CERTIFICATE

                                       OF

                        AMENDED ARTICLES OF INCORPORATION

                                       OF

                                FERRO CORPORATION

 

 

         Adolph Posnick, who is Chairman of the Board of Directors and Paul B.

Campbell, who is Secretary, of the above-named Ohio corporation for profit with

its principal location at Cleveland, Ohio, do hereby certify that a meeting of

the Board of Directors was duly called on April 28, 1989, at which meeting the

following Eleventh Amended Articles of Incorporation were adopted in accordance

with Section 1701.72(B) of the Ohio Revised Code to supersede and take the place

of the existing Tenth Amended Articles of Incorporation and all amendments

thereto, including the amendment thereto approved by the requisite vote of the

shareholders on that date.

 

                   ELEVENTH AMENDED ARTICLES OF INCORPORATION

                              OF FERRO CORPORATION

 

         FIRST:  The name of the corporation shall be Ferro Corporation.

 

         SECOND: The place in the State of Ohio where its principal office is to

be located is the City of Cleveland, Cuyahoga County.

 

         THIRD:  The purpose or purposes for which it is formed are:

 

            (1)  Manufacturing, buying, selling, and dealing in enamels and

                 enameled wares and products of all kinds; applying enamel to

                 metals and other materials.

 

            (2)  Developing, manufacturing, buying, selling, and dealing in

                 paints, lacquers, and other coatings or finishes or

                 constituents thereof; chemicals and other products, natural or

                 synthetic, of all kinds.

 

            (3)  Designing, manufacturing, erecting, installing, equipping,

                 buying, selling, and dealing in furnaces, smelters, kilns,

                 ovens, and all manner of articles, devices, appliances,

                 machinery, tools, materials and equipment for industrial,

                 commercial or domestic use, and parts or elements thereof.

 

            (4)  The doing of all such further acts and things as are

                 necessary, convenient or expedient to accomplish the purposes

                 aforesaid and as otherwise permitted by law.

 

         FOURTH: The number of shares which the Corporation is authorized to

have outstanding is 77,000,000, consisting of 2,000,000 shares of Serial

Preferred Stock without Par

 

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Value (hereinafter called "Serial Preferred Stock") and 75,000,000 shares of

Common Stock of the Par Value of $1.00 each (hereinafter called "Common Stock").

 

         No holder of any class of shares of the Corporation shall, as such

holder, have any preemptive or preferential right to purchase or subscribe to

any shares of any class of stock of the Corporation, whether now or hereafter

authorized, whether unissued or in the treasury, or to purchase any obligations

convertible into shares of any class of stock of the Corporation, which at any

time may be proposed to be issued by the Corporation or subjected to rights or

options to purchase granted by the Corporation.

 

         The shares of such classes shall have the following express terms:

 

 

                                   DIVISION A

 

                   EXPRESS TERMS OF THE SERIAL PREFERRED STOCK

 

 

         SECTION 1. The Serial Preferred Stock may be issued from time to time

in one or more series. All shares of Serial Preferred Stock shall be of equal

rank and shall be identical, except in respect of the matters that may be fixed

by the Board of Directors as hereinafter provided, and each share of each series

shall be identical with all other shares of such series, except as to the date

from which dividends are cumulative. Subject to the provisions of Sections 2 to

7, both inclusive, of this Division, which provisions shall apply to all Serial

Preferred Stock, the Board of Directors hereby is authorized to cause such

shares to be issued in one or more series and with respect to each such series

prior to the issuance thereof to fix:

 

                  (a) The designation of the series, which may be by

distinguishing number, letter, or title.

 

                  (b) The number of shares of the series, which number the Board

of Directors may (except where otherwise provided in the creation of the series)

increase or decrease (but not below the number of shares thereof then

outstanding).

 

                  (c) The annual dividend rate of the series.

 

                  (d) The dates at which dividends, if declared, shall be

payable, and the dates from which dividends shall be cumulative.

 

                  (e) The redemption rights and price or prices, if any, for

shares of the series.

 

                  (f) The terms and amount of any sinking fund provided for the

purchase or redemption of shares of the series.

 

                  (g) The amounts payable on shares of the series in the event

of any voluntary liquidation, dissolution, or winding up of the affairs of the

Corporation.

 

 

                                      -2-

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                  (h) Whether the shares of the series shall be convertible into

Common Stock, and, if so, the conversion price or prices, any adjustments

thereof, and all other terms and conditions upon which conversion may be made;

provided, however, that in no event shall the number of shares of Common Stock

issuable upon conversion of the Serial Preferred Stock exceed 2,000,000 shares

plus such additional shares as may be required to be issued pursuant to

anti-dilution provisions of any Serial Preferred Stock.

 

                  (i) Restrictions (in addition to those set forth in Sections

5(b) and 5(c) of this Division) on the issuance of shares of the same series or

of any other class or series.

 

         The Board of Directors is authorized to adopt from time to time

amendments to the Articles of Incorporation fixing, with respect to each such

series, the matters described in clauses (a) to (i), both inclusive, of this

Section 1.

 

         SECTION 2. The holders of Serial Preferred Stock of each series, in

preference to the holders of Common Stock and of any other class of shares

ranking junior to the Serial Preferred Stock, shall be entitled to receive out

of any funds legally available and when and as declared by the Board of

Directors dividends in cash at the rate for such series fixed in accordance with

the provisions of Section 1 of this Division and no more, payable quarterly on

the dates fixed for such series. Such dividends shall be cumulative, in the case

of shares of each particular series, from and after the date or dates fixed with

respect to such series. No dividends may be paid upon or declared or set apart

for any of the Serial Preferred Stock for any quarterly dividend period unless

at the same time a like proportionate dividend for the same quarterly dividend

period, ratably in proportion to the respective annual dividend rates fixed

therefor, shall be paid upon or declared or set apart for all Serial Preferred

Stock of all series then issued and outstanding and entitled to receive such

dividend.

 

         SECTION 3. In no event so long as any Serial Preferred Stock shall be

outstanding shall any dividends, except a dividend payable in Common Stock or

other shares ranking junior to the Serial Preferred Stock, be paid or declared

or any distribution be made except as aforesaid on the Common Stock or any other

shares ranking junior to the Serial Preferred Stock, nor shall any Common Stock

or any other shares ranking junior to the Serial Preferred Stock be purchased,

retired, or otherwise acquired by the Corporation (except out of the proceeds of

the sale of Common Stock or other shares ranking junior to the Serial Preferred

Stock received by the Corporation subsequent to January 1, 1984):

 

                  (a) Unless all accrued and unpaid dividends on Serial

Preferred Stock, including the full dividends for the current quarterly dividend

period, shall have been declared and paid or a sum sufficient for payment

thereof set apart; and

 

                  (b) Unless there shall be no arrearages with respect to the

redemption of Serial Preferred Stock of any series from any sinking fund

provided for shares of such series in accordance with the provisions of Section

1 of this Division.

 

         SECTION 4. (a) The holders of Serial Preferred Stock of any series

shall, in case of liquidation, dissolution, or winding up of the affairs of the

Corporation, be entitled to receive in full out of the assets of the

Corporation, including its capital, before any amount shall be paid or

 

 

                                      -3-

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distributed among the holders of the Common Stock or any other shares ranking

junior to the Serial Preferred Stock:

 

                  (i) in the event of any voluntary liquidation, dissolution, or

         winding up of the affairs of the Corporation, the amounts fixed with

         respect to shares of such series in accordance with Section 1 of this

         Division; or

 

                  (ii) in the event of any involuntary liquidation, dissolution,

         or winding up of the affairs of the Corporation, $25 per share;

 

plus in either event an amount equal to all dividends accrued and unpaid thereon

to the date of payment of the amount due pursuant to such liquidation,

dissolution, or winding up of the affairs of the Corporation. In case the net

assets of the Corporation legally available therefor are insufficient to permit

the payment upon all outstanding shares of Serial Preferred Stock of the full

preferential amount to which they are respectively entitled, then such net

assets shall be distributed ratably upon outstanding shares of Serial Preferred

Stock in proportion to the full preferential amount to which each such share is

entitled.

 

         After payment to holders of Serial Preferred Stock of the full

preferential amounts as aforesaid, holders of Serial Preferred Stock as such

shall have no right or claim to any of the remaining assets of the Corporation.

 

                  (b) The merger or consolidation of the Corporation into or

with any other corporation, or the merger of any other corporation into it, or

the sale, lease or conveyance of all or substantially all the property or

business of the Corporation, shall not be deemed to be a dissolution,

liquidation, or winding up, voluntary or involuntary, for the purposes of this

Section 4.

