<PAGE>
 
                                                                 EXHIBIT 3.1

                   SECOND RESTATED ARTICLES OF INCORPORATION

                                       OF

                           FEDERAL-MOGUL CORPORATION
                           -------------------------


Pursuant to the provisions of Act 284, Public Acts of 1972, as amended, the
undersigned corporation executes the following Articles:

     1.  The present name of the corporation is:
                FEDERAL-MOGUL CORPORATION

     2.  The corporation identification number (CID) assigned by the Bureau is;
                142-176

     3.  All former names of the Corporation are:
                FEDERAL-MOGUL-BOWER BEARINGS, INC.

     4.  The date of filing the original articles of incorporation was:
                May 1, 1924
 
     The following Second Restated Articles of Incorporation supercede the
Restated Articles of Incorporation as amended and shall be the Articles of
Incorporation of the corporation:


                                   ARTICLE I

     The name of the Corporation is FEDERAL-MOGUL CORPORATION.

                                   ARTICLE II

     The purpose or purposes for which the Corporation is organized are:

     The Corporation may engage in any activity within the purposes for which
corporations may be organized under the Business Corporation Act of Michigan.

                                  ARTICLE III

     A.1.  The total number of shares of stock which the Corporation shall have
the authority to issue is as follows: 260,000,000 shares of Common Stock, no par
value, (Common Stock); and 5,000,000 shares of Preferred Stock (Preferred
Stock).

                                       1
<PAGE>
 
     2.  The designations, voting powers, preferences and relative,
participating optional or other special rights, and qualifications, limitations
or restrictions of the shares of stock shall be as follows;

                               GENERAL PROVISIONS

     B.1.  Subject to the power of the Board of Directors to provide to the
contrary with respect to any one or more series of Preferred Stock at any time
authorized, no holder of stock of any class of the Corporation shall be entitled
as a matter of right to purchase or subscribe for any part of any unissued stock
of any class, or of any additional stock of any class of capital stock of the
Corporation, or of any bonds, certificates of indebtedness, debentures, or other
securities, whether or not convertible into other securities, but any such stock
or other securities may be issued and disposed of pursuant to resolution by the
Board of Directors to such persons, firms, corporations or associations and upon
such terms and for such consideration as the Board of Directors in the exercise
of its discretion may determine and as may be permitted by law without action by
the stockholders.  The Board of Directors may provide for payment therefor to be
received by the Corporation in cash, property, or services.  Any and all shares
of stock so issued for which the consideration so provided for has been paid or
delivered shall be deemed fully paid and not liable to any further call or
assessment.

     2.  Shares of any class or series of capital stock redeemed, converted,
exchanged, purchased, retired or surrendered to the Corporation, or which have
been issued and reacquired in any manner may, upon compliance with any
applicable provisions of the Michigan Business Corporation Act, be retained as
treasury shares, or be given the status of authorized and unissued shares of the
same class.


                                  COMMON STOCK

     C.1.  Except as otherwise required by law or by these Articles of
Incorporation, each holder of Common Stock shall have one vote for each share of
stock held by him or her on all matters to be voted upon by the holders of
Common Stock, whether or not any one or more series of Preferred Stock shall be
entitled to no voting rights or to more or less than one vote for each share.

     2.  Subject to the preferential dividend rights, if any, applicable to
shares of Preferred Stock and subject to applicable requirements, if any, with
respect to the setting aside of sums for purchase, retirement or sinking funds
for Preferred Stock, the holders of Common Stock shall be entitled to receive,
to the extent permitted by law, such dividends as may be declared from time to
time by the Board of Directors.

     3.  In the event of any liquidation, dissolution or winding-up of the
Corporation, the holders of Common Stock shall be entitled, after payment or
provisions for payment of the debts and other liabilities of the Corporation and
the amounts to which

                                       2
<PAGE>
 
the holders of any Preferred Stock shall be entitled, to share ratably in the 
remaining net assets of the Corporation or the proceeds thereof.


                                PREFERRED STOCK

     D.1.  The Board of Directors is expressly authorized at any time, and from
time to time, to provide for the issuance of shares of Preferred Stock in one or
more series, and for such consideration or considerations as the Board of
Directors may determine, with such voting powers, full or limited, or without
voting powers, and with such designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof, as shall be stated and expressed in the resolution or
resolutions providing for the issue thereof adopted by the Board of Directors,
all except as otherwise required by law or by these Articles of Incorporation,
and including (but without limiting the generality of the foregoing) the
following:

     (a) The distinctive designation and number of shares comprising such
series, which number may (except where otherwise provided by the Board of
Directors in creating such series) be increased or decreased (but not below the
number of shares then outstanding) from time to time by action of the Board of
Directors.

     (b) The dividend rate or rates on the shares of such series and the
relation which such dividend shall bear to the dividends payable on any other
class of capital stock or on any other series of Preferred Stock, the terms and
conditions upon which and the periods in respect of which dividends shall be
payable, whether and upon what conditions such dividends shall be cumulative
and, if cumulative, the date or dates from which dividends shall accumulate.

     (c) Whether the shares of such series shall be redeemable, and, if
redeemable, whether redeemable for cash, property or rights, including
securities of any other corporation, at the option of either the holder or the
Corporation or upon the happening of a specified event, the limitations and
restrictions with respect to such redemption, the time or times when, the price
or prices or rate or rates at which, the adjustments with which and the manner
in which such shares shall be redeemable, including the manner of selecting
shares of such series for redemption if less than all shares are to be redeemed.

     (d) The rights to which the holders of shares of such series shall be
entitled, and the preferences, if any, over any other series (or of any other
series over such series), upon the voluntary or involuntary liquidation,
dissolution, distribution or windingup of the Corporation, which rights may vary
depending on whether such liquidation, dissolution, distribution or winding-up
is voluntary or involuntary, and, if voluntary, may vary at different dates.

     (e) Whether the shares of such series shall be subject to the operation of
a purchase, retirement, or sinking fund, and, if so, whether and upon what
conditions 

                                       3
<PAGE>
 
such purchase, retirement or sinking fund shall be cumulative or
noncumulative, the extent to which and the manner in which such fund shall be
applied to the purchase or redemption of the shares of such series for
retirement or to other corporate purposes and the terms and provisions relative
to the operation thereof.

     (f) Whether the shares of such series shall be convertible into or
exchangeable for shares of any other class or of any other series of any class
of capital stock or other securities of the Corporation, or the securities of
any other corporation or entity, and, if so convertible or exchangeable, the
price or prices or the rate or rates of conversion or exchange and the method,
if any, of adjusting the same, and any other terms and conditions of such
conversion or exchange.

     (g) The voting powers, full and/or limited, if any, of the shares of such
series, and whether and under what conditions the shares of such series (alone
or together with the shares of one or more other series) shall be entitled to
vote separately as a single class, upon any merger or consolidation or other
transaction of the Corporation, or upon any other matter, including but without
limitation the election of one or more additional directors of the Corporation
in case of dividend arrearages or other specified events.

     (h) Whether the issuance of any additional shares of such series, or of any
shares of any other series, shall be subject to restrictions as to issuance, or
as to the powers, preferences or rights of any other series

     (i) Any other preferences, privileges and powers and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions of such series, as the Board of Directors may deem advisable and
as shall not be inconsistent with the provisions of these Articles of
Incorporation.

     2.  All shares of Preferred Stock of any one series shall be of equal rank
and identical in all respects, except that shares of any one series issued at
different times may differ as to the dates from which dividends thereon, if
cumulative, shall be cumulative.

                   Series C ESOP Convertible Preferred Stock
                   

     Section 1.  Designation and Amount; Special Purpose Restricted Transfer
Issue.


     (A) The shares of this series of Preferred Stock shall be designated as
Series C ESOP Convertible Preferred Stock ("Series C Preferred Stock") and the
number of shares constituting such series shall be 1,000,000.

