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                                                                     EXHIBIT 4.1



                   CERTIFICATE OF DESIGNATIONS OF THE POWERS
                    PREFERENCES AND RELATIVE, PARTICIPATING,
                      OPTIONAL AND OTHER SPECIAL RIGHTS OF
                      PREFERRED STOCK AND QUALIFICATIONS,
                      LIMITATIONS AND RESTRICTIONS THEREOF

                                       OF

                        8 1/2% CONVERTIBLE EXCHANGEABLE
                                PREFERRED STOCK
                             GREYHOUND LINES, INC.



               ------------------------------------------------
                         Pursuant to Section 151 of the
               General Corporation Law of the State of Delaware
               ------------------------------------------------


          Greyhound Lines, Inc. (the "Company"), a corporation organized and
existing under the General Corporation Law of the State of Delaware, does
hereby certify that, pursuant to authority conferred upon the board of
directors of the Company (the "Board of Directors") by its Restated Certificate
of Incorporation (hereinafter referred to as the "Certificate of
Incorporation"), and pursuant to the provisions of Section 151 of the General
Corporation Law of the State of Delaware, said Board of Directors, by a meeting
duly called and held on March 11, 1997, duly approved and adopted the following
resolution (the "Resolution"):

          RESOLVED, that, pursuant to the authority vested in the Board of
     Directors by its Certificate of Incorporation, the Board of Directors does
     hereby create, authorize and provide for the issue of 8 1/2% Convertible
     Exchangeable Preferred Stock, par value $0.01 per share, with a
     liquidation preference of $25.00 per share, consisting initially of
     2,760,000 shares, having the designations, preferences, relative,
     participating, optional and other special rights and the qualifications,
     limitations and restrictions thereof that are set forth in the Certificate
     of Incorporation and in this Resolution as follows:

          (a) Designation. There is hereby created out of the authorized and
unissued shares of preferred stock of the Company a series of preferred stock
designated as the "8 1/2% Convertible Exchangeable Preferred Stock" (the
"Preferred Stock"). The number of shares constituting such series shall be
2,760,000. The liquidation preference of the Preferred Stock (the "Liquidation
Preference") shall be $25.00 per share.

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


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

          (c) Dividends,

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

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

          (iii) Nothing herein contained shall in any way or under any
     circumstances be construed or deemed to require the Board of Directors to
     declare, or the Company to pay or set apart for payment, any cash
     dividends on shares of the Preferred Stock at any time.

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

          (v)   Except as set forth in the following sentence, no dividends 
     shall be declared by the Board of Directors or paid or funds set apart 
     for the payment of dividends by the Company on any Parity Securities for 
     any period unless full cumulative dividends shall have been or




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     contemporaneously are declared and paid in cash or declared and a sum in
     cash set apart sufficient for such payment on the Preferred Stock for all
     Dividend Periods terminating on or prior to the date of payment of such
     dividends on such Parity Securities. If full dividends in cash are not so
     paid upon the shares of the Preferred Stock and any other Parity
     Securities, all dividends declared upon the Preferred Stock and any other
     Parity Securities shall be declared pro rata so that the amount of
     dividends declared on each class or series of the Preferred Stock and such
     Parity Securities shall in all cases bear to each other the same ratio
     that the aggregate accrued dividends on the Preferred Stock and such
     Parity Securities bear to each other.

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

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

          (C) So long as any shares of the Preferred Stock are outstanding, the
     Company shall not make any payment on account of, or set apart for payment
     money for a sinking or other similar fund for, the purchase, redemption or
     other retirement of, any Parity Securities or any warrants, rights, calls
     or options exercisable for or convertible into any Parity Securities, and
     shall not permit any corporation or other entity directly or indirectly
     controlled by the Company to purchase or redeem any Parity Securities or
     any such warrants, rights, calls or options unless the dividends
     determined in accordance herewith on the Preferred Stock have been paid or
     deemed paid in full for all past Dividend Periods.

          (vii) Dividends payable on shares of the Preferred Stock for any
     period of less than a year shall be computed on the basis of a 360-day
     year of twelve 30-day months and the actual number of days elapsed in any
     period of less than one month. If any Dividend Payment Date occurs on a
     day that is not a Business Day, any accrued dividends otherwise payable on
     such Dividend Payment Date shall be paid on the next succeeding Business
     Day.

          (d) Liquidation Preference.

          (i) Upon any voluntary or involuntary liquidation, dissolution or
     winding-up of the Company, the Holders of shares of Preferred Stock then
     outstanding shall be entitled to be paid, out of the assets of the Company
     available for distribution, the Liquidation Preference, plus an amount in
     cash equal to accumulated and unpaid dividends and Liquidated Damages, if
     any, thereon to the date fixed for liquidation, dissolution or winding-up
     (including an amount equal




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     to a prorated dividend for the period from the last Dividend Payment Date
     to the date fixed for liquidation, dissolution or winding-up), before any
     payment shall be made or any assets distributed to the holders of any
     Junior Securities. If, upon any voluntary or involuntary liquidation,
     dissolution or winding-up of the Company, the amounts payable with respect
     to the Preferred Stock and all other Parity Securities are not paid in
     fall, then the holders of the Preferred Stock and the Parity Securities
     shall share equally and ratably in any distribution of assets of the
     Company in proportion to the full liquidation preference and accumulated
     and unpaid dividends and Liquidated Damages, if any, determined as of the
     date of such voluntary or involuntary liquidation, dissolution or
     winding-up, to which each is entitled. After payment of the full amount of
     the liquidation preferences and accumulated and unpaid dividends and
     Liquidated Damages, if any, to which they are entitled, the Holders of
     shares of Preferred Stock shall not be entitled to any further
     participation in any distribution of assets of the Company.

