8-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): July 21, 1998

LEHMAN BROTHERS HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

        1-9466                     13-3216325
(Commission File Number) (IRS Employer Identification No.)

3 World Financial Center
New York, New York                                       10285
(Address of principal                                  (Zip Code)
executive offices)

Registrant's telephone number, including area code: (212) 526-7000

Item 7. Financial Statements and Exhibits

(c) Exhibits

The  following  Exhibit  is  incorporated  by  reference  into the  Registration
Statement on Form S-3  (Registration No. 333-50197) as an exhibit thereto and is
filed as part of this Report.

4.2 Certificate  of  Designations  with  respect  to the  Registrant's  Series D
    Preferred Stock

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly  caused  this  Report  to be signed  on its  behalf by the  undersigned
hereunto duly authorized.

LEHMAN BROTHERS HOLDINGS INC.

By:/s/ Jennifer Marre
   Jennifer Marre
   Vice President
Date:  July 23, 1998

EXHIBIT INDEX

Exhibit No. Exhibit

    4.2     Certificate of Designations with respect to the
            Registrant's Series D Preferred Stock

EX-4.2

                                                                     Exhibit 4.2

                      CERTIFICATE OF DESIGNATIONS, POWERS,
                             PREFERENCES AND RIGHTS
                                     OF THE
                   5.67% CUMULATIVE PREFERRED STOCK, SERIES D ($5,000.00 initial
              liquidation preference per share)
                                       OF
                          LEHMAN BROTHERS HOLDINGS INC.
                       ----------------------------------

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

                  LEHMAN  BROTHERS  HOLDINGS INC., a Delaware  corporation  (the
"Corporation"),  HEREBY  CERTIFIES  that  resolutions  were duly  adopted by the
Executive  Committee of the Board of Directors of the  Corporation in accordance
with  Section  151(g) of the  General  Corporation  Law of the State of Delaware
pursuant  to  the  authority  conferred  upon  the  Board  of  Directors  of the
Corporation by the provisions of the Restated  Certificate of  Incorporation  of
the  Corporation  and pursuant to the  authority  conferred  upon the  Executive
Committee  by the  By-Laws of the  Corporation  and  pursuant  to the  authority
delegated thereto by the Board of Directors of the Corporation, as follows:

                  RESOLVED,  that the Corporation be, and hereby is,  authorized
to offer,  issue and sell preferred stock,  par value $1.00,  with a liquidation
preference,  in the aggregate, of up to $230,000,000 (the "New Preferred Stock")
on such terms, with the following designations, powers, preferences and rights:

         1. Designation and Amount;  Fractional  Shares. The series of preferred
stock shall be designated as the "5.67%  Cumulative  Preferred Stock,  Series D"
(the  "Series  D  Preferred  Stock").  The  Series D  Preferred  Stock  shall be
perpetual and the authorized  number of shares of Series D Preferred Stock shall
be forty-six  thousand (46,000) shares. The Series D Preferred Stock is issuable
in whole shares only.

         2.  Dividends.  Holders of shares of Series D Preferred  Stock shall be
entitled to receive,  when, as and if declared by the Board or a duly authorized
committee thereof out of funds of the Corporation legally available for payment,
cumulative  cash  dividends  at the rate of 5.67%  per  annum  per  share on the
initial liquidation preference of $5,000.00 per share. Dividends on the Series D
Preferred Stock shall be payable quarterly,  in arrears, on February 28, May 31,
August 31 and  November  30 of each year,  commencing  August  31,  1998 (each a
"Dividend  Payment  Date").  If any date on which  dividends  would otherwise be
payable  shall be or be  declared a national  or New York State  holiday,  or if
banking  institutions  in the  State of New York  shall be closed  because  of a
banking  moratorium  or otherwise on such date,  then the Dividend  Payment Date
shall be the next succeeding day on which such banks shall be open. Dividends on
shares of the  Series D  Preferred  Stock  shall be fully  cumulative  and shall
accumulate  (whether  or not  earned or  declared),  on a daily  basis,  without
interest,  from the  previous  Dividend  Payment  Date,  except  that the  first
dividend shall accrue,  without  interest,  from the date of initial issuance of
the Series D Preferred  Stock.  Accumulated and unpaid  dividends shall not bear
interest.  Dividends shall be payable,  in arrears, to holders of record as they
appear on the stock books of the Corporation on each record date, which shall be
the 15th day of the month in which such  Dividend  Payment  Date occurs (each of
which dates being a "Dividend  Payment Record Date").  Dividends  payable on the
Series D Preferred Stock for any full quarterly  period shall be computed on the
basis of a 360-day year  consisting  of twelve 30-day months and, for any period
shorter than a full  quarter,  on the basis of the actual number of days elapsed
in such a 90-day  quarter.  Dividends  shall  cease to  accrue  on the  Series D
Preferred Stock on the date of their earlier  redemption  pursuant to Section 6,
unless the  Corporation  shall  default in  providing  funds for the  payment of
redemption price on the shares called for redemption pursuant thereto.

