BIRD CORP, 10-K, 1996-04-01

BIRD CORP
10-K, 1996-04-01
ASPHALT PAVING & ROOFING MATERIALS

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<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

(Mark One)

X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (FEE REQUIRED)

For the fiscal year ended December 31, 1995

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from______________to______________
Commission File Number 0-828

BIRD CORPORATION
(Exact name of registrant as specified in its charter)

MASSACHUSETTS 04-3082903
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)

1077 Pleasant Street, Norwood, MA 02062
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (617) 551-0656

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Name of each exchange
------------------- on which registered
-------------------
NONE NONE

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $1 per share
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No___

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ___

The aggregate market value of common stock, par value $1 per share, held by
non-affiliates as of March 1, 1996 was $23,150,000. As of March 1, 1996 there
were 4,123,178 shares of Bird Corporation common stock, par value $1 per share,
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Proxy Statement for the 1996 Annual Meeting of Stockholders to
be filed with the Commission by April 30, 1996 are incorporated by reference
into Parts I and III of this report.

<PAGE> 2

PART I

ITEM 1. DESCRIPTION OF BUSINESS

As a result of the sale of its vinyl building products business, window
fabrication business and San Leon hydrocarbon waste recycling center (see
"Recent Business Developments" below), Bird Corporation's current manufacturing
operation consists of one primary business unit - roofing manufacturing and
sales and marketing. Products currently manufactured at Bird Corporation's
roofing facility include asphalt shingles and roll roofing for commercial and
residential use. These products are marketed through independent wholesalers,
including wholesalers whose primary customers are roofing contractors. All
references herein to the "Company" or "Bird" refer to Bird Corporation and its
subsidiaries unless otherwise indicated by the context.

RECENT BUSINESS DEVELOPMENTS

There have been a number of significant developments in the business of the
Company since December 31, 1994, including the following:

_ On March 14, 1996, the Company signed a definitive agreement
with CertainTeed Corporation, a subsidiary of Saint-Gobain
Corporation, providing for CertainTeed to acquire in a merger
transaction all of the Company's outstanding common, preferred
and preference shares.

CertainTeed will pay $7.50 per share for the common stock. As
of March 1, 1996 there were approximately 4.1 million shares
of Bird common stock outstanding.

The Bird/CertainTeed merger provides for the acquisition or
redemption of all outstanding 5% cumulative preferred stock at
their liquidation preference of $110.00 per share and all
outstanding $1.85 cumulative convertible preference stock for
$20.00 per share. Payment for preferred and preference stock
will include any previously accrued but unpaid dividends. The
total consideration for the transaction exceeds $50 million,
including common and preferred equity plus debt.

Completion of the transaction is subject to approval by Bird's
shareholders, appropriate governmental approvals and other
customary conditions.

_ On November 29, 1995, the Company sold all of the outstanding
capital stock of Bird Environmental Gulf Coast, Inc. ("BEGCI")
which owned the Company's interest in the San Leon, Texas
based hydrocarbon waste recycling center, to GTS Duratek, Inc.
("Purchaser") for a purchase price of $1.00. In addition, BETI
agreed to pay the Purchaser the amount by

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which BEGCI's current liabilities exceeded its current assets
at August 31, 1995, which was approximately $1.3 million. The
sale of the recycling center completes the Company's
withdrawal from the environmental remediation and recycling
industry. The resulting loss of $11,252,000 is reflected as
discontinued operations in the Company's consolidated
statements of operations.

_ On September 26, 1994, the Company announced that it had
signed a definitive agreement to sell the assets of its vinyl
building products manufacturing operation located in
Bardstown, Kentucky to Jannock, Inc. ("Jannock"). This
transaction also included an option to purchase the Company's
interest in Kensington Partners ("Kensington"), a window
fabrication business. At a special meeting of the shareholders
held in Dedham, Massachusetts on March 7, 1995, the
shareholders of the Company voted to sell the assets of the
Company's vinyl building products operation to Jannock
essentially in accordance with the terms and conditions as
outlined in the definitive agreement between the Company and
Jannock dated September 23, 1994. On March 8, 1995, the sale
was closed for a gross purchase price of $47.5 million which
was reduced to approximately $42.5 million by post-closing
working capital adjustments. The sale included the assumption
by the purchaser of certain specified liabilities of the vinyl
business. Proceeds from the sale were used to reduce bank
debt. Net of adjustments, the Company's gain on this sale
totaled $20,579,000 million and is reflected as discontinued
business activity income in the consolidated statements of
operations.

_ On June 2, 1995, the Company sold all of the outstanding
capital stock of Bird-Kensington Holding Corp.
("Bird-Kensington"), which owned the Company's interest in
Kensington to Jannock, Inc. The sale was consummated pursuant
to the exercise by Jannock of an option granted under the
Asset Purchase Agreement dated as of September 23, 1994 (as
amended by amendments dated as of January 24, 1995, January
31, 1995, and April 27, 1995). The purchase price consisted of
cash in the amount of $2,780,000 and the assumption of certain
liabilities related to the Kensington business. Cash proceeds
of $1 million were used to acquire the minority partner's
interest in Kensington. In addition, $4,090,000 was invested
by the Company in Bird-Kensington, as a condition of the sale,
to enable Kensington to pay certain liabilities and to meet
equity requirements as stipulated in the Asset Purchase
Agreement. The sale resulted in a loss of $1,959,000 and is
reflected as discontinued business activity expense in the
Company's consolidated statements of operations.

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<PAGE> 4

HOUSING GROUP

Asphalt roofing products are manufactured and sold at the Company's facilities
in Norwood, Massachusetts. Asphalt shingles and roll roofing are produced by
coating a fiberglass mat with a mixture of hot asphalt and crushed rock filler
and covering the coated mat with Company-manufactured roofing granules. The
Company's facilities include a roofing manufacturing facility, a granule plant,
a quarry, an asphalt plant and a private landfill for the Company's use.

The Company's Housing Group produced vinyl siding products at its plant in
Bardstown, Kentucky prior to the sale of such facility in March 1995.
Additionally, the Company sold its interest in Kensington, its joint venture in
the replacement window fabrication business in June 1995. The Housing Group also
carried on a distribution business through wholesale building materials
distributors based in New England, New York, Kentucky, Texas, Louisiana, and
Arizona until such businesses were sold in August and November 1994.

Net sales of the components of the Housing Group as a percentage of consolidated
net sales of the Company were as follows: sales of asphalt roofing products, 80%
in 1995, 31% in 1994 and 23% in 1993; sales of vinyl products, 20% in 1995, 24%
in 1994 and 20% in 1993; and sales through building materials distribution
centers (including roofing and vinyl products manufactured by the Company), 45%
in 1994 and 57% in 1993.

The principal geographic markets for the Company's manufactured roofing
products, due to limitations imposed by freight costs, are the northeastern
United States. The building materials business is seasonal to the extent that
outside repair and remodeling and new construction decline during the winter
months. To reduce the impact of this seasonal factor, the Company generally
employs what it believes to be an industry-wide practice of "winter dating",
pursuant to which extended or discounted payment terms are offered to
credit-worthy customers who order and accept delivery of roofing products during
specified periods of time in the slow season.

RAW MATERIALS

The principal raw materials used in the manufacture of asphalt roofing products
are fiberglass mat, asphalt saturants and coatings and crushed granules. The
Company's requirements for fiberglass mat are met primarily under a Glass Mat
Supply Agreement with one vendor which expires on December 31, 1996. Fiberglass
mat is also generally available in adequate quantities from a number of outside
suppliers. Asphalt saturants and coatings were, until recently, purchased from a
major oil refinery. These materials are also available from other sources at a
higher delivered cost. After the refinery's discontinuation of its production of
asphalt in April 1994, the Company relied on a number of alternative sources for
this raw material. Since completion of construction of an asphalt plant in
January 1995, the Company has been able to process asphalt at its

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roofing facility, thereby reducing its costs and decreasing the potential for
temporary interruptions in its manufacturing operations. The Company believes
that it can produce all of its current granule requirements at its granule plant
and quarry.

BACKLOG

Order backlog is not a meaningful measure of the Company's building materials
business because there are fewer sales during the last quarter of the fiscal
year and the order-to-shipment cycle is relatively short. Additionally, it is
very rare, at any time, to require more than 30 days from the receipt of a
product order to delivery of the product.

COMPETITION

The building materials business is, to a large degree, a commodities-type
business and is highly competitive with respect to price, delivery terms and
consistent product quality. Many of the Company's competitors are larger and
financially stronger than the Company, but none is dominant in any of its
markets.

The strengths of the Company's asphalt roofing business arise, in part, from the
unique marketing programs the Company directs toward its indirect customer base,
professional roofing contractors, combined with an industry-wide reputation for
providing quality products with a high level of service. The Company's
comprehensive contractor marketing program is designed to support the position
of the Company's contractors in the industry. Such marketing programs include a
special system for in-home sales promotions. Pursuant to its exclusive
certification program, the Company also certifies contractors who have recorded
three (3) successful years in business, who provide the Company with names of
customers for quality checks, sign a letter of ethics, have a good credit
history, warrant their workmanship for two (2) years and attend annual training
meetings. Contractors must be recertified every two years. Certified contractors
are supplied with a wide array of marketing materials, including customized
sample cases, special mailers and custom job site signs.

INTELLECTUAL PROPERTY

The Company owns a number of trademarks, as well as significant technology and
know-how, which it utilizes in connection with its asphalt roofing business. The
Company believes that its trademarks are strong and well recognized in the
industry.

COMPLIANCE WITH CERTAIN ENVIRONMENTAL LAWS

The Company has expended, and expects to continue to expend, funds to comply
with federal, state and local provisions and orders which

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relate to the environment. Based on the information available to the Company at
this time, the Company believes that the effect of compliance with these
provisions on the capital expenditures, earnings and competitive position of the
Company is not material. Litigation and other proceedings involving
environmental matters are described under the heading "Environmental Matters" in
Item 7, "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and in Item 3, "Legal Proceedings".

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

While the Company formerly operated in two major business segments, its housing
segment and its environmental segment, the Company no longer operates its
environmental segment. Financial information about the industrial segments in
which the Company operates, for the three years ended December 31, 1995, appear
in Note 12 of the Notes to Consolidated Financial Statements which are included
herein.

EMPLOYEES

At December 31, 1995, the Company employed 174 people.

ITEM 2. PROPERTIES

The Company's executive offices are located at its plant in Norwood,
Massachusetts. The Company believes that its plant and facilities, as described
below, are suitable and adequate for its current and anticipated business.
Operating capacity can be increased by additional man hours, changing product
mix, and/or minimal capital investment should the need arise. The Company's
facilities are well maintained, in sound operating condition, and in regular
use.

ROOFING MANUFACTURING FACILITY

The Company owns its asphalt roofing manufacturing facility in Norwood,
Massachusetts. The Norwood plant includes the roofing manufacturing facility, a
granule plant and an asphalt plant. The Company's quarry is located in Wrentham,
Massachusetts, and its private landfill is located in Walpole, Massachusetts.
The Company leases an industrial laminator and certain other equipment which
were fabricated for use in its roofing plant. The laminator lease expires in
1998. The Company completed the construction of an asphalt oxidizer plant at the
Norwood premises in January 1995 to ensure a continuous supply of asphalt. The
Company also leases an asphalt storage tank and terminal facilities in
Providence, Rhode Island.

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ITEM 3. LEGAL PROCEEDINGS

The Company monitors its compliance with environmental regulations on an ongoing
basis. The Company's general counsel receives environmental site assessments
from the operating managers responsible for site environmental compliance.
Appropriate action is undertaken where needed. When environmental claims are
asserted against the Company, the claims are evaluated by the Company's general
counsel and operating management in conjunction with external legal counsel and
environmental engineers as necessary, and action is taken with respect to all
known sites, as appropriate. The Company is currently engaged in proceedings
relating to or has received notice of the following environmental matters:

On March 15, 1994 the Company received a draft of an Administrative Consent
Order and Notice of Noncompliance from the Massachusetts Department of
Environmental Protection ("DEP") concerning operations at its Norwood,
Massachusetts manufacturing facility and associated rock granule processing
facility. The draft alleges that the Company was not in compliance with
regulations of the DEP relating to air emissions, granule plant operation, and
labeling, handling and storage of certain hazardous waste. The draft proposes
certain corrective action on the part of the Company as well as payment of civil
administrative penalties. On June 10, 1994, the Company's roofing division
entered into an administrative consent order and notice of noncompliance with
respect to the alleged violations. The consent order requires the Company to
undertake certain modifications and corrective actions with respect to certain
hazardous waste handling and storage facilities at the Norwood facility, to
conduct an environmental audit of its operations at such facility and to
undertake various modifications of air pollution control equipment. On May 13,
1994, the Company paid an administrative penalty of $30,000. The Company
estimated that the cost of corrective action to be taken by it in accordance
with the consent order would be approximately $100,000. The majority of the
corrective actions were completed in 1995.

On March 25, 1994, the Company received a notice from the United States
Environmental Protection Agency (the "EPA") regarding a site inspection
prioritization report prepared by the DEP. The notice alleges a potential
release of hazardous substances into the environment at the Company's former
mill site in East Walpole, Massachusetts. The EPA has reserved the right to
conduct further site tests on the location. A site assessment performed on the
mill site for the Company by its environmental consultants, GZA GeoEnvironmental
Inc. ("GZA"), showed no environmental cleanup was necessary. This report was
submitted to the DEP in July 1995. In the opinion of management and based on
management's and GZA's understanding that the alleged releases are in de minimis
quantities, this matter should not have a material adverse effect on the
Company's financial position or on the results of its operations.

On June 21, 1994, the Arizona Department of Environmental Quality ("ADEQ")
issued a notice of violation ("NV") to Southwest Roofing

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Supply, a previously owned division of the Company ("Southwest"), which directed
Southwest to conduct a site investigation of property formerly leased by
Southwest. A consent order between the ADEQ and the Company was issued on
September 23, 1994. Pursuant to the consent order, the Company agreed to submit
a work plan with a view to remediating the soil and groundwater that may have
been contaminated by leaks from an underground storage tank previously removed
by the Company. The Company's management believes that the remediation cost to
the Company will be in the range of $200,000 to $700,000. As of December 31,
1995, the Company has provided a reserve of $450,000 for the estimated cost of
cleanup. The Company anticipates that $200,000 will be reimbursed to the Company
by the ADEQ in accordance with Arizona law and regulation.

In 1986, the Company, along with numerous other companies, was named by the EPA
and other governmental agencies responsible for regulation of the environment as
a Potentially Responsible Person ("PRP") pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C.
Paragraph 9601, et seq. ("CERCLA") in connection with hazardous substances at a
site known as the Fulton Terminal Superfund site located in Fulton, Oswego
County, New York. On September 28, 1990, the Company and a number of other PRPs
reached a negotiated settlement with the EPA pursuant to which the settling PRPs
agreed to pay the costs of certain expenses in connection with the proceedings
and to pay certain other expenses, including the costs and expenses of
administering a trust fund to be established by the settling PRPs. The
settlement agreement is embodied in a consent decree lodged with the United
States District Court for the Western District of New York and fixed the
Company's proportionate share of the total expenses. The ultimate cost to the
Company of the remedial work and other expenses covered by the settlement
agreement is estimated to be between $1 million to $2 million payable over a
period of 3 to 15 years (depending upon the duration of remediation efforts). At
December 31, 1995, the Company has provided a reserve of approximately $1
million to cover the estimated cost of the Company's remaining proportionate
share (i.e., 17%) of the ultimate total cost of cleanup. Under a cost-sharing
arrangement set forth in a consent decree with the EPA, the other PRPs have
agreed to incur 83% of the aggregate cost of remediation of this site.

The Company has been named as a PRP with respect to certain other sites which
are being investigated by federal or state agencies responsible for regulation
of the environment. As a consequence of its status as a PRP, the Company may be
jointly and severally liable for all of the potential monetary sanctions and
remediation costs applicable to each site. In assessing the potential liability
of the Company at each site, management has considered, among other things, the
aggregate potential cleanup costs of each site; the apparent involvement of the
Company at each site and its prospective share of the remediation costs
attributable thereto; the number of PRPs identified with respect to each site
and their financial ability to contribute their proportionate shares of the
remediation costs for such site; the availability of insurance coverage for the
Company's

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involvement at each site and the likelihood that such coverage may be contested;
and whether and to what extent potential sources of contribution from other PRPs
or indemnification by insurance companies constitute reliable sources of
recovery for the Company. Similar consideration has been given in determining
the exposure and potential liability of the Company in connection with other
significant legal proceedings to which the Company is a party. On the basis of
such consideration, management has determined that such environmental matters
will not have a material adverse effect on the Company's financial position or
results of operations. The Company has provided an aggregate reserve amounting
to approximately $300,000 for its estimated share of the ultimate cost of
clean-up for claims arising from other such sites (without taking into account
any potential indemnification or recovery from third parties).

The Company's roofing facility at Norwood, Massachusetts is one of 4,000 sites
on the DEP List of Confirmed Disposal Sites. The DEP significantly revised the
regulations that govern the reporting, assessment and remediation of hazardous
waste sites in Massachusetts. The new Massachusetts Contingency Plan ("MCP")
however, does not alter the ultimate liability for any remediation that may be
necessary at the Norwood facility. Under the new MCP, the roofing facility was
listed on the August 1993 "Transition List of Confirmed Disposal Sites and
Locations to be Investigated."

A site assessment of the Norwood facility was performed for the Company by its
environmental consultants GZA GeoEnvironmental, Inc. because the Company was on
the DEP List of Confirmed Disposal Sites. The Company was required to complete
certain additional remedial activities described in the new MCP on or before
August 2, 1996. The Phase I and Phase II plan was completed in 1995 and
submitted to the DEP in January 1996. In the opinion of management, no
additional material costs will be incurred.

Since 1981 Bird has been named as a defendant in approximately 550 product
liability cases throughout the United States by persons claiming to have
suffered asbestos-related diseases as a result of alleged exposure to asbestos
used in products manufactured and sold by Bird. Approximately 140 of these cases
are currently pending and costs of approximately $2 million in the aggregate
have been incurred in the defense of these claims since 1981. Employers
Insurance of Wausau ("Wausau") has accepted the defense of these cases under an
agreement for sharing of the costs of defense, settlements and judgments, if
any. At December 31, 1995, the Company has recorded a reserve of $950,000 to
cover the estimated cost of these claims. In light of the nature and merits of
the claims alleged, in the opinion of management, the resolution of these
remaining claims will not have a material adverse effect on the results of
operations or financial condition of the Company.

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County, Massachusetts. The jury found in favor of ABPCO and judgement was
entered on January 26, 1996 in the principal amount of approximately $1.8
million. The award, with interest accruing at 12% per annum, is expected to be
in excess of $3 million and will not be reported as income until collected. The
defendant has appealed the judgement.

INSURANCE AND PRODUCT LIABILITY CLAIMS

On June 1, 1993, Wausau commenced action in the Superior Court for Norfolk
County, Massachusetts, against Bird seeking a declaratory judgment that certain
built-up roofing and glass shingle claims made against Bird were not covered by
liability insurance policies issued by Wausau. Bird asserts that the claims are
covered and has answered the complaint. A trial is scheduled for 1997. In the
opinion of management, the above matter will not have a material adverse effect
on the Company's financial position or results of operations.

The Company is also exposed to a number of other asserted and unasserted
potential claims encountered in the normal course of business. In the opinion of
management, the resolution of such claims will not have a material adverse
effect on the Company's financial position or results of operations.

The Company is a defendant in a number of suits alleging product defects, the
outcome of which management believes will not in the aggregate have a material
impact on the Company's financial position or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders during the quarter
ended December 31, 1995.

EXECUTIVE OFFICERS OF THE REGISTRANT

The names and ages of the executive officers of the Company as of

March 8, 1996, the date from which they have served as officers and their
present positions with the Company are as follows:

Richard C. Maloof 50 January 1985 President and
Chief Operating
Officer

Frank S. Anthony 49 May 1984 Vice President,
General Counsel and
Corporate Secretary

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Mr. Maloof joined the Company in October 1971. He has held various positions
such as Senior Roofing Engineer, Manufacturing Manager - Pacific Division, Vice
President of Manufacturing and President of the Roofing Division. Mr. Maloof
holds an engineering degree. He was elected President and COO in May 1995 and
was also elected to the Board of Directors in 1995. Mr. Anthony is an attorney
and prior to joining Bird served in the law department of Westinghouse Electric
Corporation from 1976 to 1983.

These officers are appointed annually at an organizational meeting of the Board
of Directors immediately following the annual meeting of stockholders. There are
no family relationships among any of the officers of the Company nor are any of
the officers related to any member of the Board of Directors.

The Company had an employment agreement with George Haufler, the former CEO,
which was terminated on January 25, 1994. In December 1993, the Company entered
into an employment contract and a severance agreement with Joseph Vecchiolla,
successor to Mr. Haufler. The Company has also entered into agreements with its
two executive officers. Mr. Anthony's agreement superseded his earlier severance
agreement and provides that severance benefits are payable to him on March 31,
1996. The agreement automatically converts to an oral agreement on the same
terms and conditions terminable by either party on 60 days notice. Mr. Maloof's
agreement provides severance benefits to him after a change in control of the
Company. These agreements are described in the Company's definitive proxy
statement for its 1996 Annual Meeting which is to be filed with the Commission
by April 30, 1996 and is incorporated herein by reference.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER
MATTERS COMMON STOCK INFORMATION

The Company had 2,123 common shareholders of record at December 31, 1995.

The common stock is quoted in the National Market System under the NASDAQ symbol
BIRD. The range of high and low prices for the common stock as reported by
NASDAQ for the periods indicated is set forth below.

<TABLE>
<CAPTION>
1995 1994
---- ----
QUARTER HIGH LOW HIGH LOW
------- ---- --- ---- ---

<S> <C> <C> <C> <C>
FIRST 9 7 3/4 12 1/4 8
SECOND 8 5/8 6 1/4 11 1/4 8 1/2
THIRD 8 1/2 5 7/8 10 1/2 7
FOURTH 6 5/8 4 1/2 10 8
</TABLE>

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The Company paid no cash dividends on its common stock during 1995 or 1994.

Under the terms of the Loan Agreement between the Company and Fleet Capital, the
Company has agreed that it will refrain from paying cash dividends on its common
stock or its $1.85 cumulative preference stock, without prior approval from the
Bank.

The Company is in arrears in the payment of four dividends on its preference
stock. The Articles of Organization of the Company provide that as long as any
arrearage on the payment of dividends on the Company's 5% preferred stock
exists, no dividends may be declared or paid on any other class of stock of the
Company and further provides that in the event that full cumulative dividends on
the preference stock have not been declared and paid, the Company may not
declare or pay any dividends or make any distributions on, or purchase, redeem,
or otherwise acquire, its common stock until full cumulative dividends on the
preference stock have been declared and paid or set aside for payment.

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ITEM 6. SELECTED FINANCIAL DATA

The following tables set forth certain financial data and are qualified in their
entirety by the more detailed Consolidated Financial Statements and information
included elsewhere herein:

SELECTED CONSOLIDATED STATEMENT OF OPERATIONS DATA

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,

1995 1994 1993 1992 1991
--------- --------- --------- --------- ---------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Net sales $ 54,180 $ 167,886 $ 187,745 $ 164,202 $ 137,059
--------- --------- --------- --------- ---------
Costs and expenses:
Cost of sales 48,007 136,878 151,664 128,371 107,226
Selling, general and
administrative expenses 11,817 28,786 32,716 27,811 23,023
Interest expense 927 4,782 2,472 1,506 1,026
Discontinued business activities (income) (17,570) (1,313) 268 178 189
Other (income) expense 372 4,680 5,903 (197) (331)
--------- --------- --------- --------- ---------

Earnings (loss) from continuing operations
before income taxes 10,627 (5,927) (5,278) 6,533 5,926
Provision (benefit) for income taxes 11,424 (7,010) (637) 869 498
--------- --------- --------- --------- ---------

Earnings (loss) from continuing operations
before cumulative effect of accounting change (797) 1,083 (4,641) 5,664 5,428
--------- --------- --------- --------- ---------

Discontinued operations:
Gain (loss) from operations of discontinued
businesses, net of taxes 0 1,245 (15,414) (2,573) (249)
Loss on disposal of businesses, net of taxes (11,252) (6,011) (11,000) 0 0
--------- --------- --------- --------- ---------

Net loss from discontinued operations (11,252) (4,766) (26,414) (2,573) (249)
--------- --------- --------- --------- ---------

Cumulative effect of accounting change 0 0 2,733 0 0
--------- --------- --------- --------- ---------

Net earnings (loss) $ (12,049) $ (3,683) $ (28,322) $ 3,091 $ 5,179
========= ========= ========= ========= =========

Primary earnings (loss) per common share:
Continuing operations $ (0.57) $ (0.11) $ (1.51) $ 1.00 $ 1.01
Discontinued operations (2.74) (1.20) (6.45) (0.62) (0.06)
Cumulative effect of accounting change 0.00 0.00 0.67 0.00 0.00
--------- --------- --------- --------- ---------

Net earnings (loss) per common share $ (3.31) $ (1.31) $ (7.29) $ 0.38 $ 0.95
========= ========= ========= ========= =========

Cash dividend per common share $ 0.00 $ 0.00 $ 0.15 $ 0.20 $ 0.20
========= ========= ========= ========= =========

Book value per common share $ 1.45 $ 5.07 $ 5.75 $ 12.83 $ 12.61
========= ========= ========= ========= =========
</TABLE>

SELECTED CONSOLIDATED BALANCE SHEET DATA

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
(In thousands)

<S> <C> <C> <C> <C> <C>
Total assets $ 43,703 $ 85,705 $123,229 $119,075 $ 99,904
Working capital $ 5,978 $ 5,627 $ 30,090 $ 43,782 $ 34,179
Long-term debt, excluding current portion $ 4,869 $ 12,504 $ 43,127 $ 30,374 $ 12,150
Stockholders' equity $ 24,416 $ 37,718 $ 40,561 $ 69,101 $ 68,602
</TABLE>

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<PAGE> 14

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

PROPOSED MERGER

On March 14, 1996, the Company signed a definitive agreement with CertainTeed
Corporation, a subsidiary of Saint-Gobain Corporation, providing for CertainTeed
to acquire in a merger transaction all of the Company's outstanding common,
preferred and preference shares.

Completion of the merger is subject to approval by the Company's shareholders
and appropriate governmental authorities. The merger is not subject to a
financing contingency. The Company's Board of Directors has received a fairness
opinion from its investment bankers regarding the merger. The closing of the
merger is anticipated at the end of the second quarter, following distribution
of proxy materials to the Company's shareholders and approval at a special
meeting.

FINANCIAL CONDITION

Prior to November 30, 1994, the Company's external financial needs were
satisfied by borrowing under the Second and Third Amended Credit Agreements with
The First National Bank of Boston, Philadelphia National Bank incorporated as
Corestates Bank, N.A. and The Bank of Tokyo Trust Company.

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<PAGE> 15

which was reduced to approximately $42.5 million by post-closing working capital
adjustments. The proceeds from the sale were used to reduce bank debt.
Concurrent with the sale, Fleet Capital executed the First Amendment to the Loan
Agreement amending the amount of the facility to $20 million consisting of a $15
million revolving credit commitment and a $5 million term loan. At December 31,
1995, $5 million of debt was outstanding. On January 10, 1996, the Company paid
down the term loan so that the outstanding principal balance equaled $2.5
million. Up to $5 million of the revolving credit facility can be used for
letters of credit. Letters of credit outstanding as of December 31, 1995 totaled
$2,233,000 compared to $2,927,000 as of December 31, 1994.

Borrowings by Bird Incorporated under the Loan Agreement are guaranteed by the
Company and the Company's other subsidiaries and are secured by substantially
all of the assets of the Company and its subsidiaries. The revolving credit line
availability is determined with reference to a percentage of accounts receivable
and inventory which are pledged to the lender. During the period January 1
through April 30, the Loan Agreement provides a $2 million over advance on
accounts receivable and inventories in order to assist the Company in assuring
adequate funding of any seasonal build up of accounts receivable which may occur
under sales programs offered during the winter months. Currently, the
availability calculation does not allow borrowings to the full extent of the
revolving credit commitment, due to the seasonality of the building materials
manufacturing business. As of March 15, 1996, an aggregate of $7,683,000 was
available to the Company under the terms of the revolving credit facility under
the Loan Agreement.

The Loan Agreement contains financial and operating covenants which, among other
things, (i) require the Company to maintain prescribed levels of tangible net
worth, net cash flow and working capital and (ii) place limits on the Company's
capital expenditures. The Loan Agreement also contains restrictions on
indebtedness, liens, investments, distributions (including payment of common and
preference dividends), mergers, acquisitions and disposition of assets. As of
September 30, 1995, the Company was in default under Section 8.3.3 of the Loan
Agreement as a result of failing to achieve a stated level of cash flow for the
third quarter of 1995. As a result of the weak remodeling market during 1995,
sales volume and earnings were less than anticipated, negatively impacting cash
flow. At the request of the Company, Fleet Capital waived the cash flow
requirements for the third quarter without penalty and amended this and other
financial covenants for subsequent periods based on a review of the Company's
financial condition and future projections. As of December 31, 1995, the Company
was in compliance with all covenants.

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<PAGE> 16

8.69%. The repayment of the principal on the term loan is at the rate of $62,500
per month through November 1996 and $71,417 per month thereafter with a final
principal payment of $3,455,800 due on November 30, 1997. Proceeds in excess of
$100,000 from the sale of fixed assets may, at Fleet Capital's discretion, be
applied to the outstanding principal payments of the term loan.

In order to control its cost and supply of asphalt, the Company constructed an
asphalt oxidizer plant at its roofing facility in Norwood, Massachusetts.
Construction was completed during January 1995. The Company's decision to build
the oxidizer was triggered by the decision of Exxon (the only remaining supplier
of asphalt in New England) to exit the New England market. The cost of this
plant expansion was approximately $5.5 million.

On March 8, 1995, the Company sold substantially all of the assets of its vinyl
siding operation to Jannock, Inc. for $47.5 million in cash subject to certain
downward adjustments which totaled $4,962,000. Net of adjustments, the gain on
the sale of the vinyl business totaled $20,579,000.

On June 2, 1995, the Company sold all of the outstanding capital stock of
Bird-Kensington Holding Corp. ("Bird-Kensington"), which owned the Company's
interest in Kensington Partners ("Kensington"), to Jannock, Inc. ("Jannock").
The sale was consummated pursuant to the exercise by Jannock of an option
granted under an Asset Purchase Agreement related to the sale of the Company's
vinyl business dated as of September 23, 1994 (as amended by amendments dated as
of January 24, 1995, January 31, 1995, and April 27, 1995, the "Asset Purchase
Agreement"). The purchase price consisted of cash in the amount of $2,780,000
and the assumption of certain liabilities related to the Kensington business.
Cash proceeds of $1 million were used to acquire the minority partner's interest
in Kensington. In addition, $3,692,000 was invested by the Company in
Bird-Kensington, as a condition of the sale, to enable Kensington to pay certain
liabilities and to assure that the equity of Kensington was not less than
$1,150,000 at the time of closing as stipulated in the Asset Purchase Agreement.

Following the closing date, Jannock presented to the Company financial
statements of Kensington as of June 2, 1995, indicating that net equity was
$471,000 less than the amount required by the Asset Purchase Agreement. The
Company had established a reserve for the full amount of the shortfall at June
30, 1995 and subsequently paid to Jannock $398,000 in full settlement of the
terms of the Asset Purchase Agreement. Net of certain purchase price
adjustments, the loss on the sale of Kensington was $1,959,000.

One June 18, 1994, the Company agreed to cause the sale of its 80% interest in
Bird Environmental Gulf Coast, Inc. ("BEGCI") to the minority shareholders
thereof, subject to financing, resulting in the complete withdrawal from the
environmental business. During 1995, the minority partner became unable to
finance the purchase of the facility and efforts to attract another purchaser
were unsuccessful. In July 1995, the Company's Board of Directors suspended
further funding of the facility. As a result of this action, during the second
quarter of

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<PAGE> 17

1995, the Company's remaining investment of $8.6 million was written-off and a
$3 million reserve was established for the costs associated with the closure of
the facility. On November 29, 1995, the Company caused the sale all of the
outstanding capital stock of BEGCI to GTS Duratek, Inc. for a purchase price of
$1.00. In addition, the Company agreed to pay the purchaser the amount by which
BEGCI's current liabilities exceeded its current assets at August 31, 1995 which
was approximately $1.3 million. Of the $3 million reserve established in the
second quarter of 1995, $2,050,000 was utilized, while $650,000 remains at
December 31, 1995 for future claims against discontinued operations.

Net cash and cash equivalents increased during fiscal 1995 by $3.4 million
primarily due to cash received from the sale of the vinyl business. The cash
used by continuing operations for the fiscal period ended December 31, 1995
increased $6.7 million, from $11.6 million to $18.3 million. In 1995, the
Company recorded a gain of $20.6 million on the sale of its vinyl business. This
gain was offset by charges of $11.3 million and $2 million related to the
disposal of the environmental and window fabrication businesses, respectively.
Cash used by operations in 1995 was also attributable to several significant
changes in the balance sheet such as a reversal of future tax benefits of $11.3
million, a decrease of $3.1 million in trade accounts receivable, a decrease of
$14.3 million in liabilities not relating to financing activities and an
increase of $2.7 million relating to inventories.

Additionally, the vinyl and window fabrication business activities which were
discontinued in 1995 had a significant impact on the changes in the balance
sheet accounts between December 31, 1994 and December 31, 1995. As a result of
these sales, inventory decreased $6.3 million, accounts and notes receivable
decreased $11 million, and current liabilities decreased $9 million. In
addition, assets held for sale decreased $7.5 million due to the write-off of
the Company's interest in Bird Environmental Gulf Coast, Inc. ("BEGCI").

The Company had approximately $47.3 million of net cash provided from investing
activities for the period ended December 31, 1995 as compared to a total of
approximately $19.4 million for the period ended December 31, 1994. The change
is primarily the result of $50.7 million of cash receipts from the proceeds of
the sale of certain of the Company's assets (primarily, the sale of the assets
of the vinyl and window fabrication businesses to Jannock, Inc. in March and
June 1995, respectively), offset by cash used for capital expenditures of the
roofing business and additional investments in discontinued operations. In the
prior comparable period, net cash provided by investing activities resulted
primarily from the proceeds of the sale of the Company's distribution business
to Wm. Cameron & Co., offset by cash used for capital expenditures.

The net cash resulting from financing activities changed by $11 million from the
prior year. Cash used in financing activities during 1995 resulted from the net
repayment of debt of $24 million and $1.6 million of dividend payments, as
compared to 1994 when the Company had net

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<PAGE> 18

repayments of debt of approximately $16 million and made minimal dividend
payments.

ENVIRONMENTAL MATTERS

On March 25, 1994, the Company received a notice from the United States
Environmental Protection Agency (the "EPA") regarding a site inspection
prioritization report prepared by the DEP. The notice alleges a potential
release of hazardous substances into the environment at the Company's former
mill site in East Walpole, Massachusetts. The EPA has reserved the right to
conduct further site tests on the location. A site assessment performed on the
mill site in East Walpole for the Company by its environmental consultants, GZA,
showed no environmental cleanup was necessary. This report was submitted to the
DEP in July 1995. In the opinion of management and based on management's and
GZA's understanding that the alleged releases are in de minimis quantities, this
matter should not have a material adverse effect on the Company's financial
position or on the results of its operations.

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<PAGE> 19

On June 21, 1994, the Arizona Department of Environmental Quality ("ADEQ")
issued a notice of violation ("NV") to Southwest Roofing Supply, a previously
owned division of the Company ("Southwest"), which directed Southwest to conduct
a site investigation of property formerly leased by Southwest. A consent order
between the ADEQ and the Company was issued on September 23, 1994. Pursuant to
the consent order, the Company agreed to submit a work plan with a view to
remediating the soil and groundwater that may have been contaminated by leaks
from an underground storage tank previously removed by the Company. The
Company's management believes that the remediation cost to the Company will be
in the range of $200,000 to $700,000. As of December 31, 1995, the Company has
provided a reserve of $450,000 for the estimated cost of cleanup. The Company
anticipates that $200,000 will be reimbursed to the Company by the ADEQ in
accordance with Arizona law and regulation.

Company at each site and its prospective share of the remediation costs
attributable thereto; the number of PRPs identified with respect to each site
and their financial ability to contribute their proportionate shares of the
remediation costs for such site; the availability of

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<PAGE> 20

insurance coverage for the Company's involvement at each site and the likelihood
that such coverage may be contested; and whether and to what extent potential
sources of contribution from other PRPs or indemnification by insurance
companies constitute reliable sources of recovery for the Company. Similar
consideration has been given in determining the exposure and potential liability
of the Company in connection with other significant legal proceedings to which
the Company is a party. On the basis of such consideration, management has
determined that such environmental matters will not have a material adverse
effect on the Company's financial position or results of operations. The Company
has provided an aggregate reserve amounting to approximately $300,000 for its
estimated share of the ultimate cost of clean-up for claims arising from other
such sites (without taking into account any potential indemnification or
recovery from third parties).

A site assessment of the Norwood facility was performed for the Company by its
environmental consultants GZA GeoEnvironmental, Inc. because the Company was on
the DEP List of Confirmed Disposal Sites. The Company must complete certain
additional remedial activities described in the new MCP on or before August 2,
1996. The Phase I and Phase II plan was completed and submitted to the DEP in
January 1996. In the opinion of management, no additional material costs will be
incurred.

INSURANCE AND PRODUCT LIABILITY CLAIMS

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<PAGE> 21

against Bird were not covered by liability insurance policies issued by Wausau.
Bird asserts that the claims are covered and has answered the complaint. A trial
is scheduled for 1997. In the opinion of management, the above matter will not
have a material adverse effect on the Company's financial position or results of
operations.

LEGAL MATTERS

In 1992, a subsidiary of the company, Bird Atlantic Corporation, formerly
Atlantic Building Products Corporation ("ABPCO"), commenced an action against a
former vendor, alleging violation of an exclusive distributorship without
adequate and fair compensation to ABPCO. A jury trial was held in November 1995
in the Superior Court of Plymouth County, Massachusetts. The jury found in favor
of ABPCO and judgement was entered on January 26, 1996 in the principal amount
of approximately $1.8 million. The award, with interest accruing at 12% per
annum, is expected to be in excess of $3 million and will not be reported as
income until collected. The defendant has appealed the judgement.

RESULTS OF OPERATIONS

The Company's future prospects and sales are tied solely to one line of business
(roofing manufacturing) which is dependent upon the economy in the northeastern
United States. The Company produces all of its output at a single plant which
relies on one major supplier for glass mat, a critical raw material.
Nevertheless, the Company believes it has significant competitive advantages in
this business. These advantages stem from, and are expected to continue in light
of the Company's leading market share, its low cost production abilities
resulting from a state-of-the-art plant, its internal supply of granules from
its own quarry and granule plant and its asphalt oxidizing plant.

1995 COMPARED WITH 1994

Earnings from continuing operations before income taxes in fiscal 1995 were
$10,627,000 compared to losses of $5,927,000 in fiscal 1994. Net sales from
continuing operations decreased 67.7% from $167,886,000 to $54,180,000 as
compared to 1994, primarily due to the sale of the Company's distribution and
vinyl products business units. Sales from the roofing manufacturing business
decreased $10,857,000 or 19.9% due

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<PAGE> 22

to price weakness and a decline in volume. The decreased volume was attributable
to a weak re-roofing market in the northeast caused by a mild 1994/1995 winter
followed by a hot, dry summer. The Company is expanding its sales territories to
include areas bordering the northeastern United States in an effort to replace
lost volume.

Cost of sales in 1995 was $48,007,000 as compared to $136,878,000 in 1994,
constituting a decrease of 64.9%. The decline was primarily a result of the sale
of the Company's distribution and vinyl products business units. Cost of sales
for the roofing business decreased 18.4% or $8,662,000 due primarily to
decreased manufacturing costs related to a decrease in sales volume. Although
the Company experienced raw material price increases in glass mat and dry felt,
the cost of asphalt, along with related freight, was reduced significantly as a
result of the newly constructed asphalt oxidizer, which produces asphalt
saturant and coatings. The oxidizer became operational in February 1995. From
November 1995 through mid-February 1996, the oxidizer was temporarily shut down
for repairs as a result of a fire within the tank farm area of the plant.

Cost of sales, stated as a percentage of net sales, was 88.6% in fiscal 1995 as
compared to 81.5% in fiscal 1994. Roofing manufacturing cost of sales, as a
percentage of sales, increased 1.6% from 86.2% to 87.8% in 1995. Increases in
raw material costs and decreases in sales prices contributed to the percentage
increase.

Selling, general and administrative ("SG&A") expenses for fiscal 1995 decreased
59% from $28,786,000 to $11,817,000. The decrease was primarily attributable to
the sale of the Company's distribution and vinyl products business units.
However, SG&A expenses, as a percentage of sales, increased approximately 5%
from year-to-year. The increase was due primarily to the amortized refinancing
costs associated with the 1994 refinancing of an earlier credit agreement,
additional charges related to environmental remediation and costs associated
with closing the Company's corporate office. The decrease in sales in the
roofing business without a corresponding decline in certain fixed costs also
contributed to the increase as a percentage of sales.

Interest expense was $927,000 in 1995 as compared to $4,782,000 in 1994, an
80.6% decrease. The decrease resulted from the reduction of debt which occurred
through the use of proceeds from the sale of the vinyl products and distribution
business units.

Discontinued business activities income in 1995 reflects primarily the gain of
$20,579,000 on the sale of the vinyl manufacturing business, the loss of
$1,959,000 on the sale of the window fabrication business and a charge of
$1,500,000 for costs associated with the Company's employee benefit plans and
future product liability claims, both related to former roofing operations.
Fiscal 1994 discontinued business activities income reflects primarily the gain
of $2,727,000 on the sale of all of the Company's building materials
distribution businesses reduced by the loss of $1,261,000 on the sale of the
Company's 40% interest in Mid-South Building Supply, Inc.

Equity losses from the Company's partnership in the Kensington window

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<PAGE> 23

fabrication business amounted to $372,000 for the period January 1, through
February 28, 1995 as compared to $4,680,000 for the twelve month period ended
December 31, 1994.

A provision for income taxes from continuing operations amounting to $11,424,000
was recorded in 1995 compared to a benefit of $7,010,000 in 1994. The Company's
decision to reverse $4 million of the valuation reserve in 1994 and subsequent
decision to increase the reserve to $15.1 million in 1995 is the primary reason
the effective tax rates differ from the statutory rate. At December 31, 1995 the
Company's net deferred tax asset is approximately $19.1 million less a valuation
reserve of $15.1 million. As required under FAS 109, this valuation reserve was
determined based upon the Company's review of all available evidence including
projections of future taxable income. During 1995, the Company disposed of
Bird-Kensington Holding Corporation and Bird Environmental Gulf Coast, Inc.
resulting in losses not anticipated at the end of the previous year. In
addition, the lower overall demand and price weakness in the northeast caused by
a mild 1994/1995 winter followed by a hot, dry summer negatively impacted
profits of the roofing operations.

During the second quarter of 1995, the Company's remaining investment in BEGCI
of $8.6 million was written-off to discontinued operations and a $3 million
reserve was established for additional costs associated with the closure and
disposition of the facility (see Note 9 to Consolidated Financial Statements).
In November 1995, the Company caused the sale of all the outstanding capital
stock of BEGCI to GTS Duratek, Inc.. for a purchase price of $1.00. Of the $3
million reserve established in the second quarter of 1995, $2,050,000 was
utilized, while $650,000 remains at December 31, 1995 for future claims against
discontinued operations.

In connection with the Board of Director's 1994 decision to withdraw from the
off-site environmental business and the Company's agreement on June 18, 1994 to
cause the sale of its shares in BEGCI to the minority stockholders on or before
February 28, 1995, subject to financing, the Company reclassified the
environmental business results as discontinued operations as of June 30, 1994
and adjusted the book value associated with BEGCI, resulting in an aggregate
charge for the twelve months ended December 31, 1994 of $11,586,000.

In 1993, in connection with its decision to withdraw from the "on-site"
environmental remediation business, the Company charged the results of
operations for the write-down of assets, the expected loss from operations and
general expenses related to closing of such "on-site" remediation business (see
notes to Consolidated Financial Statements). Based upon the actual outcome of
the sale of assets and results of operations, excess costs of $3,861,000 charged
in 1993 were reversed and recorded as discontinued operations in the
consolidated statement of operations for the year ending December 31, 1994.