     (B) Shares of Series C Preferred Stock shall be issued only to a trustee
acting on behalf of an employee stock ownership plan or other employee benefit
plan of the Corporation.  In the event of any transfer of shares of Series C
Preferred Stock to any person other than any such plan trustee, the shares of
Series C Preferred Stock so transferred, upon such transfer and without any
further action by the Corporation or the 

                                       4
<PAGE>
 
holder, shall be automatically converted into shares of Common Stock on the
terms otherwise provided for the conversion of shares of Series C Preferred
Stock into shares of Common Stock pursuant to Section 5 hereof and no such
transferee shall have any of the voting powers, preferences and relative,
participating, optional or special rights ascribed to the shares of Series C
Preferred Stock hereunder but, rather, on the powers and rights pertaining to
the Common Stock into which such shares of Series C Preferred Stock shall be so
converted. In the event of such a conversion, the transferee of the shares of
Series C Preferred Stock shall be treated for all purposes as the record holder
of the shares of Common Stock into which such shares of Series C Preferred Stock
have been automatically converted as of the date of such transfer. Certificates
representing shares of Series C Preferred Stock shall be legended to reflect
such restrictions on transfer. Notwithstanding the foregoing provisions of this
paragraph (B) of Section 1, shares of Series C Preferred Stock (i) may be
converted into shares of Common Stock as provided by Section 5 hereof 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 6,7 and 8 hereof.

     Section 2.  Dividends and Distributions.
                 
     (A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series C Preferred stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available therefor, cash dividends ("Preferred Dividends") in an amount per
share equal to $4.78125 per share per annum, and no more, payable semi-annually
in arrears, one-half on the last day of December and one-half on the last day of
June of each year (each a "Dividend Payment Date") commencing on June 30, 1989,
to holders of record at the start of business on such Dividend Payment Date.  In
the event that any Dividend Payment Date shall fall on any other day other than
a "Business Day" (as hereinafter defined), the dividend payment due on such
Dividend Payment Date shall be paid on the Business Day immediately preceding
such Dividend Payment Date.  Preferred Dividends shall begin to accrue on
outstanding shares of Series C Preferred Stock from the date of issuance of such
shares of Series C Preferred Stock.  Preferred Dividends shall accrue on a daily
basis whether or not the Corporation shall have earnings or surplus at the time,
but Preferred Dividends accrued after the date of issuance on the shares of
Series C Preferred Stock for any period less than a full semi-annual period
between Dividend Payment Dates shall be computed on the basis of a 360-day year
of 30-day months.  In lieu of the initial semi-annual dividend, such a
proportional dividend shall accrue for the period from the date of issuance
until June 30, 1989.  Accumulated but unpaid Preferred Dividends shall cumulate
as of the Dividend Payment Date on which they first become payable, but no
interest shall accrue on accumulated but unpaid Preferred Dividends.

     (B) So long as any Series C Preferred Stock shall be outstanding, no
dividend shall be declared or paid or set apart for payment on any other series
of stock ranking on a parity with the Series C Preferred Stock as to dividends,
unless there shall also be or have been declared and paid or set apart for
payment on the Series C Preferred Stock, dividends for all dividend payment
periods of the Series C Preferred Stock ending on or 

                                       5
<PAGE>
 
before the dividend payment date of such parity stock, ratably in proportion to
the respective amounts of dividends accumulated and unpaid through such dividend
payment period on the Series C Preferred Stock and accumulated and unpaid on
such parity stock through the dividend payment period on such parity stock next
preceding such dividend payment date. In the event that full cumulative
dividends on the Series C Preferred Stock have not been declared and paid or set
apart for payment when due, the Corporation shall not declare or pay or set
apart for payment any dividends or make any other distributions on, or make any
payment on account of the purchase, redemption or other retirement of any other
class of stock or series thereof of the Corporation ranking, as to dividends or
as to distributions in the event of a liquidation, dissolution or winding-up of
the Corporation, junior to the Series C Preferred Stock until full cumulative
dividends on the Series C Preferred Stock shall have been paid or declared and
set apart for payment; provided, however, that the foregoing shall not apply to
(i) any dividend payable solely in any shares of any stock ranking, as to
dividends or as to distributions in the event of a liquidation, dissolution or
winding-up of the Corporation, junior to the Series C Preferred Stock, or (ii)
the acquisition of shares of any stock ranking, as to dividends or as to
distributions in the event of a liquidation, dissolution or winding-up of the
Corporation, junior to the Series C Preferred Stock either (A) pursuant to any
employee or director incentive 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 or (B) in exchange
solely for shares of any other stock ranking, as to dividends and as to
distributions in the event of a liquidation, dissolution or winding-up of the
Corporation, junior to the Series C Preferred Stock.

     Section 3.  Voting Rights.  The holders of shares of Series C Preferred
Stock shall have the following voting rights:

     (A) The holders of Series C Preferred Stock shall be entitled to vote on
all matters submitted to a vote of the holders of Common Stock of the
Corporation, voting together with the holders of Common Stock as one class.
Each share of the Series C Preferred Stock shall be entitled to the number of
votes equal to the number of shares of Common Stock into which such share of
Series C Preferred Stock could be converted on the record date for determining
the stockholders entitled to vote, rounded to the nearest one-tenth of a vote;
it being understood, that whenever the "Conversion Ratio" (as defined in Section
5 hereof) is adjusted as provided in Section 9 hereof, the voting rights of the
Series C Preferred Stock shall also be similarly adjusted.

     (B) Except as otherwise required by law or set forth herein, holders of
Series C Preferred Stock shall have no special voting rights and their consent
shall not be required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for the taking of any corporate
action; provided, however, that the vote of at least sixty-six and two-thirds
percent (66-2/3%) of the outstanding shares of Series C Preferred Stock, voting
separately as a series, shall be necessary to adopt any alternation, amendment
or repeal of any provision of the Restated Articles of Incorporation of the
Corporation, as amended, or this Resolution (including any such alteration,
amendment or repeal affected by any merger or consolidation in which the

                                       6
<PAGE>
 
Corporation is the surviving or resulting corporation), if such amendment,
alternation or repeal would alter or change the powers, preferences or special
rights of the shares of Series C Preferred Stock so as to affect them adversely.

     Section 4.  Liquidation, Dissolution or Winding-up.

     (A) Upon voluntary or involuntary liquidation, dissolution or winding-up of
the Corporation, the holders of Series C Preferred Stock shall be entitled to
receive out of assets of the Corporation which remain after satisfaction in full
of all valid claims of creditors of the Corporation and which are available for
payment to stockholders, and subject to the rights of holders of any stock of
the Corporation ranking senior to or on a parity with the Series C Preferred
Stock in respect of distributions upon liquidation, dissolution or winding-up of
the Corporation, before any amount shall be paid or distributed among the
holders of Common Stock or any other shares ranking junior to the Series C
Preferred Stock in respect of distributions upon liquidation, dissolution or
winding-up of the Corporation, liquidating distributions in the amount of $63.75
per share (the "Liquidation Preference"), plus an amount equal to all accrued
and unpaid dividends thereon to the date fixed for distribution, and no more.
If upon any liquidation, dissolution or winding-up of the Corporation, the
amounts payable with respect to the Series C Preferred Stock and any other stock
ranking as to any such distribution on a parity with the Series C Preferred
Stock are not paid in full, the holders of the Series C Preferred Stock and such
other stock shall share ratably in any distribution of assets in proportion to
the full respective preferential amounts to which they are entitled.  After
payment of the full amount to which they are entitled as provided by the
foregoing provisions of this paragraph 4(A), the holders of shares of Series C
Preferred Stock shall not be entitled to any further right or claim to any of
the remaining assets of the Corporation.