         If, prior to 18 months  after the date of the original  issuance of the
Series D Preferred Stock, one or more amendments to the Internal Revenue Code of
1986,  as amended (the  "Code"),  are enacted that reduce the  percentage of the
dividends-received  deduction  (currently 70%) as specified in section 243(a)(1)
of the Code or any successor  provision (the  "Dividends-Received  Percentage"),
the  amount  of each  dividend  payable  (if  declared)  per  share of  Series D
Preferred  Stock for dividend  payments made on or after the  effective  date of
such  change in the Code  will be  adjusted  by  multiplying  the  amount of the
dividend payable described above (before  adjustment) by the following  fraction
(the "DRD Formula"),  and rounding the result to the nearest cent (with one-half
cent rounded up):

1- .35(1-.70)
- -------------
1- .35(1-DRP)

For  the  purposes  of the  DRD  Formula,  "DRP"  means  the  Dividends-Received
Percentage  (expressed  as a decimal)  applicable  to the  dividend in question;
provided,  however, that if the Dividends-Received  Percentage applicable to the
dividend  in  question  shall be less than 50%,  then the DRP shall  equal  .50.
Notwithstanding  the  foregoing  provisions,   if,  with  respect  to  any  such
amendment,  the Corporation receives either an unqualified opinion of nationally
recognized  independent  tax counsel  selected by the  Corporation  or a private
letter ruling or similar form of authorization from the Internal Revenue Service
("IRS") to the effect that such amendment  does not apply to a dividend  payable
on the Series D  Preferred  Stock,  then such  amendment  will not result in the
adjustment  provided  for  pursuant  to the DRD  Formula  with  respect  to such
dividend.  Such  opinion  shall  be  based  upon  the  legislation  amending  or
establishing  the DRP or upon a published  pronouncement  of the IRS  addressing
such legislation.

         If any such amendment to the Code is enacted after the dividend payable
on a Dividend Payment Date has been declared, the amount of the dividend payable
on such  Dividend  Payment  Date  will  not be  increased;  instead,  additional
dividends (the "Post  Declaration Date Dividends")  equal to the excess, if any,
of (x) the product of the  dividend  paid by the  Corporation  on such  Dividend
Payment Date and the DRD Formula (where the DRP used in the DRD Formula would be
equal to the  greater  of the  Dividend-Received  Percentage  applicable  to the
dividend in question and .50) over (y) the dividend paid by the  Corporation  on
such Dividend Payment Date, will be payable (if declared) to holders of Series D
Preferred  Stock on the  Dividend  Payment  Record Date  applicable  to the next
succeeding  Dividend  Payment Date or, if the Series D Preferred Stock is called
for redemption  prior to such Dividend Payment Record Date, to holders of Series
D Preferred  Stock on the  applicable  redemption  date,  as the case may be, in
addition  to any  other  amounts  payable  on  such  date.  Notwithstanding  the
foregoing  provisions,  if, with respect to any such amendment,  the Corporation
receives either an unqualified opinion of nationally recognized  independent tax
counsel  selected by the  Corporation or a private letter ruling or similar form
of  authorization  from the IRS to the effect that such amendment does not apply
to a dividend so payable on the Series D Preferred  Stock,  then such  amendment
will not result in the payment of Post Declaration  Date Dividends.  The opinion
referenced  in the  previous  sentence  shall  be  based  upon  the  legislation
amendment or establishing  the DRP or upon a published  pronouncement of the IRS
addressing such legislation.

