AMENDMENT NO. 3 TO PLAN AND AGREEMENT OF MERGER

     AMENDMENT  NO. 3,  made and  entered  into as of  November  7,  1996  (this
"Amendment"),  to the PLAN AND AGREEMENT OF MERGER,  dated as of April 24, 1996,
as amended by Amendment  No. 1 and  Amendment  No. 2 made and entered into as of
June 28, 1996 and September 30, 1996,  respectively (as so amended,  the "Merger
Agreement"),  by and between J.  MICHAELS,  INC.,  a New York  corporation  (the
"Company"),  J. MICHAELS, INC. TRUST, a New York trust (the "Trust"), and MURIEL
SIEBERT  CAPITAL  MARKETS  GROUP INC., a Delaware  corporation  wholly-owned  by
Muriel Siebert ("MSCMG").

                              W I T N E S S E T H:

     WHEREAS, the Company and MSCMG have entered into the Merger Agreement; and

     WHEREAS,  the Company and MSCMG desire to amend the Merger Agreement to add
the Trust as a party thereto.

     NOW, THEREFORE, the parties hereto agree as follows:

     1. Trust as a Party to the Merger Agreement.  By its execution hereof,  the
Trust does hereby agree to become a party to, and by its execution  hereof shall
become a party to, the Merger Agreement effective upon the Effective Time of the
Merger.  On and after the Effective Time of the Merger,  the Trust shall succeed
to the rights and obligations of the Company under the Merger Agreement.

     2. Approval of this Amendment.  All authorizations,  approvals and consents
(including consents of the Boards of Directors)  necessary for the execution and
delivery by the Company,  the Trust and MSCMG of this  Amendment have been given
or made.

     3.  Governing  Law.  This  Amendment  shall be  construed  and  enforced in
accordance  with and governed by the laws of the State of New York applicable to
contracts executed in and to be performed solely within such state.

     4. Status of the Merger  Agreement.  All other terms and  conditions of the
Merger Agreement shall remain in full force and effect, as amended hereby.

     5.  Miscellaneous.  (a)  Headings.  All headings in this  Amendment are for
convenience  of  reference  only and are not  intended  to limit or  affect  the
meaning of any provision hereof.


<PAGE>


     (b)   Counterparts.   This  Amendment  may  be  executed  in  one  or  more
counterparts  with the same effect as if the signatures to all such counterparts
were upon the same instrument,  and all such  counterparts  shall constitute but
one instrument.

     (c) Capitalized Terms. All capitalized terms used in this Amendment, unless
otherwise defined herein,  shall have the same meaning as such terms have in the
Merger Agreement.

     IN WITNESS  WHEREOF,  the parties have caused this Amendment to be executed
by a duly  authorized  officer  and to become  effective  as of the day and year
first above written.


                                              J. MICHAELS, INC.


                                              By: /S/  JAMES MICHAELS
                                                 ------------------------------
                                                  Name:  James H. Michaels
                                                  Title:  President


                                              J. MICHAELS, INC. TRUST


                                              By: /S/  JAMES H. MICHAELS
                                                 ------------------------------
                                                  Name:
                                                  Title:  Trustee


                                              MURIEL SIEBERT CAPITAL MARKETS
                                                GROUP INC.


                                              By: /S/  MURIEL F. SIEBERT
                                                 ------------------------------
                                                  Name:  Muriel F. Siebert
                                                  Title:  President



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