 

         SECTION 5. (a) The holders of Serial Preferred Stock shall be entitled

to one vote for each share of such stock upon all matters presented to the

shareholders; and, except as otherwise provided herein or required by law, the

holders of Serial Preferred Stock and the holders of Common Stock shall vote

together as one class on all matters.

 

         If, and so often as, the Corporation shall be in default in the payment

of six (6) full quarterly dividends (whether or not consecutive) on any series

of Serial Preferred Stock at the time outstanding, whether or not earned or

declared, the holders of Serial Preferred Stock of all series, voting separately

as a class and in addition to all other rights to vote for Directors, shall be

entitled to elect, as herein provided, two (2) members of the Board of Directors

of the Corporation; provided, however, that the holders of shares of Serial

Preferred Stock shall not have or exercise such special class voting rights

except at meetings of the shareholders for the election of Directors at which

the holders of not less than thirty-five percent (35%) of the outstanding shares

of Serial Preferred Stock of all series then outstanding are present in person

or by proxy; and provided further that the special class voting rights provided

for herein when the same shall have become vested shall remain so vested until

all accrued and unpaid dividends on the Serial Preferred Stock of all series

then outstanding shall have been paid, whereupon the holders of Serial Preferred

Stock shall be divested of their special class voting rights in respect of

 

 

 

                                      -4-

<PAGE>

 

subsequent elections of Directors, subject to the revesting of such special

class voting rights in the event hereinabove specified in this paragraph.

 

         In the event of default entitling the holders of Serial Preferred Stock

to elect two (2) Directors as above specified, a special meeting of the

shareholders for the purpose of electing such Directors shall be called by the

Secretary of the Corporation upon written request of, or may be called by, the

holders of record of at least ten percent (10%) of the shares of Serial

Preferred Stock of all series at the time outstanding, and notice thereof shall

be given in the same manner as that required for the annual meeting of

shareholders; provided, however, that the Corporation shall not be required to

call such special meeting if the annual meeting of shareholders shall be held

within ninety (90) days after the date of receipt of the foregoing written

request from the holders of Serial Preferred Stock. At any meeting at which the

holders of Serial Preferred Stock shall be entitled to elect Directors, the

holders of thirty-five percent (35%) of the then outstanding shares of Serial

Preferred Stock of all series, present in person or by proxy, shall be

sufficient to constitute a quorum, and the vote of the holders of a majority of

such shares so present at any such meeting at which there shall be such a quorum

shall be sufficient to elect the members of the Board of Directors which the

holders of Serial Preferred Stock are entitled to elect as hereinabove provided.

The two directors who may be elected by the holders of Serial Preferred Stock

pursuant to the foregoing provisions shall be in addition to any other directors

then in office or proposed to be elected otherwise than pursuant to such

provisions, and nothing in such provisions shall prevent any change otherwise

permitted in the total number of directors of the Corporation or require the

resignation of any director elected otherwise than pursuant to such provisions.

Notwithstanding any classification of the other directors of the Corporation,

the two directors elected by the holders of Serial Preferred Stock shall be

elected annually for terms expiring at the next succeeding annual meeting of

shareholders.

 

                  (b) The affirmative vote of the holders of at least two-thirds

of the shares of Serial Preferred Stock at the time outstanding, given in person

or by proxy at a meeting called for the purpose at which the holders of Serial

Preferred Stock shall vote separately as a class, shall be necessary to effect

any one or more of the following (but so far as the holders of Serial Preferred

Stock are concerned, such action may be effected with such vote):

 

                  (i) Any amendment, alteration, or repeal of any of the

         provisions of the Articles of Incorporation or of the Regulations of

         the Corporation which affects adversely the voting powers, rights or

         preferences of the holders of Serial Preferred Stock; provided,

         however, that, for the purpose of this clause (i) only, neither the

         amendment of the Articles of Incorporation so as to authorize or

         create, or to increase the authorized or outstanding amount of, Serial

         Preferred Stock or of any shares of any class ranking on a parity with

         or junior to the Serial Preferred Stock, nor the amendment of the

         provisions of the Regulations so as to increase the number of Directors

         of the Corporation shall be deemed to affect adversely the voting

         powers, rights or preferences of the holders of Serial Preferred Stock;

         and provided further, that if such amendment, alteration, or repeal

         affects adversely the rights or preferences of one or more but not all

         series of Serial Preferred Stock at the time outstanding, only the

         affirmative vote of the

 

 

                                      -5-

<PAGE>

 

         holders of at least two-thirds of the number of shares at the time

         outstanding of the series so affected shall be required;

 

                  (ii) The authorization or creation of, or the increase in the

         authorized amount of, any shares of any class, or any security

         convertible into shares of any class, ranking prior to the Serial

         Preferred Stock; or

 

                  (iii) The purchase or redemption (for sinking fund purposes or

         otherwise) of less than all of the Serial Preferred Stock then

         outstanding except in accordance with a stock purchase offer made to

         all holders of record of Serial Preferred Stock, unless all dividends

         upon all Serial Preferred Stock then outstanding for all previous

         quarterly dividend periods shall have been declared and paid or funds

         therefor set apart and all accrued sinking fund obligations applicable

         thereto shall have been complied with.

 

                  (c) The affirmative vote of the holders of at least a majority

of the shares of Serial Preferred Stock at the time outstanding, given in person

or by proxy at a meeting called for the purpose at which the holders of Serial

Preferred Stock shall vote separately as a class, shall be necessary to effect

any one or more of the following (but so far as the holders of Serial Preferred

Stock are concerned, such action may be effected with such vote):

 

                  (i) The sale, lease or conveyance by the Corporation of all or

         substantially all of its property or business, or its consolidation

         with or merger into any other corporation unless the corporation

         resulting from such consolidation or merger will have after such

         consolidation or merger no class of shares either authorized or

         outstanding ranking prior to or on a parity with the Serial Preferred

         Stock except the same number of shares ranking prior to or on a parity

         with the Serial Preferred Stock and having the same rights and

         preferences as the shares of the Corporation authorized and outstanding

         immediately preceding such consolidation or merger, and each holder of

         Serial Preferred Stock immediately preceding such consolidation or

         merger shall receive the same number of shares, with the same rights

         and preferences, of the resulting corporation; or

 

                  (ii) The authorization of any shares ranking on a parity with

         the Serial Preferred Stock or an increase in the authorized number of

         shares of Serial Preferred Stock.

 

         SECTION 6. For the purpose of this Division A: Whenever reference is

made to shares "ranking prior to the Serial Preferred Stock" or "on a parity

with the Serial Preferred Stock," such reference shall mean and include all

shares of the Corporation in respect of which the rights of the holders thereof

as to the payment of dividends or as to distributions in the event of a

voluntary or involuntary liquidation, dissolution, or winding up of the affairs

of the Corporation are given preference over, or rank on an equality with (as

the case may be) the rights of holders of Serial Preferred Stock; and whenever

reference is made to shares "ranking junior to the Serial Preferred Stock," such

reference shall mean and include all shares of the Corporation in respect of

which the rights of the holders thereof as to the payment of dividends and as to

distributions in

 

 

                                      -6-

<PAGE>

 

the event of a voluntary or involuntary liquidation, dissolution, or winding up

of the affairs of the Corporation are junior and subordinate to the rights of

the holders of Serial Preferred Stock.

 

 

                                  DIVISION A-1

 

                       EXPRESS TERMS OF THE SERIES A ESOP

                           CONVERTIBLE PREFERRED STOCK

 

         There is hereby established, in accordance with and subject to the

provisions of Division A of the Corporation's Amended Articles of Incorporation,

a first series of the Serial Preferred Stock to which Sections 2 through 6, both

inclusive, of such Division A and the following provisions shall be applicable:

 

         SECTION 1.  Designation of Series; Restrictions on Issuance.

 

         (a) The series shall be designated "Series A ESOP Convertible Preferred

Stock" (hereinafter called the "Series A Preferred Stock").