         If any such  amendment to the Code is enacted and the  reduction in the
Dividends-Received  Percentage  retroactively applies to a Dividend Payment Date
as to which the Corporation  previously paid dividends on the Series D Preferred
Stock (each, an "Affected  Dividend Payment Date"), the Corporation will pay (if
declared)  additional  dividends  (the  "Retroactive  Dividends")  to holders of
Series D Preferred  Stock on the Dividend  Payment Record Date applicable to the
next  succeeding  Dividend  Payment Date (or, if such amendment is enacted after
the dividend payable on such Dividend Payment Date has been declared, to holders
of Series D Preferred  Stock on the Dividend  Payment  Record Date following the
date of enactment) or, if the Series D Preferred  Stock is called for redemption
prior to such  Dividend  Payment  Record Date,  to holders of Series D Preferred
Stock on the applicable  redemption date, as the case may be, in an amount equal
to the excess of (x) the product of the dividend paid by the Corporation on each
Affected  Dividend  Payment Date and the DRD Formula  (where the DRP used in the
DRD Formula would be equal to the greater of the  Dividends-Received  Percentage
and .50 applied to each Affected  Dividend Payment Date) over (y) the sum of the
dividend paid by the  Corporation  on each Affected  Dividend  Payment Date. The
Corporation  will only make one payment of  Retroactive  Dividends  for any such
amendment.  Notwithstanding  the foregoing  provisions,  if, with respect to any
such  amendment,  the  Corporation  receives  either an  unqualified  opinion of
nationally  recognized  independent tax counsel selected by the Corporation or a
private  letter  ruling or  similar  form of  authorization  from the IRS to the
effect that such amendment  does not apply to a dividend  payable on an Affected
Dividend Payment Date for the Series D Preferred Stock, then such amendment will
not result in the payment of Retroactive Dividends with respect to such Affected
Dividend Payment Date. The opinion  referenced in the previous sentence shall be
based upon the legislation  amending or establishing the DRP or upon a published
pronouncement of the IRS addressing such legislation.

         Notwithstanding  the foregoing,  no adjustment in the dividends payable
by the  Corporation  shall be made,  and no Post  Declaration  Date Dividends or
Retroactive  Dividends  shall be payable by the  Corporation,  in respect of the
enactment  of any  amendment  to the Code 18  months  or more  after the date of
original   issuance   of  the  Series  D  Preferred   Stock  that   reduces  the
Dividends-Received Percentage.

         In the event  that the  amount of  dividends  payable  per share of the
Series D  Preferred  Stock is adjusted  pursuant to the DRD Formula  and/or Post
Declaration  Date  Dividends  or  Retroactive  Dividends  are  to be  paid,  the
Corporation  will give notice of each such  adjustment  and, if applicable,  any
Post  Declaration  Date  Dividends and  Retroactive  Dividends to the holders of
Series D Preferred Stock.

         No  dividends  may be  declared or paid or set apart for payment on any
Parity  Preferred  Stock (as  defined  in Section 8 below),  with  regard to the
payment of dividends  unless there shall also be or have been  declared and paid
or set apart for  payment on the Series D  Preferred  Stock,  dividends  for all
dividend payment periods of the Series D Preferred Stock ending on or before the
Dividend Payment Date of such Parity  Preferred Stock,  ratably in proportion to
the  respective  amounts of dividends (x)  accumulated  and unpaid or payable on
such Parity  Preferred  Stock,  on the one hand, and (y)  accumulated and unpaid
through the dividend  payment period or periods of the Series D Preferred  Stock
next preceding such Dividend Payment Date, on the other hand.

