P. H. GLATFELTER COMPANY

 

                           ARTICLES OF INCORPORATION

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     1.   The name of the corporation is

 

                            P. H. GLATFELTER COMPANY

 

     2.   The location and post office address of its registered office in this

Commonwealth is Spring Grove, York County, Pennsylvania.

 

     3.   The purpose or purposes for which the corporation is organized are to

acquire by purchase, or otherwise, own, buy, sell and deal in standing timber

lands, and to buy, cut, haul, drive and sell timber and logs, and to saw and

otherwise work the same, and to buy, manufacture and sell lumber, bark, wood,

pulp and all products made therefrom; to manufacture, produce, purchase, sell

and deal in any and all kinds of papers, and in all ingredients, products and

compounds thereof, and in any and all materials that now are or hereafter may be

used in or in connection with such manufacture, including the manufacture of

wood pulp and any other fibre; and to engage in, and to do, any other lawful act

concerning any or all lawful business for which corporations may be incorporated

under the Business Corporation Law of the Commonwealth of Pennsylvania,

including, but not limited to, manufacturing, processing, owning, using and

dealing in personal property of every class and description, engaging in

research and development, furnishing services, and acquiring, owning, using and

disposing of real property of any nature whatsoever.

 

     4.   The term for which the corporation is to exist is perpetual.

 

     5.   The aggregate number of shares which the corporation (hereinafter

referred to as the "Company") has authority to issue is 120,040,000 shares

divided into two classes consisting of (a) 40,000 shares of Preferred Stock of

the par value of $50 each; and (b) 120,000,000 shares of Common Stock of the par

value of $.01 each.  Each share of Common Stock of the par value of $.01 each

which is issued and outstanding when this provision becomes effective, including

each share owned by the Company, shall be reclassified as two fully paid and

non-assessable shares of Common Stock of the par value of $.01 each, which shall

be included in the 120,000,000 shares of Common Stock herein authorized.

 

     The designations and the powers, preferences and rights, and the

qualifications, limitations or restrictions thereof, of the classes of stock of

the Company which are fixed by the Articles of Incorporation, and the express

grant of authority to the Board of Directors of the Company (hereinafter

referred to as the "Board of Directors") to fix by resolution or resolutions the

designations and the powers, preferences and rights, and the qualifications,

limitations or restrictions thereof, of the shares of Preferred Stock, which are

not fixed by the Articles of Incorporation, are as follows:

 

 

                                PREFERRED STOCK

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     1.   The Preferred Stock may be issued at any time or from time to time in

any amount, not exceeding in the aggregate the total number of shares of

Preferred Stock hereinabove authorized, as Preferred Stock of one or more

series, as hereinafter provided, and for such lawful consideration as shall be

fixed from time to time by the Board of Directors.  All shares of any one series

of Preferred Stock shall be alike in every particular, each series of Preferred

Stock shall be distinctively designated by letter or descriptive words, and all

series of Preferred Stock shall rank equally and be identical in all respects

except as permitted by the provisions of Section 2 of this Article.

 

     2.   To the extent that this Article does not establish series of Preferred

Stock and fix and determine the variations in the relative rights and

preferences as between series, authority is hereby expressly granted to and

vested in the Board of Directors at any time, or from time to time, to authorize

the issue of Preferred Stock as Preferred Stock of one or more series and, in

connection with the creation of each such series, to fix by resolution or

resolutions providing for the issue of shares thereof the designations,

preferences and relative, participating, optional or other special rights, and

qualifications, limitations or restrictions thereof, of such series, to the full

extent now or hereafter permitted by the laws of the Commonwealth of

Pennsylvania, in respect of the matters set forth in the following subdivisions

(a) to (g), inclusive:

 

          (a)  The designation of such series;

 

          (b)  The dividend rate of such series;

 

          (c)  The price at, and the terms and conditions on, which shares of

such series may be redeemed, subject to the provisions of subdivision (e) of

Section 3 of this Article;

 

          (d)  The amounts payable upon shares of such series in the event of

voluntary liquidation of the Company;

 

          (e)  Subject to the limitations provided by law, whether or not the

shares of such series shall be entitled to the benefit of a sinking fund to be

applied to the purchase or redemption of shares of such series, and if so

entitled, the amount of such fund, the manner of its application and the

sinking fund redemption price;