1994 COMPARED WITH 1993

Losses from continuing operations before income taxes in 1994 were

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approximately $5.9 million compared to losses of approximately $5.3 million in
1993. Net sales from continuing operations decreased 10.6% from $187,745,000 in
1993 to $167,886,000 in 1994. Sales from the Company's roofing manufacturing
business and its vinyl business increased 14.9% and 5.9%, respectively. Improved
weather conditions and renewed strength in the remodeling market caused by low
interest rates and a generally favorable economy contributed to the improvement
in these businesses. However, a decrease in sales volume due to the sale of
substantially all of the Company's building materials distribution businesses in
August and November of 1994 significantly offset the improvement attained by the
roofing and vinyl businesses.

The Company's cost of sales from continuing operations in 1994 as compared to
1993 decreased 9.7% from $151,664,000 to $136,878,000. Cost of sales from
continuing operations in the roofing and vinyl manufacturing businesses
increased 15.4% and 7.9%, respectively, due to increased manufacturing costs
related to volume, higher raw material costs related to the increase in resin
prices for the vinyl business and higher asphalt prices for the roofing
manufacturing business. The increase was more than offset by the decline in cost
of sales due to the August and November 1994 sales of the Company's building
materials distribution businesses.

Cost of sales stated as a percentage of net sales was 81.5% in 1994 as compared
to 80.8% in 1993. The roofing manufacturing business cost of sales as a
percentage of sales increased .3% from 85.9% to 86.2% in 1994. The vinyl
business cost of sales as a percentage of sales for fiscal 1994 increased from
76.0% to 77.5% or 1.5% over fiscal 1993. The major factor in such percentage
increase was the increased cost of raw materials.

Selling, general and administrative ("SG&A") expenses for fiscal 1994 decreased
12.0% from $32,716,000 in 1993 to $28,786,000 in 1994. The decrease was
primarily attributable to the sale of the Company's building materials
distribution businesses. The SG&A expenses of the Company's roofing and vinyl
manufacturing businesses, on a combined basis, decreased 7.2% from year-to-year.
However, SG&A expenses, as a percentage of sales remained relatively constant at
approximately 17%.

Interest expense was $4,782,000 in 1994 as compared to $2,472,000 in 1993,
constituting a 93% increase. The increased interest expense reflects the nearly
$10 million increased debt level and higher overall interest costs in 1994.
Between April 11, 1994 and November 30, 1994 the Company was required to pay a
default interest rate of 4% above the rate otherwise applicable to the revolving
credit and term loans, compared to an approximate rate of 4.5% to 5% for 1993.
Default interest expense totaled $1,032,000 during fiscal 1994.

Discontinued business activities income in 1994 reflects primarily the gain of
$2,727,000 on the sale of all of the Company's building materials distribution
businesses reduced by the loss of $1,261,000 on the sale of the Company's 40%
interest in Mid-South Building Supply, Inc.

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<PAGE> 25

Other non-recurring expenses totalled $4,680,000 in 1994 as compared to
$5,903,000 in 1993. Kensington continued to experience operations problems and
incurred losses of $4,680,000 and $2,625,000 in 1994 and 1993, respectively.

A higher tax benefit from continuing operations was recorded in 1994 compared to
the benefit booked in 1993. The Company's decision to record a $9 million
valuation reserve in 1993 and subsequent decision to reverse $4 million in 1994
is the primary reason the effective tax rates differ from the statutory rate.

In connection with the Board of Director's decision to withdraw from the
environmental business and the Company's agreement on June 18, 1994 to cause the
sale of its shares in BEGCI to the minority stockholders on or before February
28, 1995, subject to financing, the Company reclassified BEGCI results as a
discontinued operation as of June 30, 1994 and adjusted its book value,
resulting in an aggregate charge for the twelve months ended December 31, 1994
of $11,586,000. The Company intended to operate the San Leon Facility until the
sale of its interest in BEGCI was consummated.

Due to the Company's decision to exit the off-site environmental business by
selling its interest in the San Leon Facility as described above, the Company
completely withdrew from the environmental business. As a result, historical
results of operations for all of the environmental businesses have been
classified as discontinued operations. In 1993, in connection with its decision
to withdraw from the "on-site" environmental remediation business, the Company
recorded a charge for the write-down of assets, the expected loss from
operations and general expenses related to the closing of such "on-site"
remediation business (see notes to Consolidated Financial Statements). Based
upon the outcome of the sales of assets and results of operations, excess costs
of $3,861,000 charged in 1993 were reversed and recorded as discontinued
operations in the consolidated statement of operations for the year ending
December 31, 1994.

INFLATION

The Company is continually seeking ways to deal with raw material cost increases
by productivity improvements and cost reduction programs. In recent years, the
Company has not always been able to pass on increased raw material costs to
customers by increasing selling prices because of intense competitive pressures.
The Company has an ongoing program of updating productive capacity to take
advantage of improved technology, and although the cumulative impact of
inflation has resulted in higher costs for replacement of plant and equipment,
these costs have been offset, in part, by productivity savings.

NEW ACCOUNTING PRONOUNCEMENTS

During 1995, the Financial Accounting Standards Board issued "Statement of
Financial Accounting Standards No. 123 Accounting For Stock Based

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<PAGE> 26

Compensation" ("FAS 123"). The Company intends to adopt FAS 123 through
disclosure only in 1996.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements and schedules of the Company are included
in a separate section of this report and are incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

ITEM 11. EXECUTIVE COMPENSATION

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by Items 10, 11, 12 and 13 (except the information on
executive officers) is included in the Company's definitive proxy statement for
its 1996 Annual Meeting of Stockholders which will be filed with the Commission
by April 30, 1996 and which is incorporated herein by reference. Information on
executive officers, required by Item 10, is included in PART I of this report
under the heading "Executive Officers of the Registrant".

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<PAGE> 27

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) An Index of Financial Statements and Schedules is on page F1 of this
report. The Exhibit Index is on pages 28 through 33 of this report.

(b) Reports on Form 8-K - No reports on Form 8-K were filed during the last
quarter of the year ended December 31, 1995.

(d) Financial Statements of Kensington Partners are on Page F32 through F55
of this report.

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Items 14 (a) (3) and (c)
Exhibits
Bird Corporation
Norwood, Massachusetts

EXHIBIT INDEX

Sequential
Exhibit No. Page No.
- ----------- ----------

3(a) Articles of Organization (Filed as Appendix B to
the Company's Registration Statement on Form S-4,
Registration No 33-34440 and incorporated herein by
reference.)

3(b) By-laws of the Company as amended to date. (Filed
as Exhibit 3(b) to the Company's report on Form
10-K for the year ended December 31, 1990 and
incorporated herein by reference.)

4(a)(1) Forbearance Agreement dated as of February 14, 1994
with regard to the Revolving Credit Agreement dated
as of December 17, 1990, as amended. (Filed as
Exhibit 4 (a)(3) to the Company's Form 10-K for the
year ended December 31, 1993 and incorporated
herein by reference.)

4(a)(2) Third Amended and Restated Revolving Credit and
Term Loan Agreement dated as of March 4, 1994
(Filed as Exhibit 4(a)(1) to the Company's Form 8-K
dated March 14, 1994 and incorporated herein by
reference.)

4(a)(3) Loan and Security Agreement dated as of November
30, 1994 (the "Loan Agreement") between Barclays
Business Credit, Inc. (now known as Fleet Capital
Corporation) and Bird Incorporated. (Filed as
Exhibit 4(a)(3) to the Company's Form 10-K for the
year ended December 31, 1994 and incorporated
herein by reference.)

4(a)(4) First Amendment dated as of March 8, 1995 to the
Loan Agreement between Shawmut Capital Corporation
(now known as Fleet Capital Corporation) and Bird
Incorporated. (Filed as Exhibit 4(a)(4) to the
Company's Form 10-K for the year ended December 31,
1994 and incorporated herein by reference.)

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<PAGE> 29

Sequential
Exhibit No. Page No.
- ----------- ----------

4(a)(5) Rights Agreement dated as of November 25, 1986
between the Company and the First National Bank of
Boston, as Rights Agent. (Filed as Exhibit 1 to
Registration Statement on Form 8-A dated December
5, 1986 and incorporated herein by reference.)

4(a)(6) First Amendment dated May 24, 1990 to Rights
Agreement dated as of November 25, 1986. (Filed as
Exhibit 4(b)(2) to the Company's report on Form
10-K for the year ended December 31, 1990 and
incorporated herein by reference.)

10(a)* Plan for Assistance to Key Employees in Financing
Purchases of Company Stock (Filed as Exhibit 10(b)
to the Company's report on Form 10-K for the year
ended December 31, 1980 and incorporated herein by
reference.)

10(b)* Plan for Deferring Payment of Senior Officer's
Compensation (Adopted December 22, 1975). (Filed as
Exhibit 10(c) to the Company's report on Form 10-K
for the year ended December 31, 1980 and
incorporated herein by reference.)

10(c)* 1975 Plan for Deferring Payment of Director's
Compensation (Adopted June 23, 1975). (Filed as
Exhibit 10(d) to the Company's report on Form 10-K
for the year ended December 31, 1980 and
incorporated herein by reference.)

10(d)* Settlement Agreement dated as of July 7, 1994
between Bird Corporation and George J. Haufler.
(Filed as Exhibit 10(d) to the Company's Form 10-K
for the year ended December 31, 1994 and
incorporated herein by reference.)

10(e)* Management Incentive Compensation Program adopted
January 25, 1983. (Filed as Exhibit 10(m) to the
Company's report on Form 10-K for the year ended
December 31, 1982 and incorporated herein by
reference.)

29
<PAGE> 30

Sequential
Exhibit No. Page No.
- ----------- ----------

10(f)* Bird Corporation 1982 Stock Option Plan as amended
through January 29, 1992. (Filed as Exhibit 10(f)
to the Company's report on Form 10-K for the year
ended December 31, 1991 and incorporated herein by
reference.)

10(g)* Bird Corporation 1992 Stock Option Plan. (Filed as
Exhibit 10(g) to the Company's report on Form 10-K
for the year ended December 31, 1992 incorporated
herein by reference.)

10(h)* Bird Corporation Non-Employee Director Stock Option
Plan. (Filed as Exhibit 10(h) to the Company's
report on Form 10-K for the year ended December 31,
1992 incorporated herein by reference.)

10(i)(1)* Form of severance agreement with eight key
executive employees of the Company. (Filed as
Exhibit 10(n) to the Company's report on Form 10-K
for the year ended December 31, 1984 and
incorporated herein by reference.)

10(i)(2)* Form of Amendment dated May 24, 1990 to form of
severance agreement. (Filed as Exhibit 10(g)(2) to
the Company's report on Form 10-K for the year
ended December 31, 1990 and incorporated herein by
reference.)

10(k) Glass Mat Supply Agreement dated as of February 20,
1985 between the Company, The Flintkote Company and
Genstar Roofing Company, Inc. (Filed as Exhibit
10(s) to Amendment No. 1 to the Company's report on
Form 10-K for the year ended December 31, 1984 and
incorporated herein by reference.)

10(l) Equipment Acquisition Agreement dated May 25, 1990
between BancBoston Leasing Inc. and Bird
Incorporated. (Filed as Exhibit 10(j) to the
Company's report on Form 10-K for the year ended
December 31, 1990 and incorporated herein by
reference.)

30
<PAGE> 31

Sequential
Exhibit No. Page No.
- ----------- ----------

10(m) Equipment Acquisition Agreement dated July 23, 1986
between BancBoston Leasing Inc. and Bird
Incorporated. (Filed as Exhibit 10(s) to the
Company's report on Form 10-K for the year ended
December 31, 1986 and incorporated herein by
reference.)

10(n)(1)* Long Term Incentive Compensation Plan dated June
28, 1988. (Filed as Exhibit 10(v) to the Company's
report on Form 10-Q for the quarter ended September
30, 1988 and incorporated herein by reference.)

10(n)(2)* Amendment dated May 24, 1990 to Long Term
Incentive Compensation Plan. (Filed as Exhibit
10(o)(2) to the Company's report on Form 10-K for
the year ended December 31, 1990 and incorporated
herein by reference.)

10(o) Amendment dated February 1, 1994 to the First
Amended and Restated Partnership Agreement between
Bird Vinyl Products, Inc. and Kensington
Manufacturing Company. (Filed as Exhibit 10(o)(2)
to the Company's report on Form 10-K for the year
ended December 31, 1993 and incorporated herein by
reference.)

10(p)* Employment Agreement dated as of December 1, 1993
between the Company and Joseph D. Vecchiolla.
(Filed as Exhibit 10(p) to the Company's report on
Form 10-K for the year ended December 31, 1993 and
incorporated herein by reference.)

10(q)* Severance Agreement dated as of December 21, 1993
between the Company and Joseph D. Vecchiolla.
(Filed as Exhibit 10(q) to the Company's report on
Form 10-K for the year ended December 31, 1993 and
incorporated herein by reference.)

10(r)* Settlement Agreement dated as of November 25, 1994
between Bird Corporation and William A. Krivsky.
(Filed as Exhibit 10(r) to the Company's Form 10-K
for the year ended December 31, 1994 and
incorporated herein by reference.)

31
<PAGE> 32

Sequential
Exhibit No. Page No.
- ----------- ----------

10(s) Asset Purchase Agreement dated as of August 19,
1994 between Bird Incorporated, Atlantic Building
Products Corporation, Greater Louisville Aluminum,
Inc., Southwest Roofing Supply, Inc., Southwest
Express, Inc., New York Building Products, Inc.,
and Wm. Cameron & Co. (Filed as Exhibit (1) to the
Company's Form 8-K dated August 31, 1994 and
incorporated herein by reference.)

10(t) Asset Purchase Agreement dated as of September 23,
1994 among Bird Corporation, Bird Incorporated, and
Jannock, Inc. (as amended by amendments dated as of
January 27, 1995 and January 31, 1995). (Filed as
Exhibit B to the Company's proxy statement dated
February 10, 1995 for the special meeting of the
stockholders to be held on March 7, 1995 and
incorporated herein by reference.)

10(u)* Employment Agreement dated as of July 31, 1995
between the Company and Frank S. Anthony. (Filed as
Exhibit 10(u) to the Company's Form 10-Q for the
quarter ended September 30, 1995 and incorporated
herein by reference).

10(v)* Amended Employment Agreement dated August 21, 1995
between the Company and Richard C. Maloof. (Filed
as Exhibit 10(v) to the Company's Form 10-Q for the
quarter ended September 30, 1995 and incorporated
herein by reference).

10(w) Stock Purchase Agreement dated as of November 29,
1995 by and among Bird Environmental Gulf Coast,
Inc., Bird Environmental Technologies, Inc., Bird
Corporation, GTS Duratek,Inc. and GTSD Sub II, Inc.

10(x) Amended Glass Mat Supply Agreement dated as of
December 1, 1995 between the Company, Flintkote
Company and Genstar Roofing Company, Inc.

10(y) Agreement and Plan of Merger by and among
CertainTeed Corporation, BI Expansion Corporation
and Bird Corporation dated as of March 14, 1996.

32
<PAGE> 33

Sequential
Exhibit No. Page No.
- ----------- ----------

11 Statement regarding computation of per share
earnings(loss).

22 Significant subsidiaries.

23(a) Consent of Price Waterhouse LLP.

23(b) Consent of Alpern, Rosenthal and Company,
independent accountants for Kensington Partners.

24 Power of Attorney. (Immediately preceding the
signature page hereof.)

28 Annual report on Form 11-K of the Bird Employees'
Savings and Profit Sharing Plan for the fiscal year
ended December 31, 1995. (To be filed by
amendment.)

* Indicates management contract or compensatory
plan or arrangement

33
<PAGE> 34

POWER OF ATTORNEY

We, the undersigned officers and Directors of Bird Corporation, hereby
severally constitute and appoint Richard C. Maloof and Frank S. Anthony, and
each of them severally, our true and lawful attorneys or attorney, with full
power to them and each of them to execute for us, and in our names in the
capacities indicated below, and to file with the Securities and Exchange
Commission the Annual Report on Form 10-K of Bird Corporation, for the fiscal
year ended December 31, 1995, and any and all amendments thereto.

IN WITNESS WHEREOF, we have signed this Power of Attorney in the
capacities indicated on March 21, 1996.

Principal Executive Officer:

____________________________ President, Director and
Richard C. Maloof Chief Operating Officer

Principal Accounting Officer:

____________________________ Corporate Controller
Donald L. Sloper, Jr.

Directors

____________________________ ____________________________
Robert P. Bass, Jr. Francis J. Dunleavy

____________________________ ____________________________
Charles S. Bird, Jr. John T. Dunlop

____________________________ ____________________________
Guy W. Fiske Joseph D. Vecchiolla

____________________________
Loren R. Watts

<PAGE> 35

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

BIRD CORPORATION
(Registrant)

By_____________________
Richard C. Maloof
President, COO

March 27, 1996

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.

SIGNATURE TITLE DATE
--------- ----- ----

________________________ President, Director, March 27, 1996
RICHARD C. MALOOF and COO (Principal
Executive Officer)

________________________ Corporate Controller March 27, 1996
DONALD L. SLOPER, JR. (Principal Accounting
Officer)

*
________________________ Director March 27, 1996
JOSEPH D. VECCHIOLLA
<PAGE> 36

SIGNATURES
(continued)

*
________________________ Director March 27, 1996
ROBERT P. BASS, JR.

*
________________________ Director March 27, 1996
CHARLES S. BIRD, JR.

*
________________________ Director March 27, 1996
FRANCIS J. DUNLEAVY

*
________________________ Director March 27, 1996
JOHN T. DUNLOP

*
________________________ Director March 27, 1996
GUY W. FISKE

*
________________________ Director March 27, 1996
LOREN R. WATTS

* By _________________________________________
Frank S. Anthony as
Attorney-in-fact
<PAGE> 37

ANNUAL REPORT ON FORM 10-K

ITEM 14 (A) (1) AND (2)

LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

YEAR ENDED DECEMBER 31, 1995

BIRD CORPORATION
NORWOOD, MASSACHUSETTS
<PAGE> 38

Bird Corporation and Subsidiaries

Form 10-K

Items 14(a)(1) and (2)

INDEX OF FINANCIAL STATEMENTS AND SCHEDULES

The following consolidated financial statements of the registrant and its
subsidiaries required to be included in Item 8 are listed below.

Consolidated Financial Statements: Page
----
Reports of independent accountants F2

Balance sheets at December 31, 1995 and 1994 F4

Statements of operations for each of the three years in
the period ended December 31, 1995 F6

Statements of stockholders' equity for each of the three
years in the period ended December 31, 1995 F7

Statements of cash flows for each of the
three years in the period ended December 31, 1995 F8

Notes to consolidated financial statements F9

The following consolidated financial statement schedules of Bird Corporation and
its subsidiaries are included in Item 14(a)(2) and should be read in conjunction
with the financial statements included herein:

Schedule II - Valuation and qualifying accounts F31

All other schedules for which provision is made in the applicable accounting
regulations of the Securities and Exchange Commission have been omitted because
they are not applicable or the required information is shown in the financial
statements or the notes thereto.

F1
<PAGE> 39

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders
of Bird Corporation

We have audited the consolidated balance sheets of Bird Corporation and its
subsidiaries as of December 31, 1995 and 1994, and the related consolidated
statements of operations, of stockholders' equity and of cash flows for each of
the three years in the period ended December 31, 1995. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. We did not audit the financial statements of Kensington Partners,
which statements reflect total assets of $8.9 million at December 31, 1994, and
total net sales of $24.2 million and $21.2 million and net losses of $5.3
million and $5.2 million for the years ended December 31, 1994 and 1993,
respectively. Those statements were audited by other auditors whose report has
been furnished to us, and our opinion, insofar as it relates to the amounts
included for Kensington Partners, is based solely on the report of the other
auditors.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of the other auditors provide a
reasonable basis for our opinion.

In our opinion, based on our audits and the report of the other auditors, the
consolidated financial statements listed in the index appearing under Item
14(a)(1) and (2) on Page F1 present fairly, in all material respects, the
financial position of Bird Corporation and its subsidiaries as of December 31,
1995 and 1994, and the results of their operations and their cash flows for each
of the three years in the period ended December 31, 1995 in conformity with
generally accepted accounting principles.

As discussed in Note 4 to the consolidated financial statements, the Company
changed its method of accounting for income taxes in 1993 to comply with a new
pronouncement issued by the Financial Accounting Standards Board.

Price Waterhouse LLP
Boston, Massachusetts

March 15, 1996

<PAGE> 40
INDEPENDENT AUDITORS' REPORT

TO THE PARTNERS
KENSINGTON PARTNERS AND AFFILIATE
Leechburg, Pennsylvania

We have audited the accompanying combined balance sheet of Kensington
Partners and Affiliate (Joint Venture Partnerships) as of December 31, 1994 and
the related combined statements of operations and changes in partners' capital
(deficit), and cash flows for the years ended December 31, 1994 and 1993. These
financial statements are the responsibility of the Partnerships' management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the combined financial statements referred to above
present fairly, in all material respects, the financial position of Kensington
Partners and Affiliate as of December 31, 1994, and the results of their
operations and their cash flows for the years ended December 31, 1994 and 1993,
in conformity with generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that
Kensington Partners and Affiliate will continue as going concerns. As discussed
in Note 2 to the financial statements, the Companies have incurred significant
operating losses and current liabilities exceed current assets. Those
conditions, among others, raise substantial doubt about the Companies' ability
to continue as going concerns. Management's plans regarding those matters are
also described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

Alpern, Rosenthal & Company
Pittsburgh, Pennsylvania

February 10, 1995

<PAGE> 41
BIRD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE, PAR VALUE, AND LIQUIDATION VALUE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
1995 1994
------- -------
ASSETS

Current Assets:

<S> <C> <C>
Cash and equivalents $ 3,679 $ 321
Accounts and notes receivable, less
allowances - $153 in 1995

and $3,137 in 1994 5,461 19,644
Inventories 4,701 8,371
Refundable income taxes 1,021 0
Prepaid expenses and other assets 1,157 3,095
Deferred income taxes 435 6,836
------- -------

Total current assets 16,454 38,267
------- -------

Property, Plant and Equipment:

Land and land improvements 2,810 3,145
Buildings 7,184 11,742
Machinery and equipment 28,980 33,760
Construction in progress 672 5,705
------- -------
39,646 54,352

Less - Depreciation and amortization 16,127 24,323
------- -------
23,519 30,029
------- -------

Assets held for sale 0 7,500
Deferred income taxes 3,631 8,662
Other assets 99 1,247
------- -------
$43,703 $85,705
======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F4
<PAGE> 42
BIRD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE, PAR VALUE, AND LIQUIDATION VALUE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
1995 1994
-------- --------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 3,394 $ 6,632
Accrued expenses 5,881 7,039
Long-term debt, portion due within one year 1,113 18,071
Retirement plan contributions payable 88 302
Income taxes payable 0 596
-------- --------
Total current liabilities 10,476 32,640
-------- --------

Long-term debt, portion due after one year 4,869 12,504
-------- --------
Other liabilities 3,942 2,715
-------- --------
Deferred income taxes 0 128
-------- --------

Total liabilities 19,287 47,987
-------- --------

STOCKHOLDERS' EQUITY
5% cumulative preferred stock, par
value $100. Authorized 15,000 shares;
issued 5,820 shares in 1995 and 1994
(liquidating preference $110 per share,
aggregating $640,000) 582 582

Preference stock, par value $1. Authorized 1,500,000 shares; issued 814,300
shares of $1.85 cumulative convertible preference stock in 1995 and
1994(liquidating value $20
per share, aggregating $16,286,000) 814 814

Common stock, par value $1. Authorized
15,000,000 shares; 4,395,162 shares issued
in 1995 and 4,375,179 shares issued in 1994 4,395 4,375
Other capital 27,362 27,235
Retained earnings (deficit) (5,746) 7,860
-------- --------
27,407 40,866

Less -

Treasury stock, at cost, Common stock:
275,100 shares in 1995 and 1994 (2,991) (2,991)
Unearned compensation 0 (157)
-------- --------
24,416 37,718
-------- --------
COMMITMENTS AND CONTINGENCIES (NOTE 11)

$ 43,703 $ 85,705
======== ========
</TABLE>

See accompanying notes to consolidated financial statements.

F5
<PAGE> 43
BIRD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Net sales $ 54,180 $ 167,886 $ 187,745
----------- ----------- -----------
Costs and expenses:
Cost of sales 48,007 136,878 151,664
Selling, general and administrative expense 11,817 28,786 32,716
Interest expense 927 4,782 2,472
Discontinued business activities (income) expense (17,570) (1,313) 268
Equity losses from partnership 372 4,680 2,625
Other expense 0 0 3,278
----------- ----------- -----------
Total costs and expenses 43,553 173,813 193,023
----------- ----------- -----------
Earnings (loss) from continuing
operations before income taxes 10,627 (5,927) (5,278)

Provision (benefit) for income taxes 11,424 (7,010) (637)
----------- ----------- -----------
Earnings (loss) from continuing operations
before cumulative effect of accounting change (797) 1,083 (4,641)
----------- ----------- -----------
Discontinued operations (Note 9):
Income (loss) from operations of
discontinued businesses, net of taxes 0 1,245 (15,414)
Loss on disposal of environmental business,
1993 includes a provision of $5,200,000
for operating losses during phase out
period, net of taxes (11,252) (6,011) (11,000)
----------- ----------- -----------
Net loss from discontinued operations (11,252) (4,766) (26,414)
----------- ----------- -----------
Cumulative effect of accounting change 0 0 2,733
----------- ----------- -----------
Net loss before dividends (12,049) (3,683) (28,322)
Preferred and preference stock
cumulative dividends 1,536 1,536 1,536
----------- ----------- -----------
Net loss applicable to common
stockholders $ (13,585) $ (5,219) $ (29,858)
=========== =========== ===========
Primary earnings (loss) per common share:
Continuing operations $ (0.57) $ (0.11) $ (1.51)
Discontinued operations (2.74) (1.20) (6.45)
Cumulative effect of accounting change 0.00 0.00 0.67
----------- ----------- -----------
Net loss after dividends $ (3.31) $ (1.31) $ (7.29)
=========== =========== ===========
Fully diluted earnings (loss) per common share:
Continuing operations $ (0.57) $ (0.11) $ (1.51)
Discontinued operations (2.74) (1.20) (6.45)
Cumulative effect of accounting change 0.00 0.00 0.67
----------- ----------- -----------
Net loss after dividends $ (3.31) $ (1.31) $ (7.29)
=========== =========== ===========
Average number of shares used in earnings
per share computations 4,104,965 3,992,251 4,097,999
=========== =========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F6
<PAGE> 44
BIRD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(In thousands, except share and per share amounts)

<TABLE>
<CAPTION>
$1.85
5% CUMULATIVE
CUMULATIVE CONVERTIBLE RETAINED COMMON TOTAL
PREFERRED PREFERENCE COMMON OTHER EARNINGS STOCK IN UNEARNED STOCKHOLDERS'
STOCK STOCK STOCK CAPITAL (DEFICIT) TREASURY COMPENSATION EQUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance December 31, 1992 $582 $814 $4,267 $25,401 $41,645 ($2,059) ($1,549) $69,101
Net loss (28,322) (28,322)
Cash dividends declared:
5% cumulative preferred
stock - $5 per share (29) (29)
$1.85 cumulative
convertible preference stock
$1.85 per share (1,130) (1,130)
Common stock $.15 per share (613) (613)
Common stock issued as
compensation - 1,200 shares 1 13 14
Common stock issued for contributions to
employees' saving plan - 19,119 shares 19 210 229
Common stock issued and note
repayment upon exercise of stock
options - 4,080 shares 4 210 214
Purchase of 10,119 shares of
common stock (120) (120)
Amortization of unearned compensation 595 595
Cumulative effect of accounting change 323 323
Tax effect of stock options exercised 303 303
Cumulative foreign currency translation (4) (4)
---- ---- ------ ------- ------- ------- ------- -------
Balance December 31, 1993 582 814 4,291 26,456 11,551 (2,179) (954) 40,561

Net loss (3,683) (3,683)
Cash dividends declared:
5% cumulative preferred
stock - $1.25 per share (8) (8)
Common stock issued as
compensation - 1,426 shares 1 14 15
Common stock issued for contributions to
employees' saving plan - 12,439 shares 13 110 123
Common stock issued upon exercise
of stock options - 69,750 shares common
and 15,000 shares treasury 70 609 109 788
Purchase of 248 shares of common stock (3) (3)
L.T.Incentive forfeitures - 125,145 shares (910) 910 0
Common stock from distribution
business - 916 shares (6) (8) (14)
Amortization of unearned compensation (113) (113)
Cumulative foreign currency translation 52 52
---- ---- ------ ------- ------- ------- ------- -------
Balance December 31, 1994 582 814 4,375 27,235 7,860 (2,991) (157) 37,718

Net loss (12,049) (12,049)
Cash dividends declared:
5% cumulative preferred
stock - $1.25 per share (51) (51)
$1.85 cumulative
convertible preference stock -
$1.85 per share (1,506) (1,506)
Common stock issued as
compensation - 200 shares 1 1
Common stock issued for contributions to
employees' saving plan - 17,783 shares 18 112 130
Common stock issued upon exercise
of stock options - 2,000 shares common 2 14 16
Amortization of unearned compensation 157 157
---- ---- ------ ------- ------- ------- ------- -------
Balance December 31, 1995 $582 $814 $4,395 $27,362 ($5,746) ($2,991) $0 $24,416
==== ==== ====== ======= ======= ======= ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F7
<PAGE> 45
BIRD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
Year Ended December 31,
(Brackets denote cash outflows) 1995 1994 1993
----------- ----------- -----------
<S> <C> <C> <C>
Cash flow provided (used) by operations:
Net loss $ (12,049) $ (3,683) $ (28,322)
Adjustments to reconcile to net
cash provided by operations:
Writedown of assets to net realizable value 0 0 5,800
Depreciation and amortization 2,861 4,317 8,714
Provision for losses on accounts receivable 26 905 2,162
Deferred income taxes 11,304 (10,172) (1,044)
Cumulative effect of accounting change 0 0 (2,733)
Gain on sale of vinyl business (20,579) 0 0
Loss on sale of window business 1,959 0 0
Gain on sale of distribution business 0 (1,466) 0
Loss (gain) on disposal of environmental business 11,252 9,747 (858)
Changes in balance sheet items:
Accounts receivable 3,120 (2,841) (8,199)
Inventories (2,664) 1,423 4,538
Prepaid expenses 712 203 (2,039)
Liabilities not related to financing activities (14,325) (6,867) 11,646
Liquidation reserve 0 (5,398) 5,398
Other assets 128 2,230 2,564
----------- ----------- -----------
Cash flow used by operations: (18,255) (11,602) (2,373)
----------- ----------- -----------
Cash flows from investing activities:
Acquisition of property, plant and equipment,net (1,590) (10,614) (16,251)
Proceeds from disposal of assets 50,680 31,296 9,141
Additional investments in discontinued operations (2,402) 0 0
Other investments 651 (1,277) 159
----------- ----------- -----------
Net cash provided (used) in investing activities 47,339 19,405 (6,951)
----------- ----------- -----------
Cash flows from financing activities:
Debt proceeds 16,627 159,139 1,286,500
Debt repayments (40,942) (175,091) (1,270,987)
Dividends paid (1,558) (8) (2,351)
Purchase of treasury stock 0 (11) (120)
Other equity changes 147 971 577
----------- ----------- -----------
Net cash provided (used) by financing activities (25,726) (15,000) 13,619
----------- ----------- -----------
Net increase (decrease) in cash and equivalents 3,358 (7,197) 4,295
Cash and cash equivalents at beginning of year 321 7,518 3,223
----------- ----------- -----------
Cash and cash equivalents at end of year $ 3,679 $ 321 $ 7,518
=========== =========== ===========
Supplemental Disclosures:
Cash paid during the year for:
Interest $ 1,501 $ 4,811 $ 2,160
Income taxes $ 1,170 $ 363 $ 291
</TABLE>

See accompanying notes to consolidated financial statements.

F8
<PAGE> 46
BIRD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES

NATURE OF OPERATIONS

Bird Corporation is a manufacturer of asphalt roofing products. Currently,
asphalt shingles and roll roofing are produced at the Company's plant in
Norwood, Massachusetts for commercial and residential use. These products are
marketed in the northeastern United States through independent wholesalers and
building material retailers whose primary customers are roofing contractors.

BASIS OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of Bird
Corporation and its majority-owned subsidiaries (the "Company"). All material
intercompany activity has been eliminated from the financial statements.
Investments in less than majority-owned companies are accounted for by the
equity method. Certain prior year amounts have been reclassified to conform with
the 1995 presentation.

PERVASIVENESS OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

CONCENTRATION OF RISK AND MAJOR CUSTOMERS

The Company is dependent upon the economy in the northeastern United States and
sells its products primarily to independent wholesalers and building material
retailers for resale primarily to roofing contractors. One customer accounted
for slightly more than 10% of the Company's sales during 1995 and accounts
receivable at December 31, 1995.

F9
<PAGE> 47

REVENUE RECOGNITION

The Company recognizes revenue when products are shipped or services are
performed.

STATEMENT OF CASH FLOWS

The Company considers all highly liquid debt instruments purchased with an
original maturity of three months or less to be cash equivalents.

INVENTORIES

Inventories are valued at the lower of cost or market. Cost is determined for a
large portion of the inventories by the last-in, first-out (LIFO) method
computed using the dollar value method for natural business unit pools. The cost
of the remaining inventories is determined generally on a first-in, first-out
(FIFO) basis.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost. Depreciation has been provided
in the financial statements primarily on the straight-line method at rates,
based on reasonable estimates of useful lives, which fall within the following
ranges for major asset classifications:

Land improvements 10 to 20 years
Buildings 20 to 40 years
Machinery and equipment 5 to 20 years

Deprecation expense for continuing operations for 1995, 1994 and 1993 amounted
to $2,831,000, $3,644,000 and $3,757,000, respectively. Maintenance, repairs and
minor renewals are charged to earnings in the year in which the expense is
incurred. Additions, improvements and major renewals are capitalized. The cost
of assets retired or sold, together with the related accumulated depreciation,
are removed from the accounts, and any gain or loss on disposition is credited
or charged to earnings. The Company capitalizes interest cost on construction
projects while in progress. The capitalized interest is recorded as part of the
asset to which it is related and is amortized over the asset's estimated useful
life.

RETIREMENT PLANS

The Company has a defined contribution plan covering substantially all eligible
non-union salaried and non-union hourly employees. Annual contributions are made
to the plan based on rates identified in the plan agreement.

F10
<PAGE> 48

ADVERTISING

Advertising costs are charged to operations when incurred. The Company did not
incur any costs associated with direct response advertising in 1995, 1994 and
1993, and there were no capitalized advertising costs at December 31, 1995 and
1994. Advertising expense for 1995, 1994 and 1993 was $503,000, $1,023,000 and
$1,230,000, respectively.

EARNINGS(LOSS) PER COMMON SHARE

Primary earnings(loss) per common share is determined after deducting the
dividend requirements of the preferred and preference shares and is based on the
weighted average number of common shares outstanding during each period
increased by the effect of dilutive stock options. Fully diluted earnings(loss)
per common share also give effect to the reduction in earnings per share, if
any, which would result from the conversion of the $1.85 cumulative convertible
preference stock at the beginning of each period if the effect is dilutive.

ENVIRONMENTAL MATTERS

The Company records a liability for environmental matters when it is probable
that a liability has been incurred and the amount of the liability can be
reasonably estimated based on the available evidence and site assessments. If an
amount is likely to fall within a range and no single amount within that range
can be determined to be a better estimate, the minimum amount of the range is
recorded. If there are other participants and the liability is joint and
several, the financial stability of the other participants is considered in
determining the Company's accrual. In addition, the liability excludes claims
for recoveries from insurance companies and other third parties until such
claims for recoveries are probable of realization at which point they would be
classified separately as a receivable.

WARRANTY COSTS

The Company warrants under certain circumstances that its building material
products meet certain manufacturing and material specifications. The warranty
policy is unique to each product, ranges from twenty to forty years, is
generally for the material cost and requires the owner to meet specific criteria
such as proof of purchase. The Company offers the original manufacturer's
warranty only as part of the original sale and at no additional cost to the
customer. In addition, for marketing considerations, the Company makes elective
settlements in response to customer complaints. The Company records the
liability for warranty claims and elective customer settlements when it
determines that a specific liability exists or a payment will be made.

F11
<PAGE> 49

2. INVENTORIES

The percentages of inventories valued on the LIFO method were 100% and 86% at
December 31, 1995 and 1994, respectively. It is not practical to separate LIFO
inventories by raw materials and finished goods components; however, the
following table (in thousands) presents these components on a current cost basis
with the LIFO reserve shown as a reduction.

<TABLE>
<CAPTION>
December 31,
1995 1994
---- ----

Current Costs:
<S> <C> <C>
Raw materials $ 1,202 $ 3,554
Finished goods 4,217 6,924
------- -------
5,419 10,478
Less LIFO reserve 718 2,107
------- -------
$ 4,701 $ 8,371
======= =======
</TABLE>

3. DEBT

At December 31, the Company's borrowings and debt obligations are summarized as
follows (in thousands):

<TABLE>
<CAPTION>
1995 1994
---- ----
Long Term Debt:
<S> <C> <C>
Revolving Credit Agreement $ 0 $13,937
Term Loans 5,000 15,000
Obligations under capital leases 982 1,638
------- -------
5,982 30,575
Less - portion due within 1,113 18,071
------- -------
one year $ 4,869 $12,504
======= =======
</TABLE>

On November 30, 1994, Bird Incorporated entered into a three year $39 million
Loan Agreement with Fleet Capital Corporation ("Fleet Capital"), previously
Barclays Business Credit, Inc. and Shawmut Capital Corporation. At the end of
the three year period, the Loan Agreement will be automatically renewed for
successive one year periods unless terminated specifically in writing. The Loan
Agreement consisted of a $24 million revolving credit commitment and two equal
term loans (Term loan A and Term loan B, as defined in the Loan Agreement)
totaling $15 million. On March 8, 1995 the Company sold the assets of its vinyl
siding operation to Jannock, Inc. for $47.5 million which was reduced to
approximately $42.5 million by post-closing working capital adjustments (see
Note 7). The proceeds from the sale were used to reduce bank debt. Concurrent
with the sale, Fleet Capital executed the First Amendment to the Loan Agreement
amending the amount of the facility to $20 million consisting of a $15

F12
<PAGE> 50

million revolving credit commitment and a $5 million term loan. On January 10,
1996, the Company paid down the term loan so that the outstanding principal
balance equaled $2.5 million. Up to $5 million of the revolving credit facility
can be used for letters of credit. Letters of credit outstanding as of December
31, 1995 totaled $2,233,000 compared to $2,927,000 as of December 31, 1994.

Interest on the revolving credit commitment under the First Amended Loan
Agreement accrues at the Fleet Capital base rate (as specified in such
Agreement) or the London Interbank Offering Rate ("LIBOR") plus 2 3/4% at the
Company's election on all borrowings plus the greater of $25,000 per annum or
1/4% on any unused portion of the commitment payable monthly in arrears. The
interest on the term loan accrues at the base rate or the LIBOR rate plus 2 3/4%
at the Company's election. The interest rate on outstanding borrowings at
December 31, 1995 was 8.69%. The repayment of the principal on the term loan is
at the rate of $62,500 per month through November 1996 and $71,417 per month
thereafter with a final principal payment of $3,455,800 due on November 30,
1997. Proceeds in excess of $100,000 from the sale of fixed assets may, at Fleet
Capital's discretion, be applied to the outstanding principal payments of the
term loan.

F13
<PAGE> 51

The weighted average interest rates on short term borrowings at December 31,
1995 and December 31, 1994 were 9.74% and 9.53%, respectively. The fair value of
the Company's total debt approximated the carrying value at December 31, 1995
and 1994, respectively. The fair value is based on management's estimate of
current rates available to the Company for similar debt with the same remaining
maturity.

Maturities of long-term debt for each of the five years subsequent to December
31, 1995 are as follows:

1996 - $1,113,000; 1997 - $4,614,000; 1998 - $255,000; 1999 - $0; 2000 - $0. The
Company incurred net interest expense of $927,000 in 1995, $4,782,000 in 1994
(net of $257,000 capitalized interest), and $2,472,000 in 1993 (net of $345,000
capitalized interest).

4. INCOME TAXES

Earnings (loss) from continuing operations before income taxes and the
provision(benefit) for income taxes are shown below (in thousands):

<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Earnings (loss) from
continuing operations
before income taxes: $ 10,627 $ (5,927) $ (5,278)
======== ======== ========

Provision (benefit) for continuing operations:
Currently payable $ 120 $ 200 $ 765
Deferred 11,304 (7,210) (1,402)
-------- -------- --------
$ 11,424 $ (7,010) $ (637)
======== ======== ========
</TABLE>

The provision (benefit) for income taxes on continuing operations varied from
the U.S. federal statutory rate for the following reasons:

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
Continuing operations:
<S> <C> <C> <C>
U.S. federal statutory rate 34.0% (34.0%) (34.0%)
State income taxes 7.3 (6.5) 0.6
Corporate owned life insurance 2.5 (9.9) 0.0
Effect of valuation allowance 63.7 (67.5) 22.3
Other 0.0 (0.4) (1.0)
----- ----- -----
107.5% (118.3%) (12.1%)
===== ====== =====
</TABLE>

The net provision (benefit) for income taxes related to discontinued operations
amounted to $(2,962,000) and $304,000 for 1994 and 1993, respectively.

The deferred income tax asset recorded in the consolidated balance sheet results
from differences between financial statement and tax

F14
<PAGE> 52

reporting of income and deductions. A summary of the composition of the deferred
income tax asset at December 31, 1995 and 1994 is as follows (in thousands):

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Deferred tax assets:
Bad debt reserves $ 66 $ 1,314
Compensation/pension accruals 648 882
Investment in
non-consolidated subsidiary 0 4,284
Net operating loss carryover 14,810 9,129
Capital loss carryover 0 451
Investment tax credit carryover 1,233 1,233
Minimum tax credit carryover 1,091 1,091
Other reserves & accruals 3,222 3,389
-------- --------
Total deferred tax assets 21,070 21,773

Deferred tax liabilities:
Depreciation (1,942) (1,403)
-------- --------
Net deferred tax asset before
valuation reserve 19,128 20,370

Less: Valuation reserve (15,062) (5,000)
-------- --------
Net deferred tax asset $ 4,066 $ 15,370
======== ========
</TABLE>

The Company has available for federal income tax purposes unused net operating
loss and investment tax credit carryforwards, which may provide future tax
benefits, expiring as follows (in thousands):

<TABLE>
<CAPTION>
Year of Net Investment
Expiration Operating Loss Tax Credit

Additionally, for federal income tax purposes, at December 31, 1995 the Company
had available for carryforward minimum tax credits with no expiration
aggregating $1,091,000. If certain substantial changes in the Company's
ownership should occur, there would be an annual limitation on the amount of the
carryforwards, including certain unrealized built-in losses, which can be
utilized for regular and alternative minimum tax purposes. (See Note 14
regarding proposed merger with CertainTeed Corporation.)

F15
<PAGE> 53

The Company adopted FAS 109 in 1993 and recorded the cumulative effect of the
change in accounting principle of approximately $2.7 million as a benefit in the
results of operations for the first quarter of 1993. This accounting change also
requires the recognition of a valuation reserve if it is more likely than not
that the Company may not be able to realize the benefits of recorded deferred
tax assets. At December 31, 1995 the Company's net deferred tax asset is
approximately $19.1 million less a valuation reserve of $15.1 million. As
required under FAS 109, this valuation reserve was determined based upon the
Company's review of all available evidence including projections of future
taxable income. During 1995, the company disposed of Bird-Kensington Holding
Corporation and Bird Environmental Gulf Coast, Inc. (as disclosed in Notes 7 and
9, respectively) resulting in losses not anticipated at the end of the previous
year. In addition, the lower overall demand and price weakness in the northeast
caused by a mild 1994/1995 winter followed by a hot, dry summer negatively
impacted profits of the roofing operations. Based on the above factors, the
Company increased the valuation reserve by $10.1 million.

