January 13, 1998

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re: National Discount Brokers Group, Inc.
    Report on Form 10-Q for the Six Months Ended November 30, 1997

Gentlemen:

Enclosed please find the following material submitted on behalf of National
Discount Brokers Group, Inc. ("Company"):

         One  complete  copy of the  Company's  report  on Form 10-Q for the six
months ended November 30, 1997 including financial statements and exhibits.

Thank you for your attention to this matter.

Very truly yours,

/s/ Denise Isaac
Denise Isaac
Chief Financial Officer and
Principal Accounting Officer






                                                     CONFORMED

                             FORM 10-Q
                   SECURITIES AND EXCHANGE COMMISSION
                      WASHINGTON, D.C. 20549


                [X] Quarterly  Report Pursuant to Section 13 or 15(d)   
                       of the Securities Exchange Act of 1934

                    For Quarter Ended November 30, 1997
                                    OR
              [ ] Transition Report Pursuant to Section 13 or 15(d)
                     of the Securities Exchange Act of 1934

                 For the transition period from                to
 
                                                --------------    -------------

                          Commission file number 1-9480

    ---------------------------------------------------------------------


                     National Discount Brokers Group, Inc.

    ----------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)


      Delaware                                         22-2394480

----------------------------------------------------------------------
      (State or other jurisdiction of                 (I.R.S. Employer
      incorporation or organization)                   Identification No.)


        10 Exchange Place Centre, Jersey City, New Jersey     07302

----------------------------------------------------------------------------
  (Address of principal executive offices)                   (Zip code)

                         The Sherwood Group, Inc.

--------------------------------------------------------------------------------
      (Former name, former address and former fiscal year, if changed
                            since last report)


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
 required to file such reports), and (2) has been subject to such filing
              requirements for the past 90 days.

                             Yes  X      No
                                 ----      ----


   Indicate the number of shares outstanding of each of the issuer's
     classes of common stock, as of the latest practicable date.
                                             

 12,733,973 shares of Common Stock, par value $.01 per share, were outstanding
                           on December 31, 1997.





                    NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                                                                             

                                        INDEX


                                                                       PAGE

                                                                     --------

Part I - Financial Information

Item 1. - Financial Statements

  Consolidated Statements of Financial Condition -
         November 30, 1997 (Unaudited) and May 31, 1997                  3

  Consolidated Statements of Income (Unaudited) -
         Three Months and Six Months Ended November 30, 1997 and 1996    4

  Consolidated Statements of Cash Flows (Unaudited) -
         Six Months Ended November 30, 1997 and 1996                   5 - 6

  Notes to Consolidated Financial Statements (Unaudited) -
         November 30, 1997                                             7 - 8


Item 2. - Management's Discussion and Analysis of
          Financial Condition and Results of Operations                9 - 13


Part II - Other Information

Item 2. - Changes in Securities and Use of Proceeds                      13

Item 4. - Submission of Matters to a Vote of Security Holders          13 - 14

Item 6. - Exhibits and Reports on Form 8-K                               14

Signatures                                                               15


PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>

                       NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                          CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<CAPTION>

                                                                 November 30,
                                                                     1997              May 31,
              ASSETS                                             (Unaudited)            1997
                                                            -------------------  ------------------
<S>                                                         <C>                  <C>       
Cash                                                        $        1,208,317           3,033,818
Funds segregated for customers                                        -                     29,203
Receivables:
  Brokers and dealers                                               47,965,095          58,047,183
  Other                                                                743,997             599,725

Securities owned, at market value                                   53,943,315          45,696,436
Investment securities not readily marketable, at fair value            501,320             501,320
Investment in partnerships                                              13,484              12,984
Notes receivable                                                       870,247             830,589
Furniture, fixtures, equipment, and leasehold improvements - at
  cost, net of accumulated depreciation and amortization of $9,952,457
  at November 30, 1997 and $7,674,370 at May 31, 1997               20,247,101          20,263,511
Computer software - at cost, net of accumulated amortization of
  $812,054 at November 30, 1997 and $929,942 at May 31, 1997         2,625,728           1,853,693
Identified intangible assets, net of accumulated amortization of
   $968,374 at November 30, 1997 and $535,853 at May 31, 1997        6,295,437           6,727,958
Exchange memberships (market value $9,035,000 at November 30,
  1997 and $7,957,750 at May 31, 1997)                               7,416,496           7,416,496
U.S. Treasury Obligations, held as collateral                        7,740,226           7,815,254
Subordinated notes receivable                                        3,500,000           3,000,000
Deferred tax asset (net of valuation allowance)                      2,129,165           2,220,472
Other assets                                                         1,314,655           2,112,083
                                                            -------------------  ------------------
                                                            $      156,514,583   $     160,160,725
                                                            ===================  ==================
      LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Securities sold, not yet purchased, at market value       $       18,413,953   $      25,129,290
  Accounts payable and accrued expenses, including
    compensation payable to officers and employees of
    $9,496,452 at November 30, 1997 and $11,831,551
    at May 31, 1997                                                 26,848,383          31,734,213
  Secured demand notes payable                                       3,500,000           3,000,000
  Income taxes payable                                               1,282,493             302,501
  Minority interest in Equitrade                                     9,456,208           7,720,236
                                                            -------------------  ------------------
          Total liabilities                                         59,501,037          67,886,240
                                                            -------------------  ------------------

Commitments and contingencies (Note 4)

Stockholders' equity (Note 5):
  Preferred stock - $.01 par value;
    authorized 1,000,000 shares; none issued                              -                   -
  Class A common stock - $.01 par value;
    authorized 50,000,000 shares; none issued                             -                   -
  Common stock - $.01 par value; authorized
    50,000,000 shares; issued 14,343,201 shares                        143,432             143,432
  Additional paid-in capital                                        57,893,222          57,189,985
  Retained earnings                                                 52,011,598          47,215,833
                                                            -------------------  ------------------
                                                                   110,048,252         104,549,250
  Less: Treasury stock - at cost, 1,618,577 shares at
    November 30, 1997 and 1,648,536 shares at May 31, 1997         (13,034,706)        (12,274,765)
                                                            -------------------  ------------------
          Total stockholders' equity                                97,013,546          92,274,485
                                                            -------------------  ------------------
                                                            $      156,514,583   $     160,160,725
                                                            ===================  ==================
</TABLE>

               The accompanying notes are an integral part of these statements.
                                             (3)

                   NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                              CONSOLIDATED STATEMENTS OF INCOME
                                      (Unaudited)
<TABLE>
<CAPTION>

                                                            Three Months Ended November 30,         Six Months Ended November 30,
                                                          ---------------------------------------  --------------------------------
                                                                       1997               1996                 1997        1996
                                                          -------------------  ------------------  ----------------- --------------

Revenues:
  <S>                                                       <C>               <C>                  <C>               <C>          
  Firm securities transactions - net                        $    26,169,781   $      26,755,037    $     50,096,225  $  56,438,552
  Commission income                                               9,590,738           8,056,241          19,293,445     15,752,392
  Floor brokerage income                                          4,130,485           3,435,834           8,409,483      6,374,138
  Equity loss in partnerships                                      -                     (3,492)                500        (15,332)
  Interest income                                                 1,883,830           1,922,670           3,783,846      3,918,229
  Fee income                                                        777,852             662,010           1,536,187      1,088,598
  Other revenues                                                    397,610             226,835             567,684        488,306
                                                         -------------------  ------------------   ----------------- --------------
                                                                 42,950,296          41,055,135          83,687,370     84,044,883
                                                         -------------------  ------------------   ----------------- --------------

Expenses:
  Compensation and benefits                                      13,491,125          13,452,795          26,233,522     28,477,133
  Clearing and related charges                                   15,197,931          13,835,379          28,785,213     27,946,252
  Communications                                                  2,708,409           2,867,614           5,254,591      5,752,803
  Depreciation and amortization                                   1,979,700           1,053,189           3,787,004      2,024,233
  Occupancy costs and equipment rental                              637,380             709,092           1,263,348      1,401,540
  Other expenses                                                  3,002,688           2,769,074           6,091,821      5,968,726
  Interest expense                                                  168,945              61,857             384,023        133,598
                                                         -------------------  ------------------   ----------------- --------------
                                                                 37,186,178          34,749,000          71,799,522     71,704,285
                                                         -------------------  ------------------   ----------------- --------------

   Income before minority interest and income taxes               5,764,118           6,306,135          11,887,848     12,340,598

   Income of Equitrade allocated to
    minority partners                                            (2,008,746)           (739,360)         (3,150,153)      (752,960)
                                                         -------------------  ------------------   ----------------- --------------

   Income before income taxes                                     3,755,372           5,566,775           8,737,695     11,587,638
                                                         -------------------  ------------------   ----------------- --------------

   Income taxes:
        Federal, currently payable                                1,248,049           1,481,877           2,773,019      3,579,127
        State and local, currently payable                          435,260             789,613           1,077,604      1,710,185
                                                         -------------------  ------------------   ----------------- --------------
                  Total current income tax expense                1,683,309           2,271,490           3,850,623      5,289,312
                                                         -------------------  ------------------   ----------------- --------------

        Federal, deferred                                            (6,624)           -                     63,717         -
        State and local, deferred                                    (8,106)           -                     27,590         -
                                                         -------------------  ------------------   ----------------- --------------
                  Total deferred income tax expense                 (14,730)           -                     91,307         -
                                                         -------------------  ------------------   ----------------- --------------

           Total income taxes                                     1,668,579           2,271,490           3,941,930      5,289,312
                                                         -------------------  ------------------   ----------------- --------------
 
   Net  income                                              $     2,086,793      $    3,295,285        $  4,795,765  $   6,298,326
                                                         ===================  ==================   ================= ==============

   Net income per common and common equivalent share (a):
        Net  income                                         $          0.16      $         0.25        $       0.37  $        0.48
                                                            ===================  ==================  ================= =============

Weighted average common shares outstanding                       12,793,369          13,028,509          12,816,683     13,039,467
                                                           ===================  ==================   ================= =============
<FN>
(a) For presentation purposes, primary and fully diluted are identical.
</FN>
</TABLE>



         The accompanying notes are an integral part of these statements.