 

         (b) The shares of the Series A Preferred Stock shall be issued only to

National City Bank, as trustee, or any successor trustee (the "trustee") of the

Ferro Corporation Savings and Stock Ownership Plan, as the same may be amended,

or any successor plan (the "Plan") or the trustee's pledgee holding such shares

as security for loans made to such trustee on behalf of an employee stock

ownership plan or other employee benefit plan of the Corporation. All references

to the holder of the shares of the Series A Preferred Stock shall mean the

trustee or such trustee's pledgee. In the event of any transfer of any shares of

Series A Preferred Stock to any person other than any such Plan trustee or

pledgee, the shares of Series A Preferred Stock so transferred upon such

transfer and without any further action by the Corporation or the holder, shall

automatically be converted into shares of Common Stock on the terms otherwise

provided for the conversion of shares of the Series A Preferred Stock into

shares of Common Stock pursuant to Section 8 of Division A-1 and no such

transferee shall have any of the voting powers, preferences and any relative,

participating, optional or special rights ascribed to shares of the Series A

Preferred Stock hereunder but, rather, only the powers and rights pertaining to

the Common Stock into which such shares of the Series A Preferred Stock shall be

so converted. Certificates representing shares of the Series A Preferred Stock

shall be legended to reflect such restrictions on transfer. Notwithstanding the

foregoing provisions of this Section 1(b) of Division A-1, shares of the Series

A Preferred Stock (i) may be converted into shares of Common Stock pursuant to

Section 8 of Division A-1 and the shares of Common Stock issued upon such

conversion may be transferred by the holder thereof as permitted by law and (ii)

shall be redeemable by the Corporation upon the terms and conditions provided by

Sections 5 and 8 of this Division A-1.

 

         SECTION 2. Number of Shares. The number of shares of the Series A

Preferred Stock is 1,762,500 which number from time to time may be increased or

decreased (but not below the number of shares of the series then outstanding) by

the Board of Directors.

 

 

                                      -7-

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         SECTION 3. Dividend Rate. Subject to any provisions for adjustment

hereinafter set forth, the holders of shares of the Series A Preferred Stock

shall be entitled to receive cash dividends ("Preferred Dividends") in an amount

equal to seven percent (7%) of the Redemption Price per share per annum. If the

Redemption Price is adjusted in accordance with Section 5(d) of this Division

A-1, Preferred Dividends shall accrue from the date of initial issuance of the

Series A Preferred Stock based upon the Redemption Price as so adjusted.

 

         SECTION 4. Dividend Payment Dates; Cumulation Date. Preferred Dividends

shall be payable in equal installments quarterly in arrears, on the last day of

March, June, September and December of each year commencing June 30, 1989 to

holders of record at the beginning of business on such dividend payment date,

except that the Preferred Dividends payable on June 30, 1989, for the period

from the date of issuance of the Series A Preferred Stock until such date, shall

be based upon the rate set forth in Section 3 of this Division A-1 and the

number of days elapsed from the date of issuance of such stock. Preferred

Dividends on outstanding shares of Series A Preferred Stock shall be cumulative

from the date of the issuance of such shares. Preferred Dividends shall accrue

on a daily basis whether or not the Corporation shall have earnings or surplus

at the time. Preferred Dividends accrued on the shares of Series A Preferred

Stock for any period less than a full quarterly period between dividend payment

dates shall be computed on the basis of a 360-day year of 30-day months. In the

event that any dividend payment date shall occur on any day other than a

"Business Day" (as defined in Section 8(n)(vii) of Division A-1), the dividend

payment due on such dividend payment date shall be paid on the Business Day

immediately preceding such dividend payment date. Accrued but unpaid Preferred

Dividends shall cumulate as of the dividend payment date on which they first

become payable, but no interest shall be payable on accrued but unpaid Preferred

Dividends.

 

         SECTION 5.  Redemption.

 

         (a) The shares of the Series A Preferred Stock shall be subject to

mandatory redemption by the Corporation upon the occurrence of the following

event:

 

                  (i) If the affirmative vote of the holders of at least a

         majority of the shares of all Serial Preferred Stock at the time

         outstanding and voting separately as a class is not obtained at any

         meeting called pursuant to Section 5(c)(i) of Division A of the Amended

         Articles of Incorporation with respect to any matters that are

         described therein and if, in the absence of such Section 5(c)(i), the

         holders of the Serial Preferred Stock would not have had the right as a

         matter of law to vote separately as a class on such matters, and if all

         required voting approvals with respect to such matters have been

         obtained from the holders of the Common Stock and, in the judgment of

         the Board of Directors, all other material conditions to the

         consummation of such matters are likely to be satisfied.

 

         (b) The shares of the Series A Preferred Stock shall be redeemable, in

whole or in part, at the option of the holder, at any time or from time to time

upon notice to the Corporation given not less than five (5) Business Days prior

to the date fixed by the holder in such notice for such redemption:

 

 

                                      -8-

<PAGE>

 

                  (i) When, to the extent and in the number of shares necessary

         for such holder to provide for distributions required to be made to

         participants under, or to satisfy an investment election provided to

         participants in accordance with, or to provide for loans to or

         withdrawals by participants under, the Plan; or

 

                  (ii) When, to the extent and in the number of shares necessary

         for such holder to make payment of principal, interest or premium due

         and payable (whether as scheduled or upon acceleration) on any

         promissory note of the trustee under the Plan or any indebtedness

         incurred by the holder for the benefit of the Plan.

 

         (c) The shares of the Series A Preferred Stock shall be redeemable, in

whole or in part, at the option of the Corporation:

 

                  (i) At any time after July 1, 1999; or

 

                  (ii) If the exclusion of interest received by any lender on

         any borrowings by the trustee of the Plan (or any indebtedness incurred

         by the holder for the benefit of the Plan) from the lender's income

         pursuant to Section 133 or any successor provision of the Internal

         Revenue Code of 1986, as the same may be amended and in effect from

         time to time (the "Code") is reduced to a percentage amount less than

         fifty percent (50%); or

 

                  (iii) If the Corporation terminates the Plan or terminates

future contributions to the Plan.

 

         (d) In any redemption of the Series A Preferred Stock other than under

Section 5(c)(iii) of this Division A-1, the redemption price per share initially

shall be $46.375, adjusted as provided in the next succeeding sentence (as so

adjusted, the "Redemption Price"), plus, in each case, an amount equal to all

accrued and unpaid dividends thereon to the date fixed for redemption. The

initial Redemption Price of $46.375 per share shall be adjusted to the average

of the Current Market Price of the Common Stock on each of the third, fourth and

fifth full Unaffected Trading Days after the initial issuance of Series A

Preferred Stock; provided, however, that (i) the initial Redemption Price may be

reduced, but not increased, and (ii) the initial Redemption Price may not be

reduced below $40 per share. If an adjustment to the initial Redemption Price is

required pursuant to the next preceding sentence, the Corporation shall

forthwith place on file with the Secretary of the Corporation and deliver to the

holders of the Series A Preferred Stock a statement signed by two officers of

the Corporation stating the adjusted Redemption Price and setting forth in

reasonable detail such facts as shall be necessary to show the determination of

the adjusted Redemption Price.

 

         (e) In the event of a redemption of any shares of the Series A

Preferred Stock under Section 5(c)(iii) of this Division A-1, the Corporation

shall pay the Redemption Price plus an additional amount as follows:

 

 

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          During the Twelve-

        Month Period Beginning                       Percentage of

               April 24                            Redemption Price

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

 

                1989.....................................7.0%

                1990.....................................6.3

                1991.....................................5.6

                1992.....................................4.9

                1993.....................................4.2

                1994.....................................3.5

                1995.....................................2.8

                1996.....................................2.1

                1997.....................................1.4

                1998.......................................7

 

and thereafter the Redemption Price, and no additional amount, plus, in each

case, an amount equal to all accrued and unpaid dividends thereon to the date

fixed for redemption.

 

         (f) Payment of the Redemption Price shall be made by the Corporation in

cash or shares of Common Stock, or a combination thereof, as permitted by

paragraph (i) of this Section 5 of Division A-1. From and after the date fixed

for redemption, dividends on shares of the Series A Preferred Stock called for

redemption will cease to accrue, such shares will no longer be deemed to be

outstanding and all rights in respect of such shares shall cease, except the

right to receive the Redemption Price. If less than all of the outstanding

shares of the Series A Preferred Stock are to be redeemed, then except in the

case of a redemption under Section 5(b) or 5(c)(ii) above of Division A-1, the

Corporation shall either redeem a portion of the shares of each holder

determined pro rata based on the number of shares held by each holder or shall

select the shares to be redeemed by lot, as may be determined by the Board of

Directors of the Corporation.

 

         (g) In the event (i) there is a change in the federal tax law of the

United States of America which has the effect of precluding the Corporation from

claiming any of the tax deductions for dividends paid on the Series A Preferred

Stock when such dividends are used as provided under Section 404(k)(2) of the

Code as in effect on the date of the initial issuance of the Series A Preferred

Stock, or (ii) the Plan, as the same may be amended, or any successor plan is

determined by the Internal Revenue Service not to be qualified within the

meaning of Sections 401(a) or 4975(e)(7) of the Code, the Corporation may, in

its sole discretion and notwithstanding anything to the contrary in this Section

5 of Division A-1, elect to redeem such shares for the Redemption Price.