The Company expects to be profitable and with other tax planning strategies
expects to generate future taxable income. Realization of the $4,066,000 net
deferred tax asset is dependent on generating sufficient taxable income prior to
expiration of the loss carryforwards. Although realization is not assured,
management believes that it is more likely than not that the net deferred tax
asset will be realized. The amount of the net deferred tax asset considered
realizable, however, could be reduced in the near term if estimates of future
taxable income during the carryforward period are reduced.

5. STOCKHOLDERS' EQUITY

The $1.85 cumulative convertible preference stock is redeemable, in whole or in
part, at the option of the Company, at a redemption price of $20.00 per share on
and after May 15, 1993. The convertible preference stock has a liquidation value
of $20.00 per share and is convertible at the option of the holder into common
stock of the Company at a conversion price of $22.25 per share, subject to
adjustment in certain events. Dividends are cumulative from the date of issue
and are payable quarterly. There are four preference dividends in arrears. The
Company has the option to redeem the convertible preference stock. The Company's
5% cumulative preferred stock ranks senior to the convertible preference stock
as to dividends and upon liquidation.

On June 18, 1992 the Company announced that its Board of Directors authorized it
to buy back, on the open market or in privately negotiated transactions, up to
400,000 of its outstanding shares of common stock at prices available from time
to time that the Company deems attractive. Since this announcement the Company
has repurchased 248 shares in 1994, 5,364 shares in 1993 and 92,007 shares in
1992.

The Company is prohibited from purchasing its common stock as long as dividends
on the convertible preference stock are in arrears. Under the 1992 Stock Option
Plan described in Note 6, 931,325 shares of

F16
<PAGE> 54

common stock are reserved for issuance upon exercise of options and stock
appreciation rights at December 31, 1995.

Restrictions on the payment of dividends on common and preference stock are
imposed by the terms of the Loan Agreement dated November 30, 1994. Payment of
dividends on the preferred stock are permitted under the Loan Agreement. As of
December 31, 1995, all dividends current and in arrears on the preferred stock
in the amount of $29,000 and $22,000 respectively, have been declared and paid
in full. Dividends are in arrears on the preference stock in the aggregate
amount of $1,506,000 for the four quarterly periods ended February 15, 1995 and
must be paid in full before any dividends could be declared and paid on the
common stock. The quarterly dividends on the preference stock due May 15, August
15, and November 15, 1995 in the aggregate amount of $1,130,000, along with one
dividend in arrears in the amount of $377,000, have with the consent of Fleet
Capital, been declared and paid in full.

The Company has a Rights Agreement which, as amended, entitles certain common
stockholders to purchase shares of common stock of the Company or securities of
an acquiring entity in the event of certain efforts to acquire control of the
Company. The proposed merger with CertainTeed Corporation (Note 14) will not
trigger the exercisability of these rights.

6. EMPLOYEE BENEFIT PLANS

RETIREMENT PLANS

The Company's "Bird Employees' Savings and Profit Sharing Plan" provides for a
defined base contribution and profit sharing and savings contributions.

DEFINED BASE CONTRIBUTION

The Company contributes annually 2-7% of plan participants' basic compensation
depending upon their age and employment status as of December 31, 1984. Vesting
accrues at 20% per year of service. Contributions for continuing operations for
the years ended December 31, 1995, 1994, and 1993 amounted to $72,000, $203,000,
and $352,000, respectively.

PROFIT SHARING CONTRIBUTION

Profit sharing contributions are made annually, if earned, based upon certain
defined levels of return on equity by the Company and its business units. The
distribution of the contribution to the plan's participants is based upon annual
basic compensation. Contributions for continuing operations for the year ended
December 31, 1993 amounted to $145,000. No profit sharing contributions were
earned for 1995 or 1994.

SAVINGS CONTRIBUTION

The Company's savings plan provides that eligible employees may contribute to
the plan any whole percentage of their basic

F17
<PAGE> 55

compensation varying from 2 to 15%. The Company may make discretionary matching
contributions not exceeding 6% of the participant's basic compensation during
the plan year. Such matching Company contributions are invested in shares of the
Company's common stock. The Company's contributions for continuing operations
for the years ended December 31, 1995, 1994, and 1993 amounted to $124,000,
$142,000, and $155,000, respectively.

POST RETIREMENT BENEFITS

Certain health care and life insurance benefits are provided for substantially
all of the Company's retired employees, except those covered under union plans.
Benefits are provided by the payment of premiums for life insurance benefits and
the reimbursement for eligible employees of a portion of their health care
premiums. The Company's cost for the years 1995, 1994, and 1993 amounted to
$66,000, $79,000, and $71,000, respectively.

EMPLOYEE INCENTIVE PLANS

Under the 1982 Stock Option Plan, as amended, options to purchase up to 900,000
shares of the Company's common stock may be granted to officers, directors and
key employees upon terms and conditions determined by a committee of the Board
of Directors which administers the plan. In 1993, the Company adopted a new
stock option plan which allows the issuance of up to 450,000 stock options in
addition to the unissued shares approved for issuance under the 1982 plan. The
new plan will expire in 2002 and no further options will be granted under the
former plan. A Non-Employee Directors' Stock Option Plan was also adopted in
1993 which will automatically provide grants of options to each non-employee
director serving on the Board of Directors at the time of such grant. Each
annual grant will cover 2,500 shares of common stock and any recipient may not
receive option grants exceeding a total of 30,000 shares. An aggregate of
100,000 shares of common stock are available for grants under the Non-Employee
Directors' Stock Option Plan.

Options granted by the committee may be designated as either incentive stock
options, as defined under the current tax laws, or non-qualified options. The
committee may also grant stock appreciation rights, either singly or in tandem
with stock options. A right entitles the holder to benefit from market
appreciation in the Company's common stock subject to the right between the date
of the grant and the date of exercise without any payment on the part of the
holder. Upon exercise of a right, the holder surrenders the option and receives
an amount of common stock (or, at the election of the committee, cash) equal in
value to the amount of such appreciation.

The exercise price of options specified by the committee must be at least 100%
of the fair market value of the Company's common stock as of the date of grant.
All options and rights granted become exercisable at the rate of 20 to 25% per
year, on a cumulative basis, beginning with the first anniversary of the date of
grant for options granted under the Stock Option Plan and in full one year after
grant for option granted under the Non-Employee Directors' Stock Option Plan. In
case of termination of employment, options and grants

F18
<PAGE> 56

vested, but not yet exercised, are subject to forfeiture under the Stock Option
Plan and are exercisable up to 90 days after termination for the Non-Employee
Directors' Stock Option Plan.

Transactions involving the Stock Option Plan are summarized as follows for the
year ended December 31, 1995:

<TABLE>
<CAPTION>
STOCK OPTIONS
-------------
<S> <C>
Outstanding January 1, 1995
($5.00 to $17.50 per share) 500,650
Granted ($6.625 to $8.125 per share) 65,000
Exercised ($5.00 per share) (2,000)
Canceled ($5.50 to $17.50 per share) (125,550)
--------
Outstanding December 31, 1995
($5.00 to $17.50 per share) 438,100
========

Exercisable December 31, 1995
($5.00 to $17.50 per share) 186,300

Shares available for granting options:
January 1, 1995 432,675
December 31, 1995 493,225
</TABLE>

In tandem with the stock options there are 9,500 stock appreciation rights at
December 31, 1995.

During 1995, the Financial Accounting Standards Board issued "Statement of
Financial Accounting Standards No. 123 Accounting for Stock Based Compensation"
("FAS 123"). The Company intends to adopt FAS 123 through disclosure only in
1996.

LONG TERM INCENTIVE COMPENSATION

Under the terms of a Long Term Incentive Compensation Plan, certain officers and
key management employees received common stock of the Company on a restricted
time lapse grant basis. These shares were to be released from escrow and
delivered to the plan's participants when the market price of the Company's
common stock achieved certain designated levels between $12 and $24 per share
for 30 consecutive days prior to June 28, 1994 or in any event if the
participant has remained in the continuous employ of the Company through June
2003. Certain market prices were achieved and maintained for the required 30-day
period during 1994 and 1993. Therefore, 40,670 and 45,630 shares of the
Company's common stock were released in June of 1994 and 1993, respectively, to
the plan's participants. Additionally, 30,000 shares were released to the former
Chief Executive Officer in 1994 as part of his Termination Agreement. As a
result of his termination and the termination of certain other officer and key
management personnel during 1994, 125,145 shares of restricted stock valued at
$910,000 were forfeited and returned to treasury stock. Upon consummation of the
vinyl sale, all restrictions on the remaining 23,560 shares of common stock held
under the plan automatically lapsed and such shares were distributed to the
intended recipients.

F19
<PAGE> 57

Amortization of unearned compensation under this agreement for the years 1995
and 1993 amounted to $157,000 and $595,000, respectively. In 1994 amortization
was reduced by $113,000 associated with the forfeiture of shares.

7. DISCONTINUED BUSINESS ACTIVITIES

The Company records income and expenses associated with former business
activities on the Consolidated Statement of Operations under the caption
"Discontinued Business Activities".

On March 8, 1995, the Company sold substantially all of the assets of its vinyl
business to Jannock, Inc. for $47.5 million in cash subject to certain downward
adjustments which totaled $4,962,000. Net of adjustments, the gain on the sale
of the vinyl business totaled $20,579,000. Sales of $6,365,000 were recorded for
the now discontinued vinyl business for the period ending March 7, 1995.

On June 2, 1995 the Company sold all of the outstanding capital stock of
Bird-Kensington Holding Corp., which owned the Company's interest in Kensington
Partners, to Jannock, Inc. The purchase price consisted of cash in the gross
amount of $2,780,000 and the assumption of certain liabilities related to the
Kensington window business. The sale resulted in a loss of $1,959,000. Sales of
$4,265,000 were recorded for this business for the period March 1, 1995 through
June 2, 1995.

On June 10, 1994, the Company's 40% interest in Mid-South Building Supply, Inc.
was redeemed for $1 million in cash resulting in a loss of $1,261,000.

On August 22, 1994, the Company sold the assets of substantially all of its
distribution businesses to Wm. Cameron & Co. for a purchase price consisting of
cash in the amount of $26,142,000, including $1 million held in escrow to pay
any indemnification claims arising under the purchase and sale agreement. The
sale resulted in a gain of $2,677,000. Sales of $67,089,000 were recorded for
these businesses for the period ending August, 22, 1994.

On November 28, 1994, the Company sold its last remaining building materials
distribution business, Southland Building Products, Inc., to Ashley Aluminum,
Inc. for a purchase price of $2,134,000. The sale resulted in a modest gain.
Sales of $9,092,000 were recorded for this business for the period ending
November 27, 1994.

The Company recorded other expenses related to discontinued business activities
of $1,050,000, $153,000, and $268,000, for the years 1995, 1994, and 1993,
respectively. These charges against earnings include warranty claims and other
costs directly related to discontinued business activities. Expenses incurred in
1995 also included $1.5 million in provisions relating to employee benefit plans
and product liability claims associated with former roofing operations which
were offset by a $602,000 crude oil refund from the Department of Energy.

F20
<PAGE> 58

8. OTHER EXPENSE

Other expense was $3.3 million in 1993. A series of non-recurring items
developed at the end of 1993 that required a number of charges to results of
operations. The majority of these are outlined in the following paragraphs:

Accounting requirements associated with the responsible parties on an
environmental cleanup require the Company to maintain a reserve sufficient to
absorb the full cost of the Company's portion of the cleanup. Based on recent
site assessments, the Company increased the cleanup reserve by $500,000 based on
the Company's estimated share of the proportionate costs.

The Company had been considering the development of certain real property. As a
result of cash flow and bank covenant constraints, no further development was
possible. Based on the estimated net realizable value of the property, the
Company wrote-off its $1.3 million investment.

To satisfy the remaining portion of an outstanding receivable, the Company
previously accepted a $1.3 million note, collateralized by a secondary interest
in a mortgage portfolio. Because assessment of the portfolio and the bankruptcy
of the debtor indicated the note to be of no value it was written off.

The termination of the former Chief Executive Officer of the Company resulted in
a $850,000 reserve to cover a settlement under an employment agreement which was
paid in 1994.

The remainder of "Other Expense" is comprised of other miscellaneous adjustments
of a more typical nature and income of approximately $1.3 million from a
settlement with an insurance provider relating to product liability claims.

9. DISCONTINUED OPERATIONS

ENVIRONMENTAL BUSINESSES

On June 18, 1994, the Company agreed to cause the sale of its 80% interest in
its "off-site" environmental business, Bird Environmental Gulf Coast,Inc.
("BEGCI") to the minority shareholders thereof, subject to financing, resulting
in the complete withdrawal from the environmental business. Accordingly, the
Company, as of June 30, 1994, recorded the operating results of BEGCI as a
discontinued operation for all years presented. In conjunction with this
decision, the Company recorded an aggregate charge of approximately $9 million,
to adjust its book value to approximate the net realizable value of $7.5 million
at June 30, 1994. In June 1994, the Company estimated that the results of
operations from the "off-site" environmental business would be breakeven through
the disposal date and, accordingly, no liability for anticipated losses from the
measurement date to the disposal date was recorded. However, at December 31,
1994, the Company had invested an additional $1,270,000 in BEGCI

F21
<PAGE> 59

which, based on the Company's assessment, would not be recoverable and was
accordingly written-off, thus maintaining the Company's investment at $7.5
million.

During 1995, the minority partner became unable to finance the purchase of the
facility and efforts to attract another purchaser were unsuccessful. In July
1995, the Company's Board of Directors suspended further funding of the
facility. As a result of this action, during the second quarter of 1995, the
Company's remaining investment of $8.6 million was written off and a $3 million
reserve was established for additional expenses associated with the closure of
the facility. On November 29, 1995, the Company caused the sale of all of the
outstanding capital stock of BEGCI to GTS Duratek, Inc. for a purchase price of
$1.00. Of the $3 million reserve established in the second quarter of 1995,
$2,050,000 was utilized, while $650,000 remains at December 31, 1995 for future
claims against discontinued operations.

In 1993 the Company decided to close the "on-site" environmental remediation
business. This business involved environmental remediation projects such as the
processing of oily waste sites at a refinery, operations and management of waste
processing sites and the removal and remediation of sludge. The contracts with
customers were generally fixed price and usually for periods less than one year.
As a result of the decision to exit this business, the Company recorded a
provision totaling approximately $11 million. Included in this provision was a
$5.8 million write-down of certain assets to net realizable value, $2.1 million
for certain contracts including any additional amounts due to stipulated
buyouts, $635,000 for severance-related payments, $740,000 for inventory and
other assets, $1 million for the write-off of intangible assets and $700,000 for
other expenses due to lease buyouts, fees and other general expenses.

Included in the 1993 environmental results is a restructuring reserve of $2
million relating primarily to the environmental business. Included in this
provision is $300,000 for severance and benefit payments, $700,000 for lease
buyouts, $650,000 for expected losses on exiting certain contracts, and $350,000
of other costs. This charge was offset by a $858,000 gain on the sale of the
municipal sludge business. These amounts, including the operating results, are
recorded as discontinued operations. Based upon the actual results of the
environmental "on-site" remediation operations and the sale of its assets,
excess costs of $3,861,000 charged in 1993 were reversed and recorded as
discontinued operations in the consolidated statement of operations for the
twelve months ended December 31, 1994.

Net sales relating to these environmental businesses amounted to $2,848,000,
$3,715,000 and $24,681,000 for 1995, 1994 and 1993, respectively.

10. ACQUISITIONS

On July 1, 1992 the Company entered into a 50% joint venture with Kensington
Manufacturing Company to manufacture vinyl replacement windows through
Kensington Partners ("Kensington"). In 1993,

F22
<PAGE> 60

Kensington experienced serious cash needs which hampered production
requirements. As a result of continuing losses and the inability of Kensington
to properly finance its operation, Kensington's independent accountants issued
"going concern" opinions at December 31, 1994 and December 31, 1993. After
negotiating with its partner, Bird Corporation agreed to invest additional cash
in return for temporarily increasing its ownership in Kensington to 90%. The
terms of the new agreement allowed Kensington to return to an equal partnership
if, before the later of December 31, 1994 or six months following the Company's
last investment (made in August, 1994), its partner matched the additional
investment made by the Company. As of February 28, 1995, the minority partner
did not match the additional investment made by the Company. As a result, the
Company's ownership in the joint venture was permanently fixed at 90%, resulting
in a change in financial reporting from the equity method to consolidation
beginning March 1, 1995 through June 2, 1995 when the operation was sold (see
Note 7).

The Company recorded 50% of the joint venture's loss from operations under the
equity method from inception through January 31, 1994 and 90% for the period
February 1, 1994 through February 28, 1995. Equity losses from Kensington are
shown separately on the consolidated statements of operations.

The following table represents summarized financial information for Kensington
Partners for the year ended December 31, 1994 (in thousands):

<TABLE>
<S> <C>
Current Assets $ 5,040
Property and Equipment 3,137
Other Assets 677
-------
Total Assets $ 8,854
=======

Current Liabilities $ 9,722
Other Liabilities 1,288
-------
Total Liabilities $11,010
=======
</TABLE>

The following table represents summarized financial information for the years
ended December 31, 1994 and December 31, 1993 and the two month period ended
February 28, 1995 (in thousands):

<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
Net Sales $ 1,774 $ 24,180 $ 21,169
Gross Profit (Loss) $ (18) $ 1,317 $ 1,384
Net Loss $ (413) $ (5,310) $ (5,249)
</TABLE>

11. COMMITMENTS AND CONTINGENCIES

LEASE COMMITMENTS

The Company leases certain manufacturing, administrative, warehousing,

F23
<PAGE> 61

transportation equipment and other facilities. The leases generally provide that
the Company pay the taxes, insurance and maintenance expenses related to the
leased assets.

At December 31, 1995 minimum lease commitments under noncancelable operating
leases are as follows (in thousands):

<TABLE>
<CAPTION>
Year
----
<S> <C>
1996 $ 986
1997 899
1998 740
1999 740
2000 740
Later years 10,353
--------
$ 14,458
========
</TABLE>

Total rental expense for continuing operations, exclusive of taxes, insurance
and other expenses paid by the lessee related to all operating leases (including
those with terms of less than one year) was as follows (in thousands):

<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1995 $ 1,059
1994 $ 2,883
1993 $ 3,202
</TABLE>

The following represents property under capital leases (in thousands):

<TABLE>
<CAPTION>
December 31,
1995 1994
---- ----
<S> <C> <C>
Machinery and equipment $2,456 $3,790
Less, accumulated depreciation 903 1,495
------ ------
$1,553 $2,295
====== ======
</TABLE>

At December 31, 1995 minimum lease commitments under capital leases are as
follows (in thousands):

<TABLE>
<CAPTION>
Year Amount
---- ------
<S> <C>
1996 $ 412
1997 406
1998 262
1999 0
2000 0
-------
Total minimum lease payments 1,080
Imputed interest (@ rates ranging from
3.4% to 7.2%) (98)
Total future principal payments
-------
of lease obligations $ 982
=======
</TABLE>

LITIGATION

Since 1981, the Company has been named as a defendant in approximately

F24
<PAGE> 62

550 product liability cases throughout the United States by persons claiming to
have suffered asbestos-related diseases as a result of alleged exposure to
asbestos in products manufactured and sold by the Company. Approximately 140 of
these cases are currently pending and costs of approximately $2 million in the
aggregate have been incurred in the defense of these claims since 1981. The
Company's insurance provider has accepted the defense of these cases under an
agreement for sharing of the costs of defense, settlements and judgements, if
any. The Company has provided a reserve amounting to $950,000 at December 31,
1995 for its estimated share of losses related to these claims. In light of the
nature and merits of the claims alleged, in the opinion of management, the
resolution of these remaining claims will not have a material adverse effect on
the results of operations or financial condition of the Company.

In 1986, the Company, along with numerous other companies, was named by the
United States Environmental Protection Agency ("EPA") as a Potentially
Responsible Party ("PRP") under the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended, 42 U.S.C. Paragraph 9601, et seq.
("CERCLA"), in connection with the existence of hazardous substances at a site
known as the Fulton Terminal Superfund site located in Fulton, Oswego County,
New York. On September 28, 1990 the Company and a number of other PRPs reached a
negotiated settlement with the EPA pursuant to which the settling PRPs agreed to
pay the costs of certain expenses in connection with the proceedings, and to pay
certain other expenses including the costs and expenses of administering a trust
fund to be established by the settling PRPs. The settlement agreement is
embodied in a consent decree lodged with the United States District Court for
the Western District of New York. The ultimate cost to the Company of the
remedial work and other expenses covered by the settlement agreement is
estimated to be between $1 million to $2 million. This range is based, in part,
on an allocation of certain sites' costs which, due to the joint and several
nature of the liability, could increase if the other PRP's are unable to bear
their allocated share. The Company has provided a reserve of approximately $1
million at December 31, 1995 to cover the remaining proportionate share of the
estimated total remaining cost of cleanup, most of which will be paid in 1996.
Based on information currently available to the Company, management believes
that it is probable that the major responsible parties will fully pay the cost
apportioned to them. Management believes that, based on its financial position
and the estimated accrual recorded, its remediation expense with respect to this
site is not likely to have a material adverse effect on its consolidated
financial position or results of operations of the Company.

The Company has been named as a PRP with respect to certain other sites which
are being investigated by federal or state agencies responsible for regulation
of the environment. Status as a PRP means that the Company may be jointly and
severally liable for all of the potential monetary sanctions and remediation
costs applicable to each site. In assessing the potential liability of the
Company at each site, management has considered, among other things, the
aggregate potential cleanup costs of each site; the apparent involvement of the
Company at each site and its prospective share of the remediation costs
attributable thereto; the number of the PRPs identified with

F25
<PAGE> 63

respect to each site and their financial ability to contribute their
proportionate shares of the remediation costs for such site; the availability of
insurance coverage for the Company's involvement at each site and the likelihood
that such coverage may be contested; and whether and to what extent potential
sources of contribution from other PRPs or indemnification by insurance
companies constitute reliable sources of recovery for the Company. On the basis
of such consideration, management has determined that such environmental matters
will not have a material affect on the Company's financial position or results
of operations. The Company has provided an aggregate reserve amounting to
approximately $300,000 at December 31, 1995 for its estimated share of the
ultimate cost of cleanup for such claims excluding any potential sources of
indemnification or recovery from third parties.

In 1992, a subsidiary of the Company, Bird Atlantic Corporation, formerly
Atlantic Building Products Corporation ("ABPCO"), commenced an action against a
former vendor, alleging violation of an exclusive distributorship without
adequate and fair compensation to ABPCO. A jury trial was held in November 1995
in the Superior Court of Plymouth County, Massachusetts. The jury found in favor
of ABPCO and judgement was entered on January 26, 1996 in the principal amount
of approximately $1.8 million. The award, with interest accruing at 12% per
annum, is expected to be in excess of $3 million and will not be reported as
income until collected. The defendant has appealed the judgement.

The Company is also exposed to a number of other asserted and unasserted
potential claims encountered in the normal course of business and unrelated to
environmental matters. In the opinion of management, the resolution of such
claims will not have a material adverse effect on the Company's financial
position or results of operations.

WARRANTY OBLIGATIONS

The Company warrants under certain circumstances that its Housing Group's
products meet certain manufacturing and material specifications. In addition,
for marketing considerations, the Company makes elective settlements in response
to customer complaints. The Company records the liability for warranty claims
and elective customer settlements when it determines that a specific liability
exists or a payment will be made. During 1995, 1994 and 1993, the Company
recorded (exclusive of those claims included in discontinued business
activities) approximately $2,262,000, $2,687,000, and $3,196,000, respectively,
in warranty expenses and elective customer settlements. The warranty related
expense included in discontinued business activities for 1995, 1994 and 1993
amounted to approximately $94,000, $100,000 and $104,000, respectively. Based
upon analyses performed by the Company's management, a reasonably possible range
of potential liability from unasserted warranty obligations for all products
sold prior to December 31, 1995 is estimated to be between $3.5 million and
$16.5 million. However, the Company has not recorded any liability for these
future unasserted claims or complaints because management has concluded, based
on such analyses, that no particular estimate within this range is probable.

F26
<PAGE> 64

12. OPERATIONS IN DIFFERENT INDUSTRIES

The Company has had two business segments which it defined as the Housing Group
and the Environmental Group.

The Housing Group manufactures and markets residential and commercial roofing
products in the northeastern United States, including a full line of fiberglass
based asphalt shingles and roll roofing. The Group also manufactured vinyl
siding, window profiles, trim and accessories which were distributed nationwide.
In prior years, the Group operated distribution centers primarily in the
southeastern and southwestern markets for vinyl siding and in the Arizona and
northeastern markets for roofing and other building materials products.

The Company's Environmental Group provided recycling, remediation, and
beneficial re-use services for applications as diverse as food processing waste
streams, oily waste recovery and the treatment of municipal wastes. Generally,
these on-site services recovered valuable constituents, removed wastes and
reduced the volume of materials which must be disposed of by other means. In
December 1993, the Company decided to close this portion of the environmental
segment and dedicate this group to operating BEGCI, the fixed site facility in
Texas. As discussed in Note 9, the Company sold its interest in BEGCI in
November 1995 to GTS Duratek, Inc.

Net sales represent sales to unaffiliated customers. Identifiable assets are
those that are used in the Company's operations in each industry segment.
Corporate assets are principally cash investments and equivalents and property
maintained for general corporate purposes. As discussed in Note 9, the results
of operations for the environmental group for the three years ended December 31,
1995 have been recorded as discontinued operations. Accordingly, net sales, cost
of sales and SG&A relating to this segment are not shown below.

F27
<PAGE> 65
12. OPERATIONS IN DIFFERENT INDUSTRIES (CONTINUED)

<TABLE>
<CAPTION>
Year ended December 31,
1995 1994 1993
---- ---- ----

Housing Group
<S> <C> <C> <C>
Net Sales $ 54,180 $ 167,886 $ 187,745
========= ========= =========

Earnings (loss) from continuing operations before income taxes:
Housing group operating income $ 189 $ 6,126 $ 7,121
Other non-recurring income 17,722 1,466 877
Interest expense (927) (4,782) (2,472)
Corporate office expenses (6,357) (8,737) (6,970)
Other write offs 0 0 (3,834)
--------- --------- ---------

$ 10,627 $ (5,927) $ (5,278)
========= ========= =========

Identifiable assets:
Housing group $ 34,111 $ 57,282 $ 95,663
Environmental group 75 7,874 23,250
Corporate office 9,517 20,549 4,316
--------- --------- ---------
$ 43,703 $ 85,705 $ 123,229
========= ========= =========

Depreciation:
Housing group $ 2,759 $ 3,573 $ 3,670
Environmental group 0 500 1,686
Corporate office 72 71 87
--------- --------- ---------
$ 2,831 $ 4,144 $ 5,443
========= ========= =========

Capital expenditures:
Housing group $ 1,924 $ 9,446 $ 4,505
Environmental group 0 1,283 12,251
Corporate office 0 37 56
--------- --------- ---------
$ 1,924 $ 10,766 $ 16,812
========= ========= =========
</TABLE>

F28

<PAGE> 66
13. QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial data for 1995 and 1994 is shown below:

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31 JUNE 30 SEPT. 30 DEC. 31
-------- -------- -------- --------
(thousands of dollars, except per share amounts)
<S> <C> <C> <C> <C>
1995
Net sales $ 16,623 $ 15,138 $ 12,170 $ 10,249
Gross profit $ 1,532 $ 2,621 $ 1,817 $ 203(1)
Earnings(loss):
Continuing operations $ 9,036 ($ 4,066) ($ 596) ($ 5,171)
Discontinued operations (236) (11,368) 0 352
-------- -------- -------- --------
Net earnings (loss) $ 8,800 ($15,434) ($ 596) ($ 4,819)
======== ======== ======== ========

Earnings per share data:
Primary earnings (loss) per
common share:
Continuing operations $ 2.11 ($ 1.08) ($ 0.24) ($ 1.35)
Discontinued operations (0.06) (2.77) 0.00 0.09
-------- -------- -------- --------
Net earnings (loss) $ 2.05 ($ 3.85) ($ 0.24) ($ 1.26)
======== ======== ======== ========
1994
1994
Net sales $ 36,863 $ 58,486 $ 46,246 $ 26,291
Gross profit $ 6,670 $ 10,943 $ 9,169 $ 4,226(2)
Earnings(loss):
Continuing operations ($ 3,398) ($ 1,480) $ 3,304 $ 2,657
Discontinued operations (750) (5,708) (907) 2,599
-------- -------- -------- --------
Net earnings (loss) ($ 4,148) ($ 7,188) $ 2,397 $ 5,256
======== ======== ======== ========

Earnings per share data:
Primary earnings (loss) per
common share:
Continuing operations ($ 0.92) ($ 0.45) $ 0.76 $ 0.56
Discontinued operations (0.18) (1.37) (0.24) 0.64
-------- -------- -------- --------
Net earnings (loss) ($ 1.10) ($ 1.82) $ 0.52 $ 1.20
======== ======== ======== ========
</TABLE>

(1) Decrease in gross profit in the fourth quarter compared to the previous
quarter is due to sales price weakness and the decline in sales volume
attributable to a weak re-roofing market caused by a dry, hot summer.

(2) Decrease in gross profit in the fourth quarter compared to the previous
quarter is due primarily to increased raw material costs that could not
be passed on via price increases.

F29
<PAGE> 67

14. MERGER WITH CERTAINTEED CORPORATION

Upon the effective date of the merger, each share of the Company's outstanding
common stock, par value $1 per share, will be converted into the right to
receive an amount in cash equal to $7.50. The Company's outstanding 5%
cumulative preferred stock, par value $100 per share, will remain issued and
outstanding upon the effective date of the merger and will be called for
redemption and retirement as soon as practicable thereafter at a price equal to
$110, plus all accrued and unpaid dividends thereon as of the date of redemption
and retirement. Each share of the Company's outstanding $1.85 cumulative
convertible preference stock, par value $1 per share, will be converted into the
right to receive $20 plus all accrued and unpaid dividends thereon as of the
effective date of the merger. All outstanding options to purchase common stock
under the 1982 Stock Option Plan, the 1992 Stock Option Plan, and the 1992
Non-Employee Directors' Stock Option Plan will be converted into the right to
receive an amount in cash equal to $7.50 per share less the exercise price per
share. Any option with an exercise price equal to or greater than $7.50 will be
cancelled on the effective date of the merger without any payment to the option
holder.

F30

<PAGE> 68

BIRD CORPORATION and Subsidiaries

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

Years Ended December 31, 1995, 1994 and 1993
(In thousands)

<TABLE>
<CAPTION>
Additions
-------------------------
Balance Charged to Charged to Balance
beginning cost and other Deduc- at end
of year expenses accounts(a) tions of year
--------- ---------- ----------- ------ -------
<S> <C> <C> <C> <C> <C>
Year Ended December 31, 1995:

Allowance for doubtful accounts $ 3,137 $ 26 $ 56 $(3,066)(c) $ 153

Valuation allowance for
deferred tax assets $ 5,000 $10,789 $ 0 $ (727) $15,062

Year Ended December 31, 1994:

Allowance for doubtful accounts $ 4,273 $ 905 $ 100 $(2,141)(b) $ 3,137

Valuation allowance for
deferred tax assets $ 9,000 $ 0 $ 0 $(4,000) $ 5,000

Year Ended December 31, 1993:

Allowance for doubtful accounts $ 2,978 $ 2,162 $ 47 $ (914)(b) $ 4,273

Valuation allowance for
deferred tax assets $ 0 $ 9,000 $ 0 $ 0 $ 9,000
</TABLE>

(a) Represents recovery of balances previously written off.

(b) Uncollectible accounts written off by a charge to reserve.

(c) Represents the allowance for doubtful accounts of vinyl business sold
of $517 and the uncollectible accounts written off by a charge to
reserve of $2,549.

F31
<PAGE> 69
KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

COMBINED FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
ITEM 14(d)

DECEMBER 31, 1994

F32

<PAGE> 70

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

COMBINED FINANCIAL STATEMENTS

- --------------------------------------------------------------------------------
DECEMBER 31, 1994
- --------------------------------------------------------------------------------

TABLE OF CONTENTS

PAGE
----

FINANCIAL STATEMENTS

Independent Auditors' Report F34

Combined Balance Sheet F35

Combined Statements of Operations and Partners' Capital (Deficit) F37

Combined Statements of Cash Flows F38

Notes to the Combined Financial Statements F40

SUPPLEMENTAL INFORMATION

Independent Auditors' Report on Financial Statement Schedule F54

Financial Statement Schedule II F55

F33

<PAGE> 71

INDEPENDENT AUDITORS' REPORT

TO THE PARTNERS
KENSINGTON PARTNERS AND AFFILIATE
Leechburg, Pennsylvania

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

/s/Alpern, Rosenthal & Company
Pittsburgh, Pennsylvania

February 10, 1995

F34

<PAGE> 72

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

COMBINED BALANCE SHEET

<TABLE>
<CAPTION>
- ------------------------------------------------------------------
DECEMBER 31 1994
- ------------------------------------------------------------------

ASSETS

CURRENT ASSETS
<S> <C>
Cash $ 55,655
Accounts receivable
Trade - net of allowance for doubtful
accounts of $323,000 - Note 3 1,742,715
Related parties-Note 13B 1,286,189
Inventories-Note 4 1,875,584
Prepaid expenses 79,862
----------

TOTAL CURRENT ASSETS 5,040,005

PROPERTY AND EQUIPMENT-At cost - net of
accumulated depreciation of $1,139,398 - Note 5 3,136,639
----------

OTHER ASSETS
Other receivables - related party - net of
allowance-Note 13E 306,386
Other assets-Note 6 371,249
----------
677,635
----------
TOTAL ASSETS $8,854,279
==========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F35

<PAGE> 73
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
1994
- ------------------------------------------------------------------------

LIABILITIES AND PARTNERS' DEFICIT

CURRENT LIABILITIES
<S> <C> <C>
Demand notes payable-Note 7 $ 1,628,302
Current maturities of capital lease
obligations and long-term debt-Note 8 312,023
Accounts payable
Trade 2,485,977
Related parties-Note 13A 3,654,990
Accrued expenses-Note 9 1,640,238
------------
TOTAL CURRENT LIABILITIES 9,721,530
------------

LONG-TERM LIABILITIES
Capital lease obligations and long-term debt-
net of current maturities-Note 8 807,012
Accounts payable - trade - long-term 354,636
Other long-term liabilities-related parties-
Notes 13D and 13E 126,314
------------
TOTAL LONG-TERM LIABILITIES 1,287,962
------------

TOTAL LIABILITIES 11,009,492

PARTNERS' DEFICIT (2,155,213)

COMMITMENTS AND CONTINGENCIES - Note 12 --
------------
TOTAL LIABILITIES AND PARTNERS' DEFICIT $ 8,854,279
============
</TABLE>

F36

<PAGE> 74

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

COMBINED STATEMENTS OF OPERATIONS AND PARTNERS' CAPITAL (DEFICIT)

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
NET SALES (related parties - 1994 - 26%,
1993 - 34%) $ 24,180,093 $ 21,169,467

COST OF GOODS SOLD (purchased
from related parties - 1994 - 28%,
1993 - 27%) 22,863,159 19,785,555
------------ ------------

GROSS PROFIT 1,316,934 1,383,912

OPERATING EXPENSES (related parties -
1994 - 11%, 1993 - 23%) 5,346,966 6,012,508
------------ ------------
LOSS FROM OPERATIONS (4,030,032) (4,628,596)
------------ ------------

OTHER INCOME (EXPENSE)
Interest expense (289,638) (155,452)
Income (loss) from equity investment 3,468 (69,578)
Provision for doubtful accounts (595,417) (202,154)
Tax penalties (199,872) --
Other expense - net (198,186) (193,647)
------------ ------------

TOTAL OTHER EXPENSE (1,279,645) (620,831)

NET LOSS (5,309,677) (5,249,427)

PARTNERS' CAPITAL (DEFICIT) - Beginning
of year (195,526) 4,453,901

Capital Contributions 3,349,990 600,000
------------ ------------

PARTNERS' DEFICIT - End of year $ (2,155,213) $ (195,526)
============ ============
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F37

<PAGE> 75

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

COMBINED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31 1994 1993
- --------------------------------------------------------------------------------------------

CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES
<S> <C> <C>
Net loss $(5,309,677) $(5,249,427)
Adjustments for noncash items
included in net loss
Depreciation and amortization 763,183 540,921
(Income) loss from equity investment (3,468) 68,578
Working capital changes (below) 2,818,892 3,269,036
----------- -----------

NET CASH USED FOR OPERATING ACTIVITIES (1,731,070) (1,370,892)
----------- -----------

CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
Purchase of property and equipment (38,222) (132,650)
Proceeds from sale of equipment 81,430 --
Other assets (98,273) (280,508)
Other receivables-related parties 18,723 (100,000)
----------- -----------
NET CASH USED FOR INVESTING ACTIVITIES (36,342) (513,158)
----------- -----------

CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES
Cash contributed by the
partners - Note 10 2,825,000 600,000
Demand notes payable (617,278) 1,335,000
Proceeds from long-term debt 169,706 34,107
Payments on long-term debt (631,082) (399,543)
Other long-term liabilities -
related parties 61,203 306,286
----------- -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES 1,807,549 1,875,850
----------- -----------
INCREASE (DECREASE) IN CASH 40,137 (8,200)

CASH - Beginning of year 15,518 23,718
----------- -----------

CASH - End of year $ 55,655 $ 15,518
=========== ===========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F38

<PAGE> 76

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

COMBINED STATEMENTS OF CASH FLOWS (CONTINUED)

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
FOR THE YEARS ENDED DECEMBER 31 1994 1993
- --------------------------------------------------------------------------------------------------------------------------

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

<S> <C> <C>
Cash paid during the year for interest $ 255,304 $ 152,341
=========== ===========

NONCASH INVESTING AND FINANCING ACTIVITIES

Capital lease and debt obligations
incurred for acquisition of equipment $ 68,431 $ 1,502,028
=========== ===========

Partners' capital contribution of inventory $ 399,990 $ --
=========== ===========

Liability to related party
contributed to capital $ 125,000 $ --
=========== ===========

WORKING CAPITAL (INCREASES) DECREASES

Accounts receivable
Trade $ 1,020,492 $(1,210,178)
Related parties (280,204) (13,661)
Inventories 1,480,803 (921,219)
Other current assets and
liabilities 940,601 520,199
Accounts payable
Trade (1,087,268) 2,825,082
Related parties 744,468 2,068,813
----------- -----------

INCREASE IN WORKING CAPITAL $ 2,818,892 $ 3,269,036
=========== ===========
</TABLE>

The accompanying notes are an integral part of these combined financial
statements.

F39

<PAGE> 77

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)
NOTES TO THE COMBINED FINANCIAL STATEMENTS

NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. PRINCIPLES OF COMBINATION

The accompanying combined financial statements include the accounts
of Kensington Partners (KP), combined with the accounts of North American
Installations Company (NAICO). NAICO is owned 100% by common owners of
KP. All significant intercompany balances and transactions have been
eliminated in the preparation of the combined financial statements. The
combined group is herein referred to as "the Companies".

KP is a joint venture partnership formed by ZES, Inc. (formerly
Kensington Manufacturing Company) (ZES) and Bird-Kensington Holding
Corp., an indirect subsidiary of Bird Corporation (Bird). NAICO was
formed in May 1993, as a joint venture partnership, and ceased operations
in 1994.

B. NATURE OF BUSINESS

Kensington Partners operates in one principal industry segment: the
manufacture of vinyl replacement windows for wholesalers and home
remodelers. The Partnership grants credit to its customers, substantially
all of which are retail and wholesale resellers of windows located in the
eastern half of the United States.

NAICO was an exclusive installer of KP windows for a significant
customer of KP, a retail seller of windows to end users, which has sales
throughout the United States. The installation of the windows has been
transferred to the customer that purchases the windows.

C. CASH AND CASH EQUIVALENTS

Interest-bearing deposits and other investments with original
maturities of three months or less are considered cash equivalents.

D. ACCOUNTS RECEIVABLE

The Companies provide for estimated losses on uncollectible
accounts receivable based on historical data and management's evaluation
of individual accounts receivable balances at the end of the year.

F40

<PAGE> 78

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)
NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

E. INVENTORIES

The Companies value all of its inventories at the lower of cost or
market. Raw materials are determined on the last-in, first-out (LIFO)
method. Work-in-process and finished goods inventories are determined on
a first-in, first-out (FIFO) method.

F. DEPRECIATION

Depreciation is computed by the straight-line method at rates
intended to distribute the cost of the assets over their estimated useful
lives. Property under capital lease is being amortized over the life of
the lease in accordance with generally accepted accounting principles.
Rates used by principal classifications are as follows:

Rate
(Years)
-------

Warehouse and manufacturing equipment 3-10
Furniture and fixtures 5-10
Leasehold improvements 3-15
Transportation equipment 3- 6

Maintenance and repairs which are not considered to extend the
useful lives of assets are charged to operations as incurred. Upon sale
or retirement, the cost of assets and related allowances are removed from
the accounts and any resulting gains or losses are included in other
income (expense) for the year.

G. INVESTMENT IN AFFILIATED COMPANY

The Companies' investment in a joint venture partnership is carried
on the equity basis, which approximates the Companies' equity in the
underlying net book value.

H. PRODUCT WARRANTIES

The Companies provide an accrual for future warranty costs based
upon actual claims experience. The warranties are limited and provide for
parts and/or labor based upon the type of window sold.

I. INCOME TAXES

The Companies are being treated as partnerships for Federal and
state income tax purposes. Under the Internal Revenue Code provisions for
partnerships, the partners reflect their proportionate share of the
Companies' taxable income or loss on their respective income tax returns,
and the Companies are not liable for income taxes.

F41

<PAGE> 79

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

J. RECLASSIFICATION

Certain reclassifications were made to the amounts previously
reported for December 31, 1993 to conform with the 1994 classifications.

NOTE 2 - OPERATIONS AND LIQUIDITY

The Companies' combined financial statements have been presented on the
basis that they are going concerns, which contemplates the realization of assets
and the satisfaction of liabilities in the normal course of business. The
Companies incurred net losses of approximately $5,310,000 and negative cash
flows from operations of $1,731,000 for 1994. At December 31, 1994, the balance
sheet reflects an excess of current liabilities over current assets of
$4,682,000, and a net capital deficiency of $2,155,000.

In addition, a lease agreement (Note 12A) is in default as a result of
late payments being made and certain payroll and sales taxes are delinquent.
(Note 9)

Management believes the above mentioned losses and the associated balance
sheet deficiencies are a result of adding new products in 1993 which required
different manufacturing processes and a significant increase in orders, which
put strain on the existing systems. The combination of the above resulted in
manufacturing inefficiencies, low asset performance, excessive delivery costs
and inadequate management information.

During 1993, the Companies embarked on a program to correct the problems
associated with operations. Management believes that the major components of the
plan have been achieved in 1994 and that the effect of addressing and correcting
these problems during 1994 will have a positive impact on 1995 operating
results.

During the first quarter of 1995, KP has secured price increases from a
majority of its customers and negotiated a price reduction from a major vendor.
In addition, KP continues on a program to increase productivity, which includes:
simplifying product lines, improving plant layout, management training and
investing in labor saving equipment. KP has also begun a sales program to
broaden its customer base.

The outcome of the uncertainties discussed above cannot be predicted at
this time. The financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts and
classification of liabilities that might be necessary should the Companies be
unable to continue in existence.

F42

<PAGE> 80

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 3 - ACCOUNTS RECEIVABLE

At December 31, 1994, accounts receivable - trade from three customers
were approximately 67% of trade receivables. Sales to these unrelated customers
comprised 67% of total sales for the years ended December 31, 1994. Sales to
these customers comprised 51% of total sales for the year ended December 31,
1993.

