the date of final distribution to such
       holders, and (ii) the amount that would be received in liquidation
       following conversion of a share of 5% Preferred Stock, Series B into
       Common Stock.

              "Major Entity" shall mean any of the Corporation, NTL (Delaware),
       Inc., NTL Communications Corp., Diamond Cable Communications Limited,
       Diamond Holdings Limited, NTL (Triangle) LLC or any Significant
       Subsidiary.

              "Mandatory Redemption Date" shall have the meaning set forth in
       paragraph (6)(c) hereof.

              "Mandatory Redemption Obligation" shall have the meaning set forth
       in paragraph (6)(d) hereof.

              "Market Value" shall mean (A) the market value of the
       Corporation's outstanding shares of capital stock plus (B) the market
       value of any debt securities of the Corporation and the Corporation
       Subsidiaries (provided that, in the case of any Corporation Subsidiary
       that is not wholly owned, such amount shall be included only to the
       extent of the Corporation's ownership interest in the Corporation
       Subsidiary) for which quotes are available from brokerage companies of
       national reputation plus (C) with respect to shares of preferred stock
       for which no such quotes are available, the aggregate amount of
       liquidation preference thereof and the aggregate amount of accumulated
       and unpaid dividends with respect thereto plus (D) the principal amount
       and the amount of accrued and unpaid interest with respect to any
       borrowings of the Corporation and the Corporation Subsidiaries (provided
       that, in the case of any Corporation Subsidiary that is not wholly owned,
       such amount shall be included only to the extent of the Corporation's
       ownership interest in the Corporation Subsidiary).

              "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
       securities market regulated by the National Association of Securities
       Dealers, Inc.

              "Nasdaq National Market" shall have the meaning set forth in Rule
       4200(a)(23) of the rules of the National Association of Securities
       Dealers, Inc.



                                        7

<PAGE>   396



              "9.9% Series B Preferred" shall have the meaning set forth in
       paragraph (3)(d) hereof.

              "non-electing share" shall have the meaning set forth in paragraph
       (8)(e)(i) hereof.

              "NYSE" means the New York Stock Exchange.

              "outstanding", when used with reference to shares of stock, shall
       mean issued shares, excluding shares held by the Corporation or a
       subsidiary.

              "Parity Securities" shall have the meaning set forth in paragraph
       (3)(b) hereof.

              "Permitted Encumbrances" means such of the following as to which
       no enforcement, collection, execution, levy or foreclosure proceeding
       shall have been commenced or is reasonably expected to commence: (a)
       liens for taxes, assessments and governmental charges or claims that are
       not yet delinquent or that are being contested in good faith by
       appropriate proceedings promptly instituted and diligently conducted,
       provided that any reserve or other appropriate provision as shall be
       required in conformity with GAAP shall have been made therefor; (b)
       Encumbrances imposed by law, such as materialmen's, mechanics',
       carriers', workmen's and repairmen's liens and other similar liens
       arising in the ordinary course of business; (c) pledges or deposits to
       secure obligations under workers' compensation laws or similar
       legislation or to secure public or statutory obligations or other
       obligations of a like nature incurred in the ordinary course of business;
       (d) minor survey exceptions, reciprocal easement agreements and other
       customary encumbrances on title to real property that (i) were not
       incurred in connection with any indebtedness, (ii) do not render title to
       the property encumbered thereby unmarketable and (iii) do not,
       individually or in the aggregate, materially adversely affect the value
       or use of such property for its current and anticipated purposes; (e)
       Encumbrances permitted under any of the indentures to which the
       Corporation or a Corporation Subsidiary is a party as of the date of the
       Investment Agreement; (f) purchase money security interests in supplier
       equipment; (g) precautionary liens filed by lessors with respect to
       leased equipment; and (h) any single or series of related Encumbrances
       which are not in excess of $2,500,000 and do not materially impair the
       value or use of the property subject thereto or the operation of the
       Corporation's business at the relevant date.

              "Person" shall mean any individual, partnership, association,
       joint venture, corporation, business, trust, joint stock company, limited
       liability company, any unincorporated organization, any other entity, a
       "group" of such persons, as that term is defined in Rule 13d-5(b) under
       the Exchange Act, or a government or political subdivision thereof.

              "Preferred Shares" has the meaning set forth in paragraph (9)(c).


                                        8

<PAGE>   397
              "Preferred Stock" shall have the meaning set forth in the first
       resolution above.

              "Pro Forma Rating" has the meaning set forth in paragraph
       (9)(h)(ix).

              "Purchase Shares" shall have the meaning set forth in paragraph
       (8)(d)(v) hereof.

              "Qualified Holder" shall mean France Telecom, a societe anonyme
       formed under the laws of France, or an Affiliate, so long as such Person
       holds at least one share of the 5% Preferred Stock, Series B.

              "Qualified Holding Condition" shall be satisfied so long as a
       Qualified Holder is the holder of at least 15.0% of the Diluted Shares.

              "Record Date" shall have the meaning set forth in paragraph
       (8)(d)(iv) hereof.

              "Relevant Compounding Factor" shall mean, with respect to each
       share of 5% Preferred Stock, Series B, upon initial issuance 1.00, and
       shall on each Dividend Payment Date be increased to equal the product of
       the Relevant Compounding Factor in effect immediately prior to such
       Dividend Payment Date and 1.0125.

              "Rights" shall have the meaning set forth in paragraph (12)
       hereof.

              "Rights Agreement" shall have the meaning set forth in paragraph
       (12) hereof.

              "Securities" shall have the meaning set forth in paragraph
       (8)(d)(iii) hereof.

              "Senior Securities" shall have the meaning set forth in paragraph
       (3)(a) hereof.

              "Series A Certificate" means the Certificate of Designation in
       respect of the 5% Series A.

              "set apart for payment" shall be deemed to include, without any
       action other than the following, the recording by the Corporation in its
       accounting ledgers of any accounting or bookkeeping entry which
       indicates, pursuant to a declaration of dividends or other distribution
       by the Board of Directors, the allocation of funds to be so paid on any
       series or class of capital stock of the Corporation; provided, however,
       that, if any funds for any class or series of Junior Securities or any
       class or series of Parity Securities are placed in a separate account of
       the Corporation or delivered to a disbursing, paying or other similar
       agent, then "set apart for payment" with respect to the 5% Preferred
       Stock, Series B shall mean placing such funds in a separate account or
       delivering such funds to a disbursing, paying or other similar agent, as
       the case may be.

                                        9
<PAGE>   398
              "Significant Subsidiary" shall have the meaning given to such term
       in Regulation S-X under the Exchange Act.

              "Strategic Acquisition" has the meaning set forth in the
       Investment Agreement.

              "Subsidiaries" of any Person means any corporation, partnership,
       joint venture, limited liability company, trust, estate or other Person
       of which (or in which), directly or indirectly, more than 50% of (a) the
       issued and outstanding capital stock having ordinary voting power to
       elect a majority of the board of directors of such corporation
       (irrespective of whether at the time capital stock of any other class or
       classes of such corporation shall or might have voting power upon the
       occurrence of any contingency), (b) the interest in the capital or
       profits of such partnership, joint venture or limited liability company
       or other Person or (c) the beneficial interest in such trust or estate is
       at the time owned by such first Person, or by such first Person and one
       or more of its other Subsidiaries or by one or more of such Person's
       other Subsidiaries.

              "13% Preferred" shall have the meaning set forth in paragraph
       (3)(d) hereof.

              "Trading Day" shall mean any day on which the securities in
       question are traded on the NYSE or, if such securities are not listed or
       admitted for trading on the NYSE, on the principal national securities
       exchange on which such securities are listed or admitted or, if not
       listed or admitted for trading on any national securities exchange, on
       the Nasdaq National Market or, if such securities are not quoted thereon,
       in the applicable securities market in which the securities are traded.

              "Transaction" shall have the meaning set forth in paragraph
       (8)(e)(i) hereof.

              "Transaction Agreement" shall mean the Restated Transaction
       Agreement, dated as of July 26, 1999, among NTL (Delaware), Inc., Bell
       Atlantic Corporation, Cable & Wireless plc and Cable & Wireless
       Communications plc.

              "Trigger Event" shall have the meaning set forth in paragraph
       (9)(b) hereof.

              "Trigger Event Cure" shall have the meaning set forth in paragraph
       (9)(b) hereof.

              "25-Day Average Market Price" shall mean, for any security, the
       volume-weighted average of the Current Market Prices of that security
       for the twenty-five Trading Days immediately preceding the date of
       determination.

              (3)   Rank. Any class or series of stock of the Corporation shall
be deemed to rank:

                                       10
<PAGE>   399



              (a)   prior to the 5% Preferred Stock, Series B, either as to the
payment of dividends or as to distribution of assets upon liquidation,
dissolution or winding up, or both, if the holders of such class or series shall
be entitled by the terms thereof to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up, in preference or
priority to the holders of 5% Preferred Stock, Series B ("Senior Securities");

              (b)   on a parity with the 5% Preferred Stock, Series B, either as
to the payment of dividends or as to distribution of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, Series B, if the holders of the 5%
Preferred Stock, Series B and of such class of stock or series shall be entitled
by the terms thereof to the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, or both, in proportion to their
respective amounts of accrued and unpaid dividends per share or liquidation
preferences, without preference or priority one over the other and such class of
stock or series is not a class of Senior Securities ("Parity Securities"); and

              (c)   junior to the 5% Preferred Stock, Series B, either as to the
payment of dividends or as to the distribution of assets upon liquidation,
dissolution or winding up, or both, if such stock or series shall be Common
Stock or if the holders of the 5% Preferred Stock, Series B shall be entitled to
receipt of dividends, and of amounts distributable upon liquidation, dissolution
or winding up, in preference or priority to the holders of shares of such stock
or series ("Junior Securities").

              (d)   The 13% Series B Senior Redeemable Exchangeable Preferred
Stock (the "13% Preferred") is a Senior Security. The 9.9% Non-Voting
Mandatorily Redeemable Preferred Stock, Series B ("9.9% Series B Preferred") is
a Junior Security. Each of (i) the 5% Cumulative Participating Convertible
Preferred Stock, Series A (the "5% Series A") and any dividends paid on the 5%
Series A in accordance with its terms, to the extent that such dividends are
paid in preferred stock having terms substantially identical to the 5% Series A
and any dividends paid on preferred stock issued as in-kind dividends thereon,
to the extent such dividends are paid in preferred stock having terms
substantially identical to the 5% Series A (the 5% Series A and all such in-kind
dividends being hereinafter referred to as the "5% Preferred Stock, Series A")
and (ii) the 5% Cumulative Preferred Stock, Series A (the "5% Cumulative
Preferred, Series A") is a Parity Security. One or more classes of Additional
Preferred (as defined below) shall be Parity Securities; provided, however, that
there shall be no issue of other Senior Securities, Parity Securities or rights
or options exercisable for or convertible into any such securities, except as
approved by the holders of the 5% Preferred Stock, Series B pursuant to
paragraph 9(f).

              (e)   The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5%


                                       11

<PAGE>   400



Preferred Stock, Series B shall be subject to the creation of Junior Securities,
Parity Securities and Senior Securities as set forth herein.

              (4)   Dividends. (a) Subject to paragraph (8)(b)(ii), the holders
of shares of 5% Preferred Stock, Series B shall be entitled to receive, when, as
and if declared by the Board of Directors, out of funds legally available for
the payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for such Dividend Payment Date) or additional
shares of Preferred Stock of a class to be designated by the Board of Directors
having terms substantially identical to the 5% Preferred Stock, Series B, except
as follows: (A) the Conversion Rate (as set forth in Section 8(a)) on such
Preferred Stock initially shall be the quotient resulting from the division of
the Conversion Rate (as then in effect on the 5% Preferred Stock, Series B) by
the Relevant Compounding Factor (except that for purposes of additional shares
of Preferred Stock payable as a dividend for the initial Dividend Period, the
Conversion Rate shall be the quotient resulting from the division of the
Conversion Rate (as then in effect) by 1.0041667 and (B) the number of shares of
such Preferred Stock payable as a dividend on any Dividend Payment Date shall
increase for each Dividend Payment Date from the first Dividend Payment Date by
the Relevant Compounding Factor (such classes of Preferred Stock singularly and
collectively, the "Additional Preferred"). All dividends on the 5% Preferred
Stock, Series B, in whatever form, shall be payable in arrears quarterly on each
Dividend Payment Date and shall be cumulative from the Issue Date (except that
dividends on Additional Preferred shall accrue from the date such Additional
Preferred is issued or would have been issued in accordance with this
Certificate of Designation if such dividends had been declared), whether or not
in any Dividend Period or Dividend Periods there shall be funds of the
Corporation legally available for the payment of such dividends. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock, Series B, as they appear on the stock records of the Corporation at the
close of business on the record date for such dividend. Upon the declaration of
any such dividend, the Board of Directors shall fix as such record date on the
fifth Business Day preceding the relevant Dividend Payment Date and shall give
notice on or prior to the record date of the form of payment of such dividend.
Accrued and unpaid dividends for any past Dividend Payment Date may be declared
and paid at any time, without reference to any Dividend Payment Date, to holders
of record on such record date, not more than 45 days nor less than five Business
Days preceding the payment date thereof, as may be fixed by the Board of
Directors.

              (b)   In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock, Series B shall be
entitled to receive an amount equal to the amount (and in the form of
consideration) that such holders would be entitled to receive if, pursuant to
paragraph (8), they had converted such 5% Preferred Stock, Series B fully into
Common Stock immediately before the record date for the payment of any such
dividends on Common Stock. Each such dividend shall be payable to the holders of
record of shares of the 5% Preferred Stock, Series B as they appear on the stock
records of the Corporation at the close


                                       12

<PAGE>   401



of business on the record date for such dividend on Common Stock, and the
Corporation shall pay each such dividend on the applicable payment date for such
dividend on the Common Stock.

              (c)   For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each such Additional
Preferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).

              (d)   The dividends payable for the initial Dividend Period, or
any other period shorter than a full Dividend Period, on the 5% Preferred Stock,
Series B shall accrue daily and be computed on the basis of a 360-day year and
the actual number of days in such period. No interest, or sum of money in lieu
of interest, shall be payable in respect of any dividend payment or payments on
the 5% Preferred Stock, Series B that may be in arrears except as otherwise
provided herein.

              (e)   So long as any shares of the 5% Preferred Stock, Series B
are outstanding, no dividends, except as described in the next succeeding
sentence, shall be declared or paid or set apart for payment on Parity
Securities or Junior Securities, for any period, nor shall any Parity Securities
or Junior Securities 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 such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock, Series
B for all Dividend Periods terminating on or prior to the date of such
redemption, repurchase or other acquisition shall have been paid or set apart
for payment, (ii) sufficient funds shall have been paid or set apart for the
payment of the dividend for the current Dividend Period with respect to the 5%
Preferred Stock, Series B and (iii) the Corporation is not in default with
respect to any redemption of shares of 5% Preferred Stock, Series B by the
Corporation pursuant to paragraph (6) below. When dividends are not fully paid
in Common Stock or Additional Preferred or are not paid in full in cash or a sum
sufficient for such payment is not set apart, as aforesaid, all dividends
declared upon shares of the 5% Preferred Stock, Series B and all dividends
declared upon Parity Securities shall be declared ratably in proportion to the
respective amounts of dividends accumulated and unpaid on the 5% Preferred
Stock, Series B and accumulated and unpaid on such Parity Securities.

              (f)   So long as any shares of the 5% Preferred Stock, Series B
are outstanding, no dividends (other than (i) any rights issued pursuant to the
Rights Agreement and (ii) dividends or distributions paid in shares of, or
options, warrants or rights to subscribe for or purchase shares of, Junior
Securities) shall be declared or paid or set apart for payment or other
distribution declared or made upon Junior Securities, nor shall any Junior
Securities be redeemed, purchased or otherwise acquired (other than a
redemption, purchase, or other acquisition of shares of Common Stock made for
purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or


                                       13

<PAGE>   402



purchases being hereinafter referred to as "Junior Securities Distributions")
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,
directly or indirectly (except by conversion into or exchange for Junior
Securities, including pursuant to paragraph 4(d) of the 9.9% Series B
Preferred), unless, in each case, (A) full cumulative dividends on all
outstanding shares of the 5% Preferred Stock, Series B and all other Parity
Securities shall have been paid or set apart for payment for all past Dividend
Periods and dividend periods for such other stock, (B) sufficient funds shall
have been paid or set apart for the payment of the dividend for the current
Dividend Period with respect to the 5% Preferred Stock, Series B and all other
Parity Securities, (C) the Corporation is not in default with respect to any
redemption of shares of 5% Preferred Stock, Series B by the Corporation pursuant
to paragraph (6) below, and (D) the Corporation has fully performed its
obligations under paragraphs (4)(b) and (6) hereof.

              (5)   Liquidation Preference. (a) In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
before any payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of Junior
Securities, the holders of the shares of 5% Preferred Stock, Series B shall be
entitled to receive the Liquidation Right. If, upon any liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of the shares of 5% Preferred Stock,
Series B shall be insufficient to pay in full the preferential amount aforesaid
and liquidating payments on any Parity Securities, then such assets, or the
proceeds thereof, shall be distributed among the holders of shares of 5%
Preferred Stock, Series B and any such other Parity Securities ratably in
accordance with the respective amounts that would be payable on such shares of
5% Preferred Stock, Series B and any such other stock if all amounts payable
thereon were paid in full. For the purposes of this paragraph (5), (i) a
consolidation or merger of the Corporation with one or more corporations, or
(ii) a sale or transfer of all or substantially all of the Corporation's assets,
shall not be deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary, of the Corporation.

              (b)   Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, Series B, as provided in this paragraph (5), any other series or class or
classes of Junior Securities shall, subject to the respective terms and
provisions (if any) applying thereto, be entitled to receive any and all assets
remaining to be paid or distributed, and the holders of the 5% Preferred Stock,
Series B shall not be entitled to share therein.