     (B) Neither the merger or consolidation of the Corporation with or into any
other corporation, nor the merger or consolidation of any other corporation with
or into the Corporation, nor the sale, lease, transfer or other exchange of all
or any portion of the assets of the Corporation, shall be deemed to be a
dissolution, liquidation or winding-up of the affairs of the Corporation for
purposes of this Section 4, but the holders of Series C Preferred Stock shall
nevertheless be entitled in the event of any such merger or consolidation to the
rights provided by Section 8 hereof.

     (C) Written notice of any voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation, stating the payment date or dates when, and
the place or places where, the amounts distributable to holders of Series C
Preferred Stock in such circumstances shall be payable, shall be given by first-
class mail, postage prepaid, mailed not less then twenty (20) days prior to any
payment date stated therein, to the holders of Series C Preferred Stock, at the
address shown on the books of the Corporation or any transfer agent for the
Series C Preferred Stock.

                                       7
<PAGE>
 
     Section 5.  Conversion into Common Stock.

     (A) A holder of shares of Series C Preferred Stock shall be entitled, at
any time prior to the close of business on the date fixed for redemption of such
shares pursuant to Section 6,7 or 8 hereof, to cause any or all such shares to
be converted into shares of Common Stock, initially at a conversion rate equal
to the ratio of one share of Common Stock for each one share of Series C
Preferred Stock, and which shall be adjusted as hereinafter provided (and, as so
adjusted, is hereinafter sometime referred to as the "Conversion Ratio");
provided, however, that in no event shall the Conversion Ratio be greater than
the Liquidation Preference divided by the par value of one share of Common
Stock.

     (B) Any holder of shares of Series C Preferred Stock desiring to convert
such shares into shares of Common Stock shall surrender the certificate or
certificates representing the shares of Series C 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 C 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 Series C Preferred Stock accompanied by written notice
of conversion.  Such notice of conversion shall specify (i) the number of shares
of Series C 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 Series C Preferred Stock 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
Series C 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 Series C 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 Series C 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 Series C Preferred Stock into shares of Common Stock
made at the option of the holder thereof 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 Series C 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 day of conversion, the person or persons entitled to

                                       8
<PAGE>
 
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 Series C Preferred Stock
on a Dividend Payment Date if such Dividend Payment Date for such dividend shall
coincide with or be on or subsequent to the effective date of conversion of such
shares.

     (E) The Corporation shall not be obligated to deliver to holders of Series
C Preferred Stock any fractional share or shares of Common Stock issuable upon
any conversion of such shares of Series C Preferred Stock, but in lieu thereof
may make a cash payment in respect thereof in any manner permitted by law.

     (F) The Corporation shall at all times reserve and keep available out of
its authorized and unissued Common Stock solely for issuance upon the conversion
of shares of Series C Preferred Stock as herein provided, free from any
preemptive rights, such number of shares of Common Stock as shall from time to
time be issuable upon the conversion of all the shares of Series C Preferred
Stock then outstanding.  Nothing contained herein shall preclude the Corporation
from issuing shares of Common Stock held in its treasury upon the conversion of
shares of Series C Preferred Stock into Common Stock pursuant to the terms
thereof.  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 Series C
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 Series C Preferred
Stock then outstanding and convertible into shares of Common Stock.

     Section 6.  Redemption at the Option of the Company.
 
     (A) The Series C Preferred Stock shall be redeemable, in whole or in part,
at the option of the Corporation at any time after January 1, 1992, or at any
time after the date of issuance, if permitted by paragraph (C) or (D) of this
Section 6, at the following percentages of the Liquidation Preference:


 
     During the Twelve-Month                   Price Per
     Period Beginning January 1,                 Share
     --------------------------                  -----

               1989                            107.50%
               1990                            106.75
               1991                            106.00
               1992                            105.25
               1993                            104.50
               1994                            103.75


                                       9
<PAGE>
 
               1995                            103.00
               1996                            102.25
               1997                            101.50
               1998                            100.75

and thereafter at the Liquidation Preference, plus, in each case, an amount
equal to all accrued and unpaid dividends thereon to the date fixed for
redemption.  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 (E) of this Section 6.  From and after the date fixed for redemption,
dividends on shares of Series C 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 of the Corporation shall cease, except the right to
receive the redemption price.  If less then all of the outstanding shares of
Series C Preferred Stock are to be redeemed, 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 elect the shares to be redeemed by lot,
as may be determined by the Board of Directors of the Corporation.

     (B) Unless otherwise required by law, notice of redemption pursuant to
paragraphs (A), (C), or (D) of this Section 6 will be sent to the holders of
Series C Preferred Stock at the address shown on the books of the Corporation or
any transfer agent for the Series C Preferred Stock by first-class mail, postage
prepaid, mailed not less then 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 C Preferred Stock to be
redeemed and, if fewer than all shares held by such holder are to be redeemed,
the number of such shares to be redeemed for such holder, (iii) the redemption
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 in effect at the
time.  Upon surrender of the certificate 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 at the redemption price set forth pursuant to this Section 6.

     (C) In the event of 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 C Preferred Stock when such
dividends are used as provided under Section 404(k)(2) of the Internal Revenue
Code of 1986, as amended and in effect on the date shares of Series C Preferred
Stock are initially issued, the Corporation may in its sole discretion and
notwithstanding anything to the contrary in paragraph (A) of this Section 6,
elect to redeem any or all of such shares for the amount payable in respect of
the shares upon liquidation of the Corporation pursuant to Section 4 hereof.

                                       10
<PAGE>
 
     (D) Notwithstanding anything to the contrary in paragraph (A) of this
Section 6, the Corporation may elect to redeem any or all of the shares of
Series C Preferred Stock at any time on or prior to January 1, 1992 on the terms
and conditions set forth in paragraphs (A) and (B) of this Section 6, if (i) the
last reported sales price, regular way, of a Common Stock, as reported on the
New York Stock Exchange Composite Tape or, if the Common Stock is not listed or
admitted to trading on the New York Stock Exchange, on the principal national
securities exchange on which such stock is listed or admitted to trading or, if
the Common Stock is not listed or admitted to trading on any national securities
exchange, on the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or, if the Common
Stock is not quoted on such National Market System, the average of the closing
bid and asked prices in over-the-counter market as reported by NASDAQ, for at
least twenty (20) trading days within a period of thirty (30) consecutive
trading days ending within five (5) days of the notice of redemption equals or
exceeds one hundred fifty percent (150%) of an amount equal to (x) the
Liquidation Preference divided by (y) the Conversion Ratio (giving effect in
making such calculation to any adjustments required by Section 9 hereof); or
(ii) the Corporation terminates an employee stock ownership plan pursuant to
which shares of Series C Preferred Stock are then held by a trustee (in which
case only the shares held pursuant to such plan may be so redeemed);

     (E) The Corporation, at its option, may make payment of the redemption
price required upon redemption of shares of Series C Preferred Stock in cash or
in shares of Common Stock, or in a combination of such shares and cash, any such
shares of Common Stock to be valued for such purpose at their Fair Market Value
(as defined in paragraph (F) of Section 9 hereof; provided, however, that in
calculating their Fair Market Value the Adjustment Period shall be deemed to be
the five (5) consecutive trading days preceding, and including, the date of
redemption).

     Section 7.  Other Redemption Rights.

     Subject to the restrictions of the Michigan Business Corporation Act,
shares of Series C Preferred Stock shall be redeemed by the Corporation for cash
or, if the Corporation so elects, in shares of Common Stock, or a combination of
such shares and cash, any such shares of Common Stock to be valued for such
purpose as provided by paragraph (E) of Section 6, at a redemption price equal
to the Liquidation Preference plus accrued and unpaid dividends thereon to the
date fixed for redemption, at the option of the holder, at any time 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, (i)
when and to the extent necessary for such holder to provide for distributions
required to be made under the Federal-Mogul Corporation Salaried Employees'
Investment Program, as amended through and restated as of January 1, 1989,  as
the same may be amended, or any successor plan (the "Plan") to participants in
the Plan, or (ii) in the event that the Plan is not initially determined by the
Internal Revenue Service to be qualified within the meaning of Section 401(a)
and 4975 (e)(7) of the Internal Revenue Code of 1986, as amended.