NOTE 4-INVENTORIES

Inventories at December 31, 1994 are as follows:

<TABLE>
<S> <C>
Raw materials $ 950,893
Allowance to state raw materials at LIFO cost (39,005)
-----------

Raw materials at LIFO cost 911,888
Work-in-process 648,987
Finished goods 314,709
-----------

Total Inventories $ 1,875,584

NOTE 5-PROPERTY AND EQUIPMENT

Property and equipment at December 31, 1994 is as follows:

Equipment under capital leases - Note 8 $ 1,785,817
Warehouse and manufacturing equipment 1,715,676
Furniture and fixtures 290,258
Leasehold improvements 419,791
Transportation equipment 64,495
-----------

4,276,037

Less:Accumulated depreciation 1,139,398
Total Property and Equipment $ 3,136,639
===========
</TABLE>

F43

<PAGE> 81

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6 - OTHER ASSETS

Other assets at December 31, 1994 is as follows:

<TABLE>
<S> <C>
Deposits $199,838
Sample windows 89,965
Other assets 81,446
--------

$371,249
========
</TABLE>

NOTE 7 - DEMAND NOTES

On June 15, 1994, KP entered into a financing/factoring agreement with a
lending institution to sell, on an ongoing basis, up to 80% or $2,500,000,
whichever is less, of acceptable trade accounts receivable. All accounts
receivable that remain unpaid after 90 days of the purchase by the lender are
subject to recourse at the lender's discretion. KP may, at any time, repurchase
the accounts receivable sold. The agreement, which expires on June15, 1995, is
subject to automatic renewal for a six month period, unless notice of nonrenewal
is given by either party. The loan was funded with $1,000,000, at which time the
Companies' line of credit was paid in full (see below).

Under the terms of this agreement, fees ranging from 1% to 3 1/2% are
based on the number of days to collect the trade receivable, with a guaranteed
minimum monthly fee of $5,000. In addition, interest is charged on any amounts
advanced under the agreement, at the rate of prime (8 1/2% at December 31, 1994)
plus 1 1/2%. Under the terms of this agreement, Bird has guaranteed $1,250,000
of this debt.

The amount outstanding under this agreement, included in the accompanying
balance sheet at December 31, 1994, is net of a $150,000 cash reserve held by
the lending institution.

Prior to June 15, 1994, the Companies had a line-of-credit, with maximum
borrowings of $2,500,000. Interest was payable monthly at the bank's basic rate
plus 1% (see below). The borrowings on the line were collateralized by
substantially all the assets of the Companies. The line was guaranteed by the
partners of the Companies.

In early 1994, the bank cited defaults under the line of credit agreement
and made demand for payment. Based on agreements between the Companies and the
bank in February and April, 1994, the bank agreed to forebear collection and set
a final due date of August 31, 1994. In addition, the interest rate was changed
to the bank's basic rate plus 3%. Bird was required to put up $750,000 as
additional collateral, which was later applied to the line. Bird was also
required to make additional payments totaling $1,200,000. The payments by Bird
were recorded as capital contributions to the partnership.

F44

<PAGE> 82

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 8-CAPITAL LEASE OBLIGATIONS AND LONG-TERM DEBT

The following is a schedule by years of future minimum lease payments
under capital leases and installment notes together with the present value of
the net minimum lease payments and note payments as of December 31, 1994:

<TABLE>
<S> <C>
1995 $ 332,000
1996 287,000
1997 278,000
1998 334,000
-----------

Net minimum lease payments 1,231,000

Less: Amount representing interest 158,000
-----------
Present value of net minimum lease payments 1,073,000

Long-term debt principal payments - all due
within one year 46,000
-----------

Net obligations under capital leases and notes payable 1,119,000

Less: Current portion 312,000
-----------

Long-term obligations under capital leases and notes payable $ 807,000
===========

The partners have guaranteed substantially all of the above lease
obligations.

Assets under capital lease are capitalized using interest rates
appropriate at the inception of each lease. The following is an analysis of the
Companies' assets under capital lease obligations, included in property and
equipment (Note 5), at December 31, 1994:

Warehouse and manufacturing equipment $ 1,624,677
Transportation equipment 161,140
-----------

1,785,817

Less: Accumulated amortization 290,729
-----------

Total $ 1,495,088
===========
</TABLE>
F45

<PAGE> 83

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 9 - ACCRUED EXPENSES

Accrued expenses at December 31, 1994 are as follows:

<TABLE>
<S> <C>
Accrued and withheld payroll and payroll taxes (Note 2) $ 575,500
Accrued and collected sales taxes (Note 2) 502,415
Accrued tax penalties and interest 239,219
Accrued vacation 155,510
Accrued real estate taxes 105,932
Other accrued expenses 61,662
----------

Total Accrued Expenses $1,640,238
==========
</TABLE>

NOTE 10 - PARTNERS' CAPITAL

Effective July 1, 1992, ZES entered into an agreement with Bird through
one of Bird's indirect subsidiaries to form a joint venture partnership,
Kensington Partners (KP), for the purpose of manufacturing and selling custom
windows, a business previously conducted by ZES. ZES' capital contribution to KP
consisted of all of its assets subject to certain of its liabilities, including
$2,800,000 owed to Jones and Brown, Inc. (J&B), a related party. Bird's capital
contribution consisted of $2,800,000, in cash, which was used to pay off the
amount owed by KP to J&B, subsequent to the inception of the Partnership. The
net assets contributed by ZES were $1,689,000.

During 1994, the partners entered into an agreement to restructure the
partnership agreement of KP and to make capital contributions. Each partner's
ownership percentage is to be adjusted plus or minus 2% for each $50,000 of
capital contributed or collateral provided on the bank loan, but in no event
should a partner be diluted below 10%. A diluted partner is entitled to cure any
shortfall between its capital account and the other partner's capital account by
contributing the capital necessary to equalize each partner's capital account by
the later of December 31, 1994 or six months from the date of the last capital
contribution (August 1994) made on or before December 31, 1994.

Pursuant to the agreement, Bird contributed $2,700,000 in cash, including
payments on debt (Note 7), and $150,000 of inventory. ZES has contributed
$250,000 in cash and $250,000 of inventory. Accordingly, the ownership
percentages for Bird and ZES at December 31, 1994 are 90% and 10%, respectively.

In addition to the capital contributed, the partners have advanced
various amounts of working capital during 1994 (Note 13).

F46

<PAGE> 84

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10 - PARTNERS' CAPITAL (CONTINUED)

In September 1994, Bird entered into a sales agreement with Jannock, Inc.
to sell all of the assets of a wholly owned subsidiary, Bird Incorporated. The
sales agreement contains an option for Jannock to purchase Bird's interest in
Kensington Partners for $2,780,000. In addition to the purchase price, Jannock
would assume all of Bird's obligations under various security agreements. The
option, which expires on April 7, 1995, is subject to Bird fulfilling its
obligations under the partnership agreement.

Subsequent to December 31, 1994, Bird advanced KP approximately $524,000.

NOTE 11 - RETIREMENT PLANS

KP participates in a multi-employer defined benefit pension plan for the
electrician's union employees. Plan contributions are determined by the union
labor agreement. Management has not expressed any intent to terminate its
participation in this plan. KP contributed approximately $191,000 and $163,000
to this plan during the years ended December 31, 1994 and 1993, respectively.

The Companies also sponsors an executive retirement plan. Under the
provisions of the plan certain key employees may elect, at their discretion, to
contribute to the plan. The Companies provide a matching contribution of one
half of all employee contributions up to a maximum of 3% of gross compensation.
Contributions are used to purchase variable rate annuities.

Additional benefits under this plan include proceeds from life insurance
policies owned by KP or the cash value upon termination of employment. The
Companies' contributions to this plan were not material for the years ended
December 31, 1994 and 1993.

NOTE 12 - COMMITMENTS AND CONTINGENCIES

A. OPERATING LEASES

The Companies lease various operating facilities from related and
unrelated parties and transportation equipment from unrelated parties
under various operating leases. Rent expense for the years ended December
31, 1994 and 1993 are as follows:

<TABLE>
<CAPTION>
1994 1993
---- ----
<S> <C> <C>
Facilities leases - primarily
related party $285,000 $263,000
Transportation equipment 133,000 67,000
-------- --------
$418,000 $330,000
======== ========
</TABLE>

F47

<PAGE> 85

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

The following are the approximate future minimum operating lease
payments at December31, 1994, substantially all of which are due to a
related party:

Year Ending
December 31 Amount
----------- ------
<S> <C>
1995 $ 239,000
1996 227,000
1997 215,000
1998 215,000
1999 215,000
Thereafter 1,280,000
----------
Total minimum lease payments $2,391,000
==========
</TABLE>

KP is currently in default on its lease for its primary operating
facility as a result of not making the required rent payments as they
became due. Rent of approximately $237,000, due a related party, has been
accrued in the accompanying balance sheets at December 31, 1994. Based
upon the current payment plan, approximately $61,000 of the accrued rent
at December31, 1994 is included in other long-term liabilities - related
parties.

B. PURCHASE COMMITMENTS

KP and Bird have entered into a supply agreement which requires KP
to purchase specified quantities of raw materials from Bird beginning in
1993 and ending in the year 2002. Minimum purchases for the next five
years are 1995, $900,000; 1996, $1,100,000; 1997, $1,300,000; and 1998
and 1999, the greater of $1,300,000 or actual amounts purchased in 1997.
The agreement includes penalties for shortfalls in purchases on a per
year basis. Shortfalls can be offset with credits from years when excess
volume is purchased.

KP and Domken Plastics (Note 13A) have entered into a supply
agreement which requires KP to purchase $2,500,000 of raw materials,
annually, through 1999. The agreement includes penalties for shortfalls
in total purchases over the term of the agreement.

C. SUPPLY AGREEMENTS

KP has entered into a supply agreement with a customer that
primarily purchases through Quantum II Partners (Notes 12D and 13E). The
agreement requires KP to provide not less than 90% of the customer's
total requirement of Quantum II vinyl replacement windows (Note 12D).

F48

<PAGE> 86

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 12 - COMMITMENTS AND CONTINGENCIES (CONTINUED)

D. LITIGATION

On September 13, 1994, a complaint was filed in Middlesex Superior
Court by the other 50% owner of Quantum II Partners (Note 13E) and
others, including Quantum II Partners (collectively, the plaintiffs),
against Kensington Partners and Quantum II Partners (collectively, the
defendants). The plaintiffs allege various breaches of contract on the
part of the defendants including breach of a partnership agreement, a
supply agreement (Note 12C) and an employment agreement along with other
complaints under the Massachusetts Unfair Trade Practices Act. The
plaintiffs are seeking relief of actual damages in an unspecified amount
and a doubling or trebling of such damages as provided in the Unfair
Trade Practices Act. KP believes that the claims filed by the plaintiffs
have no merit and denies any liability.

On October 4, 1994, the defendants filed a complaint in Federal
Court alleging various breaches of contract by the plaintiffs and seeking
collection of outstanding balances due to the Company from the plaintiffs
of approximately $560,000, included in accounts receivable - trade.

No answers have been filed in these actions because the parties are
involved in settlement negotiations. With respect to the litigation filed
by KP for the collection of the 1994 balances receivable, management
estimates that some loss may occur and has recorded its estimate of
possible loss as an allowance for doubtful accounts.

The Company anticipates that a settlement agreement will be
achieved, as currently contemplated. If the matter is not settled, and
goes to trial, management believes that the ultimate loss, if any, will
not exceed the amounts recorded.

F49

<PAGE> 87

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 13 - RELATED PARTY TRANSACTIONS

The Companies have entered into various transactions with related parties
during the years ended December 31, 1994 and 1993. The transactions are as
follows:

A. PURCHASES AND PAYABLES

The Companies have purchases for raw materials, advertising
services, and commissions from the following related parties as of and
for the years ended December 31, 1994 and 1993:

<TABLE>
<CAPTION>
1994 1993
---- ----

<S> <C> <C>
Vinyl Division of Bird, Inc. $2,862,000 $2,053,000
Domken Plastics Limited (DPL) $3,616,000 $2,964,000
Quantum II Partners (see below) $ 200,000 $ 440,000
Design Matrix, Inc. (DMI) -
Advertising $ -- $ 147,000

Accounts payable to related parties at December 31,1994 is as follows:

Bird, Inc. $1,947,000
Domken Plastics Limited (DPL) 1,436,000
Quantum II (Notes 12D and 13E) 16,000
Other related parties 256,000
----------
$3,655,000
==========
</TABLE>

DMI and DPL are related through common ownership with ZES.

A stockholder of ZES was compensated approximately $143,000 during
the year ended December 31, 1993 for services rendered in assisting with
the acquisition of raw materials from DPL. In addition, J&B was also
compensated $86,000 during 1993 for similar services.

Any compensation for services discussed above was reimbursed
directly by DPL to ZES for the year ended December 31, 1994.

Fees from J&B for computer software support of approximately
$144,000 were charged to operations for the year ended December 31, 1994.

F50

<PAGE> 88

KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED)

NOTE 13-RELATED PARTY TRANSACTIONS (CONTINUED)

B. SALES AND RECEIVABLES

The Companies had sales to Jones & Brown, Inc. (J&B), a related
party through common ownership with ZES, of approximately $5,890,000 and
$7,255,000 for 1994 and 1993, respectively. In addition, the Companies
had sales to other related parties of approximately $471,000 for 1994.
Accounts receivable from related parties are as follows as of December31,
1994:

<TABLE>
<S> <C>
J&B $1,174,000
Other 112,000
----------

Total $1,286,000
==========
</TABLE>

C. RENTS

KP rents facilities from related parties (Note 12).

D. MANAGEMENT FEES

Management fees of approximately $488,000 were paid to J&B under a
management contract for the year ended December 31, 1993. The management
agreement was terminated effective December 31, 1993.

E. OTHER

Kensington Partners owns a 50% equity investment in Quantum II
Partners (Note 12D). Quantum II was formed during 1993 to be the
exclusive marketing representative to sell Quantum II replacement windows
manufactured by KP. Quantum II Partners reported a net partnership
deficit of approximately $130,000 and $138,000 for 1994 and 1993,
respectively. KP has reflected its share of Quantum's excess of
liabilities over assets in other long-term liabilities.

At December 31, 1994, approximately $306,000 due from Quantum II is
included in other receivables - related parties. This amount is net of an
allowance for doubtful accounts of $65,000.

F51

<PAGE> 89
KENSINGTON PARTNERS AND AFFILIATE
(JOINT VENTURE PARTNERSHIPS)

NOTES TO THE COMBINED FINANCIAL STATEMENTS (CONTINUED)

EVENT (UNAUDITED) SUBSEQUENT TO THE DATE OF THE INDEPENDENT AUDITORS' REPORT

In 1995, Jannock, Inc. exercised its option to purchase Bird's interest,
owned by its wholly-owned subsidiary Bird-Kensington Holding Corporation, in KP.
Immediately preceding the sale, Bird purchased ZES' interest in KP for
$1,000,000. In addition, Bird invested in KP $4,090,000 prior to the sale to
fulfill provisions in the asset purchase agreement.

On June 2, 1995, the stock of Bird-Kensington Holding Corporation, which
owned the assets and liabilties of KP was sold by Bird to Jannock, Inc. in
exchange for cash of $2,780,000 and assumption of certain liabilities.

F52

<PAGE> 90

SUPPLEMENTAL INFORMATION

F53

<PAGE> 91

INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULE

TO THE PARTNERS
KENSINGTON PARTNERS AND AFFILIATE
Leechburg, Pennsylvania

We have audited the combined financial statements of Kensington Partners
and Affiliate as of December 31, 1994 and for each of the two years in the
period then ended, and have issued our report thereon dated February 10, 1995.
In connection with our audits of these financial statements, we audited
financial statement schedule II. In our opinion, such a financial statement
schedule, when considered in relation to the basic financial statements taken as
a whole, presents fairly in all material respects, the information set forth
therein.

/s/Alpern, Rosenthal & Company
Pittsburgh, Pennsylvania
February 10, 1995

F54

<PAGE> 92

KENSINGTON PARTNERS AND AFFILIATE

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

YEAR ENDED DECEMBER 31, 1994

<TABLE>
<CAPTION>
Additions
--------------------------
Balance Charged to Charged to Balance
beginning costs and other Deduc- at end
of year expenses accounts tions(1) of year

YEAR ENDED DECEMBER 31, 1994:
<S> <C> <C> <C> <C> <C>
Allowance for doubtful accounts $195,000 $595,000 $- $402,000 $388,000
======== ======== == ======== ========

YEAR ENDED DECEMBER 31, 1993:
Allowance for doubtful accounts $ 66,000 $202,000 $- $ 73,000 $195,000
======== ======== == ======== ========
</TABLE>

(1) Uncollectible accounts written off.

F55

<PAGE> 1
EXHIBIT 10(w)

STOCK PURCHASE AGREEMENT

BY AND AMONG

BIRD ENVIRONMENTAL GULF COAST, INC.;

BIRD ENVIRONMENTAL TECHNOLOGIES, INC.;

BIRD CORPORATION;

GTS DURATEK, INC.; AND

GTSD SUB II, INC.

DATED AS OF NOVEMBER 29, 1995
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<S> <C>
ARTICLE I: DEFINITIONS.............................................................. 1

ARTICLE II: SALE AND PURCHASE OF STOCK.............................................. 4
Section 2.1 Purchase and Sale.................................................. 4
Section 2.2 Purchase Price..................................................... 4
Section 2.3 Closing............................................................ 5

ARTICLE III: REPRESENTATIONS AND WARRANTIES
OF BETI and BIRD..................................................................... 6
Section 3.1 Organization, Standing and Authority of BETI; Title to Stock....... 6
Section 3.2 Organization, Standing and Authority of Bird....................... 6
Section 3.3 Organization, Standing, Authority and Capitalization of Company.... 7
Section 3.4 No Conflicts....................................................... 8
Section 3.5 No Other Pending Transactions...................................... 9
Section 3.6 Company's Names, Business, and Location of Company Assets.......... 9
Section 3.7 Subsidiaries....................................................... 9
Section 3.8 Financial Statements............................................... 9
Section 3.9 No Undisclosed Liabilities......................................... 10
Section 3.10 Absence of Certain Changes, Events or Conditions.................. 10
Section 3.11 Litigation and Other Proceedings.................................. 10
Section 3.12 Licenses and Approvals............................................ 11
Section 3.13 Legal Compliance.................................................. 11
Section 3.14. Material Contracts And Agreements................................ 12
Section 3.15 Title Matters..................................................... 12
Section 3.16 Labor Matters..................................................... 13
Section 3.17 Employee Benefit Plans and Pension Plans.......................... 13
Section 3.18 Insurance......................................................... 13
Section 3.19 Condition of Company Assets....................................... 14
Section 3.20 Intellectual Property............................................. 14
Section 3.21 Environmental Matters............................................. 15
Section 3.22 Customers and Suppliers........................................... 17
Section 3.23 Brokers and Finders............................................... 17
Section 3.24 Accounts Receivable............................................... 18
Section 3.25 No Material Adverse Change........................................ 18
Section 3.26 Books and Records................................................. 18
Section 3.27 Disaster.......................................................... 18
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
Section 3.28 Tax Returns and Audits............................................ 18
Section 3.29 Due Diligence Review.............................................. 19
Section 3.30 Disclosure........................................................ 19

ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF
PURCHASER AND GTSD................................................................... 19
Section 4.1 Organizational Matters; Authority.................................. 19
Section 4.2 No Conflicts....................................................... 20
Section 4.3 Litigation......................................................... 20
Section 4.4 Brokers and Finders................................................ 20

ARTICLE V: COVENANTS AND AGREEMENTS................................................. 20
Section 5.1 Consents; Cause Conditions to be Satisfied......................... 20
Section 5.2 Best Efforts....................................................... 21
Section 5.3 Certain Notifications.............................................. 21
Section 5.4 Competition........................................................ 21
Section 5.5 Non-Interference Agreement......................................... 22
Section 5.6 Confidentiality.................................................... 23
Section 5.7 Tax Election....................................................... 23
Section 5.8 Notification of Certain Events..................................... 23
Section 5.9 Sharing of Expenses for RFI Work Plan.............................. 23
Section 5.10 Closure Trust Fund................................................ 24
Section 5.11 Knowledge of the Company.......................................... 24
Section 5.12 Vehicle Leases.................................................... 24
Section 5.13 Use of Company Logo............................................... 25

ARTICLE VI: CONDITIONS PRECEDENT TO PURCHASER'S
OBLIGATIONS.......................................................................... 25
Section 6.1 Receipt of Stock Certificates...................................... 25
Section 6.2 Minority Shareholders Agreements................................... 25
Section 6.3 Payments by Bird................................................... 25
Section 6.4 Release from Liability............................................. 25
Section 6.5 Required Approvals................................................. 26
Section 6.6 Filings............................................................ 26
Section 6.7 Actions or Events Interfering with Agreement....................... 26
Section 6.8 Representations and Warranties..................................... 26
Section 6.9 Compliance with Agreements......................................... 26
Section 6.10 Delivery of Certificates.......................................... 27
Section 6.11 Resignation of Officers and Directors............................. 27
</TABLE>

-2-
<PAGE> 4
<TABLE>
<S> <C>
Section 6.12 Termination of Certain Agreements................................. 27

ARTICLE VII: CONDITIONS PRECEDENT TO THE COMPANY'S,
BETI'S AND BIRD'S OBLIGATIONS........................................................ 28
Section 7.1 Compliance with Agreements......................................... 28
Section 7.2 Release of Liabilities............................................. 28
Section 7.3 Representations and Warranties..................................... 28
Section 7.4 Compliance with Agreements......................................... 28
Section 7.5 Delivery of Certificates........................................... 28
Section 7.6 Proceedings Taken.................................................. 29

ARTICLE VIII: INDEMNIFICATION....................................................... 29
Section 8.1 Indemnification by BETI and Bird................................... 29
Section 8.2 Indemnification by Purchaser and GTSD.............................. 30
Section 8.3 Procedures for Third Party Claims.................................. 30
Section 8.4 Limits for Recovery of Losses...................................... 31
Section 8.5 Waiver of Contribution............................................. 31
Section 8.6 Sole Remedy........................................................ 31

ARTICLE IX: SURVIVAL................................................................ 31

ARTICLE X: MISCELLANEOUS............................................................ 32
Section 10.1 No Assignment..................................................... 32
Section 10.2 Costs............................................................. 32
Section 10.3 Publicity......................................................... 32
Section 10.4 Confidentiality................................................... 32
Section 10.5 Parties in Interest............................................... 33
Section 10.6 Entire Agreement.................................................. 33
Section 10.7 Construction...................................................... 33
Section 10.8 Notices........................................................... 33
Section 10.9 Counterparts...................................................... 35
Section 10.10 Governing Law.................................................... 35
Section 10.11 Specific Performance............................................. 35
Section 10.12 Severability..................................................... 36
Section 10.13 Further Assurances............................................... 36
Section 10.14 No Drafting Presumption.......................................... 36
Section 10.15 Incorporation by Reference; Use of Certain Terms................. 36
Section 10.16 Amendment and Waiver............................................. 36
Section 10.17 Waiver of Jury Trial............................................. 36
</TABLE>

-3-
<PAGE> 5
STOCK PURCHASE AGREEMENT

THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made as of this 29th
day of November, 1995 by and among Bird Environmental Gulf Coast, Inc., a Texas
corporation (the "Company"); Bird Environmental Technologies, Inc., a Delaware
corporation and the sole stockholder of the Company ("BETI"); Bird Corporation,
a Massachusetts corporation and the parent corporation of BETI ("Bird"); GTS
Duratek, Inc., a Delaware corporation ("GTSD"), and GTSD Sub II, Inc., a
Maryland corporation and a wholly-owned subsidiary of GTSD (the "Purchaser").

W I T N E S S E T H :

WHEREAS, BETI desires to sell to the Purchaser and the Purchaser
desires to purchase from BETI all of the capital stock of the Company held by
BETI, which constitutes 80% of the issued and outstanding stock of the Company,
upon the terms and provisions hereinafter set forth.

WHEREAS, contemporaneously with the execution and delivery of this
Agreement and effective as of the date hereof, (i) the Company, the Purchaser,
GTSD and James Hogan, Mark Hogan, Barry Hogan and Samuel Lucas III
(collectively, the "Minority Shareholders") will execute and deliver that
certain Shareholders Agreement (the "Shareholders Agreement") outlining certain
rights between the parties as stockholders of the Company, (ii) the Company will
have executed with each of Mark Hogan, Barry Hogan and Samuel Lucas III
employment agreements (the "Employment Agreements") and (iii) the Company, GTSD
and James Hogan will have executed and delivered that certain technology license
agreement (the "License Agreement") pursuant to which James Hogan will license
to the Company and GTSD the technologies specified therein. The Shareholders
Agreement, the Employment Agreements and the License Agreement shall be
collectively referred to herein as the "Minority Shareholders Agreements".

NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

ARTICLE I: DEFINITIONS

In addition to those terms defined elsewhere herein, when used herein,
the following capitalized terms shall have the meanings indicated:

"Affiliate" of a specified person means a person that (in the case of
Bird or BETI only, as of the date hereof) directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control
with, the person specified.
<PAGE> 6
"Applicable Authority" shall mean any foreign, federal, state or local
governmental or quasi-governmental instrumentality, agency, department, bureau,
board or commission having authority or purporting to have authority over the
Company, any of the Company Assets, or the operation of the Company's Business,
including any entity with licensing or regulatory authority concerning Company
and the operation of Company's Business.

"Applicable Laws" shall mean all foreign, federal, state and local
laws, regulations, rules, orders, decrees, ordinances or judgments applicable to
the Company, the Company Assets, or the operation of the Company's Business,
including all laws concerning the licensing and regulation of the Company and
the conduct of the Company's Business.

"Bird Instruments" shall mean the following documents to which the
Minority Shareholders, certain of their Affiliates and certain Affiliates of
Bird are parties: (a) that certain Pre-Incorporation Agreement dated August 9,
1991; (b) that certain Stock Option Agreement dated August 9, 1991; (c) that
certain Voting Agreement dated August 9, 1991; (d) that certain Stock Purchase
Agreement dated August 9, 1991; (e) that certain Amendment Agreement dated
August 9, 1991; and (f) that certain Agreement dated June 18, 1994, forms of
which documents are attached hereto as APPENDIX I.

"Bird Letter of Intent" shall mean the letter of intent dated as of
September 6, 1995 addressed to Mr. Frank S. Anthony, Vice President and General
Counsel of Bird, from GTSD.

"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations and interpretations thereunder.

"Company Assets" shall mean all of the properties and assets owned or
leased by the Company, including without limitation, all of the following: the
Property, the Tangible Operating Assets, the Intellectual Property, the Company
Contracts, the Leases, and the Licenses and Approvals (as each term is defined
below).

"Company's Business" shall mean developing and implementing waste
treatment technologies, as such activity was conducted prior to the shutdown or
suspension of its operations as contemplated by the Bird Letter of Intent.

"Company Contracts" shall mean, collectively, all contracts or
agreements to which the Company is a party or by which the Company or any of the
Company Assets is bound, including personal property leases, franchise,
manufacturer's representative, distributorship, service, supply, maintenance,
employee, leasing and management contracts and agreements affecting or involving
the Property or the Company's Business.

"GAAP" shall mean United States generally accepted accounting
principles, applied on a consistent basis.

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<PAGE> 7
"Inventory" means all of Company's inventories as of the Closing Date
relating to the Products, including all ingredients, finished goods, work in
progress, raw materials, marketing materials and production, shipping and
packaging supplies.

"Leases" shall mean, collectively, all of the oral or written leases,
subleases, licenses, concession agreements or other use or occupancy agreements
pursuant to which the Company or any other party is entitled to occupy and use
any portion of the Property or pursuant to which Company leases to or from any
other party any real property, including all renewals, extensions, modifications
or supplements to any of the foregoing or substitutions for any of the
foregoing.

"Licenses and Approvals" shall mean all certificates, licenses, permits
or other approvals required or obtained by the Company in connection with the
use or ownership of the Company Assets, the operation of the Company's Business
or in connection with its use and occupancy of the Leased Facility or any of the
Property.

"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien or other charge of any kind, including, without limitation, any conditional
sale or other title retention agreement, any lease in the nature thereof and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction and including any lien or charge arising by
statute or other law.

"Material Adverse Effect" shall mean any material and adverse effect on
the assets, properties, liabilities, business affairs, results of operations,
condition (financial or otherwise) or prospects of the Company, provided that an
effect resulting solely from the shutdown or suspension of the operations of and
funding of the Company as described in the Bird Letter of Intent shall not be
deemed to constitute a Material Adverse Effect.

"Minority Shareholders" shall mean Barry Hogan, Brad Hogan, Samuel
Lucas, III and James Hogan as shareholders holding in the aggregate 20% of the
issued and outstanding capital stock of the Company.

"Minority Shareholders' Letter of Intent" shall mean the letter of
intent dated as of September 7, 1995 addressed to Mr. Barry K. Hogan, Executive
Vice President of the Company from GTSD.

"Organizational Documents" shall mean a corporation's Articles or
Certificate of Incorporation and By-Laws, as amended or supplemented.

"Person" or "person" means an individual, corporation, partnership,
firm, association, joint venture, trust, unincorporated organization,
government, governmental body, agency, political subdivision or other entity.

"Products" means all of the products manufactured, distributed,
marketed, sold or packaged in connection with the operation of the Company's
Business.

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<PAGE> 8
"Property" shall mean, collectively, all of the land and the
improvements thereon, together with any tangible property located thereon which
would constitute a "fixture" under the laws of the State of Maryland and all
personal property owned or leased by Company and used or useful in connection
with the operation of the Company's business (other than that personal property
included within the definition of "Tangible Operating Assets") and all of
Company's right, title and interest in and to all privileges, appurtenances, and
advantages belonging or in any way appertaining to any such land, including all
easements, rights-of-way, water and riparian rights, air rights above the land,
development rights, and all rights, title and interest in and to all adjoining
streets, roads or alleys (public or private, open or proposed).

"Restricted Agreement" shall refer to any of the Leases and Company
Contracts (as each is defined in this Article I), to the extent that any such
Lease or Company Contract contains any provision that, as a result of the
consummation of the transactions contemplated by this Agreement, causes one or
more of the following to occur: (i) Company is deemed to be in default under
such Lease or Company Contract (with or without the giving of notice and any
cure period); (ii) automatically voids such Lease or Company Contract or renders
voidable by any party other than Company, the Lease or Company Contract or
provides any party other than the Company with a right to terminate or rescind
such Lease or Company Contract; (iii) imposes any fine, penalty, charge or
increase in payments or other charges required to be made by the Company under
such Lease or Company Contract; or (iv) otherwise modifies any of the material
terms of such Lease or Company Contract.

"Stock" shall mean the Company's common stock, $0.01 par value per
share.

"Tangible Operating Assets" shall mean, collectively, all of the
tangible personal property owned or leased by the Company, wheresoever located,
including Inventory, trade fixtures, stock-in-trade, equipment, and supplies.

ARTICLE II: SALE AND PURCHASE OF STOCK

Section 2.1 Purchase and Sale.

Subject to the terms and conditions hereinafter set forth, at the
Closing, BETI will sell and transfer to Purchaser, and Purchaser will purchase
from BETI, 560 shares of Stock, which is all of the Stock owned by BETI and
which represents 80% of the issued and outstanding stock of the Company, free
and clear of any and all Liens.

Section 2.2 Purchase Price.

The purchase price for the purchase of the Stock shall be the sum of
$1.00 (the "Purchase Price") and no further payment from the Purchaser shall be
required for the Stock. BETI hereby acknowledges receipt of the Purchase Price
in full payment of the Stock.

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<PAGE> 9
Section 2.3 Closing.

(a) Generally. Subject to the terms and conditions of this Agreement,
the sale and purchase of the Stock contemplated hereby (the "Closing") shall
take place at 10:00 a.m., local time, on November 29, 1995 (the "Closing Date")
at the offices of Piper & Marbury L.L.P., or at such other time, date or place
as BETI, Bird and Purchaser may mutually agree; provided, however, that prior to
the Closing, all of the conditions in Articles VI and VII of this Agreement
shall have been satisfied or waived, as the case may be.

(b) BETI's Obligations at Closing. At the Closing, BETI will pay any
costs required to be paid by it hereunder and will deliver to Purchaser the
following (collectively, the "BETI Closing Documents"):

(i) all original stock certificates in due and proper form
evidencing the Stock to be sold by BETI;

(ii) an endorsement on each original Stock certificate or separate
stock powers duly executed in blank, together with such other instruments of
conveyance as may be reasonably acceptable to Purchaser and its counsel and
sufficient to transfer full, marketable title to the Stock to Purchaser, free
and clear of any Liens;

(iii) duly-executed resignations of each of the directors and
officers of the Company;

(iv) a good standing certificate of Company, dated no earlier than
5 calendar days prior to the Closing Date, certifying that the Company is in
good standing in the State of Texas; and

(v) such other documents and instruments as may be required to
consummate the transactions contemplated hereunder.

(c) Purchaser's Obligations at Closing. At the Closing, Purchaser will
pay any costs required to be paid by it hereunder and will deliver the following
to BETI:

(i) the Purchase Price; and

(ii) such other documents and instruments as shall be required to
consummate the transactions contemplated hereunder.

(d) Bird's Obligations at or Prior to the Closing. To the extent that
the current liabilities of the Company exceed the current assets of the Company
as of August 31, 1995 (as determined by a nationally recognized independent
public accounting firm selected by mutual agreement of Purchaser and Bird and
set forth on Schedule 2.3(d) hereto), Bird will either (i) at or prior to the
Closing, make payments on behalf of the Company to reduce the Company's
outstanding accounts payable in the amount and to the extent that the Company's
current

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<PAGE> 10
liabilities exceed its current assets at August 31, 1995 or (ii) at the Closing,
pay to the Company the amount by which the Company's current liabilities
exceeded current assets at August 31, 1995.

ARTICLE III: REPRESENTATIONS AND WARRANTIES OF
BETI AND BIRD

BETI and Bird hereby jointly and severally represent and warrant to
Purchaser and GTSD as of the Closing Date as follows:

Section 3.1 Organization, Standing and Authority of BETI; Title to
Stock.

(a) BETI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.

(b) BETI has all requisite corporate power and authority to execute,
deliver and perform this Agreement and each of the instruments, documents, and
agreements contemplated herein to be executed and delivered by BETI pursuant to
this Agreement (collectively, the "BETI Instruments"). The execution, delivery
and performance of this Agreement and the BETI Instruments have been duly
authorized and approved by all necessary corporate action, and this Agreement
and the BETI Instruments, when duly executed and delivered by BETI will
constitute valid and legally binding obligations of BETI, enforceable against
BETI in accordance with their terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to the rights of
creditors generally.

(c) BETI owns 80% of the issued and outstanding capital stock of the
Company free and clear of any Liens, right of first refusal or restriction of
any kind other than to the Minority Shareholders. BETI is not a party to or
bound by any options, calls, contracts of commitments of any character relating
to any of the Stock or any other equity or debt security issued or to be issued
by the Company, including any agreement, instrument or understanding, order or
decree that would restrict the transfer by BETI of the Stock pursuant to this
Agreement, other than agreements with the Minority Shareholders (which
agreements will be terminated at or prior to the Closing).

Section 3.2 Organization, Standing and Authority of Bird.

(a) Bird is a corporation duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts.

(b) Bird has all requisite corporate power and authority to execute,
deliver and perform this Agreement and each of the instruments, documents, and
agreements contemplated herein to be executed and delivered by Bird pursuant to
this Agreement (collectively, the "Bird Instruments"). The execution, delivery
and performance of this Agreement and of the Bird

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<PAGE> 11
Instruments have been duly authorized and approved by all necessary corporate
action, and this Agreement and the Bird Instruments, when duly executed and
delivered by Bird, will constitute valid and legally binding obligations of
Bird, enforceable against Bird in accordance with their terms.

Section 3.3 Organization, Standing, Authority and Capitalization of
Company.

(a) The Company is a corporation duly organized, validly existing and
in good standing under the laws of the State of Texas and has all requisite
corporate power and authority to carry on the Company's Business as it is now
being conducted and to own or lease the Company Assets. True, complete and
correct copies of the Organizational Documents of the Company have been
delivered to GTSD and the Organizational Documents are in full force and effect.
The Company is not in violation, breach or default of any of the provisions of
its Organizational Documents. The Company is duly qualified to do business in
the jurisdictions set forth in Schedule 3.3(a) attached hereto, which
jurisdictions represent all of the jurisdictions where the Company is required
to be qualified as the result of the location of its assets or the conduct of
the Company's Business, other than where the failure to qualify would not have a
Material Adverse Effect.

(b) Company has all requisite corporate power and authority to execute,
deliver and perform this Agreement and each of the instruments, documents, and
agreements contemplated herein to be executed and delivered by Company pursuant
to this Agreement (collectively, the "Company Instruments"). The execution,
delivery and performance of this Agreement and of the Company Instruments have
been duly authorized and approved by all necessary corporate action, and this
Agreement and the Company Instruments, when duly executed and delivered by the
Company, will constitute valid and legally binding obligations of Company,
enforceable against the Company in accordance with their terms.

(c) The authorized capital stock of Company consists entirely of 3,000
shares of common stock, $0.01 par value, of which 700 shares are issued and
outstanding. Three hundred (300) shares of common stock of Company are held in
the Company's treasury and no shares of capital stock are reserved for issuance.
All outstanding shares of capital stock of the Company have been duly authorized
and are validly issued and are fully paid and non-assessable with no personal
liability attaching to the ownership thereof. The Company is not a party to or
bound by any options, warrants, rights, calls or other preemptive rights or
other agreements or plans under which the Company may become obligated to issue,
sell or transfer shares of its capital stock or other securities other than
agreements with the Minority Shareholders (which agreements will be terminated
at or prior to the Closing).

(d) The designations, powers, preferences, rights, qualifications,
limitations and restrictions in respect of each class and series of authorized
capital stock of the Company are as set forth in the Organizational Documents of
the Company, copies of which have been furnished to GTSD.

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<PAGE> 12
(e) There are no outstanding registration rights with respect to any
capital stock of the Company other than as set forth in agreements with the
Minority Shareholders (which agreements will be terminated at or prior to
Closing).

(f) The Company has no obligation (contingent or other) to purchase,
redeem or otherwise acquire any of its capital stock or any interest therein or
to pay any dividend or make any other distribution in respect thereof other than
as set forth in agreements with the Minority Shareholders (which agreements will
be terminated at or prior to Closing).

(g) The Company has no knowledge of any voting agreements, voting
trusts, stockholders' agreements, proxies or other agreements or understandings
that are currently in effect or that are currently contemplated with respect to
the voting of any capital stock of the Company other than as set forth in
agreements with the Minority Shareholders (which agreements will be terminated
at or prior to Closing).

(h) All of the outstanding securities of the Company were issued in
compliance with all applicable federal and state securities laws.

(i) There are no outstanding contractual obligations (contingent or
otherwise) of the Company that would prohibit or restrict the Company's ability
to declare or pay dividends or to repurchase or redeem the Company's capital
stock other than as set forth in agreements with the Minority Shareholders
(which agreements will be terminated at or prior to Closing).

(j) Since December 31, 1994, the Company has not (i) issued any capital
stock, (ii) redeemed any capital stock, (iii) made any distributions on its
capital stock or (iv) changed the tax basis of any of the Company Assets.

Section 3.4 No Conflicts.

Neither the execution and delivery of this Agreement nor the carrying
out of the transactions contemplated hereby or under any of the Company
Instruments, BETI Instruments or Bird Instruments will: (a) with or without
notice or the passage of time or both, result in any violation, termination or
modification of, or be in conflict with, (i) the Organizational Documents of the
Company, BETI or Bird, (ii) any License and Approval, Lease or Company Contract,
or any other instrument or agreement to which the Company, BETI or Bird is a
party or by which the Company, BETI or Bird is bound other than agreements with
the Minority Shareholders (which agreements will be terminated at or prior to
Closing)., or (iii) any law, rule, regulation, ordinance, writ, injunction,
judgment, decree or order applicable to the Company, BETI or Bird, (b) result in
the creation of any Lien upon the Property or any of the other Company Assets or
in the acceleration of any indebtedness or other obligation of the Company; or
(c) require the filing, declaration or registration with, or permit, consent or
approval of, or the giving of any notice to, any Applicable Authority,
excluding, those that have already been obtained prior to the Closing.

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<PAGE> 13
Section 3.5 No Other Pending Transactions.

Except for the transactions contemplated by this Agreement: (i) neither
BETI nor Bird is a party to or bound by or the subject of any agreement,
commitment or undertaking with respect to the sale of all or any part of the
Stock of the Company; and (ii) the Company is not a party to or bound by or the
subject of any agreement, undertaking or commitment to merge or consolidate
with, or acquire all or substantially all of the property and assets of, any
other person, corporation, or entity, or to sell, lease or exchange all or
substantially all of the Company Assets to any other person, corporation, or
entity.

Section 3.6 Company's Names, Business, and Location of Company Assets.

The Company has conducted business under the name "Bird Environmental
Gulf Coast, Inc." and the "San Leon Recycling Center" and no other names. The
Company is in the business of developing and implementing waste treatment
technologies. The Company has not engaged in and does not currently engage in
any other business other than as described in the preceding sentence. The
Company's chief executive office and principal place of business is located at
2700 Avenue S, San Leon, Texas 77539. Substantially all of the Company Assets
are located at same address as its chief executive office and the Company does
not currently have any places of business other than at such address. Set forth
on Schedule 3.6 attached hereto is a complete and accurate listing of all
locations at which the Company has conducted business, as owner, operator,
lessor or otherwise over the last ten (10) years.

Section 3.7 Subsidiaries.

The Company does not own, or have any contract or other right to
acquire, directly or indirectly, any capital stock or other equity securities of
any Person, nor does the Company have any direct or indirect equity or ownership
interest in any business other than the Company's Business.

Section 3.8 Financial Statements.

(a) The Company, BETI or Bird has delivered to GTSD copies of: (i) the
unaudited balance sheet of the Company as of December 31, 1994 and the unaudited
balance sheet of the Company as of August 31, 1995, and (ii) the related
consolidated statements of income for the related annual and eight month periods
ended December 31, 1994 and August 31, 1995, respectively (collectively, the
"Financial Statements").

(b) The Financial Statements: (i) were prepared in accordance with GAAP
consistently applied throughout the periods covered thereby; (ii) present fairly
the financial condition and the results of operations of the Company as at the
respective dates of and for the periods referred to in such financial
statements; and (iii) are true, complete and correct in all material respects.

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<PAGE> 14
Section 3.9 No Undisclosed Liabilities.

Except as set forth on Schedule 3.9 attached hereto, the Company does
not have any liabilities or obligations of any nature (whether known or unknown,
matured or unmatured, disputed or undisputed, liquidated or unliquidated, fixed
or contingent, secured or unsecured) except for liabilities or obligations
reflected or reserved against in the Financial Statements and current
liabilities incurred in the ordinary course of business since the respective
dates thereof and provided such liabilities do not exceed $200,000 at Closing,
which liabilities will be paid by Bird to Purchaser pursuant to Section 6.3
hereof at or prior to the Closing.

Section 3.10 Absence of Certain Changes, Events or Conditions.

Except as set forth in Schedule 3.10 attached hereto, since August 31,
1995:

(a) the Company has not incurred any debt, obligation or liability
except for normal debt incurred in the ordinary course of business and the
Company Assets have not been subjected to any Liens other than those liens
described on Schedule 3.10(a) attached hereto (the "Permitted Liens");

(b) the Company Assets have not been sold or transferred;

(c) there has not been any change in the Company's authorized or issued
capital stock; grant of any stock option or right to purchase shares of capital
stock of the Company; issuance of any security convertible into such capital
stock; grant of any registration rights; purchase, redemption, retirement or
other acquisition by Company of any shares of any such capital stock; or
declaration or payment of any dividend or other distribution or payment in
respect of shares of capital stock;

(d) there has not been any payment or increase by the Company of any
bonuses, salaries, or other compensation to any stockholder, director, officer,
or employee (except in the ordinary course of business) or entry into any
employment, severance, or similar contract or agreement with any director,
officer or employee;

(e) there has not been any damage to or destruction or loss of any
asset or property of Company, whether or not covered by insurance, materially
and adversely affecting the properties, assets, business, financial condition or
prospects of the Company taken as a whole; and

(f) no agreements have been entered into, whether in writing or
otherwise, to take any of the actions set forth in this Section 3.10.

Section 3.11 Litigation and Other Proceedings.

