<PAGE>   1
                                                                     EXHIBIT 3.1

                             CERTIFICATE OF MERGER

                                       OF

                       LAIDLAW TRANSIT ACQUISITION CORP.

                                 WITH AND INTO

                             GREYHOUND LINES, INC.


     Greyhound Lines, Inc., a Delaware corporation, does hereby certify:

1.   The name and state of incorporation of each of the constituent
     corporations participating in the merger are:

     (a)  Greyhound Lines, Inc. ("Greyhound"), which is incorporated under the
          laws of the State of Delaware; and

     (b)  Laidlaw Transit Acquisition Corp. ("LTAC"), which is incorporated
          under the laws of the State of Delaware.

2.   The Amended and Restated Agreement and Plan of Merger, dated as of
     November 5, 1998 (the "Merger Agreement"), by and among Greyhound, Laidlaw
     Inc. and LTAC has been approved, adopted, certified, executed and
     acknowledged by each of the constituent corporations in accordance with
     Section 251 of the General Corporation Law of the State of Delaware.

3.   The name of the surviving corporation in the merger is Greyhound Lines,
     Inc. (the "Company").

4.   The Restated Certificate of Incorporation of Greyhound Lines, Inc., as
     amended, shall be the Restated Certificate of Incorporation of the Company
     as set forth in the attached Exhibit A.

5.   The executed Merger Agreement is on file at the principal place of
     business of the Company, the address of which is: 15110 N. Dallas Parkway,
     Suite 600, Dallas, Texas 75248.

6.   A copy of the Merger Agreement will be furnished by the Company, on
     request and without cost, to any stockholder of either constituent
     corporation.

<PAGE>   2

     IN WITNESS WHEREOF, the Company has caused this Certificate of Merger to
be signed by its President and Chief Executive Officer and attested by its
Secretary as of this 16th day of March, 1999.


                                   GREYHOUND LINES, INC.



                                   By: /s/ Craig R. Lentzsch
                                       ---------------------------------------
                                       Craig R. Lentzsch,
                                       President and Chief Executive Officer



ATTESTED BY:


/s/ Mark E. Southerst                   
----------------------------------
Mark E. Southerst, Secretary
<PAGE>   3
                                                                      Exhibit A

                     RESTATED CERTIFICATE OF INCORPORATION

                                       OF

                             GREYHOUND LINES, INC.


         FIRST.  The name of the corporation is Greyhound Lines, Inc.

         SECOND. The address of the Company's registered office in the State of
Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle, Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.

         THIRD. The purpose of the Company is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware, as amended.

         FOURTH. The total number of shares of stock which the Company shall
have authority to issue is 102,400,000 shares of capital stock classified as
(i) 2,400,000 shares of 8 1/2% Convertible Exchangeable Preferred Stock, par
value $.01 per share ("Preferred Stock") and (ii) 100,000,000 shares of common
stock, par value $.01 per share ("Common Stock").

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

         I.  Provisions Relating to the Preferred Stock.

                (a) Designation. The following is a statement of the powers,
preferences, rights, qualifications, limitations and restrictions of the
Preferred Stock. The liquidation preference of the Preferred Stock (the
"Liquidation Preference") shall be $25.00 per share.

                (b) Rank. the Preferred Stock shall, with respect to dividend
distributions and distributions upon the liquidation, winding-up and
dissolution of the Company, rank (i) senior to all classes of common stock of
the Company and to each other class of capital stock or series of preferred
stock established after April 11, 1997 by the Board of Directors, the terms of
which do not expressly provide that it ranks senior to or on a parity with the
Preferred Stock as to dividend distributions and distributions upon the
liquidation, winding-up and dissolution of the Company (collectively referred
to with the common stock of the Company as "Junior Securities"); (ii) on a
parity with any class of capital stock or series of preferred stock established
after the Preferred Stock Issue Date by the Board of Directors, the terms of
which expressly provide that such class or series will rank on a parity with
the Preferred Stock as to dividend distributions and distributions upon the
liquidation, winding-up and dissolution of the Company (collectively referred
to as "Parity Securities"); and (iii) junior to each class of capital stock or
series of 

<PAGE>   4

preferred stock established after the Preferred Stock Issue Date by the Board
of Directors, the terms of which expressly provide that such class or series
will rank senior to the Preferred Stock as to dividend distributions and
distributions upon liquidation, winding-up and dissolution of the Company
(collectively referred to as "Senior Securities"). The Preferred Stock shall be
subject to the issuance of series of Junior Securities, Parity Securities and
Senior Securities, provided that the Company may not issue any new class of
Senior Securities without the approval of the Holders of at least 66 2/3% of the
shares of Preferred Stock then outstanding, voting or consenting, as the case
may be, together as one class. The Preferred Stock shall rank junior in right
of payment to all indebtedness and other obligations of the Company.

                (c) Dividends.

                    (i) Beginning on the Preferred Stock 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,
                distributions in the form of cash dividends on each share of
                Preferred Stock, at a rate per annum equal to 8 1/2% of the
                Liquidation Preference per share of the Preferred Stock,
                payable quarterly. All dividends shall be cumulative, whether
                or not earned or declared, on a daily basis from the Preferred
                Stock Issue Date and shall be payable quarterly in arrears on
                each Dividend Payment Date, commencing on August 1, 1997. Each
                distribution in the form of a dividend shall be payable to the
                Holders of record as they appear on the stock register of the
                Company on the record date for such purpose fixed by the Board
                of Directors, which shall not be less than 10 nor more than 60
                days preceding the related Dividend Payment Date. Dividends
                shall cease to accumulate in respect of shares of the Preferred
                Stock on the Exchange Date or on the date of their earlier
                redemption unless the Company shall have failed to issue the
                appropriate aggregate principal amount of Exchange Debentures
                in respect of the Preferred Stock on the Exchange Date or shall
                have failed to pay the relevant redemption price on the date
                fixed for redemption.

                    (ii) All dividends paid with respect to shares of the
                Preferred Stock pursuant to paragraph I(c)(i) of this Article
                Fourth shall be paid pro rata to the Holders entitled thereto.

                    (iii) 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 Company to pay or set apart for
                payment, any cash dividends on shares of the Preferred Stock at
                any time.


                                      -2-
<PAGE>   5

                    (iv) Dividends on account of arrears for any past Dividend
                Period and dividends in connection with any optional redemption
                pursuant to paragraph I(f)(i) of this Article Fourth may be
                declared and paid at any time, without reference to any regular
                Dividend Payment Date, to Holders of record on such date, not
                more than 45 days prior to the payment thereof, as may be fixed
                by the Board of Directors.