                                               (4)


               NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                    (Unaudited)
<TABLE>
<CAPTION>

                                                                  Six Months Ended November 30,
                                                            ---------------------------------------
                                                                      1997                 1996
                                                            -------------------  ------------------
 Cash flows from operating activities:

 <S>                                                        <C>                  <C>              
  Net income                                                $        4,795,765   $       6,298,326

 Non-cash items included in net income:
  Equity (income) loss in partnerships                                    (500)             15,332
  Depreciation and amortization                                      3,787,004           2,024,233
  Income of Equitrade allocated to minority partners                 3,150,153             752,960
  Provision for deferred taxes                                          91,307

 (Increase) decrease in operating assets:
  Funds segregated for customers                                        29,203                     -
  Receivables:
    Brokers and dealers                                             10,082,088          29,314,980
    Other                                                             (144,272)            (20,911)
  Securities owned, at market value                                 (8,246,879)        (19,320,967)
  U.S. Treasury Obligations, held as collateral                         75,028            (123,624)
  Other assets (net of deposits made on furniture, fixtures
     and equipment, and leasehold improvements)                        723,300             358,750

 Increase (decrease) in operating liabilities:
  Securities sold, not yet purchased, at market value               (6,715,337)           (765,328)
  Accounts payable and accrued expenses                             (5,173,169)         (2,957,716)
  Income taxes payable                                               1,255,625          (3,174,661)
                                                            -------------------  ------------------
     Net cash provided by operating activities                       3,709,316          12,401,374
                                                            -------------------  ------------------

 Cash flows from investing activities:

  Purchase of investment securities not readily marketable            -                   (100,000)
  Loans made                                                          -                   (100,275)
  Principal collected on notes receivable                               63,287              71,154
  Purchases of furniture, fixtures and
    equipment, and leasehold improvements                           (2,902,059)         (2,508,625)
  Deposits made on furniture, fixtures and equipment,
    and leasehold improvements                                         (73,815)         (4,657,796)
  Purchases of computer software                                    (1,208,049)           (201,755)
  Purchase of exchange membership                                     -                 (1,450,000)
  Issuance of subordinated note                                       -                   (500,000)
                                                            -------------------  ------------------
     Net cash used in investing activities                          (4,120,636)         (9,447,297)
                                                            -------------------  ------------------




</TABLE>





                                (Continued)

                                     (5)


               NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (Unaudited)
                                (Continued)
<TABLE>
<CAPTION>

                                                                  Six Months Ended November 30,
                                                            ---------------------------------------
                                                                       1997                 1996
                                                            -------------------  ------------------
 Cash flows from financing activities:

  <S>                                                       <C>                  <C>      
  Purchase of treasury stock                                          -                 (1,556,160)
  Capital contributions by minority interest                            50,000            -        
  Capital withdrawals by minority interest                          (1,464,181)         (1,044,000)
                                                            -------------------  ------------------
     Net cash used in financing activities                          (1,414,181)         (2,600,160)
                                                            -------------------  ------------------

 Net increase in cash                                               (1,825,501)            353,917

 Cash at beginning of period                                         3,033,818             470,313
                                                            -------------------  ------------------
 Cash at end of period                                      $        1,208,317   $         824,230
                                                            ===================  ==================

</TABLE>

Supplemental disclosure of non-cash investing and financing activities:

  During  September  1997,  the  Company  sold the  remaining  net assets of its
  subsidiary,  Anvil  Institutional  Services,  Inc., and received a note in the
  amount of $102,945 which is due in December 1998.

  During October 1997,  certain executives of the Company exercised an aggregate
  of 237,274 options for the purchase of 237,274 shares of the Company's  common
  stock with  exercise  prices  ranging  from  $7.9375  per share to $10.125 per
  share.  In order to pay for the exercise price  ($2,194,323)  and to reimburse
  the Company for the personal  income taxes  ($332,337)  on the gain related to
  the transaction,  the executives remitted to the Company 207,315 shares of the
  Company's common stock with a market value of $2,526,660.

  During October 1997, Equitrade entered into a $500,000 subordination agreement
  with an  unrelated  party.  The note has a  stated  interest  rate of 4% and a
  maturity date of October 1, 1998.

  In connection with the closing of NDB's branch offices as of October 31, 1997,
  the Company wrote off fixed assets with a net book value of $154,603.



















         The accompanying notes are an integral part of these statements.


                                (6)


                NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)

                              November 30, 1997

Note 1 - Business and organization

     National  Discount  Brokers  Group,  Inc.  ("NDBG"),  formerly The Sherwood
Group,  Inc., and its subsidiaries  (the "Company") are primarily engaged in the
securities business and in providing related financial services.  (See "Note 7 -
Subsequent Events".) The Company has a principal registered broker-dealer wholly
owned subsidiary,  Sherwood Securities Corp. ("Sherwood  Securities").  Sherwood
Securities  is also a specialist  for  securities  listed on the American  Stock
Exchange.  National Discount Brokers ("NDB"), another registered  broker-dealer,
is a division of the Company's  wholly owned  subsidiary,  Triak  Services Corp.
MXNet, Inc. ("MXNet"),  another wholly owned subsidiary,  delivers comprehensive
technical solutions to trading  organizations.  On January 24, 1997, the Company
acquired,   from  its  joint  venture  partner,   the  remaining  51%  of  Anvil
Institutional  Services  Company  (the "Anvil  Joint  Venture")  that it did not
previously  own.  The  Company,  therefore,  became  the  100%  owner  of  Anvil
Institutional Services Inc. ("Anvil"),  a broker-dealer  previously owned by the
Anvil Joint Venture.

     On  September  5,  1997,  the  Company  sold all of the  stock of Anvil for
$217,000,  which  approximated  book value.  In  connection  with the sale,  the
Company's  $250,000  subordinated  loan agreement  with Anvil was cancelled.  As
such, the Company liquidated the $300,000 face value of U.S. Treasury securities
that had been  pledged  as  collateral  for the  agreement  and such  funds were
transferred back to the Company.

     In  addition,  NDBG  has a 60%  special  limited  partnership  interest  in
Equitrade Partners ("Equitrade"), which is a specialist for securities listed on
The New York Stock Exchange  ("NYSE").  The Company  acquired a further  limited
partnership  interest in Equitrade on May 2, 1997 upon the acquisition of all of
the stock of SHD  Corporation  (formerly  Dresdner-NY  Incorporated),  which was
engaged in the specialist business of the NYSE. The assets, including four seats
on the NYSE,  except cash, and liabilities of SHD Corporation  ("SHD") were then
contributed by SHD to Equitrade in exchange for a limited partner interest.  Two
employees  of SHD  retained  a portion  of the  specialist  book of SHD and also
became  limited  partners  of  Equitrade.  SHD is  entitled  to 38.4% of the net
profits and losses from the activities of this specialist book.

Note 2 - Basis of presentation

     The accompanying unaudited consolidated financial statements do not include
all of the  information  and notes  required by  generally  accepted  accounting
principles for complete  consolidated  financial  statements.  In the opinion of
management,  all  adjustments  considered  necessary for a fair  presentation of
consolidated  financial  condition  and  results of  operations  for the periods
presented  have been  included.  All  adjustments  are of a normal and recurring
nature. It is suggested that these consolidated  financial statements be read in
conjunction  with the  consolidated  financial  statements and the related notes
included in the Company's  1997 Annual  Report on Form 10-K.  Certain prior year
amounts  have been  reclassified  to conform  to the three and six months  ended
November 30, 1997 presentations.

Note 3 - Net income per common share

     Net income per common share is computed  using the weighted  average number
of shares of common stock and common stock equivalents outstanding. Common stock
equivalents  include stock  issuable  under stock  options.  The treasury  stock
method of accounting was used in computing the common stock  equivalents for the
computation of earnings per common share.

Note 4 - Commitments and contingencies

     Certain significant legal proceedings and matters were previously disclosed
in Item 3, Legal Proceedings,  of the Company's 1997 Annual Report on Form 10-K,
and the disclosures regarding such matters are incorporated herein by reference.
The Company's  subsidiaries,  and in some cases the Company,  have been named as
defendants  in lawsuits that allege  violations of Federal and state  securities
and related laws. Sherwood Securities has received additional


                              (7)

subpoenas in connection  with the SEC's ongoing  investigation  In the Matter of
Certain  Market Making  Activities on NASDAQ,  HO-2974.  Sherwood  Securities is
continuing to cooperate with the SEC's  investigation.  Although there can be no
assurance  that such lawsuits and  investigations  involving the Company are not
likely to have a material,  adverse  effect on the results of  operations of the
Company in any future period,  depending in part on the results for such period,
based on information  currently  available,  management of the Company  believes
that any such  lawsuits  and  investigations  are not  likely to have a material
adverse effect on the consolidated financial condition and results of operations
or liquidity of the Company in future periods.

Note 5 - Net capital requirements

     As registered  broker-dealers,  Sherwood Securities,  NDB and Equitrade are
subject to the  Securities  Exchange Act of 1934 Uniform Net Capital Rule 15c3-1
(the "Rule").  As of November 30, 1997, the net capital of Sherwood  Securities,
NDB and Equitrade exceeded their required net capital by $20,989,000, $4,392,000
and  $30,984,000,  respectively.  On July 10,  1997,  SHD  filed  its  notice of
withdrawal from registration as a broker-dealer with the SEC. As such, SHD is no
longer required to compute net capital.

     The Rule also  provides  that equity  capital may not be  withdrawn or cash
dividends be paid if the resulting net capital of a broker-dealer  would be less
than the amount required under the Rule. Accordingly,  at November 30, 1997, the
payment of dividends and advances to the Company by Sherwood Securities, NDB and
Equitrade is limited to $20,789,000,  $4,329,000 and $30,934,000,  respectively,
under  the most  restrictive  of these  requirements.  The SEC  may,  by  order,
restrict the  withdrawal of equity  capital on a net basis if the SEC determines
that such  withdrawal  would be  detrimental  to the financial  integrity of the
broker-dealer or the financial community.