              (6)   Redemption. (a) On and after the first Business Day
following the earlier to occur of (i) the seventh anniversary of the Issue Date
and (ii) the date on which both (A) the 25-Day Average Market Price of the
Common Stock shall have exceeded $96.00 and (B) the fourth anniversary of the
Issue Date, to the extent the Corporation shall have funds legally available for
such payment, the Corporation may redeem at its option shares of 5% Preferred
Stock, Series B, from time to time in part, All But One Outstanding Share or, if
the Qualified


                                       14

<PAGE>   403



Holding Condition is not satisfied, in whole, payable at the option of the
Corporation in (A) cash, at a redemption price of $1,000.00 per share, (B) in
shares of Common Stock, at a redemption price of $1,000.00 per share, or (C) in
a combination of cash and Common Stock, at a redemption price based on the
respective combination of consideration, together, in each case, with accrued
and unpaid dividends thereon, whether or not declared, to, but excluding, the
date fixed for redemption, without interest. For purposes of determining the
number of shares of Common Stock to be issued pursuant to this paragraph (6)(a),
the price per share of Common Stock shall be the 25-Day Average Market Price.

              (b)   On and after the first Business Day following the tenth
anniversary of the Issue Date, each holder of shares of 5% Preferred Stock,
Series B shall have the right to require the Corporation, to the extent the
Corporation shall have funds legally available therefor, to redeem such holder's
shares of 5% Preferred Stock, Series B, from time to time in part, All But One
Outstanding Share or, if the Qualified Holding Condition is not satisfied, in
whole, at a redemption price of $1,000.00 per share, payable at the option of
the Corporation in cash, shares of Common Stock or a combination thereof,
together with accrued and unpaid dividends thereon to, but excluding, the date
fixed for redemption, without interest. For purposes of determining the number
of shares of the Common Stock to be issued pursuant to this paragraph (6)(b),
the price per share of Common Stock shall equal the 25-Day Average Market Price.
Any holder of shares of 5% Preferred Stock, Series B who elects to exercise its
rights pursuant to this paragraph (6)(b) shall deliver to the Corporation a
written notice of election not less than 20 days prior to the date on which such
holder demands redemption pursuant to this paragraph 6(b), which notice shall
set forth the name of the Holder, the number of shares of 5% Preferred Stock,
Series B to be redeemed and a statement that the election to exercise a
redemption right is being made thereby, and, subject to paragraph (11)(d), shall
deliver to the Corporation on or before the date of redemption certificates
evidencing the shares of 5% Preferred Stock, Series B to be redeemed, duly
endorsed for transfer to the Corporation.

              (c)   If the Corporation shall not have redeemed all outstanding
shares of 5% Preferred Stock, Series B pursuant to paragraphs (6)(a) or (6)(b),
on the twentieth anniversary of the Issue Date (the "Mandatory Redemption
Date"), to the extent the Corporation shall have funds legally available for
such payment, the Corporation shall redeem All But One Outstanding Share of 5%
Preferred Stock, Series B, or, if the Qualified Holding Condition is not
satisfied, all outstanding shares of 5% Preferred Stock, Series B, at a
redemption price of $1,000.00 per share, payable at the option of the
Corporation in cash, shares of Common Stock or a combination thereof, together
with accrued and unpaid dividends thereon to, but excluding, the Mandatory
Redemption Date, without interest. For purposes of determining the number of
shares of the Common Stock to be issued pursuant to this paragraph (6)(c), the
price per share of Common Stock shall be the 25-Day Average Market Price. For
purposes of the 5% Preferred Stock, Series B, "All But One Outstanding Share"
means all but one share of 5% Preferred Stock, Series B outstanding at the
relevant time. For the avoidance of doubt, so long as the Qualified Holding
Condition is satisfied, at least one share of 5% Preferred Stock, Series B shall
remain outstanding in perpetuity. As soon as (i) the Qualified Holding Condition
is no longer satisfied and (ii) there is only one share of 5% Preferred Stock,
Series B that has not been redeemed pursuant to this


                                       15

<PAGE>   404



paragraph (6) or converted pursuant to paragraph (8), that one outstanding share
of 5% Preferred Stock, Series B shall be redeemed, payable, at the option of the
holder, in cash or in Common Stock.

              (d)   If the Corporation is unable or shall fail to discharge its
obligation to redeem all outstanding shares or All But One Outstanding Share of
5% Preferred Stock, Series B pursuant to paragraphs 6(b) or 6(c) (each, a
"Mandatory Redemption Obligation"), the Mandatory Redemption Obligation shall be
discharged as soon as the Corporation is able to discharge such Mandatory
Redemption Obligation. If and so long as any Mandatory Redemption Obligation
with respect to the 5% Preferred Stock, Series B shall not be fully discharged,
the Corporation shall not (i) directly or indirectly, redeem, purchase, or
otherwise acquire any Parity Security or discharge any mandatory or optional
redemption, sinking fund or other similar obligation in respect of any Parity
Securities (except in connection with a redemption, sinking fund or other
similar obligation to be satisfied pro rata with the 5% Preferred Stock, Series
B) or (ii) declare or make any Junior Securities Distribution (other than
dividends or distributions paid in shares of, or options, warrants or rights to
subscribe for or purchase shares of, Junior Securities), or, directly or
indirectly, discharge any mandatory or optional redemption, sinking fund or
other similar obligation in respect of the Junior Securities.

              (e)   Upon any redemption of 5% Preferred Stock, Series B, the
Corporation shall pay the redemption price and any accrued and unpaid dividends
in arrears to, but excluding, the applicable redemption date.

              (f)   For purposes of paragraph (6)(a) only, unless full
cumulative dividends (whether or not declared) on all outstanding shares of 5%
Preferred Stock, Series B and any Parity Securities shall have been paid or
contemporaneously are declared and paid or set apart for payment for all
Dividend Periods terminating on or prior to the applicable redemption date and
notice has been given in accordance with paragraph (7), none of the shares of 5%
Preferred Stock, Series B shall be redeemed, and no sum shall be set aside for
such redemption, unless shares of 5% Preferred Stock, Series B are redeemed pro
rata and notice has previously been given in accordance with paragraph (7).

              (7)   Procedure for Redemption. (a) If the Corporation shall
redeem shares of 5% Preferred Stock, Series B pursuant to paragraph 6(a), notice
of such redemption shall be given by certified mail, return receipt requested,
postage prepaid, mailed not less than 30 days nor 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
and confirmed by facsimile transmission to each holder of record if the
Corporation has been furnished with such facsimile address by the holder(s);
provided, however, that neither the failure to give such notice nor confirmation
nor any defect therein or in the mailing thereof, to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice that was mailed in
the manner herein provided shall be conclusively presumed to have been duly
given on the date mailed whether or


                                       16

<PAGE>   405



not the holder receives the notice. Each such notice shall state: (i) the
redemption date; (ii) the number of shares of 5% Preferred Stock, Series B to be
redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of shares to be redeemed from such holder; (iii) the amount
payable, whether such amount shall be paid in Common Stock or in cash, and, if
the payment is in Common Stock, an explanation of the determination of the
amount to be paid; (iv) the place or places where certificates for such shares
are to be surrendered or where the notice under paragraph (11)(d) should be sent
for payment of the redemption price; and (v) that dividends on the shares to be
redeemed will cease to accrue on such redemption date, except as otherwise
provided herein.

              (b)   If notice has been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
for the payment of the redemption price of the shares called for redemption and
dividends accrued and unpaid thereon, if any), (i) except as otherwise provided
herein, dividends on the shares of 5% Preferred Stock, Series B so called for
redemption shall cease to accrue, (ii) said shares shall no longer be deemed to
be outstanding, and (iii) all rights of the holders thereof as holders of the 5%
Preferred Stock, Series B shall cease (except the right to receive from the
Corporation the redemption price without interest thereon, upon surrender and
endorsement (or a constructive surrender under paragraph (11)(d)) of their
certificates if so required, and to receive any dividends payable thereon).

              (c)   Upon surrender (including a constructive surrender under
paragraph (11)(d)) in accordance with notice given pursuant to this paragraph
(7) of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid, plus any dividends payable
thereon. If fewer than all the outstanding shares of 5% Preferred Stock, Series
B are to be redeemed, the number of shares to be redeemed shall be determined by
the Board of Directors and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded to the nearest whole share). In case
fewer than all the shares represented by any such certificate are redeemed, a
new certificate shall be issued, subject to a holder's election under paragraph
(11)(d), representing the surrendered shares without cost to the holder thereof.

              (8)   Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock,
Series B shall have the right, at any time and from time to time, at such
holder's option, to convert any or All But One Outstanding Share or, if the
Qualified Holding Condition is not satisfied, all outstanding shares, of 5%
Preferred Stock, Series B held by such holder, but not fractions of shares, into
fully paid and non-assessable shares of Common Stock by surrendering such shares
to be converted, such surrender to be made in the manner provided in paragraph
(8)(b) hereof. The number of shares of Common Stock deliverable upon conversion
of each share of 5% Preferred Stock, Series B shall be equal to 12.50 (as
adjusted as provided herein, the "Conversion Rate"). The Conversion Rate is
subject to adjustment from time to time pursuant to paragraph (8)(d) hereof. The
right to


                                       17

<PAGE>   406



convert shares called for redemption pursuant to paragraph 6(a) shall terminate
at the close of business on the date immediately preceding the date fixed for
such redemption unless the Corporation shall default in making payment of the
amount payable upon such redemption, in which case such right of conversion
shall be reinstated. Upon conversion, any accrued and unpaid dividends on the 5%
Preferred Stock, Series B at the date of conversion shall be paid to the holder
thereof in accordance with the provisions of paragraph (4), except that, upon
conversion of All But One Outstanding Share or, if the Qualified Holding
Condition is not satisfied, all outstanding shares, of 5% Preferred Stock,
Series B held by such holder, all such accrued and unpaid dividends at the date
of conversion shall be paid in Common Stock at the applicable Conversion Rate.

              (b)   (i) In order to exercise the conversion privilege, the
holder of each share of 5% Preferred Stock, Series B to be converted shall
surrender (or constructively surrender in accordance with paragraph (11)(d)) the
certificate representing such share, duly endorsed or assigned to the
Corporation or in blank, at the office of the Corporation, or to any transfer
agent of the Corporation previously designated by the Corporation to the holders
of the 5% Preferred Stock, Series B for such purposes, with a written notice of
election to convert completed and signed, specifying the number of shares to be
converted. Such notice shall state that the holder has satisfied any legal or
regulatory requirement for conversion, including compliance with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976; provided, however, that
the Corporation shall use its best efforts in cooperating with such holder to
obtain such legal or regulatory approvals to the extent its cooperation is
necessary. Such notice shall also state the name or names (with address and
social security or other taxpayer identification number, if applicable) in which
the certificate or certificates for Common Stock are to be issued. Unless the
shares issuable on conversion are to be issued in the same name as the name in
which such share of 5% Preferred Stock, Series B is registered, each share
surrendered for conversion shall be accompanied by instruments of transfer, in
form satisfactory to the Corporation, duly executed by the holder or the
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates representing
shares of 5% Preferred Stock, Series B surrendered for conversion shall be
canceled by the Corporation or the transfer agent.

              (ii)  Subject to the last sentence of paragraph (8)(a), holders of
shares of 5% Preferred Stock, Series B at the close of business on a dividend
payment record date shall not be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date if such holder shall have
surrendered (or made a constructive surrender under paragraph (11)(d)) for
conversion such shares at any time following the preceding Dividend Payment Date
and prior to such Dividend Payment Date.

              (iii) Subject to a holder's election under paragraph (11)(d), as
promptly as practicable after the surrender (including a constructive surrender
under paragraph (11)(d)) by a holder of the certificates for shares of 5%
Preferred Stock, Series B as aforesaid, the Corporation shall issue and shall
deliver to such holder, or on the holder's written order, a certificate or


                                       18

<PAGE>   407



certificates (which certificate or certificates shall have the legend set forth
in paragraph (11)(c)) for the whole number of duly authorized, validly issued,
fully paid and non-assessable shares of Common Stock issuable upon the
conversion of such shares in accordance with the provisions of this paragraph
(8), and any fractional interest in respect of a share of Common Stock arising
on such conversion shall be settled as provided in paragraph (8)(c). Upon
conversion of only a portion of the shares of 5% Preferred Stock, Series B
represented by any certificate, a new certificate shall be issued representing
the unconverted portion of the certificate so surrendered without cost to the
holder thereof. Subject to a holder's election under paragraph (11)(d), upon the
surrender (including a constructive surrender under paragraph (11)(d)) of
certificates representing shares of 5% Preferred Stock, Series B to be
converted, such shares shall no longer be deemed to be outstanding and all
rights of a holder with respect to such shares so surrendered shall immediately
terminate except the right to receive the Common Stock and other amounts payable
pursuant to this paragraph (8).

              (iv)  Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock, Series B shall have been surrendered (or
deemed surrendered pursuant to an election under paragraph (11)(d)) and such
notice received by the Corporation as aforesaid, and the person or persons in
whose name or names any certificate or certificates for shares of Common Stock
shall be issuable upon such conversion shall be deemed to have become the holder
or holders of record of the shares of Common Stock represented thereby at such
time on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock, Series
B surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered and such notice received by the Corporation.

              (c)   (i) No fractional shares or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock, Series B. Instead of any fractional interest in a share of Common Stock
that would otherwise be deliverable upon the conversion of a share of 5%
Preferred Stock, Series B, the Corporation shall pay to the holder of such share
an amount in cash based upon the Current Market Price of Common Stock on the
Trading Day immediately preceding the date of conversion. If more than one share
shall be surrendered for conversion (or deemed surrendered under paragraph
(10)(d)) at one time by the same holder, the number of full shares of Common
Stock issuable upon conversion thereof shall be computed on the basis of the
aggregate number of shares of 5% Preferred Stock, Series B surrendered (or
deemed surrendered under paragraph (10)(d)) for conversion by such holder.

              (ii)  Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock, Series B shall have been surrendered (or
deemed surrendered under paragraph (10)(d)) and such notice received by the
Corporation as aforesaid, and the Person or Persons in whose name or


                                       19

<PAGE>   408



names any certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby at such time
on such date and such conversion shall be into a number of shares of Common
Stock equal to the product of the number of shares of 5% Preferred Stock, Series
B surrendered times the Conversion Rate in effect at such time on such date,
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such Person or Persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be based
upon the Conversion Rate in effect on the date upon which such shares shall have
been surrendered (or deemed surrendered under paragraph (10)(d)) and such notice
received by the Corporation.

              (d)   The Conversion Rate shall be adjusted from time to time as
       follows:

              (i)   If the Corporation shall after the Issue Date (A) declare a
       dividend or make a distribution on its Common Stock in shares of its
       Common Stock, (B) subdivide its outstanding Common Stock into a greater
       number of shares, (C) combine its outstanding Common Stock into a smaller
       number of shares, or (D) effect any reclassification of its outstanding
       Common Stock, the Conversion Rate in effect on the record date for such
       dividend or distribution, or the effective date of such subdivision,
       combination or reclassification, as the case may be, shall be
       proportionately adjusted so that the holder of any share of 5% Preferred
       Stock, Series B thereafter surrendered for conversion shall be entitled
       to receive the number and kind of shares of Common Stock that such holder
       would have owned or have been entitled to receive after the happening of
       any of the events described above had such share been converted
       immediately prior to the record date in the case of a dividend or
       distribution or the effective date in the case of a subdivision,
       combination or reclassification. An adjustment made pursuant to this
       subparagraph (i) shall become effective immediately after the opening of
       business on the Business Day next following the record date (except as
       provided in paragraph (8)(h)) in the case of a dividend or distribution
       and shall become effective immediately after the opening of business on
       the Business Day next following the effective date in the case of a
       subdivision, combination or reclassification. Adjustments in accordance
       with this paragraph (8)(d)(i) shall be made whenever any event listed
       above shall occur.

              (ii)  If the Corporation shall after the Issue Date fix a record
       date for the issuance of rights or warrants (in each case, other than any
       rights issued pursuant to a shareholder rights plan) to all holders of
       Common Stock entitling them (for a period expiring within 45 days after
       such record date) to subscribe for or purchase Common Stock (or
       securities convertible into Common Stock) at a price per share (or, in
       the case of a right or warrant to purchase securities convertible into
       Common Stock, having an effective exercise price per share of Common
       Stock, computed on the basis of the maximum number of shares of Common
       Stock issuable upon conversion of such convertible securities, plus the
       amount of additional consideration payable, if any, to


                                       20

<PAGE>   409



       receive one share of Common Stock upon conversion of such securities)
       less than the 25-Day Average Market Price on the date on which such
       issuance was declared or otherwise announced by the Corporation (the
       "Determination Date"), then the Conversion Rate in effect at the opening
       of business on the Business Day next following such record date shall be
       adjusted so that the holder of each share of 5% Preferred Stock, Series B
       shall be entitled to receive, upon the conversion thereof, the number of
       shares of Common Stock determined by multiplying (I) the Conversion Rate
       in effect immediately prior to such record date by (II) a fraction, the
       numerator of which shall be the sum of (A) the number of shares of Common
       Stock outstanding on the close of business on the Determination Date and
       (B) the number of additional shares of Common Stock offered for
       subscription or purchase pursuant to such rights or warrants (or in the
       case of a right or warrant to purchase securities convertible into Common
       Stock, the aggregate number of additional shares of Common Stock into
       which the convertible securities so offered are initially convertible),
       and the denominator of which shall be the sum of (A) the number of shares
       of Common Stock outstanding on the close of business on the Determination
       Date and (B) the number of shares that the aggregate proceeds to the
       Corporation from the exercise of such rights or warrants for Common Stock
       would purchase at such 25-Day Average Market Price on such date (or, in
       the case of a right of warrant to purchase securities convertible into
       Common Stock, the number of shares of Common Stock obtained by dividing
       the aggregate exercise price of such rights or warrants for the maximum
       number of shares of Common Stock issuable upon conversion of such
       convertible securities, plus the aggregate amount of additional
       consideration payable, if any, to convert such securities into Common
       Stock, by such 25-Day Average Market Price). Such adjustment shall become
       effective immediately after the opening of business on the Business Day
       next following such record date (except as provided in paragraph (8)(h)).
       Such adjustment shall be made successively whenever such a record date is
       fixed. In the event that after fixing a record date such rights or
       warrants are not so issued, the Conversion Rate shall be readjusted to
       the Conversion Rate which would then be in effect if such record date had
       not been fixed. In determining whether any rights or warrants entitle the
       holders of Common Stock to subscribe for or purchase shares of Common
       Stock at less than such 25-Day Average Market Price, there shall be taken
       into account any consideration received by the Corporation upon issuance
       and upon exercise of such rights or warrants, the value of such
       consideration, if other than cash, to be determined by the Board of
       Directors in good faith. In case any rights or warrants referred to in
       this subparagraph (ii) shall expire unexercised after the same have been
       distributed or issued by the Corporation (or, in the case of rights or
       warrants to purchase securities convertible into Common Stock once
       exercised, the conversion right of such securities shall expire), the
       Conversion Rate shall be readjusted at the time of such expiration to the
       Conversion Rate that would have been in effect if no adjustment had been
       made on account of the distribution or issuance of such expired rights or
       warrants.