                                       11
<PAGE>
 
     Section 8.  Consolidation, Merger, etc.

     (A) In the event that the Corporation shall consummate any consolidation or
merger or similar transaction, however named,  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 Series C Preferred Stock within the
meaning of Section 409(e) of the Internal Revenue Code of 1986, as amended, and
Section 407(c)(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, the shares of Series C 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, preference and relative,
participating, operational or other special rights (including the redemption
rights provided by Sections 6, 7 and 8 hereof), and the qualifications,
limitations or restrictions thereon, that the Series C Preferred Stock had
immediately prior to such transaction, except that after such transaction each
share of Series C Preferred Stock shall be convertible, otherwise on the terms
and conditions provided by Section 5 hereof, 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 Series C Preferred Stock could have
been converted immediately prior to such transaction if such holder of Common
Stock failed to exercise any right or election to receive any kind or amount of
qualifying employer securities 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 C Preferred
Stock as preferred stock of such successor or resulting company shall
successively be subject to adjustments pursuant to Section 9 hereof 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 Series C Preferred Stock shall be assumed and authorized by the
successor or resulting company as aforesaid.

     (B) In the event that the Corporation shall consummate any consolidation or
merger or similar transaction however, named, 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 (A) of this Section 8) and cash payments, if applicable, in lieu of
fractional shares, outstanding shares of Series C Preferred Stock shall, without
any action on the part of the Corporation or any holder thereof (but subject to
paragraph (C) of this Section 8), be automatically converted by virtue of such
merger, consolidation or similar transaction immediately prior to such
consummation into the number of shares of Common Stock into which such shares of
Series C Preferred Stock 

                                       12
<PAGE>
 
could have been converted at such time so that each share of Series C 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
Series C 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).

     (C) In the event the Corporation shall enter into any agreement providing
for any consolidation or merger or similar transaction described in paragraph
(B) of this Section 8, 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 Series C 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 such Series C Preferred Stock, as cash payment equal to the amount
payable in respect of shares of Series C Preferred Stock upon liquidation of the
Corporation pursuant to Section 4 hereof.  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 to the Corporation prior to the close of business on the
fifth business day prior to consummation of such transaction.

     Section 9.  Anti-Dilution Adjustments.
 
     (A)  In the event the Corporation shall, at any time or from time to time
while any of the shares of the Series C 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 Section 8 hereof does 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 9(A) 

                                       13
<PAGE>
 
shall be given effect, upon payment of such 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.

     (B) In the event the Corporation shall, at any time or from time to time
while any of the shares of Series C Preferred Stock are outstanding, issue, sell
or exchange shares of Common Stock (other than pursuant to 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) and other than pursuant to any employee or director incentive 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 Fair Market Value of such shares
on the date of such issuance sale or exchange, then, subject to the provisions
of paragraph (D) and (E) of this Section 9, 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 of sale or
exchange multiplied by (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 plus (ii) the Fair Market Value of the consideration received
by the Corporation in respect of such issuance, sale or exchange or shares of
Common Stock.  In the event the Corporation shall, at any time or from time to
time while any shares of Series C 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 reclassification of shares or a recapitalization of the Corporation) and
other than pursuant to any employee or director incentive 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 herein
defined), then, subject to the provisions of paragraphs (D) and (E) of this
Section 9, 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 multiplied by (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 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 

                                       14
<PAGE>
 
of all the shares of Common Stock outstanding on the day immediately preceding
the first public announcement of such issuance, sale or exchange plus (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 plus (iii) the Fair
Market Value as of the time of such issuance of the consideration which the
Corporation would receive upon exercise in full of all such rights or warrants.

     (C) In the event the Corporation shall, at any time or from time to time
while any of the shares of Series C Preferred Stock are outstanding, make an
Extraordinary Distribution (as herein 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 or consolidation to which Section 8 hereof
does not apply) or effect a Pro Rata Repurchase (as herein defined) of Common
Stock, the Conversion Ratio in effect immediately prior to such Extraordinary
Distribution or Pro Rata Repurchase shall, subject to paragraphs (D) and (E) of
this Section 9, 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 Dividend or Pro
Rata Repurchase minus, in the case of a Pro Rata Repurchase, the number of
shares of Common Stock repurchased by the Corporation multiplied by (ii) 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 (as herein 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
multiplied by (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 distribution made during the period of twelve (12) 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 eleven and one-half percent (11-1/2%) 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 Series C
Preferred Stock (i) notice of its intent to make any dividend or 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 

                                       15
<PAGE>
 
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.

     (D) Notwithstanding any other provisions of this Section 9, 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.

     (E) 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 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 9, the Board of
Directors of the Corporation shall in its sole discretion consider whether such
action is of such a nature 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 9(E), 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 9, as shall be necessary in order that any dividend or distribution
of 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 Common Stock.

     (F) For purposes of this Resolution, the following definitions shall apply:

     "Business Day" shall mean that each day that is not a Saturday, Sunday or a
day on which state or federally chartered banking institutions in Detroit,
Michigan are not required to be open.

     "Extraordinary Distribution" shall mean any dividend or other distribution
(effected while any of the shares of Series C Preferred Stock are outstanding)
or (i) cash, where the aggregate amount of such cash dividend or distribution
together with the amount of all cash dividend and distributions made during the
preceding period of twelve (12) 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 Repurchase), the Effective Dates of which fall
within such twelve-month period, exceeds eleven and one-

                                       16
<PAGE>
 
half percent (11-1/2%) 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 (ii) any shares of
capital stock of the Corporation (other than shares of Common Stock), other
securities of the Corporation, evidence 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 (C) of this Section 9 shall
be equal to the sum of the Fair Market Value of such Extraordinary Distribution
plus the amount of any cash dividends which are not Extraordinary Distributions
made during such twelve-month period and not previously indicated in the
calculation of an adjustment pursuant to paragraph (C) of this Section 9.

     "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 of
which are publicly traded, the average of the Current Market Prices (as herein
defined) of such shares or securities for each day of the Adjustment Period (as
herein defined).

     "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, in
case no sale takes place on such day, the average of the reporting closing bid
and asked prices, regular way, in either case as reported on the New York Stock
Exchange Composite Tape or, if such security is not listed or admitted to
trading on the New York Stock Exchange, 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
New York Stock Exchange 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, "Adjustment Period" shall mean the period of five (5) consecutive
trading days preceding, and including, the date as of which the Fair Market
Value of a security is to be determined.  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.

     "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) 

                                       17
<PAGE>
 
shall mean the remainder of (i) the product of the Fair Market Value of a share
of Common Stock on the day preceding the first public announcement of such
issuance, sale or exchange multiplied by 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 (ii) 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 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.

     "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 Series C 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 by the Corporation or any subsidiary thereof made in open market
transactions shall be deemed a Pro Rata Repurchase.  For purposes of this
paragraph 9(F), 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 10-b-18 as
in effect under the Exchange Act, on the date shares of Series C Preferred Stock
are initially issued by the Corporation or on such others 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 which is a Pro Rata
Repurchase, or the date of the purchase with respect to any Pro Rata Repurchase
which is not a tender offer.