Note 6 - New Accounting Pronouncement

              In February 1997, the Financial  Accounting Standards Board issued
Statement  of  Financial  Accounting  Standards  No. 128,  "Earnings  per Share"
("Statement  128"),  for periods ending after  December 15, 1997.  Statement 128
replaces  the current  standard  used to calculate  primary  earnings per share,
Accounting  Principles Board Opinion No. 15 ("APB 15"). Statement 128 requires a
calculation of basic earnings per share, as well as a dual presentation of basic
and diluted  earnings per share on the face of the  statement  of income.  Basic
earnings per share differs from primary  earnings per share under APB 15 in that
dilution for common stock  equivalents  is  excluded.  Basic  earnings per share
under  Statement 128 for the three months ended November 30, 1997 and 1996 would
not have been materially different than primary earnings per share under APB 15.


Note 7 - Subsequent Events

     On  December  5, 1997,  the  Company  entered  into an  agreement  with IAT
Reinsurance  Syndicate  Ltd.  ("IAT"),  a Bermuda  corporation,  for the sale of
1,500,000  shares of the  Company's  common stock at $12.875 per share.  IAT, an
entity  controlled  by investor  Peter  Kellogg,  will  receive  shares from the
Company's  treasury stock. The transaction,  which is expected to close no later
than  February  1998 and which is subject to review under the  Hart-Scott-Rodino
Antitrust  Improvement  Act  of  1976,  as  amended,   increases  Mr.  Kellogg's
beneficial  ownership of the  Company's  common stock from  approximately  8% to
17.8%.  The proceeds of approximately  $19,300,000  from the transaction,  which
were received by the Company on December 8, 1997 and are expected to be used for
general corporate purposes and marketing  activities to support the expansion of
NDB.  While  management of the Company  believes the  transaction  will close as
scheduled,  there can be no assurance that the transaction  will be consummated.
If the  transaction  does not close,  the  Company  must return the funds it has
received from IAT.

     Effective  December  15,  1997,  the  Company  changed its name to National
Discount Brokers Group,  Inc. as part of a strategic  initiative to focus on its
NDB  subsidiary.  The name  change  will  leverage  NDB's core  competencies  in
Internet trading and financial  services,  as well as help fuel its expansion in
Internet  commerce.  The Company's ticker symbol on the NYSE also changed,  from
"SHD" to "NDB", effective December 22, 1997.






                                   (8)


Item - 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS


Results of Operations

     The  results of  operations  of  National  Discount  Brokers  Group,  Inc.,
formerly The Sherwood Group, Inc., and its subsidiaries (the "Company"), for the
three and six months ended November 30, 1997 reflect primarily the activities of
Sherwood  Securities Corp.  ("Sherwood  Securities"),  National Discount Brokers
("NDB"), a division of the Company's subsidiary,  Triak Services Corp. ("Triak")
and Equitrade Partners  ("Equitrade").  Sherwood Securities is primarily engaged
in the securities business as a wholesale market maker in NASDAQ National Market
System  and  Small-Cap  securities.  NDB  is  a  deep  discount  brokerage  firm
specializing  in trade  execution for individual  investors while Equitrade is a
registered  specialist  in  equity  securities  on The New York  Stock  Exchange
("NYSE"). MXNet, Inc. ("MXNet"), another wholly owned subsidiary of the Company,
delivers comprehensive technical solutions to trading organizations.

     On January 24, 1997, the Company acquired,  from its joint venture partner,
the  remaining  51% of Anvil  Institutional  Services  Company (the "Anvil Joint
Venture") that it did not  previously  own. The Company,  therefore,  became the
100% owner of Anvil  Institutional  Services  Inc.  ("Anvil"),  a  broker-dealer
previously  owned by the Anvil Joint Venture.  On September 5, 1997, the Company
sold all of the stock of Anvil for $217,000,  which  approximated book value. In
connection  with the sale, the Company's  $250,000  subordinated  loan agreement
with Anvil was  cancelled.  As such,  the Company  liquidated  the $300,000 face
value of U.S.  Treasury  securities  that had been pledged as collateral for the
agreement and such funds were transferred back to the Company.

     The Company's  consolidated  net income for the three months ended November
30,  1997 was  $2,087,000  compared to  $3,295,000  for the three  months  ended
November 30, 1996. For the quarter ended November 30, 1997,  Sherwood Securities
had a net loss of $383,000, compared to net income of $2,010,000 for the quarter
ended  November  30, 1996 while NDB had net income of  $997,000  for the quarter
ended  November  30,  1997,  compared to net income of $153,000  for the quarter
ended November 30, 1996.  Equitrade had a net profit of $4,228,000 for the three
months ended November 30, 1997 (of which the Company's share,  inclusive of that
earned by SHD, was $2,219,000) as compared to a net profit of $2,233,000 for the
three  months  ended  November  30,  1996 (of  which  the  Company's  share  was
$1,494,000).

     The Company's consolidated net income for the six months ended November 30,
1997 was $4,796,000 compared to $6,298,000 for the six months ended November 30,
1996.  For the six months ended November 30, 1997,  Sherwood  Securities and NDB
had a net income of  $915,000  and  $1,450,000,  respectively,  compared  to net
income of  $5,130,000  and $231,000 for the six months ended  November 30, 1996,
respectively.  Equitrade had a net profit of $6,881,000 for the six months ended
November  30, 1997 (of which the  Company's  share,  inclusive of that earned by
SHD,  was  $3,731,000)  as  compared to a net profit of  $2,633,000  for the six
months ended November 30, 1996 (of which the Company's share was $1,880,000).

     Total revenue for the Company increased by approximately $1,896,000, or 5%,
for the three months ended November 30, 1997, and decreased $358,000, or 1%, for
the six months  ended  November 30, 1997 as compared  with the  previous  year's
respective  periods.  The reasons for the  variances  in revenues  are set forth
below.

     Revenue from firm securities  transactions  decreased $585,000,  or 2%, and
$6,342,000, or 11%, for the three and six month periods ended November 30, 1997,
respectively,  as compared with the previous year. Revenues from firm securities
transactions at Sherwood Securities decreased approximately  $3,298,000, or 13%,
and $10,975,000,  or 20%, for the three and six month periods ended November 30,
1997,  respectively,  when  compared  to the prior year,  even  though  Sherwood
Securities'  overall ticket volume increased  approximately  55% and 36% for the
same periods as trading profits per ticket continued to decline. Several factors
contributed to this decrease.  Regulatory  changes enacted by the Securities and
Exchange Commission ("SEC") and the National  Association of Securities Dealers,
such as limit order  protection,  have  resulted in an increase in the number of
transactions  executed on an "even" basis.  Tightened  spreads between "bid" and
"ask" prices,  the new limit order display  rules,  increased  volatility in the
marketplace and increased Small Order Execution  Systems ("SOES")  activity have
also been factors in the decrease in trading profits per


                                (9)

ticket.  These  changes  are having an adverse  impact on  Sherwood  Securities'
trading  profits.  Substantially  offsetting the decreases in trading profits at
Sherwood Securities was an increase in revenues from securities  transactions at
Equitrade,   for  the  three  and  six  months  ended   November  30,  1997,  of
approximately $2,711,000, or 316%, and $4,632,000, or 2,693%, respectively.

     The Company's  commission income,  primarily generated by NDB, increased by
$1,534,000, or 19%, and $3,541,000, or 22%, respectively,  for the three and six
months ended November 30, 1997, when compared with the prior year. The increases
are due largely to the fact that NDB's average daily ticket count increased from
approximately  4,540 to 6,470 tickets per day, an increase of 43%, for the three
months ended November 30, 1997 and from approximately 4,460 to 6,150 tickets per
day,  an  increase  of 38%,  for the six months  ended  November  30,  1997 when
compared  with the previous  year.  The increase in  commission  income does not
correspond  directly to the  increase in NDB's  ticket count as the mix of NDB's
trades has trended  more  toward  electronic  trading  (i.e.-IVR  telephone  and
Internet  trading),  on which the  commission  charged  is lower than for trades
executed by a live sales representative.

     Floor brokerage  income increased by  approximately  $695,000,  or 20%, and
$2,035,000,  or 32%,  respectively,  for the three and six months ended November
30, 1997,  when  compared to the prior year.  The  increases  were the result of
increases in both the volume of Equitrade's  transactions and an increase in the
number of stocks in which Equitrade is a specialist. The increase from 98 stocks
at November 30, 1996 to 152 stocks at November 30, 1997 was due  principally  to
the acquisition,  on May 2, 1997, of SHD  Corporation,  which added 54 stocks to
Equitrade's specialist list.

     For the three and six months ended November 30, 1996, the principal portion
of equity loss in partnerships was an equity loss from the Company's 49% limited
partnership  interest it held in the Anvil Joint Venture.  For the three and six
months ended November 30, 1997,  Anvil's results were consolidated with those of
the Company until Anvil was sold on September 5, 1997.

     Interest income decreased by approximately $39,000, or 2%, and $134,000, or
3%, for the three and six months  ended  November  30,  1997,  respectively,  as
compared to the previous year. The decrease is primarily due to the availability
of lesser amounts of cash for  investment.  Since November 30, 1996, the Company
has  used  approximately   $24,000,000  for  capital   expenditures,   including
$4,800,000 for four NYSE seats.  A significant  rise in NDB's customer debit and
credit  balances held with the Company's  clearing  broker led to an increase in
interest  earned  from that  source  and  substantially  offset  the  decline in
interest income as described above.

     Fee income  increased by $116,000,  or 18%, and  $448,000,  or 41%, for the
three and six months ended November 30, 1997,  respectively,  as compared to the
prior year. The increases are principally due to higher 12b-1 fees received from
mutual funds as NDB's  customers'  balances in those funds have increased  since
the prior  year,  as well as the  negotiated  rates used to  calculate  the fees
rebated thereon.

     Total  expenses  for the three months  ended  November  30, 1997  increased
approximately  $2,437,000,  or 7%, from  $34,749,000  in 1996 to  $37,186,000 in
1997.  Total  expenses  for the six months  ended  November  30, 1997  increased
approximately  $95,000, or less than 1%, from $71,704,000 in 1996 to $71,800,000
in 1997. The reasons for the net increases in expenses are set forth below.