                    (v) Except as set forth in the following sentence, no
                dividends shall be declared by the Board of Directors or paid
                or funds set apart for the payment of dividends by the Company
                on any Parity Securities for any period unless full cumulative
                dividends shall have been or contemporaneously are declared and
                paid in cash or declared and a sum in cash set apart sufficient
                for such payment on the Preferred Stock for all Dividend
                Periods terminating on or prior to the date of payment of such
                dividends on such Parity Securities. If full dividends in cash
                are not so paid upon the shares of the Preferred Stock and any
                other Parity Securities, all dividends declared upon the
                Preferred Stock and any other Parity Securities shall be
                declared pro rata so that the amount of dividends declared on
                each class or series of the Preferred Stock and such Parity
                Securities shall in all cases bear to each other the same ratio
                that the aggregate accrued dividends on the Preferred Stock and
                such Parity Securities bear to each other.

                    (vi) (A) Holders of shares of the Preferred Stock shall be
                entitled to receive the dividends provided for in paragraph
                I(c)(i) of this Article Fourth in preference to and in priority
                over any dividends upon any of the Junior Securities.

                         (B) So long as any shares of Preferred Stock are
                outstanding, the Company shall not declare, pay or set apart
                for payment any dividend on any Junior Securities or make any
                payment on account of, or set apart for payment money for a
                sinking or other similar fund for, the purchase, redemption or
                other retirement of, any Junior Securities or any warrants,
                rights, calls or options exercisable for or convertible into
                any Junior Securities, or make any distribution in respect
                thereof, either directly or indirectly, and whether in cash,
                obligations or shares of the Company or other property (other
                than distributions or dividends in Junior Securities to the
                holders of Junior Securities), and shall not permit any
                corporation or other entity directly or indirectly controlled
                by the Company to purchase or redeem any Junior Securities or
                any such warrants, rights, calls or options unless full
                cumulative dividends determined in accordance herewith have
                been paid or deemed paid in full on the Preferred Stock for all
                past Dividend Periods.

                         (C) So long as any shares of the Preferred Stock are
                outstanding, the Company shall not make any payment on account
                of, or set apart for payment money for a sinking or other
                similar fund for, the purchase, redemption or other retirement
                of, any Parity Securities or any warrants, rights, calls or
                options exercisable for or convertible into any Parity
                Securities, and shall not permit any corporation or other
                entity directly or indirectly controlled by the


                                      -3-
<PAGE>   6

                Company to purchase or redeem any Parity Securities or any such
                warrants, rights, calls or options unless the dividends
                determined in accordance herewith on the Preferred Stock have
                been paid or deemed paid in full for all past Dividend Periods.

                    (vii) Dividends payable on shares of the Preferred Stock
                for any period of 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 any period of less than one month. If
                any Dividend Payment Date occurs on a day that is not a
                Business Day, any accrued dividends otherwise payable on such
                Dividend Payment Date shall be paid on the next succeeding
                Business Day.

                (d) Liquidation Preference.

                    (i) Upon any voluntary or involuntary liquidation,
                dissolution or winding-up of the Company, the Holders of shares
                of Preferred Stock then outstanding shall be entitled to be
                paid, out of the assets of the Company available for
                distribution, the Liquidation Preference, plus an amount in
                cash equal to accumulated and unpaid dividends and Liquidated
                Damages, if any, thereon to the date fixed for liquidation,
                dissolution or winding-up (including an amount 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 payment shall be made or any assets
                distributed to the holders of any Junior Securities. If, upon
                any voluntary or involuntary liquidation, dissolution or
                winding-up of the Company, the amounts payable with respect to
                the Preferred Stock and all other Parity Securities are not
                paid in full, then the holders of the Preferred Stock and the
                Parity Securities shall share equally and ratably in any
                distribution of assets of the Company in proportion to the full
                liquidation preference and accumulated and unpaid dividends and
                Liquidated Damages, if any, determined as of the date of such
                voluntary or involuntary liquidation, dissolution or
                winding-up, to which each is entitled. After payment of the
                full amount of the liquidation preferences and accumulated and
                unpaid dividends and Liquidated Damages, if any, to which they
                are entitled, the Holders of shares of Preferred Stock shall
                not be entitled to any further participation in any
                distribution of assets of the Company.

                    (ii) For the purposes of this paragraph (d) only, neither
                the sale, lease, 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 Company nor
                the consolidation or merger of the Company with or into one or
                more entities shall be deemed to be a liquidation, dissolution
                or winding-up of the Company.


                                      -4-

<PAGE>   7

                (e) Conversion.

                    (i) A Holder of shares of Preferred Stock may convert such
                shares into cash at any time. For the purposes of conversion,
                each share of Preferred Stock shall be convertible into $33.33.
                Immediately following such conversion, the rights of the
                Holders of converted Preferred Stock shall cease.

                    (ii) To convert Preferred Stock, a Holder must (A) 
                surrender the certificate or certificates evidencing the shares
                of Preferred Stock to be converted, duly endorsed in a form
                satisfactory to the Company, at the office of the Company or
                transfer agent for the Preferred Stock, (B) notify the Company
                at such office that he elects to convert Preferred Stock and
                the number of shares he wises to convert, and (C) pay any
                transfer or similar tax if required. In the event that a Holder
                fails to notify the Company of the number of shares of
                Preferred Stock which he wises to convert, he shall be deemed
                to have elected to convert all shares represented by the
                certificate or certificates surrendered for conversion. The
                date on which the Holder satisfies all those requirements is
                the "Conversion Date." As soon as practical, the Company shall
                deliver a payment in cash and a new certificate representing
                the unconverted portion, if any, of the shares of Preferred
                Stock represented by the certificate or certificates
                surrendered for conversion. No payment or adjustment will be
                made for accrued and unpaid dividends on converted shares of
                Preferred Stock. A share of Preferred Stock surrendered for
                conversion during the period from the close of business on any
                record date for the payment of dividends to the opening of
                business of the corresponding Dividend Payment Date must be
                accompanied by a payment in cash in an amount equal to the
                dividend payable on such Dividend Payment Date, unless such
                share of Preferred Stock has been called for redemption on a
                redemption date occurring during the period from the close of
                business on any record date for the payment of dividends to the
                close of business on the business day immediately following the
                corresponding Dividend Payment Date. The dividend payment with
                respect to a share of Preferred Stock called for redemption on
                a date during the period from the close of business on any
                record date for the payment of dividends to the close of
                business on the business day immediately following the
                corresponding Dividend Payment Date will be payable on such
                Dividend Payment Date to the record Holder of such share on
                such record date, notwithstanding the conversion of such share
                after such record date and prior to such Dividend Payment Date,
                and the Holder converting such share of Preferred Stock need
                not include a payment of such dividend amount upon surrender of
                such share of Preferred Stock for conversion. If the last day
                on which Preferred Stock may be converted is not a Business
                Day, Preferred Stock may be surrendered for conversion on the
                next succeeding Business Day.