         Except as set forth in the preceding  sentence,  unless full cumulative
dividends  on the  Series D  Preferred  Stock  have been paid  through  the most
recently  completed  quarterly dividend period for the Series D Preferred Stock,
no  dividends  (other than in common  stock of the  Corporation)  may be paid or
declared  and set aside for payment or other  distribution  made upon the common
stock or on any other stock of the Corporation  ranking junior to or on a parity
with the Series D Preferred  Stock as to dividends,  nor may any common stock or
any other  stock of the  Corporation  ranking  junior to or on a parity with the
Series D Preferred  Stock as to dividends  be  redeemed,  purchased or otherwise
acquired for any  consideration  (or any payment be made to or  available  for a
sinking fund for the redemption of any shares of such stock; provided,  however,
that any moneys  theretofore  deposited  in any sinking fund with respect to any
preferred  stock of the  Corporation  in compliance  with the provisions of such
sinking fund may  thereafter  be applied to the purchase or  redemption  of such
preferred stock in accordance with the terms of such sinking fund, regardless of
whether at the time of such application full cumulative dividends upon shares of
the Series D Preferred Stock outstanding to the last Dividend Payment Date shall
have  been paid or  declared  and set apart  for  payment)  by the  Corporation;
provided  that any such junior or parity  stock or common stock may be converted
into or exchanged for stock of the  Corporation  ranking  junior to the Series D
Preferred Stock as to dividends.

         3. Liquidation Preference. The shares of Series D Preferred Stock shall
rank, as to liquidation,  dissolution or winding up of the Corporation, prior to
the shares of common stock and any other stock of the Corporation ranking junior
to the Series D Preferred  Stock as to rights upon  liquidation,  dissolution or
winding  up of the  Corporation,  so  that  in  the  event  of any  liquidation,
dissolution or winding up of the Corporation,  whether voluntary or involuntary,
the holders of the Series D Preferred  Stock shall be entitled to receive out of
the assets of the Corporation  available for  distribution to its  stockholders,
whether from capital,  surplus or earnings,  before any  distribution is made to
holders of shares of common  stock or any other  such  junior  stock,  an amount
equal to $5,000.00 per share plus an amount equal to all  dividends  (whether or
not earned or  declared)  accrued  and  accumulated  and unpaid on the shares of
Series D Preferred Stock to the date of final  distribution.  The holders of the
Series D Preferred  Stock  shall not be  entitled  to receive  the  preferential
amounts as aforesaid until the liquidation  preference of any other stock of the
Corporation  ranking  senior to the Series D  Preferred  Stock as to rights upon
liquidation,  dissolution or winding up shall have been paid (or a sum set aside
therefor  sufficient to provide for payment) in full.  After payment of the full
amount of the preferential amounts as aforesaid, the holders of shares of Series
D  Preferred  Stock will not be entitled  to any  further  participation  in any
distribution of assets by the Corporation. If, upon any liquidation, dissolution
or winding up of the  Corporation,  the assets of the  Corporation,  or proceeds
thereof, distributable among the holders of shares of Parity Preferred Stock and
Series D Preferred Stock shall be  insufficient to pay in full the  preferential
amounts payable thereon,  then such assets,  or the proceeds  thereof,  shall be
distributable  among such  holders  ratably in  accordance  with the  respective
amounts  which would be payable on such shares if all  amounts  payable  thereon
were paid in full. For the purposes hereof, neither a consolidation or merger of
the Corporation  with or into any other  corporation,  nor a merger of any other
corporation  with or  into  the  Corporation,  nor a sale,  lease,  exchange  or
transfer of all or any part of the  Corporation's  assets shall be  considered a
liquidation, dissolution or winding up of the Corporation.