     Compensation and benefits increased $38,000, or less than 1%, and decreased
$2,244,000,  or 8%, for the three and six month periods ended November 30, 1997,
respectively,  compared  with the prior year.  The decrease is due  primarily to
lower commissions paid to Sherwood  Securities'  traders because of the decrease
in trading profits for that subsidiary,  and the resulting reduction in accruals
for executive bonuses based on profitability computations.

     Clearing and related charges increased by approximately $1,363,000, or 10%,
and  $839,000,  or 3%, for the three and six month  periods  ended  November 30,
1997,  respectively,  as  compared  to the prior  year.  The  increases  are due
principally  to  increased  clearance  charges at NDB.  The rise in NDB's ticket
count  offset a reduced rate of clearance  per ticket that was  negotiated  with
NDB's  clearing  agent  during  the  quarter  ended  November  30,  1997.   Also
contributing to the overall increase in clearing and related charges were higher
execution  fees  paid by  Sherwood  Securities,  as a result of a rise in ticket
count. Partially offsetting these increases were lower correspondence fees being
paid by Sherwood Securities based on the overall size and type of the order flow
received and decreased  clearance charges for Sherwood  Securities  (despite the
rise  in  ticket  count)  based  on the  decreased  rate  of  clearance  charges
negotiated during May 1997.


                                  (10)


     Communications   expense,   which   includes   quotations,   decreased   by
approximately $159,000, or 6%, and $498,000, or 9%, for the three and six months
ended  November 30, 1997,  respectively,  as compared to the previous  year. The
declines  are mainly  due to the  upgrade  of the  Powerbrokersm  IVR System and
development of an in-house quote server at NDB.

     Depreciation and amortization increased by approximately  $927,000, or 88%,
and  $1,763,000,  or 87%, for the three and six months ended  November 30, 1997,
respectively,  as compared to the prior year.  These increases can be attributed
to depreciation and amortization incurred on fixed asset, leasehold improvement,
computer  software and  intangible  asset  additions by the Company  aggregating
approximately  $19,000,000 during the period from December 1996 through November
1997 primarily in conjunction with the upgrade of NDB's  infrastructure  and the
purchase of a NYSE specialist unit.

     Occupancy and equipment  rental  expenses  decreased  $72,000,  or 10%, and
$138,000,  or 10%, for the three and six month periods ended  November 30, 1997,
as compared to the prior year. The declines are due to a decrease for NDB which,
last year, incurred rent concurrently on two main office locations as it awaited
the move of its new headquarters to 7 Hanover Square in New York City.

     Other expenses increased by approximately $234,000, or 8%, and $123,000, or
2%, for the three and six months  ended  November  30,  1997,  respectively,  as
compared  to  the  prior  year.  The  recent  upgrade  of  NDB's   technological
infrastructure  has  led to  increased  expenses  for  service  contracts.  Also
affecting other expenses is an increase in NDB customer  accommodations  and bad
debt expense related to trade executions. Finally, soft dollar research expenses
from Anvil are  included in other  expenses  as Anvil's  results for the current
year have been consolidated  while in the prior year, they were accounted for on
the equity basis. Offsetting the aforementioned increases to other expenses is a
decrease in legal fees and other professional fees.

     Interest  expense  increased  by  approximately   $107,000,  or  173%,  and
$250,000,  or 187%,  for the three  and six  months  ended  November  30,  1997,
respectively,  as compared to the previous year. During the three and six months
ended November 30, 1997,  Sherwood  Securities  incurred interest charges on the
remaining unpaid balance of approximately $4,600,000 owed in connection with its
settlement   agreement,   as  amended,  in  the  case  entitled  In  Re:  NASDAQ
Market-Makers  Antitrust Litigation.  In addition, the Company incurred interest
expense on short-term borrowings made in connection with its trading activities.

     Income of Equitrade  allocated to minority partners represents the share of
Equitrade's  net income  allocated to the partners of Equitrade,  other than the
Company and its subsidiary,  SHD, during the three and six months ended November
30, 1997 and 1996, respectively.

     The Company's  effective tax rate increased from  approximately 41% for the
three months ended November 30, 1996 to  approximately  44% for the three months
ended November 30, 1997 and decreased from  approximately 46% for the six months
ended November 30, 1996 to  approximately  45% for the six months ended November
30, 1997.

    For the three  months  ended  November  30,  1997,  deferred  tax benefit of
approximately  $15,000, and for the six months ended November 30, 1997, deferred
tax expense of approximately $91,000,  included in income tax expense, relate to
the future  taxability of certain  temporary book to tax basis  differences.  In
conjunction  with the deferred tax asset the Company has  recorded,  the Company
has booked a valuation  allowance of approximately  $252,000 due to management's
judgment of the likelihood of realization of the deferred tax asset.


Liquidity

     The Company's tangible assets are highly liquid with more than 66% of these
tangible assets consisting of cash or assets readily  convertible into cash. The
Company's operations have generally been financed by internally generated funds.
In addition,  at November 30, 1997,  margin account  borrowings of approximately
$145,000,000 were available to the Company from its clearing brokers.

     The  Company's  broker-dealer  entities,   Sherwood  Securities,   NDB  and
Equitrade,  are  subject to SEC's  minimum  net  capital  requirement,  which is
designed  to  measure  the  general   financial   soundness   and  liquidity  of
broker-dealers. On

                                 (11)

July 10,  1997,  SHD  filed its  notice of  withdrawal  from  registration  as a
broker-dealer  with the SEC. As such,  SHD is no longer  required to compute net
capital.  As of November 30, 1997,  Sherwood  Securities,  NDB and Equitrade had
approximately $20,989,000,  $4,392,000 and $30,984,000,  respectively, in excess
of the  required  minimum net capital.  The net capital  rule imposes  financial
restrictions upon Sherwood Securities',  NDB's, and Equitrade's businesses which
are more severe than those imposed on most other businesses.

     From time to time,  the Company has borrowed  funds in connection  with its
trading  activities.  The Company currently has no committed lines of credit and
such  borrowings  were done on an "as  needed"  basis.  Management  has found an
alternative  to meeting these funding  requirements.  See  "Subsequent  Events",
below.

     Cash  flows from  operations  will vary on a daily  basis as the  Company's
portfolio of marketable  securities  changes.  The Company's  ability to convert
marketable  securities  owned into cash is determined by the depth of the market
and the size of the Company's  security positions in relation to the market as a
whole.  The  portfolio  mix also  affects the  regulatory  capital  requirements
imposed on Sherwood  Securities,  NDB and Equitrade,  which directly affects the
amount of funds available for operating, investing and financing activities.

     The Company  anticipates that it will spend an additional $900,000 over the
next three months for its  subsidiaries'  ongoing  technological  infrastructure
upgrades and intends to finance these upgrades with internally generated funds.

     The operations of the Company's  American Stock  Exchange  Specialist  book
continue to be funded by the income generated by the book.

     Cash flows from the Company's investment activities are directly related to
market conditions.

     During the three and six months ended  November  30, 1997,  the Company did
not repurchase any additional  shares in connection  with its December 1992 plan
to buy back up to 1,500,000  shares of the  Company's  common stock from time to
time in the open  market or through  privately  negotiated  transactions.  As of
November 30, 1997,  1,351,482  shares had been  reacquired  under this plan. The
source of funds for these purchases was internally generated.


Subsequent Events

     On  December  5, 1997,  the  Company  entered  into an  agreement  with IAT
Reinsurance  Syndicate  Ltd.  ("IAT"),  a Bermuda  corporation,  for the sale of
1,500,000  shares of the  Company's  common stock at $12.875 per share.  IAT, an
entity  controlled  by investor  Peter  Kellogg,  will  receive  shares from the
Company's  treasury stock. The transaction,  which is expected to close no later
than  February  1998 and which is subject to review under the  Hart-Scott-Rodino
Antitrust  Improvement  Act  of  1976,  as  amended,   increases  Mr.  Kellogg's
beneficial  ownership of the  Company's  common stock from  approximately  8% to
17.8%.  The proceeds of approximately  $19,300,000  from the transaction,  which
were received by the Company on December 8, 1997 and are expected to be used for
general corporate purposes and marketing  activities to support the expansion of
NDB.  While  management of the Company  believes the  transaction  will close as
scheduled,  there can be no assurance that the transaction  will be consummated.
If the  transaction  does not close,  the  Company  must return the funds it has
received from IAT.


     Effective  December  15,  1997,  the  Company  changed its name to National
Discount Brokers Group,  Inc. as part of a strategic  initiative to focus on its
NDB  subsidiary.  The name  change  will  leverage  NDB's core  competencies  in
Internet trading and financial  services,  as well as help fuel its expansion in
Internet  commerce.  The Company's ticker symbol on the NYSE also changed,  from
"SHD" to "NDB", effective December 22, 1997.


Effects of Inflation

     The Company's assets are not  significantly  affected by inflation  because
they are primarily  monetary in nature.  Management  believes  that  replacement
costs of furniture,  equipment and leasehold  improvements  will not  materially
affect  operations.  However,  the  rate  of  inflation  affects  the  Company's
principal expenses such as employee compensation, rent and communication,  which
may not be readily recoverable from increased revenues.



                                   (12)


Because of market forces and competitive  conditions in the securities industry,
a  broker-dealer  may be unable to  restructure  its profit  margins in order to
recover  increased  costs related to inflation.  Consequently,  the Company must
rely on increased volume for this purpose.  However, the Company has significant
cash balances on deposit with its principal  clearing  brokers on which interest
is paid which,  in the event  there are higher  interest  rates  which  normally
result from inflation, would offset some of the costs.