 

          (f)  Whether or not the shares of such series shall be made

convertible into, or exchangeable for, shares of any other class or classes or

of any other series of the same or any other class or classes of stock of the

Company, and, if made so convertible or exchangeable, the conversion price or

prices, or the rates of exchange, and the adjustments, if any, at which, and

all other terms and conditions upon which, such conversion or exchange may be

made; and

 

          (g)  Whether or not the shares of such series shall be entitled to

other special rights in addition to those in this Article provided for,

including, without limitation, restrictive provisions with respect to the

issue of additional shares of stock of the same class or series or of any

other class of the Company or of any subsidiary, restrictive provisions with

respect to the payment of dividends upon, or the making of any other

distribution in respect of, or the making of any purchase or redemption of,

stock of any class of the Company or of any subsidiary, and the incurring of

indebtedness, secured or unsecured, by the Company or by any subsidiary, and,

if so, the nature thereof.

 

     The Board of Directors may from time to time authorize and direct by

resolution or resolutions an increase in the number of shares of any series of

Preferred Stock already created by specifying that any or all unissued shares of

Preferred Stock shall be assigned to and included in such series and/or a

decrease in the number of shares of any such series (but not below the number of

shares thereof then outstanding) by specifying that any or all unissued shares

of Preferred Stock previously assigned to such series shall no longer be

included therein.

 

 

                       4-1/2% Cumulative Preferred Stock

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     The series of the authorized shares of Preferred Stock of the par value of

Fifty Dollars ($50) per share designated at 4-1/2% Cumulative Preferred Stock

(hereinafter called "4-1/2% Preferred Stock"), of which 20,000 shares were

issued and at one time outstanding, shall consist of 7,000 shares; and the

shares of said series shall have, in addition to the rights and preferences granted by

law and the other provisions of this Article, the following relative rights and

preferences:

 

                    (i)   The dividend rate of the 4-1/2% Preferred Stock shall

          be four and one-half percent (4-1/2%) per share per annum, and no

          more, upon the par value thereof.

 

                    (ii)  The redemption price per share of the 4-1/2% Preferred

          Stock shall be $50 plus an amount equal to full cumulative dividends,

          as defined in Section 3(f) of this Article, thereon to the date fixed

          by the Board of Directors as the redemption date.

 

                    (iii) In the event of any voluntary liquidation,

          dissolution or winding up of the Company, the holders of the 4-1/2%

          Preferred Stock shall be entitled to receive an amount equal to the

          redemption price specified in subsection (ii) above for every share

          thereof respectively held by them, before any distribution shall be

          made to the holders of the Common Stock.

 

                    (iv)  The 4-1/2% Preferred Stock shall be entitled to the

          benefit of a sinking fund to be applied to the purchase or redemption

          of such series as follows:

 

               The 4-1/2% Preferred Stock shall be subject to redemption through

          the operation of a Sinking Fund hereinbelow provided for at the

          Sinking Fund redemption price which shall be $50 per share plus an

          amount equal to all accumulated and unpaid dividends thereon, whether

          or not earned or declared, to the date fixed for redemption.

 