         4. Conversion. The Series D Preferred Stock is not convertible into, or
exchangeable for, other securities or property.

         5.  Voting  Rights.  The Series D Preferred  Stock,  except as provided
herein or as otherwise  from time to time required by law,  shall have no voting
rights.  Whenever,  at any time or times,  dividends  payable  on the  shares of
Series D Preferred  Stock or on any Parity  Preferred  Stock shall be in arrears
for an aggregate number of days equal to six calendar quarters or more,  whether
or not consecutive,  the authorized number of directors of the Corporation shall
automatically  be  increased  by two and the  holders of the Series D  Preferred
Stock  shall  have the  right,  with  holders of shares of any one or more other
classes or series of Parity  Preferred Stock  outstanding at the time upon which
like voting  rights have been  conferred  and are  exercisable  ("Voting  Parity
Stock"),  voting  together as a class, to elect two directors  (hereinafter  the
"Preferred  Directors"  and each a  "Preferred  Director")  to fill  such  newly
created  directorships at the Corporation's  next annual meeting of stockholders
and at each subsequent annual meeting of stockholders until such arrearages have
been paid or set aside for  payment,  at which time such right shall  terminate,
except as herein or by law expressly provided, subject to revesting in the event
of each and every subsequent default of the character above mentioned.  Upon any
termination  of the right of the holders of shares of Series D  Preferred  Stock
and Voting Parity Stock as a class to vote for directors as provided above,  the
term of  office  of all  Preferred  Directors  then in  office  shall  terminate
immediately  and the  authorized  number of  directors  shall be  reduced by the
number of Preferred  Directors elected pursuant hereto.  Any Preferred  Director
may be removed at any time,  with or without cause.  Any vacancy created thereby
may be filled only by the affirmative  vote of the holders of shares of Series D
Preferred  Stock  voting  separately  as a class  (together  with the holders of
shares of Voting Parity Stock). If the office of any Preferred  Director becomes
vacant for any reason other than removal from office as aforesaid, the remaining
Preferred  Director  may  choose a  successor  who  shall  hold  office  for the
unexpired term in respect of which such vacancy occurred.  At elections for such
directors,  each holder of shares of Series D Preferred  Stock shall be entitled
to one vote for each  share held (the  holders  of shares of any other  class or
series of Voting  Parity Stock being  entitled to such number of votes,  if any,
for each share of such stock held as may be granted to them).

         So  long  as  any  shares  of  any  Series  D  Preferred  Stock  remain
outstanding,  the Corporation  shall not,  without the  affirmative  vote of the
holders of at least  66-2/3% of the shares of such Series D Preferred  Stock (i)
authorize,  create or issue any capital stock of the Corporation  ranking, as to
dividends or upon liquidation, dissolution or winding up, prior to such Series D
Preferred  Stock, or reclassify any authorized  capital stock of the Corporation
into any such shares of such capital  stock or issue any  obligation or security
convertible  into or evidencing the right to purchase any such shares of capital
stock, or (ii) amend,  alter or repeal the certificate of designations  for such
Series D Preferred  Stock, or the Restated  Certificate of  Incorporation of the
Corporation,  whether by merger,  consolidation or otherwise, so as to adversely
affect the  powers,  preferences  or special  rights of such  Series D Preferred
Stock. Any increase in the amount of authorized common stock or other authorized
preferred  stock,  or any  increase  or  decrease in the number of shares of any
series of preferred stock or the  authorization,  creation and issuance of other
classes  or series of common  stock or other  stock,  in each case  ranking on a
parity with or junior to the shares of Series D Preferred  Stock with respect to
the  payment of  dividends  and the  distribution  of assets  upon  liquidation,
dissolution or winding up, shall not be deemed to adversely  affect such powers,
preferences or special rights.

         In exercising  the voting rights set forth in this  Paragraph 5 or when
otherwise granted voting rights by operation of law or by the Corporation,  each
share of Series D Preferred Stock shall be entitled to ten votes.

         The foregoing voting  provisions shall not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required or
upon which the  holders of Series D  Preferred  Stock  shall be entitled to vote
shall be effected, all outstanding shares of Series D Preferred Stock shall have
been  redeemed or called for  redemption  and  sufficient  funds shall have been
deposited in trust to effect such redemption.

         6.  Redemption.  The shares of Series D  Preferred  Stock  shall not be
redeemable prior to August 31, 2008. On and after such date, the Corporation, at
its option,  may redeem shares of the Series D Preferred Stock, as a whole or in
part, at any time or from time to time, at a redemption price equal to $5,000.00
per share,  plus, in each case, an amount equal to all dividends (whether or not
earned or declared)  accrued and accumulated  and unpaid to, but excluding,  the
date fixed for redemption.