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

          (e) Conversion.

          (i) A Holder of shares of Preferred Stock may convert such shares
     into Common Stock at any time on or after July 15, 1997. For the purposes
     of conversion, each share of Preferred Stock shall be valued at the
     Liquidation Preference, which shall be divided by the Conversion Price in
     effect on the Conversion Date to determine the number of shares issuable
     upon conversion, except that the right to convert shares of Preferred
     Stock called for redemption shall terminate at the close of business on
     the Business Day preceding the Redemption Date and shall be lost if not
     exercised prior to that time (unless the Company shall default in payment
     of the Optional Redemption Price). Immediately following such conversion,
     the rights of the Holders of converted Preferred Stock shall cease and the
     persons entitled to receive the Common Stock upon the conversion of
     Preferred Stock shall be treated for all purposes as having become the
     owners of such Common Stock.

          (ii) To convert Preferred Stock, a Holder must (A) surrender the
     certificate or certificates evidencing the shares of Preferred Stock to be
     converted, duly endorsed in a form satisfactory to the Company, at the
     office of the Company or transfer agent for the Preferred Stock, (B)
     notify the Company at such office that he elects to convert Preferred
     Stock and the number of shares he wishes to convert, (C) state in writing
     the name or names in which he wishes the certificate or certificates for
     shares of Common Stock to be issued, and (D) pay any transfer or similar
     tax if required. In the event that a Holder fails to notify the Company of
     the number of shares of Preferred Stock which he wishes to convert, he
     shall be deemed to have elected to convert all shares represented by the
     certificate or certificates surrendered for conversion. The date on which
     the Holder satisfies all those requirements is the "Conversion Date." As
     soon as practical,the Company shall deliver a certificate for the number
     of full shares of Common Stock issuable upon the conversion, a payment in
     cash for any fractional share and a new certificate representing the
     unconverted portion, if any, of the shares of Preferred Stock represented
     by the certificate or certificates surrendered for conversion. The person
     in whose name the Common Stock certificate is registered shall be treated
     as the stockholder of record on




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     and after the Conversion Date. No payment or adjustment will be made for
     accrued and unpaid dividends on converted shares of Preferred Stock or for
     dividends on any Common Stock issued upon such conversion. A share of
     Preferred Stock surrendered for conversion during the period from the
     close of business on any record date for the payment of dividends to the
     opening of business of the corresponding Dividend Payment Date must be
     accompanied by a payment in cash in an amount equal to the dividend
     payable on such Dividend Payment Date, unless such share of Preferred Stock
     has been called for redemption on a redemption date occurring during the
     period from the close of business on any record date for the payment of
     dividends to the close of business on the business day immediately
     following the corresponding Dividend Payment Date. The dividend payment
     with respect to a share of Preferred Stock called for redemption on a date
     during the period from the close of business on any record date for the
     payment of dividends to the close of business on the business day
     immediately following the corresponding Dividend Payment Date will be
     payable on such Dividend Payment Date to the record Holder of such share
     on such record date, notwithstanding the conversion of such share after
     such record date and prior to such Dividend Payment Date, and the Holder
     converting such share of Preferred Stock need not include a payment of
     such dividend amount upon surrender of such share of Preferred Stock for
     conversion. If a Holder of Preferred Stock converts more than one share at
     a time, the number of full shares of Common Stock issuable upon conversion
     shall be based on the total value of all shares of Preferred Stock
     converted. If the last day on which Preferred Stock may be converted is
     not a Business Day, Preferred Stock may be surrendered for conversion on
     the next succeeding Business Day.

          (iii) The Company shall not issue a fractional share of Common Stock
     upon conversion of Preferred Stock. Instead the Company shall pay a cash
     adjustment for the current market value of the fractional share. The
     current market value of a fraction of a share shall be determined as
     follows: Multiply the current market price of a full share by the
     fraction. Round the result to the nearest cent. The current market price
     of a share of Common Stock is Ile Quoted Price of the Common Stock on the
     last Trading Day prior to the Conversion Date.

          (iv) If a Holder converts shares of Preferred Stock, the Company
     shall pay any documentary, stamp or similar issue or transfer tax due on
     the issue of shares of Common Stock upon the conversion. However, the
     Holder shall pay any such tax that is due because the shares are issued in
     a name other than the Holder's name.

          (v) The Company has reserved and shall continue to reserve out of its
     authorized but unissued Common Stock or its Common Stock held in treasury
     enough shares of Common Stock to permit the conversion of the Preferred
     Stock in full. All shares of Common Stock that may be issued upon
     conversion of Preferred Stock shall be fully paid and nonassessable. The
     Company shall endeavor to comply with all securities laws regulating the
     offer and delivery of shares of Common Stock upon conversion of Preferred
     Stock and shall endeavor to list such shares on each national securities
     exchange on which the Common Stock is listed.