(a) Except as set forth on Schedule 3.11 attached hereto, there is no
litigation, arbitration, mediation, or other investigation or proceeding pending
nor, to the best of BETI's and Bird's

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<PAGE> 15
knowledge, threatened or in prospect, against or relating to the Company, the
Company Assets, the Company's Business, or the transactions contemplated by this
Agreement; nor, is there any valid basis for any such litigation, arbitration,
mediation, or other investigation or proceeding relating to the transactions
contemplated by this Agreement. Except as disclosed on Schedule 3.11 attached
hereto, Company is not subject to, or bound by, any order of any court or
Applicable Authority entered in any judicial, administrative or other proceeding
to which it is or was a party. Except as set forth on Schedule 3.11 attached
hereto, no matter set forth on Schedule 3.11 attached hereto would, if adversely
decided, have a Material Adverse Effect on the business, operations, condition
(financial or otherwise), liabilities, assets, earnings, working capital or
prospects of the Company.

(b) There is no litigation, arbitration, mediation, or other
investigation or proceeding pending nor, to the best of Bird's or BETI's
knowledge, threatened or in prospect, against or relating to Bird or BETI which
seeks to prohibit, restrict or delay consummation of the transactions
contemplated under this Agreement and there is no judgment, decree, injunction,
ruling or order of any Court, Applicable Authority or arbitrator outstanding
against Bird or BETI having any such effect.

Section 3.12 Licenses and Approvals.

Attached hereto as Schedule 3.12 is a complete and accurate list of all
of the Licenses and Approvals held by Company. Company has provided GTSD with
true, correct and complete copies of all of the Licenses and Approvals. To
Bird's and BETI's actual or constructive knowledge, the Company owns or
possesses and holds free from restrictions or conflicts with the rights of
others all franchises, licenses, permits, consents, approvals and other
authority (governmental or otherwise), and all rights and privileges with
respect to the foregoing, as are necessary for the conduct of its business as
now being conducted, and as proposed to be conducted, except where the failure
to own or possess and hold such franchises, licenses, permits, consents,
approvals and other authority (governmental or otherwise) would not have a
Material Adverse Effect. All of the Licenses and Approvals are in full force and
effect and Company is not in violation with respect to any of them. No
proceedings are pending or, to the best of BETI's and Bird's knowledge,
threatened by any Applicable Authority to revoke or limit the scope of any of
the Licenses and Approvals. Except as noted on Schedule 3.12 attached hereto,
none of the Licenses and Approvals would be rendered ineffective or be required
to be reissued as a result of the consummation of the transactions contemplated
hereby.

Section 3.13 Legal Compliance.

Except as set forth on Schedule 3.13 attached hereto and except for
matters covered by Sections 3.16, 3.17 and 3.21 (which matters are addressed
exclusively in such respective sections), to Bird's and BETI's actual or
constructive knowledge, the Company's Business and the operations of the Company
are being conducted in compliance with all Applicable Laws and neither the
Company, BETI nor Bird has received notice from any Applicable Authority that
the

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<PAGE> 16
Company, the Company's Business or the Company Assets is not in compliance with
any Applicable Laws.

Section 3.14. Material Contracts And Agreements.

Listed on Schedule 3.14 is a listing of all material contracts,
agreements, leases, indentures or instruments of the Company. With respect to
such material contracts, agreements, leases, indentures or instruments of the
Company, the Company and, to the best of BETI's and Bird's knowledge, each other
party thereto have in all material respects performed all the obligations
required to be performed by them to date, have received no notice of default and
are not in default, in any material respect, (with due notice or lapse of time
or both) under any material contract, agreement, indenture or other instrument
now in effect to which the Company is a party or by which it or its property may
be bound. Bird and BETI have no knowledge of any breach and have received no
written notice of any anticipated breach by the other party to any material
contract or commitment to which the Company is a party. Except as noted on
Schedule 3.14 attached hereto, none of the Company's material contracts or
agreements constitute a Restricted Agreement or would require the consent or
approval of any party thereto, other than Company, or the consent or approval of
any third party in connection with the consummation of the transactions
contemplated hereby. Except as disclosed on Schedule 3.14, the Company is not a
party to, or bound by, any material contract or agreement, any term of which
materially adversely affects, or which the Company expects in the future to have
a Material Adverse Effect. The Company is not a party to any contract or
agreement with any Affiliate of the Company other than the Minority Shareholders
(which agreements will be terminated at or prior to the Closing).

Section 3.15 Title Matters.

The Company has good and marketable title to the Company Assets owned
by it, free and clear of all Liens except for (i) certain mechanics' liens or
other similar statutory liens arising by operation of law in respect of
obligations that are adequately reflected in the Company's balance sheet as of
August 31, 1995, (ii) certain subsurface rights to the Company's real property
(iii) certain exceptions to title listed on the title report effective October
11, 1995 and attached hereto as Schedule 3.15 and (iv) other encumbrances of
record as of the date that title insurance was obtained on the real property
(collectively Items (i) through (iv) shall be referred to as the
"Encumbrances"). The Encumbrances that exist on the Company's real property will
not in any material way adversely affect the Company's use or enjoyment of its
real property and will not in any material way adversely affect the Company's
operations. The Company does not lease any real property. None of the properties
owned by the Company is subject to any Liens which could reasonably be expected
to materially and adversely affect the assets, properties, liabilities,
business, affairs, results of operations, condition (financial or otherwise) or
prospects of the Company.

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<PAGE> 17
Section 3.16 Labor Matters.

To Bird's and BETI's actual or constructive knowledge, the Company has
complied in all material respects with all applicable federal and state laws
relating to the employment of labor including the provisions thereof relating to
wages, hours, collective bargaining and the payment of social security and taxes
and is not liable for any arrears of wages or any tax or any penalty for failure
to comply with any of the foregoing. No labor dispute, strike, work stoppage,
employee action or labor relations problem of any kind which has affected or may
affect Company has occurred since the inception of Company or, to BETI's and
Bird's knowledge, is currently pending or threatened.

Section 3.17 Employee Benefit Plans and Pension Plans.

Copies of all of the Company's employee policy manuals have been
provided to GTSD, which policy manuals contain a description of all material
employee benefit plans and pension plans of the Company. The Company's employee
benefit plans and pension plans comply in all material respects with applicable
laws relating thereto and have been maintained in accordance with their plan
documents. The Company has no liability (whether actual, contingent, with
respect to any of its assets or otherwise) with respect to any of its employee
benefit plans and other pension plans other than as adequately reflected in the
Financial Statements. The Company, GTSD or any of GTSD's Affiliates will have no
liability with respect to any benefit plans or pension plans of BETI or BETI's
control group as defined in Section 414(b), (c), (m) or (o) of the Code. None of
the Company's employee benefit plans and other pension plans contains any
provisions which would prohibit the transactions contemplated by this Agreement
or which would give rise to any severance, termination or other payments or
liabilities as a result of the transactions contemplated by this Agreement.
Schedule 3.17 attached hereto contains the most recent quarterly listing of
workers' compensation claims and a schedule of workers' compensation claims of
the Company for the last three fiscal years.

Section 3.18 Insurance.

The Company maintains and has maintained all such general liability,
pollution liability, product liability, fire, casualty and motor vehicle
insurance set forth on Schedule 3.18. All such insurance policies continue to be
in full force and effect, and the Company is in compliance with all requirements
and provisions thereof. True and correct copies of all insurance policies
relating to such coverage have been provided by the Company to GTSD. No notice
of cancellation has been given to or received by the Company with respect to any
of its insurance policies, and no such policies are subject to any retroactive
rate or audit adjustments or coinsurance arrangements. The Company, BETI and
Bird have no reason to believe that the pollution liability insurance coverage
will not be renewed upon expiration thereof at premiums substantially equivalent
to those currently being paid by the Company. The Company is not currently
involved in any projects and, accordingly, the Company is not currently required
to post any completion performance and other bonds and indemnities. The Company,
BETI or Bird

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has provided GTSD with a list of all property damage, personal injury claims and
workers' compensation claims asserted against the Company with respect to the
Company's Business during the past five (5) years involving any claim in excess
of $10,000. The Company has not received any notice from any insurance company
or insurance board of underwriters of the existence of any default or unsafe
condition with respect to the Property that remains unsatisfied or uncured or
that will remain unsatisfied or uncured as of the Closing Date.

Section 3.19 Condition of Company Assets.

(a) The Company Assets include all assets, properties, licenses and
other agreements necessary for the continued conduct of Company's Business after
the Closing in substantially the same manner as conducted prior to the Closing.

(b) Attached as Schedule 3.19(b) is a complete and accurate summary of
all of the Tangible Operating Assets of Company.

Section 3.20 Intellectual Property.

(a) Schedule 3.20 hereto contains a complete and accurate list of all
patents, trademarks, servicemarks and copyrights (registered or unregistered),
trade names, assumed names, brand names and all applications therefor, owned,
used or filed by the Company and the Company has sufficient trademarks, trade
names, service marks, patent rights, copyrights, manufacturing processes,
formulae, applications, trade secrets, know how, licenses, approvals and
governmental authorizations (or rights thereto) (collectively, the "Intellectual
Property") to conduct its business as conducted prior to the Closing Date except
where the absence of such Intellectual Property would not have a Material
Adverse Effect. Except as set forth in Schedule 3.20 attached hereto, the
patents, trademarks and the copyrights that constitute Intellectual Property are
valid, subsisting and enforceable, and the patents, registered trademarks and
registered copyrights are duly recorded in the name of Company.

(b) The Company has the right, free from any Liens, to use the
Intellectual Property and the consummation of the transactions contemplated
hereby will not alter or impair any such rights. Except as set forth in Schedule
3.20 attached hereto, within the last five years, no claims have been asserted
by any entity or person with respect to, or challenging or questioning, the
ownership, validity, enforceability or use of the Intellectual Property by the
Company, nor, to the knowledge of BETI and Bird, is there a valid basis for any
such claim. The use or other exploitation of such Intellectual Property by the
Company prior to the Closing has not infringed the rights of any other entity or
person. To the best of BETI's and Bird's knowledge, no entity or person is
infringing the rights of the Company with respect to such Intellectual Property
and the Company has no reasonable basis to claim such infringement. Schedule
3.20 attached hereto sets forth a complete and accurate list of all license
agreements between Company and third-parties with respect to the use of the
Intellectual Property.

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Section 3.21 Environmental Matters.

(a) As used in this Environmental Matters Section, the following terms
shall have the definitions indicated:

(i) "Company's Properties" means any real property or facility
currently owned, leased or operated by the Company or previously owned, leased
or operated by the Company.

(ii) "Environmental Law" means any statute, regulation, rule,
code, common law, order or judgment of any applicable federal, state, local or
foreign jurisdiction relating to pollution, hazardous substances, hazardous
wastes, petroleum or otherwise relating to protection of the environment,
natural resources or human health, including, by way of example and not by way
of limitation, the Clean Air Act ("CAA"); Clean Water Act ("CWA"); Resource
Conservation and Recovery Act ("RCRA"); Comprehensive Environmental Response
Compensation, and Liability Act ("CERCLA"); Emergency Planning and Community
Right-to-Know Act ("EPCRA"); Federal Insecticide, Fungicide and Rodenticide Act;
Safe Drinking Water Act ("SDWA"); Toxic Substances Control Act ("TSCA");
Hazardous Materials Transportation Act ("HMTA"); Occupational Safety and Health
Act ("OSHA"); and Endangered Species Act of 1973, each as currently amended;

(ii) "Regulated Substances" means any substance regulated under
Environmental Laws, including but not limited to: asbestos and
asbestos-containing materials ("ACMs"), polychlorinated biphenyls ("PCBs");
urea-formaldehyde in any of its forms; petroleum and its fractions; radioactive
materials; and any substances defined as "hazardous waste," "hazardous
substances," "pollutants or contaminants," "toxic substances," "hazardous
chemicals," "hazardous air pollutants," "toxic chemicals" or "hazardous
materials" under the CAA, CWA, RCRA, CERCLA, EPCRA, SDWA, TSCA, HMTA or OSHA.

(iii) "Environmental Condition" means

(a) the Release of any Regulated Substances into the
environment in an amount and under circumstances that would require notice,
removal or remediation, or constitute a basis for a claim or cause of action;

(b) the environmental, health or safety aspects of the
transportation, storage, treatment, handling, use or disposal of materials in
connection with the operations or past operations of the Company's business; or

(c) the violation, or alleged violation, of any Environmental
Law, order, permit or license of or from any governmental authority, agency or
court relating to environmental, health or safety matters; and

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<PAGE> 20
(iv) "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment of any Regulated Substance.

(b) Except as set forth in Schedule 3.21, there has been no Release at,
on, under or from any of the Company's Properties.

(c) Except as set forth in Schedule 3.21, there has been no Release at,
on, under or from any nearby properties that has migrated or threatened to
migrate onto or under the Company's Properties or that would or could otherwise
affect the Company's Properties, and, to the best knowledge of BETI and Bird,
there is currently no threat of a Release at, on, under or from any nearby
properties that would or could migrate onto or under the Company's Properties or
that would or could otherwise affect the Company's Properties.

(d) No PCBs, asbestos or ACMs, urea-formaldehyde or radioactive
materials are located on the Company's Properties.

(e) Except as set forth in Schedule 3.21, no storage tanks, underground
or otherwise, are or have been located on any of the Company's Properties. To
the knowledge of BETI and Bird, none of the storage tanks set forth in Schedule
3.21 is leaking or has ever leaked.

(f) Except as set forth in Schedule 3.21, the Company has complied with
all Environmental Laws with respect to any operations now or previously
conducted by the Company. Except as set forth in Schedule 3.21, the Company has
no existing or potential liability under any Environmental Laws.

(g) Except as set forth in Schedule 3.21, the Company has not received
any notice, letter, citation, order, warning, complaint, inquiry, information
request or demand that: (i) it has violated or is in violation of any
Environmental Law; (ii) there has been a Release at or from the Company's
Properties, or any property where the company's wastes or products have been
sent; or (iii) it may be or is liable, in whole or in part, for the costs of
cleaning up, remediating, removing or responding to a Release.

(h) To the best knowledge of the Company, BETI or Bird, no other party
has received any notice, demand, suit, inquiry or information request pursuant
to CERCLA or any comparable state law relating to the Company, the Company's
Properties or any property where the Company's wastes or products have been
sent.

(i) None of the Company's Properties is listed on any regulatory list
of contaminated properties, including but not limited to the National Priorities
List promulgated pursuant to CERCLA, the CERCLIS or any federal, state or local
counterpart.

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<PAGE> 21
(j) Except as set forth in Schedule 3.21, no environmental approvals,
clearances or consents are required under applicable law from any governmental
entity or authority in order for the parties to this Agreement to consummate the
transactions contemplated herein or for the Company to conduct its business as
presently conducted or proposed to be conducted.

(k) The Company has disclosed, prior to the date of this Agreement, its
waste practices, its use of Regulated Substances and all potentially material
environmental matters, and has disclosed all reports, audits assessments,
studies, inspections, evaluations, surveys, remedial action plans or other
similar documents relating to any Environmental Condition, whether or not
material, of the Company's Properties or operations.

(l) Except as set forth in Schedule 3.21, to the knowledge of BETI and
Bird, no location to which the Company transported or caused to be transported
any Regulated Substances for storage, recycling, treatment or disposal is or has
been the subject of any cleanup or remediation of such location pursuant to any
Environmental Law.

(m) The Company's Properties are not subject to any Lien in favor of
any governmental entity or other party for any liability, costs, or damages
incurred by such governmental entity or other party in response to a Release.

Section 3.22 Customers and Suppliers.

The Company, BETI or Bird has delivered to GTSD a complete and accurate
list of the Company's ten largest customers and suppliers (measured by dollar
volume of purchases and sales, as applicable) and the dollar amount of the
Company's Business which each customer and supplier represented during the
fiscal year ended 1994 and the eight months ended August 31, 1995. Neither the
Company, BETI nor Bird has received any oral or written notice that any such
supplier or any customer of Company does not plan to continue to do business
with Company, or plans to reduce its supplies to or volume of orders from the
Company or will not do business on substantially the same terms and conditions
with Purchaser subsequent to the Closing Date as such supplier or customer did
with Company before such date, except for those suppliers that may discontinue
doing business with the Company or modify the terms upon which they do business
with the Company due to the fact that the Company is delinquent in the payment
for goods or services provided by such supplier.

Section 3.23 Brokers and Finders.

Neither the Company, BETI, Bird nor any of their officers, directors or
employees has employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement.

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<PAGE> 22
Section 3.24 Accounts Receivable.

All accounts receivable of the Company that are reflected in the
Financial Statements (the "Accounts Receivable") represent valid obligations
arising from sales actually made or services actually performed in the ordinary
course of business. All Accounts Receivable have been collected in full.

Section 3.25 No Material Adverse Change.

Since August 31, 1995, there has not been any material adverse change
in the Company Assets or the Company's financial condition, customer or business
prospects other than a change resulting from the shutdown or suspension of
operations or of funding of the Company as described in the Bird Letter of
Intent.

Section 3.26 Books and Records.

The minute books, stock record books, and other records of the Company,
all of which have been made available to GTSD, are complete and correct and have
been maintained in accordance with sound business practices. The minute books of
the Company contain accurate and complete records of all meetings held of, and
corporate action taken by, the stockholders, the Boards of Directors, and
committees of the Boards of Directors of the Company, and no meeting of any such
stockholders, Board of Directors, or committee has been held for which minutes
have not been prepared and are not contained in such minute books. At the
Closing, all of such books and records will be in the possession of the Company.

Section 3.27 Disaster.

Neither the business nor the Property of the Company is currently
affected (or has been affected at any time since December 31, 1994) by any fire,
explosion, accident, strike, lockout or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God or of the public enemy or other casualty
(whether or not covered by insurance), of a kind which (individually or in the
aggregate) has, or could have, a Material Adverse Effect on the assets,
properties, liabilities, business, affairs, results of operations, condition
(financial or otherwise) or prospects of the Company.

Section 3.28 Tax Returns and Audits.

The Company has duly filed all income, franchise and other federal,
state and local tax returns, notices and reports that it has been or is required
to file. Except as may be otherwise disclosed in writing to the Purchaser or
GTSD, the Company is not delinquent in the payment of any taxes nor has it
requested any extension of time within which to file any tax return which return
has not since been or will not be timely filed. No deficiency for any tax has
been asserted or assessed against the Company other than as reflected in the
Financial Statements. The

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<PAGE> 23
Company has withheld or otherwise collected all taxes or amounts it was required
to withhold or collect under any applicable federal, state or local law,
including, without limitation, any amounts required to be withheld or collected
with respect to employee state and federal income tax withholding, social
security, unemployment compensation, sales or use taxes or workmen's
compensation, and all such amounts have been timely remitted to the proper
authorities.

Section 3.29 Due Diligence Review.

The Company, BETI or Bird has made available for GTSD's review all
information reasonably requested by the Purchaser in connection with GTSD's due
diligence examination.

Section 3.30 Disclosure.

All schedules, exhibits, documents, certificates, reports or written
statements furnished or to be furnished to GTSD by or on behalf of the Company,
BETI or Bird with this Agreement or the transactions contemplated hereby and
delivered at Closing are true, complete and accurate in all material respects,
and no representation or warranty made in this Agreement or information
furnished pursuant hereto to GTSD (including information contained in the
schedules or documents referred to herein) contains any untrue statement of a
material fact or fails to include a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they are made, not misleading. To Bird's and BETI's knowledge, neither
Bird, BETI nor the Company has failed to disclose to GTSD any facts material to
the business, operations, condition (financial or otherwise), liabilities,
assets, earnings or working capital of the Company.

ARTICLE IV: REPRESENTATIONS AND WARRANTIES OF PURCHASER AND GTSD

Purchaser and GTSD hereby jointly and severally represent and warrant
to BETI and Bird as of the Closing Date as follows:

Section 4.1 Organizational Matters; Authority.

(a) Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Maryland. GTSD is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware.

(b) Purchaser and GTSD have all requisite corporate power and authority
to execute, deliver and perform this Agreement and each of the instruments,
documents, and agreements contemplated herein to be executed and delivered by
Purchaser pursuant to this Agreement to which each is a party (collectively, the
"GTSD Instruments"). The execution, delivery and performance of this Agreement
and of the GTSD Instruments have been duly authorized and

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<PAGE> 24
approved by all necessary corporate action and this Agreement and the GTSD
Instruments, when duly executed and delivered by Purchaser and GTSD, as
applicable, will constitute valid and legally binding obligations of Purchaser
and GTSD, as applicable, enforceable against each that is a party thereto in
accordance with their terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to the rights of creditors generally.

(c) Purchaser is purchasing the Stock for its own account, and the
Stock is being purchased by it for investment and not with a present view to any
distribution thereof in violation of applicable securities laws.

Section 4.2 No Conflicts.

Neither the execution and delivery of this Agreement nor the carrying
out of the transactions contemplated hereby or under any of the GTSD Instruments
will: (a) with or without notice or the passage of time or both, result in any
violation, termination or modification of, or be in conflict with, (i) the
Organizational Documents of the Purchaser or GTSD, or (ii) any law, rule,
regulation, ordinance, writ, injunction, judgment, decree or order applicable to
the Purchaser or GTSD, (b) result in the creation of any Lien upon the property
or assets of the Purchaser or GTSD or in the acceleration of any indebtedness or
other obligation of the Purchaser or GTSD; or (c) require the filing,
declaration or registration with, or permit, consent or approval of, or the
giving of any notice to, any Applicable Authority, excluding, those that have
already been obtained prior to the Closing.

Section 4.3 Litigation.

There is no litigation, arbitration, mediation, or other investigation
or proceeding pending or, to Purchaser's and GTSD's knowledge, threatened or in
prospect, against Purchaser or GTSD with respect to the transactions
contemplated by this Agreement.

Section 4.4 Brokers and Finders.

Neither Purchaser, GTSD nor any of their officers, directors or
employees have employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement.

ARTICLE V: COVENANTS AND AGREEMENTS

Section 5.1 Consents; Cause Conditions to be Satisfied.

The Company, BETI and Bird agree to take all necessary corporate or
other action, and will use their reasonable best efforts to complete all filings
and obtain, or assist Purchaser or GTSD in obtaining, such licenses, permits,
consents, waivers, approvals, and authorizations of

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<PAGE> 25
third parties and Applicable Authorities as may be necessary or appropriate in
connection with: (i) the execution and delivery of this Agreement; (ii) the
consummation of the transactions contemplated hereby or (iii) the ownership or
use of the Company Assets or the operation of the Company's Business.

Section 5.2 Best Efforts.

(a) Each of the Company, BETI and Bird shall use their reasonable best
efforts to cause all of the conditions contained in Article VI of this Agreement
to be satisfied.

(b) Purchaser and GTSD shall use their reasonable best efforts to cause
all of the conditions contained in Article VII of this Agreement to be
satisfied.

Section 5.3 Certain Notifications.

At all times prior to the Closing, each party hereto shall as promptly
as reasonably practicable notify the other in writing of the occurrence of any
event as to which it obtains knowledge that would make the representations,
warranties and disclosures made herein untrue or misleading or which is
reasonably likely to result in the failure of a condition specified in Article
VII or Article VIII hereof.

Section 5.4 Competition.

(a) The following terms when used in this Section 5.4 shall have the
following meanings:

"Competition" means (i) the treatment and disposal of hazardous and
other wastes, and (ii) any business which is competitive with the Company's
Business as it is now operated.

"Directly or Indirectly" means either for one's own account or as a
partner, shareholder, director, officer, principal, agent or employee of another
person.

"Person" means an individual, corporation, partnership, joint venture,
trust or other entity.

"Restricted Territory" means the United States, Canada and all other
jurisdictions worldwide in which the Company is conducting or has conducted the
Company's Business at or prior to the Closing.

(b) BETI and Bird shall not, for a period of five years after the date
hereof, Directly or Indirectly, engage in any Competition in the Restricted
Territory; provided, that BETI or Bird may, without violating this covenant (i)
own as a passive investment not in excess of 5% of the outstanding capital stock
of a corporation which engages in Competition if such capital stock is a
security which is actively traded on an established national securities
exchange; and (ii) have an ownership interest otherwise proscribed by this
Section 5.4 if such interest arises as a result of

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<PAGE> 26
the acquisition of a business entity not principally engaged in a business in
Competition with that of the Company.

(c) Neither BETI nor Bird shall, directly or indirectly, for itself or
on behalf of any other Person, induce or attempt to induce any employee of the
Company to leave his or her employment with the Company at any time within three
years from the Closing Date.

(d) BETI and Bird each acknowledges that in view of the nature of the
Company's Business and the business objectives of Purchaser in acquiring it, the
foregoing territorial and time limitations are reasonable and properly required
for the adequate protection of Purchaser and that in the event that any such
territorial or time limitation is deemed to be unreasonable and is then reduced
by a court of competent jurisdiction, then, as reduced, the territorial and/or
time limitation shall be enforced.

(e) BETI and Bird further acknowledge that the remedy at law for any
breach by it of the agreements contained in this Section 5.4 will be inadequate
and that Purchaser will be entitled to seek injunctive relief without being
required to prove actual damages or post bond. This Section 5.4 constitutes an
independent and severable covenant and if any or all of the provisions of this
Section 5.4 are held to be unenforceable for any reason whatsoever, it will not
in any way invalidate or affect the remainder of this Agreement which will
remain in full force and effect.

Section 5.5 Non-Interference Agreement.

BETI and Bird covenant and agree that neither they nor any Affiliate of
either of them will, at any time after the Closing, directly or indirectly, for
whatever reason, whether for their own account or for the account of any other
person, firm, corporation or other organization: (i) solicit, deal with or
otherwise interfere with any of the Company's Business or Company's existing or
potential contracts or relationships with any affiliate, employee, officer,
director or any independent contractor whether or not the person is employed by
or associated with the Company on the Closing Date or at any time thereafter;
(ii) solicit, accept, deal with or otherwise interfere with the continuance of
supplies to Company (or the terms relating to such supplies), from any suppliers
who have been supplying goods, materials or services to Company at any time
during the last five years prior to the date of this Agreement; (iii) solicit,
accept, deal with or otherwise interfere with the Company's Business or
Company's existing or potential contracts or relationships with any independent
contractor, customer, client or consultant of the Company, or any person who is
a bona fide or prospective independent contractor, customer, client or
consultant thereof; or (iv) solicit or otherwise interfere with any existing or
proposed contract between the Company and any other party whatsoever.

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<PAGE> 27
Section 5.6 Confidentiality.

BETI and Bird agree that they may possess certain data and knowledge of
the operations of the Company which are proprietary in nature and confidential.
BETI and Bird covenant and agree that they will not, for a period of three years
after the Closing, reveal, divulge or make known to any person (other than
Purchaser, GTSD or the Minority Shareholders) or use for its own account or for
the account of any person, firm, corporation or other organization, any
confidential or proprietary information, method, record, data, trade secret,
pricing policy, bid amount, bid strategy, rate structure, personnel policy,
method or practice of soliciting or obtaining or doing business by the Company,
or any other confidential or proprietary information whatsoever relating to the
Company or its Affiliates, whether or not obtained with the knowledge and
permission of Purchaser or its Affiliates. BETI and Bird further covenant and
agree that for a period of three years from the Closing Date, they shall not
divulge any such confidential or proprietary information which it may acquire
during any transition period in which it assists or consults with Purchaser or
its Affiliates to facilitate the transfer and the continued success of the
Company, respecting such confidential and proprietary information in trust for
the sole benefit of Purchaser and its Affiliates and their successors and
assigns. The foregoing provisions shall not be applicable to any disclosure or
use of confidential information or knowledge that can be demonstrated to have
(i) been publicly known prior to the date of this Agreement, (ii) become well
known by publication or otherwise not due to the unauthorized act or omission on
the part of BETI or Bird or their Affiliates, or (iii) been supplied to BETI or
Bird by a third party without violation of the rights of the Company or the
Purchaser or any other party.

Section 5.7 Tax Election.

The Company, Bird or BETI will not make any elections which changes the
tax basis of the Company's assets or liabilities for any date subsequent to
December 31, 1994 other than (i) depreciation of fixed assets through methods
established in the 1994 federal income tax returns of the Company or (ii)
changes in the normal course of business.

Section 5.8 Notification of Certain Events.

Bird covenants and agrees that it shall provide written notice to GTSD
within 15 days of execution of an agreement providing for: (i) the merger or
consolidation of Bird with or into any other entity, (ii) the sale of all or
substantially all of the assets of Bird to another entity, (iii) the
liquidation, dissolution or any other similar fundamental corporate transaction.

Section 5.9 Sharing of Expenses for RFI Work Plan.

The Company and Bird covenant and agree that they shall share equally
all costs and expenses for Phase I of the RFI Work Plan which has been submitted
to the Texas Natural Resource Conservation Commission ("TNRCC"). In connection
therewith, the Company covenants and agrees that it shall use all reasonable
efforts to minimize the costs and expenses of

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such work and to use the Company's personnel to perform such work wherever
reasonably possible.

Section 5.10 Closure Trust Fund.

The parties hereto covenant and agree that all contributions by, or on
behalf of, the Company to the date hereof to the closure trust fund pursuant to
that certain Trust Agreement between the Company, as grantor, and Texas Commerce
Bank, N.A., as trustee, dated December 8, 1992 as required by the Texas Water
Commission, the predecessor to the TNRCC, shall remain an asset of the Company
following the Closing, and Bird, BETI or its Affiliates shall have no right or
claim to such contributions. The parties further covenant and agree that the
closure trust fund shall not be deemed to be a current asset for purposes of
Bird's obligations pursuant to Section 2.3(d). GTSD and GTSD Sub covenant and
agree that they will use their reasonable efforts to cause the Company to
self-insure for any of the plant closure obligations mandated by the TNRCC and,
in the event the Company is able to do so within two (2) years from the date of
Closing hereunder, without any additional direct or indirect cost to the
Company, effect on the Company's credit, or credit enhancement by GTSD or its
Affiliates, it will distribute any funds contributed by the Company, BETI or
Bird prior to the Closing and received from the termination of the trust fund,
less any reasonable out of pocket expenses incurred by GTSD, the Company or
their Affiliates in connection therewith, promptly to Bird. In the event the
Company is able to reduce the plant closure obligations mandated by the TNRCC
within two (2) years from the date of Closing hereunder, it will distribute to
Bird a portion of the funds contributed by the Company, BETI or Bird prior to
the Closing, and such portion shall equal the product of the aggregate amount of
funds contributed prior to the Closing and the percentage reduction in the
aggregate funding obligation of $2 million. The distributions to Bird required
by the previous sentence will be made either (i) when funds are released from
the trust fund, (ii) as the annual payments to the trust fund are reduced to the
extent of such reduction or (iii) when the trust fund is terminated earlier than
when it would have terminated otherwise but for the reduction.

Section 5.11 Knowledge of the Company.

For purposes of Article III hereof, the knowledge of the Company or the
Minority Shareholders shall not be imputed to the knowledge of Bird or BETI
whenever a representation or warranty contained therein is made to the knowledge
of Bird or BETI.

Section 5.12 Vehicle Leases.

The Company agrees to assume the current leases for the Company's
automobiles that are reflected on Schedule 5.12 hereto pursuant to the terms
that are reflected on such schedule.

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Section 5.13 Use of Company Logo.

If and to the extent that the logo used by the Company prior to the
date hereof is owned by BETI, Bird or an Affiliate thereof, then such party
hereby assigns to the Company the right to use such logo for a period of two (2)
years from the date hereof and such party agrees to execute any and all
documents or instruments that may be reasonably necessary, as determined by
counsel to the Company, to evidence such assignment.

ARTICLE VI: CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS

Unless waived in writing by Purchaser in its sole discretion, the
obligations of Purchaser hereunder shall be subject to the fulfillment, prior to
or at the Closing, of each of the following conditions precedent:

Section 6.1 Receipt of Stock Certificates.

The Purchaser shall concurrently receive the certificates for the Stock
contemplated by Article II, Section 2.1 hereof.

Section 6.2 Minority Shareholders Agreements.

The Purchaser, GTSD and the Minority Shareholders shall have entered
into the Minority Shareholders Agreements, including the Shareholders Agreement,
the Employment Agreements and the License Agreement in forms acceptable to the
Purchaser and GTSD.

Section 6.3 Payments by Bird.

Bird shall have paid (i) any amount required pursuant to Article II,
Section 2.3(d) of this Agreement and (ii) any costs incurred by the Company in
connection with putting the Bird Gulf Coast Recycling Center in a state of
suspension during the period of August 31, 1995 until the Closing Date, which
includes putting the desorber and other processing equipment in a safe shutdown
condition, removing substantially all processed and unprocessed inventory and
residuals from the site, emptying tanks that were being used by the Company and
continuing the employment of the employees listed on Schedule 6.3 and providing
the necessary support from the Company to complete GTSD's due diligence effort,
provided that Bird will be limited to a maximum payment amount of $200,000 for
such costs pursuant to this clause (ii) of this Section 6.3.

Section 6.4 Release from Liability.

The Minority Shareholders shall have released Purchaser, its Affiliates
and their officers, directors, stockholders, employees, agents, successors and
assigns from any and all obligations,

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liabilities, claims, causes of action and damages whether past or present, real
or contingent, in tort or contract or otherwise, in law or equity, including but
not limited to, obligations in connection with the payment of severance benefits
to any Minority Shareholders, whether arising under such individual's current
employment agreements and arrangements with Bird, BETI, or any other subsidiary
of Bird, or otherwise and such release shall be in form and substance reasonably
acceptable to Purchaser and its counsel.

Section 6.5 Required Approvals.

All approvals, consents, waivers, actions or consents from any
Applicable Authority or any other Person required for the consummation of the
transactions contemplated hereby and necessary for the Company to engage in the
Company's Business following the Closing shall have been obtained and shall be
effective and in form and substance satisfactory to the Purchaser.

Section 6.6 Filings.

The Company, BETI and Bird shall make all filings and take all other
actions necessary to cause the transaction contemplated hereby to become
effective under applicable law.

Section 6.7 Actions or Events Interfering with Agreement.

No investigation, suit, action or other proceeding shall be threatened
or pending before any court or governmental agency which seeks to restrain,
prohibit or delay, or seeks damages or other relief in connection with, this
Agreement or the transactions contemplated hereby, or which could have a
Material Adverse Effect upon the financial condition, Company's Business,
Company Assets or prospects of the Company. The Company shall not have been
adversely affected in any material way by any act of God, fire, flood, war,
labor disturbance, legislation (proposed or enacted) or other event or
occurrence, and there shall have been no change in the Company Assets, financial
condition, customer or business prospects since August 31, 1995 other than a
change resulting from the shutdown or suspension of operations of the Gulf Coast
Recycling Center.

Section 6.8 Representations and Warranties.

The representations and warranties set forth in Article III shall be
true and accurate at and as of the Closing Date as though such representations
and warranties were made at and as of such time.

Section 6.9 Compliance with Agreements.

The Company, BETI and Bird shall have performed and complied in all
respects with all of the agreements, covenants and conditions required by this
Agreement to be performed or complied with by them prior to or at the Closing
Date.

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<PAGE> 31
Section 6.10 Delivery of Certificates.

(a) Each of the Company, BETI and Bird shall have delivered to
Purchaser a certificate of its president or any vice president certifying (i)
the fulfillment of the conditions set forth in this Article VI, (ii) that
attached as exhibits thereto are certified, true, correct and complete copies of
resolutions of the Board of Directors of such corporation authorizing the
execution and delivery of this Agreement, the performance of that party's
obligations hereunder and appointing one or more specific individuals to execute
and deliver all of the instruments and documents required to be executed and
delivered by such party pursuant to the terms and conditions hereof and (iii)
the names and signatures of the officers authorized to execute and deliver this
Agreement and the other documents and instruments required hereby and that all
such officers still hold the office or position set forth in such certificate.

(b) The Company shall have delivered a certificate, dated as of the
Closing Date, executed by the President and the Secretary of the Company, that:
(i) certifies that attached as exhibits thereto are certified true, correct and
complete copies of the Company's Organizational Documents and (ii) certifies
that as of the Closing Date, the Company's Organizational Documents have not
been revoked, rescinded or amended and remain in full force and effect.

(c) The Company shall have furnished to Purchaser certificates of valid
existence and good standing from the jurisdictions in which the Company is
organized and certificates of qualification to do business as a foreign company
in each of the jurisdictions in which such qualification is necessary.

Section 6.11 Resignation of Officers and Directors.

If and to the extent requested by the Purchaser, the existing officers
and directors of the Company shall have submitted resignations to be effective
upon the Closing.

Section 6.12 Termination of Certain Agreements.

The Bird Instruments, the License Agreement between Jim Hogan and the
Company dated April 1, 1993, the Employment Letter between the Company and Brad
Hogan dated August 9, 1991 and the Employment Letter between the Company and
Barry Hogan dated July 1, 1994 shall have been terminated at or prior to the
Closing and the Company, GTSD and its Affiliates shall have been released from
any and all obligations and liabilities under such agreements.

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<PAGE> 32
ARTICLE VII: CONDITIONS PRECEDENT TO THE COMPANY'S, BETI'S AND
BIRD'S OBLIGATIONS

Unless waived in writing by the Company, BETI or Bird, the obligations
of the Company, BETI or Bird hereunder shall all be subject to the fulfillment,
prior to or at the Closing, of each of the following conditions precedent:

Section 7.1 Compliance with Agreements.

Purchaser and GTSD shall have performed and complied in all material
respects with all of its agreements, covenants and conditions required by this
Agreement to be performed or complied with by Purchaser and GTSD prior to or at
the Closing Date.

Section 7.2 Release of Liabilities.

The Minority Shareholders shall have released the Company, BETI, Bird,
any of their Affiliates and any of their officers, directors, stockholders,
employees, agents, successors and assigns from any and all obligations,
liabilities, claims, causes of action and damages, whether past or present, real
or contingent, in tort or contract or otherwise, in law or equity, including but
not limited to, obligations in connection with the payment of severance benefits
to any Minority Shareholders, whether arising under such individual's current
employment agreements and arrangements with Bird, BETI, or any other subsidiary
of Bird, or otherwise, and such release shall be in form and substance
reasonably acceptable to the Company, BETI and Bird and their counsel.

Section 7.3 Representations and Warranties.

The representations and warranties set forth in Article IV shall be
true and accurate at and as of the Closing Date as though such representations
and warranties were made at and as of such time.

Section 7.4 Compliance with Agreements.

The Purchaser and GTSD shall have performed and complied in all
respects with all of its agreements, covenants and conditions required by this
Agreement to be performed or complied with by it prior to or at the Closing
Date.

Section 7.5 Delivery of Certificates.

The Purchaser and GTSD shall have delivered to the Company, BETI and
Bird a certificate of their president or any vice president certifying (i) the
fulfillment of the conditions set forth in this Article VII, (ii) that attached
as exhibits thereto are certified, true, correct and complete copies of
resolutions of the Board of Directors of such corporation authorizing the

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<PAGE> 33
execution and delivery of this Agreement, the performance of the Purchaser's and
GTSD's obligations hereunder and appointing one or more specific individuals to
execute and deliver all of the instruments and documents required to be executed
and delivered by the Purchaser and GTSD pursuant to the terms and conditions
hereof and (iii) the names and signatures of the officers authorized to execute
and deliver this Agreement and the other documents and instruments required
hereby and that all such officers still hold the office or position set forth in
such certificate.

Section 7.6 Proceedings Taken.

All proceedings, corporate or other, to be taken by the Purchaser and
GTSD, in connection with the transactions contemplated by this Agreement, shall
have been taken.

ARTICLE VIII: INDEMNIFICATION

Section 8.1 Indemnification by BETI and Bird.

(a) BETI and Bird hereby jointly and severally covenant and agree to
indemnify the Purchaser, GTSD and their officers, directors, employees, agents,
Affiliates, successors and assigns and hold each of them harmless against and
with respect to any and all liabilities, losses, damages, claims, deficiencies,
costs and expenses, interest, awards, judgments and penalties (including,
without limitation, reasonable legal costs and expenses) actually suffered or
incurred by it, (hereinafter, a "Loss"), arising out of or resulting from:

(i) the breach of any representation or warranty by the BETI or
Bird contained herein or in any document delivered hereunder at the Closing;

(ii) the breach of any covenant or agreement by the Company, BETI
or Bird contained herein or in any document delivered hereunder at the Closing;
or

(iii) any investigation, suit, action, demands, assessments,
judgments or other proceeding by or before any court or governmental or
regulatory agency which seeks to restrain, modify, prohibit or revoke, or seeks
damages or other relief in connection with the consummation of this transaction.

Notwithstanding anything herein to the contrary, the fact
that an item may be disclosed on a schedule to this Agreement in response to a
representation or warranty contained in Article III hereto, shall not in any way
limit any rights that an indemnified party referred to in this Section 8.1(a)
shall have to indemnification for any Losses resulting therefrom, except to the
extent a statement in such schedule expressly limits or excludes any right to
indemnity in respect thereof. The inclusion of an item on a schedule attached
hereto is merely for purposes of disclosure and not to release Bird or BETI from
any liability therefor, except as may be otherwise expressly provided on the
schedule.

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<PAGE> 34
(b) In addition to any other indemnification provided herein, BETI and
Bird hereby jointly and severally covenant and agree to indemnify the Company,
Purchaser, GTSD and their officers, directors, employees, agents, Affiliates,
successors and assigns and hold each of them harmless against and with respect
to any and all Losses arising out of or resulting from:

(i) the litigation between Universal Process Equipment, Inc. and
Universal Industrial Refrigeration, Inc. and the Company and an Affiliate of
Bird and the litigation between BAC Holdings Inc. and the Company;

(ii) any additional assessment against the Company for taxes of
any kind due and payable for the period up to and including the Closing Date;
and

(iii) items II, III, IV and VI reflected on Schedule 3.9 hereto.

Section 8.2 Indemnification by Purchaser and GTSD.

Purchaser and GTSD (but not their officers, directors, stockholders,
employees, agents or Affiliates) hereby jointly and severally covenant and agree
to indemnify BETI and Bird and their officers, directors, employees, agents,
Affiliates, successors and assigns and holds each of them harmless against and
with respect to any and all Losses, arising out of or resulting from:

(a) the breach of any representation or warranty by Purchaser or GTSD
contained herein or in any document delivered hereunder at the Closing;

(b) the breach of any covenant or agreement by Purchaser or GTSD
contained herein or in any document delivered hereunder at the Closing;

(c) payment claims by any of the Company's vendors or suppliers to the
extent such claims are fully reflected as payables on the August 31, 1995
balance sheet of the Company; or

(d) payment claims that arise pursuant to the leasing of the Company's
automobiles, which leases are assumed by the Company pursuant to Section 5.12
hereto, to the extent of the payment obligations reflected on Schedule 5.12
hereto.

Section 8.3 Procedures for Third Party Claims.

Promptly after the assertion by any third party of any claim against
any party entitled to be indemnified under this Article VIII (the "Indemnitee")
that, in the judgment of such Indemnitee, may result in the incurrence by such
Indemnitee of Losses for which such Indemnitee would be entitled to
indemnification pursuant to this Agreement, such Indemnitee shall deliver to the
other party or parties who has indemnified such Losses hereunder ("Indemnitor")
a written notice describing such claim. Such Indemnitor may participate in and,
at its option upon acknowledgment of Indemnitee's right to indemnification for
such matter, assume the defense of the Indemnitee against such claim, including
the employment of counsel,

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who shall be reasonably satisfactory to such Indemnitee. In such case, any
Indemnitee shall have the right to employ separate counsel in any such action or
claim and to participate in the defense thereof, but the fees and expenses of
such counsel shall not be at the expense of the Indemnitor unless (i) the
Indemnitor shall have failed, within a reasonable time after having been
notified by the Indemnitee of the existence of such claim as provided in the
preceding sentence, to assume the defense of the such claim, (ii) the employment
of such counsel has been specifically authorized in writing by the Indemnitor or
(iii) the named parties to any such action (including impleaded parties) include
both such Indemnitee and the Indemnitor and such Indemnitee shall have been
advised in writing by such counsel that there may be conflicting interests
between Indemnitee and the Indemnitor in the legal defense thereof. No
Indemnitor shall be liable to indemnify any Indemnitee for any compromise or
settlement of any such action or claim effected without the consent of the
Indemnitor.

Section 8.4 Limits for Recovery of Losses.

Notwithstanding anything herein to the contrary, BETI and Bird shall
not be liable as Indemnitors for any Losses of Purchaser under this Article VIII
unless and until the aggregate amount of all Losses hereunder by Purchaser
equals or exceeds $50,000, in which case BETI and Bird shall be jointly and
severally liable for all Losses pursuant to Section 8.1(a) of the indemnified
parties identified in Section 8.1 up to a maximum aggregate amount of $500,000
(in excess of the $50,000 referred to above) and BETI and Bird shall be jointly
and severally liable for all Losses pursuant to Section 8.1(b)(ii) of the
indemnified parties identified in Section 8.1 up to a maximum aggregate amount
of $125,000.