              (iii) If the Corporation shall fix a record date for the making
       of a distribution to all holders of its Common Stock of evidences of its
       indebtedness, shares of its capital


                                       21

<PAGE>   410



       stock or assets (excluding regular cash dividends or distributions
       declared in the ordinary course by the Board of Directors and dividends
       payable in Common Stock for which an adjustment is made pursuant to
       paragraph (8)(d)(i)) or rights or warrants (in each case, other than any
       rights issued pursuant to a shareholder rights plan) to subscribe for or
       purchase any of its securities (excluding those rights and warrants
       issued to all holders of Common Stock entitling them (for a period
       expiring within 45 days after such record date) to subscribe for or
       purchase Common Stock or securities convertible into shares of Common
       Stock, which rights and warrants are referred to in and treated under
       subparagraph (ii) above) (any of the foregoing being hereinafter in this
       subparagraph (iii) called the "Securities"), then in each such case the
       Conversion Rate shall be adjusted so that the holder of each share of 5%
       Preferred Stock, Series B shall be entitled to receive, upon the
       conversion thereof, the number of shares of Common Stock determined by
       multiplying (I) the Conversion Rate in effect immediately prior to the
       close of business on such record date by (II) a fraction, the numerator
       of which shall be the 25-Day Average Market Price per share of the Common
       Stock on such record date, and the denominator of which shall be the
       25-Day Average Market Price per share of the Common Stock on such record
       date less the then-fair market value (as determined by the Board of
       Directors in good faith, whose determinations shall be conclusive) of the
       portion of the assets, shares of its capital stock or evidences of
       indebtedness so distributed or of such rights or warrants applicable to
       one share of Common Stock. Such adjustment shall be made successively
       whenever such a record date is fixed; and in the event that after fixing
       a record date such distribution is not so made, the Conversion Rate shall
       be readjusted to the Conversion Rate which would then be in effect if
       such record date had not been fixed. Such adjustment shall become
       effective immediately at the opening of business on the Business Day next
       following (except as provided in paragraph (8)(h)) the record date for
       the determination of shareholders entitled to receive such distribution.
       For the purposes of this subparagraph (iii), the distribution of a
       Security, which is distributed not only to the holders of the Common
       Stock on the date fixed for the determination of shareholders entitled to
       such distribution of such Security, but also is distributed with each
       share of Common Stock delivered to a Person converting a share of 5%
       Preferred Stock, Series B after such determination date, shall not
       require an adjustment of the Conversion Rate pursuant to this
       subparagraph (iii); provided, however, that on the date, if any, on which
       a Person converting a share of 5% Preferred Stock, Series B would no
       longer be entitled to receive such Security with a share of Common Stock
       (other than as a result of the termination of all such Securities), a
       distribution of such Securities shall be deemed to have occurred and the
       Conversion Rate shall be adjusted as provided in this subparagraph (iii)
       (and such day shall be deemed to be "the date fixed for the determination
       of shareholders entitled to receive such distribution" and "the record
       date" within the meaning of the three preceding sentences). If any rights
       or warrants referred to in this subparagraph (iii) shall expire
       unexercised after the same shall have been distributed or issued by the
       Corporation, the Conversion Rate shall be readjusted at the time of such
       expiration to the Conversion Rate that would have been in effect if no


                                       22

<PAGE>   411



       adjustment had been made on account of the distribution or issuance of
       such expired rights or warrants.

               (iv) In case the Corporation shall, by dividend or otherwise,
       distribute to all holders of its Common Stock cash in the amount per
       share that, together with the aggregate of the per share amounts of any
       other cash distributions to all holders of its Common Stock made within
       the 12 months preceding the date of payment of such distribution and in
       respect of which no adjustment pursuant to this paragraph (iv) has been
       made exceeds 5.0% of the 25-Day Average Market Price immediately prior to
       the date of declaration of such dividend or distribution (excluding any
       dividend or distribution in connection with the liquidation, dissolution
       or winding up of the Corporation, whether voluntary or involuntary, and
       any cash that is distributed upon a merger, consolidation or other
       transaction for which an adjustment pursuant to paragraph 8(e) is made),
       then, in such case, the Conversion Rate shall be adjusted so that the
       same shall equal the rate determined by multiplying the Conversion Rate
       in effect immediately prior to the close of business on the Record Date
       for the cash dividend or distribution by a fraction the numerator of
       which shall be the Current Market Price of a share of the Common Stock on
       the Record Date and the denominator shall be such Current Market Price
       less the per share amount of cash so distributed during the 12-month
       period applicable to one share of Common Stock, such adjustment to be
       effective immediately prior to the opening of business on the Business
       Day following the Record Date; provided, however, that in the event the
       denominator of the foregoing fraction is zero or negative, in lieu of the
       foregoing adjustment, adequate provision shall be made so that each
       holder of 5% Preferred Stock, Series B shall have the right to receive
       upon conversion, in addition to the shares of Common Stock to which the
       holder is entitled, the amount of cash such holder would have received
       had such holder converted each share of 5% Preferred Stock, Series B at
       the beginning of the 12-month period. In the event that such dividend or
       distribution is not so paid or made, the Conversion Rate shall again be
       adjusted to be the Conversion Rate which would then be in effect if such
       dividend or distribution had not been declared. Notwithstanding the
       foregoing, if any adjustment is required to be made as set forth in this
       paragraph (8)(d)(iv), the calculation of any such adjustment shall
       include the amount of the quarterly cash dividends paid during the 12-
       month reference period only to the extent such dividends exceed the
       regular quarterly cash dividends paid during the 12 months preceding the
       12-month reference period. For purposes of this paragraph (8)(d)(iv),
       "Record Date" shall mean, with respect to any dividend or distribution in
       which the holders of Common Stock have the right to receive cash, the
       date fixed for determination of shareholders entitled to receive such
       cash.

              In the event that at any time cash distributions to holders of
       Common Stock are not paid equally on all series of Common Stock, the
       provisions of this paragraph 8(d)(iv) will apply to any cash dividend or
       cash distribution on any series of Common Stock otherwise meeting the
       requirements of this paragraph, and shall be deemed amended to


                                       23

<PAGE>   412



       the extent necessary so that any adjustment required will be made on the
       basis of the cash dividend or cash distribution made on any such series.

              (v)   In case of the consummation of a tender or exchange offer
       (other than an odd-lot tender offer) made by the Corporation or any
       subsidiary of the Corporation for all or any portion of the outstanding
       shares of Common Stock to the extent that the cash and fair market value
       (as determined in good faith by the Board of Directors of the
       Corporation, whose determination shall be conclusive and shall be
       described in a resolution of such Board) of any other consideration
       included in such payment per share of Common Stock at the last time (the
       "Expiration Time") tenders or exchanges may be made pursuant to such
       tender or exchange offer (as amended) exceed by more than 5.0%, with any
       smaller excess being disregarded in computing the adjustment to the
       Conversion Rate provided in this paragraph (8)(d)(v), the first reported
       sale price per share of the Common Stock on the Trading Day next
       succeeding the Expiration Time, then the Conversion Rate shall be
       adjusted so that the same shall equal the rate determined by multiplying
       the Conversion Rate in effect immediately prior to the Expiration Time by
       a fraction the numerator of which shall be the sum of (x) the fair market
       value (determined as aforesaid) of the aggregate consideration payable to
       shareholders based on the acceptance (up to any maximum specified in the
       terms of the tender or exchange offer) of all shares validly tendered or
       exchanged and not withdrawn as of the Expiration Time (the shares deemed
       so accepted, up to any such maximum, being referred to as the "Purchase
       Shares") and (y) the product of the number of shares of Common Stock
       outstanding (less any Purchase Shares) on the Expiration Time and the
       first reported sale price of the Common Stock on the Trading Day next
       succeeding the Expiration Time, and the denominator of which shall be the
       number of shares of Common Stock outstanding (including any tendered or
       exchanged shares) on the Expiration Time multiplied by the first reported
       sale price of the Common Stock on the Trading Day next succeeding the
       Expiration Time, such adjustment to become effective immediately prior to
       the opening of business on the day following the Expiration Time.

              (vi)  No adjustment in the Conversion Rate shall be required
       unless such adjustment would require a cumulative increase or decrease of
       at least 1% in the Conversion Rate; provided, however, that any
       adjustments that by reason of this subparagraph (vi) are not required to
       be made shall be carried forward and taken into account in any subsequent
       adjustment until made, and provided further that any adjustment shall be
       required and made in accordance with the provisions of this paragraph (8)
       (other than this subparagraph (vi)) not later than such time as may be
       required in order to preserve the tax-free nature of a distribution for
       United States income tax purposes to the holders of shares of 5%
       Preferred Stock, Series B or Common Stock. Notwithstanding any other
       provisions of this paragraph (8), the Corporation shall not be required
       to make any adjustment of the Conversion Rate for the issuance of any
       shares of Common Stock pursuant to any plan providing for the
       reinvestment of dividends or interest payable on securities of the
       Corporation and the investment of additional optional


                                       24

<PAGE>   413



       amounts in shares of Common Stock under such plan. All calculations under
       this paragraph (8) shall be made to the nearest dollar or to the nearest
       1/1,000 of a share, as the case may be. Anything in this paragraph (8)(d)
       to the contrary notwithstanding, the Corporation shall be entitled, to
       the extent permitted by law, to make such adjustments in the Conversion
       Rate, in addition to those required by this paragraph (8)(d), as it in
       its discretion shall determine to be advisable in order that any stock
       dividends subdivision of shares, reclassification or combination of
       shares, distribution or rights or warrants to purchase stock or
       securities, or a distribution of other assets (other than cash dividends)
       hereafter made by the Corporation to its shareholders shall not be
       taxable.

              (vii) In the event that, at any time as a result of shares of any
       other class of capital stock becoming issuable in exchange or
       substitution for or in lieu of shares of Common Stock or as a result of
       an adjustment made pursuant to the provisions of this paragraph (8)(d),
       the holder of 5% Preferred Stock, Series B upon subsequent conversion
       shall become entitled to receive any shares of capital stock of the
       Corporation other than Common Stock, the number of such other shares so
       receivable upon conversion of any shares of 5% Preferred Stock, Series B
       shall thereafter be subject to adjustment from time to time in a manner
       and on terms as nearly equivalent as practicable to the provisions
       contained herein.

              (e)   (i) If the Corporation shall be a party to any transaction
 (including without limitation, a merger, consolidation, sale of all or
 substantially all of the Corporation's assets or recapitalization of the Common
 Stock and excluding any transaction as to which paragraph (8)(d)(i) applies)
 (each of the foregoing being referred to herein as a "Transaction"), in each
 case as a result of which shares of Common Stock shall be converted into the
 right to receive stock, securities or other property (including cash or any
 combination thereof), there shall be no adjustment to the Conversion Rate but
 each share of 5% Preferred Stock, Series B which is not converted into the
 right to receive stock, securities or other property in connection with such
 Transaction shall thereafter be convertible into the kind and amount of shares
 of stock, securities and other property (including cash or any combination
 thereof) receivable upon the consummation of such Transaction by a holder of
 that number of shares or fraction thereof of Common Stock into which one share
 of 5% Preferred Stock, Series B was convertible immediately prior to such
 Transaction, assuming such holder of Common Stock (i) is not a Person with
 which the Corporation consolidated or into which the Corporation merged or
 which merged into the Corporation or to which such sale or transfer was made,
 as the case may be ("Constituent Person"), or an affiliate of a Constituent
 Person and (ii) failed to exercise his rights of election, if any, as to the
 kind or amount of stock securities and other property (including cash)
 receivable upon such Transaction (provided, that, if the kind or amount of
 stock, securities and other property (including cash) receivable upon such
 Transaction is not the same for each share of Common Stock of the Corporation
 held immediately prior to such Transaction by other than a Constituent Person
 or an affiliate thereof and in respect of which such rights of election shall
 not have been exercised ("non-electing share"), then for the purpose of this
 paragraph (8)(e) the kind and amount of stock, securities and other property
 (including


                                       25

<PAGE>   414



 cash) receivable upon such Transaction by each non-electing share shall be
 deemed to be the kind and amount so receivable per share by a plurality of the
 non-electing shares). The provisions of this paragraph (8)(e)(i) shall
 similarly apply to successive Transactions.

              (ii)  Notwithstanding anything herein to the contrary, if the
 Corporation is reorganized such that the Common Stock is exchanged for the
 common stock of a new entity ("Holdco") whose common stock is traded on the
 Nasdaq National Market or another recognized securities exchange or automated
 quotation system, then the Corporation, by notice to and consultation with the
 holders of the 5% Preferred Stock, Series B, may cause the exchange of this 5%
 Preferred Stock, Series B for preferred stock of Holdco having the same terms
 and conditions as set forth herein; provided that the rights attaching to the
 preferred stock of Holdco shall be adjusted so as to comply with the local law
 of the country of incorporation of Holdco or the new share structure of Holdco
 subject to such rights effectively giving the same economic rights as the 5%
 Preferred Stock, Series B (including for these purposes any resultant change in
 the tax treatment for the holders of such stock).

              (f)   If:

              (i)   the Corporation shall declare a dividend (or any other
distribution) on the Common Stock; or

              (ii)  the Corporation shall authorize the granting to the holders
of the Common Stock of rights or warrants to subscribe for or purchase any
shares of any class or any other rights or warrants; or

              (iii) there shall be any subdivision, combination or
reclassification of the Common Stock or any consolidation or merger to which the
Corporation is a party and for which approval of any shareholders of the
Corporation is required, or the sale or transfer of all or substantially all of
the assets of the Corporation as an entirety; or

              (iv)  there shall occur the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock, Series B at their addresses as
shown on the stock records of the Corporation, as promptly as possible, but at
least ten days prior to the applicable date hereinafter specified, a notice
stating (A) the date on which a record is to be taken for the purpose of such
dividend (or such other distribution) or rights or warrants, or, if a record is
not to be taken, the date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution or rights or warrants are to be
determined or (B) the date on which such subdivision, combination,
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up or other action is expected to become effective, and
the date as of which it is


                                       26

<PAGE>   415



expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable upon such subdivision, combination, reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution or winding up. Failure to give
or receive such notice or any defect therein shall not affect the legality or
validity of any distribution, right, warrant subdivision, combination,
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, winding up or other action, or the vote upon any of the foregoing.

              (g)   Whenever the Conversion Rate is adjusted as herein provided,
the Corporation shall prepare an officer's certificate with respect to such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the effective date of such adjustment and shall mail a copy of such officer's
certificate to the holder of each share of 5% Preferred Stock, Series B at such
holder's last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (8)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be conclusive evidence of the correctness of such adjustment.

              (h)   In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock, Series B converted after such
record date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (ii) paying to such holder any
amount in cash in lieu of any fraction pursuant to paragraph (8)(c).

              (i)   For purposes of this paragraph (8), the number of shares of
Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.

              (j)   There shall be no adjustment of the Conversion Rate in case
of the issuance of any stock of the Corporation in a reorganization, acquisition
or other similar transaction except as specifically set forth in this paragraph
(8). If any single action would require adjustment of the Conversion Rate
pursuant to more than one subparagraph of this paragraph (8), only one
adjustment shall be made and such adjustment shall be the amount of adjustment
that has the highest absolute value.

              (k)   If the Corporation shall take any action affecting the
Common Stock, other than action described in this paragraph (8), that in the
opinion of the Board of Directors materially adversely affects the conversion
rights of the holders of the shares of 5% Preferred


                                       27

<PAGE>   416



Stock, Series B, the Conversion Rate may be adjusted, to the extent permitted by
law, in such manner, if any, and at such time, as the Board of Directors may
determine to be equitable in the circumstances; provided that the provisions of
this paragraph (8)(k) shall not affect any rights the holders of 5% Preferred
Stock, Series B may have at law or in equity.

              (l)   (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, Series B, the full number of shares of
Common Stock deliverable upon the conversion of all outstanding shares of 5%
Preferred Stock, Series B not theretofore converted. For purposes of this
paragraph (8)(l) the number of shares of Common Stock that shall be deliverable
upon the conversion of all outstanding shares of 5% Preferred Stock, Series B
shall be computed as if at the time of computation all such outstanding shares
were held by a single holder.

              (ii)  The Corporation covenants that any shares of Common Stock
issued upon conversion of the 5% Preferred Stock, Series B shall be duly
authorized, validly issued, fully paid and non-assessable. Before taking any
action that would cause an adjustment increasing the Conversion Rate such that
the quotient of $1,000.00 and the Conversion Rate (which quotient initially
shall be $80.00) would be reduced below the then-par value of the shares of
Common Stock deliverable upon conversion of the 5% Preferred Stock, Series B,
the Corporation will take any corporate action that, in the opinion of its
counsel, may be necessary in order that the Corporation may validly and legally
issue fully paid and non-assessable shares of Common Stock based upon such
adjusted Conversion Rate.

              (iii) Prior to the delivery of any securities that the Corporation
shall be obligated to deliver upon conversion of the 5% Preferred Stock, Series
B, the Corporation shall comply with all applicable federal and state laws and
regulations which require action to be taken by the Corporation.

              (m)   The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the 5%
Preferred Stock, Series B pursuant hereto; provided, however, that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of shares of Common Stock or
other securities or property in a name other than that of the holder of the 5%
Preferred Stock, Series B to be converted and no such issue or delivery shall be
made unless and until the Person requesting such issue or delivery has paid to
the Corporation the amount of any such tax or established, to the satisfaction
of the Corporation, that such tax has been paid.