               On or before March 25 in each year, if any 4-1/2% Preferred Stock

          remains outstanding or owned by the Company and if the amount in the

          Sinking Fund shall be less than the Sinking Fund redemption price of

          all outstanding 4-1/2% Preferred Stock (including 4-1/2% Preferred

          Stock owned by the Company) the Company shall, subject to the

          conditions hereinafter set forth, set aside a sum (hereinafter called

          "Sinking Fund Installment") in cash equal to the aggregate par value

          of 2-1/2% of the greatest number of shares of 4-1/2% Preferred Stock

          at any one time theretofore outstanding (including 4-1/2% Preferred

          Stock owned by the Company); provided, however, that such amount may

          be reduced, at the option of the Company, by the aggregate

          par value of such number of shares of 4-1/2% Preferred Stock

          theretofore acquired by the Company by purchase other than through the

          Sinking Fund or by voluntary redemption and not therefore used to

          reduce the amount of any Sinking Fund Installment or theretofore

          restored to the status of authorized and unissued Preferred Stock and

          classified as to series, as the Board of Directors shall specify by

          resolution.  The Company may omit to set aside in any year such

          portion of any Sinking Fund Installment as shall be in excess of the

          net income of the Company for the immediately preceding fiscal year,

          determined in accordance with sound accounting practice, after

          deducting therefrom dividend requirements during such year on all

          outstanding Preferred Stock, and the Company shall not set aside any

          Sinking Fund Installment unless full cumulative dividends on the

          Preferred Stock to the end of the then current dividend period shall

          have been paid or declared and set apart for payment.  If, however,

          the Company shall omit to set aside the full amount of any Sinking

          Fund Installment owing to any deficiency in net income as above

          provided, or if for any other reason (including the fact that

          dividends have not been provided for) the Company shall fail to set

          aside on or before the date due the full amount of any Sinking Fund

          Installment, or if the Company shall fail to apply amounts in the

          Sinking Fund as herein provided, the Company shall be deemed to be in

          arrears in connection with its Sinking Fund obligations in respect of

          the 4-1/2% Preferred Stock until such time as the full amount which

          the Company shall have omitted or failed to set aside shall have been

          set aside and applied as herein provided.

 

               From each Sinking Fund Installment, together with all amounts

          from prior installments not theretofore applied to the purchase or

          redemption of 4-1/2% Preferred Stock, the Company shall use its best

          efforts to purchase, from time to time, in the open market, on any

          stock exchange or at private sale, as the Board of Directors may

          determine, and at the lowest available price (not exceeding the

          Sinking Fund redemption price) such number of outstanding shares of 4-

          1/2% Preferred Stock as the amount then in the Sinking Fund shall be

          sufficient to purchase, as nearly as may be.  On July 1 of each year,

          if the unexpended balance in the Sinking Fund shall be sufficient to

          redeem one hundred or more shares of 4-1/2% Preferred Stock (or less

          than one hundred shares if the Company so desires) the Company shall

          apply such unexpended balance to the redemption on August 1 of such

          year of such number of outstanding

          shares of 4-1/2% Preferred Stock at the Sinking Fund redemption price

          as said balance shall be sufficient to redeem, as nearly as may be.

          Any such redemption shall be accomplished in the manner and with the

          effect provided in Section 3(e) of this Article.

 

                    (v)   The 4-1/2% Preferred Stock shall not be convertible.

 

                    (vi)  So long as any shares of 4-1/2% Preferred Stock shall

          be outstanding, the Company shall not create, assume or guarantee or

          permit any subsidiary to create, assume or guarantee at any one time

          or from time to time any funded debt in excess of $36,000,000 at any

          one time outstanding (except any purchase money mortgage upon property

          acquired after January 1, 1947, and any mortgage to which such

          property may be subject at the time of its acquisition) unless notice

          of the intention of the Company to create, assume or guarantee such

          funded debt shall be given to the holders of the 4-1/2% Preferred

          Stock and a meeting of said shareholders called upon thirty days'

          written notice or on such longer notice as may be provided by law.  At

          said meeting the holders of 4-1/2% Preferred Stock shall vote for or

          against the creation, assumption or guaranty of such proposed funded

          debt and the negative vote of the holders of forty percent (40%) of

          the 4-1/2% Preferred Stock then outstanding shall absolutely prevent

          the creation, assumption or guaranty of any such funded debt by the

          Company.

 

 

              4-5/8% Cumulative Preferred Stock, Series of 1955

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          The series of the authorized shares of Preferred Stock of the par

value of Fifty Dollars ($50) per share designated as 4-5/8% Cumulative Preferred

Stock, Series of 1955 (hereinafter called "Preferred Stock, Series of 1955"), of

which 40,000 shares were issued and at one time outstanding, shall consist of

21,000 shares; and the shares of said series shall have, in addition to the

rights and preferences granted by law and the other provisions of this Article,

the following relative rights and preferences:

 

                    (i)   The dividend rate of the Preferred Stock, Series of

          1955, shall be four and five-eighths percent (4-5/8%) per share per

          annum, and no more, upon the par value thereof.

 

                    (ii)  The redemption price per share of the Preferred Stock,

          Series of 1955, shall be $50.75 plus

          an amount equal to full cumulative dividends, as defined in Section

          3(f) of this Article, thereon to the date fixed by the Board of

          Directors as the redemption date.