Section 8.5 Waiver of Contribution.

Neither BETI nor Bird shall have any right to seek contribution from
the Company in the event that BETI and/or Bird is required to make any payments
under this Article VIII.

Section 8.6 Sole Remedy.

Recourse under this Article VIII shall be Purchaser's, GTSD's and their
officers, directors, employees, agents, Affiliates, successors and assigns sole
remedy against BETI or Bird.

ARTICLE IX: SURVIVAL

Except for actions based upon a claim of fraud (which shall survive
without limitation), all representations and warranties made pursuant to or in
connection with this Agreement shall survive the Closing, but shall terminate
two (2) years after the Closing Date; provided, that there shall be no such
termination with respect to any representation or warranty as to which a bona
fide claim has been asserted prior to such date.

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<PAGE> 36
ARTICLE X: MISCELLANEOUS

Section 10.1 No Assignment.

No assignment by any of the parties of their respective rights nor
delegation by any of the parties of their respective duties shall be permitted
hereunder without the prior written consent of all other parties hereto.

Section 10.2 Costs.

Each party hereto shall pay all fees and expenses incurred by it in
connection with the negotiation, preparation, and performance of this Agreement,
including fees and disbursements of their respective counsel, accountants and
financial advisors.

Section 10.3 Publicity.

Prior to Closing, Purchaser, GTSD, the Company, BETI and Bird agree not
to issue any statement or communication to the public or the press regarding the
transactions contemplated by this Agreement without the prior written consent of
the other parties; provided, however, that each party shall be permitted, upon
notice to the other, to make such disclosures to the public or such governmental
entities as its counsel reasonably should deem necessary to maintain compliance
with applicable law.

Section 10.4 Confidentiality.

Purchaser, GTSD, the Company, BETI and Bird will hold, and will cause
their employees, representatives, agents and affiliated persons to hold in
strict confidence, and not disclose to any other party, and not use in any way
except in connection with the transactions contemplated hereby, without the
prior written consent of the other party, all confidential information obtained
from the other party in connection with the transactions contemplated by this
Agreement (including the existence of this Agreement, any of the terms hereof,
and the negotiations between the parties hereto), except such information may be
disclosed: (a) to Applicable Authorities and, where necessary, to any other
person in connection with the obtaining of the Licenses and Approvals and the
consents or waivers contemplated or required by the terms of this Agreement; (b)
if required by court order or decree or any Applicable Law; (c) if it is
publicly available through no act or failure to act of such party; (d) was
already known to such party on a confidential basis on the date of receipt; (e)
during the course of or in connection with any litigation, governmental
investigation, arbitration or other proceedings based upon or in connection with
the subject matter of this Agreement, including the failure of the transactions
contemplated hereby to be consummated; or (f) if it is otherwise expressly
provided for herein.

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<PAGE> 37
Section 10.5 Parties in Interest.

This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the respective successors, heirs, personal representatives, and
assigns permitted under the terms of this Agreement.

Section 10.6 Entire Agreement.

This Agreement, any Exhibits, Schedules and any other writings
delivered pursuant hereto which form a part hereof and all other documents
delivered contemporaneous with the execution hereof contain the entire
understanding of the parties with respect to its subject matter and supersede
all prior oral and written agreements and understandings between the parties
with respect to its subject matter. In this regard, although the Bird Letter of
Intent and the Minority Shareholders' Letter of Intent shall be merged into and
superseded by this Agreement, certain descriptive language contained therein is
expressly referred to herein and shall be interpreted as if expressly set forth
herein.

Section 10.7 Construction.

The Article and Section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. The masculine pronoun shall include the
feminine and neuter, and vice versa, where the context so requires.

Section 10.8 Notices.

Except as otherwise expressly stated, all notices, claims,
certificates, requests, demands and other communications hereunder shall be in
writing and shall be deemed given upon the earlier of (i) when it is personally
delivered, (ii) three (3) days after having been mailed by certified mail,
postage prepaid, return receipt requested, (iii) two (2) days after having been
sent by recognized overnight delivery service or (iv) one (1) day after having
been sent by facsimile transmission, addressed as follows:

If to GTSD:

GTS Duratek, Inc.
8955 Guilford Road, Suite 200
Columbia, Maryland 21046
Attention: Robert E. Prince, President and Chief
Executive Officer
Telecopy No.: (301) 621-8211

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<PAGE> 38
with a copy to:

Piper & Marbury L.L.P.
Charles Center South
36 South Charles Street
Baltimore, Maryland 21201-3010
Attention: Henry D. Kahn, Esquire
Telecopy No.: (410) 576-1700

If to Purchaser:

GTSD Sub II, Inc.
8955 Guilford Road, Suite 200
Columbia, Maryland 21046
Attention: Robert E. Prince, President
Telecopy No: (301) 621-8211

with a copy to:

Piper & Marbury L.L.P.
Charles Center South
36 South Charles Street
Baltimore, Maryland 21201-3010
Attention: Henry D. Kahn, Esquire
Telecopy No.: (410) 576-1700

If to Company:

Bird Environmental Gulf Coast, Inc.
2700 Avenue S
San Leon, Texas 77539
Attention: Bob Hensel, President
Telecopier No.: (713) 559-1364

with a copy to:

Piper & Marbury L.L.P.
Charles Center South
36 South Charles Street
Baltimore, Maryland 21201-3010
Attention: Henry D. Kahn, Esquire
Telecopy No.: (410) 576-1700

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<PAGE> 39
If to BETI:

Bird Environmental Technologies, Inc.
1077 Pleasant Street
Norwood, Massachusetts 02062
Attention: Frank S. Anthony, Vice President and General Counsel
Telecopy No.: (617) 551-9507

If to Bird:

Bird Corporation
1077 Pleasant Street
Norwood, Massachusetts 02062
Attention: Frank S. Anthony, Vice President and General Counsel
Telecopy No.: (617) 551-9507

or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.

Section 10.9 Counterparts.

This Agreement may be executed simultaneously in several counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

Section 10.10 Governing Law.

This Agreement is governed by and construed and enforced in accordance
with the laws of the State of Maryland, excluding any laws thereof which would
direct the application of the law of another jurisdiction, and exclusive venue
for filing any lawsuit shall be in the federal courts in Maryland.

Section 10.11 Specific Performance.

The parties acknowledge and agree that the breach of the provisions of
this Agreement could not be adequately compensated with monetary damages, and
the parties hereto agree, accordingly, that injunctive relief and specific
performance shall be appropriate remedies to enforce provisions of this
Agreement and waive any claim or defense that there is an adequate remedy at law
for such breach; provided, however, that nothing herein shall limit the remedies
herein, legal or equitable, otherwise available and all remedies herein are in
addition to any remedies available at law or otherwise.

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<PAGE> 40
Section 10.12 Severability.

If any provision of this Agreement shall be held to be illegal, invalid
or unenforceable under any applicable law, then such contravention or invalidity
shall not invalidate the entire Agreement. Such provision shall be deemed
modified to the extent necessary to render it legal, valid and enforceable, and
if no such modification shall render it legal, valid and enforceable, then this
Agreement shall be construed as if not containing the provision held to be
invalid, and the rights and obligations of the parties shall be construed and
enforced accordingly.

Section 10.13 Further Assurances.

From time to time, at Purchaser's request and without further
consideration, BETI and Bird shall execute and deliver to Purchaser such
documents and take such other action as Purchaser may reasonably request in
order to consummate more effectively the transactions contemplated hereby.

Section 10.14 No Drafting Presumption.

Each of the parties hereto shall be deemed to have participated equally
in the drafting and preparation of this Agreement and, accordingly, no
presumption shall arise concerning the interpretation of any of the provisions
hereof with respect to the party or parties responsible for its preparation.

Section 10.15 Incorporation by Reference; Use of Certain Terms.

All Exhibits and Schedules attached to this Agreement shall be deemed
incorporated herein by reference as if fully set forth herein. When the context
requires, the gender of all words used herein shall include the masculine,
feminine and neuter and the number of all words shall include the singular and
plural.

Section 10.16 Amendment and Waiver.

This Agreement may not be amended or modified except by a written
instrument signed by the parties hereto. The waiver by any party of such party's
rights under this Agreement in any particular instance or instances, whether
intentional or otherwise, shall not be considered as a continuing waiver which
would prevent subsequent enforcement of such rights or of any other rights.

Section 10.17 Waiver of Jury Trial.

THE COMPANY, BETI, BIRD, PURCHASER AND GTSD HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT, THE STOCK, OR ANY

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<PAGE> 41
DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS
TRANSACTION, INCLUDING WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THE COMPANY,
BETI, BIRD, PURCHASER AND GTSD FURTHER WARRANT AND REPRESENT THAT EACH HAS
REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
SUPPLEMENTS OR MODIFICATIONS TO (OR ASSIGNMENTS OF) THIS AGREEMENT OR THE STOCK.
IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO
A TRIAL (WITHOUT A JURY) BY THE COURT.

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<PAGE> 42
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the parties hereto on the date first above written.

WITNESS/ATTEST: BIRD ENVIRONMENTAL GULF COAST, INC.

By:_______________________________ By: _________________________(SEAL)
Frank A. Anthony
Vice President

BIRD ENVIRONMENTAL TECHNOLOGIES, INC.

By:_______________________________ By: _________________________(SEAL)
Frank A. Anthony
Vice President

BIRD CORPORATION

By:_______________________________ By: _________________________(SEAL)
Frank A. Anthony
Vice President

GTS DURATEK, INC.

By:_______________________________ By: _________________________(SEAL)
Diane R. Brown, Secretary Robert F. Shawver

Executive Vice President

GTSD SUB II, INC.

By:_______________________________ By: _________________________(SEAL)
Diane R. Brown, Secretary Robert F. Shawver

Vice President

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<PAGE> 1

EXHIBIT 10(X)

SALES AGREEMENT

DATE: December 1, 1995

1. PARTIES
SELLER: GS ROOFING PRODUCTS CO., INC.
5525 MacArthur Blvd., Suite 900
Irving, Texas 75038

BUYER: BIRD INC.
1077 Pleasant Street
Norwood, MA 02062

2. PRODUCT 2.0# CSF & 2.2# CSF GLASS MAT per attached Specifications and
Agreement, in widths of 59-7/8, 61-7/8 and 36 inches

ANNUAL QTY: Sixty percent (60%) of Buyers annual requirements,
estimated to be approximately 3.9 mm squares

FOB POINT: Seller's plant, Charleston, SC

SHIPMENT: Rail car loads as arranged by Seller

PRICE: 2.0# csf $1.34/csf Freight delivered & prepaid
2.2# csf $1.40/csf Freight delivered & prepaid
Through March 31, 1996
Subject to a maximum 5% increase April 1, 1996 or
thereafter if prices are increased by alternate
competitive supplier

TERMS: 1% 10th Prox Net 30th prox. on shipments prior to the
25th of the month for determination of due dates.
Discount applies to material only and does not apply
to freight costs.

3. PERIOD. The period of this Agreement will begin on January 1, 1996 and
end on December 31, 1996.

4. QUANTITY. During this Agreement period, Buyer will purchase the specified
Annual Quantity in approximately equal monthly quantities. Orders will be faxed
to Seller's facility in Charleston, SC by the 15th of each month for the
following month's requirements.

5. SHIPMENTS. Seller shall arrange for the carrier and shall be entitled to
utilize the Buyer's contract rates from the CSXT Railroad of $1795/car (50' &
60'). Buyer will unload each shipment at its own risk and expense, including any
demurrage or detention charges at destination. Shipper will be responsible for
all risk and expense, including demurrage at the loading facility. If Seller is
unable, after normal and reasonable efforts, to secure wide door cars, and Buyer
is unable to reasonably delay shipment until such cars are available, then
Seller will be required to provide delivery by truck, at the Sellers expense.
<PAGE> 2

6. WARRANTIES. Seller warrant that Product will meet the "PURCHASE SPECIFICATION
FOR GLASS MAT," as clarified by the summary of understanding titled "1996 BIRD
ROOFING MAT SUPPLY PROGRAM,' copy attached. Seller MAKES NO OTHER REPRESENTATION
OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, IN FACT OR IN LAW, INCLUDING
WITHOUT LIMITATION THE WARRANTY OF MERCHANT ABILITY OR THE WARRANTY OF FITNESS
FOR A PARTICULAR PURPOSE, OTHER THAN THE LIMITED WARRANTY SET FORTH ABOVE.

7. REMEDIES. If buyer fails to pay any indebtedness to Seller, Seller may, in
addition to any other remedies, suspend shipments, change terms of payment or
terminate this Agreement by notice to the Buyer. Buyer's obligation to perform
will not be limited by any previous waiver by Seller. Product which fails to
meet specifications will be returned to the Seller at the Sellers expense.

8. NOTICES. Notice by either Seller or Buyer will be made only by letter or
facsimile addressed to the other part at this address in Article 1 and will be
considered given as of the time it is deposited with the U.S. Postal Service or
acknowledged as received by the other Party's facsimile machine.

9. GOVERNING LAW. This Agreement will be interpreted and the rights,
obligations, and liabilities of the Parties determined in accordance with the
laws of the State of New York.

10. PRICE AND PAYMENT TERMS. Price shall be in accordance with Article 2 above.
If Seller is prevented by law, regulation or governmental action from continuing
any price in effect under this Agreement, Seller may terminate this Agreement on
thirty (30) days' notice. Buyer will be obligated to provide immediate written
notice to Seller if and when the suppler or suppliers of Buyer's balance of
requirements increase prices to Buyer. Seller will be permitted to increase
prices at a comparable level, effective on the date of such other competitor's
increase. The 1% 10th prox Net 30th prox Terms under this Agreement are the
result of meeting competitive conditions outlined by the Buyer. Buyer shall keep
in full force and effect a $300,000 letter of credit in favor of the Seller.
Seller shall review with reasonableness the financial condition of the Buyer on
or before July 1, 1996 to determine the need to continue such letter of credit.

11. EXCUSES FOR NO PERFORMANCE. Either Seller or Buyer will be excused from the
obligations of this Agreement to the extent that performance is delayed or
prevented by any circumstance (except financial) reasonably beyond its control
or by fire, explosion, mechanical breakdown, strikes or other labor trouble,
plant shutdown, unavailability of or interference with the usual means of
transporting the Product or compliance with any law, regulation, order,
recommendation or request of any governmental authority. In addition, Seller
will be so excused in the event it is unable to acquire from its usual source
and on terms it deems to be reasonable, any material necessary for manufacturing
the Product. If, because of such circumstances, there should be a shortage of
Product from the Seller, Seller will not be obligated to purchase products in
order to perform this Agreement and may apportion its available Product among it
internal needs and the Buyer's needs based upon the prior year sales, upon a
prorated share of available Product. Quantities of Product
<PAGE> 3

consequently not shipped will be deducted from the applicable remaining quantity
obligation unless the Parties agree otherwise.

12. SAFETY AND HEALTH COMMUNICATIONS. Seller will furnish to Buy Material Safety
Data Sheets which include health, safety and other hazard communication
information on Product consistent with the Occupational Safety and Health
administration's hazard Communications Standard. Seller will also furnish other
health or safety information as available. Buyer will disseminate appropriate
health and safety information to all persons Buyer foresees may be exposed to
Product (including but not limited to Buyer's employees, contractors and
customers).

13. LIABILITIES-CLAIMS-INDEMNIFICATION. Buyer shall indemnify and hold the
Seller harmless for any claim, loss or expense on account of any injury, disease
or death of persons or damage to property arising directly out of use of the
Product. These indemnity obligations of Buyer will survive termination of this
Contract. Neither Seller nor Buyer will have any liability to the other for any
claim (except for Indebtedness of Buyer to Seller) arising out of or in
connection with this Agreement unless claimant gives the other Party notice of
the claim, setting forth fully the facts on which it is based, within sixty (60)
days of the date such facts were discovered or reasonably should have been
discovered. Except as elsewhere herein provided, Seller's liability for
defective or nonconforming Product will not exceed the purchase price and
inbound freight costs of the Product involved in the claim and NEITHER PARTY
WILL BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES.

14. ENTIRETY AND RELEASE. This Agreement, as of the beginning date of it Period,
contains the complete and exclusive agreement of Seller and Buyer concerning the
Product identified in Article 2, merges and supersedes all prior understandings
and representations (oral or written) and terminates all prior contracts between
Seller and Buyer concerning the same product. Except for any indebtedness or
indemnity obligation of Buyer to Seller, each releases the other from all claims
arising in connection with any such prior contract, except as herein provided.
Neither this Agreement nor any agreement supplementing or amending this
Agreement (including any purchase order or other document issued by Buyer) will
be binding unless signed by the Parties, and performance prior to such execution
will not constitute a waiver of this requirement.

15. FURTHER LIMITATIONS. No action by the Buyer arising out of the Agreement
shall commence later than sixty (60) days after the cause of action has
occurred.

16. CONSIDERATIONS. Section deleted.
<PAGE> 4

17. AMENDMENTS. No alteration, modification or change of this Agreement shall be
valid except by an agreement in writing executed by the parties hereto.

18. OTHER PROVISIONS. (Attach additional page(s) Exhibits etc).

GS ROOFING PRODUCTS COMPANY, INC.

BY:______________________________
Thomas Gruss

Date 3/15/96

BIRD ROOFING DIVISION

BY:______________________________
R.C. Maloof

Date 12/5/95

<PAGE> 1
EXHIBIT 10(Y)

================================================================================

AGREEMENT AND PLAN OF MERGER

by and among

CERTAINTEED CORPORATION,

BI EXPANSION CORP.

and

BIRD CORPORATION

Dated as of March 14, 1996

================================================================================
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
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ARTICLE I

The Merger

SECTION 1.01. Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Articles of Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.03. By-Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.04. Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.05. Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.06. Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.07. Additional Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.08. Company Common Stock, Preferred Stock and Preference Stock . . . . . . . . . . . 2
SECTION 1.09. Conversion of Acquisition Sub Common Stock . . . . . . . . . . . . . . . . . . . 3
SECTION 1.10. Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 1.11. Surrender of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 1.12. Certain Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE II

Representations and Warranties of the Company

SECTION 2.01. Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.02. Capitalization of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.03. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.04. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.05. Absence of Conflicts; Consents . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.06. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.07. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 2.08. Absence of Material Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.09. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.10. Patents and Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.11. Material Contracts; Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.12. Title to Properties and Related Matters . . . . . . . . . . . . . . . . . . . . . 15
SECTION 2.13. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 2.14. Labor Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.15. Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2.16. Labor Disputes; Unfair Labor Practices . . . . . . . . . . . . . . . . . . . . . 23
SECTION 2.17. Product Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 2.18. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
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<TABLE>
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SECTION 2.19. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.20. SEC Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 2.21. Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.22. Rights Agreement; Antitakeover . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.23. Opinion of Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 2.24. Asbestos Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE III

Representations and Warranties of Parent

SECTION 3.01. Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.02. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.03. Absence of Conflicts; Consents . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.04. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 3.05. Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

ARTICLE IV

Representations and Warranties of Acquisition Sub

SECTION 4.01. Corporate Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.02. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.03. Absence of Conflicts; Consents . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.04. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.05. Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 4.06. Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

ARTICLE V

Covenants

SECTION 5.01. Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 5.02. Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.03. Shareholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 5.04. Supplemental Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.05. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.06. Conduct of Company Business Prior to the Effective Date . . . . . . . . . . . . . 34
SECTION 5.07. Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.08. Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
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Contents, p. 3
<TABLE>
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<S> <C> <C>
SECTION 5.09. Filing of Articles of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.10. Interim Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.11. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.12. No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.13. Validity of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.14. Employees; Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 5.15. Indemnification and Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 5.16. Redemption of 5% Stock and Preference Stock . . . . . . . . . . . . . . . . . . . 42
SECTION 5.17. Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.18. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.19. Dividend Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 5.20. Satisfaction of Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

ARTICLE VI

Conditions to the Obligations of Parent
and Acquisition Sub

SECTION 6.01. Representations and Warranties True . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.02. Company's Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.03. Authorization of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.04. Absence of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.05. Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.06. Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.07. Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.08. Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.09. Reported Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

ARTICLE VII

Conditions to the Obligations of the Company

SECTION 7.01. Representations and Warranties True . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 7.02. Parent's and Acquisition Sub's Performance . . . . . . . . . . . . . . . . . . . 46
SECTION 7.03. Authorization of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.04. Absence of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.05. Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
</TABLE>
<PAGE> 5
Contents, p. 4

<TABLE>
<CAPTION>
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<S> <C> <C>
ARTICLE VIII

Closing

SECTION 8.01. Time and Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 8.02. Deliveries at the Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

ARTICLE IX

Termination and Abandonment of the Merger

SECTION 9.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 9.02. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

ARTICLE X

Miscellaneous

SECTION 10.01. Expenses; Alternate Transaction Fee . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.02. Non-Survival of Representations and Warranties . . . . . . . . . . . . . . . . . 51
SECTION 10.03. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 10.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 10.05. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 10.06. Complete Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 10.07. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 10.08. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.09. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.10. Accounting Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 10.11. Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Exhibits

EXHIBIT A Articles of Merger
</TABLE>
<PAGE> 6
Contents, p. 5

<TABLE>
Pursuant to Item 601(b)(2) of Regulation S-K, the Registrant has omitted the
following schedules to the Merger Agreement and agrees to furnish
supplementally a copy of such omitted schedules to the Commission upon request:

<CAPTION>
Schedules
<S> <C>
SCHEDULE 2.01 Foreign Jurisdictions
SCHEDULE 2.02 Capitalization
SCHEDULE 2.03 Subsidiaries
SCHEDULE 2.05 Conflicts, Consents, Approvals and Authorizations
SCHEDULE 2.07 Company Financial Statements
SCHEDULE 2.08 Absence of Material Changes
SCHEDULE 2.09 Litigation
SCHEDULE 2.10 Patents and Trademarks
SCHEDULE 2.11 Material Contracts
SCHEDULE 2.12 Real Property
SCHEDULE 2.13 Taxes
SCHEDULE 2.14 Labor Agreements
SCHEDULE 2.15 Benefit Plans
SCHEDULE 2.17 Product Warranties
SCHEDULE 2.18 Environmental Matters
SCHEDULE 2.19 Insurance
SCHEDULE 2.20 SEC Filings
SCHEDULE 5.06 Conduct of Business
</TABLE>
<PAGE> 7
INDEX OF DEFINITIONS

<TABLE>
<CAPTION>
Definition Section
- ---------- -------
<S> <C>
"Acquisition Sub" . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction
"Acquisition Sub Common Stock" . . . . . . . . . . . . . . . . . . . . Section 1.09
"Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction
"Alternate Transaction Fee" . . . . . . . . . . . . . . . . . . . . . . Section 10.01(b)
"Antitrust Division" . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.05(e)
"Applicable Laws" . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.05(d)
"Articles of Merger" . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.06
"Balance Sheet" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.07(a)
"Balance Sheet Date" . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.07(a)
"Benefit Plans" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.15(i)
"CERCLA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.18
"Certificates" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(b)
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.01
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.01
"Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.13
"Commonly Controlled Entity" . . . . . . . . . . . . . . . . . . . . . Section 2.15(i)
"Company" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction
"Company Common Stock" . . . . . . . . . . . . . . . . . . . . . . . . Section 1.08(a)(i)
"Company Estimates" . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.18(g)
"Company Financial Statements" . . . . . . . . . . . . . . . . . . . . Section 2.07(a)
"Company Pension Plan" . . . . . . . . . . . . . . . . . . . . . . . . Section 2.15(iii)
"Company Property" . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.12(a)
"Company Willful Misrepresentation" . . . . . . . . . . . . . . . . . . Section 9.02(b)
"Confidentiality Agreement" . . . . . . . . . . . . . . . . . . . . . . Section 5.01(b)
"Conversion Rights" . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.02(c)
"Covered Taxes" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.13(c)
"Defined Benefit Plan" . . . . . . . . . . . . . . . . . . . . . . . . Section 2.15(vi)
"Defined Benefit Pension Plan" . . . . . . . . . . . . . . . . . . . . Section 2.15(vi)
"Director Option Plan" . . . . . . . . . . . . . . . . . . . . . . . . Section 1.12(a)(i)
"Dissenting Consideration" . . . . . . . . . . . . . . . . . . . . . . Section 1.10
"Dissenting Shares" . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.10
"D&O Insurance" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.15(a)
"Effective Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.06
"Effective Time" . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.06
"Eligible Option" . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.12(a)(i)
"Environmental Laws" . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.18
"ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.15(i)
"Exchange Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.05(e)
"Exchange Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(a)
"Expenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 10.01(b)
</TABLE>
<PAGE> 8
<TABLE>
<CAPTION>
Definition Section
- ---------- -------
<S> <C>
"5% Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.08(b)
"5% Stock Consideration" . . . . . . . . . . . . . . . . . . . . . . . Section 1.08(b)
"French parcel" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.04(d)
"FTC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.05(e)
"GAAP" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.07(a)
"Governmental Authority" . . . . . . . . . . . . . . . . . . . . . . . Section 2.05(d)
"Hazardous Materials" . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.18
"HSR Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.05(e)
"Inactive Subsidiary" . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.03(a)
"Indemnified Parties" . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.15(a)
"Ineligible Option" . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.12(a)(ii)
"Interim Financial Statements" . . . . . . . . . . . . . . . . . . . . Section 2.07(b)
"Judgment" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.05(d)
"Leased Real Property" . . . . . . . . . . . . . . . . . . . . . . . . Section 2.12(a)
"Legal Action" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.09
"Lien" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.05(b)
"LTIP" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.12(b)
"Material Adverse Effect" . . . . . . . . . . . . . . . . . . . . . . . Section 2.01
"Material Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.11
"Maximum Premium" . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.15(a)
"MBCL" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01
"Merger" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction
"1982 Stock Option Plan" . . . . . . . . . . . . . . . . . . . . . . . Section 1.12(a)(i)
"1992 Stock Option Plan" . . . . . . . . . . . . . . . . . . . . . . . Section 1.12(a)(i)
"Notice of Qualified Takeover Proposal" . . . . . . . . . . . . . . . . Section 5.12(b)
"Options" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.12(a)(i)
"Owned Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.12(a)
"Parent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction
"Parent Willful Misrepresentation" . . . . . . . . . . . . . . . . . . Section 9.02(c)
"Paying Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11
"PBGC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.15(i)
"Pension Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.15(i)
"Permits" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.06
"Permitted Liens" . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.12(b)
"Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.05(c)
"Preference Stock" . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.08(c)
"Preference Stock Consideration" . . . . . . . . . . . . . . . . . . . Section 1.08(c)
"Proxy Statement" . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.02(a)
"Qualified Takeover Proposal" . . . . . . . . . . . . . . . . . . . . . Section 5.12(a)
"Release" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.18
"Reported Financials" . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.09
"Rights" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.02(a)
"Rights Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.02(a)
"Rights Agreement" . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.02(a)
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
Definition Section
- ---------- -------
<S> <C>
"Return" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.13(a)
"Savings Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.12(c)
"SEC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.20
"SEC Documents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.20
"Securities Act" . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.20
"Special Meeting" . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.03(a)
"Subsidiary" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.01
"Surviving Corporation" . . . . . . . . . . . . . . . . . . . . . . . . Section 1.01
"Surviving Corporation Common Stock" . . . . . . . . . . . . . . . . . Section 1.09
"Takeover Proposal" . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.12(a)
"Tax" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.13(a)
"Taxing Authority" . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.13(a)
"Total Merger Consideration" . . . . . . . . . . . . . . . . . . . . . Section 1.08(a)(i)
"Transmittal Letter" . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.11(b)
</TABLE>
<PAGE> 10
EXECUTION COPY

This AGREEMENT AND PLAN OF MERGER dated as of
March 14, 1996, is entered into by and among
CERTAINTEED CORPORATION, a Delaware corporation
("Parent"), BI EXPANSION CORP., a Massachusetts
corporation ("Acquisition Sub"), and BIRD
CORPORATION, a Massachusetts corporation (the
"Company").

WHEREAS the respective Boards of Directors of Parent,
Acquisition Sub and the Company have approved the merger of Acquisition Sub
with and into the Company (the "Merger"), upon the terms and subject to the
conditions set forth herein, as a result of which the Company will become a
wholly owned subsidiary of Parent and the shareholders of the Company (other
than shareholders who perfect appraisal rights) will be entitled to receive the
consideration provided in this Agreement.

NOW, THEREFORE, in consideration of the mutual benefits to be
derived from this Agreement and of the representations, warranties, covenants
and agreements hereinafter contained, Parent, Acquisition Sub and the Company
agree as follows:

ARTICLE I

The Merger

SECTION 1.01. Surviving Corporation. In accordance with the
provisions of this Agreement and the Massachusetts Business Corporation Law, as
amended (the "MBCL"), at the Effective Date (as defined in Section 1.06),
Acquisition Sub shall be merged with and into the Company, and the Company
shall be the surviving corporation in the Merger (hereinafter sometimes called
the "Surviving Corporation"). At the Effective Date, the separate existence of
Acquisition Sub shall cease.

SECTION 1.02. Articles of Organization. (a) The Articles of
Organization of the Company as amended pursuant to the Articles of Merger (as
defined in Section 1.06), shall be the Articles of Organization of the
Surviving Corporation.

(b) The purposes of the Surviving Corporation shall be as set
forth in the Articles of Organization of Acquisition Sub as in effect on the
date hereof until such time as such purposes may be amended as provided in the
Articles of Organization of the Surviving Corporation and by applicable law.
<PAGE> 11
2

SECTION 1.03. By-Laws. The By-Laws of Acquisition Sub as in
effect at the Effective Date shall be the By-Laws of the Surviving Corporation,
until thereafter amended or repealed as provided by law.

SECTION 1.04. Directors. The directors of Acquisition Sub at
the Effective Date shall, from and after the Effective Date, be the directors
of the Surviving Corporation and shall hold office from the Effective Date
until their respective successors are duly elected or appointed and qualified
in the manner provided in the Articles of Organization and By-Laws of the
Surviving Corporation, or as otherwise provided by law.

SECTION 1.05. Officers. The officers of Acquisition Sub at
the Effective Date shall, from and after the Effective Date, be the officers of
the Surviving Corporation and shall hold office from the Effective Date until
their respective successors are duly elected or appointed and qualified in the
manner provided in the Articles of Organization and By-Laws of the Surviving
Corporation, or as otherwise provided by law.

SECTION 1.06. Effective Date. The Merger shall become
effective at the time of filing of articles of merger (substantially in the
form set forth in Exhibit A annexed hereto) with the Secretary of State of the
Commonwealth of Massachusetts in accordance with the provisions of Section 78
of the MBCL (the "Articles of Merger"). The Articles of Merger shall be filed
with the Secretary of State of the Commonwealth of Massachusetts on the Closing
Date. The date and time when the Merger becomes effective shall be herein
referred to as the "Effective Date" and the "Effective Time", respectively.

SECTION 1.07. Additional Actions. If, at any time after the
Effective Date, the Surviving Corporation determines that any deeds, bills of
sale, assignments, assurances or any other acts or things are necessary or
desirable (a) to vest, perfect or confirm, of record or otherwise, in the
Surviving Corporation, its right, title or interest in, to or under any of the
rights, properties or assets of the Company or its Subsidiaries acquired or to
be acquired by reason of, or as a result of, the Merger, or (b) otherwise to
carry out the purposes of this Agreement, the Surviving Corporation and its
proper officers and directors shall be authorized to execute and deliver, in
the name and on behalf of the Company and its Subsidiaries, all such deeds,
bills of sale, assignments and assurances and to do, in the name and on behalf
of the Company and its Subsidiaries, all such other acts and things necessary
or desirable to vest, perfect or confirm any and all right, title or interest
in, to or under such rights, properties or assets in the Surviving Corporation
or otherwise to carry out the purposes of this Agreement.

SECTION 1.08. Company Common Stock, Preferred Stock and
Preference Stock. (a) Company Common Stock. (i) Each share of Common Stock
<PAGE> 12
3

of the Company, par value $1 per share (including Rights as defined in Section
2.02(a)) (the "Company Common Stock") actually issued and outstanding at the
Effective Date (except for Dissenting Shares, as defined in Section 1.10)
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into the right to receive $7.50 (the "Total Merger
Consideration").

(ii) Each share of Company Common Stock held by Parent or in
the Company's treasury at the Effective Date shall, by virtue of the Merger, be
canceled without payment of any consideration therefor and without any
conversion thereof.

(b) 5% Cumulative Preferred Stock. Each share of the
Company's 5% Cumulative Preferred Stock, par value $100 per share (the "5%
Stock"), actually issued and outstanding at the Effective Date, shall remain
issued and outstanding after the Merger and shall be called for redemption and
retirement as soon as practicable following the Merger (except for Dissenting
Shares, as defined in Section 1.10), in accordance with the terms of Section
5.16(a), at a price equal to $110, plus all accrued and unpaid dividends
thereon as of the date of redemption and retirement (the "5% Stock
Consideration"), in accordance with the terms of the 5% Stock.

(c) $1.85 Cumulative Convertible Preference Stock. Unless
called for redemption prior to the Closing pursuant to Section 5.16, each share
of the Company's $1.85 Cumulative Convertible Preference Stock, par value $1
per share (the "Preference Stock"), actually issued and outstanding at the
Effective Date (except for Dissenting Shares, as defined in Section 1.10)
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into the right to receive $20 plus all accrued and unpaid
dividends thereon as of the Effective Date (whether redeemed or converted, the
"Preference Stock Consideration").

SECTION 1.09. Conversion of Acquisition Sub Common Stock.
Each share of Common Stock, par value $1 per share, of Acquisition Sub (the
"Acquisition Sub Common Stock") issued and outstanding at the Effective Date
shall, by virtue of the Merger and without any action on the part of the holder
thereof, be converted into and exchangeable for one fully paid and
nonassessable share of Common Stock, par value $1 per share, of the Surviving
Corporation (the "Surviving Corporation Common Stock"). From and after the
Effective Date, each outstanding certificate theretofore representing shares of
Acquisition Sub Common Stock shall be deemed for all purposes to evidence
ownership of, and to represent the number of shares of, Surviving Corporation
Common Stock into which such shares of Acquisition Sub Common Stock shall have
been converted.

SECTION 1.10. Dissenting Shares. Notwithstanding anything in
this Agreement to the contrary, shares of Company Common Stock, 5% Stock and
Preference Stock issued and outstanding on the Effective Date (other than any
called for redemption pursuant to Section 5.16) which are held of record by
shareholders
<PAGE> 13
4

who shall not have voted such shares in favor of the Merger, if applicable, and
who shall have properly exercised rights to demand payment of the fair value of
such shares in accordance with Sections 86 through 98, inclusive, of the MBCL
("Dissenting Shares") shall not be converted into the right to receive the
consideration specified in Section 1.08(a), 1.08(b), or 1.08(c), respectively,
but the holders thereof instead shall be entitled to payment of the fair value
of such shares in accordance with the provisions of Sections 86 to 92,
inclusive, of the MBCL (the "Dissenting Consideration"); provided, however,
that (i) if such a holder fails to file a notice of election to dissent in
accordance with Section 86 of the MBCL or, after filing such notice of
election, subsequently delivers an effective written withdrawal of such notice
or fails to establish his entitlement to appraisal rights as provided in
Sections 87 through 98, inclusive, of the MBCL, if he or she be so required, or
(ii) if a court shall determine that such holder is not entitled to receive
payment for his shares or such holder shall otherwise lose his or her appraisal
rights, then in either of such cases, each share of Company Common Stock, 5%
Stock or Preference Stock, respectively, held of record by such holder or
holders shall automatically be converted into and represent only the right to
receive the Total Merger Consideration, the 5% Stock Consideration or the
Preference Stock Consideration, respectively, upon the surrender of the
certificate or certificates representing such Dissenting Shares. The Company
shall give Parent prompt notice of any demands received by the Company for
payment of the fair value of such shares, and Parent shall have the right to
participate in all the negotiations and proceedings with respect to such
demands. The Company shall not, except with the prior written consent of
Parent, make any payment (except to the extent that any such payment is made
pursuant to a court order) with respect to, or settle or offer to settle, any
such demands.

SECTION 1.11. Surrender of Shares. (a) At and after the
Effective Date, Parent shall make available on a timely basis, by transferring
to Chemical Bank (the "Paying Agent") for the benefit of former shareholders of
the Company, such funds as and when necessary to make the payments provided for
in Section 1.08 herein with respect to the outstanding shares of Company Common
Stock and Preference Stock (other than any called for redemption pursuant to
Section 5.16). The Paying Agent shall agree to hold such funds in trust for
the benefit of the former shareholders of the Company and deliver such funds in
accordance with the terms hereof and the terms of a Paying Agency Agreement to
be entered into by and between the Paying Agent and Parent.

(b) Prior to or at the Effective Date, the Paying Agent shall
mail or cause to be mailed to each record holder of an outstanding certificate
or certificates which, immediately prior to the Effective Date, represented
shares of Company Common Stock or Preference Stock (other than any called for
redemption pursuant to Section 5.16) (the "Certificates"), a form letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent) (the "Transmittal
<PAGE> 14
5

Letter") and instructions for use in effecting the surrender of the
Certificates for payment therefor. Upon surrender to the Paying Agent of a
Certificate, together with such Transmittal Letter duly executed, the holder of
such Certificate shall be entitled to receive in exchange for each share of
Company Common Stock or Preference Stock (other than any called for redemption
pursuant to Section 5.16) represented by such Certificate, the Total Merger
Consideration or Preference Stock Consideration, respectively, and such
Certificate shall forthwith be canceled upon receipt by the holder of such
Certificate of the Total Merger Consideration or Preference Stock
Consideration, respectively. No interest will be paid or accrued on the Total
Merger Consideration or Preference Stock Consideration payable upon the
surrender of such Certificates.

(c) If payment is to be made to a person other than the
person in whose name the Certificate surrendered in exchange therefor is
registered, it shall be a condition of payment of the Total Merger
Consideration or Preference Stock Consideration, as the case may be, that the
Certificate so surrendered be properly endorsed or accompanied by appropriate
stock powers, in either case signed exactly as the name of the record holder
appears on such Certificate, and is otherwise in proper form for transfer, and
that the Person requesting such payment shall pay any transfer or other taxes
required by law as a result of such payment to a Person other than the record
holder of the Certificate surrendered, or shall establish to Parent's
satisfaction that such tax has been paid or is not applicable.

(d) After the Effective Date, there shall be no further
transfers on the stock transfer books of the Surviving Corporation of the
shares of Company Common Stock or Preference Stock which are outstanding at the
Effective Date. If, after the Effective Date, Certificates are presented to
the Surviving Corporation or the Paying Agent for transfer, they shall be
canceled and there shall be issued to the transferee in exchange for each share
of Company Common Stock the Total Merger Consideration and in exchange for each
share of Preference Stock the Preference Stock Consideration in accordance with
Section 1.08 hereof.

(e) The consideration payable upon the surrender for exchange
of Certificates in accordance with the terms of this Article I shall be deemed
to have been paid in full satisfaction of all rights pertaining to the shares
of Company Common Stock or Preference Stock theretofore represented by such
Certificates, and there shall be no further registration of transfers on the
stock transfer books of the Surviving Corporation of the shares of Company
Common Stock or Preference Stock which were outstanding immediately prior to
the Effective Date.

(f) None of Parent, Acquisition Sub, the Company or the
Paying Agent shall be liable to any person in respect of any cash delivered to
a public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificates shall not have been surrendered prior to
seven years after the Effective
<PAGE> 15
6

Date (or immediately prior to such earlier date on which any payment pursuant
to this Article I would otherwise escheat to or become the property of any
Governmental Authority), the payment in respect of such Certificate shall, to
the extent permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person previously
entitled thereto.

SECTION 1.12. Certain Benefit Plans. (a) (i) With respect
to unexpired options ("Options"), whether or not exercisable at the Effective
Date, including stock appreciation rights relating thereto, outstanding on the
Effective Date which have been issued pursuant to the Company's 1982 Stock
Option Plan, as amended (the "1982 Stock Option Plan"), the Company's 1992
Stock Option Plan, as amended (the "1992 Stock Option Plan"), or the Company's
1992 Non-Employee Directors Stock Option Plan, as amended (the "Director Option
Plan"), each such Option with an exercise price less than the Total Merger
Consideration (an "Eligible Option") shall, by virtue of the Merger and without
any action on the part of the holder thereof, be converted into the right to
receive, for each share of Company Common Stock subject thereto, a cash payment
without interest equal to the Total Merger Consideration, less the per share
exercise price of each such Option. Such Options shall be canceled upon such
cash payment following the Merger.

(ii) Any Option with an exercise price equal to or greater
than the Total Merger Consideration (an "Ineligible Option") shall be canceled
upon the Effective Date without payment of any consideration.

(iii) The Company shall use its best efforts to amend each
outstanding Option issued under the 1982 Stock Option Plan, the 1992 Stock
Option Plan and the Director Option Plan to effect the transactions
contemplated by this Agreement, including the cancellation of the Options in
connection with the Merger in accordance with this Section 1.12.

(b) There are no shares of Company Common Stock held in
escrow pursuant to the Company's Long Term Incentive Compensation Plan (the
"LTIP").

(c) Each share of Company Common Stock issued by the Company
but not yet vested pursuant to the Company's Employees' Savings and Profit
Sharing Plan (the "Savings Plan") shall, in connection with the Merger, become
vested in the Person to whose account such share of Company Common Stock was
issued and converted into the right to receive the Total Merger Consideration
as provided in Section 1.08(a).

(d) Immediately following the Effective Date, the Company's
1982 Stock Option Plan, 1992 Stock Option Plan, Director Option Plan, LTIP and
Savings Plan shall be terminated and no further stock awards or stock options
shall be granted thereunder from and after the date of this Agreement.
<PAGE> 16
7

ARTICLE II

Representations and Warranties of the Company

The Company hereby represents and warrants to Parent and
Acquisition Sub as follows with respect to the Company and its Subsidiaries:

SECTION 2.01. Corporate Organization. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts with all requisite corporate power
and authority to own, operate and lease its properties and to carry on its
business as now being conducted. The Company is qualified to do business and
is in good standing in each jurisdiction set forth in Schedule 2.01, which are
the only jurisdictions in which such qualification is necessary except where
failure to be qualified could not reasonably be expected to have a Material
Adverse Effect. For purposes of this Agreement, a "Material Adverse Effect" is
(a) a material adverse effect on the business, assets, properties, condition
(financial or other) or results of operations of the Company and its
Subsidiaries taken as a whole or the Surviving Corporation and its Subsidiaries
taken as a whole or (b) a material adverse effect on the ability of the Company
to carry out the transactions contemplated by this Agreement without
significant unanticipated delay or expense. For purposes of this Agreement, a
"Subsidiary" of any Person is any corporation of which a majority of all
outstanding shares of capital stock (the holders of which are ordinarily and
generally entitled to vote in the election of a majority of the members of the
board of directors thereof) is owned, directly or indirectly, by such Person
and/or other Subsidiaries of such Person. The Company has delivered to Parent
complete and correct copies of its Articles of Organization and By-Laws, as
amended to the date hereof.

SECTION 2.02. Capitalization of the Company. (a) The
authorized capital stock of the Company consists of 15,000,000 shares of
Company Common Stock, 15,000 shares of 5% Stock and 1,500,000 shares of
Preference Stock. As of February 29, 1996, 4,123,178 shares of Company Common
Stock, 5,820 shares of 5% Stock and 814,300 shares of Preference Stock were
issued and are outstanding, 275,100 shares of Company Common Stock were held in
the Company's treasury and 687,197 shares of Company Common Stock were reserved
for issuance in connection with the rights (the "Rights") to purchase shares of
Company Common Stock issued pursuant to the Rights Agreement dated as of
November 25, 1986 (as amended from time to time, the "Rights Agreement")
between the Company and The First National Bank of Boston (the "Rights Agent").
The Company has delivered to Parent a complete and correct copy of the Rights
Agreement as amended and supplemented to the date hereof. All issued and
outstanding shares of Company Common Stock, 5% Stock and Preference Stock are
duly and validly issued and outstanding, fully paid and
<PAGE> 17
8

nonassessable. The aggregate amount of accrued and unpaid dividends on the 5%
Stock is zero and on the Preference Stock is $1,506,455.

(b) As of the date hereof, there are outstanding unexercised,
unexpired Options to purchase 288,100 shares of Company Common Stock, in each
case with the exercise or "strike" price and other terms as set forth on
Schedule 2.02 hereto.