              (n)   No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock, Series B are entitled to participate in
such transaction pursuant to paragraph 4(b).


                                       28

<PAGE>   417



              (9)   Governance. (a) The holders of record of shares of 5%
Preferred Stock, Series B shall not be entitled to any voting rights except as
hereinafter provided in this paragraph (9) or as otherwise provided by law.

              (b)   If and whenever either (i) six quarterly dividends (whether
or not consecutive) payable on the 5% Preferred Stock, Series B have not been
paid in full, (ii) the Corporation shall have failed to discharge its Mandatory
Redemption Obligation, or (iii) there occurs a Bankruptcy Event (any such event
described in the preceding subparagraphs (i) through (iii) being hereinafter
referred to as a "Trigger Event"), a vote of the holders of shares of 5%
Preferred Stock, Series B, voting as a single class, will be required on all
matters brought to shareholders of the Corporation. Whenever all arrears in
dividends on the 5% Preferred Stock, Series B then outstanding shall have been
paid and dividends thereon for the current quarterly dividend period shall have
been paid or declared and set apart for payment, the Corporation shall have
fulfilled its Mandatory Redemption Obligation, and all Bankruptcy Events shall
have been cured (the "Trigger Event Cure"), then the right of the holders of the
5% Preferred Stock, Series B to vote as described in this paragraph 9(b) shall
cease (but subject always to the same provisions for the vesting of such voting
rights if any Trigger Event occurs).

              (c)   In addition to the power to elect directors in accordance
with paragraph (9)(d), upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, Series B, together with the holders
of 5% Preferred Stock, Series A, the 5% Cumulative Preferred, Series A, and
shares of every other series of preferred stock (including, without limitation,
Additional Preferred) upon which like rights to vote for the election of two
additional directors have been conferred and are exercisable (resulting from
either the failure to pay dividends or the failure to redeem) (the 5% Preferred
Stock, Series A and any such other series are collectively referred to as the
"Preferred Shares"), voting as a single class regardless of series, shall be
entitled to elect the two additional directors to serve on the Board of
Directors at any annual meeting of stockholders or special meeting held in place
thereof, or at a special meeting of the holders of 5% Preferred Stock, Series B
and the Preferred Shares, called as hereinafter provided. Whenever all arrears
in dividends on the Preferred Shares then outstanding shall have been paid and
dividends thereon for the current quarterly dividend period shall have been paid
or declared and set apart for payment, the Corporation shall have fulfilled any
redemption obligation in respect of the Preferred Shares, and the Trigger Event
Cure has occurred, then the right of the holders of the 5% Preferred Stock,
Series B and the Preferred Shares to elect such additional two directors shall
cease (but subject always to the same provisions for the vesting of such voting
rights if any Trigger Event occurs), and the terms of office of all persons
elected as directors by the holders of 5% Preferred Stock, Series B and the
Preferred Shares shall forthwith terminate and the number of members of the
Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in holders of shares of 5% Preferred Stock,
Series B and the Preferred Shares, the Secretary of the Corporation may, and
upon the written request of any holder of 5% Preferred Stock, Series B
(addressed to the secretary at the principal office of the Corporation) shall,
call a special


                                       29

<PAGE>   418



meeting of the holders of the 5% Preferred Stock, Series B and of the Preferred
Shares for the election of the two directors to be elected by them as herein
provided, such call to be made by notice similar to that provided in the By-laws
for a special meeting of the stockholders or as required by law. If any such
special meeting required to be called as above provided shall not be called by
the Secretary of the Corporation within 20 days after receipt of any such
request, then any holder of shares of 5% Preferred Stock, Series B may call such
meeting, upon the notice above provided, and for that purpose shall have access
to the stock books of the Corporation. The directors elected at any such special
meeting shall hold office until the next annual meeting of the stockholders or
special meeting held in lieu thereof if such office shall not have previously
terminated as above provided. If any vacancy shall occur among the directors
elected by the holders of the 5% Preferred Stock, Series B and the Preferred
Shares, a successor shall be elected by the Board of Directors, upon the
nomination of the then-remaining director elected by the holders of the 5%
Preferred Stock, Series B and the Preferred Shares or the successor of such
remaining director, to serve until the next annual meeting of the stockholders
or special meeting held in place thereof if such office shall not have
previously terminated as provided above.

              (d)   (i) (A) In addition to any other rights granted in this
paragraph (9) to elect directors or to vote on any matter submitted to
stockholders, all holders of shares of 5% Preferred Stock, Series B, voting
separately as a class, shall have the right to elect directors to serve on the
Board of Directors in accordance with the provisions of this paragraph (9)(d),
so long as the Qualified Holding Condition is satisfied.

              (B)   If there are twelve or fewer members of the Board of
Directors, the Qualified Holder shall be entitled to elect three directors. If
there are fourteen or more members of the Board of Directors, the Qualified
Holder shall be entitled to elect four directors. In either case, any director
that is appointed by a holder of shares of 5% Series A, pursuant to paragraph
(9)(d) of the Series A Certificate, shall be counted toward the three or four
directors, as the case may be, that a Qualified Holder is entitled to appoint
pursuant to this paragraph (9)(d).

              (C)   Immediately upon failure of the Qualified Holding Condition,
this paragraph (9)(d), paragraphs (9)(h), (9)(i) and (9)(j) shall be of no
effect and the rights granted in such paragraphs to the holders of the 5%
Preferred Stock, Series B shall cease to apply.

              (ii)  The Qualified Holder may appoint, remove or replace such
directors by way of a written notice by the Qualified Holder to the Corporation,
at a special meeting called pursuant to subparagraph (iii) of this paragraph
(9)(d) or at any annual meeting of stockholders, provided that such voting
rights may not be exercised at any meeting unless an Authorized Officer of the
Qualified Holder shall be present at such meeting in person or by proxy. The
absence of a quorum of the holders of Common Stock shall not affect the exercise
by the holders of shares of 5% Preferred Stock, Series B of such rights. At any
meeting at which the holders of shares of 5% Preferred Stock, Series B shall
exercise such voting rights initially, they shall have the right, voting
separately as a class, to elect the number of directors provided under


                                       30

<PAGE>   419



paragraph (9)(d)(i)(B) to fill vacancies in the Board of Directors, to the
extent that such number of vacancies then exist, or, if such right is exercised
at an annual meeting, to elect such number of directors. If necessary, the
holders of the shares of 5% Preferred Stock, Series B shall have the right to
make such increase in the number of members of the Board of Directors as shall
be necessary to permit them to so elect such number of directors. If the
Qualified Holder exercises its right to appoint, remove or replace a director by
way of a written notice to the Corporation, any such appointment, removal or
replacement shall be effective immediately upon the sending of such written
notice to the Corporation.

              (iii) Unless the holders of shares of 5% Preferred Stock, Series B
shall have previously exercised their right to elect the number of directors
provided under paragraph (9)(d)(i)(B), the Board of Directors shall order, and
any stockholder or stockholders owning in the aggregate not less than 25% of the
total number of the shares of 5% Preferred Stock, Series B outstanding may
request, the calling of a special meeting of the holders of shares of 5%
Preferred Stock, Series B, which meeting shall thereupon promptly be called by
the Secretary of the Corporation. Notice of such meeting and of any annual
meeting at which holders of shares of 5% Preferred Stock, Series B are entitled
to vote pursuant to this paragraph (9)(d) shall be given to each holder of
record of shares of 5% Preferred Stock, Series B by mailing a copy of such
notice to him at his last address as the same appears on the books of the
Corporation. Such meeting shall be called for a time not earlier than 20 days
and not later than 60 days after such order or request or in default of the
calling of such meeting within 60 days after such order or request, such meeting
may be called on similar notice by any stockholder or stockholders owning in the
aggregate not less than 25% of the total number of outstanding shares of 5%
Preferred Stock, Series B.

              (iv)  The holders of shares of Common Stock and shares of 5%
Preferred Stock, Series B, and other classes or series of stock of the
Corporation, if applicable, shall continue to be entitled to elect all the
directors until holders of the shares of 5% Preferred Stock, Series B shall have
exercised their right to elect the number of directors provided under paragraph
(9)(d)(i)(B), voting as a separate class (or exercised such right pursuant to a
written notice, as set forth under paragraph (9)(d)(ii)), after the exercise of
which right (x) the directors so elected by the holders of shares of 5%
Preferred Stock, Series B shall continue in office until their successors shall
have been elected by such holders (or appointed pursuant to a written notice, as
set forth under paragraph (9)(d)(ii)), and (y) any vacancy in the Board of
Directors may (except as provided in paragraph (9)(d)(ii)) be filled by vote of
a majority of the remaining directors theretofore elected by the holders of the
class of capital stock which elected the directors whose offices shall have
become vacant. References in this paragraph (9)(d)(iv) to directors elected by
the holders of a particular class of capital stock shall include directors
elected by such directors to fill vacancies as provided in clause (y) of the
foregoing sentence.

              (e)   Without the written consent of the holders of at least
662/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock, Series B or the vote of holders of at least 662/3% in liquidation
preference of the outstanding shares of 5% Preferred Stock, Series B


                                       31

<PAGE>   420



at a meeting of the holders of 5% Preferred Stock, Series B called for such
purpose, the Corporation will not amend, alter or repeal any provision of the
Certificate of Incorporation (by merger or otherwise) so as to adversely affect
the preferences, rights or powers of the 5% Preferred Stock, Series B; provided
that any such amendment that changes the dividend payable on, the Conversion
Rate with respect to, or the liquidation preference of, the 5% Preferred Stock,
Series B shall require the affirmative vote at a meeting of holders of 5%
Preferred Stock, Series B called for such purpose or written consent of the
holder of each share of 5% Preferred Stock, Series B.

              (f)   Without the written consent of the holders of at least
662/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock, Series B or the vote of holders of at least 662/3% in liquidation
preference of the outstanding shares of 5% Preferred Stock, Series B at a
meeting of such holders called for such purpose, the Corporation will not issue
any additional 5% Preferred Stock, Series B or create, authorize or issue any
Parity Securities or Senior Securities or increase the authorized amount of any
such other class or series; provided that this paragraph 9(f) shall not limit
the right of the Corporation to (i) issue Additional Preferred as dividends
pursuant to paragraph 4 or (ii) issue Parity Securities or Senior Securities in
order to refinance, redeem or refund the 13% Preferred, 5% Cumulative Preferred,
Series A, or the 5% Preferred Stock, Series A, provided that the maximum value
of such Parity Securities or Senior Securities issued by the Corporation in such
refinancing as shall be reflected on the Corporation's consolidated balance
sheet prepared in accordance with GAAP applied on a basis consistent with the
Corporation's prior practice, shall not exceed in the aggregate the aggregate
value of the 13% Preferred, 5% Cumulative Preferred, Series A, or the 5%
Preferred Stock, Series A, respectively, as reflected on the Corporation's
consolidated balance sheet as contained in the report filed by the Corporation
with the United States Securities and Exchange Commission pursuant to the
Exchange Act that is most recent prior to such refinancing.

              (g)   In exercising the voting rights set forth in this paragraph
(9), each share of 5% Preferred Stock, Series B shall have one vote per share,
except that when any other series of preferred stock shall have the right to
vote with the 5% Preferred Stock, Series B as a single class on any matter, then
the 5% Preferred Stock, Series B and other series shall have with respect to
such matters one vote per $1,000 of stated liquidation preference. Except as
otherwise required by applicable law or as set forth herein, the shares of 5%
Preferred Stock, Series B shall not have any relative, participating, optional
or other special voting rights and powers and the consent of the holders thereof
shall not be required for the taking of any corporate action.

              (h)   So long as the Qualified Holding Condition is met:

              (i)   there shall be no more than sixteen members of the Board of
Directors;



                                       32

<PAGE>   421



              (ii)  at least one director appointed by the Qualified Holder
shall be a member of each committee of the Board of Directors, other than a
committee formed to evaluate transactions with that holder;

              (iii) the directors elected by the Qualified Holder to the Board
of Directors pursuant to paragraph (9)(d) shall be elected as members of the
boards of directors of the Corporation Subsidiaries, if such boards of directors
include substantially all of the other members of the Board of Directors;

              (iv)  the By-laws shall contain provisions (A) requiring notices
to be given to directors in a reasonable and customary form and allowing
directors enough time to take any action that directors may deem necessary with
respect to such notice and (B) allowing participation of directors in any
meeting of the Board of Directors and any committee thereof by means of
telephonic conference;

              (v)   the Corporation shall not offer, issue, sell or transfer any
securities to any Person or amend or waive the Rights Agreement to permit a
transaction by any Person, if as a result of such offer, issuance, sale or
transfer, such Person will beneficially own 15.0% or more of the Diluted Shares;
provided, however, that this paragraph (9)(h)(v) shall not apply to a
transaction or series of related transactions involving a contractual sale or
other acquisition of 100% of the capital stock of the Corporation, so long as
(a) such transaction is definitive or provides for a make-whole premium or
similar significant penalty payable to shareholders of the Corporation other
than the potential acquirer if the potential acquirer does not complete such a
transaction, and (b) the transactions contemplated by such agreement are
approved by the Board of Directors and are (A) submitted for approval by the
holders of Common Stock or (B) subject to the tender offer rules under the
Exchange Act;

              (vi)  if the Corporation offers, issues, sells or transfers any
securities to any Person that would result in such Person owning less than 15.0%
of the Diluted Shares, the Corporation shall comply with the provisions of
paragraph (10) and shall not (A) grant to such Person a right to elect more than
one director to the Board of Directors or (B) agree to standstill or transfer
restrictions more favorable than those granted to the Qualified Holder under the
Investment Agreement and shall not grant any rights to such Person that the
Qualified Holder does not have herein or under the Investment Agreement;

              (vii) the Corporation shall not consummate, without the approval
of a majority of holders of the Common Stock or the unanimous approval by the
Board of Directors or a committee thereof (if such committee includes a director
appointed by the Qualified Holder), any transaction or a series of related
transactions involving (A) an acquisition (either in an asset or stock purchase
transaction) or (B) a sale or transfer (either in an asset or stock purchase
transaction) (other than a spin-off (to the Corporation's stockholders) of the
Corporation's and the Corporation Subsidiaries' broadcast assets or assets
located outside of the United Kingdom, it being understood that the Purchaser
shall have the corporate governance and other rights with


                                       33

<PAGE>   422



respect to such spun-off entity, as provided pursuant to the Investment
Agreement) of Core Business Assets, if the fair market value of the Core
Business Assets to be so acquired, sold or transferred exceeds, in the
aggregate, 10% of the Market Value;

              (viii) the acquisition of any assets or stock of a business that
does not constitute Core Business Assets, in any transaction or series of
related transactions that represents, individually or when aggregated with all
such transactions completed during the immediately preceding 24 months, 10% or
more of the Market Value at the time of the proposed new acquisition, will
require the approval of at least 662/3% of the holders of the then-outstanding
Common Stock, unless the Board of Directors or a committee thereof (if such
committee includes a director appointed by the Qualified Holder) approves such
transaction unanimously, and a transaction shall be considered to be completed
in the preceding 24-month period if it shall have been either completed (in
which case the fair market value of the acquired assets shall be determined at
the time of completion) or announced pursuant to a definitive agreement (in
which case the fair market value of the acquired assets shall be determined at
the time of such announcement);

              (ix)  the Corporation shall not, without the unanimous approval by
the Board of Directors or a committee thereof (if such committee includes a
director appointed by the Qualified Holder), incur any Indebtedness (other than
any refinancing of any existing Indebtedness that would not result in a material
increase of the principal amount of such existing Indebtedness) after the date
on which the Corporation receives its first credit rating from a rating agency
of national reputation giving effect to the Strategic Acquisition (the "Pro
Forma Rating"), if the Board of Directors has reason to believe (after
reasonable inquiry of an internationally recognized rating agency or a major
investment bank having expertise in credit rating advisory work) that the effect
of incurring such Indebtedness would reduce the credit rating of NTL
Communications Corp. below (i) the lower of (x) the equivalent of Standard &
Poor's rating of BB- or (y) the Pro Forma Rating, if such Indebtedness is
incurred prior to January 1, 2001 or (ii) the equivalent of Standard & Poor's
rating of BB, if the Indebtedness is incurred on or after January 1, 2001; and

              (x)   the Corporation shall maintain the total number of directors
at a level that enables the Qualified Holder to elect at least ten percent of
the members of the Board of Directors.

              (i)   So long as the Qualified Holding Condition is met, none of
the following shall be permitted without the prior written approval of one of
the Authorized Officers:

              (I)   a reclassification, combination, stock dividend or any
       similar transaction that may adversely affect the rights of the holders
       of the 5% Preferred Stock, Series B;

              (II)  an amendment to the Certificate of Incorporation or By-laws
       that may adversely affect the rights of the holders of the 5% Preferred
       Stock, Series B;


                                       34

<PAGE>   423



              (III) commencement or institution of a Bankruptcy Event;

              (IV)  issuance by the Corporation of any security that would
       adversely affect the rights of holders of the 5% Preferred Stock, Series
       A or the 5% Preferred Stock, Series B; or

              (V)   any agreement by the Corporation or any of its Affiliates to
       enter into a Conflicting Investment.

              (j)   Before entering into any Alliance to provide
telecommunications services in any country in the European Union, the
Corporation shall consult with the Qualified Holder with a view to mutually
cooperating in such venture.

              (k)   Nothing in this paragraph (9) shall be in derogation of any
rights that a holder of shares of 5% Preferred Stock, Series B may have in its
capacity as a holder of shares of Common Stock.