 

                    (iii) In the event of any voluntary liquidation,

          dissolution or winding up of the Company, the holders of the Preferred

          Stock, Series of 1955, shall be entitled to receive an amount equal to

          the redemption price specified in subsection (ii) above for every

          share thereof respectively held by them, before any distribution shall

          be made to the holders of the Common Stock.

 

                    (iv)  The Preferred Stock, Series of 1955, shall be entitled

          to the benefit of a sinking fund to be applied to the purchase or

          redemption of such series as follows:

 

               The Preferred Stock, Series of 1955, shall be subject to

          redemption through the operation of a Sinking Fund for the Preferred

          Stock, Series of 1955, hereinbelow provided for at the Sinking Fund

          redemption price which shall be $50 per share plus an amount equal to

          all accumulated and unpaid dividends thereon, whether or not earned or

          declared, to the date fixed for redemption.

 

               On or before March 25 in each year, if any Preferred Stock,

          Series of 1955, remains outstanding or owned by the Company and if the

          amount in the Sinking Fund shall be less than the Sinking Fund

          redemption price of all outstanding Preferred Stock, Series of 1955

          (including Preferred Stock, Series of 1955, owned by the Company), the

          Company shall, subject to the conditions hereinafter set forth, set

          aside a sum (hereinafter called "Sinking Fund Installment") in cash

          equal to the aggregate par value of 2-1/2% of the greatest number of

          shares of Preferred Stock, Series of 1955, at any one time theretofore

          outstanding (including Preferred Stock, Series of 1955, owned by the

          Company); provided, however, that any such amount may be reduced, at

          the option of the Company, by the aggregate par value of such number

          of shares of Preferred Stock, Series of 1955, theretofore acquired by

          the Company by purchase other than through the Sinking Fund or by

          voluntary redemption and not therefore used to reduce the amount of

          any Sinking Fund Installment or theretofore restored to the status of

          authorized and unissued Preferred Stock and classified as to series,

          as the Board of Directors shall specify

          by resolution.  The Company may omit to set aside in any year such

          portion of any Sinking Fund Installment as shall be in excess of the

          net income of the Company for the immediately preceding fiscal year,

          determined in accordance with sound accounting practice, after

          deducting therefrom dividend requirements during such year on all

          outstanding Preferred Stock, and the Company shall not set aside any

          Sinking Fund Installment unless full cumulative dividends on all

          outstanding Preferred Stock to the end of the then current dividend

          period shall have been paid or declared and set apart for payment.

          If, however, the Company shall omit to set aside the full amount of

          any Sinking Fund Installment owing to any deficiency in net income as

          above provided, or if for any other reason (including the fact that

          dividends have not been provided for) the Company shall fail to set

          aside on or before the date due the full amount of any Sinking Fund

          Installment, or if the Company shall fail to apply amounts in the

          Sinking Fund as herein provided, the Company shall be deemed to be in

          arrears in connection with its Sinking Fund obligations in respect of

          the Preferred Stock, Series of 1955, until such time as the full

          amount which the Company shall have omitted or failed to set aside

          shall have been set aside and applied as herein provided.

 

               From each Sinking Fund Installment, together with all amounts

          from prior installments not theretofore applied to the purchase or

          redemption of Preferred Stock, Series of 1955, the Company shall use

          its best efforts to purchase, from time to time, in the open market,

          on any stock exchange or at private sale, as the Board of Directors

          may determine, and at the lowest available price (not exceeding the

          Sinking Fund redemption price) such number of outstanding shares of

          Preferred Stock, Series of 1955, as the amount then in the Sinking

          Fund shall be sufficient to purchase, as nearly as may be.  On July 1

          of each year, if the unexpended balance in the Sinking Fund shall be

          sufficient to redeem one hundred or more shares of Preferred Stock,

          Series of 1955, (or less than one hundred shares if the Company so

          desires) the Company shall apply such unexpended balance to the

          redemption on August 1 of such year of such number of outstanding

          shares of Preferred Stock, Series of 1955, at the Sinking Fund

          redemption price as said balance shall be sufficient to redeem, as

          nearly as may be.  Any such redemption shall be accomplished in the

          manner and with the effect provided in Section 3(e) of this Article.

 

                    (v)   The Preferred Stock, Series of 1955, shall not be

          convertible.