     (G) Whenever an adjustment to the Conversion Ratio and the related voting
rights of the Series C Preferred Stock is required pursuant to this Resolution,
the Corporation shall forthwith place on file with the transfer agent for the
Common Stock and the Series C 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,
and the voting rights (as appropriately adjusted), of the Series C 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 determination of Fair Market Value involved in such 

                                       18
<PAGE>
 
computation. Promptly after each adjustment to the Conversion Ratio and the
related voting rights of the Series C Preferred Stock, the Corporation shall
mail a notice thereof and of the then prevailing conversion ratio to each holder
of shares of Series C Preferred Stock.

     Section 10.  Ranking; Attributable Capital and Adequacy of Surplus:
Retirement of Shares.
 

     (A) The Series C Preferred Stock shall rank senior to the Common Stock as
to the payment of dividends and the distribution of assets on liquidation,
dissolution and winding-up the Corporation, and, unless otherwise provided in
the Restated Articles of Incorporation of the Corporation, as the same may be
amended, or a Certificate of Designations relating to a subsequent series of
Preferred Stock of the Corporation, the Series C Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock as to payment of
dividends and the distribution of assets on liquidation, dissolution or winding-
up.

     (B) In addition to any vote of stockholders required by law, the vote of
the holders of the majority of the outstanding shares of Series C Preferred
Stock shall be required to increase the capital of the Corporation allocable to
the Common Stock for the purposes of the Michigan Business Corporation Act, if
as a result thereof, the surplus of the Corporation for purposes of the Michigan
Business Corporation Act would be less than the amount of Preferred Dividends
that would accrue on the then outstanding shares of Series C Preferred Stock
during the following three (3) years.

     (C) Any shares of Series C Preferred Stock acquired by the Corporation by
reason of the conversion or redemption of such shares as provided by this
Resolution, or otherwise so acquired, shall be cancelled as shares of Series C
Preferred Stock and restored to the status of authorized but unissued shares of
Preferred Stock of the Corporation, undesignated as to series, and may
thereafter be reissued as part of the new series of such Preferred Stock as
permitted by law.

     Section 11.  Miscellaneous.

     (A) 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 of this Resolution) with postage prepaid, addressed: (i) if to the
Corporation, to its office at 26555 Northwestern Highway, Southfield, Michigan,
48034 (Attention: Secretary) or to the transfer agent for the Series C Preferred
Stock, or other agent, of the Corporation designated as permitted by this
Resolution or (ii) if to any holder of the Series C 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 the transfer agent for the Series C Preferred Stock or Common Stock,
as the case may be) or (iii) to 

                                       19
<PAGE>
 
such other address as the Corporation or any such holder, as the case may be, 
shall have designated by notice similarly given.

     (B) The term "Common Stock" as used in this Resolution means the
Corporation's Common Stock as the same exists at the date of filing of a
Certificate of Designations relating to Series C Preferred Stock or any other
class of stock resulting from successive changes or reclassifications of such
Common Stock consisting solely of changes in par value, or from par value to no
par value, or from no par value to par value.  In the event that, at any time as
a result of an adjustment made pursuant to Section 9, the holder of any share of
the Series C 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 C 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 9 hereof, and the provisions of Sections 1 through 8 and 10
and 11 hereof with respect to Common Stock shall apply on like or similar terms
to any such other shares or securities.

     (C) 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 Series C Preferred Stock or shares of Common Stock or other securities issued
on account of Series C 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 Series C Preferred Stock or
Common Stock or other securities in a name other than that in which the shares
of Series C 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 such
issuance, delivery or payment unless and until the person otherwise entitled so
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.

     (D) In the event that a holder of shares of Series C 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 Series C 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 C
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 on the records of the Corporation.

                                       20
<PAGE>
 
     (E) Unless otherwise provided in the Restated Articles of Incorporation, as
the same may be amended, of the Corporation, all payments in the form of
dividends, distributions on voluntary or involuntary dissolution, liquidation or
winding-up or otherwise made upon the shares of Series C Preferred Stock and any
other stock ranking on a parity with the Series C Preferred Stock with respect
to such dividend or distribution shall be made pro rata, so that amounts paid
per share on the Series C Preferred Stock and such other stock shall in all
cases bear to each other the same ratio that the required dividends,
distributions or payment, as the case may be, then payable per share on the
shares of the Series C Preferred Stock and such other stock bear to each other.

     (F) The Corporation may appoint, and from time to time discharge and
change, a transfer agent for the Series C Preferred Stock.  Upon 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 Series
C Preferred Stock.

                                   ARTICLE IV

     1.  The address of the current registered office is: 26555 Northwestern
Highway, Southfield, Michigan, 48034.

     2.  The name of the current resident agent is:  James J. Zamoyski

                                   ARTICLE V

     The duration of the Corporation is perpetual.

                                   ARTICLE VI

     A.1.  In addition to any affirmative vote required by law or these Articles
of Incorporation, and except as otherwise expressly provided in paragraph B:

     (a) any merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with or into (i) any Interested Shareholder (as hereinafter
defined) or (ii) any other corporation (whether or not itself an Interested
Shareholder) which, after such merger or consolidation, would be an Affiliate
(as hereinafter defined) of an Interested Shareholder, or

     (b) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions) to or with
any Interested Shareholder or any Affiliate of any Interested Shareholder of any
assets of the Corporation or any Subsidiary having an aggregate Fair Market
Value of $1,000,000 or more, other than such a disposition in the ordinary
course of the Corporation's business on an arms-length basis, or

     (c) the issuance or transfer by the Corporation or any Subsidiary (in one
transaction or a series of related transactions) of any securities of the
Corporation or 

                                       21
<PAGE>
 
any Subsidiary to any Interested Shareholder or any Affiliate of any Interested
Shareholder in exchange for cash, securities or other property (or a combination
thereof) having an aggregate Fair Market Value of $1,000,000 or more, or

     (d) the adoption of any plan or proposal for the liquidation or dissolution
of the Corporation as a result of which any Interested Shareholder or any
Affiliate of any Interested Shareholder would receive any assets of the
Corporation other than cash, or

     (e) any reclassification of securities (including any reverse stock split)
or recapitalization of the Corporation, or any merger or consolidation of the
Corporation with any Subsidiary, or any similar transaction (whether or not with
or into an Interested Shareholder), which has the effect, directly or
indirectly, of increasing the proportion of the outstanding shares of any class
of equity security of the Corporation or any Subsidiary directly or indirectly
owned by any Interested Shareholder or any Affiliate of any Interested
Shareholder shall require the affirmative vote or consent of the holders of at
least a majority of the outstanding non-interested shares of Common Stock and
voting Preferred Stock of the Corporation considered for the purposes of this
Article as one class, except that (i) in the case of any such transaction which
is required by Article III to be approved by the Preferred Stock or one or more
series thereof considered as a separate class, such transaction shall also
require the affirmative vote or consent of at least a majority of the
outstanding non-interested shares of the Preferred Stock or such series thereof
with the Preferred Stock or such series thereof considered as a separate class;
and (ii) in the case of any such transaction which under applicable law is
required to be approved by any class or series of the Corporation's stock or any
combination thereof considered as a single class, such transaction shall also
require the affirmative vote or consent of at least a majority of the
outstanding non-interested shares of each such class or series or combination
considered as a single class.  Such affirmative vote or consent shall be
required notwithstanding the fact that no vote may be required or that some
lesser percentage may be specified by law or in any agreement with any national
securities exchange or otherwise.

     2.  The term "business combination" as used in this Article shall mean any
transaction which is referred to in any one or more clauses (a) through (e) of
Section 1 of this paragraph (A).

     3.  The term "non-interested shares" as used in this Article with respect
to any class of the Corporation's stock, any series of any class of the
Corporation's stock or any combination of any such classes, series or classes
and series, shall mean the shares of which the Interested Shareholder involved
in the business combination is not the beneficial owner of such class, series,
or combination of classes, series or classes and series.