              (10)  Preemptive Rights. The Corporation shall not issue, sell,
transfer to any Person or grant to any Person a right to acquire any shares of
capital stock or options, warrants or similar instruments or any other security
convertible or exchangeable for shares of capital stock of the Corporation
(other than (i) through exercise of any options, warrants, Convertible
Debentures, the 13% Preferred, 5% Cumulative Preferred, Series A or the 9.9%
Series B Preferred, in each case, that is outstanding on the Issue Date or the
issuance of options to the employees of the Corporation and the Corporation
Subsidiaries pursuant to Benefit Plans existing on the Issue Date, as such
Benefit Plans may be amended or replaced (provided that such amended or replaced
Benefit Plans shall have terms similar to and consistent with the terms of
Existing Benefit Plans), and the exercise of such options, (ii) as consent
payments contemplated by and in accordance with Section 5.01(d)(iv) of the
Investment Agreement, (iii) as contemplated by the Transaction Agreement, or
(iv) as dividends on or conversion or in redemption of shares of preferred stock
contemplated by and in accordance with Section 5.01(d)(iii) of the Investment
Agreement (the "Equity Securities")), unless the Qualified Holder is notified in
writing of any such issuance, sale or transfer and is offered the right to
purchase at the sale price and on the terms and conditions of the sale such
quantity of Equity Securities as would be necessary for the Purchaser to
maintain its then current beneficial ownership level of the Diluted Shares. The
preemptive rights of the Qualified Holder pursuant to this paragraph (10) shall
be exercised in a manner and based on a timetable that will not restrict or
adversely affect the Corporation's ability to raise equity capital in a flexible
and cost-effective manner.

              (11)  General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are for
convenience of reference only and shall not define, limit or affect any of the
provisions hereof.



                                       35

<PAGE>   424



              (b)   If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) hereof or shall have failed to
discharge any obligation to redeem shares of 5% Preferred Stock, Series B
pursuant to paragraph (6) hereof, the holders of shares of 5% Preferred Stock,
Series B shall be entitled to receive, in addition to all other amounts required
to be paid hereunder, when, as and if declared by the Board of Directors, out of
funds legally available for the payment of dividends, cash dividends on the
aggregate dividends which the Corporation shall have failed to declare or pay or
the redemption price, together with accrued and unpaid dividends thereon, as the
case may be, at a rate of 2% per quarter, compounded quarterly, for the period
during which the failure to pay dividends or failure to discharge an obligation
to redeem shares of 5% Preferred Stock, Series B shall continue.

              (c)   The shares of 5% Preferred Stock, Series B shall bear the
following legend:

              THE SHARES OF PREFERRED STOCK, PAR VALUE $.01, OF THE COMPANY (THE
              "PREFERRED STOCK") (AND THE SHARES OF COMMON STOCK, PAR VALUE
              $.01, OF THE COMPANY (THE "COMMON STOCK") INTO WHICH THE PREFERRED
              STOCK MAY BE CONVERTED) REPRESENTED BY THIS CERTIFICATE MAY NOT BE
              OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE
              SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ANY APPLICABLE
              STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM REGISTRATION
              REQUIREMENTS. THE TRANSFER OF THE PREFERRED STOCK (OR COMMON
              STOCK, IF THE PREFERRED STOCK HAS BEEN CONVERTED) EVIDENCED BY
              THIS CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER
              PROVIDED FOR IN THE INVESTMENT AGREEMENT, DATED JULY 26, 1999, AS
              AMENDED, AMONG NTL (DELAWARE), INC. AND FRANCE TELECOM, A COPY OF
              WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF THE COMPANY AND WILL
              BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH PREFERRED STOCK
              UPON WRITTEN REQUEST TO THE COMPANY.

              THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY
              BE CONVERTED INTO COMMON STOCK, PAR VALUE $.01, OF THE COMPANY
              (THE "COMMON STOCK") OR REDEEMED IN EXCHANGE FOR COMMON STOCK
              WITHOUT THE SURRENDER AND EXCHANGE OF THIS CERTIFICATE FOR
              CERTIFICATES REPRESENTING SUCH COMMON STOCK. A NOTICE OF SUCH
              CONVERSION EVENT, IF ANY, IS ON FILE AT THE EXECUTIVE OFFICES OF
              THE COMPANY AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF
              THIS CERTIFICATE UPON WRITTEN REQUEST TO THE COMPANY.


                                       36

<PAGE>   425



              The shares of Common Stock issuable upon conversion of the 5%
 Preferred Stock, Series B shall bear the following legend:

              THE SHARES OF COMMON STOCK, PAR VALUE $.01, OF THE COMPANY (THE
              "COMMON STOCK") REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED
              OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE
              SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ANY APPLICABLE
              STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM REGISTRATION
              REQUIREMENTS. THE TRANSFER OF THE COMMON STOCK EVIDENCED BY THIS
              CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED
              FOR IN THE INVESTMENT AGREEMENT, DATED AS OF JULY 26, 1999, AS
              AMENDED, AMONG NTL (DELAWARE), INC. AND FRANCE TELECOM, A COPY OF
              WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF THE COMPANY AND WILL
              BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH COMMON STOCK
              UPON WRITTEN REQUEST TO THE COMPANY.

              (d)   (i) Whenever in connection with any conversion or redemption
of the 5% Preferred Stock, Series B in exchange for Common Stock the holder is
required to surrender certificates representing such shares of 5% Preferred
Stock, Series B, such holder may, by written notice to the Corporation and its
transfer agent, elect to retain such certificates. In such case, the
certificates so retained by the holder thereof shall be deemed to represent, at
and from the date of such conversion or redemption, the number of shares of
Common Stock issuable upon such conversion or redemption (subject to paragraph
(8)(c), if applicable), and shall be so reflected upon the books of the
Corporation and its transfer agent.

              (ii)  (A) A holder who has previously elected to retain
certificates representing the 5% Preferred Stock, Series B in accordance with
paragraph (11)(d)(i) upon conversion or redemption may subsequently elect to
receive certificates representing the shares of Common Stock issued upon such
conversion or redemption. To receive certificates representing such shares of
Common Stock, the holder of such certificate shall surrender it, duly endorsed
or assigned to the Corporation or in blank, at the office of the Corporation, or
to any transfer agent of the Corporation previously designated by the
Corporation for such purposes, with a written notice of that election.

              (B)   Unless the certificates to be issued shall be registered in
the same name as the name in which such surrendered certificates are registered,
each certificate so surrendered shall be accompanied by instruments of transfer,
in form satisfactory to the Corporation, duly executed by the holder or the
holder's duly authorized attorney and an amount sufficient to pay any transfer
or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid). All certificates so surrendered
shall be canceled by the Corporation or the transfer agent.


                                       37

<PAGE>   426



              (C)   As promptly as practicable after the surrender by a holder
of such certificates, the Corporation shall issue and shall deliver to such
holder, or on the holder's written order, a certificate or certificates (which
certificate or certificates shall have the legend set forth in paragraph 11(c))
for the number of duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock represented by the certificates so surrendered.

              (12)  Shareholder Rights Plan. The shares of 5% Preferred Stock,
Series B shall be entitled to the benefits of a number of rights ("Rights")
issuable under the Shareholder Rights Agreement, dated as of October 1, 1993, as
amended, between the Company and Continental Stock Transfer & Trust Company or
any successor plan of similar purpose and effect (the "Rights Agreement") equal
to the number of shares of Common Stock then issuable upon conversion of the 5%
Preferred Stock, Series B at the prevailing Conversion Rate. Any shares of
Common Stock deliverable upon conversion of a share of 5% Preferred Stock,
Series B or upon payment of a dividend shall be accomplished by a Right.


                                       38

<PAGE>   427


              IN WITNESS WHEREOF, NTL Incorporated has caused this Certificate
 of Designation to be signed by the undersigned this 26th day of May, 2000.


                                NTL Incorporated



                                By:    /s/ Richard J. Lubasch
                                       ---------------------------------------
                                       Name: Richard J. Lubasch
                                       Title: Executive Vice President, General
                                       Counsel and Secretary




                                       39

<PAGE>   428
                           CERTIFICATE OF DESIGNATION
                       OF THE VOTING POWERS, DESIGNATION,
                    PREFERENCES AND RELATIVE, PARTICIPATING,
              OPTIONAL OR OTHER SPECIAL RIGHTS AND QUALIFICATIONS,
                       LIMITATIONS AND RESTRICTIONS OF THE
                     5% CUMULATIVE PARTICIPATING CONVERTIBLE
                          PREFERRED STOCK, SERIES F OF
                                NTL INCORPORATED

                         ------------------------------
                        PURSUANT TO SECTION 151(g) OF THE
                GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
                         ------------------------------

              The undersigned, Executive Vice President, General Counsel and
Secretary of NTL Incorporated, a Delaware corporation (the "Corporation"),
HEREBY CERTIFIES that the Board of Directors, in accordance with Article FOURTH,
Section B of the Corporation's Restated Certificate of Incorporation and Section
151(g) of the Delaware General Corporation Law (the "DGCL"), has authorized the
creation of the series of Preferred Stock (as defined below) hereinafter
provided for and has established the dividend, redemption, conversion and voting
rights thereof and has adopted the following resolution, creating the following
new series of Preferred Stock:

              "BE IT RESOLVED that, pursuant to authority expressly granted to
the Board of Directors by the provisions of Article FOURTH, Section B of the
Restated Certificate of Incorporation of the Corporation and Section 151(g) of
the DGCL, there is hereby created and authorized the issuance of a new series of
Preferred Stock, par value $0.01 per share (the "Preferred Stock"), with the
following powers, designations, dividend rights, voting powers, rights on
liquidation, conver sion rights, redemption rights and other preferences and
relative, participating, optional or other special rights and with the
qualifications, limitations or restrictions on the shares of such series (in
addition to the powers, designations, preferences and relative, participating,
optional or other special rights and the qualifications, limita tions or
restrictions thereof set forth in the Certificate of Incorporation of the Corpo
ration that are applicable to each series of Preferred Stock) hereinafter set
forth.




<PAGE>   429



              (1)   Number and Designation. 9,191.17 shares of Preferred Stock
shall be designated as "5% Cumulative Participating Convertible Preferred Stock,
Series F of NTL Incorporated" (the "5% Preferred Stock") and no other shares of
Preferred Stock shall be designated as 5% Preferred Stock.

              (2)   Definitions. For purposes of the 5% Preferred Stock, the
following terms shall have the meanings indicated:

              "Additional Preferred" shall have the meaning set forth in
paragraph (4)(a) hereof.

              "Bankruptcy Event" shall mean any of the following: (I) a court
       having jurisdiction in the premises enters a decree or order for (A)
       relief in respect of any Major Entity in an involuntary case under any
       applicable bankruptcy, insolvency or other similar law now or hereinafter
       in effect, (B) appointment of a receiver, liquidator, assignee,
       custodian, trustee, sequestrator or similar official of any Major Entity
       or for all or substantially all of the property and assets of any Major
       Entity or (C) the winding up or liquidation of the affairs of any Major
       Entity; or (II) any Major Entity (A) commences a voluntary case under any
       applicable bankruptcy, insolvency or other similar law now or hereinafter
       in effect, or consents to the entry of an order for relief in an
       involuntary case under any such law, (B) consents to the appointment of
       or taking possession by a receiver, liquidator, assignee, custodian,
       trustee, sequestrator or similar official of any Major Entity, or for all
       or substantially all of the property and assets of any Major Entity or
       (C) effects any general assignment for the benefit of creditors.

              "Board of Directors" shall mean the board of directors of the
       Corpora tion. Except as such term is used in paragraph (9), "Board of
       Directors" shall also mean the Executive Committee, if any, of such board
       of directors or any other committee duly authorized by such board of
       directors to perform any of its responsibilities with respect to the 5%
       Preferred Stock.

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

              "Common Stock" shall mean the Corporation's Common Stock, par
       value $0.01 per share.


                                       2

<PAGE>   430



              "Constituent Person" shall have the meaning set forth in paragraph
       (8)(e)(i) hereof.

              "Conversion Rate" shall have the meaning set forth in paragraph
       (8)(a) hereof.

              "Current Market Price" of publicly traded shares of Common Stock
       or any other class of capital stock or other security of the Corporation
       or any other issuer for any day shall mean the last reported sale price
       for such security on the principal exchange or quotation system on which
       such security is listed or traded. If the security is not admitted for
       trading on any national securities exchange or the Nasdaq National
       Market, "Current Market Price" shall mean the average of the last
       reported closing bid and asked prices reported by the Nasdaq as furnished
       by any member in good standing of the National Association of Securities
       Dealers, Inc., selected from time to time by the Corporation for that
       purpose or as quoted by the National Quotation Bureau Incorporated. In
       the event that no such quotation is available for such day, the Current
       Market Price shall be the average of the quotations for the last five
       Trading Days for which a quotation is available within the last 30
       Trading Days prior to such day. In the event that five such quotations
       are not available within such 30-Trading Day period, the Board of
       Directors shall be entitled to determine the Current Market Price on the
       basis of such quotations as it reasonably considers appropriate.

              "Determination Date" shall have the meaning set forth in paragraph
       (8)(d)(ii) hereof.

              "Dividend Payment Date" shall mean September 30, December 31,
       March 31 and June 30 of each year, commencing September 30, 2000;
       provided, however, that if any Dividend Payment Date falls on any day
       other than a Business Day, the dividend payment due on such Dividend
       Payment Date shall be paid on the Business Day immediately following such
       Dividend Payment Date.

              "Dividend Periods" shall mean quarterly dividend periods
       commencing on September 30, December 31, March 31 and June 30 of each
       year and ending on and including the day preceding the first day of the
       next succeeding Dividend Period.



                                        3

<PAGE>   431



              "Exchange Act" shall mean the Securities Exchange Act of 1934, as
       amended, and the rules and regulations thereunder.

              "Expiration Time" shall have the meaning set forth in paragraph
       (8)(d)(v) hereof.

              "5% Preferred Stock" shall have the meaning set forth in paragraph
       (1) hereof.

              "Holdco" shall have the meaning set forth in paragraph (8)(e)(ii)
       hereof.

              "Issue Date" shall mean the date on which shares of 5% Preferred
       Stock are first issued.

              "Junior Securities" shall have the meaning set forth in paragraph
       (3)(c) hereof.

              "Junior Securities Distribution" shall have the meaning set forth
       in paragraph (4)(f) hereof.

              "Liquidation Right" shall mean, for each share of 5% Preferred
       Stock, the greater of (i) an amount equal to $1,000 per share, plus an
       amount equal to all dividends (whether or not earned or declared) accrued
       and unpaid thereon to the date of final distribution to such holders, and
       (ii) the amount that would be received in liquidation following
       conversion of a share of 5% Preferred Stock into Common Stock.

              "Major Entity" shall mean any of the Corporation, NTL (Delaware),
       Inc., NTL Communications Corp., Diamond Cable Communications Limited,
       Diamond Holdings Limited, NTL (Triangle) LLC or any Significant
       Subsidiary.


              "Mandatory Redemption Date" shall have the meaning set forth in
       paragraph (6)(c) hereof.

              "Mandatory Redemption Obligation" shall have the meaning set forth
       in paragraph (6)(d) hereof.



                                        4

<PAGE>   432



              "Nasdaq" means the Nasdaq Stock Market, Inc., the electronic
       securities market regulated by the National Association of Securities
       Dealers, Inc.

              "Nasdaq National Market" shall have the meaning set forth in Rule
       4200(a)(23) of the rules of the National Association of Securities
       Dealers, Inc.

              "non-electing share" shall have the meaning set forth in paragraph
       (8)(e)(i) hereof.

              "NYSE" means the New York Stock Exchange.

              "outstanding", when used with reference to shares of stock, shall
       mean issued shares, excluding shares held by the Corporation or a
       subsidiary.

              "Parity Securities" shall have the meaning set forth in paragraph
       (3)(b) hereof.

              "Person" shall mean any individual, partnership, association,
       joint venture, corporation, business, trust, joint stock company, limited
       liability company, any unincorporated organization, any other entity, a
       "group" of such persons, as that term is defined in Rule 13d-5(b) under
       the Exchange Act, or a government or political subdivision thereof.

              "Preferred Shares" has the meaning set forth in paragraph (9)(c).

              "Preferred Stock" shall have the meaning set forth in the
       introductory resolution above.

              "Purchase Shares" shall have the meaning set forth in paragraph
       (8)(d)(v) hereof.

              "Record Date" shall have the meaning set forth in paragraph
       (8)(d)(iv) hereof.

              "Relevant Compounding Factor" shall mean, with respect to each
       share of 5% Preferred Stock, upon initial issuance 1.00, and shall on
       each Dividend Payment Date be increased to equal the product of the
       Relevant


                                        5

<PAGE>   433



       Compounding Factor in effect immediately prior to such Dividend
       Payment Date and 1.0125.

              "Rights" shall have the meaning set forth in paragraph (11)
       hereof.

              "Securities" shall have the meaning set forth in paragraph
       (8)(d)(iii) hereof.

              "Senior Securities" shall have the meaning set forth in paragraph
       (3)(a) hereof.

              "set apart for payment" shall be deemed to include, without any
       action other than the following, the recording by the Corporation in its
       accounting ledgers of any accounting or bookkeeping entry which
       indicates, pursuant to a declaration of dividends or other distribution
       by the Board of Directors, the allocation of funds to be so paid on any
       series or class of capital stock of the Corporation; provided, however,
       that if any funds for any class or series of Junior Securities or any
       class or series of Parity Securities are placed in a separate account of
       the Corporation or delivered to a disbursing, paying or other similar
       agent, then "set apart for payment" with respect to the 5% Preferred
       Stock shall mean placing such funds in a separate account or delivering
       such funds to a disbursing, paying or other similar agent, as the case
       may be.

              "Significant Subsidiary" shall have the meaning given to such term
       in Regulation S-X under the Exchange Act.

              "13% Preferred" shall have the meaning set forth in paragraph
       (3)(d) hereof.

              "Trading Day" shall mean any day on which the securities in
       question are traded on the NYSE, or if such securities are not listed or
       admitted for trading on the NYSE, on the principal national securities
       exchange on which such securities are listed or admitted, or if not
       listed or admitted for trading on any national securities exchange, on
       the Nasdaq National Market, or if such securities are not quoted thereon,
       in the applicable securities market in which the securities are traded.



                                        6

<PAGE>   434



              "Transaction" shall have the meaning set forth in paragraph
       (8)(e)(i) hereof.

              "Trigger Event" shall have the meaning set forth in paragraph
       (9)(b) hereof.

              "Trigger Event Cure" shall have the meaning set forth in paragraph
       (9)(b) hereof.