          (vi) In case the Company shall pay or make a dividend or other
     distribution on any class of capital stock of the Company in Common Stock,
     the Conversion Price in effect at the opening of business on the day
     following the date fixed for the determination of stockholders entitled to
     receive such dividend or other distribution shall be reduced by
     multiplying such Conversion Price by a fraction the numerator of which
     shall be the number of shares of Common Stock outstanding at the close of
     business on the date fixed for such determination and the




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     denominator of which shall be the sum of such number of shares and the
     total number shares constituting such dividend or other distribution, such
     reduction to become effective immediately after the opening of business on
     the day following the date fixed for such determination of the holders
     entitled to such dividends and distributions. For the purposes of this
     paragraph (e)(vi), the number of shares of Common Stock at any time
     outstanding shall not include shares held in the treasury of the Company.
     The Company will not pay any dividend of make any distribution on shares
     of Common Stock held in the treasury of the Company.

          (vii) In case the Company shall issue rights, options or warrants to
     all holders of its Common Stock entitling them to subscribe for, purchase
     or acquire shares of Common Stock at a price per share less than the
     current market price per share (determined as provided in paragraph
     (e)(xi) below) of the Common Stock on the date fixed for the determination
     of stockholders entitled to receive such rights, options or warrants, the
     Conversion Price in effect at the opening of business on the day following
     the date fixed for such determination shall be reduced by multiplying such
     Conversion Price by a fraction the numerator of which shall be the number
     of shares of Common Stock outstanding at the close of business on the date
     fixed for such determination plus the number of shares of Common Stock
     which the aggregate of the offering price of the total number of shares of
     Common Stock so offered for subscription, purchase or acquisition would
     purchase at such current market price and the denominator of which shall
     be the number of shares of Common Stock outstanding at the close of
     business on the date fixed for such determination plus the number of
     shares of Common Stock so offered for subscription, purchase or
     acquisition, such reduction to become effective immediately after the
     opening of business on the day following the date fixed for such
     determination of the holders entitled to such rights, options or warrants.
     However, upon the expiration of any right, option or warrant to purchase
     Common Stock, the issuance of which resulted in an adjustment in the
     Conversion Price pursuant to this paragraph (e)(vii), if any such right,
     option or warrant shall expire and shall not have been exercised, the
     Conversion Price shall be recomputed immediately upon such expiration and
     effectively immediately upon such expiration shall be increased to the
     price it would have been (but reflecting any other adjustments to the
     Conversion Price made pursuant to the provisions of this paragraph (e)
     after the issuance of such rights, options or warrants) had the adjustment
     of the Conversion Price made upon the issuance of such rights, options or
     warrants been made on the basis of offering for subscription or purchase
     only that number of shares of Common Stock actually purchased upon the
     exercise of such rights, options or warrants. No further adjustment shall
     be made upon exercise of any right, option or warrant if any adjustment
     shall have been made upon the issuance of such security. For the purposes
     of this paragraph (e)(vii), the number of shares of Common Stock at any
     time outstanding shall not include shares held in the treasury of the
     Company. The Company will not issue any rights, options or warrants in
     respect of shares of Common Stock held in the treasury of the Company.

          (viii) In case the outstanding shares of Common Stock shall be
     subdivided into a greater number of shares of Common Stock, the Conversion
     Price in effect at the opening of business on the day following the day
     upon which such subdivision becomes effective shall be reduced, and,
     conversely, in case the outstanding shares of Common Stock shall each be
     combined into a smaller number of shares of Common Stock, the Conversion
     Price in effect at the opening of business on the day following the day
     upon which such combination becomes effective shall be increased to equal
     the product of the Conversion Price in effect on such date and a fraction
     the numerator of which shall be the number of shares of Common Stock
     outstanding immediately prior to such subdivision or combination, as the
     case may be, and the denominator of which shall




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     be the number of shares of Common Stock outstanding immediately after such
     subdivision or combination, as the case may be. Such reduction or
     increase, as the case may be, shall become effective immediately after the
     opening of business on the day following the day upon which such
     subdivision or combination becomes effective.

          (ix) In case the Company shall, by dividend or otherwise, distribute
     to all holders of its Common Stock (A) evidences of its indebtedness or
     (B) shares of any class of capital stock, cash or other assets (including
     securities, but excluding (x) any rights, options or warrants referred to
     in paragraph (e)(vii) above, (y) any dividend or distribution referred to
     in paragraph (e)(vi) above, and (z) cash dividends paid from the Company's
     retained earnings, unless the sum of (1) all such cash dividends and
     distributions made within the preceding 12 months in respect of which no
     adjustment has been made and (2) any cash and the fair market value of
     other consideration paid in respect of any repurchases of Common Stock by
     the Company or any of its subsidiaries within the preceding 12 months in
     respect of which no adjustment has been made, exceeds 20% of the Company's
     market capitalization (being the product of the then current market price
     per share (determined as provided in paragraph (e)(xi) below) of the
     Common Stock times the aggregate number of shares of Common Stock then
     outstanding) on the record date for such distribution), then in each case,
     the Conversion Price in effect at the opening of business on the day
     following the date fixed for the determination of holders of Common Stock
     entitled to receive such distribution shall be adjusted by multiplying
     such Conversion Price by a fraction of which the numerator shall be the
     current market price per share (determined as provided in paragraph
     (e)(xi) below) of the Common Stock on such date of determination (or, if
     earlier, on the date on which the Common Stock goes "ex-dividend" in
     respect of such distribution) less the then fair market value as
     determined by the Board of Directors (whose determination shall be
     conclusive and shall be described in a statement filed with any Conversion
     Agent) of the portion of the capital stock, cash or other assets or
     evidences of indebtedness so distributed (and for which an adjustment to
     the Conversion Price has not previously been made pursuant to the terms of
     this paragraph (e)) applicable to one share of Common Stock, and the
     denominator shall be such current market price per share of the Common
     Stock, such adjustment to become effective immediately after the opening
     of business on the day following such date of determination of the holders
     entitled to such distribution. The following transactions shall be
     excluded from the foregoing clauses (1) and (2): (I) repurchases of Common
     Stock issued under the Company's stock incentive programs; (II) dividends
     or distributions payable-in-kind in additional shares of, or warrants,
     rights, calls or options exercisable for or convertible into additional
     shares of Junior Securities; and (III) the redemption of shares of capital
     stock pursuant to the Company's Shareholder Rights Plan.