     B.  The provisions of paragraph (A) of this Article shall not be applicable
to any particular business combination, and such business combination shall
require only 

                                       22
<PAGE>
 
such affirmative vote as is required by law and any other provisions of these 
Articles of Incorporation, if either:

     1.  the Corporation's Board of Directors includes at least one member who
was a duly elected and acting member of the Board prior to the time the
Interested Shareholder involved became an Interested Shareholder and such
business combination has been approved by a majority of such members of the
Board of Directors and by a majority of the entire Board of Directors, or

     2.  the aggregate amount of the cash and the Fair Market Value of
consideration other than cash to be received per share by holders of Common
Stock in such business combination shall be at least equal to the highest of the
following:

          (a) the highest per share price (including any brokerage commissions,
     transfer taxes and soliciting dealers' fees) paid or agreed to be paid by
     such Interested Shareholder to acquire beneficial ownership of any shares
     of Common Stock within the two-year period prior to the consummation of the
     business combination (the acquisition of any shares of Preferred Stock, for
     example, being deemed an acquisition of the number of shares of Common
     Stock into which such Preferred Stock is convertible at the time of the
     acquisition.

          (b) the per share book value of the Common Stock at the end of the
     fiscal month immediately preceding the consummation of such business
     combination; and

          (c) if the common stock of the Interested Shareholder is publicly
     traded, the price per share equal to the earnings per share of Common Stock
     for the four full consecutive fiscal quarters immediately preceding the
     record date for solicitation of votes on such business combination (or, if
     votes are not solicited on such business combination, immediately preceding
     the consummation of such business combination) multiplied by the ratio (if
     any) of the highest published sale price of the Interested Shareholder's
     common stock during its four fiscal quarters immediately preceding such
     date, to the earnings per share of common stock of the Interested
     Shareholder for such four fiscal quarters, or

     3.  such business combination has been unanimously approved by the Board of
Directors and the Board has, in the faithful exercise of its fiduciary duties to
the holders of Common Stock, unanimously and expressly determined that the
aggregate amount of the cash and the Fair Market Value of the consideration
other than cash to be received per share by holders of Common Stock in such
business combination, although less than the highest amount required by Section
2 of this paragraph B is nonetheless fair to all holders of Common Stock.

     All per share figures specified in Section 2 of this paragraph B shall be
adjusted to reflect any subdivisions (by stock split, stock dividend or
otherwise) of the 

                                       23
<PAGE>
 
stock referred to above and combinations (by reverse stock split or otherwise) 
of such stock into a lesser number of shares.

          C.  For the purposes of this Article;

          1.  A "person" shall mean any individual, firm, corporation or other
     entity.

          2.  "Interested Shareholder" shall mean, in respect of any business
     combination, any person (other than the Corporation) who or which, as the
     record date for the determination of shareholders entitled to notice of and
     to vote on such business combination, or immediately prior to the
     consummation of such business combination,

               (a) is the beneficial owner, directly or indirectly through one
          or more intermediaries, of ten percent (10%) or more of the
          outstanding shares of Common Stock, or

               (b) is an Affiliate of the Corporation and at any time within two
          (2) years prior thereto was the beneficial owner, directly or
          indirectly through one or more intermediaries, of not less than ten
          percent (10%) of the then outstanding Common Stock, or

               (c) is an assignee of or has otherwise succeeded to any shares of
          capital stock of the Corporation which were at any time within two (2)
          years prior thereto beneficially owned by any Interested Shareholder,
          and such assignment or succession shall have occurred in the course of
          a transaction or series of transactions not involving a public
          offering within the meaning of the Securities Act of 1933.

          3.  A person shall be the "beneficial owner" of any of the
     Corporation's stock:

               (a) which such person or any of its Affiliates or Associates (as
          hereinafter defined) beneficially owns, directly or indirectly through
          one or more intermediaries, or

               (b) which such person or any of its Affiliates or Associates has
          (i) the right to acquire (whether such right is exercisable
          immediately or only after the passage of time) pursuant to any
          agreement, arrangement or understanding or upon the exercise of
          conversion rights, exchange rights, warrants or options, or otherwise,
          or (ii) the right to vote pursuant to any agreement, arrangement or
          understanding, or

               (c) which is beneficially owned, directly or indirectly through
          one or more intermediaries, by any other person with which such first
          

                                       24
<PAGE>
 
          mentioned person or any of its Affiliates or Associates has any
          agreement, arrangement or understanding for the purpose of acquiring,
          holding, voting or disposing of any shares of the Corporation's stock;

     provided, however, that no person shall be deemed the "beneficial owner" of
     any shares of the Corporation's stock which such person would otherwise be
     deemed the "beneficial owner" of solely because of such person's serving as
     the trustee of any employee plan of the Corporation, including, without
     limitation, the Corporation's Salaried Employees' Investment Plan, as the
     same may be amended from time to time.

          4.  The outstanding "Common Stock" shall include shares deemed owned
     through application of Section 3 above by and the person whose status as an
     Interested Shareholder is being determined, shall not include any Common
     Stock which may be issuable to any other person pursuant to any agreement,
     or upon exercise of conversion rights, warrants, or options, or otherwise.

          5.  "Affiliate" and "Associate" shall have the respective meanings
     given those terms in Rule 12b-2 of the General Rules and Regulations under
     the Securities Exchange Act of 1934, as in effect on March 26, 1980.

          6.  "Subsidiary" means any corporation of which a majority of any
     class of equity security (as defined in Rule 3all-1 of the General Rules
     and Regulations under the Securities Exchange Act of 1934, as in effect on
     March 26, 1980) is owned, directly or indirectly, by the Corporation.

          D.  The Corporation's directors shall have the power and duty to
     determine for the purpose of this Article, on the basis of information
     known to them, (i) the number of shares of the Corporation's stock of any
     class or series beneficially owned by any person, (ii) whether a person is
     an Affiliate or Associate of another, (iii) whether a person has an
     agreement, arrangement or understanding with another as to the matters
     referred to in section 3 of paragraph C, and (iv) whether the assets
     subject to any business combination or the consideration received for the
     issuance or transfer of securities by the Corporation or any Subsidiary
     have an aggregate Fair Market Value of $1,000,000 or more.

          E.  Nothing contained in this Article shall be constituted to relieve
     any Interested Shareholder or any director of the Corporation from any
     fiduciary or other obligation imposed by law.

          F.  The affirmative vote or consent of the holders of at least a
     majority of the outstanding shares of Common Stock and Preferred Stock of
     which no person who is an Interested Shareholder (or would be an Interested
     Shareholder if a business combination involving such person were then being
     voted on) is the beneficial owner, considered as a single class, shall be
     required to amend, alter or repeal this Article.

                                       25

<PAGE>
 
                                  ARTICLE VII

         A director of the Corporation shall not be personally liable to the
     Corporation or its Shareholders for monetary damages for breach of
     fiduciary duty as a director except for liability (i) for any breach of the
     director's duty of loyalty to the Corporation or its Shareholders, (ii) for
     acts or omissions not in good faith or that involve intentional misconduct
     or a knowing violation of law, (iii) a violation of Section 551(1) of the
     Michigan Business Corporation Act, or (iv) for any transaction from which
     the director derived any improper personal benefit. If the Michigan
     Business Corporation Act is amended after approval by the Shareholders of
     this provision to authorize corporate action further eliminating or
     limiting the personal liability of directors, then the liability of a
     director of the Corporation shall be eliminated or limited to the fullest
     extent permitted by the Michigan Business Corporation Act, as so amended.

         Any repeal or modification of the foregoing paragraph by the
     Shareholders of the Corporation shall not adversely affect any right or
     protection of a director of the Corporation existing at the time of such
     repeal or modification.