              "25-Day Average Market Price" shall mean, for any security, the
       volume-weighted average of the Current Market Prices of that security for
       the twenty-five Trading Days immediately preceding the date of
       determination.

              (3)   Rank. Any class or series of stock of the Corporation shall
be deemed to rank:

              (a)   prior to the 5% Preferred Stock, either as to the payment of
dividends or as to distribution of assets upon liquidation, dissolution or
winding up, or both, if the holders of such class or series shall be entitled by
the terms thereof to the receipt of dividends and of amounts distributable upon
liquidation, dissolution or winding up, in preference or priority to the holders
of 5% Preferred Stock ("Senior Securities");

              (b)   on a parity with the 5% Preferred Stock, either as to the
payment of dividends or as to distributions of assets upon liquidation,
dissolution or winding up, or both, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share thereof be different
from those of the 5% Preferred Stock, if the holders of the 5% Preferred Stock
and of such class of stock or series shall be entitled by the terms thereof to
the receipt of dividends or of amounts distributable upon liquidation,
dissolution or winding up, or both, in proportion to their respective amounts of
accrued and unpaid dividends per share or liquidation preferences, without
preference or priority one over the other and such class of stock or series is
not a class of Senior Securities ("Parity Securities"); and

              (c)   junior to the 5% Preferred Stock, either as to the payment
of dividends or as to the distribution of assets upon liquidation, dissolution
or winding up, or both, if such stock or series shall be Common Stock or if the
holders of the 5% Preferred Stock shall be entitled to receipt of dividends, and
of amounts distributable


                                        7

<PAGE>   435



upon liquidation, dissolution or winding up, in preference or priority to the
holders of shares of such stock or series ("Junior Securities").

              (d)   Each of the 13% Senior Redeemable Exchangeable Preferred
Stock and the 13% Series B Senior Redeemable Exchangeable Preferred Stock
(collectively, the "13% Preferred") is a Senior Security. Each of the Series A
Junior Participating Preferred Stock of the Corporation is a Junior Security.
The 5% Cumulative Participating Convertible Preferred Stock, Series A, the 5%
Cumulative Participating Convertible Preferred Stock, Series C, the 5%
Cumulative Participating Convertible Preferred Stock, Series D, the 5%
Cumulative Preferred Stock, Series A, the 5% Cumulative Participating
Convertible Preferred Stock, Series E, the 5% Cumulative Participating
Convertible Preferred Stock, Series B, the 5% Cumulative Participating
Convertible Preferred Stock, Series B-1, and one or more classes of Additional
Preferred shall be Parity Securities; provided, however, that there shall be no
issue of other Senior Securities, Parity Securities or rights or options
exercisable for or convertible into any such securities, except as approved by
the holders of the 5% Preferred Stock pursuant to paragraph 9(e).

              (e)   The respective definitions of Senior Securities, Junior
Securities and Parity Securities shall also include any rights or options
exercisable for or convertible into any of the Senior Securities, Junior
Securities and Parity Securities, as the case may be. The 5% Preferred Stock
shall be subject to the creation of Junior Securities, Parity Securities and
Senior Securities as set forth herein.

              (4)   Dividends. (a) Subject to paragraph (8)(b)(ii), the holders
of shares of 5% Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of funds legally available for the
payment of dividends, dividends at the quarterly rate of $12.50 per share
(assuming a $1,000.00 face amount) payable in cash, shares of Common Stock (such
Common Stock for this purpose to be assigned a value equal to the 25-Day Average
Market Price as of the record date for such Dividend Payment Date) or additional
shares of Preferred Stock of a class to be designated by the Board of Directors
having terms substantially identical to the 5% Preferred Stock except as
follows: (A) the Conversion Rate (as set forth in Section 8(a)) on such
Preferred Stock initially shall be the quotient resulting from the division of
the Conversion Rate (as then in effect on the 5% Preferred Stock) by the
Relevant Compounding Factor and (B) the number of shares of such Preferred Stock
payable as a dividend on any Dividend Payment Date shall increase for each
Dividend Payment Date from the first Dividend Payment Date by the Relevant
Compounding Factor (such classes of Preferred Stock singularly and


                                        8

<PAGE>   436



collectively, the "Additional Preferred"). All dividends on the 5% Preferred
Stock, in whatever form, shall be payable in arrears quarterly on each Dividend
Payment Date and shall be cumulative from the Issue Date (except that dividends
on Additional Preferred shall accrue from the date such Additional Preferred is
issued or would have been issued in accordance with this Certificate of
Designation if such dividends had been declared), whether or not in any Dividend
Period or Dividend Periods there shall be funds of the Corporation legally
available for the payment of such dividends. Each such dividend shall be payable
to the holders of record of shares of the 5% Preferred Stock, as they appear on
the stock records of the Corporation at the close of business on the record
date for such dividend. Upon the declaration of any such dividend, the Board of
Directors shall fix as such record date the fifth Business Day preceding the
relevant Dividend Payment Date and shall give notice on or prior to the record
date of the form of payment of such dividend. Accrued and unpaid dividends for
any past Dividend Payment Date may be declared and paid at any time, without
reference to any Dividend Payment Date, to holders of record on such record
date, not more than 45 days nor less than five Business Days preceding the
payment date thereof, as may be fixed by the Board of Directors.

              (b)   In addition to the dividends described in the preceding
paragraph, holders of shares of the 5% Preferred Stock shall be entitled to
receive an amount equal to the amount (and in the form of consideration) that
such holders would be entitled to receive if, pursuant to paragraph (8), they
had converted such 5% Preferred Stock fully into Common Stock immediately before
the record date for the payment of any such dividends on Common Stock. Each such
dividend shall be payable to the holders of record of shares of the 5% Preferred
Stock as they appear on the stock records of the Corporation at the close of
business on the record date for such dividend on Common Stock, and the
Corporation shall pay each such dividend on the applicable payment date for such
dividend on the Common Stock.

              (c)   For the purpose of determining the number of Additional
Preferred to be issued pursuant to paragraph (4)(a), each share of Additional
Preferred shall be valued at $1,000.00. Holders of such Additional Preferred
shall be entitled to receive dividends payable at the rates specified in
paragraph (4)(a).

              (d)   The dividends payable for any period shorter than a full
Dividend Period on the 5% Preferred Stock shall accrue daily and be computed on
the basis of a 360-day year and the actual number of days in such period. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any


                                        9

<PAGE>   437



dividend payment or payments on the 5% Preferred Stock that may be in arrears
except as otherwise provided herein.

              (e)   So long as any shares of the 5% Preferred Stock are
outstanding, no dividends, except as described in the next succeeding sentence,
shall be declared or paid or set apart for payment on Parity Securities or
Junior Securities, for any period, nor shall any Parity Securities or Junior
Securities 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 such Parity Securities or Junior Securities) by the
Corporation (except for conversion into or exchange into other Parity Securities
or Junior Securities, as the case may be) unless, in each case, (i) full
cumulative dividends on all outstanding shares of the 5% Preferred Stock for all
Dividend Periods terminating on or prior to the date of such redemption,
repurchase or other acquisition shall have been paid or set apart for payment,
(ii) sufficient funds shall have been paid or set apart for the payment of the
dividend for the current Dividend Period with respect to the 5% Preferred Stock
and (iii) the Corporation is not in default with respect to any redemption of
shares of 5% Preferred Stock by the Corporation pursuant to paragraph (6) below.
When dividends are not fully paid in Common Stock or Additional Preferred or are
not paid in full in cash or a sum sufficient for such payment is not set apart,
as aforesaid, all dividends declared upon shares of the 5% Preferred Stock and
all dividends declared upon Parity Securities shall be declared ratably in
proportion to the respective amounts of dividends accumulated and unpaid on the
5% Preferred Stock and accumulated and unpaid on such Parity Securities.

              (f)   So long as any shares of the 5% Preferred Stock are
outstanding, no dividends (other than (i) any rights issued pursuant to a
shareholder rights plan as provided in paragraph (11) and (ii) dividends or
distributions paid in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Junior Securities) shall be declared or paid or set apart
for payment or other distribution declared or made upon Junior Securities, nor
shall any Junior Securities be redeemed, purchased or otherwise acquired (other
than a redemption, purchase, or other acquisition of shares of Common Stock made
for purposes of an employee incentive or benefit plan of the Corporation or any
subsidiary) (all such dividends, distributions, redemptions or purchases being
hereinafter referred to as "Junior Securities Distributions") 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, directly or
indirectly (except by conversion into or exchange for Junior Securities), unless
in each case (A) full cumulative dividends on all outstand-

                                       10

<PAGE>   438

ing shares of the 5% Preferred Stock and all other Parity Securities shall have
been paid or set apart for payment for all past Dividend Periods and dividend
periods for such Parity Securities, (B) sufficient funds shall have been paid or
set apart for the payment of the dividend for the current Dividend Period with
respect to the 5% Preferred Stock and all other Parity Securities, (C) the
Corporation is not in default with respect to any redemption of shares of 5%
Preferred Stock by the Corporation pursuant to paragraph (6) below and (D) the
Corporation has fully performed its obligations under paragraphs (4)(b) and (6)
hereof.

              (5)   Liquidation Preference. (a) In the event of any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
before any payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of Junior
Securities, the holders of the shares of 5% Preferred Stock shall be entitled to
receive the Liquidation Right. If, upon any liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of the shares of 5% Preferred Stock shall be
insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any Parity Securities, then such assets, or the proceeds thereof,
shall be distributed among the holders of shares of 5% Preferred Stock and any
such other Parity Securities ratably in accordance with the respective amounts
that would be payable on such shares of 5% Preferred Stock and any such other
stock if all amounts payable thereon were paid in full. For the purposes of this
paragraph (5), (i) a consolidation or merger of the Corporation with one or more
corporations, or (ii) a sale or transfer of all or substantially all of the
Corporation's assets, shall not be deemed to be a liquidation, dissolution or
winding up, voluntary or involuntary, of the Corporation.

              (b)   Subject to the rights of the holders of any Parity
Securities, upon any liquidation, dissolution or winding up of the Corporation,
after payment shall have been made in full to the holders of the 5% Preferred
Stock, as provided in this paragraph (5), any other series or class or classes
of Junior Securities shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the 5% Preferred Stock shall not be
entitled to share therein.

              (6)   Redemption. (a) On and after the first Business Day
following the earlier to occur of (i) August 13, 2006 or (ii) the date on which
both (A) the 25-Day Average Market Price of the Common Stock shall have exceeded
$96.00 and (B) August 13, 2003, to the extent the Corporation shall have funds
legally available


                                       11

<PAGE>   439



for such payment, the Corporation may redeem at its option shares of 5%
Preferred Stock, from time to time in part, or in whole, payable at the option
of the Corporation in (A) cash, at a redemption price of $1,000.00 per share,
(B) in shares of Common Stock, at a redemption price of $1,000.00 per share, or
(C) in a combination of cash and Common Stock, at a redemption price based on
the respective combination of consideration, together in each case with accrued
and unpaid dividends thereon, whether or not declared, to, but excluding, the
date fixed for redemption, without interest. For purposes of determining the
number of shares of Common Stock to be issued pursuant to this paragraph (6)(a),
the price per share of Common Stock shall be the 25-Day Average Market Price.

              (b)   On and after the first Business Day following August 13,
2009, each holder of shares of 5% Preferred Stock shall have the right to
require the Corporation, to the extent the Corporation shall have funds legally
available therefor, to redeem such holder's shares of 5% Preferred Stock, from
time to time in part, or in whole, at a redemption price of $1,000.00 per share,
payable at the option of the Corporation in cash, shares of Common Stock or a
combination thereof, together with accrued and unpaid dividends thereon to, but
excluding, the date fixed for redemption, without interest. For purposes of
determining the number of shares of Common Stock to be issued pursuant to this
paragraph (6)(b), the price per share of Common Stock shall equal the 25-Day
Average Market Price. Any holder of shares of 5% Preferred Stock who elects to
exercise its rights pursuant to this paragraph (6)(b) shall deliver to the
Corporation a written notice of election not less than 20 days prior to the date
on which such holder demands redemption pursuant to this paragraph 6(b), which
written notice shall set forth the name of the Holder, the number of shares of
5% Preferred Stock to be redeemed and a statement that the election to exercise
a redemption right is being made thereby; and, subject to paragraph (10)(d),
shall deliver to the Corporation on or before the date of redemption
certificates evidencing the shares of 5% Preferred Stock to be redeemed, duly
endorsed for transfer to the Corporation.

              (c)   If the Corporation shall not have redeemed all outstanding
shares of 5% Preferred Stock pursuant to paragraphs (6)(a) or (6)(b), on August
13, 2019 (the "Mandatory Redemption Date"), to the extent the Corporation shall
have funds legally available for such payment, the Corporation shall redeem all
outstanding shares of 5% Preferred Stock, at a redemption price of $1,000.00
per share, payable at the option of the Corporation in cash, shares of Common
Stock or a combination thereof, together with accrued and unpaid dividends
thereon to, but excluding, the Mandatory Redemption Date, without interest. For
purposes of determining the number of shares of Common Stock to be issued
pursuant to this


                                       12

<PAGE>   440



paragraph (6)(c), the price per share of Common Stock shall be the 25-Day
Average Market Price.

              (d)   If the Corporation is unable or shall fail to discharge its
obligation to redeem all outstanding shares of 5% Preferred Stock pursuant to
paragraphs 6(b) or 6(c) (each, a "Mandatory Redemption Obligation"), the
Mandatory Redemption Obligation shall be discharged as soon as the Corporation
is able to discharge such Mandatory Redemption Obligation. If and so long as any
Mandatory Redemption Obligation with respect to the 5% Preferred Stock shall not
be fully discharged, the Corporation shall not (i) directly or indirectly,
redeem, purchase, or otherwise acquire any Parity Security or discharge any
mandatory or optional redemption, sinking fund or other similar obligation in
respect of any Parity Securities (except in connection with a redemption,
sinking fund or other similar obligation to be satisfied pro rata with the 5%
Preferred Stock) or (ii) declare or make any Junior Securities Distribution
(other than dividends or distributions paid in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Junior Securities), or,
directly or indirectly, discharge any mandatory or optional redemption, sinking
fund or other similar obligation in respect of the Junior Securities.

              (e)   Upon any redemption of 5% Preferred Stock, the Corporation
shall pay the redemption price and any accrued and unpaid dividends in arrears
to, but excluding, the applicable redemption date.

              (f)   For purposes of paragraph (6)(a) only, unless full
cumulative dividends (whether or not declared) on all outstanding shares of 5%
Preferred Stock and any Parity Securities shall have been paid or
contemporaneously are declared and paid or set apart for payment for all
Dividend Periods terminating on or prior to the applicable redemption date and
notice has been given in accordance with paragraph (7), none of the shares of 5%
Preferred Stock shall be redeemed, and no sum shall be set aside for such
redemption, unless shares of 5% Preferred Stock are redeemed pro rata and notice
has previously been given in accordance with paragraph (7).

              (7)   Procedure for Redemption. (a) If the Corporation shall
redeem shares of 5% Preferred Stock pursuant to paragraph 6(a), notice of such
redemption shall be given by certified mail, return receipt requested, postage
prepaid, mailed not less than 30 days nor more than 60 days prior to the
applicable 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 and confirmed


                                       13

<PAGE>   441



by facsimile transmission to each holder of record if the Corporation has been
furnished with such facsimile address by the holder(s); provided, however, that
neither the failure to give such notice nor confirmation nor any defect therein
or in the mailing thereof, to any particular holder, shall affect the
sufficiency of the notice or the validity of the proceedings for redemption with
respect to the other holders. Any notice that was mailed in the manner herein
provided shall be conclusively presumed to have been duly given on the date
mailed whether or not the holder receives the notice. Each such notice shall
state: (i) the redemption date; (ii) the number of shares of 5% Preferred Stock
to be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of shares to be redeemed from such holder; (iii) the amount
payable, whether such amount shall be paid in Common Stock or in cash and if the
payment is in Common Stock an explanation of the determination of the amount to
be paid; (iv) the place or places where certificates for such shares are to be
surrendered or the notice under paragraph (10)(d) should be sent for payment of
the redemption price; and (v) that dividends on the shares to be redeemed will
cease to accrue on such redemption date, except as otherwise provided herein.

              (b)   If notice has been mailed as aforesaid, from and after the
redemption date (unless default shall be made by the Corporation in providing
for the payment of the redemption price of the shares called for redemption and
dividends accrued and unpaid thereon, if any), (i) except as otherwise provided
herein, dividends on the shares of 5% Preferred Stock so called for redemption
shall cease to accrue, (ii) said shares shall no longer be deemed to be
outstanding and (iii) all rights of the holders thereof as holders of the 5%
Preferred Stock shall cease (except the right to receive from the Corporation
the redemption price without interest thereon, upon surrender and endorsement
(or a constructive surrender under paragraph (10)(d)) of their certificates if
so required, and to receive any dividends payable thereon).

              (c)   Upon surrender (including a constructive surrender under
paragraph (10)(d)) in accordance with notice given pursuant to this paragraph
(7) of the certificates for any shares so redeemed (properly endorsed or
assigned for transfer, if the Board of Directors of the Corporation shall so
require and the notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price aforesaid, plus any dividends payable
thereon. If fewer than all the outstanding shares of 5% Preferred Stock are to
be redeemed, the number of shares to be redeemed shall be determined by the
Board of Directors and the shares to be redeemed shall be selected pro rata
(with any fractional shares being rounded to the nearest


                                       14

<PAGE>   442



whole share). In case fewer than all the shares represented by any such
certificate are redeemed, a new certificate shall be issued, subject to a
holder's election under paragraph (10)(d), representing the surrendered shares
without cost to the holder thereof.