New Accounting Pronouncement

     In February 1997, the Financial Accounting Standards Board issued Statement
of Financial  Accounting  Standards No. 128,  "Earnings  per Share"  ("Statement
128"),  for periods ending after  December 15, 1997.  Statement 128 replaces the
current  standard  used to  calculate  primary  earnings  per share,  Accounting
Principles Board Opinion No. 15 ("APB 15"). Statement 128 requires a calculation
of basic earnings per share, as well as a dual presentation of basic and diluted
earnings per share on the face of the  statement of income.  Basic  earnings per
share differs from primary  earnings per share under APB 15 in that dilution for
common stock  equivalents is excluded.  Basic earnings per share under Statement
128,  for the three and six months  ended  November 30, 1997 would not have been
materially different than primary earnings per share under APB 15.


Forward Looking Statements

     Statements regarding the Company's expectations as to its future operations
and financial  condition and certain  other  information  contained in this Form
10-Q or in documents incorporated herein by reference constitute forward looking
statements within the meaning of the Private Securities Litigation Reform Act of
1995.  Although  the  Company  believes  that  its  expectations  are  based  on
reasonable  assumptions  within the bounds of its  knowledge of its business and
operation,  there  can be no  assurance  that  actual  results  will not  differ
materially  from its  expectations.  Factors which could cause actual results to
differ from expectations  include a general downturn in the economy,  changes in
the level of activity of securities  markets in which the Company  participates,
changes  in  government  policy or  regulation  and  unforeseen  costs and other
effects  related to legal  proceedings or  investigations  of  governmental  and
self-regulatory organizations.



PART II - OTHER INFORMATION

Item 2 - CHANGES IN SECURITIES AND USE OF PROCEEDS

     The Company amended its Restated  Certificate of Incorporation to eliminate
Class A Common  Stock and to reduce the  number of shares of capital  stock from
101,000,000  shares to  51,000,000  shares  consisting  of  1,000,000  shares of
preferred stock and 50,000,000 shares of common stock.

Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

          (a) The Company held an Annual Meeting of its  Stockholders on October
21, 1997.

          (b) (i) The  following  persons were elected  directors  for a term of
three years:

<TABLE>
<CAPTION>
                                                                              Votes          Votes
                                                                               For         Withheld

                               <S>                                             <C>             <C>   
                               Dennis Marino                                   9,004,871       45,510
                               James H. Lynch, Jr.                             9,004,871       45,510
                               Stephen J. DiLascio                             9,001,871       48,510

                 The following persons continued as directors:
                 Arthur Kontos, Richard J. Marino, Ralph N. Del Deo, Carl H. Hewitt, John P. Duffy and Thomas Neumann.

</TABLE>

                                    (13)

                 (ii) The  shareholders  ratified an amendment to The  Company's
Restated  Certificate  of  Incorporation  to decrease  the number of  authorized
shares of the Company's  capital stock from 101,000,000 to 51,000,000 shares and
to eliminate  provisions  related to Class A Common Stock. The following was the
shareholder vote on this matter:
<TABLE>
<CAPTION>

                              <S>                                         <C>      
                              For:                                        8,995,756
                              Against:                                       46,900
                              Withheld:                                       7,725
                              Broker Non-Vote:                                    0
</TABLE>


                  (iii) The  shareholders  ratified an amendment of The Sherwood
Group,  Inc. 1995 Stock Option Plan to increase the number of shares  subject to
the Plan from  767,200 to  1,187,200  and expand the types of persons  who would
qualify for benefits under the Plan. The following was the  shareholder  vote on
this matter:
<TABLE>
<CAPTION>

                              <S>                                         <C>      
                              For:                                        8,602,430
                              Against:                                      426,276
                              Withheld:                                      21,675
                              Broker Non-Vote:                                    0
</TABLE>

            (iv) The shareholders  ratified the appointment of KPMG Peat Marwick
LLP as the Company's  independent  auditors  for the fiscal year ending May 31,
1998. The following was the shareholder vote on this matter:
<TABLE>
<CAPTION>

                              <S>                                         <C>      
                              For:                                        9,006,891
                              Against:                                       39,360
                              Withheld:                                       4,130
                              Broker Non-Vote:                                    0
</TABLE>

Item 6 - EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits: 
     Exhibit 3.1 - Amendment to the Company's Restated Certificate
of  Incorporation.  Incorporated  by reference  to Exhibit 4.3 to the  Company's
Registration  Statement of Form S-8, file number  333-41819 filed on December 9,
1997.

     Exhibit  3.2 - Amendment  to  Restated  Certificate  of  Incorporation,  as
amended. Incorporated by reference to Exhibit A to the Company's Proxy Statement
dated November 12, 1997.

     Exhibit 3.3 - Restated Certificate of Incorporation, as amended.

     Exhibit 3.4 - Amendment to the Company's By-laws.

     Exhibit 3.5 - By laws of the Company, as amended. Incorporated by reference
to Exhibit 4.4 to the Company's  Registration Statement on Form S-8, file number
333-41819 filed on December 9, 1997.

     Exhibit  10.1 -  Resolution  of  the  Board  of  Directors  of the  Company
terminating The Sherwood Group, Inc. 1996 Executive Incentive Award Plan

     Exhibit 10.2 - The Sherwood Group, Inc. 1995 Stock Option Plan, as amended.
Incorporated by reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-8, file number 333-41819 filed on December 9, 1997.

     Exhibit 11 - Computation of Net Income Per Common Share

     Exhibit 27 - Financial Data Schedule

     (b) The Company  filed no reports on Form 8-K during the quarter ended
November 30, 1997.

                                (14)


<PAGE>



                           SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.



                                           National Discount Brokers Group, Inc.

                                      ------------------------------------------

      Date: January 12, 1998               By: Dennis Marino
     -------------------------        ------------------------------------------
                                           Dennis Marino
                                           Executive Vice President
                                           and Chief Administrative
                                           Officer


      Date: January 12, 1998               By: Denise Isaac
      ------------------------         -----------------------------------------
                                           Denise Isaac
                                           Chief Financial Officer and
                                           Principal Accounting Officer


































                                      (15)

                                                                               
                                                                    EXHIBIT 3.3

            RESTATED CERTIFICATE OF INCORPORATION, AS AMENDED
                                       OF
                     NATIONAL DISCOUNT BROKERS GROUP, INC.

                  It is hereby certified that

                           1. The name of the Corporation is NATIONAL DISCOUNT 
                  BROKERS GROUP, INC. (hereinafter referred to as the 
                  "Corporation").

                           2. The address of its registered  office in the State
                  of Delaware is 229 South State  Street,  in the city of Dover,
                  County of Kent,  19901.  The name of its  registered  agent at
                  such address is Prentice Hall Corporate Services.

                           3. The  nature  of the  business  or  purposes  to be
                  conducted  or  promoted  is to  engage  in any  lawful  act or
                  activity for which  corporations  may be  organized  under the
                  General Corporation Law of Delaware.

                           4. The total number of shares of all classes of stock
                  that  the  Corporation   shall  have  authority  to  issue  is
                  51,000,000,  of which  1,000,000  shares  shall  be  Preferred
                  Stock,  par value $.01 per share,  ("Preferred  Stock") and of
                  which 50,000,000  shares shall be Common Stock, par value $.01
                  per  share   ("Common   Stock"),   and  the   voting   powers,
                  designations,   preferences   and   relative,   participating,
                  optional  or  other  special  qualifications,  limitations  or
                  restrictions thereof are set forth hereinafter:

                                    1.      Preferred Stock

                                            (a)  The  Preferred   Stock  may  be
                           issued in one or more series,  each of which shall be
                           distinctively  designated,  shall  rank  equally  and
                           shall  be  identical   in  all  respects   except  as
                           otherwise provided in subsection 1(b) of this Section
                           4.

                                            (b)  Authority  is hereby  vested in
                           the Board of Directors to issue from time to time the
                           Preferred  Stock  of any  series  and to state in the
                           resolution or resolutions  providing for the issuance
                           of shares of any series the  voting  powers,  if any,
                           designations,      preferences      and     relative,
                           participating,  optional or other special rights, and
                           the  qualifications,  limitations or  restrictions of
                           such  series  to the  full  extent  now or  hereafter
                           permitted  by the law of the  State  of  Delaware  in
                           respect  of the  matters  set forth in the  following
                           clauses (1) to (viii) inclusive;

                                               (i)   The number of shares to
                           constitute such series, and the distinctive 
                           designations thereof;

                                               (ii)  the voting powers, full or
                           limited, if any, of such series;
                           

                                               (iii) the rate of dividends 
                           payable on shares of such series,  the  conditions
                           on which and the times when such dividends
                           are payable, the preference to, or the
                           relation to, the payment of the dividends  payable on
                           any other class,  classes or series of stock, whether
                           cumulative or non-cumulative and, if cumulative,  the
                           date form which  dividends  on shares of such  series
                           shall be cumulative;

                                               (iv) the redemption price or 
                           prices, if any, and the terms and conditions on which
                           shares of such series shall be redeemable;

                                                (v) the requirement of any
                           sinking fund or funds to be applied to the purchase
                           or redemption of shares of such series and, if so, 
                           the amount of such fund or funds and the manner of 
                           application;

                                                (vi) the rights of shares of 
                           such series upon the liquidation, dissolution or
                           winding up of, or upon any distribution of the asset
                           of, the Corporation;

                                                (vii) the rights, if any, of the
                           holders of shares of such  series  to  convert
                           such  shares  into,  or to exchange such shares
                           for,  shares of any other class, classes or
                           series of stock and the price or prices or
                           the rates of exchange  and the  adjustments  at which
                           such shares shall be convertible or exchangeable, and
                           any other terms and conditions of such  conversion or
                           exchange;

                                                 (viii) any other preferences 
                           and relative, participating,
                           optional  or other  special  rights of shares of such
                           series,    and    qualifications,    limitations   or
                           restrictions  including,   without  limitation,   any
                           restriction on an increase in the number of shares of
                           any   series    theretofore    authorized   and   any
                           qualifications, limitations or restrictions of rights
                           or powers to which shares of any future  series shall
                           be subject.

                                            (c) The number of authorized  shares
                           of  Preferred  Stock may be increased or decreased by
                           the affirmative  vote of the holders of a majority of
                           the votes of all classes of voting  securities of the
                           Corporation  without  a class  vote of the  Preferred
                           Stock,  or any series  thereof,  except as  otherwise
                           provided in the resolution or resolutions  fixing the
                           voting rights of any series of the Preferred Stock.