                    (iii) All shares of Preferred Stock converted pursuant to
                this paragraph (e) shall be restored to the status of
                authorized and unissued shares of Preferred Stock.


                                      -5-
<PAGE>   8

                (f) Redemption

                    (i) Optional Redemption. (A) The Company may, at the option
                of the Board of Directors, redeem at any time on or after May 3,
                2000, from any source of funds legally available therefor, in
                whole or in part, in the manner provided in paragraph I(e)(iii)
                of this Article Fourth, any or all of the shares of the
                Preferred Stock, at the redemption prices (expressed as a
                percentage of the Liquidation Preference) set forth below if
                redeemed during the 12-month period beginning on May 3 of each
                of the years indicated below:

<TABLE>
<CAPTION>
                    Year                                        Percentage
                    ----                                        ----------
                    <S>                                         <C>    
                    2000.................................        104.86%
                    2001.................................        103.64%
                    2002.................................        102.43%
                    2003.................................        101.21%
                    2004 and thereafter..................        100.00%
</TABLE>

                plus, in each case, an amount in cash equal to all accumulated
                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 date fixed for redemption
                (the "Redemption Date") and Liquidated Damages, if any (the
                "Optional Redemption Price"), provided, that no optional
                redemption pursuant to this paragraph (f)(i)(A) shall be
                authorized or made unless prior to the applicable Redemption
                Notice all accumulated and unpaid dividends for Dividend
                Periods ended prior to the date of such Redemption Notice shall
                have been paid in cash.

                         (B) In the event of a redemption pursuant to paragraph
                I(f)(i)(A) of this Article Fourth of only a portion of the then
                outstanding shares of the Preferred Stock, the Company shall
                effect such redemption pro rata according to the number of
                shares held by each Holder of the Preferred Stock or by lot, as
                may be determined by the Company in its sole discretion;
                provided that the Company may redeem all shares held by Holders
                of fewer than 100 shares of Preferred Stock (or by Holders that
                would hold fewer than 100 shares of Preferred Stock following
                such redemption) prior to its redemption of other shares of
                Preferred Stock.

                    (ii) Procedures for Redemption. (A) At least 30 days and not
                more than 60 days prior to the Redemption Date of the Preferred
                Stock, the Company shall make a public announcement of the
                redemption, and shall mail written notice (the "Redemption
                Notice") 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 the same appears on
                the stock register of the

<PAGE>   9

                Company, provided 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 Company
                has failed to give said notice or except as to the Holder or
                Holders whose notice was defective. The Redemption Notice shall
                state:

                    (1)  that the redemption is pursuant to paragraph
                         I(f)(i)(A) of this Article Fourth;

                    (2)  the Optional Redemption Price;

                    (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 number of shares of Preferred Stock held, as of
                         the appropriate record date, by the Holder that the
                         Company intends to redeem;

                    (5)  the Redemption Date;

                    (6)  that the Holder is to surrender to the Company, at the
                         place or places where certificates for shares of
                         Preferred Stock are to be surrendered for redemption,
                         in the manner and at the price designated, his
                         certificate or certificates representing the shares of
                         Preferred Stock to be redeemed;

                    (7)  the name of any bank or trust company performing the
                         duties referred to in paragraph I(f)(ii)(D) of this
                         Article Fourth; and

                    (8)  that dividends on the shares of the Preferred Stock to
                         be redeemed shall cease to accrue on such Redemption
                         Date unless the Company defaults in the payment of the
                         Optional Redemption Price.

                (B) Each Holder of Preferred Stock shall surrender the
certificate or certificates representing such shares of Preferred Stock to the
Company, duly endorsed, in the manner and at the place designated in the
Redemption Notice, and on the Redemption Date the full Optional Redemption
Price 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.


                                      -7-
<PAGE>   10

                (C) Unless the Company defaults in the payment in full of the
applicable redemption price, dividends on the Preferred Stock called for
redemption shall cease to accumulate on the Redemption Date, and the Holders of
such redemption shares shall cease to have any further rights with respect
thereto on the Redemption Date, other than the right to receive the Optional
Redemption Price without interest.

                (D) If a Redemption Notice shall have been duly given or if the
Company shall have given to the bank or trust company hereinafter referred to
irrevocable authorization promptly to give such notice, and if on or before the
Redemption Date specified therein the funds necessary for such redemption shall
have been deposited by the Company with such bank or trust company in trust for
the pro rata benefit of the Holders of the Preferred Stock called for
redemption, then, notwithstanding that any certificate for shares so called for
redemption shall not have been surrendered for cancellation, from and after the
close of business on the day on which such funds are so deposited, all shares
so called, or to be so called pursuant to such irrevocable authorization, for
redemption shall no longer be deemed to be outstanding and all rights with
respect of such shares shall forthwith cease and terminate and, for the
purposes of paragraphs (f)(ii)(A)(8) and (f)(ii)(C) above, the Company will be
deemed to have paid the Optional Redemption Price on the Redemption Date,
except only the right of Holders thereof to receive from such bank or trust
company at any time after the time of such deposit the funds so deposited,
without interest, and the right of the Holders thereof to convert such shares
as provided in paragraph I(f) of this Article Fourth to the Business Day
preceding the Redemption Date. The aforesaid bank or trust company shall be
organized and in good standing under the laws of the United States of America
or any state thereof, shall have capital, surplus and undivided profits
aggregating at least $100,000,000 according to its last published statement of
condition, and shall be identified in the Redemption Notice. Any interest
accrued on such funds shall be paid to the Company from time to time. Any funds
so set aside or deposited, as the case may be, in respect of shares of the
Preferred Stock that are subsequently converted shall be promptly returned to
the Company. Any funds so set aside or deposited, as the case may be, and
unclaimed at the end of three years from such redemption shall, to the extent
permitted by law, be released or repaid to the Company, after which repayment
the Holders of the shares so called for redemption shall look only to the
Company for payment thereof.

(g) Voting Rights.

    (i) The holders of shares of Preferred Stock shall be entitled to vote 
(together with the holders of shares of Common Stock as one class) upon all
matters submitted to a vote of the stockholders of the Company and shall be
entitled to one vote for each share held. Holders of Preferred Stock shall
further be entitled to vote as set forth in paragraphs I(g)(ii), I(g)(iii) and
I(g)(iv) of this Article Fourth.


                                      -8-
<PAGE>   11

     (ii)  (A) So long as any shares of the Preferred Stock are outstanding, the
Company shall not authorize any class of Senior Securities without the
affirmative vote or consent of Holders of at least 66 2/3% of the 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.