(c) Except as set forth in this Section 2.02 or on Schedule
2.02 hereto, there are no other shares of capital stock of the Company, or
securities convertible into or exchangeable or exercisable for shares of
capital stock of the Company or any of its Subsidiaries, outstanding, and there
are no outstanding options, warrants, rights, contracts, commitments,
understandings, arrangements or claims of any character by which the Company or
any Subsidiary is or may become bound to issue, transfer, sell, repurchase or
otherwise acquire or retire any shares of capital stock or other ownership
interest of the Company or any Subsidiary, or any securities convertible into
or exchangeable or exercisable for any such shares or other ownership interest
(all of the foregoing being called "Conversion Rights") and, except as set
forth in Section 2.02(a) and as reserved for issuance upon exercise of the
Options described in Section 2.02(b) or the other Conversion Rights described
in Schedule 2.02, no shares of capital stock of the Company are reserved for
issuance. There are no voting trusts or other agreements or understandings to
which the Company is a party with respect to the voting of the capital stock of
the Company or any Subsidiary. Following consummation of the Merger no holder
or beneficiary of any Conversion Rights shall be entitled to receive any
securities of the Surviving Corporation or any other consideration not
expressly contemplated by this Agreement.

SECTION 2.03. Subsidiaries. (a) Schedule 2.03 hereto sets
forth each Subsidiary and the jurisdiction of incorporation of such Subsidiary.
Schedule 2.03 also sets forth each inactive Subsidiary (an "Inactive
Subsidiary") of the Company. No Inactive Subsidiary has any assets or
liabilities valued in excess of $5,000 or any business operations or real
property nor has any Inactive Subsidiary conducted any business during the
two-year period prior to the date of this Agreement. Except as disclosed on
Schedule 2.03 hereto, all of the outstanding shares of capital stock and other
ownership interest of the Company's Subsidiaries are owned, directly or
indirectly, by the Company. Except as disclosed on Schedule 2.03, none of the
shares or other ownership interests of the Subsidiaries owned or held by the
Company, directly or indirectly, is subject to any pledge, Lien (as defined
below) or claim of any kind.

(b) Each Subsidiary (excluding each Inactive Subsidiary) is
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of incorporation of each such Subsidiary, with all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now being conducted. Each Subsidiary (excluding each
Inactive Subsidiary) is also
<PAGE> 18
9

qualified to do business and is in good standing in each jurisdiction in which
such qualification is necessary, except where failure to be so qualified would
not have a Material Adverse Effect. The Company has delivered to Parent
complete and correct copies of the respective articles or certificates of
incorporation or organization or By-Laws, as amended to the date hereof, of
each of its Subsidiaries.

(c) Except for its Subsidiaries, the Company does not
directly or indirectly own any capital stock of or other equity interest in any
corporation, partnership or other person and neither the Company nor any of its
Subsidiaries is a member of or participant in any partnership, joint venture or
similar person.

SECTION 2.04. Authorization. (a) The Company has requisite
corporate power and authority to execute and deliver this Agreement, and
subject to the approval by the shareholders of the Company, to execute, deliver
and file the Articles of Merger and, subject to the satisfaction of the
conditions set forth herein and therein, to consummate the transactions
contemplated hereby and thereby.

(b) This Agreement has been approved by the Board of
Directors of the Company and, except for the approval of the shareholders of
the Company, no other corporate proceeding on the part of the Company is
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. The affirmative vote of the holders of (i) two-thirds of
the outstanding shares of Company Common Stock and (ii) unless called for
redemption pursuant to Section 5.16, two-thirds of the outstanding shares of
the Preference Stock, approving this Agreement are the only votes of the
holders of any class or series of the Company's capital stock necessary to
approve this Agreement and the transactions contemplated by this Agreement.

(c) This Agreement has been duly and validly executed and
delivered by the Company and is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, and the Plan of
Merger when executed and delivered pursuant hereto will be a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, except in each case as such enforceability may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or similar laws
in effect now or hereafter in effect relating to creditors' rights generally,
and by equitable principles (whether considered in a proceeding at law or in
equity).

(d) The transfer of the Company's granule crushing equipment
to the Company's Wrentham and Franklin, MA quarry (at least with respect to the
"French parcel" of such quarry) and its operation at such location will not
conflict with, constitute a default under, result in the termination or in a
right of termination of, or violate or be in conflict with, provide a basis for
increased rights under, or result in a breach of any term or provision of, any
term or provision of any Material Contract.
<PAGE> 19
10

SECTION 2.05. Absence of Conflicts; Consents. Except as set
forth in Schedule 2.05, neither the execution and delivery by Company of this
Agreement and the Articles of Merger nor the consummation by the Company of
the transactions contemplated hereby and thereby will:

(a) assuming the approvals set forth in Section 2.04(b) have
been obtained, conflict with or result in a breach of any provision of
the respective articles or certificate of incorporation or
organization or By-Laws of the Company or any Subsidiary;

(b) to the knowledge of the Company, result in the creation of
any lien, mortgage, agreement, right of way, charge, option, security
interest, claim, restriction, easement, covenant, lease or encumbrance
("Lien") upon any of the properties of the Company or any of its
Subsidiaries;

(c) with or without giving of notice or the passage of time,
or both, violate, or conflict with, or constitute a default under, or
result in the termination or in a right of termination of, violate or
be in conflict with, result in a breach of any term or provision of,
or constitute a default under, or accelerate or permit the
acceleration of the performance required by, or give any other natural
person, corporation, trust, association, company, partnership, joint
venture or other entity or any government, governmental agency,
instrumentality or political subdivision ("Person") a basis for
increased rights or termination or nonperformance under, or require
any consent, authorization or approval under, any term or provision of
any material Lien or any Material Contract to which the Company or any
Subsidiary is a party or by which any of them are or their respective
properties are subject or bound;

(d) subject to the approval of the Merger by the Company's
shareholders, to the knowledge of the Company, violate any provision
of, or, except as set forth in Section 2.05(e), require any consent,
authorization or approval under, any statute, law, ordinance, or
administrative rule or regulation, Permit, order or license
(collectively, but excluding Environmental Laws, "Applicable Laws") of
any governmental agency, body or instrumentality (whether Federal,
state, local or foreign) ("Governmental Authority"), or any judicial,
administrative or arbitration order, award, judgment, writ, injunction
or decree (collectively, "Judgment") in each case applicable to the
Company or any Subsidiary; or

(e) require any consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority,
to be made or obtained by or on behalf of the Company except (i) as
required by the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder (the "Exchange Act"),
(ii) the filing of the Articles of
<PAGE> 20
11

Merger and other appropriate merger documents, if any, as required by
the MBCL, or in connection with the maintenance of qualification to do
business in other jurisdictions, such other jurisdictions, and (iii)
filings with the Federal Trade Commission ("FTC") and with the
Antitrust Division of the U.S. Department of Justice (the "Antitrust
Division") pursuant to Title II of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, and the rules and regulations thereunder
(the "HSR Act").

SECTION 2.06. Compliance with Laws. Neither the Company nor
any Subsidiary has been or is presently in violation of any provision of their
respective certificates or articles of organization or incorporation or
By-Laws, or of any Applicable Law or Judgment that would have a Material
Adverse Effect. Except where the failure thereof would not cause a Material
Adverse Effect, the Company and its Subsidiaries possess, and are in compliance
in all material respects with the terms and provisions of all licenses,
permits, certificates, authorizations, rights and other approvals of
Governmental Authorities ("Permits") necessary for the operation of the
business of the Company and its Subsidiaries. Except as set forth in Schedule
2.09 or 2.18, neither the Company nor any Subsidiary has been given written
notice by any Governmental Authority of, or to the knowledge of Company, is
under investigation by any Governmental Authority with respect to, any
violation of any Applicable Law, Judgment or Permit. This Section 2.06 does
not relate to environmental representations and warranties, which matters are
exclusively the subject of Section 2.18.

SECTION 2.07. Financial Statements. (a) Set forth on
Schedule 2.07 are drafts of the consolidated balance sheets of Company and its
Subsidiaries as at December 31, 1994, and December 31, 1995, and the related
consolidated statements of income, stockholders' equity and cash flows for the
respective years then ended, including the notes thereto, and the draft report
thereon of Price Waterhouse, independent certified public accountants (the
"Company Financial Statements"). The Company Financial Statements present
fairly in all material respects the consolidated financial position and the
results of operations of the Company and its Subsidiaries as of the dates and
for the periods indicated on the Company Financial Statements, in each case in
conformity with generally accepted accounting principles ("GAAP"), consistently
applied during such periods. Except as expressly contemplated or permitted by
this Agreement or disclosed in the Schedules hereto, to the knowledge of the
Company, the Company and its Subsidiaries do not have any material liabilities
of any nature (whether accrued, absolute, contingent, unasserted or otherwise)
except (1) as disclosed, reflected or reserved against in the balance sheet
(the "Balance Sheet") dated December 31, 1995 (the "Balance Sheet Date"),
included in the Company Financial Statements and the notes thereto, and (2) as
incurred in the ordinary course of business consistent with past practice and
not in violation of this Agreement.
<PAGE> 21
12

(b) The inventory of the Company and its Subsidiaries,
whether reflected on the Balance Sheet or subsequently acquired, is, and will
be as of the Effective Date, generally of a quality and quantity usable and
saleable consistent in all material respects with past practice, in the
ordinary course of business. The inventory of the Company and its Subsidiaries
is reflected on the Balance Sheet and in their respective books and records in
accordance with GAAP applied on a basis consistent with past practice.

(c) All accounts receivable of the Company and its
Subsidiaries, whether reflected on the Balance Sheet or subsequently created,
have arisen from bona fide transactions in the ordinary course of business. To
the knowledge of the Company, all accounts receivable reflected on the Balance
Sheet are good and collectible at the aggregate recorded amounts thereof, net
of any applicable reserves for doubtful accounts reflected on the Balance Sheet
and all customer accounts receivable created since the Balance Sheet Date are
and will be as of the Effective Date good and collectible at the aggregate
recorded amounts thereof, net of any applicable reserves for doubtful accounts
reflected on the Balance Sheet or subsequently created consistent with past
practice and experience.

SECTION 2.08. Absence of Material Changes. Except as set
forth in Schedule 2.08 or as permitted by Section 5.06 or set forth in Schedule
5.06 or as expressly contemplated or permitted by this Agreement, since the
Balance Sheet Date, each of the Company and its Subsidiaries has conducted its
business in the ordinary course, and there has not been (and it is not
reasonably expected there will be) (i) any event, change or circumstance
causing, or reasonably anticipated to cause in the future, any Material Adverse
Effect, except as otherwise disclosed to Parent in writing prior to the date of
this Agreement, (ii) any declaration, setting aside or payment of any dividend
(whether in cash, stock or property) with respect to any of the Company's
capital stock, other than the minimum required dividends declared on the 5%
Stock or the Preference Stock, (iii) (x) any granting by the Company or any of
its Subsidiaries to any executive officer or director of the Company or any of
its Subsidiaries of any increase in compensation, except as was required under
employment agreements in effect as of the Balance Sheet Date, (y) any granting
by the Company or any of its Subsidiaries to any such executive officer or
director of any increase in severance or termination pay, except as was
required under employment, severance or termination agreements in effect as of
the Balance Sheet Date or (z) any entry by the Company or any of its
Subsidiaries into any employment, severance or termination agreement with any
such executive officer or director, (iv) any damage, destruction or loss,
whether or not covered by insurance, that has or could have a Material Adverse
Effect, (v) any change in accounting methods, principles or practices by the
Company materially affecting its assets, liabilities or business, except
insofar as may have been required by a change in GAAP or (vi) any other action
that would be prohibited by Section 5.06 on and after the date of this
Agreement.
<PAGE> 22
13

SECTION 2.09. Litigation. Except as set forth in Schedule
2.09 and other than routine warranty claims against the Company that do not in
the aggregate exceed in any material respect the level of such claims
experienced historically by the Company in the ordinary course, neither the
Company nor any Subsidiary is engaged in, and there is not to the knowledge of
the Company pending, nor has the Company or any Subsidiary received written
notice of, any legal action, suit, investigation, inquiry or proceeding by any
Governmental Authority or other Person ("Legal Action").

SECTION 2.10. Patents and Trademarks. To the knowledge of
the Company, the Company and its Subsidiaries own all patents, trademarks,
service marks, trade names, copyrights, trade secrets, information, proprietary
rights and processes necessary for their business as now conducted without any
conflict with or infringement of the rights of others. Except as set forth in
Schedule 2.10, there are no outstanding options, licenses or agreements of any
kind relating to the foregoing, nor is the Company nor any Subsidiary bound by
or a party to any material options, licenses or agreements of any kind with
respect to the patents, trademarks, service marks, trade names, copyrights,
trade secrets, information, proprietary rights and processes of any other
Person. Except as set forth in Schedule 2.10 or relating to any matter that
has been resolved or that the Company reasonably believes has been abandoned,
none of the Company nor any Subsidiary has received any written communications
alleging that the Company or any Subsidiary has violated any of the patents,
trademarks, service marks, trade names, copyrights or trade secrets or other
proprietary rights of any other Person.

SECTION 2.11. Material Contracts; Permits. Schedule 2.11(a)
sets forth a complete and accurate list of any of the following to which the
Company or any Subsidiary is a party or by which Company or any Subsidiary is
bound (collectively, "Material Contracts"):

(a) all deeds, indentures, leases, subleases or other
instruments by which an ownership, leasehold or other interest in real
property is held by the Company or any Subsidiary;

(b) all contracts, commitments or agreements, including
contracts or licenses pertaining to the payment of royalties (but
excluding customer purchase orders, purchase orders for raw materials
and warranties), to the extent such agreements include provisions that
do or could involve payments or commitments (whether fixed or
contingent) to or from the Company or any Subsidiary (i) for an amount
(or potential amount) in excess of $200,000 or (ii) have a term longer
than twelve (12) months in duration (except for such contracts,
commitments or agreements terminable by the Company or the appropriate
Subsidiary of the Company without penalty upon notice of 90 days or
less);
<PAGE> 23
14

(c) all written management, compensation or employment
contracts or contracts entered into with any executive officer or
director of the Company or any Subsidiary;

(d) all contracts or agreements under which the Company or any
Subsidiary has any outstanding indebtedness, obligation or liability
for borrowed money or the deferred purchase price of property or has
the right or obligation to incur any such indebtedness, obligation or
liability, in each case in an amount greater than $200,000;

(e) all bonds or agreements of guarantee or indemnification in
which the Company or any Subsidiary acts as surety, guarantor or
indemnitor with respect to any obligation (fixed or contingent) in an
amount or potential amount greater than $200,000;

(f) all secrecy, noncompete or other agreements which (i)
restrict the right of the Company or any Subsidiary to engage in any
business reasonably related to its present activities or (ii) would
restrict the right of Parent to engage in any business after the
consummation of the transactions contemplated by this Agreement;

(g) all current bank accounts that contain balances and safe
deposit arrangements;

(h) all agreements relating to preemptive or other
preferential rights relating to capital stock, restrictions on the
disposition of capital stock and registration rights;

(i) all partnership and joint venture agreements;

(j) all agreements relating to material business acquisitions
or dispositions during the last five years, including any separate tax
or indemnification agreements; and

(k) all material customer and supply agreements and all
material sales representative, marketing, agency or distributorship
agreements, to the extent such agreements include provisions that do
or could involve payments or commitments (whether fixed or contingent)
to or from the Company or any Subsidiary (i) for an amount in excess
of $200,000 or (ii) have a term (including renewals that do not
require the Company's or a Subsidiary's consent) longer than twelve
months in duration (except for such contracts, commitments or
agreements terminable by the Company or the appropriate Subsidiary of
the Company without penalty upon notice of 90 days or less).
<PAGE> 24
15

Except as set forth on Schedule 2.11(a), (i) neither the
Company nor any Subsidiary is in default under the terms of any Material
Contract, which default permits the other party to adversely alter or terminate
any rights of the Company or any Subsidiary or accelerate the obligations of
the Company or any Subsidiary under such Material Contract or to collect
damages, (ii) to the knowledge of the Company, no other party thereto is in
default under the terms of any Material Contract and (iii) each Material
Contract is in full force and effect.

In order for the Company or any Subsidiary to perform its
payment obligations noted under each of the Material Contracts set forth on
Schedule 2.11(b), the only required payment will be the payment of the
outstanding principal amount (and accrued interest thereon) owed by the Company
under each such Material Contract which as of the date of this Agreement is set
forth on Schedule 2.11(b) for each such Material Contract, without the payment
of any premium or penalty, other than accrued interest or default interest.
Upon the making of such payment under each such Material Contract, the Company
will have no further obligation or liability under any such Material Contract,
except for immaterial expenses relating to the termination of such Material
Contracts.

SECTION 2.12. Title to Properties and Related Matters. (a)
Schedule 2.12(a) sets forth all of the real property owned by the Company and
each Subsidiary (the "Owned Real Property"). Schedule 2.12(b) sets forth all
of the real property and interests in real property leased by the Company and
each Subsidiary (the "Leased Real Property", and together with the Owned Real
Property, the "Company Property"). Each of the Company or its Subsidiaries, as
the case may be, has good and marketable fee title to the Owned Real Property,
subject only to Permitted Liens (as defined in Section 2.12(b) below). Each of
the Company or its Subsidiaries, as the case may be, has a valid and existing
leasehold interest in all Leased Real Property, subject only to Permitted Liens
(as defined in Section 2.12(b) below).

(b) All Company Property and personal properties owned by the
Company or any Subsidiary are owned free and clear of all Liens (other than
mortgages securing the Company's existing credit facility described in Schedule
2.11(b)) or leased free and clear of all Liens, except for (A) Liens for taxes
and assessments or governmental charges or levies which are not at the time of
Closing due or payable, (B) Liens in respect of pledges or deposits under
workers' compensation laws or similar legislation, carriers', warehousemen's,
mechanics', laborers' and materialmen's and similar Liens, which have been
incurred in the ordinary course of business, so long as the obligations secured
by such Liens are not then delinquent, (C) Liens incidental to the conduct of
the business of the Company and its Subsidiaries (other than arising out of
claims of infringement) which were not incurred in connection with the
borrowing of money or the obtaining of advances or credits and which do not
individually or in the aggregate materially detract from the
<PAGE> 25
16

value or materially impair the use and operation of the Company Property to
which it relates or the value and operation of the business of the Company as
presently conducted, (D) covenants, conditions, restrictions, easements and
other similar matters of record existing as of the Effective Date which do not,
individually or in the aggregate, impair the use and operation of the Company
Property to which it relates in the business of the Company as presently
conducted and (E) Liens set forth on Schedule 2.18 arising pursuant to
Environmental Laws (the liens described in the foregoing clauses (A), (B), (C),
(D) and (E) being "Permitted Liens") and (ii) the Owned Real Property and
personal properties owned by the Company or any Subsidiary are not subject to
any Liens, building or use restrictions, exceptions, variances, reservations or
limitations of any nature whatsoever which interfere with or are violated by
the existence of the improvements thereon or the current use and operation of
each such Owned Real Property or personal properties, respectively, to which it
relates in the business of the Company as currently conducted.

SECTION 2.13. Taxes. (a) For purposes of this Agreement,
(A) "Tax" or "Taxes" shall mean all Federal, state, provincial, county, local,
municipal, foreign and other taxes, assessments, duties or similar charges of
any kind whatsoever, including all corporate franchise, income, sales
(including bulk sales), use, ad valorem, intangibles, receipts, value added,
profits, license, withholding, payroll, employment, excise, premium, real
property, personal property, customs, net worth, estimated, capital, gains,
transfer, stamp, documentary, social security, alternative minimum, accumulated
earnings, goods and services, recapture, recording, severance, environmental
(including but not limited to, taxes under Section 59A of the Code), occupation
and other taxes, and including any interest, penalties and additions imposed
with respect to such amounts; (B) "Code" shall mean the Internal Revenue Code
of 1986, as amended, and reference to any Section of the Code shall refer to
that Section in effect at the date hereof; (C) "Taxing Authority" shall mean
any domestic, foreign, federal, national, state, provincial, county or
municipal or other local government, any subdivision, agency, commission or
authority thereof, or any quasi-governmental body exercising any taxing
authority or any other authority exercising Tax regulatory authority; and (D)
"Return" or "Returns" shall mean all returns, declarations of estimated tax
payments, reports, estimates, information returns and statements, including any
related or supporting information filed with respect to any of the foregoing,
maintained, filed or to be filed with any Taxing Authority in connection with
the determination, assessment, collection or administration of any Taxes.

(b) Except as set forth on Schedule 2.13, the Company and
each of the Subsidiaries has timely filed or will timely file, as the case may
be, with the appropriate Taxing Authority all Returns required to be filed on
or prior to the date hereof or the Closing Date, as the case may be, and each
such Return was or will be, as the case may be, complete and correct in all
material respects at the time of filing.
<PAGE> 26
17

(c) Except as set forth on Schedule 2.13, all Taxes
(including Taxes for which no Returns are required to be filed and including
payroll and wage withholding Taxes) of the Company and any of the Subsidiaries
or for which the Company or any of the Subsidiaries is or could otherwise be
held liable, or which are or could otherwise become chargeable as an
encumbrance upon any property or assets of the Company or any of the
Subsidiaries ("Covered Taxes"), have been duly and timely paid. The amount of
"accrued Taxes" shown on the Balance Sheet adequately reflects the liability
for unpaid Taxes (including deferred Taxes) of Company and the Subsidiaries as
of the Balance Sheet Date.

(d) Except as set forth on Schedule 2.13, the Company has
made available for inspection by Parent (A) complete and correct copies of all
Returns of the Company and each of the Subsidiaries, with respect to Federal,
state, provincial, county, local, municipal, foreign and other income, profits,
corporate franchise, receipts, sales, excise, property, net worth and all other
material Taxes, that are or have been required to be filed (except as noted in
(b) above) for taxable periods ending with or within the last five calendar
years and for such longer period as Parent has requested not to exceed the
period of the relevant statute of limitations and (B) complete and correct
copies of all ruling requests, private letter rulings, revenue agent reports,
information document requests and responses thereto, notices of proposed
deficiencies, deficiency notices, applications for changes in method of
accounting, protests, petitions, closing agreements, settlement agreements, and
any similar documents submitted by, received by or agreed to by or on behalf of
the Company or any of the Subsidiaries and relating to material Covered Taxes.

(e) Except as set forth on Schedule 2.13, no liens for Taxes
exist with respect to any of the assets or properties of any of the
Subsidiaries or Company. The Returns of the Company and each of the
Subsidiaries with respect to Federal income Taxes have been examined by the
Internal Revenue Service, or the statute of limitations with respect to the
relevant Tax liability has expired, for all taxable periods through and
including the year ended December 31, 1982. All Returns with respect to state,
county, local, municipal, provincial, foreign and other income, profits,
corporate franchise, receipts, sales, excise, property, net worth, and capital
Taxes, and with respect to all other material Taxes, have been examined by the
appropriate Taxing Authority, or the statute of limitations with respect to the
relevant Tax liability has expired, for all taxable periods through and
including the taxable period listed with respect to each such jurisdiction.
Except as set forth on Schedule 2.13, each deficiency resulting from any audit
or examination
<PAGE> 27
18

relating to Covered Taxes by any Taxing Authority has been paid and no material
issues were raised in writing by the relevant Taxing Authority during any such
audit or examination that might apply to taxable periods other than the taxable
period to which such audit or examination related. Except as set forth on
Schedule 2.13, (A) no Returns with respect to Federal income Taxes are
currently under audit or examination by the Internal Revenue Service and any
other Taxing Authority, (B) no audit or examination relating to Covered Taxes
is currently being conducted by the Internal Revenue Service or any other
Taxing Authority and (C) neither the Internal Revenue Service nor any other
Taxing Authority has given notice in writing that it will commence any such
audit or examination.

(f) Except as set forth in Schedule 2.13, no Taxing Authority
is now asserting (in writing), or, to the knowledge of the Company or any of
the Subsidiaries, threatening to assert (in writing), any deficiency or claim
for Covered Taxes or any adjustment to any item of income, gain, deduction,
loss, credit, or tax basis entering into the computation of Covered Taxes and
there is no reasonable basis for any such assertion.

(g) Except as set forth in Schedule 2.13, (A) no person has
made with respect to the Company or any of the Subsidiaries, or with respect to
any property held by the Company or any of the Subsidiaries, any consent under
Section 341 of the Code, (B) no property of Company or any of the Subsidiaries
constitutes "tax-exempt use property" (as defined in Section 168(h) of the
Code), (C) neither the Company nor any of the Subsidiaries is a party to any
lease made pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954,
as amended and in effect prior to the date of enactment of the Tax Equity and
Fiscal Responsibility Act of 1982 and (D) none of the assets of Company or any
of the Subsidiaries is subject to a lease under Section 7701(h) of the Code or
under any predecessor.

(h) There is no agreement or other document extending, or
having the effect of extending, the period of assessment or collection of any
Covered Taxes and no unrevoked power of attorney with respect to any Covered
Taxes has been executed or filed with the Internal Revenue Service or any other
Taxing Authority.

(i) The Company has never been a member of any affiliated,
consolidated, combined, unitary or aggregate group for purposes of filing
Returns or paying Taxes at any time.

(j) Except as set forth in Schedule 2.13, none of the Company
or any of the Subsidiaries is a party to or is bound by any Tax sharing
agreements (whether formal or informal) with any of its affiliates, or with any
Taxing Authority.

(k) None of the Company or any of the Subsidiaries will be
required to include in a taxable period on or after the Closing Date taxable
income attributable to income that economically accrued in a taxable period
ending on or before the Closing Date, including, without limitation, as a
result of the installment method of accounting, the completed contract method
of accounting or the cash method of accounting.
<PAGE> 28
19

(l) Except as set forth on Schedule 2.13, none of the Company
or any of the Subsidiaries will be required in a taxable period beginning on or
after the Closing Date to include any amount in income pursuant to Section 481
of the Code (or any comparable provisions of state, local or foreign law), by
reason of a change in accounting methods or otherwise, as a result of actions
taken prior to the Closing Date.

(m) Schedule 2.13 lists each state, county, local, municipal
or foreign jurisdiction in which Company or any of the Subsidiaries files, has
filed, is required to file or has been required to file a Return or is or has
been liable for Tax on a "nexus" basis for the current and preceding five
years.

(n) The Company is not, and has not been during the five-year
period ending on the date hereof or the Closing Date, as the case may be, a
"United States real property holding corporation" within the meaning of Section
897 of the Code.

(o) Schedule 2.13 provides true and correct descriptions of
the following: items for which amounts for taxes have been reserved on the
Balance Sheet in excess of reserves necessary to currently pay its operating
tax liabilities. The Company has a consolidated net operating loss carryover
for regular Federal income tax purposes as of December 31, 1995, of
approximately $44 million. The Company has no material net operating loss
carryovers in states other than New York (in which it has a net operating loss
carryover of $198,000 as of December 31, 1995). The Company has tax credit
carryforwards as of December 31, 1995, of approximately $1.2 million for
regular Federal income tax purposes, and no tax credit carryforwards for state
tax purposes. In addition, the Company had approximately $1.1 million of
minimum tax carryovers.

(p) Schedule 2.13 sets forth the Company's best estimates,
made in good faith, of the excess loss accounts for the Company and its
Subsidiaries as of December 31, 1995. The Company estimates in good faith that
neither it nor its Subsidiaries had positive balances in any deferred
intercompany gain accounts as of December 31, 1995.

(q) The schedules of the Company's best estimates, made in
good faith, of the temporary and permanent differences as of December 31, 1995,
previously submitted to the Company are true, correct and complete in all
materials respects.

(r) None of the Company, any of the Subsidiaries or any other
affiliate of the Company has made any election under Section 13261(g)(2) or
Section 13261(g)(3) of the Revenue Reconciliation Act of 1993.
<PAGE> 29
20

(s) None of the Company, any of the Subsidiaries or any other
affiliate of the Company has available any foreign tax credits.

SECTION 2.14. Labor Agreements. Except as identified on
Schedule 2.14, neither the Company nor any Subsidiary is a party to any union,
collective bargaining, works council or similar agreement or arrangement.

SECTION 2.15. Benefit Plans. (i) Schedule 2.15 is a list of
each "employee pension benefit plan" (as defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
(hereinafter a "Pension Plan"), "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA, hereinafter a "Welfare Plan"), and each other plan,
arrangement or policy relating to stock options, stock purchases, compensation,
deferred compensation, severance, fringe benefits or other employee benefits,
in each case maintained or contributed to, or required to be maintained or
contributed to, by the Company and its Subsidiaries or any other person or
entity that, together with the Company, is treated as a single employer under
Section 414(b), (c), (m) or (o) of the Code (each a "Commonly Controlled
Entity") for the benefit of any present or former employees of the Company or
any of its Subsidiaries (all the foregoing being herein called "Benefit
Plans"). The Company has made available to Parent true, complete and correct
copies of (1) each Benefit Plan, (2) the most recent annual report on Form 5500
as filed with the Internal Revenue Service with respect to each applicable
Benefit Plan, (3) the most recent summary plan description (or similar
document) with respect to each applicable Benefit Plan and (4) each trust
agreement and insurance or annuity contract relating to any Benefit Plan.

(ii) Except as disclosed in Schedule 2.15, to the knowledge
of the Company, each Benefit Plan has been administered in all material
respects in accordance with its terms. Except as disclosed in Schedule 2.15,
to the knowledge of the Company, the Company, its Subsidiaries and all the
Benefit Plans are in compliance in all material respects with the applicable
provisions of ERISA, the Code, and all other Applicable Laws. Except as
disclosed in Schedule 2.15, to the knowledge of the Company, there are no
investigations by any governmental agency, termination proceedings or other
claims (except claims for benefits payable in the normal operation of the
Benefit Plans), suits or proceedings against or involving any Benefit Plan or
asserting any rights to or claims for benefits under any Benefit Plan that
could give rise to a Material Adverse Effect, and to the knowledge of the
Company, there are not any facts that could give rise to a Material Adverse
Effect in the event of any such investigation, claim, suit or proceeding.

(iii) Except as disclosed on Schedule 2.15, to the knowledge
of the Company: (1) all contributions to the Benefit Plans required to be made
by the Company or any of its Subsidiaries in accordance with the terms of the
Benefit Plans, any applicable collective bargaining agreement and, when
applicable, Section 302 of
<PAGE> 30
21

ERISA or Section 412 of the Code, have been timely made, (2) there has been no
application for or waiver of the minimum funding standards imposed by Section
412 of the Code with respect to any Benefit Plan that is a Pension Plan,
excluding any Pension Plan which is a multiemployer pension plan as defined in
Section 4001(a)(3) of ERISA (hereinafter a "Company Pension Plan") and (3) no
Company Pension Plan had an "accumulated funding deficiency" within the meaning
of Section 412(a) of the Code as of the end of the most recently completed plan
year. All such contributions to the Benefit Plans for any period ending before
the Balance Sheet Date are properly accrued and reflected in the Balance Sheet
and such contributions since such Balance Sheet Date will be reflected on
subsequent balance sheets.

(iv) Except as disclosed on Schedule 2.15, to the knowledge
of the Company, (1) each Company Pension Plan that is intended to be a
tax-qualified plan has been the subject of a determination letter from the
Internal Revenue Service to the effect that such Company Pension Plan and each
related trust is qualified and exempt from Federal income taxes under Sections
401(a) and 501(a), respectively, of the Code, (2) no such determination letter
has been revoked, and revocation has not been threatened, (3) no event has
occurred and no circumstances exist that would adversely affect the
tax-qualification of such Company Pension Plan and (4) such Company Pension
Plan has not been amended since the effective date of its most recent
determination letter in any respect that might adversely affect its
qualification, materially increase its cost or require security under Section
307 of ERISA. The Company has made available to Parent a copy of the most
recent determination letter received with respect to each Company Pension Plan
for which such a letter has been issued, as well as a copy of any pending
application for a determination letter. The Company has also provided to
Parent a list of all Company Pension Plan amendments as to which a favorable
determination letter has not yet been received.

(v) Schedule 2.15 discloses whether: (1) to the knowledge of
the Company, any non-exempt "prohibited transaction" (as defined in Section
4975 of the Code or Section 406 of ERISA) has occurred that involves the assets
of any Benefit Plan; (2) to the knowledge of the Company, any Company Pension
Plan has been terminated or has been the subject of a "reportable event" (as
defined in Section 4043 of ERISA and the regulations thereunder) for which the
30-day notice requirement has not been waived by the Pension Benefit Guaranty
Corporation ("PBGC"); and (3) to the knowledge of the Company, the Company, any
of its Subsidiaries or any trustee, administrator or other fiduciary of any
Benefit Plan has engaged in any transaction or acted in a manner that could, or
has failed to act so as to, subject the Company, any such Subsidiary or any
trustee, administrator or other fiduciary to any material liability for breach
of fiduciary duty under ERISA or any other applicable law.

(vi) Except as disclosed on Schedule 2.15, to the knowledge
of the Company, as of the most recent valuation date for each Company Pension
Plan that is a "defined benefit pension plan" (as defined in Section 3(35) of
ERISA (hereinafter a
<PAGE> 31
22

"Defined Benefit Plan")), there was not any amount of "unfunded benefit
liabilities" (as defined in Section 4001(a)(18) of ERISA) under such Defined
Benefit Plan, and the Company is not aware of any facts or circumstances that
would materially change the funded status of any such Defined Benefit Plan.
The Company has made available to Parent the most recent actuarial report or
valuation with respect to each Defined Benefit Plan.

(vii) Except as disclosed on Schedule 2.15, to the knowledge
of the Company, no Commonly Controlled Entity has incurred any liability to a
Pension Plan (other than for contributions not yet due) or to the PBGC (other
than for the payment of premiums not yet due) that, when aggregated with other
such liabilities, would result in a Material Adverse Effect to the Company,
which liability has not been fully paid as of the date hereof if due and
payable.

(viii) No Commonly Controlled Entity has (a) engaged in a
transaction described in Section 4069 of ERISA that could subject the Company
to a material liability at any time after the date hereof or (b) acted in a
manner that could, or failed to act so as to, result in material fines,
penalties, taxes or related charges under (x) Section 502(c), (i) or (l) of
ERISA, (y) Section 4071 of ERISA or (z) Chapter 43 of the Code.

(ix) Except as disclosed in Schedule 2.15, to the knowledge
of the Company, no Commonly Controlled Entity has announced an intention to
withdraw, but has not yet completed withdrawal, from a "multiemployer pension
plan" (as defined in Section 4001(a)(3) of ERISA). Except as disclosed on
Schedule 2.15, to the knowledge of the Company, no action has been taken, and
no circumstances exist, that could result in either a partial or complete
withdrawal from such a multiemployer pension plan by any Commonly Controlled
Entity. Schedule 2.15 also lists for each Benefit Plan that is a multiemployer
pension plan (excluding the multiemployer pension plan in respect of the
Company's former New York Building Products, Inc. operations) the Company's
best estimate, based upon the information supplied to it by each multiemployer
pension plan, of the amount of withdrawal liability that would be incurred if
each Commonly Controlled Entity were to make a complete withdrawal from each
such plan as of the dates specified in Schedule 2.15. Schedule 2.15 also lists
for each Benefit Plan that is a multiemployer pension plan (excluding the
multiemployer pension plans in respect of the Company's former New York
Building Products, Inc., and Bardstown operations) the Company's best estimate,
based upon the information supplied to it by each multiemployer pension plan,
of the amount of "unfunded vested benefits" (within the meaning of Section 4211
of ERISA) as of the dates specified in Schedule 2.15. As of the most recent
valuation date for the multiemployer pension plan in respect of the Company's
former New York Building Products Inc. operations, to the knowledge of the
Company, based upon the information supplied to it by such multiemployer
pension plan, there was not any amount of "unfunded vested benefits" under such
plan.
<PAGE> 32
23

(x) The list of Welfare Plans in Schedule 2.15 discloses
whether each Welfare Plan is (i) unfunded, (ii) funded through a "welfare
benefit fund", as such term is defined in Section 419(e) of the Code, or other
funding mechanism or (iii) insured. Except as disclosed on Schedule 2.15, to
the knowledge of the Company, apart from the written provisions of the Welfare
Plans disclosed to Parent, there are no understandings, agreements or
undertakings, written or oral, that would prevent any such Welfare Plan from
being amended or terminated at any time after the Closing Date. The Company
and its Subsidiaries comply with the applicable requirements of Section
4980B(f) of the Code with respect to each Benefit Plan that is a group health
plan, as such term is defined in Section 5000(b)(1) of the Code.

(xi) Except as provided in Section 1.12 with respect to the
1982 Stock Option Plan, the 1992 Stock Option Plan, the Director Option Plan,
the LTIP and the Savings Plan, and as provided in the employment and severance
agreements listed in Schedules 2.11(a) and 2.15, no employee of the Company or
any of its Subsidiaries will be entitled to any additional material benefits or
any acceleration of the time of payment or vesting of any material benefits
under any Benefit Plan as a result of the transactions contemplated by this
Agreement.

(xii) During the period beginning on January 1, 1995, and
ending on the date of this Agreement, there has been no change (a) in any
actuarial or other assumption used to calculate funding obligations with
respect to any Company Pension Plan or (b) in the manner in which contributions
to any Company Pension Plan are made or the basis on which such contributions
are determined.

(xiii) Except as disclosed on Schedule 2.15, to the knowledge
of the Company and based upon its best estimate, any amount that could be
received (whether in cash or property or the vesting of property) as a result
of any of the transactions contemplated by this Agreement by any employee,
officer or director of the Company or any of its affiliates who is a
"disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employment, severance or termination
agreement, other compensation arrangement or Benefit Plan currently in effect
would not be characterized as an "excess parachute payment" (as such term is
defined in Section 280G(B)(1) of the Code). Schedule 2.15 sets forth (i) the
Company's best estimate of the maximum amount that could be paid to each
executive officer of Company as a result of the transactions contemplated by
this Agreement under all employment, severance and termination agreements,
other compensation arrangements and Benefit Plans currently in effect and (ii)
the Company's best estimate of the "base amount" (as such term is defined in
Section 280(b)(3) of the Code) for each such executive officer calculated as of
the date of this Agreement.

SECTION 2.16. Labor Disputes; Unfair Labor Practices. (a)
There is neither pending nor, to the knowledge of the Company, threatened any
labor
<PAGE> 33
24

dispute which could materially adversely affect the facility that is the
subject of such dispute, or any strike or work stoppage involving the Company
or any Subsidiary.

(b) There is not now pending or, to the knowledge of the
Company, threatened any charge or complaint against the Company or any
Subsidiary by the National Labor Relations Board, any state or local labor or
employment agency or any representative thereof.

SECTION 2.17. Product Warranties. (a) The standard forms of
product warranties and guarantees used by the Company and each Subsidiary
during the past five (5) years are attached as Schedule 2.17 hereto. Neither
the Company nor any Subsidiary has authorized any product warranty or guaranty
during such period of time other than pursuant to such forms.

(b) Other than as set forth on Schedule 2.17 or relating to
any matter that has been resolved or that the Company reasonably believes has
been abandoned, as of date of this Agreement, the Company has not received
written notice of any product warranty or similar claims with an actual or
alleged liability to the Company or any Subsidiary other than routine warranty
claims against the Company that do not in the aggregate exceed in any material
respect the level of such claims historically experienced by the Company in the
ordinary course. The Company does not believe that the Assurance of
Discontinuance dated November 1995 between the Commonwealth of Massachusetts
and Bird, Inc. will result in an increase in liability for claims under product
warranties over the level historically experienced by the Company in the
ordinary course.

SECTION 2.18. Environmental Matters. Except as disclosed in
Schedule 2.18, with respect to the business and operations of the Company and
its Subsidiaries and to the Owned Real Property and Leased Real Property:

(a) No Hazardous Material has been used, possessed, Released,
generated, manufactured or treated, on or under such Owned Real Property or
Leased Real Property, as the case may be, by the Company or any Subsidiary in
material violation of any Environmental Law.

(b) The Company and each Subsidiary, as the case may be, has
through the date hereof (i) secured and maintained compliance with all permits,
certificates, licenses, approvals, registrations or authorizations required for
the conduct of their respective businesses under Environmental Laws and (ii)
maintained such Owned Real Property or Leased Real Property and conducted their
respective business thereon in accordance in all material respects with all
Environmental Laws.

(c) No written notice, written request for information
pursuant to common law, law or regulation, citation, summons, complaint or
order has been
<PAGE> 34
25

received by the Company or any Subsidiary, and no penalty has been assessed
and, to the knowledge of the Company, no investigation or review is pending or
threatened by any Governmental Authority or other Person, with respect to the
business and operations of the Company and its Subsidiaries or to such Owned
Real Property or Leased Real Property, as the case may be, other than relating
to any matter that has been resolved or that the Company reasonably believes
has been abandoned, regarding (i) any alleged violation by the Company or any
Subsidiary of any Environmental Laws, (ii) any alleged failure by the Company
or any Subsidiary to have any environmental permit, certificate, license,
approval, registration or authorization required under any Environmental Law,
or (iii) any use, possession, spill, Release, threatened Release, storage,
generation, manufacture, treatment, deposit, discharge, transportation or
disposal by or on behalf of the Company or any Subsidiary of any Hazardous
Material.

(d) Neither the Company nor any Subsidiary has entered into
or agreed to any court decree or order nor are any of them subject to any
judgment, decree or order relating to compliance with any Environmental Law or
to investigation or cleanup under any Environmental Law.

(e) There are no aboveground or underground storage tanks on
any such Owned Real Property or Leased Real Property.

(f) Neither the Company nor any Subsidiary has received any
written notice of non-compliance with any applicable statutes, laws,
ordinances, rules, orders and regulations of any Governmental Authority that
relate to occupational health and safety, other than relating to any matter
that has been resolved or that the Company reasonably believes has been
abandoned.

(g) The investigation, remediation, cleanup and other costs
of the Company relating to compliance with any Environmental Law will not
exceed an amount equal to 205% of the Company's estimates of such amounts (the
"Company Estimates") provided to Parent by the Company in a letter dated
January 30, 1996. The Company has used its best efforts in preparing the
Company Estimates consistent with all recognized best engineering practices.

As used in this Agreement, the term "Environmental Laws" means
any and all applicable treaties, laws, regulations, enforceable requirements,
binding determinations, orders, decrees, judgments, injunctions, permits,
approvals, authorizations, licenses or variances, promulgated or entered into
by any Governmental Authority, relating to the environment, conservation,
preservation or reclamation of natural resources, or to the management, Release
or threatened Release of Hazardous Materials, including without limitation the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. Sections 9601 et
<PAGE> 35
26

seq. ("CERCLA"), the Federal Water Pollution Control Act, as amended by the
Clean Water Act of 1977, 33 U.S.C. Sections 1251 et seq., Clean Air Act of 1970,
as amended, 42 U.S.C. Sections 7401 et seq., the Toxic Substances Control Act of
1976, 15 U.S.C. Sections 2601 et seq., the Occupational Safety and Health Act of
1970, as amended, 29 U.S.C. Sections 651 et seq., the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. Sections 11001 et seq., the Safe
Drinking Water Act of 1974, as amended, 42 U.S.C. Sections 300(f) et seq., the
Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801 et seq., and any
similar or implementing state or local law, and all amendments or regulations
promulgated thereunder.

As used in this Agreement, the term "Hazardous Materials"
means all explosive or regulated radioactive materials or substances, hazardous
or toxic substances, wastes or chemicals, petroleum (including crude oil or any
faction thereof) or petroleum distillates, asbestos or asbestos containing
materials, including materials listed in 49 C.F.R. Section 172.101 and
materials defined as hazardous substances pursuant to Section 101(14) of the
CERCLA.

As used in this Agreement, the term "Release" means any
spilling, emitting, leaking, pumping, pouring, emptying, injecting, depositing,
disposing, discharging, dispersing, leaching, emanating or migrating of any
Hazardous Materials in, into, onto, or though the environment (including
ambient air, surface water, groundwater, soils, land surface, subsurface
strata, workplace or structure).

SECTION 2.19. Insurance. The Company and each Subsidiary has
been and is insured by financially sound and reputable insurers unaffiliated
with the Company with respect to its and their properties and the conduct of
its and their business in such amounts and against such risks as are consistent
with industry practice. The insurance coverage provided by such policies of
insurance will be continued through the Effective Date and will not terminate
or lapse by reason of the transactions contemplated by this Agreement. The
Company has provided to Parent copies of such policies of insurance. Except as
set forth in Schedule 2.19, neither the Company nor any Subsidiary has been
denied insurance coverage by any carrier in the last three years.