 

         (h) Unless otherwise required by law, notice of redemption will be sent

to the holders of the Series A Preferred Stock at the address shown on the books

of the Corporation or any transfer agent for the Series A Preferred Stock by

first class mail, postage prepaid, mailed not less than twenty (20) days nor

more than sixty (60) days prior to the redemption date. Each such notice shall

state: (i) the redemption date; (ii) the total number of shares of the Series A

Preferred Stock to be redeemed and, if fewer than all the shares held by such

holder are to be redeemed, the number of such shares to be redeemed from such

holder; (iii) the Redemption

 

                                      -10-

<PAGE>

 

Price; (iv) the place or places where certificates for such shares are to be

surrendered for payment of the Redemption Price; (v) that dividends on the

shares to be redeemed will cease to accrue on such redemption date; and (vi) the

conversion rights of the shares to be redeemed, the period within which

conversion rights may be exercised, and the Conversion Ratio and number of

shares of Common Stock issuable upon conversion of a share of the Series A

Preferred Stock at the time. Upon surrender of the certificates for any shares

so called for redemption and not previously converted (properly endorsed or

assigned for transfer, if the Board of Directors of the Corporation shall so

require and the notice shall so state), such shares shall be redeemed by the

Corporation at the date fixed for redemption and for the Redemption Price.

 

         (i) The Corporation, at its option, may make payment of the Redemption

Price required upon redemption of shares of the Series A Preferred Stock in cash

or in shares of Common Stock, or in a combination of such shares and cash, any

such shares to be valued for such purpose at their Fair Market Value (as defined

in paragraph (n) of Section 8 of Division A-1).

 

         SECTION 6. Sinking Fund. There shall be no sinking fund established or

provided by the Corporation for the purchase or redemption of shares of the

Series A Preferred Stock.

 

         SECTION 7. Voluntary Liquidation. The amount payable on shares of the

Series A Preferred Stock in the event of any voluntary liquidation, dissolution,

or winding up of the affairs of the Corporation shall be the Redemption Price

plus all accrued and unpaid dividends thereon to the date fixed for

distribution, and no more.

 

         SECTION 8. Conversion Rights.

 

         (a) A holder of shares of the Series A Preferred Stock shall be

entitled, at any time (or in the case of shares called for redemption, then

until the close of business on the Business Day before the date fixed for

redemption of such shares pursuant to Section 5 or this Section 8 of Division

A-1) to cause any or all of such shares to be converted into shares of Common

Stock, initially at a conversion rate equal to the ratio of .77 of a share of

Common Stock for each one share of Series A Preferred Stock, and which shall be

adjusted as hereinafter provided (and, as so adjusted, rounded to the nearest

ten-thousandth, is hereinafter sometimes referred to as the "Conversion Ratio").

 

         (b) Any holder of shares of the Series A Preferred Stock desiring to

convert such shares into shares of Common Stock shall surrender the certificate

or certificates representing the shares of the Series A Preferred Stock being

converted, duly assigned or endorsed for transfer to the Corporation (or

accompanied by duly executed stock powers relating thereto), at the principal

executive office of the Corporation or the offices of the transfer agent for the

Series A Preferred Stock or such office or offices in the continental United

States of an agent for conversion as may from time to time be designated by

notice to the holders of the Series A Preferred Stock by the Corporation or the

transfer agent for the Series A Preferred Stock, accompanied by written notice

of conversion. Such notice of conversion shall specify (i) the number of shares

of the Series A Preferred Stock to be converted and the name or names in which

such holder wishes the certificate or certificates for Common Stock and for any

shares of the Series A Preferred Stock

 

 

                                      -11-

<PAGE>

 

not to be so converted to be issued, and (ii) the address to which such holder

wishes delivery to be made of such new certificates to be issued upon such

conversion.

 

         (c) Upon surrender of a certificate representing a share or shares of

the Series A Preferred Stock for conversion, the Corporation shall issue and

send by hand delivery (with receipt to be acknowledged) or by first class mail,

postage prepaid, to the holder thereof or to such holder's designee, at the

address designated by such holder, a certificate or certificates for the number

of shares of Common Stock to which such holder shall be entitled upon

conversion. In the event that there shall have been surrendered a certificate or

certificates representing shares of the Series A Preferred Stock, only part of

which are to be converted, the Corporation shall issue and deliver to such

holder or such holder's designee a new certificate or certificates representing

the number of shares of the Series A Preferred Stock which shall not have been

converted.

 

         (d) The Issuance by the Corporation of shares of Common Stock upon a

conversion of shares of the Series A Preferred Stock into shares of Common Stock

shall be effective as of the earlier of (i) the delivery to such holder or such

holder's designee of the certificates representing the shares of Common Stock

issued upon conversion thereof or (ii) the commencement of business on the

second Business Day after the surrender of the certificate or certificates for

the shares of the Series A Preferred Stock to be converted, duly assigned or

endorsed for transfer to the Corporation (or accompanied by duly executed stock

powers relating thereto) as provided herein. On and after the effective date of

conversion, the person or persons entitled to receive the Common Stock issuable

upon such conversion shall be treated for all purposes as the record holder or

holders of such shares of Common Stock, but no allowance or adjustment shall be

made in respect of dividends payable to holders of Common Stock in respect of

any period prior to such effective date. The Corporation shall not be obligated

to pay any dividends which shall have been declared and shall be payable to

holders of shares of the Series A Preferred Stock on a dividend payment date if

such dividend payment date for such dividend shall be subsequent to the

effective date of conversion of such shares. The stated capital of each share of

Common Stock issued upon a conversion of shares of the Series A Preferred Stock

shall be the par value of such Common Stock.

 

         (e) The Corporation shall not be obligated to deliver to holders of the

Series A Preferred Stock any fractional share or shares of Common Stock issuable

upon any conversion of such shares of the Series A Preferred Stock, but in lieu

thereof may make a cash payment in respect thereof in any manner permitted by

law.

 

         (f) Whenever the Corporation shall issue shares of Common Stock upon

conversion of shares of the Series A Preferred Stock as contemplated by this

Section 8 of Division A-1, the Corporation shall issue together with each share

of Common Stock a right to purchase Common Stock of the Corporation (or other

securities in lieu thereof) pursuant to the Rights Agreement between the

Corporation and National City Bank dated as of March 21, 1986, as amended March

31, 1989, and as the same may be further amended from time to time thereafter

and any successor agreement thereto (the "Rights Agreement"), or any rights

issued to holders of the Common Stock in addition thereto or in replacement

therefor, whether or not such rights shall be exercisable or tradeable

separately from the Common Stock at such time, but only if such rights are

outstanding and have not expired or been redeemed or exchanged.

 

 

                                      -12-

<PAGE>

 

         (g) The Corporation shall at all times reserve and keep available out

of its authorized and unissued Common Stock and/or Common Stock held in its

treasury, solely for issuance upon the conversion of shares of the Series A

Preferred Stock as herein provided, such number of shares of Common Stock as

shall from time to time be issuable upon the conversion of all the shares of the

Series A Preferred Stock then outstanding. The Corporation shall prepare and

shall use its best efforts to obtain and keep in force such governmental or

regulatory permits or other authorizations as may be required by law, and shall

comply with all requirements as to registration or qualification of the Common

Stock, in order to enable the Corporation lawfully to issue and deliver to each

holder of record of the Series A Preferred Stock such number of shares of its

Common Stock as shall from time to time be sufficient to effect the conversion

of all shares of the Series A Preferred Stock then outstanding and convertible

into shares of Common Stock.

 

         (h) In the event the Corporation shall, at any time or from time to

time while any of the shares of the Series A Preferred Stock are outstanding,

(i) pay a dividend or make a distribution in respect of the Common Stock in

shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock,

or (iii) combine the outstanding shares of Common Stock into a smaller number of

shares, in each case whether by reclassification of shares, recapitalization of

the Corporation (including a recapitalization effected by a merger or

consolidation to which paragraphs (p), (q) and (r) of this Section 8 of Division

A-1 do not apply) or otherwise, the Conversion Ratio in effect immediately prior

to such action shall be adjusted by multiplying such Conversion Ratio by a

fraction, the numerator of which is the number of shares of Common Stock

outstanding immediately after such event, and the denominator of which is the

number of shares of Common Stock outstanding immediately before such event. An

adjustment made pursuant to this paragraph 8(h) shall be given effect, upon

payment of such a dividend or distribution, as of the record date for the

determination of shareholders entitled to receive such dividend or distribution

(on a retroactive basis) and in the case of a subdivision or combination shall

become effective immediately as of the effective date thereof.