           (B) So long as any shares of the Preferred Stock are outstanding, the
Company shall not amend this Section I of this Article Fourth so as to affect
adversely the specified rights, preferences, privileges or voting rights of
Holders of shares of Preferred Stock or to authorize the issuance of any
additional shares of Preferred Stock without the affirmative vote or consent of
Holders of at least 66 2/3% 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.

           (C) Except as set forth in paragraph (g)(ii)(A) above, (1) the
creation, authorization or issuance of any shares of any Junior Securities,
Parity Securities or Senior Securities or (2) the increase or decrease in the
amount of authorized capital stock of any class, including any preferred stock,
shall not require the consent of the Holders of Preferred Stock and shall not
be deemed to affect adversely the rights, preferences, privileges or voting
rights of the Preferred Stock.

     (iii) (A) If (1) dividends on the Preferred Stock are in arrears and
unpaid for six quarterly dividend periods (whether or not consecutive) (a
"Dividend Default"); or (2) the Company fails to make a Preferred Stock Change
of Control Offer or to repurchase all of the Preferred Stock validly tendered
in a Preferred Stock Change of Control Offer pursuant to the provisions of
paragraph I(i) of this Article Fourth (a "Change of Control Default") (in each
case, a "Voting Rights Triggering Event"), then the number of directors
constituting the Board of Directors shall be adjusted to permit the Holders of
the majority of the then outstanding Preferred Stock, voting separately as one
class, to elect two directors. Holders of a majority of the issued and
outstanding shares of the Preferred Stock, voting separately as one class,
shall have the exclusive right to elect such members of the Board of Directors
at a meeting therefor called upon occurrence of such Dividend Default or Change
of Control Default, as the case may be, and at every subsequent meeting at
which the terms of office of the directors so elected by the Holders of the
Preferred Stock expire (other than as described in (g)(iii)(B) below).

           (B) The right of the Holders of Preferred Stock voting separately as
one class to elect members of the Board of Directors as set forth in paragraph
(g)(iii)(A) above shall continue until such time as (1) in the event such right
arises due to a Dividend Default, all accumulated dividends and Liquidated
Damages, if any, that are in arrears on the Preferred Stock are paid in full;
and (2) 


<PAGE>   12

in the event such right arises because a Change of Control Default, the
Company remedies any such failure, breach or default, at which time the term of
any directors elected pursuant to paragraph I(g)(iii)(A) of this Article Fourth
shall terminate, subject always to the same provisions for the renewal and
divestment of such special voting rights in the case of any future Voting
Rights Triggering Event. 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 paragraph I(g)(iii)(A) of this Article Fourth if
vacancies shall exist in the offices of directors elected by the Holders of
shares of the Preferred Stock, a proper officer of the Company 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 Company
shall, call a special meeting of the Holders of Preferred Stock, for the
purpose of electing the directors that such Holders are entitled to elect. If
such meeting shall not be called by the proper officer of the Company within 20
days after personal service of said written request upon the Secretary of the
Company, or within 20 days after mailing the same within the United States by
certified mail, addressed to the Secretary of the Company 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 Company, and such meeting may
be called by the Person so designated upon the notice required for the annual
meetings of stockholders of the Company 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 provisions of
this paragraph (g)(iii)(B), 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 Company. Any Holder of
shares of the Preferred Stock so designated shall have, and the Company 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
(g)(iii)(B).

           (C) At any meeting held for the purpose of electing directors at
which the Holders of Preferred Stock shall have the right, voting separately as
one class, to elect directors as aforesaid, the presence in person or by proxy
of the Holders of at least a majority of the outstanding Preferred Stock shall
be required to constitute a quorum of such Preferred Stock.

           (D) Directors elected pursuant to this paragraph (g) shall serve
until the earlier of (1) the next annual meeting of the stockholders and until
their successors are qualified or (2) the time specified in paragraph
(g)(iii)(B) above. Any vacancy occurring in the office of a director elected by
the Holders of shares of the Preferred Stock may be filled by the remaining
director elected by the Holders of shares of the Preferred Stock unless and
until such vacancy shall be filled by the Holders of shares of the Preferred
Stock.

                                     -10-
<PAGE>   13

                (iv) In any case in which the Holders of shares of the
          Preferred Stock shall be entitled to vote pursuant to this paragraph
          (g) or pursuant to Delaware law, each Holder of shares of the
          Preferred Stock shall be entitled to one vote for each share of
          Preferred Stock held.

          (h) Exchange.

              (i) Requirements. (A) The Company at its option may exchange all,
          but not less than all, of the then outstanding shares of Preferred
          Stock into the Company's 8 1/2% Convertible Subordinated Debentures
          due 2009 (the "Exchange Debentures") on any Dividend Payment Date on
          or after April 16, 1999, provided that within 30 days of the Exchange
          Date, the Company shall send a written notice (the "Exchange Notice")
          of exchange by mail to each Holder, which notice shall state: (1)
          that the Company is exercising its option to exchange the Preferred
          Stock into Exchange Debentures pursuant to this Section I of this of
          this Article Fourth; (2) the date of the exchange (the "Exchange
          Date"), which date shall not be less than 30 days nor more than 60
          days following the date on which the Exchange Notice is mailed; (3)
          that the Holder is to surrender to the Company, at the place or
          places where certificates for shares of Preferred Stock are to be
          surrendered for exchange, in the manner designated in the Exchange
          Notice, his certificate or certificates representing the shares of
          Preferred Stock to be exchanged; (4) that dividends on the shares of
          Preferred Stock to be exchanged shall cease to accrue on the Exchange
          Date whether or not certificates for shares of Preferred Stock are
          surrendered for exchange on the Exchange Date unless the Company
          shall default in the delivery of Exchange Debentures; and (5) that
          interest on the Exchange Debentures shall accrue from the Exchange
          Date whether or not certificates for shares of Preferred Stock are
          surrendered for exchange on the Exchange Date. On the Exchange Date,
          if the conditions set forth in clauses (u) through (z) below are
          satisfied, the Company shall issue Exchange Debentures in exchange
          for the Preferred Stock as provided in the clause (B) of this
          paragraph (h)(i) provided that on the Exchange Date: (u) there are no
          accumulated and unpaid dividends or Liquidated Damages on the
          Preferred Stock (including the dividends payable and Liquidated
          Damages on such date) or other contractual impediment to such
          exchange; (v) there shall be legally available funds sufficient
          therefore; (w) a registration statement relating to the Exchange
          Debentures shall have been declared effective under the Securities
          Act prior to such exchange and shall continue to be in effect on the
          date of such exchange, or the Company shall have obtained a written
          opinion of counsel that an exemption from the registration
          requirements of the Securities Act is available for such exchange,
          and that upon receipt of such Exchange Debentures pursuant to such
          exchange made in accordance with such exemption, the holders
          (assuming such holder is not an Affiliate of the Company) thereof
          will not be subject to any restrictions imposed by the Securities Act
          upon the resale thereof, other than any such restriction to which the
          holder thereof already is subject on the Exchange Date, and such
          exemption is relied upon by the Company for such exchange; (x) the
          Exchange Debenture Indenture and the trustee thereunder shall have
          been 