              (8)   Conversion. (a) Subject to and upon compliance with the
provisions of this paragraph (8), a holder of shares of 5% Preferred Stock shall
have the right, at any time and from time to time, at such holder's option, to
convert any or all outstanding shares of 5% Preferred Stock held by such holder,
but not fractions of shares, into fully paid and non-assessable shares of Common
Stock by surrendering such shares to be converted, such surrender to be made in
the manner provided in paragraph (8)(b) hereof. The number of shares of Common
Stock deliverable upon conversion of each share of 5% Preferred Stock shall be
equal to 11.962982, as adjusted as provided herein (the "Conversion Rate"). The
Conversion Rate is subject to adjustment from time to time pursuant to paragraph
(8)(d) hereof. The right to convert shares called for redemption pursuant to
paragraph 6(a) shall terminate at the close of business on the date immediately
preceding the date fixed for such redemption unless the Corporation shall
default in making payment of the amount payable upon such redemption, in which
case such right of conversion shall be reinstated. Upon conversion, any accrued
and unpaid dividends on the 5% Preferred Stock at the date of conversion shall
be paid to the holder thereof in accordance with the provisions of paragraph
(4).

              (b)   (i) In order to exercise the conversion privilege, the
holder of each share of 5% Preferred Stock to be converted shall surrender (or
constructively surrender in accordance with paragraph (10)(d)) the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Corporation, or to any transfer agent of the
Corporation previously designated by the Corporation to the holders of the 5%
Preferred Stock for such purposes, with a written notice of election to convert
completed and signed, specifying the number of shares to be converted. Such
notice shall state that the holder has satisfied any legal or regulatory
requirement for conversion, including compliance with the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended; provided, however, that the
Corporation shall use its best efforts in cooperating with such holder to obtain
such legal or regulatory approvals to the extent its cooperation is necessary.
Such notice shall also state the name or names (with address and social security
or other taxpayer identification number, if applicable) in which the certificate
or certificates for Common Stock are to be issued. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such share of
5%


                                       15

<PAGE>   443



Preferred Stock is registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or the holder's duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation demonstrating that such
taxes have been paid). All certificates representing shares of 5% Preferred
Stock surrendered for conversion shall be canceled by the Corporation or the
transfer agent.

              (ii)  Subject to the last sentence of paragraph (8)(a), holders of
shares of 5% Preferred Stock at the close of business on a dividend payment
record date shall not be entitled to receive the dividend payable on such shares
on the corresponding Dividend Payment Date if such holder shall have surrendered
(or made a constructive surrender under paragraph (10)(d)) for conversion such
shares at any time following the preceding Dividend Payment Date and prior to
such Dividend Payment Date.

              (iii) Subject to a holder's election under paragraph (10)(d), as
promptly as practicable after the surrender (including a constructive surrender
under paragraph (10)(d)) by a holder of the certificates for shares of 5%
Preferred Stock as aforesaid, the Corporation shall issue and shall deliver to
such holder, or on the holder's written order, a certificate or certificates
(which certificate or certificates shall have the legend set forth in paragraph
(10)(c)) for the whole number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock issuable upon the conversion of such
shares in accordance with the provisions of this paragraph (8), and any
fractional interest in respect of a share of Common Stock arising on such
conversion shall be settled as provided in paragraph (8)(c). Upon conversion of
only a portion of the shares of 5% Preferred Stock represented by any
certificate, a new certificate shall be issued representing the unconverted
portion of the certificate so surrendered without cost to the holder thereof.
Subject to a holder's election under paragraph (10)(d), upon the surrender
(including a constructive surrender under paragraph (10)(d)) of certificates
representing shares of 5% Preferred Stock to be converted, such shares shall no
longer be deemed to be outstanding and all rights of a holder with respect to
such shares so surrendered shall immediately terminate except the right to
receive the Common Stock and other amounts payable pursuant to this paragraph
(8).

              (iv)  Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered


                                       16

<PAGE>   444



pursuant to an election under paragraph (10)(d)) and such notice received by the
Corporation as aforesaid, and the Person or Persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of record
of the shares of Common Stock represented thereby at such time on such date and
such conversion shall be into a number of shares of Common Stock equal to the
product of the number of shares of 5% Preferred Stock surrendered times the
Conversion Rate in effect at such time on such date, unless the stock transfer
books of the Corporation shall be closed on that date, in which event such
Person or Persons shall be deemed to have become such holder or holders of
record at the close of business on the next succeeding day on which such stock
transfer books are open, but such conversion shall be based upon the Conversion
Rate in effect on the date upon which such shares shall have been surrendered
and such notice received by the Corporation.

              (c)   (i) No fractional shares or scrip representing fractions of
shares of Common Stock shall be issued upon conversion of the 5% Preferred
Stock. Instead of any fractional interest in a share of Common Stock that would
otherwise be deliverable upon the conversion of a share of 5% Preferred Stock,
the Corporation shall pay to the holder of such share an amount in cash based
upon the Current Market Price of Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion (or deemed surrendered under paragraph (10)(d)) at one time by
the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of 5% Preferred Stock surrendered (or deemed surrendered under paragraph
(10)(d)) for conversion by such holder.

              (ii)  Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for shares of 5% Preferred Stock shall have been surrendered (or deemed
surrendered under paragraph (10)(d)) and such notice received by the Corporation
as aforesaid, and the Person or Persons in whose name or names any certificate
or certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of record of the
shares of Common Stock represented thereby at such time on such date and such
conversion shall be into a number of shares of Common Stock equal to the product
of the number of shares of 5% Preferred Stock surrendered times the Conversion
Rate in effect at such time on such date, unless the stock transfer books of the
Corporation shall be closed on that date, in which event such Person or Persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which


                                       17

<PAGE>   445



such stock transfer books are open, but such conversion shall be based upon the
Conversion Rate in effect on the date upon which such shares shall have been
surrendered (or deemed surrendered under paragraph (10)(d)) and such notice
received by the Corporation.

              (d)   The Conversion Rate shall be adjusted from time to time as
follows:

              (i)   If the Corporation shall after the Issue Date (A) declare a
dividend or make a distribution on its Common Stock in shares of its Common
Stock, (B) subdivide its outstanding Common Stock into a greater number of
shares, (C) combine its outstanding Common Stock into a smaller number of shares
or (D) effect any reclassification of its outstanding Common Stock, the
Conversion Rate in effect on the record date for such dividend or distribution,
or the effective date of such subdivision, combination or reclassification, as
the case may be, shall be proportionately adjusted so that the holder of any
share of 5% Preferred Stock thereafter surrendered for conversion shall be
entitled to receive the number and kind of shares of Common Stock that such
holder would have owned or have been entitled to receive after the happening of
any of the events described above had such share been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification.
An adjustment made pursuant to this subparagraph (i) shall become effective
immediately after the opening of business on the Business Day next following the
record date (except as provided in paragraph (8)(h)) in the case of a dividend
or distribution and shall become effective immediately after the opening of
business on the Business Day next following the effective date in the case of a
subdivision, combination or reclassification. Adjustments in accordance with
this paragraph (8)(d)(i) shall be made whenever any event listed above shall
occur.

              (ii)  If the Corporation shall after the Issue Date fix a record
date for the issuance of rights or warrants (in each case, other than any rights
issued pursuant to a shareholder rights plan) to all holders of Common Stock
entitling them (for a period expiring within 45 days after such record date) to
subscribe for or purchase Common Stock (or securities convertible into Common
Stock) at a price per share (or, in the case of a right or warrant to purchase
securities convertible into Common Stock, having an effective exercise price per
share of Common Stock, computed on the basis of the maximum number of shares of
Common Stock issuable upon conversion of such convertible securities, plus the
amount of additional consideration payable, if any, to receive one share of
Common Stock upon conversion of such securities) less


                                       18

<PAGE>   446



than the 25-Day Average Market Price on the date on which such issuance was
declared or otherwise announced by the Corporation (the "Determination Date"),
then the Conversion Rate in effect at the opening of business on the Business
Day next following such record date shall be adjusted so that the holder of each
share of 5% Preferred Stock shall be entitled to receive, upon the conversion
thereof, the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to such record date by (II) a
fraction, the numerator of which shall be the sum of (A) the number of shares of
Common Stock outstanding on the close of business on the Determination Date and
(B) the number of additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants (or in the case of a right or
warrant to purchase securities convertible into Common Stock, the aggregate
number of additional shares of Common Stock into which the convertible
securities so offered are initially convertible), and the denominator of which
shall be the sum of (A) the number of shares of Common Stock outstanding on the
close of business on the Determination Date and (B) the number of shares that
the aggregate proceeds to the Corporation from the exercise of such rights or
warrants for Common Stock would purchase at such 25-Day Average Market Price on
such date (or, in the case of a right of warrant to purchase securities
convertible into Common Stock, the number of shares of Common Stock obtained by
dividing the aggregate exercise price of such rights or warrants for the maximum
number of shares of Common Stock issuable upon conversion of such convertible
securities, plus the aggregate amount of additional consideration payable, if
any, to convert such securities into Common Stock, by such 25-Day Average Market
Price). Such adjustment shall become effective immediately after the opening of
business on the Business Day next following such record date (except as provided
in paragraph (8)(h)). Such adjustment shall be made successively whenever such a
record date is fixed. In the event that after fixing a record date such rights
or warrants are not so issued, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect if such record date had not been
fixed. In determining whether any rights or warrants entitle the holders of
Common Stock to subscribe for or purchase shares of Common Stock at less than
such 25-Day Average Market Price, there shall be taken into account any
consideration received by the Corporation upon issuance and upon exercise of
such rights or warrants, the value of such consideration, if other than cash, to
be determined by the Board of Directors in good faith. In case any rights or
warrants referred to in this subparagraph (ii) shall expire unexercised after
the same have been distributed or issued by the Corporation (or, in the case of
rights or warrants to purchase securities convertible into Common Stock once
exercised, the conversion right of such securities shall expire), the Conversion
Rate shall be readjusted at the time of such expiration to the Conversion Rate
that would have


                                       19

<PAGE>   447



been in effect if no adjustment had been made on account of the distribution or
issuance of such expired rights or warrants.

              (iii) If the Corporation shall fix a record date for the making of
a distribution to all holders of its Common Stock of evidences of its
indebtedness, shares of its capital stock or assets (excluding regular cash
dividends or distributions declared in the ordinary course by the Board of
Directors and dividends payable in Common Stock for which an adjustment is made
pursuant to paragraph (8)(d)(i)) or rights or warrants (in each case, other than
any rights issued pursuant to a shareholder rights plan) to subscribe for or
purchase any of its securities (excluding those rights and warrants issued to
all holders of Common Stock entitling them (for a period expiring within 45 days
after such record date) to subscribe for or purchase Common Stock or securities
convertible into shares of Common Stock, which rights and warrants are referred
to in and treated under subparagraph (ii) above) (any of the foregoing being
hereinafter in this subparagraph (iii) called the "Securities"), then in each
such case the Conversion Rate shall be adjusted so that the holder of each share
of 5% Preferred Stock shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock determined by multiplying (I) the
Conversion Rate in effect immediately prior to the close of business on such
record date by (II) a fraction, the numerator of which shall be the 25-Day
Average Market Price per share of the Common Stock on such record date, and the
denominator of which shall be the 25-Day Average Market Price per share of the
Common Stock on such record date less the then-fair market value (as determined
by the Board of Directors in good faith, whose determinations shall be
conclusive) of the portion of the assets, shares of its capital stock or
evidences of indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event that after
fixing a record date such distribution is not so made, the Conversion Rate shall
be readjusted to the Conversion Rate which would then be in effect if such
record date had not been fixed. Such adjustment shall become effective
immediately at the opening of business on the Business Day next following
(except as provided in paragraph (8)(h)) the record date for the determination
of shareholders entitled to receive such distribution. For the purposes of this
subparagraph (iii), the distribution of a Security, which is distributed not
only to the holders of the Common Stock on the date fixed for the determination
of shareholders entitled to such distribution of such Security, but also is
distributed with each share of Common Stock delivered to a Person converting a
share of 5% Preferred Stock after such determination date, shall not require an
adjustment of the Conversion Rate pursuant to this subparagraph (iii); provided,
however, that on the date, if any, on which a Person converting a share of 5%


                                       20

<PAGE>   448



Preferred Stock would no longer be entitled to receive such Security with a
share of Common Stock (other than as a result of the termination of all such
Securities), a distribution of such Securities shall be deemed to have occurred
and the Conversion Rate shall be adjusted as provided in this subparagraph (iii)
(and such day shall be deemed to be "the date fixed for the determination of
shareholders entitled to receive such distribution" and "the record date" within
the meaning of the three preceding sentences). If any rights or warrants
referred to in this subparagraph (iii) shall expire unexercised after the same
shall have been distributed or issued by the Corporation, the Conversion Rate
shall be readjusted at the time of such expiration to the Conversion Rate that
would have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.

              (iv)  In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash in the amount per share that,
together with the aggregate of the per share amounts of any other cash
distributions to all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (iv) has been made exceeds 5.0% of the
25-Day Average Market Price immediately prior to the date of declaration of such
dividend or distribution (excluding any dividend or distribution in connection
with the liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, and any cash that is distributed upon a merger,
consolidation or other transaction for which an adjustment pursuant to paragraph
8(e) is made), then, in such case, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date (as defined
below) for the cash dividend or distribution by a fraction the numerator of
which shall be the Current Market Price of a share of the Common Stock on the
Record Date and the denominator shall be such Current Market Price less the per
share amount of cash so distributed during the 12-month period applicable to one
share of Common Stock, such adjustment to be effective immediately prior to the
opening of business on the Business Day following the Record Date; provided,
however, that in the event the denominator of the foregoing fraction is zero or
negative, in lieu of the foregoing adjustment, adequate provision shall be made
so that each holder of 5% Preferred Stock shall have the right to receive upon
conversion, in addition to the shares of Common Stock to which the holder is
entitled, the amount of cash such holder would have received had such holder
converted each share of 5% Preferred Stock at the beginning of the 12-month
period. In the event that such dividend or distribution is not so paid or made,
the Conversion Rate shall again be adjusted to be the Conversion Rate which
would then be in effect if such dividend or distribution


                                       21

<PAGE>   449



had not been declared. Notwithstanding the foregoing, if any adjustment is
required to be made as set forth in this paragraph (8)(d)(iv), the calculation
of any such adjustment shall include the amount of the quarterly cash dividends
paid during the 12-month reference period only to the extent such dividends
exceed the regular quarterly cash dividends paid during the 12 months preceding
the 12-month reference period. For purposes of this paragraph (8)(d)(iv),
"Record Date" shall mean, with respect to any dividend or distribution in which
the holders of Common Stock have the right to receive cash, the date fixed for
determination of shareholders entitled to receive such cash.

              In the event that at any time cash distributions to holders of
Common Stock are not paid equally on all series of Common Stock, the provisions
of this paragraph 8(d)(iv) will apply to any cash dividend or cash distribution
on any series of Common Stock otherwise meeting the requirements of this
paragraph, and shall be deemed amended to the extent necessary so that any
adjustment required will be made on the basis of the cash dividend or cash
distribution made on any such series.

              (v)   In case of the consummation of a tender or exchange offer
(other than an odd-lot tender offer) made by the Corporation or any subsidiary
of the Corporation for all or any portion of the outstanding shares of Common
Stock to the extent that the cash and fair market value (as determined in good
faith by the Board of Directors of the Corporation, whose determination shall be
conclusive and shall be described in a resolution of such Board) of any other
consideration included in such payment per share of Common Stock at the last
time (the "Expiration Time") tenders or exchanges may be made pursuant to such
tender or exchange offer (as amended) exceed by more than 5.0%, with any smaller
excess being disregarded in computing the adjustment to the Conversion Rate
provided in this paragraph (8)(d)(v), the first reported sale price per share of
the Common Stock on the Trading Day next succeeding the Expiration Time, then
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
Expiration Time by a fraction the numerator of which shall be the sum of (x) the
fair market value (determined as aforesaid) of the aggregate consideration
payable to shareholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchase Shares")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchase Shares) on the Expiration Time and the first reported sale price of
the Common Stock on the Trading Day next succeeding the Expiration Time, and the


                                       22

<PAGE>   450



denominator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time multiplied
by the first reported sale price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such adjustment to become effective immediately
prior to the opening of business on the day following the Expiration Time.

              (vi)  No adjustment in the Conversion Rate shall be required
unless such adjustment would require a cumulative increase or decrease of at
least 1% in the Conversion Rate; provided, however, that any adjustments that by
reason of this subparagraph (vi) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment until made, and
provided further that any adjustment shall be required and made in accordance
with the provisions of this paragraph (8) (other than this subparagraph (vi))
not later than such time as may be required in order to preserve the tax-free
nature of a distribution for United States income tax purposes to the holders of
shares of 5% Preferred Stock or Common Stock. Notwithstanding any other
provisions of this paragraph (8), the Corporation shall not be required to make
any adjustment of the Conversion Rate for the issuance of any shares of Common
Stock pursuant to any plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and the investment of
additional optional amounts in shares of Common Stock under such plan. All
calculations under this paragraph (8) shall be made to the nearest dollar or to
the nearest 1/1,000 of a share, as the case may be. Anything in this paragraph
(8)(d) to the contrary notwithstanding, the Corporation shall be entitled, to
the extent permitted by law, to make such adjustments in the Conversion Rate,
in addition to those required by this paragraph (8)(d), as it in its discretion
shall determine to be advisable in order that any stock dividends, subdivision
of shares, reclassification or combination of shares, distribution or rights or
warrants to purchase stock or securities, or a distribution of other assets
(other than cash dividends) hereafter made by the Corporation to its
shareholders shall not be taxable.

              (vii) In the event that, at any time as a result of shares of any
other class of capital stock becoming issuable in exchange or substitution for
or in lieu of shares of Common Stock or as a result of an adjustment made
pursuant to the provisions of this paragraph (8)(d), the holder of 5% Preferred
Stock upon subsequent conversion shall become entitled to receive any shares of
capital stock of the Corporation other than Common Stock, the number of such
other shares so receivable upon conversion of any shares of 5% Preferred Stock
shall thereafter be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained herein.


                                       23

<PAGE>   451



              (viii)  The $96.00 required stock price threshold set forth in
paragraph (6)(a)(ii) shall be adjusted from time to time in a manner consistent
with the provisions of this paragraph (8)(d).