                                    2.      Common Stock

                                            At every meeting of the stockholders
                           of the  Corporation (or with respect to any action by
                           written   consent   in   lieu   of   a   meeting   of
                           stockholders),  each share of Common  Stock  shall be
                           entitled to one (1) vote (whether  voted in person by
                           the holder  thereof or by proxy) on all matters which
                           may lawfully be  submitted to a vote of  stockholders
                           (except to the extent otherwise required by law).

                                            At the time at which  this  Restated
                           Certificate of Incorporation  becomes effective,  the
                           par value of each  share of Common  Stock,  par value
                           $.10 per  share,  issued and  outstanding  as at such
                           time, shall be reduced to $.01 per share.

                           5. The Corporation is to have perpetual existence.

                           6. In furtherance and not in limitation of the powers
                  conferred  by statute,  the board of  directors  is  expressly
                  authorized:

                                    To make,  alter or repeal the by-laws of the
                  corporation.

                                     To  authorize  and  cause  to  be  executed
                           mortgages  and  liens  upon  the  real  and  personal
                           property of the corporation.

                                    To set  apart out of any of the funds of the
                           corporation  available  for  dividends  a reserve  or
                           reserves  for any proper  purpose  and to abolish any
                           such reserve in the manner in which it was created.

                                    By  a  majority  of  the  whole  board,   to
                           designate one or more  committees,  each committee to
                           consist  of  two or  more  of  the  directors  of the
                           corporation.  The  board  may  designate  one or more
                           directors as alternate members of any committee,  who
                           may replace any absent or disqualified  member at any
                           meeting of the committee.  Any such committee, to the
                           extent  provided in the  resolution or in the by-laws
                           of the  corporation,  shall have and may exercise the
                           powers of the board of directors in the management of
                           the business and affairs of the  corporation  and may
                           authorize the seal of the  corporation  to be affixed
                           to  all  papers  which  may  require  it;   provided,
                           however,  the by-laws may provide that in the absence
                           or  disqualification of any member or members thereof
                           the members or members thereof present at any meeting
                           and not disqualified  from voting,  whether or not he
                           or they constitute a quorum, may unanimously  appoint
                           another  member of the board of  directors  to act at
                           the  meeting  in the  place  of any  such  absent  or
                           disqualified member.

                                    When authorized by the  affirmative  vote of
                           the  holders  of  majority  of the stock  issued  and
                           outstanding   having   voting   power   given   at  a
                           stockholders' meeting duly called upon such notice as
                           is  required by statute,  or when  authorized  by the
                           written  consent of the  holders of a majority of the
                           voting stock issued and  outstanding,  to sell, lease
                           or exchange all or substantially  all of the property
                           and  assets of the  corporation,  including  its good
                           will and its  corporate  franchises,  upon such terms
                           and conditions and for such consideration,  which may
                           consist  in whole  or in part of  money  or  property
                           including shares of stock in, and/or other securities
                           of, any other  corporation  or  corporations,  as its
                           board of directors  shall deem  expedient and for the
                           best interests of the corporation.

                           7.               (a)  No person serving as a director
                                    of the Corporation shall be liable to the
                                    Corporation or its shareholders for monetary
                                    damages for breach of fiduciary duty as a 
                                    director, provided that this provision shall
                                    not eliminate or limit the liability of a 
                                    director (1) 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) under Section 174 of
                                    the Delaware General Corporation Law, or  
                                    (iv) for any transaction from which the 
                                    director derived an improper personal 
                                    benefit.

                                            (b)   (i)  The   corporation   shall
                                    indemnify,  subject to the  requirements  of
                                    subsection   (iii)  of  this  Section,   any
                                    person,    or   his    heirs    and    legal
                                    representatives, who was or is a party or is
                                    threatened   to  be  made  a  party  of  any
                                    threatened,  pending  or  completed  action,
                                    suit or proceeding, whether civil, criminal,
                                    administrative or  investigative,  by reason
                                    of the  fact  that he is or was a  director,
                                    officer,   employee   or  agent  of  another
                                    corporation,   partnership,   joint  venture
                                    trust or other enterprise,  against expenses
                                    (including   attorneys'  fees),   judgments,
                                    fines  and   amounts   paid  in   settlement
                                    actually and  reasonably  incurred by him in
                                    connection   with  such   action,   suit  or
                                    proceeding  if he acted in good faith and in
                                    a manner he reasonably  believed to be in or
                                    not  opposed  to the best  interests  of the
                                    Corporation   and,   with   respect  to  any
                                    criminal   action  or  proceeding,   had  no
                                    reasonable  cause to believe his conduct was
                                    unlawful; except that, as to any threatened,
                                    pending or completed action or suit by or in
                                    the   right   of   the   Corporation,   such
                                    indemnification shall be limited to expenses
                                    (including  attorneys'  fees)  actually  and
                                    reasonably  incurred in connection  with the
                                    defense or  settlement  of the case,  and in
                                    respect of any such  claim,  issue or matter
                                    as to which  such  person  shall  have  been
                                    adjudged  to be  liable  for  negligence  or
                                    misconduct in the performance of his duty to
                                    the  Corporation,  shall not be made without
                                    court approval.

                                            (ii) To the extent  that a director,
                                    officer,    employee   or   agent   of   the
                                    corporation   shall  be  successful  on  the
                                    merits  or   otherwise  in  defense  of  any
                                    action,  suit or  proceeding  referred to in
                                    subsection  (a)  of  this  Section,   or  in
                                    defense  of  any  claim,   issue  or  matter
                                    therein, the Corporation shall indemnify him
                                    against expenses (including attorneys' fees)
                                    actually and  reasonably  incurred by him in
                                    connection therewith.

                                            (iii)  Any   indemnification   under
                                    subsection  (i)  of  this  Section   (unless
                                    ordered  by a  court)  shall  be made by the
                                    Corporation   only  as   authorized  in  the
                                    specific case upon a determination  that the
                                    director, officer, employee or agent has met
                                    the applicable standard of conduct set forth
                                    in  subsection  (a) of  this  Section.  Such
                                    determination shall be made (1) by the Board
                                    of Directors by a majority  vote of a quorum
                                    consisting of directors who were not parties
                                    to such action,  suit or proceeding,  of (2)
                                    if such quorum is not  obtainable,  or, even
                                    if  obtainable,  a quorum  of  disinterested
                                    directors so directs,  by independent  legal
                                    counsel in a written opinion,  or (3) by the
                                    stockholders.

                                            (iv) The  Corporation  shall  pay in
                                    advance of the final  disposition of a civil
                                    or  criminal  action,   suit  or  proceeding
                                    expenses  incurred by a  director,  officer,
                                    employee or agent in defending  such action,
                                    suit  or  proceeding   upon  receipt  of  an
                                    undertaking by or on behalf of the director,
                                    officer,  employee  or agent  to repay  such
                                    amount if it shall  ultimately be determined
                                    that he is not entitled to be indemnified by
                                    the   Corporation   as  authorized  in  this
                                    Section.

                                            (v) The indemnification  provided by
                                    this Section shall not limit the Corporation
                                    from  providing  any  other  indemnification
                                    permitted  by law  nor  shall  it be  deemed
                                    exclusive of any other rights to which those
                                    indemnified   may  be  entitled   under  any
                                    by-law,  agreement,  vote of stockholders or
                                    disinterested  directors or otherwise,  both
                                    as to action in his official capacity and as
                                    to action in another  capacity while holding
                                    such  office,  and  shall  continue  as to a
                                    person who has  ceased to be a  director  or
                                    officer,  and shall  inure to the benefit of
                                    the heirs,  executors and  administrators of
                                    such a person.

                           8.       (a)   Except as otherwise expressly provided
                                in paragraph c of this Section B:

                                            (i) any merger or consolidation of
                 the Corporation of any Subsidiary (as hereinafter defined)
                 with or into any Major Stockholder (as hereinafter defined), 
                 or

                                            (ii) any sale, lease, exchange,
                 mortgage, pledge, transfer or other disposition to or with any
                 Major Stockholder of all or substantially all of the assets of
                 the Corporation, or

                                            (iii) the adoption of any plan or
                 proposal for the liquidation or dissolution of the Corporation;

                 shall require the affirmative vote ofd the holders of at least
                 eighty  percent (80%) of the votes  entitled to be cast by the
                 holders of the  outstanding  Class A Stock and Common Stock of
                 the   Corporation   voting  together  as  one  class  ("Voting
                 Shares").    Such   affirmative   vote   shall   be   required
                 notwithstanding the fact that no vote may be required, or that
                 some lesser percentage may be specified, by law or otherwise.

                                    (b) For the  purposes of this Section 8, (i)
                  "Major   Stockholder"   shall  mean  any   individual,   firm,
                  corporation  (other  than the  Corporation)  or  other  entity
                  which,  as  of  the  record  date  for  the  determination  of
                  stockholders  entitled  to notice of and to vote on any of the
                  transactions   described  in  clauses  (i)  through  (iii)  of
                  paragraph (a) of this Section 8, or  immediately  prior to the
                  consummation of any such transaction,  is the beneficial owner
                  of 10% or more of the votes  represented by the Voting Shares;
                  (ii) an individual, firm, corporation or other entity shall be
                  deemed to be the  beneficial  owner of any  Voting  Shares (x)
                  which it has the right to acquire  pursuant to any  agreement,
                  or upon  the  exercise  of  conversion  rights,  warrants,  or
                  options,  or otherwise,  or (y) which are beneficially  owned,
                  directly or indirectly  [including shares deemed owned through
                  the application of clause (a) above], by it or any "affiliate"
                  or  "associate"  (as those  terms are defined in Rule 12b-2 of
                  the General Rules and  Regulations  under the  Securities  and
                  Exchange Act of 1934) of it, or by any other individual, firm,
                  corporation  or other entity with which it or any  "affiliate"
                  or  "associate"  (as defined  above) of it has any  agreement,
                  arrangement  or  understanding  for the purpose of  acquiring,
                  holding, voting or disposing of any shares of capital stock of
                  the  Corporation;  (iii) the  outstanding  Voting Shares shall
                  include  shares  deemed  owned by a Major  Stockholder  (or an
                  individual,  firm,  corporation or other entity deemed a Major
                  Stockholder) through the application of clauses (x) and (y) of
                  clause  (ii)  above  but shall not  include  any other  Voting
                  Shares which may be issuable by the  Corporation  to any other
                  individual,  firm, corporation or other entity pursuant to any
                  agreement, or upon exercise of conversion rights, warrants, or
                  options,  or otherwise;  and (iv) "Subsidiary"  shall mean any
                  corporation  of  which a  majority  of any  class  of  "equity
                  security"  (as defined in Rule 3all-1 of the General Rules and
                  Regulations  under  the  Securities  Exchange  Act of 1934) is
                  owned, directly or indirectly, by the Corporation.