                                     -11-
<PAGE>   14

          qualified under the Trust Indenture Act of 1939, as amended (the
          "Trust Indenture Act"); (y) immediately after giving effect to such
          exchange, no Default or Event of Default (each as defined in the
          Exchange Debenture Indenture) would exist under the Exchange
          Debenture Indenture; and (z) the Company shall have delivered to the
          trustee under the Exchange Debenture Indenture a written opinion of
          counsel, dated the Exchange Date, regarding the satisfaction of the
          conditions set forth in clauses (u), (v), (w) and (x). In the event
          that the issuance of the Exchange Debentures is not permitted on the
          Exchange Date or any of the condition set forth in clause (u) through
          (z) of the preceding sentence are not satisfied on the Exchange Date,
          the Company shall use its best efforts to satisfy such conditions and
          effect such exchange as soon as practicable.

                  (B) Upon any exchange pursuant to paragraph I(g)(i)(A) of this
          Article Fourth, Holders of outstanding shares of Preferred Stock
          shall be entitled to receive $1,000 principal amount of Exchange
          Debentures for each 40 shares of Preferred Stock, plus an amount in
          cash equal to accumulated and unpaid dividends (including a prorated
          dividend for the period from the immediately preceding Dividend
          Payment Date to the date of exchange) and Liquidated Damages, if any;
          provided, that the Company shall pay cash in lieu of issuing an
          Exchange Debenture in a principal amount of less than $1,000. On and
          after the Exchange Date, unless the Company defaults in the issuance
          of Exchange Debentures in exchange for the Preferred Stock, dividends
          will cease to accrue on the outstanding shares of Preferred Stock,
          and all rights of the Holders of Preferred Stock (except the right to
          receive the Exchange Debentures, an amount in cash equal to the
          accrued and unpaid dividends and Liquidated Damages, if any, to the
          Exchange Date and cash in lieu of any Exchange Debenture that is in
          an amount that is not an integral multiple of $1,000) will terminate,
          and the Person entitled to receive the Exchange Debentures issuable
          upon such exchange will be treated for all purposes as the registered
          holder of such Exchange Debentures.

             (ii) Procedure for Exchange. (A) On or before the Exchange Date,
     each Holder of Preferred Stock 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 Company shall
     cause the Exchange 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 (properly endorsed or
     assigned for transfer, if the notice shall so state), such shares shall be
     exchanged by the Company into Exchange Debentures. The Company shall pay
     interest on the Exchange 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 Exchange Debenture
          Indenture shall have been duly executed and delivered by the Company
          and the trustee and (2) all Exchange Debentures necessary for such
          exchange shall have been duly executed by the Company and delivered
          to the trustee with irrevocable 


                                     -12-
<PAGE>   15

          instructions to authenticate the Exchange Debentures necessary for
          such exchange, then dividends shall cease to accrue on the
          outstanding shares of Preferred Stock, and all rights of the Holders
          of Preferred Stock (except the right to receive the Exchange
          Debentures, an amount in cash equal to the accrued and unpaid
          dividends and Liquidated Damages, if any, to the Exchange Date and
          cash in lieu of any Exchange Debenture that is in an amount that is
          not an integral multiple of $1,000) will terminate. The Person
          entitled to receive the Exchange Debentures issuable upon such
          exchange will be treated for all purposes as the holder of such
          Exchange Debentures.

          (i) Change of Control.

              (i) Subject to paragraph I(i)(v) of this Article Fourth, upon the
          occurrence of a Change of Control, the Company shall be required to
          make an offer (a "Preferred Stock Change of Control Offer") to each
          Holder of shares of Preferred Stock to repurchase all or any part of
          such Holder's shares of Preferred Stock at an offer price in cash
          equal to 100% of the aggregate Liquidation Preference thereof plus an
          amount in cash equal to all accumulated 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 Change
          of Control Payment Date) and Liquidated Damages, if any, thereon to
          the date of repurchase (the "Change of Control Payment").

              (ii) Within 30 days following any Change of Control, the Company
          shall mail a notice to each Holder describing the transaction that
          constitutes the Change of Control, together with such other
          information as may be required pursuant to the securities laws, and
          stating: (A) that the Change of Control Offer is being made pursuant
          to this Section I of this Article Fourth and that, to the extent
          lawful, all shares of Preferred Stock validly tendered will be
          accepted for payment; (B) the purchase price and the purchase date,
          which shall be no earlier than 30 days nor later than 60 days from
          the date such notice is mailed (the "Change of Control Payment
          Date"); (C) that any shares of Preferred Stock not tendered will
          continue to accrue dividends in accordance with the terms of this
          Section I of this Article Fourth; (D) that, unless the Company
          defaults in the payment of the Change of Control Payment, all shares
          of Preferred Stock accepted for payment pursuant to the Change of
          Control Offer shall cease to accrue dividends on the Change of
          Control Payment Date; and (E) a description of the procedures to be
          followed by such Holder in order to have its shares of Preferred
          Stock repurchased.

              (iii) On the Change of Control Payment Date, (A) the Company 
          shall, to the extent lawful, (A) accept for payment shares of
          Preferred Stock validly tendered pursuant to the Change of Control
          Offer and (B) promptly mail to each Holder of shares of Preferred
          Stock so accepted payment in an amount equal to the purchase price
          for such shares and (B) unless the Company defaults in the payment
          for the shares of Preferred Stock tendered pursuant to the Preferred
          Stock 


                                     -13-
<PAGE>   16

          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. The
          Company shall publicly announce the results of the Preferred Stock
          Change of Control Offer on or as soon as practicable after the Change
          of Control Payment Date.

              (iv) The Company shall comply with any securities laws and
          regulations, to the extent such laws and regulations are applicable
          to the repurchase of shares of the Preferred Stock in connection with
          a Change of Control.

              (v) Notwithstanding the foregoing, prior to complying with this
          paragraph (i), but in any event within 90 days following a Change of
          Control, the Company shall either repay all outstanding indebtedness
          or obtain the requisite consents, if any, under all agreements
          governing outstanding indebtedness necessary to permit the repurchase
          of the Preferred Stock required by this paragraph (i).