 

                    (vi)  The Preferred Stock, Series of 1955, shall be entitled

          to no other special rights in addition to those provided herein and in

          the other provisions of this Article.

 

          3.   (a)  The holders of shares of Preferred Stock of each series

shall be entitled to receive, when and as declared by the Board of Directors,

dividends at the rate for such series fixed in Section 2 of this Article or

fixed by resolution or resolutions as provided in Section 2 of this Article and

no more, payable quarterly on the first days of February, May, August and

November in each year (the quarterly periods ending on the first days of such

months, respectively, being herein designated as dividend periods), in each case

from the date of cumulation, as hereinafter in subdivision (f) of this Section 3

defined, of such series.  Such dividends shall be cumulative (whether or not in

any dividend period or periods there shall be net profits or net assets of the

Company legally available for the payment of such dividends), so that if at any

time full cumulative dividends upon the outstanding Preferred Stock of all

series to the end of the then current dividend period shall not have been paid

or declared and set apart for payment, the amount of the deficiency shall be

fully paid, but without interest, either by redemption and the payment or

deposit, as provided in subdivision (e) hereof, of the redemption price thereof

or by dividends in the amount of such deficiency paid or declared and set apart

for payment on each such series, before any sum or sums shall be set aside for

or applied to the purchase or redemption of Preferred Stock of any series,

Common Stock or any other class of stock ranking junior to the Preferred Stock

and before any dividend shall be paid or declared or any other distribution

ordered or made upon the Common Stock or any other class of stock ranking junior

to the Preferred Stock, provided that any moneys theretofore set aside for any

sinking fund provided for in Section 2 of this Article or by resolution or

resolutions as provided in Section 2 of this Article may be applied to the

purchase or redemption of the Preferred Stock in accordance with the terms of

Section 2 of this Article or in accordance with the terms of such resolution or

resolutions.

 

          All dividends declared on the Preferred Stock of the respective series

outstanding shall be declared pro rata, so that the amounts of dividends

declared per share on the Preferred Stock of different series shall in all cases

bear to each other the same ratio that full cumulative dividends on such

respective series bear to each other.

 

               (b)  After full cumulative dividends to the end of the then

current dividend period upon the outstanding Preferred Stock of all series

shall have been paid or declared and set apart for payment, and before any sum

or sums shall be set aside for, or applied to, the purchase of Common Stock or

any other class of stock ranking junior to the Preferred Stock and before any

dividend shall be paid or declared or any other distribution ordered or made

upon the Common Stock or any other class of stock ranking junior to the

Preferred Stock, the Company shall set aside as a sinking fund, when and as

required, out of any funds legally available for that purpose, in respect of

each series of Preferred Stock any shares of which shall at the time be

outstanding and in respect of which a sinking fund for the purchase or

redemption thereof has been provided for in Section 2 of this Article or by

resolution or resolutions as provided in Section 2 of this Article, the sum or

sums required by the terms of Section 2 of this Article or by the terms of

such resolution or resolutions as a sinking fund to be applied in the manner

specified therein.

 

          Preferred Stock of any series purchased or redeemed by the use of

sinking fund moneys or purchased or redeemed otherwise than by the use of

sinking fund moneys and applied by the Company as a credit against sinking fund

payments, shall be cancelled and shall not be reissued.

 

               (c)  After full cumulative dividends to the end of the then

current dividend period upon the Preferred Stock of all series then outstanding

shall have been paid or declared and set apart for payment, and after the

Company shall have complied with the provisions of the foregoing subdivision (b)

of this Section 3 in respect of any and all amounts then or theretofore required

to be set aside or applied in respect of any sinking fund mentioned in said

subdivision (b), then and not otherwise, the holders of the Common Stock shall,

subject to the provisions of this Article and of any resolution providing for

the issue of any series of the Preferred Stock, be entitled to receive such

dividends as may be declared by the Board of Directors.