                                    (c) The  provisions  of this Section 8 shall
                  not apply to any transaction  described in clauses (i) or (ii)
                  of paragraph (a) of this Section 8 (i) if the  Corporation  is
                  then, and at all times  throughout the preceding twelve months
                  has been,  directly or indirectly,  the beneficial  owner of a
                  majority of each class of the outstanding  "equity securities"
                  (as defined above) of the Major  Stockholder  which is a party
                  to such  transaction,  (ii) if the Board of  Directors  of the
                  Corporation  shall by resolution have approved a memorandum of
                  understanding  with the Major  Stockholder which is a party to
                  such  transaction,  consistent  in  material  terms  with such
                  transaction,  prior to the time such Major  Stockholder  shall
                  have  become a  beneficial  owner of 10% or more of the  votes
                  represented by the Voting Shares, or (iii) if such transaction
                  is approved by a resolution  adopted prior to the consummation
                  of  such  transaction  by the  affirmative  vote of 70% of the
                  whole Board of Directors of the Corporation (the "whole Board"
                  being a number of directors which the  Corporation  would have
                  if there were no  vacancies),  provided that a majority of the
                  members of the Board of  Directors  voting for the approval of
                  such  transaction  were duly elected and acting members of the
                  Board of  Directors  prior to the  later of (a) the date  that
                  such Major  Stockholder first became a beneficial owner of 10%
                  or more of the votes  represented  by the Voting Shares or (b)
                  January  1,  1987 or  such  majority  were  the  designees  or
                  nominees of such members of the Board of Directors.

                                    (d)  Notwithstanding any other provisions of
                  the  Certificate  of  Incorporation  or  the  By-Laws  of  the
                  Corporation  (and  notwithstanding  the fact that some  lesser
                  percentage  may  be  specified  by  law,  the  Certificate  of
                  Incorporation  or  the  By-Laws  of  the   Corporation),   any
                  amendment,  alteration,  change or repeal of this Section 8 of
                  the Certificate of Incorporation shall require the affirmative
                  vote of the  holders of at least  eighty  percent  (80% of the
                  votes represented by the Voting Shares.

                           9. Whenever a compromise or  arrangement  is proposed
                  between  this  Corporation  and its  creditors or any class of
                  them and/or between this  Corporation 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 Corporation or any creditor or stockholder thereof, or
                  on the application o f any receiver or receivers appointed for
                  this Corporation  under the provisions of Section 291 of Title
                  8 of the Delaware  Code or on the  application  of trustees in
                  dissolution  or any receiver or receivers  appointed  for this
                  Corporation  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  Corporation,  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 Corporation, as the case may be, agree to
                  any compromise or  arrangement  and to any  reorganization  of
                  this   Corporation  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 Corporation, as
                  the case may be, and also on this Corporation.

                           10.  (a)   Commending   with  the  first  meeting  of
                  shareholder at which directors are to be elected following the
                  effective date of this Restated  Certificate of Incorporation,
                  the  directors of the  Corporation  shall be  classified  with
                  respect to the time for which they shall severally hold office
                  by dividing  them into three (3) classes,  each class to be as
                  nearly equal in number as  possible,  which  classes  shall be
                  designated  as Class 1,  Class 2 and Class 3.  Subject  to the
                  provisions hereof, the number of directors in each class shall
                  from time to time be  designated  by the Board of Directors of
                  the  Corporation.  The  Class 1  directors  shall  be  elected
                  initially  for a term of one year which  term shall  expire at
                  the  first  Annual  Meeting  of  Shareholders   following  the
                  classification  of  the  Board  of  Directors,   the  Class  2
                  directors  shall be elected  initially for a term of two years
                  which term shall expire at the Annual Meeting of  Shareholders
                  following the  classification  of the Board of Directors,  and
                  the Class 3 directors shall be elected initially for a term of
                  three (3) years  which term shall  expire at the third  Annual
                  Meeting   of   Shareholders   to   be   held   following   the
                  classification  of the  Board  of  Directors.  At each  Annual
                  Meeting,  commencing  with the first Annual Meeting to be held
                  following the  classification  of the Board of Directors,  the
                  successors  to the class shall be elected to hold office for a
                  term of three years so that the term of office of one class of
                  directors shall expire each year.

                                    (b)  Notwithstanding any other provisions of
                  the  Certificate  of  Incorporation  or  the  By-Laws  of  the
                  Corporation  (and  notwithstanding  the fact that some  lesser
                  percentage  may  be  specified  by  law,  the  Certificate  of
                  Incorporation  or  the  By-Laws  of  the   Corporation),   any
                  amendment,  alteration, change or repeal of this Section 10 of
                  the Certificate of Incorporation shall require the affirmative
                  vote of the holders of at least  eighty  percent  (80%) of the
                  votes represented by the Voting Shares.

                           11.  Meeting of  stockholders  may be held  within or
                  without the State of Delaware, as the By-laws may provide. The
                  books of the Corporation may be kept (subject to any provision
                  contained  in the  statutes)  outside the State of Delaware at
                  such place or places as may be designated from time to time by
                  the Board of Directors  or in the By-laws of the  Corporation.
                  Elections of directors need not be by written  ballot,  unless
                  the By-Laws of the Corporation shall so provide.

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


<PAGE>


                            CERTIFICATE OF AMENDMENT
                                       TO
                      RESTATED CERTIFICATE OF INCORPORATION
                                       OF
                            THE SHERWOOD GROUP, INC.

         The Sherwood  Group,  Inc., a corporation  organized and existing under
and by virtue of  Section  242 of the  General  Corporation  Law of the State of
Delaware (the "Corporation"), DOES HEREBY CERTIFY:

         1. By Unanimous Written Consent dated August 19, 1997, resolutions were
duly  adopted  by the Board of  Directors  of the  Corporation  setting  forth a
proposed  amendment  of  the  Restated   Certificate  of  Incorporation  of  the
Corporation filed on February 4, 1987 with the Delaware Department of State (the
"Certificate"),  declaring  said amendment to be advisable and calling a meeting
of the  stockholders of the Corporation for  consideration  thereof  pursuant to
Section 222 of the General Corporation Law of the State of Delaware.

         2. At an annual meeting of the  stockholders of the Corporation held on
October 21, 1997,  resolutions to amend the  Certificate  were proposed and duly
adopted  by a  sufficient  number  of shares  entitled  to vote as  required  by
Delaware law. The resolution setting forth the proposed amendment is as follows:

         "RESOLVED, that the Corporation's Certificate of Incorporation shall be
amended as follows:

         Article 4 is amended and restated in its entirety as follows:

                  "4.  The total  number of shares of all  classes of stock that
the Corporation shall have authority to issue is 51,000,000,  of which 1,000,000
shares shall be Preferred  Stock, par value $.01 per share  ("Preferred  Stock")
and of which  50,000,000  shares shall be Common Stock, par value $.01 per share
("Common Stock"), and the voting powers, designations, preferences and relative,
participating,   optional  or  other  special  qualifications,   limitations  or
restrictions thereof are set forth hereinafter:

         1.       Preferred Stock

                  (a) The  Preferred  Stock may be issued in one or more series,
each of which shall be distinctively designated, shall rank equally and shall be
identical in all respects  except as otherwise  provided in  subsection  1(b) of
this Section 4.

                  (b)  Authority  is hereby  vested in the Board of Directors to
issue  from time to time the  Preferred  Stock of any series and to state in the
resolution or resolutions providing for the issuance of shares of any series the
voting powers, if any,  designations,  preferences and relative,  participating,
optional  or  other  special  rights,  and the  qualifications,  limitations  or
restrictions of such series to the full extent now or hereafter permitted by the
law of the  State  of  Delaware  in  respect  of the  matters  set  forth in the
following clauses (i) to (viii) inclusive;

                           (i)  the number of shares to constitute such series,
         and the distinctive designations thereof;

                           (ii) the voting powers, full or limited, if any, of
         such series;

                           (iii) the rate of dividends payable on shares of such
         series,  the  conditions on which and the times when such dividends are
         payable,  the  preference  to, or the  relation  to, the payment of the
         dividends  payable  on any  other  class,  classes  or series of stock,
         whether cumulative or non-cumulative and, if cumulative,  the date from
         which dividends on shares of such series shall be cumulative;

                           (iv) the redemption price or prices,  if any, and the
         terms  and   conditions  on  which  shares  of  such  series  shall  be
         redeemable;

                           (v) the  requirement  of any sinking fund or funds to
         be applied to the purchase or  redemption of shares of such series and,
         if so, the amount of such fund or funds and the manner of application;

                           (vi) the  rights of shares  of such  series  upon the
         liquidation,  dissolution or winding up of, or upon any distribution of
         the assets of, the Corporation;

                           (vii) the rights, if any, of the holders of shares of
         such series to convert  such shares  into,  or to exchange  such shares
         for,  shares of any  other  class,  classes  or series of stock and the
         price or prices or the rates of exchange and the  adjustments  at which
         such shares shall be convertible or  exchangeable,  and any other terms
         and conditions of such conversion or exchange;

                           (viii)   any   other    preferences   and   relative,
         participating,  optional  or other  special  rights  of  shares of such
         series,  and  qualifications,  limitations or  restrictions  including,
         without  limitation,  any  restriction  on an increase in the number of
         shares of any series  theretofore  authorized  and any  qualifications,
         limitations or  restrictions of rights or powers to which shares of any
         future series shall be subject.