              (vi) Notwithstanding the foregoing, the Company will not be
          required to make a Change of Control Offer following a Change of
          Control if a third party makes the Change of Control Offer in the
          manner, at the times and otherwise in compliance with the
          requirements set forth in this Section I of this Article Fourth
          applicable to a Change of Control Offer made by the Company and
          purchases all of the Preferred Stock validly tendered and not
          withdrawn under such Change of Control Offer.

          (j) Preemptive Rights. No shares of Preferred Stock shall have any
rights of preemption whatsoever as to any securities of the Company, or any
warrants, rights or 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 but unissued shares of
Preferred Stock and may be issued or reissued, as the case may be, provided
that any issuance of such shares as Preferred Stock must be in compliance with
the terms in this Section I of this Article Fourth.

          (l) Business Day. If any payment, redemption or exchange shall be 
required by the terms in this Section I of this Article Fourth to be made on a
day that is not a Business Day, such payment, redemption or exchange shall be
made on the immediately succeeding Business Day.


                                     -14-
<PAGE>   17

          (m) Merger. Consolidation and Sale of Assets. Without the vote or
consent of the Holders of a majority of the then outstanding shares of
Preferred Stock, the Company may not consolidate or merge with or into, or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets to, any person unless (i) the entity formed by
such consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made (in any such case, the "resulting entity") is a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia; (ii) if the Company is not the resulting entity, the
Preferred Stock is converted into or exchanged for and becomes shares of such
resulting entity, having in respect of such resulting entity the same (or more
favorable) powers, preferences and relative, participating, optional or other
special rights thereof that the Preferred Stock had immediately prior to such
transaction; and (iii) immediately after giving effect to such transaction, no
Voting Rights Triggering Event has occurred and is continuing. The resulting
entity of such transaction shall thereafter be deemed to be the "Company" for
all purposes of this Section I of this Article Fourth.

          (n) Reports. Whether or not the Company is required to do so by the
rules and regulations of the Commission, the Company shall file with the
Commission (unless the Commission will not accept such a filing) and, within 15
days of filing, or attempting to file, the same with the Commission, furnish to
the Holders of the Preferred Stock (i) all quarterly and annual financial and
other information that would be required to be contained in a filing with the
Commission on Forms 10-Q and 10-K if the Company were required to file such
forms, including a "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants, and (ii) all
current reports that would be required to be filed with the Commission on Form
8-K if the Company were required to file such reports. In addition, the Company
shall furnish to the Holders of the Preferred Stock, prospective purchasers of
shares of Preferred Stock and securities analysts, upon their request, the
information, if any, required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act.

          (o) Mutilated or Missing Preferred Stock Certificates. If any of the
Preferred Stock certificates shall be mutilated, lost, stolen or destroyed, the
Company shall issue, in exchange and in substitution for and upon cancellation
of the mutilated Preferred Stock certificate, or in lieu of and substitution
for the Preferred Stock certificate lost, stolen or destroyed, a new Preferred
Stock certificate of like tenor and representing an equivalent amount of shares
of Preferred Stock, but only upon receipt of evidence of such loss, theft or
destruction of such Preferred Stock certificate and indemnity, if requested,
satisfactory to the Company and the transfer agent (if other than the Company).

          (p) Headings of Subdivision. The headings of various subdivisions in
this Section I of this Article Fourth are for convenience of reference only and
shall not affect the interpretation of any of the provisions in this Section I
of this Article Fourth.


                                     -15-
<PAGE>   18

          (q) Severability of Provisions. If any right, preference or
limitation of the Preferred Stock set forth in this Section I of this Article
Fourth filed pursuant hereto (as this Section I of this Article Fourth may be
amended from time to time) is invalid, unlawful or incapable of being enforced
by reason of any rule or law or public policy, all other rights, preferences
and limitations set forth in this Section I of this Article Fourth, as amended,
which can be given effect without the invalid, unlawful or unenforceable right,
preference or limitation shall, nevertheless remain in full force and effect
and no right, preference or limitation herein set forth shall be deemed
dependent upon any other such right preference or limitation unless so
expressed herein.

          (r) Notice of the Company. All notices other communications required
or permitted to be given to the Company hereunder shall be made by first-class
mail, postage prepaid, to the Company at its principal executive offices,
Attention: General Counsel. Minor imperfections in any such notice shall not
affect the validity thereof.

          (s) Limitations. Except as may otherwise be required by law, the
shares of Preferred Stock shall not have any powers, preferences or relative,
participating, optional or other special rights other than those specifically
set forth in this Section I of this Article Fourth (as may be amended from time
to time) or otherwise in the Certificate of Incorporation of the Company.

          (t) Definitions. As used in this Section I of this Article Fourth,
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:

              "Affiliate" of any specified Person means an "affiliate" of such
          Person. as such term is defined for purposes of Rule 144 under the
          Securities Act.

              "Board of Directors" means the Board of Directors of Greyhound
          Lines, Inc.

              "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, rights or other equivalents (however designated) of
          corporate stock or partnership interests, whether common or
          preferred.

              "Certificate of Incorporation" means the Certificate of
          Incorporation of Greyhound Lines, Inc., as in effect from time to
          time.

              "Change of Control" means the occurrence of any of the following:
          (i) the sale, lease, transfer, conveyance or other disposition (other
          than by way of merger or consolidation), in one or a series of
          related transactions, of all or substantially all of the assets of
          the Company and its subsidiaries, taken as a whole, (ii) the adoption
          of a plan relating to the liquidation or dissolution of the Company,
          (iii)


                                     -16-
<PAGE>   19

          the consummation of any transaction (including, without limitation,
          any merger or consolidation) the result of which is that any "person"
          or "group" (as such terms are used in Section 13(d)(3) of the
          Exchange Act) becomes the "beneficial owner" (as such term is defined
          in Rule 13d-3 and Rule l3d-5 under the Exchange Act), directly or
          indirectly through one or more intermediaries, of more than 50% of
          the voting power of the outstanding voting stock of the Company,
          unless at least 90% of the consideration in the transaction or
          transactions constituting a Change of Control pursuant to clause
          (iii) consists of shares of common stock traded or to be traded
          immediately following such Change of Control on a national securities
          exchange or the NASDAQ National Market and, as a result of such
          transaction or transactions, the Preferred Stock become, convertible
          solely into such common stock (and any rights attached thereto), or
          (iv) the first day on which more than a majority of the Board of
          Directors are not Continuing Directors; provided, however, that a
          transaction in which the Company becomes a subsidiary of another
          entity shall not constitute a Change of Control if (A) the
          stockholders of the Company immediately prior to such transaction
          "beneficially own" (as such term is defined in Rule 13d-3 and Rule
          13d-5 under the Exchange Act), directly or indirectly through one or
          more intermediaries, at least a majority of the voting power of the
          outstanding voting stock of the Company immediately following the
          consummation of such transaction and (B) immediately following the
          consummation of such transaction, no "person" or "group" (as such
          terms are defined above), other than such other entity (but including
          holders of equity interests of such other entity), "beneficially
          owns" (as such term is defined above), directly or indirectly through
          one or more intermediaries, more than 50 % of the voting power of the
          outstanding voting stock of the Company.