     These Second Restated Articles of Incorporation were duly adopted on the
     22nd day of July, 1992, in accordance with the provisions of Section 642 of
     the Michigan Business Corporation Act, and were duly adopted by the Board
     of Directors without a vote of the shareholders.  These Second Restated
     Articles of Incorporation only restate and integrate and do not further
     amend the provisions of the Restated Articles of Incorporation as
     heretofore amended and there is no material discrepancy between those
     provisions and the provisions of the Second Restated Articles of
     Incorporation.

                                       26
<PAGE>
 

               CERTIFICATE OF AMENDMENT TO THE ARTICLES OF INCORPORATION

                                        OF  

                              (a Michigan corporation)



     Pursuant to the provision of Act 284, Public Acts of 1972, as amended, the
undersigned corporation executes the following Certificate:

1.   The present name of the Corporation is Federal-Mogul Corporation.

2.   The corporation identification number (CID) assigned by the Bureau is: 
     142-176.

3.   The location of its registered office is: 26555 Northwestern Highway,
     Southfield, Michigan  48034.

4.   Article III of the Articles of Incorporation is hereby amended to remove
     the provisions establishing the Series A Preferred Stock, the Series B
     Junior Participating Preferred Stock, the $3.875 Series D Convertible
     Exchangeable Preferred Stock and the Series E Mandatory Exchangeable
     Preferred Stock.

5.   Article III of the Articles of Incorporation is hereby further amended to
     add the provisions set forth on Annex A hereto establishing the Series F
     Junior Participating Preferred Stock.

6.   The foregoing amendments to the Articles of Incorporation were duly adopted
     on the 24th day of  February, 1999 by the Board of Directors pursuant to
     section 611(2) of the Michigan Business Corporation Act.

7.   The foregoing amendments shall be effective as of April 30, 1999.
<PAGE>
 
     Signed this 15th day of April,1999.


                         By:  /s/ James Zamoyski
                         ------------------------------------------------
                              (Signature of President, Vice President,
                               Chairperson or Vice Chairperson)

                            James J. Zamoyski, Sr. Vice President, General
                                                   Counsel and Secretary
                         -------------------------------------------------
                           (Type or Print Name)      (Type or Print Title)



Name of person or organization      Preparer's name and business
remitting fees:                     telephone number

Dykema Gossett PLLC                 Mark A. Metz
                                    (313) 568-5434
<PAGE>
 

                                                                     ANNEX A
                          CERTIFICATE OF DESIGNATIONS
                                      OF
                 SERIES F JUNIOR PARTICIPATING PREFERRED STOCK
                                      OF
                           FEDERAL-MOGUL CORPORATION



                    Pursuant to Section 21.200(302) of the
                       Michigan Business Corporation Act



          RESOLVED, that pursuant to the authority vested in the board of
directors (the "Board of Directors") of Federal-Mogul Corporation, a Michigan
corporation (the "Corporation"), by the Second Restated Articles of
Incorporation, as amended (the "Charter"), the Board of Directors does hereby
create, authorize and provide for the issue of a series of Preferred Stock,
without par value, of the Corporation, to be designated "Series F Junior
Participating Preferred Stock" (hereinafter referred to as the "Series F
Preferred Stock"), initially consisting of 260,000 shares, and to the extent
that the designations, powers, preferences and relative and other special rights
and the qualifications, limitations or restrictions of the Series F Preferred
Stock are not stated and expressed in the Charter, does hereby fix and herein
state and express such designations, powers, preferences and relative and other
special rights and the qualifications, limitations and restrictions thereof, as
follows (all terms used herein which are defined in the Charter shall be deemed
to have the meanings provided therein):

          Section 1.  Designation and Amount.  The shares of such series shall
be designated as "Series F Junior Participating Preferred Stock" and the number
of shares constituting such series shall be 260,000.  Such number of shares may
be increased or decreased by resolution of the Board of Directors; provided,
that no decrease shall reduce the number of shares of Series F Preferred Stock
to a number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into shares of Series F Preferred Stock.

          Section 2.  Dividends and Distributions.
                      
          (A)  Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the shares
of Series F Preferred Stock with respect to dividends, the holders of shares of
Series F Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first business day of March, June,
September and December in each year (each such date being referred to herein as
a "Quarterly Dividend 
<PAGE>
 
Payment Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series F Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $.01 or (b) subject to the provision for adjustment hereinafter set
forth, 1000 times the aggregate per share amount of all cash dividends, and 1000
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock, without par value, of the
Corporation (the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series F
Preferred Stock. In the event the Corporation shall at any time after February
24, 1999 (the "Rights Declaration Date") (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each case the amount to which holders of shares of Series F
Preferred Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount 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 that were outstanding immediately prior to such
event.

          (B)  The Corporation shall declare a dividend or distribution on the
Series F Preferred Stock as provided in paragraph (A) above immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided, however, that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior to and
superior to the shares of Series F Preferred Stock with respect to dividends, a
dividend of $.01 per share on the Series F Preferred Stock shall nevertheless by
payable on such subsequent Quarterly Dividend Payment Date.

          (C)  Dividends shall begin to accrue and be cumulative on outstanding
shares of Series F Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series F Preferred Stock, unless
the date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Series F Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date.  Accrued but unpaid dividends shall
not bear interest.  Dividends paid on the shares of Series F Preferred Stock in
an amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.  The Board of Directors may fix a
record date for the determination of holders of shares of Series F Preferred
Stock entitled to receive payment of a dividend or distribution
<PAGE>
 
declared thereon, which record date shall be no more than 60 days prior to the 
date fixed for the payment thereof.

          Section 3.  Voting Rights.

          The holders of shares of Series F Preferred Stock shall have the
following voting rights:

          (A)  Subject to the provision for adjustment hereinafter set forth,
each share of Series F Preferred Stock shall entitle the holder thereof to 1000
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the number of
votes per share to which holders of shares of Series F Preferred Stock were
entitled immediately prior to such event shall be adjusted by multiplying such
number 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 that were outstanding immediately prior to
such event.

          (B)  Except as otherwise provided herein or by law, the holders of
shares of Series F Preferred Stock and the holders of shares of Common Stock
shall vote collectively as one class on all matters submitted to a vote of
stockholders of the Corporation.

          (C)  (i)  If at any time dividends on any Series F Preferred Stock
shall be in arrears in an amount equal to six (6) quarterly dividends thereon,
the occurrence of such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series F Preferred Stock then
outstanding shall have been declared and paid or set apart for payment.  During
each default period, all holders of Preferred Stock (including holders of the
Series F Preferred Stock) with dividends in arrears in an amount equal to six
(6) quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two (2) Directors.

          (ii)  During any default period, such voting right of the holders of
     Series F Preferred Stock may be exercised initially at a special meeting
     called pursuant to subparagraph (iii) of this Section 3(C) or at any annual
     meeting of stockholders, and thereafter at annual meetings of stockholders,
     provided that such voting right shall not be exercised unless the holders
     of ten percent (10%) in number of shares of Preferred Stock outstanding
     shall be present in person or by proxy.  The absence of a quorum of the
     holders of Common Stock shall not affect the exercise by the holders of
     Preferred Stock of such voting rights.  At any meeting at which the holders
     of Preferred Stock shall exercise such voting right initially during an
     existing default period, they shall have the right, voting as a class, to
     elect Directors to fill such vacancies, if any, in the Board of Directors
     as may then exist up to two (2) Directors or, if such right is exercised at
     an 
<PAGE>
 
     annual meeting, to elect two (2) Directors.  If the number which may be
     so elected at any special meeting does not amount to the required number,
     the holders of the Preferred Stock shall have the right to make such
     increase in the number of Directors as shall be necessary to permit the
     election by them of the required number.  After the holders of the
     Preferred Stock shall have exercised their right to elect Directors in any
     default period and during the continuance of such period, the number of
     Directors shall not be increased or decreased except by vote of the holders
     of Preferred Stock as herein provided or pursuant to the rights of any
     equity securities ranking senior to or pari passu with the Series F
     Preferred Stock.