                  (c) The number of authorized  shares of Preferred Stock may be
increased or decreased by the  affirmative  vote of the holders of a majority of
the votes of all classes of voting securities of the Corporation without a class
vote of the Preferred Stock, or any series thereof, except as otherwise provided
in the resolution or  resolutions  fixing the voting rights of any series of the
Preferred Stock.

         2.       Common Stock
                  At every meeting of the  stockholders  of the  Corporation (or
with  respect  to any  action  by  written  consent  in  lieu  of a  meeting  of
stockholders),  each share of Common  Stock  shall be  entitled  to one (1) vote
(whether voted in person by the holder thereof or by proxy) on all matters which
may  lawfully  be  submitted  to a vote of  stockholders  (except  to the extent
otherwise required by law).


         At the time at which this Restated Certificate of Incorporation becomes
effective,  the par value of each  share of  Common  Stock,  par value  $.10 per
share,  issued and  outstanding  as at such  time,  shall be reduced to $.01 per
share."


         3.       The  following   votes  were  cast  in  connection   with  the
                  aforementioned  amendment:  10,077,542  votes in favor  46,900
                  votes against 7,725 votes abstained

         4. The amendment was duly adopted in accordance  with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.


         IN WITNESS  WHEREOF,  the Corporation has caused this Certificate to be
signed by Arthur Kontos, its President, this 21st day of October, 1997.


                                                      THE SHERWOOD GROUP, INC.


                                                      /s/  Arthur Kontos
                                                      ------------------ 
                                                      Arthur Kontos
                                                      President and Chief
                                                      Executive Officer

ATTEST:


      /s/  Laura Singer
---------------------------------
Laura Singer, Assistant Secretary




                                                                               
                                                                   EXHIBIT 3.4
                        Unanimous Written Consent of the
                              Board of Directors of
                            The Sherwood Group, Inc.


     WHEREAS,   the  Board  of  Directors  of  The  Sherwood  Group,  Inc.  (the
"Corporation")  desires to amend the By-Laws of the Corporation  (the "By-Laws")
to clarify  that the Chairman of the Board of Directors is not an officer of the
Corporation;

     NOW  THEREFORE,  the  undersigned,  being  all  the  directors  of  the
Corporation,  do hereby  consent to the  adoption of the  following  resolutions
pursuant  to  Section  141(f)  of the  General  Corporation  Law of the State of
Delaware, without the formality of convening a meeting:

     RESOLVED, that the By-Laws shall be amended to add the following as Section
11 of Article III of the By-Laws:

                  "Section  11. The  chairman  of the board shall be a member of
                  the  board  and  shall  be  selected  by a  majority  vote  or
                  unanimous  written  consent of the  members  of the board.  He
                  shall perform such duties as may from time to time be assigned
                  to him by the board."

         RESOLVED,  that the  first  sentence  of  Article  V,  Section 1 of the
By-Laws shall be deleted and the following shall be substituted therefor:

                  "Section 1. The  officers of the  corporation  shall be chosen
                  by the board of directors and shall be a president, a 
                  vice-president, a secretary and a treasurer."

         RESOLVED, that Article V, Section 2 of the By-Laws shall be deleted and
the following shall be substituted therefor:

                  "Section 2. The board of directors  at its first  meeting  
                  after each annual  meeting of stockholders shall choose a 
                  president,  one or more  vice-presidents,  a secretary and a
                  treasurer."

         RESOLVED,  that the proper officers of the Company be, and each of them
hereby is,  authorized and empowered,  in the name and on behalf of the Company,
to execute all such further  documents,  and to take all such further action, as
any such officer may deem necessary, proper, convenient or desirable and approve
in order to carry out each of the foregoing  resolutions and to fully effectuate
the purposes and intents thereof.

         IN WITNESS WHEREOF,  the undersigned have executed this written consent
effective as of the ____ day of December, 1997.


--------------------------------              ----------------------------------
Arthur Kontos, Director                        Carl Hewitt, Director


--------------------------------              ----------------------------------
James H. Lynch, Jr. Director                   Dennis Marino, Director


--------------------------------              ----------------------------------
Richard J. Marino, Director                    Thomas Neumann, Director


--------------------------------              ----------------------------------
Ralph Del Deo, Director                        Stephen J. DiLascio, Director


--------------------------------
John Duffy, Director


                                                                               

                                                                   EXHIBIT 10.1
                        Unanimous Written Consent of the
                 Board of Directors of The Sherwood Group, Inc.
                       ----------------------------------


         The  undersigned,  being all the directors of The Sherwood Group,  Inc.
(the  "Corporation"),  do  hereby  consent  to the  adoption  of  the  following
resolutions  pursuant to Section 141 (f) of the General  Corporation  Law of the
State of Delaware as of October 9, 1997:

         RESOLVED,  that Article 1 of the Corporation's  Restated Certificate of
Incorporation, as amended to date, be amended to read as follows:

                 "1. The name of the corporation is NATIONAL  DISCOUNT BROKERS
                 GROUP, INC.  (hereinafter  referred to as the "Corporation").";

         FURTHER  RESOLVED,  that the proposed  amendment  to the  Corporation's
Restated  Certificate of Incorporation,  as amended, in the form presented above
is approved and that such  amendment be  submitted  to the  stockholders  of the
Corporation  with  the  recommendation  of  the  Board  of  Directors  that  the
stockholders give their consent authorizing such amendment;

         FURTHER  RESOLVED,  that the Board of Directors  hereby  calls a 
Special  Meeting of  Stockholders  of the Corporation to be held on December 12,
1997 at 4:00 p.m. at 10 Exchange Place Centre, Jersey City, New Jersey;

         FURTHER  RESOLVED,  that the Board of Directors  solicit the proxies of
the  stockholders  of the  Corporation  for  approval  of the  Amendment  to the
Corporation's  Restated  Certificate of  Incorporation,  as amended,  and Dennis
Marino and Thomas Neumann are appointed proxies;

         FURTHER RESOLVED, that the Board of Directors hereby fixes the close of
business  on  November  11,  1997  as  the  record  date  for  determination  of
stockholders of the Corporation entitled to vote at the Special Meeting;

         FURTHER  RESOLVED,  that a proxy statement (the "Proxy  Statement") and
any  amendments  thereto,  and proxy  cards and  related  material  be  prepared
pursuant  to the  Securities  Exchange  Act of 1934,  as  amended,  and that the
officers of the Corporation be, and they hereby are, authorized and empowered to
execute the Proxy  Statement  and related  proxy  material in the name of and on
behalf  of the  Corporation  and to file such  Proxy  Statement,  together  with
appropriate  exhibits  and  materials,  with the United  States  Securities  and
Exchange Commission;

         FURTHER  RESOLVED,  that the officers of the  Corporation  be, and they
hereby are,  authorized and empowered to execute and deliver the Proxy Statement
together  with  appropriate  exhibits and materials to the  stockholders  of the
Corporation;

         FURTHER  RESOLVED,  that the officers of the  Corporation  be, and they
hereby are,  authorized  and  empowered  to execute  and deliver all  additional
certificates  and  other  instruments  as they  deem  appropriate  and to do and
perform  such other acts as said  officers  shall deem  necessary  and proper in
order to carry into effect the foregoing resolutions;

         FURTHER  RESOLVED,  that the  Corporation  pay a cash  bonus to  Thomas
Neumann in the amount of $107,000 as soon as possible;

         FURTHER  RESOLVED,  that  pursuant to Section 7 of The Sherwood  Group,
Inc. 1996 Executive  Incentive Award Plan, the Board hereby  terminates the plan
effective immediately.


Dated:  October 9, 1997


--------------------------------              ----------------------------------
Arthur Kontos, Director                       Carl Hewitt, Director


--------------------------------              ----------------------------------
James H. Lynch, Director                      Dennis Marino, Director


--------------------------------              --------------------------------
Richard J. Marino, Director                   Thomas Neumann, Director


--------------------------------              ----------------------------------
Ralph Del Deo, Director                       Stephen J. DiLascio, Director


--------------------------------
John Duffy, Director







                                                              EXHIBIT 11
        NATIONAL DISCOUNT BROKERS GROUP, INC. AND SUBSIDIARIES 
                   COMPUTATION OF NET INCOME PER COMMON SHARE
<TABLE>
<CAPTION>


                                                                 Three Months Ended November 30,
                                                            ---------------------------------------
                                                                       1997                 1996
                                                            -------------------  ------------------
<S>                                                         <C>                  <C>   
Common stock and common stock equivalents:
  Average common stock outstanding                                  12,710,468          12,972,734
  Average common stock equivalents
    issuable under stock options                                        82,901              55,775
                                                            -------------------  ------------------

Total average common stock and common stock
  equivalents used for earnings per share computation               12,793,369          13,028,509
                                                            ===================  ==================

Income:
    Net income                                              $        2,087,293   $       3,295,285
                                                            ===================  ==================

Net income per common and common equivalent share (a):
    Net income                                              $            0.16    $            0.25
                                                            ===================  ==================

<FN>
(a) For presentation purposes, primary and fully diluted are identical.
</FN>
</TABLE>


<TABLE>
<CAPTION>

                                                                  Six Months Ended November 30,
                                                            ---------------------------------------
                                                                       1997                 1996
                                                            -------------------  ------------------
<S>                                                         <C>                  <C>    
Common stock and common stock equivalents:
  Average common stock outstanding                                  12,702,523          12,995,192
  Average common stock equivalents
    issuable under stock options                                       114,160              44,275
                                                            -------------------  ------------------

Total average common stock and common stock
  equivalents used for earnings per share computation               12,816,683          13,039,467
                                                            ===================  ==================

Income:
    Net income                                              $        4,795,765   $       6,298,326
                                                            ===================  ==================

Net income per common and common equivalent share (a):
    Net income                                              $            0.37    $            0.48
                                                            ===================  ==================

<FN>
(a) For presentation purposes, primary and fully diluted are identical.
</FN>

</TABLE>