          (x) The reclassification or change of Common Stock into securities,
     including securities other than Common Stock, (other than any
     reclassification upon a consolidation or merger to which paragraph
     (e)(xviii) below shall apply) shall be deemed to involve (A) a
     distribution of such securities other than Common Stock to all holders of
     Common Stock (and the effective date of such reclassification shall be
     deemed to be "the date fixed for the determination of holders of Common
     Stock entitled to receive such distribution" within the meaning of
     paragraph (e)(ix) above), and (B) a subdivision or combination, as the
     case may be, of the number of shares of Common Stock outstanding
     immediately prior to such reclassification into the number of shares of
     Common Stock outstanding immediately thereafter (and the effective date of
     such reclassification shall be deemed to be "the day upon which such
     subdivision becomes effective" or "the day upon which such combination
     becomes effective," as the case may be, and




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     "the day upon which such subdivision or combination becomes effective"
     within the meaning of paragraph (e)(viii) above).

          (xi) For the purpose of any computation under paragraph (e)(vii) or
     (e)(ix) above, the current market price per share of Common Stock on any
     day shall be deemed to be the average of the Closing Prices of the Common
     Stock for the 20 consecutive Trading Days selected by the Board of
     Directors commencing no more than 30 Trading Days before and ending no
     later than the day before the day in question; provided that, in the case
     of paragraph (e)(ix), if the period between the date of the public
     announcement of the dividend or distribution and the date for the
     determination of holders of Common Stock entitled to receive such dividend
     or distribution (or, if earlier, the date on which the Common Stock goes
     "ex-dividend" in respect of such dividend or distribution) shall be less
     than 20 Trading Days, the period shall be such lesser number of Trading
     Days but, in any event, not less than five Trading Days.

          (xii) No adjustment in the Conversion Price need be made until all
     cumulative adjustments amount to 1% or more of the Conversion Price as
     last adjusted. Any adjustments that are not made shall be carried forward
     and taken into account in any subsequent adjustment. All calculations
     under this paragraph (e) shall be made to the nearest cent or to the
     nearest 1/100th of a share, as the case may be.

          (xiii) For purposes of this paragraph (e), "Common Stock" includes
     any stock of any class of the Company which has no preference in respect
     of dividends or of amounts payable in the event of any voluntary or
     involuntary liquidation, dissolution or winding-up of the Company and
     which is not subject to redemption by the Company. However, subject to the
     provisions of paragraph (e)(xviii) below, shares issuable on conversion of
     shares of Preferred Stock shall include only shares of the class
     designated as Common Stock of the Company on the Preferred Stock Issue
     Date or shares of any class or classes resulting from any reclassification
     thereof and which have no preferences in respect of dividends or amounts
     payable in the event of any voluntary or involuntary liquidation,
     dissolution or winding-up of the Company and which are not subject to
     redemption by the Company; provided that, if at any time there shall be
     more than one such resulting class, the shares of each such class then so
     issuable shall be substantially in the proportion which the total number
     of shares of such class resulting from all such reclassifications bears to
     the total number of shares of all such classes resulting from all such
     reclassifications.

          (xiv) No adjustment in the Conversion Price shall reduce the
     Conversion Price below the then par value of the Common Stock. No
     adjustment in the Conversion Price need be made under paragraphs (e)(vi),
     (e)(vii) and (e)(ix) above if the Company issues or distributes to each
     Holder of Preferred Stock the shares of Common Stock, evidences of
     indebtedness, assets, rights, options or warrants referred to in those
     paragraphs which each Holder would have been entitled to receive had
     Preferred Stock been converted into Common Stock prior to the happening of
     such event or the record date with respect thereto.

          (xv) Whenever the Conversion Price is adjusted, the Company shall
     promptly mail to Holders of Preferred Stock, first class, postage prepaid,
     a notice of the adjustment. The Company shall file with the transfer agent
     for the Preferred Stock, if any, a certificate from the Company's
     independent public accountants briefly stating the facts requiring the
     adjustment and




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     the manner of computing it. Subject to paragraph (e)(xvi) below, the
     certificate shall be conclusive evidence that the adjustment is correct.

          (xvi) The Company from time to time may reduce the Conversion Price
     if it considers such reductions to be advisable in order that any event
     treated for federal income tax purposes as a dividend of stock rights will
     not be taxable to the holders of Common Stock by any amount, but in no
     event may the Conversion Price be less than the par value of a share of
     Common Stock. Whenever the Conversion Price is reduced, the Company shall
     mail to Holders of Preferred Stock a notice of the reduction. The Company
     shall mail, first class, postage prepaid, the notice at least 15 days
     before the date the reduced Conversion Price takes effect. The notice
     shall state the reduced Conversion Price and the period it will be in
     effect. A reduction of the Conversion Price does not change or adjust the
     Conversion Price otherwise in effect for purposes of paragraphs (e)(vi),
     (e)(vii), (e)(viii) and (e)(ix) above.