 

         (i) In the event that the Corporation shall, at any time or from time

to time while any of the shares of the Series A Preferred Stock are outstanding,

issue to holders of shares of Common Stock as a dividend or distribution,

including by way of a reclassification of shares or a recapitalization of the

Corporation, any right or warrant to purchase shares of Common Stock (but not

including as such a right or warrant any security convertible into or

exchangeable for shares of Common Stock or any right or warrant issued pursuant

to the Rights Agreement) at a purchase price per share less than the Fair Market

Value (as hereinafter defined) of a share of Common Stock on the date of

issuance of such right or warrant, then, subject to the provisions of paragraphs

(l) and (m) of this Section 8 of Division A-1, the Conversion Ratio in effect

immediately prior to such issuance shall be adjusted by multiplying such

Conversion Ratio by a fraction, the numerator of which shall be the sum of (i)

the number of shares of Common Stock outstanding immediately before such

issuance of rights or warrants and (ii) the maximum number of shares of Common

Stock that could be acquired upon exercise in full of all such rights and

warrants, and the denominator of which shall be the sum of (i) number of shares

of Common Stock outstanding immediately before such issuance of rights or

warrants and (ii) the number of shares of Common Stock which could be purchased

at the Fair Market Value of a share of Common Stock at the time of such issuance

for the maximum aggregate consideration payable upon exercise in full of all

such rights or warrants.

 

 

                                      -13-

<PAGE>

 

         (j) In the event the Corporation shall, at any time or from time to

time while any of the shares of the Series A Preferred Stock are outstanding,

issue, sell or exchange shares of Common Stock (other than pursuant to (i) any

right or warrant to purchase or acquire shares of Common Stock (including as

such a right or warrant any security convertible into or exchangeable for shares

of Common Stock), (ii) the Rights Agreement and (iii) any employee or director

incentive, compensation or benefit plan or arrangement (including any

employment, severance or consulting agreement) of the Corporation or any

subsidiary of the Corporation heretofore or hereafter adopted) for a

consideration having a Fair Market Value on the date of issuance, sale or

exchange less than the Fair Market Value of such shares on the date of issuance,

sale or exchange, then, subject to the provisions of paragraphs (l) and (m) of

this Section 8, the Conversion Ratio in effect immediately prior to such

issuance, sale or exchange shall be adjusted by multiplying such Conversion

Ratio by a fraction, the numerator of which shall be the product of (i) the Fair

Market Value of a share of Common Stock on the day immediately preceding the

first public announcement of such issuance, sale or exchange and (ii) the sum of

the number of shares of Common Stock outstanding on such day plus the number of

shares of Common Stock so issued, sold or exchanged by the Corporation, and the

denominator of which shall be the sum of (i) the Fair Market Value of all the

shares of Common Stock outstanding on the day immediately preceding the first

public announcement of such issuance, sale or exchange and (ii) the Fair Market

Value of the consideration on the date received by the Corporation in respect of

such issuance, sale or exchange of shares of Common Stock. In the event the

Corporation shall, at any time or from time to time while any shares of the

Series A Preferred Stock are outstanding, issue, sell or exchange any right or

warrant to purchase or acquire shares of Common Stock (including as such a right

or warrant any security convertible into or exchangeable for shares of Common

Stock), other than any such issuance to holders of shares of Common Stock as a

dividend or distribution (including by way of a reclassification of shares or a

recapitalization of the Corporation) and other than pursuant to (i) the Rights

Agreement or (ii) any employee or director incentive, compensation or benefit

plan or arrangement (including any employment, severance or consulting

agreement) of the Corporation or any subsidiary of the Corporation heretofore or

hereafter adopted, for a consideration having a Fair Market Value on the date of

such issuance, sale or exchange less than the Non-Dilutive Amount (as

hereinafter defined), then, subject to the provisions of paragraphs (l) and (m)

of this Section 8 of Division A-1, the Conversion Ratio shall be adjusted by

multiplying such Conversion Ratio by a fraction, the numerator of which shall be

the product of (i) the Fair Market Value of a share of Common Stock on the day

immediately preceding the first public announcement of such issuance, sale or

exchange and (ii) the sum of the number of shares of Common Stock outstanding on

such day plus the maximum number of shares of Common Stock which could be

acquired pursuant to such right or warrant at the time of the issuance, sale or

exchange of such right or warrant (assuming shares of Common Stock could be

acquired pursuant to such right or warrant at such time), and the denominator of

which shall be the sum of (i) the Fair Market Value of all the shares of Common

Stock outstanding on the day immediately preceding the first public announcement

of such issuance, sale or exchange, (ii) the Fair Market Value of the

consideration received by the Corporation in respect of such issuance, sale or

exchange of such right or warrant and (iii) the Fair Market Value at the time of

such issuance of the consideration which the Corporation would receive upon

exercise in full of all such rights or warrants.

 

         (k) In the event the Corporation shall, at any time or from time to

time while any of the shares of the Series A Preferred Stock are outstanding,

make an Extraordinary Distribution

 

 

                                      -14-

<PAGE>

 

(as hereinafter defined) in respect of the Common Stock, whether by dividend,

distribution, reclassification of shares or recapitalization of the Corporation

(including a recapitalization or reclassification effected by a merger,

combination or consolidation to which paragraphs (p), (q) and (r) of this

Section 8 of Division A-1 do not apply) or effect a Pro Rata Repurchase (as

hereinafter defined) of Common Stock, the Conversion Ratio in effect immediately

prior to such Extraordinary Distribution on Pro Rata Repurchase shall, subject

to paragraphs (l) and (m) of this Section 8, be adjusted by multiplying such

Conversion Ratio by a fraction, the numerator of which shall be the product of

(i) the number of shares of Common Stock outstanding immediately before such

Extraordinary Distribution or Pro Rata Repurchase minus, in the case of a Pro

Rata Repurchase, the number of shares of Common Stock repurchased by the

Corporation and (ii) the Fair Market Value (as herein defined) of a share of

Common Stock on the record date with respect to an Extraordinary Distribution or

on the Effective Date (as hereinafter defined) of a Pro Rata Repurchase, as the

case may be, and the denominator of which shall be (i) the product of (x) the

number of shares of Common Stock outstanding immediately before such

Extraordinary Distribution or Pro Rata Repurchase and (y) the Fair Market Value

of a share of Common Stock on the record date with respect to an Extraordinary

Distribution, or on the Effective Date of a Pro Rata Repurchase, as the case may

be, minus (ii) the Fair Market Value of the Extraordinary Distribution or the

aggregate purchase price of the Pro Rata Repurchase, as the case may be;

provided, however, that no Pro Rata Repurchase shall cause an adjustment to the

Conversion Ratio unless the amount of all cash dividends and distributions made

during the period of twelve months preceding the Effective Date of such Pro Rata

Repurchase, when combined with the aggregate amount of all Pro Rata Repurchases

including such Pro Rata Repurchase (for this purpose, including only that

portion of the aggregate purchase price of each Pro Rata Repurchase which is in

excess of the Fair Market Value of the Common Stock repurchased as determined on

the Effective Date of each such Pro Rata Repurchase), the Effective Dates of

which fall within such twelve month period, exceeds ten percent (10%) of the

aggregate Fair Market Value of all shares of Common Stock outstanding on the

Effective Date of such Pro Rata Repurchase. The Corporation shall send each

holder of the Series A Preferred Stock (i) notice of its intent to make any

Extraordinary Distribution and (ii) notice of any offer by the Corporation to

make a Pro Rata Repurchase, in each case at the same time as, or as soon as

practicable after, such offer is first communicated (including by announcement

of a record date in accordance with the rules of any stock exchange on which the

Common Stock is listed or admitted to trading) to holders of Common Stock. Such

notice shall indicate the intended record date and the amount and nature of such

dividend or distribution, or the number of shares subject to such offer for a

Pro Rata Repurchase and the purchase price payable by the Corporation pursuant

to such offer, and the Conversion Ratio in effect at such time.

 

         (l) Notwithstanding any other provisions of this Section 8 of Division

A-1, the Corporation shall not be required to make any adjustment of the

Conversion Ratio unless such adjustment would require an increase or decrease of

at least one percent (1%) in the Conversion Ratio. Any lesser adjustment shall

be carried forward and shall be made no later than the time of, and together

with, the next subsequent adjustment which, together with any adjustment or

adjustments so carried forward, shall amount to an increase or decrease of at

least one percent (1%) in the Conversion Ratio.