 

               (d)  In the event of any liquidation, dissolution or winding

up of the Company, the holders of the Preferred Stock of each series then

outstanding shall be entitled to receive out of the assets of the Company

available for distribution to its stockholders, whether from capital, surplus or

earnings, before any distribution of the assets shall be made to the holders of

the Common Stock or any other class of stock ranking junior to the Preferred

Stock, if such liquidation, dissolution or winding up shall be involuntary, the

sum of $50 for every share of their holdings of Preferred Stock of such series

plus full cumulative dividends thereon to the date of final distribution, and if

such liquidation, dissolution or winding up shall be voluntary, the

amount fixed in Section 2 of this Article or fixed by resolution or resolutions

as provided in Section 2 of this Article for every share of their holdings of

Preferred Stock of such series; and in the event of any such distribution of

assets, the holders of the Common Stock shall be entitled, to the exclusion of

the holders of the Preferred Stock, to share ratably in all assets of the

Company thereafter remaining according to the number of shares of the Common

Stock held by them respectively.  If upon any liquidation, dissolution or

winding up of the Company the amounts payable on or with respect to the

Preferred Stock of all series are not paid in full, the holders of shares of

Preferred Stock of all series shall share ratably in any distribution of assets

in proportion to the respective amounts which would be payable in respect of the

shares held by them upon such distribution if all amounts payable on or with

respect to the Preferred Stock of all series were paid in full.  Neither the

merger or consolidation of the Company into or with any other corporation, nor

the merger or consolidation of any other corporation into or with the Company,

nor a sale or lease of all or substantially all the assets of the Company, shall

be deemed to be a liquidation, dissolution or winding up of the Company.

 

               (e)  The Preferred Stock of all series, or of any series

thereof, or any part of any series thereof, at any time outstanding, may be

redeemed by the Company, at its election expressed by resolution of the Board of

Directors, at any time or from time to time (which time, when fixed in each

case, is hereinafter called the "redemption date"), upon not less than thirty

(30) days' previous notice to the holders of record of the Preferred Stock to be

redeemed, given by mail in such manner as may be prescribed by resolution or

resolutions of the Board of Directors, at the redemption price or prices fixed

in Section 2 of this Article or fixed by resolution or resolutions as provided

in Section 2 of this Article for the Preferred Stock to be redeemed.  If less

than all the outstanding shares of the Preferred Stock of any series is to be

redeemed, the redemption may be made either by lot or pro rata in such manner as

may be prescribed by resolution of the Board of Directors.  The Company may, if

it so elects, provide moneys for the payment of the redemption price by

depositing the amount thereof, after notice of redemption has first been mailed,

for the account of the holders of Preferred Stock entitled thereto with a bank

or trust company doing business in the City of Philadelphia, Pennsylvania, or in

the Borough of Manhattan, in the City of New York, and having capital and

surplus of at least Five Million Dollars ($5,000,000) (the date of any such

deposit being hereinafter called the "date of deposit").  In such event, the

notice of redemption shall include a statement of the date of deposit and the

name and address of the bank or trust company with which the deposit will be

made.  From and after the redemption date (unless default shall be made by the

Company in providing moneys for the

payment of the redemption price), or, if the Company shall make such deposit on

or before the date specified therefor in the notice, then on and after the date

of deposit, all rights of the holders thereof as stockholders of the Company

shall cease and terminate, except the right to receive the redemption price as

hereinafter provided and except any conversion rights not theretofore expired.

Anything herein or in any resolution providing for the issue of any series of

the Preferred Stock to the contrary notwithstanding, said redemption price shall

include an amount equal to full cumulative dividends on the Preferred Stock to

be redeemed to the redemption date thereof, and the Company shall not be

required to declare or pay on such Preferred Stock to be redeemed, and the

holders thereof shall not be entitled to receive, any dividends in addition to

those thus reflected in the redemption price; provided, however, that the

Company may pay in regular course any dividends thus reflected in the redemption

price either to the holders of record on the record date fixed for determination

of stockholders entitled to receive such dividends (in which event, anything

herein to the contrary notwithstanding, the amount so deposited need not include

any dividends so paid or to be paid), or as part of the redemption price upon

surrender of the certificates for the shares redeemed.  On and after the

redemption date, or, if the Company shall elect to deposit the moneys for such

redemption as herein provided, then on and after the date of deposit, the

holders of record of the Preferred Stock to be redeemed shall be entitled to

receive the redemption price upon actual delivery to the Company or, in the

event of such a deposit, to the bank or trust company with which such deposit is

made, of certificates for the number of shares to be redeemed (such

certificates, if required, to be properly stamped for transfer and duly endorsed

in blank or accompanied by proper instruments of assignment and transfer duly

endorsed in blank).  Any moneys so deposited which shall remain unclaimed by the

holders of such Preferred Stock at the end of six (6) years after the redemption

date shall be paid by such bank or trust company to the Company; provided,

however, that all moneys so deposited, which shall not be required for such

redemption because of the exercise of any right of conversion or exchange, shall

be returned to the Company forthwith.  Any interest accrued on moneys so

deposited shall be paid to the Company from time to time.