          (xvii) If:

               (A)  the Company takes any action which would require an
                    adjustment in the Conversion Price pursuant to paragraph
                    (e)(vii), (e)(ix) or (e)(x) above;

               (B)  the Company consolidates or merges with, or transfers all
                    or substantially all of its assets to, another corporation,
                    and stockholders of the Company must approve the
                    transaction; or

               (C)  there is a dissolution or liquidation of the Company;

     the Company shall mail to Holders of the Preferred Stock, first class,
     postage prepaid, a notice stating the proposed record or effective date,
     as the case may be. The Company shall mail the notice at least 10 days
     before such date. However, failure to mail the notice or any defect in it
     shall not affect the validity of any transaction referred to in clause
     (A), (B) or (C) of this paragraph (e)(xvii).

          (xviii) In the case of any consolidation of the Company or the merger
     of the Company with or into any other entity or the sale or transfer of
     all or substantially all the assets of the Company pursuant to which the
     Company's Common Stock is converted into other securities, cash or assets,
     upon consummation of such transaction, each share of Preferred Stock shall
     automatically become convertible into the kind and amount of securities,
     cash or other assets receivable upon the consolidation, merger, sale or
     transfer by a holder of the number of shares of Common Stock into which
     such share of Preferred Stock might have been converted immediately prior
     to such consolidation, merger, transfer or sale (assuming such holder of
     Common Stock failed to exercise any rights of election and received per
     share the kind and amount receivable per share by a plurality of
     non-electing shares). Appropriate adjustment (as determined by the Board
     of Directors of the Company) shall be made in the application of the
     provisions herein set forth with respect to the rights and interests
     thereafter of the Holders of Preferred Stock, to the end that the
     provisions set forth herein (including provisions with respect to changes
     in and other adjustment of the Conversion Price) shall thereafter be
     applicable, as nearly as reasonably may be, in relation to any shares of
     stock or other securities or property thereafter deliverable upon the
     conversion of Preferred Stock. If this paragraph (e)(xviii) applies,
     paragraphs (e)(vi), (e)(vii), (e)(viii), (e)(ix) and (e)(x) do not apply.




                                       9
<PAGE>   10


          (xix) In any case in which this paragraph (e) shall require that an
     adjustment as a result of any event become effective from and after a
     record date, the Company may elect to defer until after the occurrence of
     such event (A) the issuance to the Holder of any shares of Preferred Stock
     converted after such record date and before the occurrence of such event
     of the additional shares of Common Stock issuable upon such conversion
     over and above the shares issuable on the basis of the Conversion Price in
     effect immediately prior to adjustment and (B) a cash payment for any
     remaining fractional shares of Common Stock as provided in paragraph
     (e)(iii) above; provided, however, that if such event shall not have
     occurred and authorization of such event shall be rescinded by the
     Company, the Conversion Price shall be recomputed immediately upon such
     recision to the price that would have been in effect had such event not
     been authorized, provided that such recision is permitted by and effective
     under applicable laws.

          (xx) All shares of Preferred Stock converted pursuant to this
     paragraph (e) shall be restored to the status of authorized and unissued
     shares of preferred stock, without designation as to series and may
     thereafter be reissued as shares of any series of preferred stock.

          (f) Redemption.

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


<TABLE>
<CAPTION>
                    Year                             Percentage
                    ----                             ----------
                    <C>                                <C>    
                    2000.........................      104.86%
                    2001.........................      103.64%
                    2002.........................      102.43%
                    2003.........................      101.21%
                    2004 and thereafter..........     100.000%
</TABLE>

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

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




                                       10
<PAGE>   11


          (ii) Procedures for Redemption. (A) At least 30 days and not more
     than 60 days prior to the Redemption Date of the Preferred Stock, the
     Company shall make a public announcement of the redemption, and shall mail
     written notice (the "Redemption Notice") by first class mail, postage
     prepaid, to each Holder of record on the record date fixed for such
     redemption of the Preferred Stock at such Holder's address as the same
     appears on the stock register of the Company, provided that no failure to
     give such notice nor any deficiency therein shall affect the validity of
     the procedure for the redemption of any shares of Preferred Stock to be
     redeemed except as to the Holder or Holders to whom the Company has failed
     to give said notice or except as to the Holder or Holders whose notice was
     defective. The Redemption Notice shall state: 

          (1)  that the redemption is pursuant to paragraph (f)(i)(A) hereof,

          (2)  the Optional Redemption Price;

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

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

          (5)  the Redemption Date;

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

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

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

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

          (C) Unless the Company defaults in the payment in full of the
     applicable redemption price, dividends on the Preferred Stock called for
     redemption shall cease to accumulate on the Redemption Date, and the
     Holders of such redemption shares shall cease to have any further





                                      11
<PAGE>   12

     rights with respect thereto on the Redemption Date, other than the right
     to receive the Optional Redemption Price without interest.

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

          (g) Voting Rights.

          (i) The Holders of shares of Preferred Stock, except as otherwise
     required under Delaware law, the Certificate of Incorporation or as set
     forth in paragraphs (g)(ii), (g)(iii) and (g)(iv) below, shall not be
     entitled or permitted to vote on any matter required or permitted to be
     voted upon by the stockholders of the Company.

          (ii) (A) So long as any shares of the Preferred Stock are
     outstanding, the Company shall not authorize any class of Senior
     Securities without the affirmative vote or consent of Holders of at least
     66 2/3% of the outstanding shares of Preferred Stock, voting or
     consenting, as the case may be, as one class, given in person or by proxy,
     either in writing or by resolution adopted at an annual or special
     meeting.