 

         (m) If the Corporation shall make any dividend or distribution on the

Common Stock or issue any Common Stock, other capital stock or other security of

the Corporation or any rights

 

 

                                      -15-

<PAGE>

 

or warrants to purchase or acquire any such security, which transaction does not

result in an adjustment to the Conversion Ratio pursuant to the foregoing

provisions of this Section 8 of Division A-1, the Board of Directors of the

Corporation shall in its sole discretion consider whether such action is of such

a nature that it adversely affects the holders of the Series A Preferred Stock

and that an adjustment to the Conversion Ratio should equitably be made in

respect of such transaction. If in such case the Board of Directors of the

Corporation determines that an adjustment to the Conversion Ratio should be

made, an adjustment shall be made effective as of such date, as determined by

the Board of Directors of the Corporation. The determination of the Board of

Directors of the Corporation as to whether an adjustment to the Conversion Ratio

should be made pursuant to the foregoing provisions of this paragraph 8(m), and,

if so, as to what adjustment should be made and when, shall be final and binding

on the Corporation and all stockholders of the Corporation. The Corporation

shall be entitled to make such additional adjustments in the Conversion Ratio,

in addition to those required by the foregoing provisions of this Section 8 of

Division A-1 as shall be necessary in order that any dividend or distribution in

shares of capital stock of the Corporation, subdivision, reclassification or

combination of shares of stock of the Corporation or any recapitalization of the

Corporation shall not be taxable to holders of the Common Stock.

 

         (n) For purposes hereof, the following definitions shall apply:

 

                  (i) "Extraordinary Distribution" shall mean any dividend or

         other distribution (effected while any of the shares of the Series A

         Preferred Stock are outstanding) of (x) cash, where the aggregate

         amount of such cash dividend or distribution together with the amount

         of all cash dividends and distributions made during the preceding

         period of twelve months, when combined with the aggregate amount of all

         Pro Rata Repurchases (for this purpose, including only that portion of

         the aggregate purchase price of such Pro Rata Repurchase which is in

         excess of the Fair Market Value of the Common Stock repurchased as

         determined on the Effective Date of such Pro Rata Repurchases, the

         Effective Date of which fall within such twelve month period, exceeds

         ten percent (10%) of the aggregate Fair Market Value of all shares of

         Common Stock outstanding on the record date for determining the

         shareholders entitled to receive such Extraordinary Distribution and/or

         (y) of any shares of capital stock of the Corporation (other than

         shares of Common Stock), other securities of the Corporation (other

         than securities of the type referred to in paragraph (i) of this

         Section 8), evidences of indebtedness of the Corporation or any other

         person or any other property (including shares of any subsidiary of the

         Corporation), or any combination thereof. The Fair Market Value of an

         Extraordinary Distribution for purposes of paragraph (k) of this

         Section 8 shall be equal to the sum of the Fair Market Value of such

         Extraordinary Distribution as of the date made plus the amount of any

         cash dividends which are not Extraordinary Distributions made during

         such twelve month period and not previously included in the calculation

         of an adjustment pursuant to paragraph (k) of this Section 8.

 

                  (ii) "Fair Market Value" shall mean, as to shares of Common

         Stock or any other class of capital stock or securities of the

         Corporation or any other issuer which are publicly traded, the average

         of the Current Market Prices (as hereinafter

 

 

                                      -16-

<PAGE>

 

         defined) of such shares or securities for each day of the Adjustment

         Period (as hereinafter defined). The "Fair Market Value" of any

         security which is not publicly traded or of any other property shall

         mean the fair value thereof as determined by an independent investment

         banking or appraisal firm experienced in the valuation of such

         securities or property selected in good faith by the Board of Directors

         of the Corporation or a committee thereof, or, if no such investment

         banking or appraisal firm is in the good faith judgment of the Board of

         Directors or such committee available to make such determination, as

         determined in good faith by the Board of Directors of the Corporation

         or such committee.

 

                  (iii) "Current Market Price" of publicly traded shares of

         Common Stock or any other class of capital stock or other security of

         the Corporation or any other issuer for a day shall mean the last

         reported sales price, regular way, or, if no sale takes place on such

         day, the average of the reported closing bid and asked prices, regular

         way, in either case as reported on the Composite Tape for New York

         Stock Exchange ("NYSE") transactions (the "Composite Tape") or, if such

         security is not listed or admitted to trading on the NYSE, on the

         principal national securities exchange on which such security is listed

         or admitted to trading or, if not listed or admitted to trading on any

         national securities exchange, on the NASDAQ National Market System or,

         if such security is not quoted on such National Market System, the

         average of the closing bid and asked prices on each such day in the

         over-the-counter market as reported by NASDAQ or, if bid and asked

         prices for such security on each such day shall not have been reported

         through NASDAQ, the average of the bid and asked prices for such day as

         furnished by any NYSE member firm regularly making a market in such

         security selected for such purpose by the Board of Directors of the

         Corporation or a committee thereof, in each case, on each trading day

         during the Adjustment Period.

 

                  (iv) "Adjustment Period" shall mean the period of five (5)

         consecutive trading days preceding the date as of which the Fair Market

         Value of a security is to be determined.

 

                  (v) "Non-Dilutive Amount" in respect of an issuance, sale or

         exchange by the Corporation of any right or warrant to purchase or

         acquire shares of Common Stock (including any security convertible into

         or exchangeable for shares of Common Stock) shall mean (x) the product

         of (A) the Fair Market Value of a share of Common Stock on the trading

         day immediately preceding the first public announcement of such

         issuance, sale or exchange and (B) the maximum number of shares of

         Common Stock which could be acquired on such date upon the exercise in

         full of such rights and warrants (including upon the conversion or

         exchange of all such convertible or exchangeable securities), whether

         or not exercisable (or convertible or exchangeable) at such date, minus

         (y) the aggregate amount payable pursuant to such right or warrant to

         purchase or acquire such maximum number of shares of Common Stock;

         provided, however, that in no event shall the Non-Dilutive Amount be

         less than zero. For purposes of the foregoing sentence, in the case of

         a security convertible into or exchangeable for

 

 

                                      -17-

<PAGE>

 

         shares of Common Stock, the amount payable pursuant to a right or

         warrant to purchase or acquire shares of Common Stock shall be the Fair

         Market Value of such security on the date of the issuance, sale or

         exchange of such security by the Corporation.

 

                  (vi) "Pro Rata Repurchase" shall mean any purchase of shares

         of Common Stock by the Corporation or any subsidiary thereof, whether

         for cash, shares of capital stock of the Corporation, other securities

         of the Corporation, evidences of indebtedness of the Corporation or any

         other person or any other property (including shares of a subsidiary of

         the Corporation), or any combination thereof, effected while any of the

         shares of the Series A Preferred Stock are outstanding, pursuant to any

         tender offer or exchange offer subject to Section 13(e) of the

         Securities Exchange Act of 1934, as amended (the "Exchange Act"), or

         any successor provision of law, or pursuant to any other offer

         available to substantially all holders of Common Stock; PROVIDED,

         HOWEVER, that no purchase of shares of the Corporation or any

         subsidiary thereof made in open market transactions shall be deemed a

         Pro Rata Repurchase. For purposes of this paragraph 8(n) of Division

         A-1, shares shall be deemed to have been purchased by the Corporation

         or any subsidiary thereof "in open market transactions" if they have

         been purchased substantially in accordance with the requirements of

         Rule 10b-18 as in effect under the Exchange Act on the date shares of

         the Series A Preferred Stock are initially issued by the Corporation or

         on such other terms and conditions as the Board of Directors of the

         Corporation or a committee thereof shall have determined are reasonably

         designed to prevent such purchases from having a material effect on the

         trading market for the Common Stock. The "Effective Date" of a Pro Rata

         Repurchase shall mean the applicable expiration date (including all

         extensions thereof) of any tender offer or exchange offer which is a

         Pro Rata Repurchase, or the date of purchase with respect to any Pro

         Rata Repurchase which is not a tender offer or exchange offer.

 

                  (vii) "Business Day" shall mean each day that is not a

         Saturday, Sunday or a day on which state or federally chartered banking

         institutions in Cleveland, Ohio are required or authorized to be

         closed.

 

                  (viii) "Unaffected Trading Day" shall mean each day on which

         the NYSE is open for business if the Corporation, its agents and others

         acting in concert do not purchase shares of Common Stock on such day

         and have not purchased shares of Common Stock after noon, New York

         time, on the previous day on which the NYSE was open for business.