         The  holders  of  shares of  Series D  Preferred  Stock at the close of
business  on a Dividend  Payment  Record  Date shall be  entitled to receive the
dividend  payable on such  shares on the  corresponding  Dividend  Payment  Date
notwithstanding  the call for redemption  thereof (except that holders of shares
called for  redemption  on a date  occurring  between  such  Record Date and the
Dividend  Payment  Date shall not be entitled to receive  such  dividend on such
Dividend Payment Date) or the  Corporation's  default in payment of the dividend
due on such Dividend Payment Date.

         If fewer than all the  outstanding  shares of Series D Preferred  Stock
are to be redeemed,  the number of shares to be redeemed  shall be determined by
the Board of Directors and the shares to be redeemed shall be selected by lot or
pro rata or by any other means  determined by the Board of Directors in its sole
discretion to be equitable.

         If full  cumulative  dividends on the Series D Preferred Stock have not
been paid or set apart for payment with respect of all prior  dividend  periods,
the Series D Preferred Stock may not be redeemed in part and the Corporation may
not  purchase or acquire any shares of the Series D  Preferred  Stock  otherwise
than  pursuant  to a purchase  or  exchange  offer made on the same terms to all
holders of the Series D Preferred Stock.

         In the event the Corporation  shall redeem shares of Series D Preferred
Stock,  written  notice of such  redemption  shall be given by first class mail,
postage prepaid, mailed not less than 30 days nor more than 60 days prior to the
redemption  date,  to each holder of record of the shares to be redeemed at such
holder's  address  as the same  appears on the stock  books of the  Corporation;
provided,  however,  that no failure to give such notice nor any defect  therein
shall affect the validity of the  proceeding for the redemption of any shares of
Series D  Preferred  Stock to be  redeemed  except as to the  holder to whom the
Corporation  has  failed to mail said  notice or except as to the  holder  whose
notice was defective. Each such notice shall state: (a) the redemption date; (b)
the number of shares of Series D  Preferred  Stock to be  redeemed  and, if less
than all the shares held by such holder are to be redeemed from such holder, the
number of shares to be redeemed from such holder;  (c) the redemption  price and
any  accumulated and unpaid  dividends to the redemption  date; (d) the place or
places where  certificates  for such shares are to be surrendered for payment of
the redemption  price;  and (e) that dividends on the shares to be redeemed will
cease to accrue on such redemption date (unless the Corporation shall default in
providing funds for the payment of the redemption price of the shares called for
redemption at the time and place specified in such notice).

         If a notice of redemption  has been given  pursuant to this Paragraph 6
and if, on or before the date fixed for redemption, the funds necessary for such
redemption shall have been set aside by the Corporation, separate and apart from
its other funds,  in trust for the pro rata benefit of the holders of the shares
of Series D Preferred Stock so called for redemption, then, notwithstanding that
any certificates for such shares have not been surrendered for cancellation,  on
the  redemption  date  dividends  shall  cease to  accrue  on the  shares  to be
redeemed,  and at the close of  business on the  redemption  date the holders of
such shares shall cease to be stockholders with respect to such shares and shall
have no interest  in or claims  against the  Corporation  by virtue  thereof and
shall have no voting or other  rights with  respect to such  shares,  except the
right to receive the moneys payable upon surrender (and endorsement, if required
by the  Corporation) of their  certificates,  and the shares  evidenced  thereby
shall no longer be outstanding.  The  Corporation's  obligation to provide funds
for the  payment  of the  redemption  price  (and  any  accumulated  and  unpaid
dividends to the redemption  date) of the shares called for redemption  shall be
deemed  fulfilled  if, on or before a redemption  date,  the  Corporation  shall
deposit,  with a bank or  trust  company,  or an  affiliate  of a bank or  trust
company,  having an office or agency in New York City and  having a capital  and
surplus of at least  $50,000,000,  such funds  sufficient to pay the  redemption
price (and any accumulated and unpaid  dividends to the redemption  date) of the
shares  called for  redemption,  in trust for the  account of the holders of the
shares to be redeemed  (and so as to be and continue to be available  therefor),
with  irrevocable  instructions and authority to such bank or trust company that
such funds be  delivered  upon  redemption  of the shares of Series D  Preferred
Stock so called for redemption.