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




                                       12
<PAGE>   13
     consenting, as the case may be, as one class, given in person or by proxy,
     either in writing or by resolution adopted at an annual or special
     meeting.

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

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

          (B) The right of the Holders of Preferred Stock voting separately as
     one class to elect members of the Board of Directors as set forth in
     paragraph (g)(iii)(A) above shall continue until such time as (1) in the
     event such right arises due to a Dividend Default, all accumulated
     dividends and Liquidated Damages, if any, that are in arrears on the
     Preferred Stock are paid in full; and (2) in the event such right arises
     because a Change of Control Default, the Company remedies any such
     failure, breach or default, at which time the term of any directors
     elected pursuant to paragraph (g)(iii)(A) shall terminate, subject always
     to the same provisions for the renewal and divestment of such special
     voting rights in the case of any future Voting Rights Triggering Event. At
     any time after voting power to elect directors shall have become vested
     and be continuing in the Holders of shares of the Preferred Stock pursuant
     to paragraph (g)(iii)(A) hereof if vacancies shall exist in the offices of
     directors elected by the Holders of shares of the Preferred Stock, a
     proper officer of the Company may, and upon the written request of the
     Holders of record of at least 10% of the shares of Preferred Stock then
     outstanding addressed to the Secretary of the Company shall, call a
     special meeting of the Holders of Preferred Stock, for the purpose of
     electing the directors that such Holders are entitled to elect. If such
     meeting shall not be called by the proper officer of the Company within 20
     days after personal service of said written request upon the Secretary of
     the Company, or within 20 days after mailing the same within the United
     States by certified mail, addressed to the Secretary of the Company at its
     principal executive offices, then the Holders of record of at least 20% of
     the outstanding shares of the Preferred Stock may designate in writing one
     of their number to call such meeting at the expense of the Company, and
     such meeting may be called by the Person so designated upon the notice
     required for the annual meetings of stockholders of the Company and shall
     be held at the place for holding the annual meetings of stockholders or
     such other place in the United States as shall be designated in such
     notice. Notwithstanding the provisions of this paragraph (g)(iii)(B),




                                       13
<PAGE>   14


     no such special meeting shall be called if any such request is received
     less than 30 days before the date fixed for the next ensuing annual or
     special meeting of stockholders of the Company. Any Holder of shares of
     the Preferred Stock so designated shall have, and the Company shall
     provide, access to the lists of Holders of shares of the Preferred Stock
     for purposes of calling a meeting pursuant to the provisions of this
     paragraph (g)(iii)(B).

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

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

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

          (h) Exchange.

          (i) Requirements. (A) The Company at its option may exchange all, but
     not less than all, of the then outstanding shares of Preferred Stock into
     the Company's 8 1/2% Convertible Subordinated Debentures due 2009 (the
     "Exchange Debentures") on any Dividend Payment Date on or after April 16,
     1999, provided that within 30 days of the Exchange Date, the Company shall
     send a written notice (the "Exchange Notice") of exchange by mail to each
     Holder, which notice shall state: (1) that the Company is exercising its
     option to exchange the Preferred Stock into Exchange Debentures pursuant
     to this Certificate of Designations; (2) the date of the exchange (the
     "Exchange Date"), which date shall not be less than 30 days nor more than
     60 days following the date on which the Exchange Notice is mailed; (3)
     that the Holder is to surrender to the Company, at the place or places
     where certificates for shares of Preferred Stock are to be surrendered for
     exchange, in the manner designated in the Exchange Notice, his certificate
     or certificates representing the shares of Preferred Stock to be
     exchanged; (4) that dividends on the shares of Preferred Stock to be
     exchanged shall cease to accrue on the Exchange Date whether or not
     certificates for shares of Preferred Stock are surrendered for exchange on
     the Exchange Date unless the Company shall default in the delivery of
     Exchange Debentures; and (5) that interest on the Exchange Debentures
     shall accrue from the Exchange Date whether or not certificates for shares
     of Preferred Stock are surrendered for exchange on the Exchange Date. On
     the Exchange Date, if the conditions set forth in clauses (u) through (z)
     below are satisfied, the Company shall issue Exchange Debentures in
     exchange for the Preferred Stock as provided in the clause (B) of this
     paragraph (h)(i), provided that on the Exchange Date: (u) there are no
     accumulated and unpaid dividends or Liquidated Damages on the Preferred
     Stock (including the dividends payable and Liquidated Damages on such
     date) or other contractual impediment to such exchange; (v) there shall be
     legally available funds sufficient therefor; (w) a registration statement
     relating to the Exchange Debentures shall have been declared effective
     under the Securities Act




                                       14
<PAGE>   15
     prior to such exchange and shall continue to be in effect on the date of
     such exchange, or the Company shall have obtained a written opinion of
     counsel that an exemption from the registration requirements of the
     Securities Act is available for such exchange, and that upon receipt of
     such Exchange Debentures pursuant to such exchange made in accordance with
     such exemption, the holders (assuming such holder is not an Affiliate of
     the Company) thereof will not be subject to any restrictions imposed by
     the Securities Act upon the resale thereof, other than any such
     restriction to which the holder thereof already is subject on the Exchange
     Date, and such exemption is relied upon by the Company for such exchange,
     (x) the Exchange Debenture Indenture and the trustee thereunder shall have
     been qualified under the Trust Indenture Act of 1939, as amended (the
     "Trust Indenture Act"); (y) immediately after giving effect to such
     exchange, no Default or Event of Default (each as defined in the Exchange
     Debenture Indenture) would exist under the Exchange Debenture Indenture;
     and (z) the Company shall have delivered to the trustee under the Exchange
     Debenture Indenture a written opinion of counsel, dated the Exchange
     Date, regarding the satisfaction of the conditions set forth in clauses
     (u), (v), (w) and (x). In the event that the issuance of the Exchange
     Debentures is not permitted on the Exchange Date or any of the conditions
     set forth in clause (u) through (z) of the preceding sentence are not
     satisfied on the Exchange Date, the Company shall use its best efforts to
     satisfy such conditions and effect such exchange as soon as practicable.