              "Change of Control Default" has the meaning set forth in
          paragraph I(g)(iii) of this Article Fourth.

              "Change of Control Payment" has the meaning set forth in
          paragraph I(i)(i) of this Article Fourth.

              "Control of Control Payment Date " has the meaning set forth in
          paragraph I(i)(ii) of this Article Fourth.

              "Commission" means the Securities and Exchange Commission.

              "Continuing Directors" means, as of any date of determination,
          any member of the Board of Directors of the Company who (i) was a
          member of the Board of Directors on the date of original issuance of
          the Preferred Stock or (ii) was nominated for election to the Board
          of Directors with the approval of, or whose election to the Board of
          Directors was ratified by, at least two-thirds of the Continuing
          Directors who were members of the Board of Directors at the time of
          such nomination or election.


                                     -17-
<PAGE>   20

              "Conversion Date" has the meaning set forth in paragraph I(e)(ii)
          of this Article Fourth.

              "Dividend Default" has the meaning set forth in paragraph
          I(g)(iii) of this Article Fourth.

              "Dividend Payment Date" means February 1, May 1, August 1 and
          November 1 of each year.

              "Dividend Period" means the Initial Dividend Period and,
          thereafter, each Quarterly Dividend Period.

              "Exchange Act" means the Securities Exchange Act of 1934, as
          amended.

              "Exchange Date" means a date on which shares of Preferred Stock
          are exchanged by the Company for Exchange Debentures.

              "Exchange Debentures" has the meaning set forth in paragraph
          I(h)(i) of this Article Fourth.

              "Exchange Debenture Indenture" means that certain indenture under
          which the Exchange Debentures will be issued.

              "Exchange Notice" has the meaning set forth in paragraph I(h)(i)
          of this Article Fourth.

              "Holder" means a holder of shares of Preferred Stock as reflected
          in the stock records of the Company or the transfer agent for the
          Preferred Stock.

              "Initial Dividend Period" means the dividend period commencing on
          the Preferred Stock Issue Date and ending on the day before the first
          Dividend Payment Date to occur thereafter.

              "Junior Securities" has the meaning set forth in paragraph I(b)
          of this Article Fourth.

              "Liquidated Damages" means all liquidated damages then owing
          under the Registration Rights Agreement.

              "Liquidation Preference" has the meaning set forth in paragraph
          I(a) of this Article Fourth.

              "Optional Redemption Price" has the meaning set forth in
          paragraph I(f)(i) of this Article Fourth.


                                     -18-
<PAGE>   21

              "Person" means any individual, corporation, partnership, joint
          venture, association, joint-stock company, trust or unincorporated
          organization (including any subdivision or ongoing business of any 
          such entity or substantially all of the assets of any such entity, 
          subdivision or business).

              "Preferred Stock Change of Control Offer" has the meaning set
          forth in paragraph I(i)(i) of this Article Fourth.

              "Preferred Stock Issue Date" means the date on which the
          Preferred Stock is originally issued by the Company.

              "Quoted Price " means the last reported sales price of the
          applicable security on the principal exchange (including, if
          applicable, the NASDAQ National Market) on which the applicable
          security is listed or admitted for trading (which shall be for
          consolidated trading if applicable to such exchange), or if neither
          so reported or listed or admitted for trading, the last reported bid
          price of the applicable security in the over-the-counter market. In 
          the event that the Quoted Price cannot be determined as aforesaid, 
          the Board of Directors of the Company shall determine the Quoted 
          Price on the basis of such quotations as it in good faith considers 
          appropriate.

              "Quarterly Dividend Period" shall mean the quarterly period
          commencing on each February 1, May 1, August 1 and November 1 and
          ending on the before the following Dividend Payment Date.

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

              "Redemption Notice" has the meaning set forth in paragraph
          I(f)(ii) of this Article Fourth.

              "Registration Rights Agreement" means the Registration Rights
          Agreement with respect to the Preferred Stock, dated as of April 16,
          1997, by and between the Company and Bear, Stearns & Co. Inc., as 
          such agreement may be amended, modified or supplemented from time to 
          time.

              "Senior Securities" has the meaning set forth in paragraph I(b)
          of this Article Fourth.

              "Shareholder Rights Plan" means the Amended and Restated Rights
          Agreement dated as of April 8, 1997 by and between the Company and
          Mellon Securities Trust Company, as Rights Agent.

              "Trading Day" means any day on which the American Stock Exchange
          or other applicable stock exchange or market is open for business.


                                     -19-
<PAGE>   22

              "Trust Indenture Act" has the meaning set forth in paragraph
          I(h)(i) of this Article Fourth.

              "Voting Rights Triggering Event" has the meaning set forth in
          paragraph I(g)(iii) of this Article Fourth.

   II. Provisions Relating to the Common Stock

              (a) General. Each share of Common Stock of the Company shall have
identical rights and privileges in every respect. The holders of shares of
Common Stock shall be entitled to vote upon all matters submitted to a vote of
the stockholders of the Company and shall be entitled to one vote for each
share held.

              (b) Dividends and Distributions. Subject to the prior rights and
preferences, if any, applicable to shares of Preferred Stock, the holders of
shares of Common Stock shall be entitled to receive such dividends or other
distributions, payable in cash, property, stock, or otherwise, as may be
declared thereon by the Board of Directors at any time and from time to time
out of any funds of the Company legally available therefor.

              (c) Dissolution. In the event of any voluntary or involuntary
liquidation, dissolution, or winding-up of the affairs of the Company, after
distribution in full of the preferential amounts, if any, to be distributed to
the holders of shares of the Preferred Stock, the holders of shares of Common
Stock shall be entitled to receive all of the remaining assets of the Company
available for distribution to its stockholders, ratably in proportion to the
number of shares of Common Stock held by them. Neither the consolidation with
nor the merger of the Company into any other corporation or corporations or
other entity or entities, nor the merger of any other corporation or other
entity into the Company, nor a reorganization of the Company, nor the purchase
or redemption of all or any part of the outstanding shares of any class or
classes of the capital stock of the Company, nor a voluntary sale or transfer
of the property and business of the Company as, or substantially as, an
entirety, shall be deemed a liquidation, dissolution, or winding-up of the
affairs of the Company within the meaning of any of the provisions of this
Section II. 