 

          Preferred Stock redeemed pursuant to the provisions of this

subdivision (e) shall be cancelled and shall not be reissued.

 

               (f)  The term "full cumulative dividends" whenever used in

this Article with reference to any share of any series of the Preferred Stock

shall be deemed to mean (whether or not in any dividend period, or any part

thereof, in respect of which such term is used there shall have been net profits

or net assets

of the Company legally available for the payment of such dividends) that amount

which shall be obtained by multiplying the full dividend rate for such series

fixed in Section 2 of this Article or fixed by resolution or resolutions as

provided in Section 2 of this Article by the period of time elapsed from the

date of cumulation of such series to the date as of which full cumulative

dividends are to be computed (including the elapsed portion of the current

dividend period), less the amount of all dividends paid, or deemed paid upon

such share.

 

          The term "date of cumulation" as used in this Article with reference

to any series of the Preferred Stock shall be deemed to mean the February 1, May

1, August 1 or November 1 on which, or next preceding the date on which, shares

of Preferred Stock of such series shall first be issued.

 

          In the event of the issue of additional Preferred Stock of any then

existing series, all dividends paid on Preferred Stock of such series prior to

the issue of such additional Preferred Stock, and all dividends declared and

payable to holders of Preferred Stock of such series of record on any date prior

to such additional issue, shall be deemed to have been paid on the additional

Preferred Stock so issued.

 

          The term "stock ranking junior to the Preferred Stock", whenever used

in this Article, shall mean any stock of the Company over which the Preferred

Stock has preference or priority in the payment of dividends or in the

distribution of assets on any dissolution, liquidation or winding up of the

Company.

 

               (g)  Except as otherwise required by the statutes of the

Commonwealth of Pennsylvania and as otherwise provided in this Article, and

subject to the provisions of the by-laws of the Company, as from time to time

amended, with respect to the closing of the transfer books and the fixing of a

record date for the determination of stockholders entitled to vote, the holders

of the Common Stock shall exclusively possess voting power for the election of

directors and for all other purposes, and the holders of the Preferred Stock

shall have no voting power and shall not be entitled to any notice of any

meeting of stockholders.

 

          Provided, however, that if and whenever a default in preferred

dividends, as hereinafter defined, shall exist, the holders of the outstanding

Preferred Stock, voting separately as a class, shall have the right to elect two

directors at the annual meeting of stockholders of the Company for the election

of directors next succeeding the occurrence of such default, and at each such

annual meeting thereafter so long and only so long as such default shall exist.

The term of office of each such director elected by the holders of the Preferred

Stock as aforesaid shall continue until the next annual meeting of stockholders of the

Company for the election of directors, notwithstanding that prior to the end of

such term the default in preferred dividends shall cease to exist.  If, prior to

the end of such term, a vacancy in the office of such director shall occur by

reason of his death, resignation, removal or disability, or for any other cause,

such vacancy shall be filed for the remainder of the term in the manner provided

in the by-laws of the Company; provided, that, if such vacancy shall be filled

by election by the stockholders at a meeting thereof, the holders of the then

outstanding Preferred Stock, voting separately as a class, shall have the right

to fill such vacancy for the remainder of the term, unless at the time of such

election o default in preferred dividends shall exist.  At any meeting of

stockholders at which the holders of Preferred Stock shall be entitled to vote

for the election of a director or directors as aforesaid, the holders of twenty-

five percent (25%) of the then outstanding Preferred Stock present in person or

by proxy shall be sufficient to constitute a quorum for the election of such

director or directors and for no other purpose, and the vote of the holders of a

majority of the Preferred Stock so present at such meeting at which there shall

be a quorum, shall be sufficient to elect such director or directors.  For the

purposes of this subdivision (g), a default in preferred dividends shall be

deemed to have occurred whenever, on any dividend payment date, the amount of

unpaid full cumulative dividends upon any series of the Preferred Stock shall be

equivalent to eight (8) quarterly dividends thereon or more, and, having so

occurred, such default shall be deemed to exist thereafter until, but only

until, full cumulative dividends on all shares of Preferred Stock then

outstanding of each and every series, to the end of the last preceding dividend

period, shall have been paid.  Nothing herein contained shall be deemed to

prevent an amendment of the by-laws of the Company, in the manner therein

provided, which shall increase the number of directors of the Company or to

prevent any other change in the number of directors of the Company.