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

          (ii) Procedure for Exchange. (A) On or before the Exchange Date,
     each Holder of Preferred Stock shall surrender the certificate or
     certificates representing such shares of Preferred Stock, in the manner
     and at the place designated in the Exchange Notice. The Company shall
     cause the Exchange Debentures to be executed on the Exchange Date and,
     upon surrender in accordance with the Exchange Notice of the certificates
     for any shares of Preferred Stock so exchanged (properly endorsed or
     assigned for transfer, if the notice shall so state), such shares shall be
     exchanged by the Company into Exchange Debentures. The Company shall pay
     interest on the Exchange Debentures at the rate and on the dates specified
     therein from the Exchange Date.

          (B) If notice has been mailed as aforesaid, and if before the
     Exchange Date specified in such notice (1) the Exchange Debenture
     Indenture shall have been duly executed and delivered by the Company and
     the trustee and (2) all Exchange Debentures necessary for such exchange
     shall have been duly executed by the Company and delivered to the trustee
     with irrevocable




                                       15
<PAGE>   16


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

          (i) Change of Control.

          (i) Subject to paragraph (i)(v) hereof, upon the occurrence of a
     Change of Control, the Company shall be required to make an offer (a
     "Preferred Stock Change of Control Offer") to each Holder of shares of
     Preferred Stock to repurchase all or any part of such Holder's shares of
     Preferred Stock at an offer price in cash equal to 100% of the aggregate
     Liquidation Preference thereof plus an amount in cash equal to all
     accumulated and unpaid dividends (including an amount in cash equal to a
     prorated dividend for the period from the Dividend Payment Date
     immediately prior to the Change of Control Payment Date) and Liquidated
     Damages, if any, thereon to the date of repurchase (the "Change of Control
     Payment").

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

          (iii) On the Change of Control Payment Date, (A) the Company shall,
     to the extent lawful, (A) accept for payment shares of Preferred Stock
     validly tendered pursuant to the Change of Control Offer and (B) promptly
     mail to each Holder of shares of Preferred Stock so accepted payment in an
     amount equal to the purchase price for such shares and (B) unless the
     Company defaults in the payment for the shares of Preferred Stock tendered
     pursuant to the Preferred Stock Change of Control Offer, dividends will
     cease to accrue with respect to the shares of Preferred Stock tendered and
     all rights of Holders of such tendered shares will terminate, except for
     the right to receive payment therefor, on the Change of Control Payment
     Date. The Company shall publicly announce the results of the Preferred
     Stock Change of Control Offer on or as soon as practicable after the
     Change of Control Payment Date.

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




                                       16
<PAGE>   17


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

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

          (j) Preemptive Rights. No shares of Preferred Stock shall have any
rights of preemption whatsoever as to any securities of the Company, or any
warrants, rights or options issued or granted with respect thereto, regardless
of how such securities or such warrants, rights or options may be designated,
issued or granted.

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

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

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

          (n) Reports. Whether or not the Company is required to do so by the
rules and regulations of the Commission, the Company shall file with the
Commission (unless the Commission will not accept such a filing) and, within 15
days of filing, or attempting to file, the same with the




                                       17
<PAGE>   18


Commission, furnish to the Holders of the Preferred Stock (i) all quarterly and
annual financial and other information that would be required to be contained
in a filing with the Commission on Forms 10-Q and 10-K if the Company were
required to file such forms, including a "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and, with respect to the
annual information only, a report thereon by the Company's certified
independent accountants, and (ii) all current reports that would be required to
be filed with the Commission on Form 8-K if the Company were required to file
such reports. In addition, the Company shall furnish to the Holders of the
Preferred Stock, prospective purchasers of shares of Preferred Stock and
securities analysts, upon their request, the information, if any, required to
be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

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

          (p) Headings of Subdivisions. The headings of various subdivisions
hereof are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.

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

          (r) Notice of the Company. All notices other communications required
or permitted to be given to the Company hereunder shall be made by first-class
mail, postage prepaid, to the Company at its principal executive offices
(currently located on the date of the adoption of these Resolutions at the
following address: Greyhound Lines, Inc., 15110 North Dallas Parkway, Suite
600, Dallas, Texas 75248, Attention: General Counsel). Minor imperfections in
any such notice shall not affect the validity thereof.

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

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

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




                                       18
<PAGE>   19


          "Board of Directors" has the meaning set forth in the first paragraph
     of this Certificate of Designations.

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

          "Capital Stock" means any and all shares, interests, participations,
     rights or other equivalents (however designated) of corporate stock or
     partnership interests, whether common or preferred.

          "Certificate of Incorporation" has the meaning set forth in the first
     paragraph of this Certificate of Designations.