 

         (o) Whenever an adjustment to the Conversion Ratio of the Series A

Preferred Stock is required pursuant to this Section 8 of Division A-1, the

Corporation shall forthwith place on file with the transfer agent for the Common

Stock and the Series A Preferred Stock if there be one, and with the Secretary

of the Corporation, a statement signed by two officers of the Corporation

stating the adjusted Conversion Ratio determined as provided herein, of the

Series A Preferred Stock. Such statement shall set forth in reasonable detail

such facts as shall be necessary to show the reason and the manner of computing

such adjustment, including any

 

 

                                      -18-

<PAGE>

 

determination of Fair Market Value involved in such computation. Promptly after

each adjustment to the Conversion Ratio of the Series A Preferred Stock, the

Corporation shall mail a notice thereof and of the then prevailing Conversion

Ratio to each holder of shares of the Series A Preferred Stock.

 

         (p) In the event that the Corporation shall consummate any

consolidation, combination or merger or similar business combination transaction

pursuant to which the outstanding shares of Common Stock are by operation of law

exchanged solely for or changed, reclassified or converted solely into stock of

any successor or resulting company (including the Corporation) that constitutes

"qualifying employer securities" with respect to a holder of the Series A

Preferred Stock within the meaning of Section 409(e) of the Code and Section

407(d)(5) of the Employee Retirement Income Security Act of 1974, as amended, or

any successor provisions of law, and, if applicable, for a cash payment in lieu

of fractional shares, if any, then subject to the Corporation's right to redeem

the Series A Preferred Stock under Section 5(a)(i) of this Division A-1, the

shares of the Series A Preferred Stock of such holder shall in connection

therewith be assumed by and shall become preferred stock of such successor or

resulting company, having in respect of such company insofar as possible the

same powers, preferences and relative, participating, optional or other special

rights (including the redemption rights provided by Section 5 of this Division

A-1 and this Section 8 of Division A-1), and the qualifications, limitations or

restrictions thereon, that the Series A Preferred Stock had immediately prior to

such transaction, except that after such transaction each share of the Series A

Preferred Stock shall be convertible, otherwise on the terms and conditions

provided by this Section 8 of Division A-1, into the number and kind of

qualifying employer securities so receivable by a holder of the number of shares

of Common Stock into which such shares of the Series A Preferred Stock could

have been converted immediately prior to such transaction; PROVIDED, HOWEVER,

that if by virtue of the structure of such transaction, a holder of Common Stock

is required to make an election with respect to the nature and kind of

consideration to be received in such transaction, which election cannot

practicably be made by the holders of the Series A Preferred Stock, then the

shares of Series A Preferred Stock shall, by virtue of such transaction and on

the same terms as apply to the holders of Common Stock, be converted into or

exchanged for the aggregate amount of stock, securities, cash or other property

(payable in kind) receivable by a holder of the number of shares of Common Stock

into which such shares of Series A Preferred Stock could have been converted

immediately prior to such transaction if such holder of Common Stock failed to

exercise any rights of election to receive any kind or amount of stock,

securities, cash or other property (other than such qualifying employer

securities and a cash payment, if applicable, in lieu of fractional shares)

receivable upon such transaction (provided that, if the kind or amount of

qualifying employer securities receivable upon such transaction is not the same

for each non-electing share, then the kind and amount of qualifying employer

securities receivable upon such transaction for each non-electing share shall be

the kind and amount so receivable per share by a plurality of the non-electing

shares). The rights of the Series A Preferred Stock as preferred stock of such

successor or resulting company shall successively be subject to adjustments

pursuant to this Section 8 of Division A-1 after any such transaction as nearly

equivalent to the adjustments provided for by such Section prior to such

transaction. The Corporation shall not consummate any such merger, consolidation

or similar transaction unless all then outstanding shares of the Series A

Preferred Stock shall be assumed and authorized by the successor or resulting

company as aforesaid.

 

 

                                      -19-

<PAGE>

 

         (q) In the event that the Corporation shall consummate any

consolidation, combination or merger or similar business combination transaction

pursuant to which the outstanding shares of Common Stock are by operation of law

exchanged for or changed, reclassified or converted into other stock or

securities or cash or any other property, or any combination thereof, other than

any such consideration which is constituted solely of qualifying employer

securities (as referred to in paragraph (p) of this Section 8 of Division A-1)

and cash payments, if applicable, in lieu of fractional shares, outstanding

shares of the Series A Preferred Stock shall, without any action on the part of

the Corporation or any holder thereof (but subject to paragraph (r) of this

Section 8 of Division A-1), be automatically converted by virtue of such merger,

combination, consolidation or similar transaction immediately prior to its

consummation into the number of shares of Common Stock into which such shares of

the Series A Preferred Stock could have been converted at such time so that each

share of the Series A Preferred Stock shall, by virtue of such transaction and

on the same terms as apply to the holders of Common Stock, be converted into or

exchanged for the aggregate amount of stock, securities, cash or other property

(payable in like kind) receivable by a holder of the number of shares of Common

Stock into which such shares of the Series A Preferred Stock could have been

converted immediately prior to such transaction; PROVIDED, HOWEVER, that if by

virtue of the structure or such transaction, a holder of Common Stock is

required to make an election with respect to the nature and kind of

consideration to be received in such transaction, which election cannot

practicably be made by the holders of the Series A Preferred Stock, then the

shares of the Series A Preferred Stock shall, by virtue of such transaction and

on the same terms as apply to the holders of Common Stock, be converted into or

exchanged for the aggregate amount of stock, securities, cash or other property

(payable in kind) receivable by a holder of the number of shares of Common Stock

into which such shares of the Series A Preferred Stock could have been converted

immediately prior to such transaction if such holder of Common Stock failed to

exercise any rights of election as to the kind or amount of stock, securities,

cash or other property receivable upon such transaction (provided that, if the

kind or amount of stock, securities, cash or other property receivable upon such

transaction is not the same for each non-electing share, then the kind and

amount of stock, securities, cash or other property receivable upon such

transaction for each non-electing share shall be the kind and amount so

receivable per share by a plurality of the non-electing shares.)

 

         (r) In the event the Corporation shall enter into any agreement

providing for any consolidation, combination or merger or similar business

combination transaction described in paragraph (q) of this Section 8 of Division

A-1, then the Corporation shall as soon as practicable thereafter (and in any

event at least ten (10) Business Days before consummation of such transaction)

give notice of such agreement and the material terms thereof to each holder of

the Series A Preferred Stock and each such holder shall have the right to elect,

by written notice to the Corporation, to receive, upon consummation of such

transaction (if and when such transaction is consummated), from the Corporation

or the successor of the Corporation, in redemption and retirement of the Series

A Preferred Stock, a cash payment equal to the amount payable in respect of

shares of the Series A Preferred Stock upon redemption pursuant to Section 5 of

Division A-1. No such notice of redemption shall be effective unless given to

the Corporation prior to the close of business on the fifth Business Day prior

to consummation of such transaction, unless the Corporation or the successor of

the Corporation shall waive such prior notice, but any notice of redemption so

given prior to such time may be withdrawn by notice of withdrawal given to the

Corporation prior to the close of business on the fifth Business Day prior to

consummation of such transaction.

 

 

                                      -20-

<PAGE>

 

         (s) Any shares of the Series A Preferred Stock acquired by the

Corporation by reason of the conversion or redemption of such shares as provided

hereby, or otherwise so acquired, shall except for shares of the Series A

Preferred Stock that have been redeemed pursuant to Section 5(b) of this

Division A-1, which shares may be reissued to the trustee of the Plan, be

cancelled as shares of Series A Preferred Stock and restored to the status of

authorized but unissued shares of the Serial Preferred Stock, without par

value, of the Corporation, undesignated as to series, and may thereafter be

reissued as part of a new series of such preferred stock as permitted by law.

 

         (t) All notices referred to herein shall be in writing, and all notices

hereunder shall be deemed to have been given upon the earlier of receipt thereof

or three (3) Business Days after the mailing thereof if sent by registered mail

(unless first-class mail shall be specifically permitted for such notice under

the terms hereof) with postage prepaid, addressed: (i) if to the Corporation, to

its office at 1000 Lakeside Avenue, Cleveland, Ohio 44114 (Attention: Secretary)

or to the transfer agent for the Series A Preferred Stock, or other agent of the

Corporation designated as permitted herein or (ii) if to any holder of the

Series A Preferred Stock or Common Stock, as the case may be, to such holder at

the address of such holder as listed in the stock record books of the

Corporation (which may include the records of any transfer agent for the Series

A Preferred Stock or Common Stock, as the case may be) or (iii) to such other

address as the Corporation or any such holder, as the case may be, shall have

designated by notice similarly given.