 

               (h)  So long as any shares of the Preferred Stock of any

series shall be outstanding, the Company shall not without the consent given by

resolution adopted at a meeting duly called for that purpose of the holders of

record of at least two-thirds of the number of shares of the Preferred Stock of

all series then outstanding:

 

                    (1) alter or change the designations or the powers,

preferences or rights, or the qualifications, limitations or restrictions

thereof, of the Preferred Stock or of any series thereof in any material respect

prejudicial to the holders thereof;

  

                    (2) create any new class of stock having preference over the

Preferred Stock as to dividends or assets, or create any obligation or security

of the Company convertible into shares of stock of any class having such

preference over the Preferred Stock;

 

                    (3) sell, transfer or lease all, or substantially all, the

assets of the Company unless as a part of such transaction or prior thereto

the Preferred Stock of all series shall be retired or called for redemption

and the necessary funds therefor deposited as provided in subdivision (e)

hereof; or

 

                    (4) effect a statutory merger or consolidation of or with

any other corporation or corporations; provided that such consent shall not be

necessary if as a result of such merger or consolidation (A) the Company shall

be the surviving corporation and the Preferred Stock then outstanding shall

continue to be outstanding, there shall be no alteration or change in the

designations or the powers, preferences or rights, or the qualifications,

limitations or restrictions thereof, in any material respect prejudicial to

the holders thereof, there shall be no increase in the authorized number of

shares of Preferred Stock, and there shall not be created any new class of

stock having preference over, or being on a parity with, the Preferred Stock

as to dividends or assets, or (B) if the Company shall not be the surviving

corporation, the shares of the Preferred Stock of each series then outstanding

shall be converted into, or be exchangeable for, a like number of shares of

preferred stock of the surviving corporation which preferred stock shall have

substantially the same designations, powers, preferences and rights, and

qualifications, limitations or restrictions thereof, as the Preferred Stock of

such series, and there shall not be outstanding or created any class of stock

of the surviving corporation having preference over, or being on a parity

with, such preferred stock as to dividends or assets.

 

               (i)  So long as any shares of the Preferred Stock of any

series shall be outstanding, the Company shall not, without the consent given by

resolution adopted at a meeting duly called for that purpose of the holders of

record of at least a majority of the number of shares of the Preferred Stock of

all series then outstanding, increase the authorized number of shares of the

Preferred Stock or create any new class of stock which shall be on a parity with

the Preferred Stock as to dividends or assets, or create any obligation or

security of the Company convertible into shares of stock of any class which

shall be on a parity with the Preferred Stock as to dividends or assets.

 

          The holders of the Preferred Stock shall not be entitled to subscribe

to any increased issue of the Preferred

Stock or the Common Stock unless such privilege is provided for by resolution of

the holders of the Common Stock and the Board of Directors of the Company.

 

          Anything in this Article hereof or in any resolution or resolutions

providing for the issue of Preferred Stock of any series contained to the

contrary notwithstanding, dividends upon shares of stock of any class of the

Company shall be payable only out of unreserved and unrestricted earned surplus

of the Company legally available for dividends, and the rights of the holders of

all classes of stock of the Company in respect of the payment of dividends shall

at all times be subject to the power of the Board of Directors from time to time

to set aside such reserves and to make such other provisions, if any, as said

Board shall deem to be necessary or advisable for working capital, for additions

and improvements to plant and equipment, for expansion of the Company's business

(including the acquisition of real and personal property for that purpose) or

for any other proper purpose of the Company.

 

 

                                  COMMON STOCK

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

 

          The holders of Common Stock shall have no preemptive rights and the

Company shall have the right to issue any shares of its capital stock, option

rights or securities having conversion or option rights without first offering

such shares, rights or securities to the holders of the Common Stock.

 

[As Filed 03/25/1994]