              (e) (i) If the Corporation shall be a party to any transaction
(including without limitation, a merger, consolidation, sale of all or
substantially all of the Corporation's assets or recapitalization of the Common
Stock and excluding any transaction as to which paragraph (8)(d)(i) applies)
(each of the foregoing being referred to herein as a "Transaction"), in each
case as a result of which shares of Common Stock shall be converted into the
right to receive stock, securities or other property (including cash or any
combination thereof), there shall be no adjustment to the Conversion Rate but
each share of 5% Preferred Stock which is not converted into the right to
receive stock, securities or other property in connection with such Transaction
shall thereafter be convertible into the kind and amount of shares of stock,
securities and other property (including cash or any combination thereof)
receivable upon the consummation of such Transaction by a holder of that number
of shares or fraction thereof of Common Stock into which one share of 5%
Preferred Stock was convertible immediately prior to such Transaction, assuming
such holder of Common Stock (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be (a
"Constituent Person"), or an affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of stock,
securities and other property (including cash) receivable upon such Transaction
(provided that if the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction is not the same for each share
of Common Stock held immediately prior to such Transaction by other than a
Constituent Person or an affiliate thereof and in respect of which such rights
of election shall not have been exercised ("non-electing share"), then for the
purpose of this paragraph (8)(e) the kind and amount of stock, securities and
other property (including cash) receivable upon such Transaction by each non-
electing share shall be deemed to be the kind and amount so receivable per share
by a plurality of the non-electing shares). The provisions of this paragraph
(8)(e) shall similarly apply to successive Transactions.

              (ii)  Notwithstanding anything herein to the contrary , if the
Corporation is reorganized such that the Common Stock is exchanged for the
common stock of a new entity ("Holdco") whose common stock is traded on the
Nasdaq National Market or another recognized securities exchange or automated
quotation system, then the Corporation, by notice to and consultation with the


                                       24

<PAGE>   452



holders of the 5% Preferred Stock, may cause the exchange of this 5% Preferred
Stock for preferred stock of Holdco having the same terms and conditions as set
forth herein; provided that the rights attaching to the preferred stock of
Holdco shall be adjusted so as to comply with the local law of the country of
incorporation of Holdco or the new share structure of Holdco subject to such
rights effectively giving the same economic rights as the 5% Preferred Stock
(including for these purposes any resultant change in the tax treatment for the
holders of such stock).

              (f)   If:

              (i)   the Corporation shall declare a dividend (or any other
       distribution) on the Common Stock; or

              (ii)  the Corporation shall authorize the granting to the holders
       of the Common Stock of rights or warrants to subscribe for or purchase
       any shares of any class or any other rights or warrants; or

              (iii) there shall be any subdivision, combination or
       reclassification of the Common Stock or any consolidation or merger to
       which the Corporation is a party and for which approval of any
       shareholders of the Corporation is required, or the sale or transfer of
       all or substantially all of the assets of the Corporation as an entirety;
       or

              (iv)  there shall occur the voluntary or involuntary liquidation,
       dissolution or winding up of the Corporation;

then the Corporation shall cause to be filed with any transfer agent designated
by the Corporation pursuant to paragraph (8)(b) and shall cause to be mailed to
the holders of shares of the 5% Preferred Stock at their addresses as shown on
the stock records of the Corporation, as promptly as possible, but at least ten
days prior to the applicable date hereinafter specified, a notice stating (A)
the date on which a record is to be taken for the purpose of such dividend (or
such other distribution) or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights or warrants are to be determined or (B)
the date on which such subdivision, combination, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up or
other action is expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities or other property, if any,
deliverable


                                       25

<PAGE>   453



upon such subdivision, combination, reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution or winding up. Failure to give or
receive such notice or any defect therein shall not affect the legality or
validity of any distribution, right, warrant, subdivision, combination,
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, winding up or other action, or the vote upon any of the foregoing.

              (g)   Whenever the Conversion Rate is adjusted as herein provided,
the Corporation shall prepare an officer's certificate with respect to such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the effective date of such adjustment and shall mail a copy of such officer's
certificate to the holder of each share of 5% Preferred Stock at such holder's
last address as shown on the stock records of the Corporation. If the
Corporation shall have designated a transfer agent pursuant to paragraph (8)(b),
it shall also promptly file with such transfer agent an officer's certificate
setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment which certificate shall
be conclusive evidence of the correctness of such adjustment.

              (h)   In any case in which paragraph (8)(d) provides that an
adjustment shall become effective on the day next following a record date for an
event, the Corporation may defer until the occurrence of such event (i) issuing
to the holder of any share of 5% Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of any fraction pursuant to paragraph (8)(c).

              (i)   For purposes of this paragraph (8), the number of shares of
Common Stock at any time outstanding shall not include any shares of Common
Stock then owned or held by or for the account of the Corporation. The
Corporation shall not pay a dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.

              (j)   There shall be no adjustment of the Conversion Rate in case
of the issuance of any stock of the Corporation in a reorganization, acquisition
or other similar transaction except as specifically set forth in this paragraph
(8). If any single action would require adjustment of the Conversion Rate
pursuant to more than one


                                       26

<PAGE>   454



subparagraph of this paragraph (8), only one adjustment shall be made and such
adjustment shall be the amount of adjustment that has the highest absolute
value.

              (k)   If the Corporation shall take any action affecting the
Common Stock, other than action described in this paragraph (8), that in the
opinion of the Board of Directors materially adversely affects the conversion
rights of the holders of the shares of 5% Preferred Stock, the Conversion Rate
may be adjusted, to the extent permitted by law, in such manner, if any, and at
such time, as the Board of Directors may determine to be equitable in the
circumstances; provided that the provisions of this paragraph (8)(k) shall not
affect any rights the holders of 5% Preferred Stock may have at law or in
equity.

              (l)   (i) The Corporation covenants that it will at all times
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock or its issued shares of
Common Stock held in its treasury, or both, for the purpose of effecting
conversion of the 5% Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of 5% Preferred Stock
not theretofore converted. For purposes of this paragraph (8)(l) the number of
shares of Common Stock that shall be deliverable upon the conversion of all
outstanding shares of 5% Preferred Stock shall be computed as if at the time of
computation all such outstanding shares were held by a single holder.

              (ii)  The Corporation covenants that any shares of Common Stock
issued upon conversion of the 5% Preferred Stock shall be duly authorized,
validly issued, fully paid and non-assessable. Before taking any action that
would cause an adjustment increasing the Conversion Rate such that the quotient
of $1,000.00 and the Conversion Rate (which quotient initially shall be
$83.5912) would be reduced below the then-par value of the shares of Common
Stock deliverable upon conversion of the 5% Preferred Stock, the Corporation
will take any corporate action that, in the opinion of its counsel, may be
necessary in order that the Corporation may validly and legally issue fully paid
and non-assessable shares of Common Stock based upon such adjusted Conversion
Rate.

              (iii) Prior to the delivery of any securities that the Corporation
shall be obligated to deliver upon conversion of the 5% Preferred Stock, the
Corporation shall comply with all applicable federal and state laws and
regulations which require action to be taken by the Corporation.



                                       27

<PAGE>   455



              (m)   The Corporation will pay any and all documentary, stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the 5%
Preferred Stock pursuant hereto; provided, however, that the Corporation shall
not be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of shares of Common Stock or other securities
or property in a name other than that of the holder of the 5% Preferred Stock to
be converted and no such issue or delivery shall be made unless and until the
Person requesting such issue or delivery has paid to the Corporation the amount
of any such tax or established, to the satisfaction of the Corporation, that
such tax has been paid.

              (n)   No adjustment in the Conversion Rate need be made for a
transaction referred to in paragraph (8)(d)(i) through (v) above to the extent
that all holders of 5% Preferred Stock are entitled to participate in such
transaction pursuant to paragraph 4(b).

              (9)   Voting Rights. (a) The holders of record of shares of 5%
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this paragraph (9) or as otherwise provided by law.

              (b)   If and whenever either (i) six quarterly dividends (whether
or not consecutive) payable on the 5% Preferred Stock have not been paid in
full, (ii) the Corporation shall have failed to discharge its Mandatory
Redemption Obligation or (iii) there occurs a Bankruptcy Event (any such event
described in the preceding subparagraphs (i) through (iii) being hereinafter
referred to as a "Trigger Event"), a vote of the holders of shares of 5%
Preferred Stock, voting as a single class, will be required on all matters
brought to shareholders of the Corporation. Whenever all arrears in dividends on
the 5% Preferred Stock then outstanding shall have been paid and dividends
thereon for the current quarterly dividend period shall have been paid or
declared and set apart for payment, the Corporation shall have fulfilled its
Mandatory Redemption Obligation and all Bankruptcy Events shall have been cured
(the "Trigger Event Cure"), then the right of the holders of the 5% Preferred
Stock to vote as described in this paragraph 9(b) shall cease (but subject
always to the same provisions for the vesting of such voting rights if any
Trigger Event occurs).

              (c)   Upon the occurrence of any Trigger Event, the number of
directors then constituting the Board of Directors shall be increased by two and
the holders of shares of 5% Preferred Stock, together with the holders of shares
of every other series of preferred stock (including, without limitation,
Additional Preferred)


                                       28

<PAGE>   456



upon which like rights to vote for the election of two additional directors have
been conferred and are exercisable (resulting from either the failure to pay
dividends or the failure to redeem) (any such other series is referred to as the
"Preferred Shares"), voting as a single class regardless of series, shall be
entitled to elect the two additional directors to serve on the Board of
Directors at any annual meeting of stockholders or special meeting held in
place thereof, or at a special meeting of the holders of 5% Preferred Stock and
the Preferred Shares, called as hereinafter provided. Whenever all arrears in
dividends on the Preferred Shares then outstanding shall have been paid and
dividends thereon for the current quarterly dividend period shall have been paid
or declared and set apart for payment, the Corporation shall have fulfilled any
redemption obligation in respect of the Preferred Shares, and the Trigger Event
Cure has occurred, then the right of the holders of the 5% Preferred Stock and
the Preferred Shares to elect such additional two directors shall cease (but
subject always to the same provisions for the vesting of such voting rights if
any Trigger Event occurs), and the terms of office of all persons elected as
directors by the holders of 5% Preferred Stock and the Preferred Shares shall
forthwith terminate and the number of members of the Board of Directors shall be
reduced accordingly. At any time after such voting power shall have been so
vested in holders of shares of 5% Preferred Stock and the Preferred Shares, the
Secretary of the Corporation may, and upon the written request of any holder of
5% Preferred Stock (addressed to the secretary at the principal office of the
Corporation) shall, call a special meeting of the holders of the 5% Preferred
Stock and of the Preferred Shares for the election of the two directors to be
elected by them as herein provided, such call to be made by notice similar to
that provided in the By-laws of the Corporation for a special meeting of the
stockholders or as required by law. If any such special meeting required to be
called as above provided shall not be called by the Secretary of the Corporation
within 20 days after receipt of any such request, then any holder of shares of
5% Preferred Stock may call such meeting, upon the notice above provided, and
for that purpose shall have access to the stock books of the Corporation. The
directors elected at any such special meeting shall hold office until the next
annual meeting of the stockholders or special meeting held in lieu thereof if
such office shall not have previously terminated as above provided. If any
vacancy shall occur among the directors elected by the holders of the 5%
Preferred Stock and the Preferred Shares, a successor shall be elected by the
Board of Directors, upon the nomination of the then-remaining director elected
by the holders of the 5% Preferred Stock and the Preferred Shares or the
successor of such remaining director, to serve until the next annual meeting of
the stockholders or special meeting held in place thereof if such office shall
not have previously terminated as provided above.



                                       29

<PAGE>   457



              (d)   Without the written consent of the holders of at least
662/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 662/3% in liquidation preference of the
outstanding shares of 5% Preferred Stock at a meeting of the holders of 5%
Preferred Stock called for such purpose, the Corporation will not amend, alter
or repeal any provision of the Certificate of Incorporation of the Corporation
(by merger or otherwise) so as to adversely affect the preferences, rights or
powers of the 5% Preferred Stock; provided that any such amendment that changes
the dividend payable on, the Conversion Rate with respect to, or the liquidation
preference of the 5% Preferred Stock shall require the affirmative vote at a
meeting of holders of 5% Preferred Stock called for such purpose or written
consent of the holder of each share of 5% Preferred Stock.

              (e)   Without the written consent of the holders of at least
662/3% in liquidation preference of the outstanding shares of 5% Preferred
Stock or the vote of holders of at least 662/3% in liquidation preference of the
outstanding shares of 5% Preferred Stock at a meeting of such holders called for
such purpose, the Corporation will not issue any additional 5% Preferred Stock
or create, authorize or issue any Parity Securities or Senior Securities or
increase the authorized amount of any such other class or series; provided that
this paragraph 9(e) shall not limit the right of the Corporation to (i) issue
Additional Preferred as dividends pursuant to paragraph 4 or (ii) to issue
Parity Securities or Senior Securities in order to refinance, redeem or refund
the 13% Preferred, provided that the maximum accrual value (i.e., the sum of
stated value and maximum amount payable in kind over the term from issuance to
first date of mandatory redemption or redemption at the option of the holder) of
such Parity Securities may not exceed the maximum accrual value of the 13%
Preferred.

              (f)   In exercising the voting rights set forth in this paragraph
(9), each share of 5% Preferred Stock shall have one vote per share, except that
when any other series of preferred stock shall have the right to vote with the
5% Preferred Stock as a single class on any matter, then the 5% Preferred Stock
and other series shall have with respect to such matters one vote per $1,000 of
stated liquidation preference. Except as otherwise required by applicable law or
as set forth herein, the shares of 5% Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers and
the consent of the holders thereof shall not be required for the taking of any
corporate action.

              (g)   Nothing in this paragraph (9) shall be in derogation of any
rights that a holder of shares of 5% Preferred Stock may have in his capacity as
a holder of shares of Common Stock.


                                       30

<PAGE>   458




              (10)  General Provisions. (a) The headings of the paragraphs,
subparagraphs, clauses and subclauses of this Certificate of Designation are for
convenience of reference only and shall not define, limit or affect any of the
provisions hereof.

              (b)   If the Corporation shall have failed to declare or pay
dividends as required pursuant to paragraph (4) hereof or shall have failed to
discharge any obligation to redeem shares of 5% Preferred Stock pursuant to
paragraph (6) hereof, the holders of shares of 5% Preferred Stock shall be
entitled to receive, in addition to all other amounts required to be paid
hereunder, when, as and if declared by the Board of Directors, out of funds
legally available for the payment of dividends, cash dividends on the aggregate
dividends which the Corporation shall have failed to declare or pay or the
redemption price, together with accrued and unpaid dividends thereon, as the
case may be, at a rate of 2% per quarter, compounded quarterly, for the period
during which the failure to pay dividends or failure to discharge an obligation
to redeem shares of 5% Preferred Stock shall continue.

              (c)   The shares of 5% Preferred Stock shall bear the following
legend:

              THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF THE
              PREFERRED STOCK WHO SO REQUESTS THE POWERS, DESIGNATION,
              PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
              RIGHTS OF THE PREFERRED STOCK.

              THE SHARES OF PREFERRED STOCK, PAR VALUE $0.01, OF THE CORPORATION
              (THE "PREFERRED STOCK") (AND THE SHARES OF COMMON STOCK, PAR VALUE
              $0.01, OF THE CORPORATION (THE "COMMON STOCK") INTO WHICH THE
              PREFERRED STOCK MAY BE CONVERTED) REPRESENTED BY THIS CERTIFICATE
              MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES ABSENT
              REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY
              APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM
              REGISTRATION REQUIREMENTS. THE TRANSFER OF THE PREFERRED STOCK (OR
              COMMON STOCK, IF THE PREFERRED STOCK HAS BEEN CONVERTED) EVIDENCED
              BY THIS CERTIFICATE IS SUBJECT TO THE


                                       31

<PAGE>   459



              RESTRICTIONS ON TRANSFER PROVIDED FOR IN THE PURCHASE AGREEMENT,
              DATED JULY 15, 1999, AS MAY BE AMENDED, BETWEEN NTL (DELAWARE),
              INC. AND FRANCE TELECOM, A COPY OF WHICH IS ON FILE AT THE
              EXECUTIVE OFFICES OF THE CORPORATION AND WILL BE FURNISHED WITHOUT
              CHARGE TO THE HOLDER OF SUCH PREFERRED STOCK UPON WRITTEN REQUEST
              TO THE CORPORATION.

              THE SHARES OF PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY
              BE CONVERTED INTO COMMON STOCK OR REDEEMED IN EXCHANGE FOR COMMON
              STOCK WITHOUT THE SURRENDER AND EXCHANGE OF THIS CERTIFICATE FOR
              CERTIFICATES REPRESENTING SUCH COMMON STOCK. A NOTICE OF SUCH
              CONVERSION EVENT, IF ANY, IS ON FILE AT THE EXECUTIVE OFFICES OF
              THE CORPORATION AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER
              OF THIS CERTIFICATE UPON WRITTEN REQUEST TO THE CORPORATION.

              The shares of Common Stock issuable upon conversion of the 5%
Preferred Stock shall bear the following legend:

              THE SHARES OF COMMON STOCK, PAR VALUE $0.01, OF THE CORPORATION
              (THE "COMMON STOCK") REPRESENTED BY THIS CERTIFICATE MAY NOT BE
              OFFERED OR SOLD IN THE UNITED STATES ABSENT REGISTRATION UNDER THE
              SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE
              SECURITIES LAWS OR AN APPLICABLE EXEMPTION FROM REGISTRATION
              REQUIREMENTS. THE TRANSFER OF THE COMMON STOCK EVIDENCED BY THIS
              CERTIFICATE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER PROVIDED
              FOR IN THE PURCHASE AGREEMENT, DATED JULY 15, 1999, AS MAY BE
              AMENDED, BETWEEN NTL (DELAWARE), INC. AND FRANCE TELECOM, A COPY
              OF WHICH IS ON FILE AT THE EXECUTIVE OFFICES OF THE CORPORATION
              AND WILL BE FURNISHED WITHOUT CHARGE TO THE HOLDER OF SUCH COMMON
              STOCK UPON WRITTEN REQUEST TO THE CORPORATION.


                                       32

<PAGE>   460




              (d)(i)   Whenever in connection with any conversion or redemption
of the 5% Preferred Stock in exchange for Common Stock the holder is required to
surrender certificates representing such shares of 5% Preferred Stock, such
holder may, by written



                                       33