 

         (u) In the event that, at any time as a result of an adjustment made

pursuant to Section 8 of Division A-1, the holder of any share of the Series A

Preferred Stock upon thereafter surrendering such shares for conversion shall

become entitled to receive any shares or other securities of the Corporation

other than shares of Common Stock, the Conversion Ratio in respect of such other

shares or securities so receivable upon conversion of shares of Series A

Preferred Stock shall thereafter be adjusted, and shall be subject to further

adjustment from time to time, in a manner and on terms as nearly equivalent as

practicable to the provisions with respect to Common Stock contained in Section

8 of Division A-1, and the provisions of each of the other Sections hereof with

respect to the Common Stock shall apply on like or similar terms to any such

other shares or securities.

 

         (v) The Corporation shall pay any and all stock transfer and

documentary stamp taxes that may be payable in respect of any issuance or

delivery of shares of the Series A Preferred Stock or shares of Common Stock or

other securities issued on account of the Series A Preferred Stock pursuant

hereto or certificates representing such shares or securities. The Corporation

shall not, however, be required to pay any such tax which may be payable in

respect of any transfer involved in the issuance or delivery of shares of the

Series A Preferred Stock or Common Stock or other securities in a name other

than that in which the shares of the Series A Preferred Stock with respect to

which such shares or other securities are issued or delivered were registered,

or in respect of any payment to any person with respect to any such shares or

securities other than a payment to the registered holder thereof, and shall not

be required to make any such issuance, delivery or payment unless and until the

person otherwise entitled to such issuance, delivery or payment has paid to the

Corporation the amount of any such tax or has established, to the satisfaction

of the Corporation, that such tax has been paid or is not payable.

 

 

                                      -21-

<PAGE>

 

         (w) In the event that a holder of shares of the Series A Preferred

Stock shall not by written notice designate the name in which shares of Common

Stock to be issued upon conversion of such shares should be registered or to

whom payment upon redemption of shares of the Series A Preferred Stock should be

made or the address to which the certificate or certificates representing such

shares, or such payment, should be sent, the Corporation shall be entitled to

register such shares and make such payment, in the name of the holder of such

Series A Preferred Stock as shown on the records of the Corporation and to send

the certificate or certificates representing such shares, or such payment, to

the address of such holder shown on the records of the Corporation.

 

         (x) The Corporation may appoint, and from time to time discharge and

change, a transfer agent for the Series A Preferred Stock. Upon any such

appointment or discharge of a transfer agent, the Corporation shall send notice

thereof by first-class mail, postage prepaid, to each holder of record of the

Series A Preferred Stock.

 

 

                                   DIVISION B

 

                        EXPRESS TERMS OF THE COMMON STOCK

 

         The Common Stock shall be subject to the express terms of the Serial

Preferred Stock and any series thereof. Each share of Common Stock shall be

equal to every other share of Common Stock. The holders of shares of Common

Stock shall be entitled to one vote for each share of such stock upon all

matters presented to the shareholders.

 

         FIFTH:   The Corporation, by action of its board of directors, may

purchase any issued shares of the Corporation.

 

         SIXTH:   These Eleventh Amended Articles of Incorporation supersede the

heretofore existing Tenth Amended Articles of Incorporation and all amendments

thereto.

 

         IN WITNESS WHEREOF, the above-named officers, acting for and on behalf

of the Corporation, have subscribed their names this 28th day of April, 1989.

 

 

                                      /s/ Adolph Posnick

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

                                      Chairman of the Board of Directors

 

 

                                      /s/ Paul B. Campbell

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

                                      Secretary

 

 

 



                           CERTIFICATE OF AMENDMENT TO
 
                      AMENDED ARTICLES OF INCORPORATION OF
 
                                FERRO CORPORATION
 
 
         Albert C. Bersticker, President and Paul B. Campbell, Secretary of
Ferro Corporation (the "Corporation"), an Ohio corporation for profit with its
principal location at Cleveland, Ohio, do hereby certify that a meeting of the
shareholders of the Corporation entitling them to vote on the proposal to amend
the Amended Articles of Incorporation thereof, as contained in the following
resolutions, was duly called and held on April 22, 1994, at which meeting a
quorum of such shareholders was present in person or in proxy, and that by the
affirmative vote of the shareholders entitling them to exercise at least
two-thirds of the voting power of the Corporation on such proposal the following
resolution was adopted to amend the Amended Articles of Incorporation:
 
                  RESOLVED, by the shareholders of Ferro Corporation that the
                  first paragraph of Article Fourth of the Amended Articles of
                  Incorporation of the Corporation be and the same is hereby
                  amended so that, as amended, such Article shall be and read as
                  follows:
 
                                    "FOURTH: The number of shares which the
                           Corporation is authorized to have outstanding is
                           152,000,000, consisting of 2,000,000 shares of Serial
                           Preferred Stock without Par Value (hereinafter called
                           "Serial Preferred Stock") and 150,000,000 shares of
                           Common Stock of the Par Value of $1.00 each
                           (hereinafter called "Common Stock")."
 
 
<PAGE>
 
 
         IN WITNESS WHEREOF, the above-named officers, acting for and on behalf
of the Corporation, have subscribed their names this 21st day of December, 1994.
 
 
                                               /s/ Albert C. Bersticker
                                               ----------------------------
                                               Albert C. Bersticker
                                               President
 
 
                                               /s/ Paul B. Campbell
                                               ----------------------------
                                               Paul B. Campbell
                                               Secretary

 

 



                           CERTIFICATE OF AMENDMENT TO
 
                      AMENDED ARTICLES OF INCORPORATION OF
 
                                FERRO CORPORATION
 
 
         Albert C. Bersticker, Chairman and Chief Executive Officer, and Mark A.
Cusick, Secretary of Ferro Corporation (the "Corporation"), an Ohio corporation
for profit with its principal location at Cleveland, Ohio, do hereby certify
that a meeting of the shareholders of the Corporation entitling them to vote on
the proposal to amend the Amended Articles of Incorporation of the Corporation,
was duly called and held on April 24, 1998, at which meeting a quorum of such
shareholders was present in person or in proxy, and that by the affirmative vote
of the shareholders entitling them to exercise at least two-thirds of the voting
power of the Corporation on such proposal, the following amendment to the
Amended Articles of Incorporation was adopted:
 
                           "FOURTH: The number of shares which the Corporation
                  is authorized to have outstanding is 302,000,000 consisting of
                  2,000,000 shares of Serial Preferred Stock without Par Value
                  (hereinafter called "Serial Preferred Stock") and 300,000,000
                  shares of Common Stock of the Par Value of $1.00 each
                  (hereinafter called "Common Stock")."
 
         IN WITNESS WHEREOF, the above-named officers, acting for and on behalf
of the Corporation, have subscribed their names this 17th day of June, 1998.
 
                                    /s/ Albert C. Bersticker
                                    --------------------------------------
                                    Albert C. Bersticker
                                    Chairman & Chief Executive Officer
 
 
                                    /s/ Mark A. Cusick
                                    --------------------------------------
                                    Mark A. Cusick
                                    Secretary

 

 

 

AMENDMENT

RESOLVED, that upon the effective date of the relocation to 6060 Parkland Boulevard, Mayfield Heights, Ohio, the Eleventh Amended Articles of Incorporation of the Company be and hereby are, amended by changing the Second Article thereof so that, as amended, said Article shall be and read as follows:

The place in the State of Ohio where its principal office is to be located is the City of Mayfield Heights, Cuyahoga County.

FURTHER RESOLVED, that the Certificate of Amendment of the Eleventh Amended Articles of Incorporation shall become effective upon filing with the Secretary of State of the State of Ohio.

 

 

 

AMENDMENT

Adoption of Majority Voting Policy

On August 16, 2012, the Board adopted the "Policy of the Board of Directors Relating to Majority Voting" (the "Majority Voting Policy"). Pursuant to the Majority Voting Policy, in the event of an uncontested election — an election in which the number of nominees for director does not exceed the number of directors to be elected — where a nominee for director receives a greater number of votes "withheld" from his or her election than votes "for" his or her election such director is expected to tender his or her resignation as a director to the Board promptly following the certification of the election results. The Governance & Nomination Committee of the Board will then consider each resignation tendered and recommend to the Board whether to accept or reject it. If the Board rejects the director’s resignation, the director will continue to serve for the remainder of his or her term and until his or her successor is duly elected, or his or her earlier death, resignation or removal. If the Board accepts the director’s resignation, then the Board, in its sole discretion, may fill any resulting vacancy or may decrease the number of directors comprising the Board. The Governance & Nomination Committee, in making its recommendation, and the Board, in making its decision, may consider any factors or other information that they consider appropriate. 

 

[As Filed: 08-22-2012]