   III. General.

              (a) Subject to the foregoing provisions of this Certificate of
Incorporation, the Company may issue shares of its Preferred Stock and Common
Stock from time to time for such consideration (not less than the par value
thereof) as may be fixed by the Board of Directors, which is expressly
authorized to fix the same in its absolute and uncontrolled discretion subject
to the foregoing conditions. Shares so issued for which the consideration shall
have been paid or delivered to the Company shall be deemed fully paid stock and
shall not be liable to any further call or assessment thereon, and the holders
of such shares shall not be liable for any further payments in respect of such
shares.

              (b) The Company shall have authority to create and issue rights
and options entitling their holders to purchase shares of the Company's capital
stock of any class or series or 


                                     -20-
<PAGE>   23

other securities of the Company, and such rights and options shall be evidenced
by instrument(s) approved by the Board of Directors. The Board of Directors
shall be empowered to set the exercise price, duration, times for exercise, and
other terms of such options or rights; provided, however, that the
consideration to be received for any shares of capital stock subject thereto
shall not be less than the par value thereof.

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

            (1) To adopt, amend or repeal the by-laws of the Company and

            (2)  To provide for the indemnification of directors, officers,
                 management, employees and agents of the Company, and of
                 persons who serve other enterprises in such or similar 
                 capacities at the request of the Company, to the full extent 
                 permitted by the General Corporation Law of the State of 
                 Delaware, as amended, or any other applicable laws, as may 
                 from time to time be in effect.

     SIXTH: The Company shall indemnify any person who was, is, or is
threatened to be made a party to a proceeding (as hereinafter defined) by
reason of the fact that he or she (i) is or was a director or officer of the
Company or (ii) while a director or officer of the Company, is or was serving
at the request of the Company as a director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another foreign
or domestic corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan, or other enterprise, to the fullest extent
permitted under the General Corporation Law of the State of Delaware, as the
same exists or may hereafter be amended. Such right shall be a contract right
and as such shall run to the benefit of any director or officer who is elected
and accepts the position of director or officer of the Company or elects to
continue to serve as a director or officer of the Company while this Article
Sixth is in effect. Any repeal or amendment of this Article Sixth shall be
prospective only and shall not limit the rights of any such director or officer
or the obligations of the Company with respect to any claim arising from or
related to the services of such director or officer in any of the foregoing
capacities prior to any such repeal or amendment to this Article Sixth. Such
right shall include the right to be paid by the Company expenses incurred in
defending any such proceeding in advance of its final disposition to the
maximum extent permitted under the General Corporation Law of the State of
Delaware, as the same exists or may hereafter be amended. If a claim for
indemnification or advancement of expenses hereunder is not paid in full by the
Company within sixty (60) days after a written claim has been received by the
Company, the claimant may at any time thereafter bring suit against the Company
to recover the unpaid amount of the claim, and if successful in whole or in
part, the claimant shall also be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that such
indemnification or advancement of costs of defense is not permitted under the
General Corporation Law of the State of Delaware, but the burden of proving
such defense shall be on the Company. Neither the failure of the Company
(including its Board of Directors or any committee thereof, independent legal
counsel, or stockholders) to have made its determination prior to the
commencement of such action that indemnification of, or advancement of costs of
defense to, the claimant is permissible in the circumstances nor an actual
determination by the 


                                     -21-
<PAGE>   24

Company (including its Board of Directors or any committee thereof, independent
legal counsel, or stockholders) that such indemnification or advancement is not
permissible shall be a defense to the action or create a presumption that such
indemnification or advancement is not permissible. In the event of the death of
any person having a right of indemnification under the foregoing provisions,
such right shall inure to the benefit of his or her heirs, executors,
administrators, and personal representatives. The rights conferred above shall
not be exclusive of any other right which any person may have or hereafter
acquire under any statute, bylaw, resolution of stockholders or directors,
agreement, or otherwise.

     The Company may additionally indemnify any employee or agent of the
Company to the fullest extent permitted by law.

     As used herein, the term "proceeding" means any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal, administrative,
arbitrative, or investigative, any appeal in such an action, suit, or
proceeding, and any inquiry or investigation that could lead to such an action,
suit, or proceeding.

     SEVENTH. A director of the Company shall not be personally liable to the
Company or its stockholders for monetary damages for breach of fiduciary duty
as a director, except for liability (i) for any breach of the director's duty
of loyalty to the Company or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or knowing violation of
law, (iii) under Section 174 of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the director derived an
improper personal benefit. Any repeal or amendment of this Article Seventh by
the stockholders of the Company shall be prospective only, and shall not
adversely affect any limitation on the personal liability of a director of the
Company arising from an act or omission occurring prior to the time of such
repeal or amendment. In addition to the circumstances in which a director of
the Company is not personally liable as set forth in the foregoing provisions
of this Article Seventh, a director shall not be liable to the Company or its
stockholders to such further extent as permitted by any law hereafter enacted,
including without limitation any subsequent amendment to the General
Corporation Law of the State of Delaware.

     EIGHTH. Elections of directors need not be by written ballot unless the
by-laws of the Company shall so provide.

     NINTH. Action may be taken by the stockholders of the Company, without a
meeting, by written consent as and to the extent provided at the time by the
General Corporation Law of the State of Delaware, provided that the matter to
be acted upon by such written consent previously has been approved by the Board
of Directors of the Company and directed by such board to be submitted to the
stockholders for their action thereon by written consent.

     TENTH. Whenever a compromise or arrangement is proposed between this
Company and its creditors or any class of them and/or between this Company and
its stockholders or any class of them, any court of equitable jurisdiction
within the State of Delaware may, on the application in a summary way of this
Company or of any creditor or stockholder thereof or on the application of any
receiver or receivers appointed for this Company under the provisions of


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<PAGE>   25

section 291 of Title 8 of the Delaware Code or on the application of trustees
in dissolution or of any receiver or receivers appointed for this Company under
the provisions of section 279 of Title 8 of the Delaware Code order a meeting
of the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Company, as the case may be, to be summoned in such manner
as the said court directs. If a majority in number representing three-fourths
in value of the creditors or class of creditors, and/or of the stockholders or
class of stockholders of this Company, as the case may be, agree to any
compromise or arrangement and to any reorganization of this Company as
consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all the creditors or
class of creditors, and/or on all the stockholders or class of stockholders, of
this Company, as the case may be, and also on this Company.

     ELEVENTH. The Company reserves the right to amend its certificate of
incorporation, and thereby to change or repeal any provision therein contained,
from time to time, in the manner prescribed at the time by statute, and all
rights conferred upon stockholders by such certificate of incorporation are
granted subject to this reservation.


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