          (iii)  Unless the holders of Preferred Stock shall, during an existing
     default period, have previously exercised their right to elect Directors,
     the Board of Directors may order, or any stockholder or stockholders owning
     in the aggregate not less than ten percent (10%) of the total number of
     shares of Preferred Stock outstanding, irrespective of series, may request,
     the calling of special meeting of the holders of Preferred Stock, which
     meeting shall thereupon be called by the Chairman of the Board, the Chief
     Executive Officer, the President, a Vice President or the Secretary of the
     Corporation.  Notice of such meeting and of any annual meeting at which
     holders of Preferred Stock are entitled to vote pursuant to this paragraph
     (C)(iii) shall be given to each holder of record of Preferred Stock by
     mailing a copy of such notice to him or her at his or her last address as
     the same appears on the books of the Corporation.  Such meeting shall be
     called for a time not earlier than 10 days and not later than 60 days after
     such order or request, or in default of the calling of such meeting within
     60 days after such order or request, such meeting may be called on similar
     notice by any stockholder or stockholders owning in the aggregate not less
     than ten percent (10%) of the total number of shares of Preferred Stock
     outstanding.  Notwithstanding the provisions of this paragraph (C)(iii), no
     such special meeting shall be called during the period within 60 days
     immediately preceding the date fixed for the next annual meeting of the
     stockholders.

          (iv)  In any default period, the holders of Common Stock, and, if
     applicable, other classes of capital stock of the Corporation, shall
     continue to be entitled to elect the whole number of Directors until the
     holders of Preferred Stock shall have exercised their right to elect two
     (2) Directors voting as a class, after the exercise of which right (x) the
     Directors so elected by the holders of Preferred Stock shall continue in
     office until their successors shall have been elected by such holders or
     until the expiration of the default period, and (y) any vacancy in the
     Board of Directors may (except as provided in paragraph (C)(ii) of this
     Section 3) be filled by vote of a majority of the remaining Directors
     theretofore elected by the holders of the class of capital stock which
     elected the Director whose office shall have become vacant.  References in
     this paragraph (C) to Directors elected by the holders of a particular
     class of stock shall include Directors appointed by such Directors to fill
     vacancies as provided in clause (y) of the foregoing sentence.

          (v)  Immediately upon the expiration of a default period, (x) the
     right of the holders of Preferred Stock as a class to elect Directors shall
     cease, (y) the term of any Directors elected by the holders of Preferred
     Stock as a class shall terminate, and (z) the 
<PAGE>
 
     number of Directors shall be such number as may be provided for in the
     articles of incorporation or by-laws irrespective of any increase made
     pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such
     number being subject, however, to change thereafter in any manner provided
     by law or in the articles of incorporation or by-laws). Any vacancies in
     the Board of Directors effected by the provisions of clauses (y) and (z) in
     the preceding sentence may be filled by a majority of the remaining
     Directors.

          (D)  Except as set forth herein, holders of Series F Preferred Stock
shall have no special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders of Common Stock as
set forth herein) for taking any corporate action.

          Section 4.  Certain Restrictions.
                      
          (A)  Whenever quarterly dividends or other dividends or distributions
payable on the Series F Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series F Preferred Stock outstanding shall have
been paid in full, the Corporation shall not:

          (i)  declare or pay dividends on, make any other distributions on, or
     redeem or purchase or otherwise acquire for consideration any shares of
     capital stock ranking junior (either as to dividends or upon liquidation,
     dissolution or winding up) to the Series F Preferred Stock;

          (ii)  declare or pay dividends on or make any other distributions on
     any shares of stock ranking on a parity (either as to dividends or upon
     liquidation, dissolution or winding up) with the Series F Preferred Stock,
     except dividends paid ratably on the Series F Preferred Stock and all such
     parity stock on which dividends are payable or in arrears in proportion to
     the total amounts to which the holders of all such shares are then
     entitled;

          (iii)  redeem or purchase or otherwise acquire for consideration
     shares of any capital stock ranking on a parity (either as to dividends or
     upon liquidation, dissolution or winding up) with the Series F Preferred
     Stock, provided that the Corporation may at any time redeem, purchase or
     otherwise acquire shares of any such parity stock in exchange for shares of
     any capital stock of the Corporation ranking junior (either as to dividends
     or upon dissolution, liquidation or winding up) to the Series F Preferred
     Stock; or

          (iv)  purchase or otherwise acquire for consideration any shares of
     Series F Preferred Stock, or any shares of capital stock ranking on a
     parity with the Series F Preferred Stock, except in accordance with a
     purchase offer made in writing or by publication (as determined by the
     Board of Directors) to all holders of such shares upon such terms as the
     Board of Directors, after consideration of the respective annual dividend
     rates and other relative rights and preferences of the 
<PAGE>
 
     respective series and classes, shall determine in good faith will result 
     in fair and equitable treatment among the respective series or classes.

          (B)  The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.

          Section 5.  Reacquired Shares.

          Any shares of Series F Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof.  All such shares shall upon their
cancellation become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created by resolution
or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.

          Section 6.  Liquidation, Dissolution or Winding Up.

          (A)  Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Corporation, no distribution shall be made to the holders of
shares of capital stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series F Preferred Stock unless,
prior thereto, the holders of shares of Series F Preferred Stock shall have
received $1000 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment
(the "Series F Liquidation Preference").  Following the payment of the full
amount of the Series F Liquidation Preference, no additional distributions shall
be made to the holders of shares of Series F Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have received an amount per
share (the "Common Adjustment") equal to the quotient obtained by dividing (i)
the Series F Liquidation Preference by (ii) 1000 (as appropriately adjusted as
set forth in subparagraph (C) below to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock) (such
number in clause (ii), the "Adjustment Number").  Following the payment of the
full amount of the Series F Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series F Preferred Stock and Common Stock,
respectively, and the payment of liquidation preferences of all other shares of
capital stock which rank prior to or on a parity with Series F Preferred Stock,
holders of Series F Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, on a per share basis, respectively.

          (B)  In the event, however, that there are not sufficient assets
available to permit payment in full of the Series F Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series F Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of such parity shares in
<PAGE>
 
proportion to their respective liquidation preferences.  In the event, however,
that there are not sufficient assets available to permit payment in full of the
Common Adjustment, then such remaining assets shall be distributed ratably to
the holders of Common Stock.

          (C)  In the event the Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the Adjustment Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number 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 that
were outstanding immediately prior to such event.

          Section 7.  Consolidation, Merger, etc.

          In case the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series F Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share
(subject to the provision for adjustment hereinafter set forth) equal to 1000
times the aggregate amount of capital stock, securities, cash and/or any other
property (payable in kind), as the case may be, for which or into which each
share of Common Stock is exchanged or changed.  In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the amount set forth in the preceding
sentence with respect to the exchange or change of shares of Series F Preferred
Stock shall be adjusted by multiplying such amount 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
that were outstanding immediately prior to such event.

          Section 8.  No Redemption.

          The shares of Series F Preferred Stock shall not be redeemable.

          Section 9.  Ranking.
                       
          The Series F Preferred Stock shall rank junior to all other series of
the Corporation's Preferred Stock as to the payment of dividends and the
distribution of assets, whether or not upon the dissolution, liquidation or
winding up of the Corporation, unless the terms of any such series shall provide
otherwise.
<PAGE>
 
          Section 10.  Amendment.

          The Charter shall not be amended in any manner which would materially
alter or change the powers, preferences or special rights of the Series F
Preferred Stock so as to affect them adversely without the affirmative vote of
the holders of at least two-thirds of the outstanding shares of Series F
Preferred Stock, voting separately as a class.

          Section 11.  Fractional Shares.
 
          Series F Preferred Stock may be issued in fractions of a share which
shall entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series F Preferred Stock.