         Subject  to  applicable  escheat  laws,  any moneys so set aside by the
Corporation and unclaimed at the end of two years from the redemption date shall
revert to the  general  funds of the  Corporation,  after  which  reversion  the
holders of such shares so called for  redemption  shall look only to the general
funds of the  Corporation  for the  payment  of the  amounts  payable  upon such
redemption.  Any  interest  accrued on funds so  deposited  shall be paid to the
Corporation from time to time.

         Shares of Series D Preferred Stock that have been issued and reacquired
in any manner,  including shares  purchased or redeemed,  shall (upon compliance
with any  applicable  provisions of the laws of the State of Delaware)  have the
status  of  authorized  and  unissued  shares of the  class of  Preferred  Stock
undesignated  as to series and may be  redesignated  and reissued as part of any
series of the preferred stock.

         7. Amendment of  Resolution.  The Board reserves the right by from time
to time to increase or decrease the number of shares that  constitute the Series
D Preferred Stock (but not below the number of shares thereof then  outstanding)
and in other  respects  to amend this  Certificate  of  Designations  within the
limitations  provided by law, this  resolution  and the Restated  Certificate of
Incorporation.

         8. Rank. Any stock of any class or classes or series of the Corporation
shall be deemed to rank:

                  (a) prior to shares of the Series D Preferred Stock, either as
to dividends or upon  liquidation,  dissolution  or winding up, or both,  if the
holders of stock of such class or classes  or series  shall be  entitled  by the
terms  thereof to the  receipt of  dividends  or of amounts  distributable  upon
liquidation,  dissolution  or winding up, as the case may be, in  preference  or
priority to the holders of shares of the Series D Preferred Stock;

                  (b) on a parity with  shares of the Series D Preferred  Stock,
either as to dividends or upon liquidation,  dissolution or winding up, or both,
whether or not the dividend  rates,  dividend  payment  dates,  or redemption or
liquidation  prices per share  thereof be  different  from those of the Series D
Preferred  Stock,  if the  holders  of stock of such  class or classes or series
shall be entitled by the terms thereof to the receipt of dividends or of amounts
distributed upon liquidation,  dissolution or winding up, as the case may be, in
proportion to their  respective  dividend rates or liquidation  prices,  without
preference  or  priority  of one over the other as between  the  holders of such
stock and the  holders of shares of Series D Preferred  Stock (the term  "Parity
Preferred Stock" being used to refer to any stock on a parity with the shares of
Series D Preferred Stock, either as to dividend or upon liquidation  dissolution
or winding up, or both, as the content may require); and

                  (c) junior to shares of the Series D Preferred  Stock,  either
as to dividends or upon liquidation, dissolution or winding up, or both, if such
class or classes or series shall be common stock or if the holders of the Series
D Preferred  Stock shall be entitled to the receipt of  dividends  or of amounts
distributable  upon liquidation,  dissolution or winding up, as the case may be,
in  preference  or  priority to the holders of stock of such class or classes or
series.

         The Series D  Preferred  Stock  shall rank,  as to  dividends  and upon
liquidation,  dissolution  or  winding  up, on a parity  with the  Corporation's
Redeemable  Voting  Preferred Stock, the  Corporation's  Cumulative  Convertible
Voting Preferred Stock,  Series A and the Corporation's  Cumulative  Convertible
Voting Preferred Stock, Series B and the Corporation's 5.94% Cumulative
Preferred Stock, Series C.

         IN WITNESS  WHEREOF,  the Corporation has caused this Certificate to be
duly executed on its behalf by its undersigned  Treasurer and attested to by its
Secretary on July 21, 1998.

LEHMAN BROTHERS HOLDINGS INC.

By: /s/ Marc A. Silverman
Name: Marc A. Silverman
Title: Treasurer

Attested:

By: /s/ Suzanne M. Conticelli
Name: Suzanne M. Conticelli
Title: Assistant Secretary