          "Change of Control" means the occurrence of any of the following: (i)
     the sale, lease, transfer, conveyance or other disposition (other than by
     way of merger or consolidation), in one or a series of related
     transactions, of all or substantially all of the assets of the Company and
     its subsidiaries, taken as a whole, (ii) the adoption of a plan relating
     to the liquidation or dissolution of the Company, (iii) the consummation
     of any transaction (including, without limitation, any merger or
     consolidation) the result of which is that any "person" or "group" (as
     such terms are used in Section 13(d)(3) of the Exchange Act) becomes the
     "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5
     under the Exchange Act), directly or indirectly through one or more
     intermediaries, of more than 50% of the voting power of the outstanding
     voting stock of the Company, unless (A) the Closing Price per share of
     Common Stock for any five Trading Days within the period of ten
     consecutive Trading Days ending immediately after the announcement of such
     Change of Control equals or exceeds 105% of the Conversion Price then in
     effect or (B) at least 90% of the consideration in the transaction or
     transactions constituting a Change of Control pursuant to clause (iii)
     consists of shares of common stock traded or to be traded immediately
     following such Change of Control on a national securities exchange or the
     Nasdaq National Market and, as a result of such transaction or
     transactions, the Preferred Stock become, convertible solely into such
     common stock (and any rights attached thereto), or (iv) the first day on
     which more than a majority of the Board of Directors are not Continuing
     Directors; provided, however, that a transaction in which the Company
     becomes a subsidiary of another entity shall not constitute a Change of
     Control if (A) the stockholders of the Company immediately prior to such
     transaction "beneficially own" (as such term is defined in Rule 13d-3 and
     Rule 13d-5 under the Exchange Act), directly or indirectly through one or
     more intermediaries, at least a majority of the voting power of the
     outstanding voting stock of the Company immediately following the
     consummation of such transaction and (B) immediately following the
     consummation of such transaction, no "person" or "group" (as such terms
     are defined above), other than such other entity (but including holders of
     equity interests of such other entity), "beneficially owns" (as such term
     is defined above), directly or indirectly through one or more
     intermediaries, more than 50% of the voting power of the outstanding
     voting stock of the Company.

          "Change of Control Default" has the meaning set forth in paragraph
     (g)(iii) hereof.

          "Change of Control Payment" has the meaning set forth in paragraph
     (i)(i) hereof.




                                       19
<PAGE>   20


          "Change of Control Payment Date" has the meaning set forth in
     paragraph (i)(ii) hereof.

          "Closing Price" means for each Trading Day, the last reported sale
     price regular way on the American Stock Exchange (or if the American Stock
     Exchange is not the principal national securities exchange on which the
     Common Stock is listed or admitted for trading, on such other national
     securities exchange or, if the Common Stock is not so listed or admitted
     for trading on the American Stock Exchange or any other national
     securities exchange, on the Nasdaq National Market or, if the Common Stock
     is not quoted on the Nasdaq National Market, the average of the closing
     bid and asked prices in the over-the-counter market as furnished by any
     New York Stock Exchange member firm selected from time to time by the
     corporation for that purpose).

          "Commission" means the Securities and Exchange Commission.

          "Common Stock" means the Common Stock, par value $0.01 per share, of
     the Company.

          "Company" has the meaning set forth in the first paragraph of this
     Certificate of Designations.

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

          "Conversion Date" has the meaning set forth in paragraph (e)(ii)
     hereof.

          "Conversion" shall initially mean $4.875 and thereafter shall be
     subject to adjustment from time to time pursuant to the terms of paragraph
     (e) hereof.

          "Dividend Default" has the meaning set forth in paragraph (g)(iii)
     hereof.

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

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

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

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

          "Exchange Debentures" has the meaning set forth in paragraph (h)(i)
     hereof.

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




                                       20
<PAGE>   21


          "Exchange Notice" has the meaning set forth in paragraph (h)(i)
     hereof.

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

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

          "Junior Securities" has the meaning set forth in paragraph (b)
     hereof.

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

          "Liquidation Preference" has the meaning set forth in paragraph (a)
     hereof.

          "Optional Redemption Price" has the meaning set forth in paragraph
     (f)(i) of this Certificate of Designations.

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

          "Preferred Stock" has the meaning set forth in paragraph (a) hereof.

          "Preferred Stock Change of Control Offer" has the meaning set forth
     in paragraph (i)(i) hereof.

          "Preferred Stock Issue Date" means the date on which the Preferred
     Stock is originally issued by the Company under this Certificate of
     Designation.

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

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

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

          "Redemption Notice" has the meaning set forth in paragraph (f)(ii) 
     hereof.




                                       21
<PAGE>   22


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

          "Resolution" has the meaning set forth in the first paragraph of this
     Certificate of Designations.

          "Senior Securities" has the meaning set forth in paragraph (b)
     hereof.

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


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

          "Trust Indenture Act" has the meaning set forth in paragraph (h)(i)
     hereof.

          "Voting Rights Triggering Event" has the meaning set forth in
     paragraph (g)(iii) hereof.


                           [Signatures on Next Page]




                                       22
<PAGE>   23


     IN WITNESS WHEREOF, Greyhound Lines, Inc. has caused this Certificate to
be signed by Steven L. Korby, Executive Vice President and Chief Financial
Officer, and attested by Mark E. Southerst, its Secretary, this 15th day of
April, 1997.


                                        GREYHOUND LINES, INC.




                                        By: /s/ STEVEN L. KORBY
                                            -----------------------------------
                                            Steven L. Korby
                                            Executive Vice President and Chief
                                            Financial Officer




Attest:



By: /s/ MARK E. SOUTHERST
    -------------------------
    Mark E. Southerst
    Secretary



          [SEAL]




                                       23