SECTION 2.20. SEC Filings. Schedule 2.20 sets forth all of
the documents filed since January 1, 1994 through the date of this Agreement by
the Company with the Securities and Exchange Commission (the "SEC") under the
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder (the "Securities Act"), or the Exchange Act. The documents listed
in Schedule 2.20 (the "SEC Documents") are all the documents the Company was
required to file under the Securities Act or the Exchange Act since January 1,
1994, and at the time they were filed and when supplemented or amended, the SEC
Documents complied with the requirements of the Securities Act and the Exchange
Act, as applicable, and at such time, none of the SEC Documents contained any
<PAGE> 36
27

untrue statement of a material fact or omitted to state a material fact
required to be stated therein, in light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
the SEC Documents, at the time they were filed and when supplemented or
amended, complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with GAAP (except, in the
case of unaudited statements, as permitted by Form 10-Q of the SEC) applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present in all material respects the consolidated
financial position of the Company and its consolidated subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods therein indicated (subject, in the case of unaudited
statements, to normal year-end audit adjustments).

SECTION 2.21. Brokers and Finders. The Company has not
employed any broker or finder or incurred any liability for any brokerage fees,
commissions, finders' fees or similar fees or expenses in connection with this
Agreement or the Merger contemplated herein except for Dillon, Read & Co. Inc.
The Company has delivered to Parent a copy of its engagement letter with
Dillon, Read & Co. Inc. The estimated investment banking and legal fees and
expenses incurred and to be incurred by the Company in connection with this
Agreement and the Merger contemplated by this Agreement have been disclosed to
Parent in writing on the date hereof.

SECTION 2.22. Rights Agreement; Antitakeover. (a) The
Company has taken all necessary action to (i) amend the Rights Agreement to
render the Rights inapplicable to the Merger and the other transactions
contemplated by this Agreement and (ii) ensure that (y) neither Parent nor any
of its affiliates is an Acquiring Person (as defined in the Rights Agreement)
and (z) a Stock Acquisition Date, a Distribution Date or a Triggering Event (as
such terms are defined in the Rights Agreement) does not occur by reason of the
announcement or consummation of the Merger or any of the other transactions
contemplated by this Agreement.

(b) The Company has taken or will take prior to Closing all
action necessary to approve the Merger such that the approval (along with the
stockholder approval required pursuant to Section 6.03) is sufficient to render
entirely inapplicable to the Merger or Parent or Acquisition Sub the provisions
of Chapter 110C, 110D and 110F of the Massachusetts General Laws. No other
antitakeover or similar statute or regulation applies or purports to apply to
the transactions contemplated by this Agreement.

SECTION 2.23. Opinion of Financial Advisor. The Company has
received the opinion of Dillon, Read & Co. Inc., dated the date of this
Agreement, to the effect that, as of such date, the consideration to be
received in the Merger by the
<PAGE> 37
28

Company's stockholders is fair to the Company's stockholders from a financial
point of view, a copy of which opinion has been delivered to Parent.

SECTION 2.24. Asbestos Claims. The Agreement of Settlement
dated March 8, 1993, between Employers Insurance of Wausau and the Company with
respect to insurance coverage for the Company's exposure for future asbestos
expenses and liabilities is in full force and effect.

ARTICLE III

Representations and Warranties of Parent

Parent hereby represents and warrants to the Company as
follows:

SECTION 3.01. Corporate Organization. Parent is a
corporation duly incorporated, validly existing and in good standing under the
laws of Delaware with all requisite power and authority to own, operate and
lease its properties and to carry on its business as now being conducted.
Parent is qualified to do business and is in good standing in each jurisdiction
in which such qualification is necessary, except where failure to be qualified
would not reasonably be expected to have a material adverse effect on the
ability of Parent to carry out the transactions contemplated hereby without
significant unanticipated delay.

SECTION 3.02. Authorization. (a) Parent has requisite
corporate power and authority to execute and deliver this Agreement and,
subject to the satisfaction of the conditions set forth herein and therein, to
consummate the transactions contemplated hereby and thereby.

(b) This Agreement has been approved by the Board of
Directors of Parent and upon such approval no other corporate proceeding on the
part of Parent is necessary to authorize this Agreement or to consummate the
transactions contemplated hereby.

(c) This Agreement has been duly and validly executed and
delivered by Parent and is a valid and binding agreement of Parent, enforceable
against Parent in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws in effect now or hereafter in effect relating to
creditors' rights generally and by equitable principles (whether considered in
a proceeding at law or in equity).
<PAGE> 38
29

SECTION 3.03. Absence of Conflicts; Consents. Neither the
execution and delivery by Parent of this Agreement nor the consummation by
Parent of the transactions contemplated hereby will:

(a) conflict with or result in a breach of any provision of
the certificate of incorporation or By-Laws of Parent which would have
a material adverse effect on the ability of Parent to carry out the
transactions contemplated hereby without significant unanticipated
delay;

(b) result in the creation of any Lien upon any of the
properties of Parent which would have a material adverse effect on the
ability of Parent to carry out the transactions contemplated hereby
without significant unanticipated delay;

(c) with or without giving of notice or the passage of time,
or both, violate, or conflict with, or constitute a default under, or
result in the termination or in a right of termination of, violate or
be in conflict with, result in a breach of any term or provision of,
or constitute a default under, or accelerate or permit the
acceleration of the performance required by, or give any other Person
a basis for accelerated or increased rights or termination or
nonperformance under, or require any consent, authorization or
approval under, any term or provision of any Lien, lease, license or
other agreement or instrument to which Parent or any of its
Subsidiaries is a party or by which it or they are bound, except to
the extent that such circumstance would not have a material adverse
effect on the ability of Parent to carry out the transactions
contemplated hereby without significant unanticipated delay;

(d) subject to the approval of the Merger by the Company's
shareholders, to the knowledge of Parent, violate any provision of, or
require any consent, authorization or approval under, any Applicable
Laws of any Governmental Authority, or any Judgment applicable to
Parent or any of its Subsidiaries, except to the extent that such
circumstance would not have a material adverse effect on the ability
of Parent to carry out the transactions contemplated hereby without
significant unanticipated delay; or

(e) require any consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority,
to be made or obtained by or on behalf of Parent except (i) as
required by the Exchange Act, (ii) the filing of the Articles of
Merger and other appropriate merger documents, if any, as required by
the laws of the Commonwealth of Massachusetts or, in connection with
the maintenance of qualification to do business in other
jurisdictions, such other jurisdictions and (iii) filings with the FTC
and with the Antitrust Division under the HSR Act.
<PAGE> 39
30

SECTION 3.04. Litigation. Neither Parent nor any of its
Subsidiaries is engaged in, and there is not, to the knowledge of Parent,
pending, nor has Parent or any of its Subsidiaries received any written notice
of, any Legal Action which would prevent Parent from consummating the
transactions contemplated hereby.

SECTION 3.05. Brokers and Finders. Parent has not employed
any broker or finder or incurred any liability for any brokerage fees,
commissions, finders' fees or similar fees or expenses in connection with this
Agreement or the transactions contemplated hereby except for McFarland Dewey &
Co. In the event that the Company shall be obligated to pay Parent's Expenses
pursuant to Article X, Parent will deliver to the Company a copy of its
engagement letter with McFarland Dewey & Co.

ARTICLE IV

Representations and Warranties of Acquisition Sub

Acquisition Sub hereby represents and warrants to the Company
as follows:

SECTION 4.01. Corporate Organization. Acquisition Sub is a
corporation duly incorporated, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts and has not engaged in any operations
or incurred any obligations other than incident to its organization and the
performance of this Agreement.

SECTION 4.02. Authorization. (a) Acquisition Sub has all
requisite corporate power and authority, if necessary, to execute, deliver and
file the Articles of Merger and to execute and deliver this Agreement and,
subject to the satisfaction of the conditions set forth herein, to consummate
the transactions contemplated hereby. This Agreement has been approved by the
Board of Directors of Acquisition Sub, and no other corporate proceeding on the
part of Acquisition Sub is necessary to authorize this Agreement or to
consummate the transactions contemplated hereby without significant
unanticipated delay.

(b) The Agreement has been duly and validly executed and
delivered by Acquisition Sub and is a valid and binding agreement of
Acquisition Sub, enforceable against Acquisition Sub in accordance with its
terms, enforceable against Acquisition Sub in accordance with its terms, except
in each case as such enforceability may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws in effect now
or hereafter in effect relating to creditors' rights generally and by equitable
principles (whether considered in a proceeding at law or in equity).
<PAGE> 40
31

SECTION 4.03. Absence of Conflicts; Consents. Neither the
execution and delivery by Acquisition Sub of this Agreement nor the
consummation by Acquisition Sub of the transactions contemplated hereby will:

(a) conflict with or result in a breach of any provision of
the Articles of Organization or By-Laws of Acquisition Sub which would
have a material adverse effect on the ability of Acquisition Sub to
carry out the transactions contemplated hereby without significant
unanticipated delay;

(b) result in the creation of any Lien upon any of the
properties of Acquisition Sub which would have a material adverse
effect on the ability of Acquisition Sub to carry out the transactions
contemplated hereby without significant unanticipated delay;

(c) with or without giving of notice or the passage of time,
or both, violate, or conflict with, or constitute a default under, or
result in the termination or in a right of termination of, violate or
be in conflict with, result in a breach of any term or provision of,
or constitute a default under, or accelerate or permit the
acceleration of the performance required by, or give any other Person
a basis for accelerated or increased rights or termination or
nonperformance under, or require any consent, authorization or
approval under, any term or provision of any Lien, lease, license or
other agreement or instrument to which Acquisition Sub or any of its
Subsidiaries is a party or by which it or they are bound, unless such
circumstance would not have a material adverse effect on the ability
of Acquisition Sub to carry out the transactions contemplated hereby
without significant unanticipated delay;

(d) subject to the approval of the Merger by the Company's
shareholders, to the knowledge of Acquisition Sub, violate any
provision of, or require any consent, authorization or approval under,
any Applicable Laws of any Governmental Authority, or any Judgment
applicable to Acquisition Sub or any of its Subsidiaries, except to
the extent that such circumstance would not have a material adverse
effect on the ability of Acquisition Sub to carry out the transactions
contemplated hereby without significant unanticipated delay; or

(e) require any consent, approval or authorization of, or
declaration, filing or registration with, any Governmental Authority,
to be made or obtained by or on behalf of Acquisition Sub except (i)
as required by the Exchange Act, (ii) the filing of the Articles of
Merger and other appropriate merger documents, if any, as required by
the laws of the Commonwealth of Massachusetts or, in connection with
the maintenance of qualification to do business in other
jurisdictions, such other jurisdictions and (iii) filings with the FTC
and with the Antitrust Division under the HSR Act.
<PAGE> 41
32

SECTION 4.04. Litigation. Neither Acquisition Sub nor any of
its Subsidiaries is engaged in, and there is not, to the knowledge of
Acquisition Sub, pending, nor has Acquisition Sub received any written notice
of, any Legal Action which would prevent Acquisition Sub from consummating the
transactions contemplated hereby.

SECTION 4.05. Capitalization. The authorized capital stock
of Acquisition Sub consists of 200,000 shares of Common Stock, $1 par value, of
which 100 shares are issued and outstanding. All issued and outstanding shares
of Acquisition Sub Common Stock have been validly issued and are fully paid,
nonassessable and free of preemptive rights and all of such shares are owned,
beneficially and of record, by Parent. There are no outstanding securities
convertible into or exchangeable or exercisable for shares of capital stock of
Acquisition Sub.

SECTION 4.06. Brokers and Finders. Acquisition Sub has not
employed any broker or finder or incurred any liability for any brokerage fees,
commissions, finders' fees or similar fees or expenses in connection with this
Agreement or the transactions contemplated hereby.

ARTICLE V

Covenants

SECTION 5.01. Access and Information. (a) From the date
hereof until the Effective Date or, if earlier, the date of termination of this
Agreement pursuant to Section 9.01, the Company shall, and shall cause its
Subsidiaries to, afford to Parent and to Parent's officers, employees,
accountants, counsel and other authorized representatives full access, upon
reasonable notice to the Company, to their plants, properties, books and
records during normal business hours for the purpose of making such
investigations as Parent shall reasonably desire in connection with the
transactions contemplated hereby, at its expense (except as otherwise
contemplated by Section 10.01), and the Company shall use its reasonable
efforts to cause its and its Subsidiaries' representatives to furnish promptly
to Parent such additional financial and operating data and other information
regarding the business and properties of the Company and its Subsidiaries as
Parent may from time to time reasonably request for such purpose. In addition,
the Company shall afford to Parent and to Parent's officers, employees,
accountants, counsel and other authorized representatives the right to speak
directly with the lenders of the Company and its Subsidiaries in the presence
of representatives of the Company selected by the Chief Executive Officer of
the Company, including without limitation, Fleet Capital Corporation.

(b) The provisions of the confidentiality agreement dated
April 13, 1994 (the "Confidentiality Agreement"), between the Company and
Saint-Gobain
<PAGE> 42
33

Corporation in connection with the transactions contemplated hereby shall be
incorporated herein and made a part hereof except that the termination of such
Agreement shall be extended to December 31, 1996.

SECTION 5.02. Proxy Statement. (a) The Company shall
prepare and file with the SEC, as soon as reasonably practicable, the proxy
statement to be distributed to the Company's shareholders in connection with
the Special Meeting referred to in Section 5.03 (the "Proxy Statement"), and
the Company shall use all reasonable efforts to have such Proxy Statement
cleared by the SEC. The Proxy Statement will comply as to form in all material
respects with the requirements of the Exchange Act and the rules and
regulations thereunder, except that no representation is made by the Company
with respect to statements made or incorporated by reference therein based on
information supplied or required to be supplied by Parent or Acquisition Sub
for inclusion or incorporation by reference in the Proxy Statement.

(b) Parent shall cooperate with the Company in preparing the
Proxy Statement and making any filings required to be made pursuant to this
Section 5.02, and the Company shall consult with Parent in that regard and keep
Parent fully informed of its progress with respect thereto and provide to
Parent copies of the Proxy Statement and all such filings for review and
approval prior to the finalization thereof.

(c) Parent and the Company shall furnish to each other, and
each other's counsel, all such information as may be required and requested in
connection with the preparation of the Proxy Statement and the filing of the
Proxy Statement with the SEC, and each represents and warrants to the other
that no written information furnished as provided for in this Section 5.02(c)
which has been prepared by the responsible party will contain any untrue
statement of a material fact or omit to state a material fact required to be
stated in order to make any information so furnished, in light of the
circumstances under which it is so furnished, not misleading.

(d) Parent and the Company shall each promptly notify the
other if at any time before the Effective Date it becomes aware that the Proxy
Statement contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
contained therein, in light of the circumstances under which they were made,
not misleading. In such event, the Company shall prepare a supplement or
amendment to the Proxy Statement which corrects such misstatements or omissions
and shall cause the same to be filed with the SEC and distributed to the
shareholders of the Company in accordance with the Exchange Act.

SECTION 5.03. Shareholders' Meeting. (a) The Company shall
call a special meeting of its shareholders ("Special Meeting") to consider and
vote upon the matters necessary for the consummation of the transactions
contemplated by this
<PAGE> 43
34

Agreement and shall recommend to its shareholders a vote "FOR" the Merger;
provided, however, that nothing contained in this Section 5.03(a) or any other
provision of this Agreement shall prohibit the Company or its Board of
Directors, or the representatives of either of them, from recommending to the
shareholders of the Company against, or withdrawing, modifying or changing its
recommendation to the shareholders with respect to, the Merger, if permitted by
Section 5.12 hereof.

(b) The date of the Special Meeting shall be determined
jointly by Parent and the Company, but shall occur as soon as practicable
following the SEC's approval of the Proxy Statement and related proxy
materials.

SECTION 5.04. Supplemental Information. From time to time
prior to the Effective Date, the Company will promptly advise Parent of any
inaccuracy of which it has knowledge in any Schedules which it has delivered
pursuant to this Agreement if any matter arises hereafter which, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in any such Schedule. Such updating shall not cure any
breach or misrepresentation or failure of any closing condition that may exist
based on the Schedules originally delivered with this Agreement.

SECTION 5.05. Further Assurances. Consistent with the terms
and conditions hereof, each party hereto will execute and deliver such
instruments and take such other action as the other parties hereto may
reasonably require in order to carry out this Agreement and the transactions
contemplated hereby.

SECTION 5.06. Conduct of Company Business Prior to the
Effective Date. (a) Except as set forth on Schedule 5.06 or any other
Schedule hereto with reference to this Section 5.06 or otherwise consented to
or approved by an authorized officer of Parent or as expressly contemplated or
permitted by this Agreement, the Company agrees that prior to the Effective
Date the business of the Company and its Subsidiaries shall be conducted in the
ordinary course consistent with past practice and:

(i) no change shall be made in the respective articles or
certificate of organization or incorporation or By-Laws of the Company
or any of its Subsidiaries;

(ii) no change shall be made in the number of shares of the
Company's authorized, issued or outstanding capital stock; nor shall
any Conversion Rights be granted, made, redeemed or amended; nor shall
the Company or any Subsidiary issue, deliver, pledge or sell any such
shares, securities or obligations (except deliveries or pledges in
favor of the Company's senior lenders); provided, however, that the
Company shall be permitted to issue shares or other securities as
contemplated by the Savings Plan as in effect on
<PAGE> 44
35

the date hereof and shall be permitted to issue shares of Common Stock
in connection with the due exercise of Options under the 1982 Stock
Option Plan, the 1992 Stock Option Plan, the Director Option Plan or
any other right or convertible security outstanding as of the date of
this Agreement in accordance with the existing terms thereof;

(iii) except as required with respect to the 5% Stock or the
Preference Stock (including the obligations set forth in Section
5.19), (x) no dividend shall be declared or paid or other distribution
(whether in cash, stock, property or any combination thereof) or
payment declared or made in respect of the Company Common Stock or any
other outstanding capital stock of the Company, nor shall the Company
or any Subsidiary (y) purchase, acquire or redeem any shares of
Company Common Stock, 5% Stock or Preference Stock or (z) split,
combine or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock;

(iv) neither the Company nor any Subsidiary shall enter into
any Material Contract, or except in the ordinary course of business
consistent with past practice any other agreement, commitment or
instrument;

(v) the Company shall use and shall cause each Subsidiary to
use its and their respective reasonable efforts to preserve its and
their business organization intact, to keep available the services of
its and their officers and present key employees and to preserve its
and their properties and the goodwill of its and their suppliers,
customers and others with whom business relationships exist;

(vi) the Company shall not take, agree to take or permit any
Subsidiary to take any action or do or permit to be done anything in
the conduct of its business or that of any Subsidiary which would be
contrary to or in breach of any of the terms or provisions of this
Agreement or which would cause any of the representations of the
Company contained herein to be or become untrue in any material
respect;

(vii) neither the Company nor any of its Subsidiaries shall
adopt or amend in any material respect or terminate any Benefit Plan,
except as required by law, or change any actuarial or other assumption
used to calculate funding obligations with respect to any Company
Pension Plan (except to the extent that failure to make such change
would result in noncompliance with GAAP, ERISA or the Code), or change
the manner in which contributions to any Company Pension Plan are made
or the basis on which such contributions are determined, except as
required by Applicable Law;
<PAGE> 45
36

(viii) the Company shall not acquire or agree to acquire (x)
by merging or consolidating with, or by purchasing a substantial
portion of the assets of, or by any other manner, any business or any
corporation, partnership, joint venture, association or other business
organization or division thereof or (y) any assets that are material,
individually or in the aggregate, to the Company and its Subsidiaries
taken as a whole, except purchases of inventory, raw materials,
supplies and similar materials in the ordinary course of business
consistent with past practice and capital expenditures complying with
clause (xi);

(ix) the Company shall not sell, lease, license, mortgage or
otherwise encumber or subject to any Lien (except in favor of the
Company's senior lenders or Permitted Liens) or otherwise dispose of
any of its material properties or assets, except bona fide sales of
inventory in the ordinary course of business consistent with past
practice;

(x) the Company shall not (x) incur any indebtedness for
borrowed money or guarantee any such indebtedness of another person,
issue or sell any debt securities or warrants or other rights to
acquire any debt securities of the Company or any of its Subsidiaries,
guarantee any debt securities of another person, enter into any "keep
well" or other agreement to maintain any financial statement condition
of another person or enter into any arrangement having the economic
effect of any of the foregoing, except for short-term borrowings
incurred in the ordinary course of business consistent with past
practice and routine endorsements in the process of collection, or (y)
make any loans, advances or capital contributions to, or investments
in, any other person, other than to the Company or any direct or
indirect wholly owned Subsidiary of the Company or routine travel and
similar advances to employees;

(xi) the Company shall not make or agree to make any new
capital expenditure or expenditures which, individually, is in excess
of $100,000 or, in the aggregate, are in excess of $250,000;

(xii) the Company shall not make any tax election or settle or
compromise any income tax liability; provided that Parent shall not
unreasonably withhold any consent or approval of any such tax
election, settlement or compromise; and provided further that the
filing of the Company's 1995 Federal income tax return and 1995 state
and local income tax returns shall not constitute the settling or
compromising of any income tax liability for purposes of this
paragraph;

(xiii) the Company shall not pay, discharge or satisfy any
material claims, liabilities or obligations (absolute, accrued,
asserted or unasserted, contingent
<PAGE> 46
37

or otherwise), other than the payment, discharge or satisfaction, in
the ordinary course of business consistent with past practice or in
accordance with their terms, of liabilities that are reflected or
reserved against in, the Balance Sheet or incurred since the date of
the Balance Sheet in the ordinary course of business consistent with
past practice, or waive the benefits of, or agree to modify in any
manner, any confidentiality, standstill or similar agreement to which
the Company or any of its Subsidiaries is a party, except as permitted
by Section 5.12; and

(xiv) the Company shall not authorize any of, or commit or
agree to take any of, the foregoing actions.

(b) Parent shall respond within a reasonable period of time
to any request for consent or approval required under Section 5.06.

(c) Advice of Changes. The Company shall promptly advise
Parent orally and in writing of any change or event of which the Company has
knowledge having, or which, insofar as can reasonably be foreseen, would have,
a Material Adverse Effect.

SECTION 5.07. Consents. Each of the Company, Parent and
Acquisition Sub shall, and shall cause each of their Subsidiaries to, use its
and their reasonable efforts to obtain prior to the Effective Date all
approvals, authorizations and consents of all third Persons identified on
Schedule 2.05 and all Permits which are necessary for (i) the consummation of
the Merger and the other transactions contemplated hereby, (ii) the ownership
or leasing and operation by the Surviving Corporation and each of its
Subsidiaries of all the properties and assets of the Company and its
Subsidiaries and (iii) the conduct by the Surviving Corporation and each of its
Subsidiaries of the business of the Company and its Subsidiaries as conducted
by such entities on the date hereof.

SECTION 5.08. Filings. The Company, Parent and Acquisition
Sub shall use their reasonable efforts to respond as promptly as practicable to
all inquiries received from the FTC or the Antitrust Division for additional
information or documentation in connection with all notices, reports or other
documentation filed by Parent and the Company under the HSR Act. The Company,
Parent and Acquisition Sub shall take such reasonable action as may be
necessary under state and Federal securities laws applicable to or necessary
for, and will file all documents and notifications with the SEC and other
Governmental Authorities reasonably necessary for, the consummation of the
Merger and the transactions contemplated hereby. Each party shall furnish the
other and the other's counsel with all information reasonably requested by such
other party pertaining to it and its subsidiaries and affiliates as may be
required in order to enable such other party to take all such actions as
required by this Section 5.08. Nothing in this Agreement shall require Parent
to dispose of, or
<PAGE> 47
38

make any change in, any portion of its or the Company's assets or business or
to pay any material amount or incur any other material burden in order to
obtain any consent, approval or authorization or satisfy any condition in
connection with the Closing.

SECTION 5.09. Filing of Articles of Merger. Subject to the
terms and conditions of this Agreement, as soon as practicable following the
approval of the Merger by the shareholders of the Company contemplated by
Section 5.03 hereof, the Company, Parent and Acquisition Sub will cause the
Articles of Merger to be filed with the Secretary of State of the Commonwealth
of Massachusetts.

SECTION 5.10. Interim Financial Statements. Until the
Effective Date or, if earlier, the date of termination of this Agreement
pursuant to Section 9.01, as soon as practicable but in no event later than 30
days after the end of each month beginning with February 1996, the Company
shall deliver to Parent unaudited consolidated financial information for such
month and the corresponding month of the preceding year as prepared by the
Company's management for its own internal purposes, such information to be held
in confidence in accordance with Section 5.01(b) hereof. Until the Effective
Date or, if earlier, the date of termination of this Agreement pursuant to
Section 9.01, the Company shall deliver to Parent its Form 10-Q for each
quarter within 45 days after the end of such quarter after the date of this
Agreement (but not later than the business day prior to the date of filing of
such Form 10-Q with the SEC). The financial statements contained therein shall
present fairly in all material respects the Company's consolidated financial
condition, results of operations and changes in financial position (on a
consolidated basis) as at the date or for the periods indicated in accordance
with GAAP consistently applied, except as otherwise indicated in such
statements and except as to format and footnote disclosure shall be prepared in
conformity with the requirements of Rule 10-01 of Regulation S-X under the
Exchange Act and Item 303 of Regulation S-K.

SECTION 5.11. Public Announcements. (a) Unless required by
Applicable Law or by the rules of any applicable self-regulatory organizations,
the Company, Parent and Acquisition Sub shall not, and shall each cause their
respective officers, employees and other authorized representatives not to,
prior to the Effective Date, issue any press release or make any other public
disclosure or announcement or otherwise make any disclosure to any third Person
(other than by way of the Proxy Statement referred to in Section 5.02)
concerning the transactions contemplated by this Agreement or the terms and
provisions hereof.

(b) Should any press release or other public disclosure be
required to be made, then the party required to make such release or disclosure
shall not make such release or disclosure without first using its reasonable
efforts to obtain the prior written consent of the other parties hereto as to
both the timing and content of such press release or public disclosure, which
consent shall not be unreasonably withheld.
<PAGE> 48
39

SECTION 5.12. No Solicitation. (a) The Company shall not,
nor shall it permit any of its Subsidiaries or affiliates to, nor shall it
authorize or permit any officer, director or employee of, or any investment
banker, attorney or other advisor or representative of, the Company or any of
its Subsidiaries to, (i) solicit or initiate, or knowingly encourage the
submission of, any takeover proposal, (ii) participate in any discussions or
negotiations regarding, or furnish to any person any information with respect
to any takeover proposal (except for (1) non-confidential information, or (2)
filings with the SEC); provided, however, that prior to the Special Meeting, to
the extent required by the fiduciary obligations of the Board of Directors of
the Company, as determined in good faith by the Board of Directors based on the
advice of counsel, the Company may, (A) in response to an unsolicited request
therefor, furnish information with respect to the Company (pursuant to a
confidentiality agreement at least as restrictive as the Confidentiality
Agreement (as determined by the Company's counsel)) to any person who has
indicated to the Company that it is interested in pursuing a qualified takeover
proposal and discuss such information (but not the terms of any possible
takeover proposal) with such person and (B) upon receipt by the Company of a
qualified takeover proposal, following the delivery to Parent of the notice
required pursuant to Section 5.12(c), participate in discussions or
negotiations regarding such qualified takeover proposal. Without limiting the
foregoing, it is understood that any violation of the restrictions set forth in
the preceding sentence by any officer of the Company or any of its Subsidiaries
or any investment banker, attorney or other advisor or representative of the
Company or any of its Subsidiaries, shall be deemed to be a breach of this
Section 5.12 by the Company. For purposes of this Agreement, "takeover
proposal" means any proposal for a merger or other business combination
(regardless of legal form) involving the Company or any Subsidiary or any
proposal or offer to acquire in any manner, directly or indirectly, a
substantial portion of the assets or business of the Company or a substantial
equity interest in, or any substantial amount of voting securities of, the
Company or any Subsidiary, or any other transaction outside the ordinary course
of business and not otherwise specifically permitted by the terms of this
Agreement the consummation of which would impede or prevent the consummation of
the Merger pursuant to the terms of this Agreement; and "qualified takeover
proposal" means a takeover proposal having terms which the Board of Directors
of the Company determines (based on, among other things, the advice of a
financial advisor of nationally recognized reputation) in its good faith
reasonable judgment to be more favorable to the Company's shareholders than the
Total Merger Consideration and likely to be fully financed and consummated.

(b) Neither the Board of Directors of the Company nor any
committee thereof shall (i) withdraw or modify, or propose to withdraw or
modify, in a manner adverse to Parent or Acquisition Sub, the approval or
recommendation by such Board of Directors or any such committee of this
Agreement or the Merger, (ii) approve or recommend, or propose to approve or
recommend, any takeover proposal or (iii) enter into any agreement with respect
to any takeover proposal. Notwithstanding
<PAGE> 49
40

the foregoing, in the event the Board of Directors of the Company receives a
qualified takeover proposal, the Board of Directors or any committee thereof or
the Company may (subject to the limitations contained in this Section) withdraw
or modify its approval or recommendation of this Agreement or the Merger at any
time after 48 hours following Parent's receipt of written notice (a "Notice of
Qualified Takeover Proposal") advising Parent that the Board of Directors has
received a qualified takeover proposal, specifying the material terms and
conditions of such qualified takeover proposal and identifying the person
making such qualified takeover proposal. The Company may take any of the
foregoing actions pursuant to the preceding sentence only if the Merger shall
not yet have been approved at the Special Meeting. Nothing contained herein
shall prohibit the Company from taking and disclosing to its stockholders a
position contemplated by Rule 14e-2(a) following Parent's receipt of a Notice
of Qualified Takeover Proposal provided that the Company does not withdraw or
modify its position with respect to the Merger or approve or recommend a
takeover proposal.

(c) In addition to the obligations of the Company set forth
in paragraph (b) of this Section, the Company shall promptly advise Parent
orally and in writing of any request for information or of any takeover
proposal, or any inquiry with respect to any takeover proposal, the material
terms and conditions of such request, takeover proposal or inquiry, and the
identity of the person making any such takeover proposal or inquiry. The
Company shall keep Parent fully informed of the status and details of any such
request, takeover proposal or inquiry.

SECTION 5.13. Validity of Representations. Parent,
Acquisition Sub and the Company shall each take such action as is reasonably
necessary to render their respective representations and warranties accurate on
and as of the Effective Date. Without limiting the foregoing, the Company
shall take any action required by Parent to ensure the accuracy of Section 2.22
including redemption of the Rights if Parent determines that would be
desirable.

SECTION 5.14. Employees; Benefits. Parent and Acquisition
Sub shall honor (i) all employment, severance or similar contractual
arrangements in accordance with their terms in existence on the date of this
Agreement and disclosed prior to the date of this Agreement to Parent and (ii)
all legally imposed obligations relating to employment matters. After the
Closing Date, Parent and Acquisition Sub shall comply with enforceable
Applicable Law, including without limitation the Workers Adjustment Retraining
Notification Act, 29 U.S.C. Section 2101 et seq. It is the current intention
of Parent and Acquisition Sub to cause the Surviving Corporation to provide
benefits to employees of the Company and its Subsidiaries that are no less
favorable in the aggregate to such employees than those in effect on the date
of this Agreement; provided, however, that the foregoing shall not limit or
restrict the right of the Surviving Corporation or its Subsidiaries to
terminate the employment of such
<PAGE> 50
41

employees or subsequently to modify the benefits or other terms of employment
of such employees, to the extent permitted by enforceable Applicable Law.

SECTION 5.15. Indemnification and Insurance. (a) Parent and
Acquisition Sub hereby agree that all rights to indemnification now existing in
favor of the directors or officers of the Company and its Subsidiaries (the
"Indemnified Parties") as currently provided in their respective certificates
or articles of incorporation or organization and By-Laws or in any agreements,
contracts or arrangements with the Company or any of its Subsidiaries in effect
on the date hereof and previously furnished to Parent and to the extent not in
violation of applicable state law, shall survive the Merger and shall continue
in full force and effect for a period of five (5) years from the Effective
Date; provided that, in the event any claim or claims are asserted or made
within such five (5) year period, all rights to indemnification in respect of
any such claim or claims shall continue until the disposition of any and all
such claims. Without limiting the foregoing, to the extent currently provided
in the certificates or articles of incorporation or organization and By-Laws of
the Company and its Subsidiaries and Massachusetts law, or agreements,
contracts or arrangements disclosed to Parent with the Company or any of the
Subsidiaries, in the event that any Indemnified Party becomes involved in any
capacity in any action, proceeding or investigation in connection with any
matter, including the transaction contemplated by this Agreement, occurring
prior to, and including, the Effective Date, or otherwise relating to or
arising out of such matters, Parent or the Surviving Corporation shall
periodically advance to such Indemnified Party his or her legal and other
expenses (including the costs of any investigation and preparation incurred in
connection therewith). Parent shall use all reasonable efforts to maintain in
effect, or shall cause the Surviving Corporation to use all reasonable efforts
to maintain in effect, for two (2) years after the Effective Date, directors'
and officers' liability insurance ("D&O Insurance") covering those persons
covered by the Company's directors' and officers' liability insurance on the
date of this Agreement or the Effective Date and which is substantially
equivalent in terms of coverage and amount as the Company has in effect on the
Effective Date so long as such insurance is available and the annual premium
therefor would not be in excess of 200% of the last annual premium paid prior
to the date of this Agreement (the "Maximum Premium"). If the existing D&O
Insurance expires, is terminated or cancelled during such two-year period,
Parent will use all reasonable efforts to cause to be obtained as much D&O
Insurance as can be obtained for the remainder of such period for an annualized
premium not in excess of the Maximum Premium, on terms and conditions no less
advantageous than the existing D&O Insurance. The Company represents to Parent
that the Maximum Premium is $179,000.

(b) Any Indemnified Party wishing to claim indemnification
hereunder, upon learning of any such Legal Action, shall promptly notify Parent
and the Surviving Corporation with respect thereto, but the failure to so
notify shall not relieve Parent or the Surviving Corporation of any liability
it may have to such
<PAGE> 51
42

Indemnified Party hereunder except to the extent that Parent and the Surviving
Corporation are materially prejudiced thereby.

(c) Parent and the Surviving Corporation shall periodically,
as requested, advance to such Indemnified Party his, her or its legal and other
expenses (including the cost of investigation and preparation incurred in
connection therewith) to the extent such Indemnified Party is indemnified
pursuant to the terms of this Section 5.15, unless it is ultimately determined
by a court of competent jurisdiction that such Indemnified Party is not
entitled to indemnification hereunder.

(d) Parent and the Surviving Corporation shall be subrogated
to any rights any Indemnified Party may have with respect to any amounts paid
to or on behalf of such Indemnified Party by Parent and the Surviving
Corporation hereunder.

SECTION 5.16. Redemption of 5% Stock and Preference Stock.
(a) In connection with the Merger, the Company, Parent and Acquisition Sub
hereby agree that the 5% Stock shall be redeemed and retired, as soon as
practicable following the Effective Date for the 5% Stock Consideration in
accordance with the Surviving Corporation's Articles of Organization.

(b) Prior to the date specified in the call notice for the
redemption and retirement of the 5% Stock, the Surviving Corporation shall
cause to be deposited with an appropriate trust company or bank, for the credit
of the holders of the 5% Stock, sufficient funds to be paid to such holders for
redemption and retirement of all of such shares of 5% Stock as provided for
herein and in the Surviving Corporation's Articles of Organization.

(c) If requested by Parent or Acquisition Sub, the Company
shall immediately prior to the Closing deliver a notice of redemption and cause
to be deposited with an appropriate trust company or bank, for the credit of
the holders of the Preference Stock, sufficient funds to be paid to such
holders for redemption and retirement of all outstanding shares of Preference
Stock as provided for herein, in the Certificate of Vote of Directors that
established the Preference Stock and in the Company's Articles of Organization.
In such case Parent shall transfer to the Company immediately prior to such
deposit the amount thereof in exchange for the issuance to it by the Company of
that number of shares of Company Common Stock equal to the amount of such
deposit divided by the Total Merger Consideration. Parent may decide whether
to deliver any request under this Section 5.16(c) in its sole discretion, and,
notwithstanding any other provision of this Agreement (including Section 5.20)
shall not be obligated to do so even if redemption of the Preference Stock
would cause satisfaction of a condition set forth in Article VI or Article VII
that otherwise would not be satisfied.
<PAGE> 52
43

SECTION 5.17. Material Contracts. The Company shall not
enter into any material modification or amendment concerning any Material
Contract listed on Schedule 2.11(a) or 2.11(b) without the consent of Parent,
which consent shall not be unreasonably withheld. Immediately after the
Closing, Parent shall cause the Surviving Corporation to pay the outstanding
principal amount (and accrued interest thereon) owed by the Company under each
Material Contract set forth on Schedule 2.11(b).

SECTION 5.18. Tax Matters. Promptly after the request of
Parent and in any event no later than three months from the date of such
request, the Company shall provide to Parent true, complete and correct (in all
material respects) copies of (a) a schedule setting forth the deferred
intercompany gain account, and the excess loss account of each of its
Subsidiaries, and (b) a schedule setting forth the Federal income tax basis for
the stock of each of the Subsidiaries except those Subsidiaries for which such
information cannot be obtained after due inquiry.

SECTION 5.19. Dividend Payments. The Company shall declare
and pay or set apart for payment accumulated dividends on the 5% Stock to the
extent required such that the holders of 5% Stock shall not at any time be
entitled to vote pursuant to paragraph (d) of Article IV of the Company's
Articles of Organization. In addition, the Company shall declare and pay or
set apart for payment all accumulated dividends on the Preference Stock to the
extent required such that the holders of Preference Stock shall not at any time
be entitled to vote pursuant to subparagraph (8) of the Company's Certificate
of Vote of Directors Establishing a Series of a Class of Stock with respect to
the Preference Stock.

SECTION 5.20. Satisfaction of Conditions. The Company,
Parent and Acquisition Sub shall each take all reasonable actions that may be
required to satisfy the conditions set forth in Article VI and Article VII
hereof, respectively.

ARTICLE VI

Conditions to the Obligations of Parent
and Acquisition Sub

Each and every obligation of Parent and Acquisition Sub under
this Agreement shall be subject to the satisfaction, on or prior to the Closing
Date, of each of the following conditions, each of which may be waived by
Parent and Acquisition Sub except as otherwise provided by law:

SECTION 6.01. Representations and Warranties True. The
representations and warranties of the Company contained in this Agreement
(without regard to any information provided under Section 5.04) that are
qualified as to
<PAGE> 53
44

materiality shall be true and correct, and the representations that are not so
qualified shall be true and correct in all material respects, in each case on
and as of the date hereof and on and as of the Effective Date, and between the
date hereof and the Effective Date there shall not have been any event or
change in circumstance causing or reasonably anticipated to cause in the future
any Material Adverse Effect.

SECTION 6.02. Company's Performance. Each of the obligations
of the Company to be performed by it on or before the Closing Date pursuant to
the terms of this Agreement shall have been duly performed or complied with in
all material respects by the Closing.

SECTION 6.03. Authorization of Merger. (a) All corporate
action necessary by the Company to authorize the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby and thereby shall have been duly and validly taken, and the
Company and Acquisition Sub shall have full right and power to merge on the
terms provided herein. The holders of the Company Common Stock and of the
Preference Stock shall have duly approved the Merger at the Special Meeting
called for that purpose.

(b) All consents, approvals and authorizations from third
Persons and Governmental Authorities identified on Schedule 2.05 and Schedule
2.11(b) required to consummate the transactions contemplated by this Agreement
shall have been obtained.

SECTION 6.04. Absence of Litigation. There shall not be
pending or threatened any suit, action or proceeding by any Governmental
Authority (i) challenging the acquisition by Parent or Acquisition Sub of any
shares of Company Common Stock, seeking to restrain or prohibit the
consummation of the Merger or any of the other transactions contemplated by
this Agreement or seeking to obtain from the Company, Parent or Acquisition Sub
any damages related to the Merger or the other transactions contemplated hereby
that are material in relation to the Company and its Subsidiaries taken as a
whole, (ii) seeking to prohibit or limit the ownership or operation by the
Company, Parent or any of their respective Subsidiaries of any material portion
of the business or assets of the Company, Parent or any of their respective
Subsidiaries, or to compel the Company, Parent or any of their respective
Subsidiaries to dispose of or hold separate any material portion of the
business or assets of the Company, Parent or any of their respective
Subsidiaries, as a result of the Merger or any of the other transactions
contemplated by this Agreement, (iii) seeking to impose limitations on the
ability of Parent or Acquisition Sub to acquire or hold, or exercise full
rights of ownership of, any shares of Surviving Corporation Common Stock, (iv)
seeking to prohibit Parent or any of its Subsidiaries
<PAGE> 54
45

from effectively controlling in any material respect the business or operations
of the Company or its Subsidiaries or of Parent and its Subsidiaries or (v)
which otherwise is reasonably likely to have a Material Adverse Effect.

SECTION 6.05. Directors. All directors of the Company whose
resignation is requested by Parent at least five (5) days before the Closing
Date will have submitted their resignations as directors effective as of the
Closing Date.

SECTION 6.06. Dissenting Shares. No more than ten percent
(10%) of the issued and outstanding shares of any class of equity securities of
the Company entitled to dissenters rights as of the Closing Date shall be
Dissenting Shares entitled to receive the Dissenting Consideration as provided
in Section 1.10 hereof.

SECTION 6.07. Options. Each outstanding Option issued under
the 1982 Stock Option Plan, the 1992 Stock Option Plan and the Director Option
Plan shall have been amended as contemplated by Section 1.12.

SECTION 6.08. Certificates. The Company shall have furnished
Parent with such certificates of its officers and others to evidence compliance
with the conditions set forth in this Article VI as may be reasonably requested
by Parent. The form and substance of all opinions, certificates and other
documents hereunder shall be satisfactory in all reasonable respects to Parent
and its counsel.

SECTION 6.09. Reported Financials. Price Waterhouse,
independent certified public accountants, shall have issued a report on the
consolidated balance sheets of the Company and its Subsidiaries as at December
31, 1994, and December 31, 1995, and the related consolidated statements of
income, stockholders' equity and cash flows for the respective years then
ended, including the notes thereto (the "Reported Financials"). The Reported
Financials and the report thereon shall be identical to the Company Financial
Statements and the report thereon, except for immaterial language differences
in the notes thereto.

ARTICLE VII

Conditions to the Obligations of the Company

Each and every obligation of Company under this Agreement
shall be subject to the satisfaction, on or prior to the Closing Date, of each
of the following conditions, each of which may be waived by the Company except
as otherwise provided by law:

SECTION 7.01. Representations and Warranties True. The
representations and warranties of Parent and Acquisition Sub contained in this
<PAGE> 55
46

Agreement that are qualified as to materiality shall be true and correct, and
the representations that are not so qualified shall be true and correct in all
material respects, in each case on and as of the date hereof and on and as of
the Effective Date.

SECTION 7.02. Parent's and Acquisition Sub's Performance.
Each of the obligations of Parent and Acquisition Sub to be performed by them
on or before the Closing Date pursuant to the terms hereof shall have been duly
performed and complied with in all material respects by the Closing.

SECTION 7.03. Authorization of Merger. (a) All corporate
action necessary by Acquisition Sub and Parent to authorize the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby shall have been duly and validly taken, and
Acquisition Sub shall have full right and power to merge on the terms provided
herein. The Company's shareholders shall have approved the Merger at the
Special Meeting called for that purpose.

(b) All consents, approvals and authorizations from third
Persons and Governmental Authorities identified on Schedule 2.05 required to
consummate the transactions contemplated by this Agreement shall have been
obtained.

SECTION 7.04. Absence of Litigation. No Judgment shall have
been entered by a Governmental Authority with proper jurisdiction and not
revised prohibiting the Merger, and no Legal Action shall have been instituted
by any Governmental Authority challenging the Merger which if successful would
prohibit the consummation of the Merger.

SECTION 7.05. Certificates. Parent and Acquisition Sub shall
have furnished Company with such certificates of their respective officers and
others to evidence compliance with the conditions set forth in this Article VII
as may be reasonably requested by Company. The form and substance of all
certificates and other documents hereunder shall be satisfactory in all
reasonable respects to Company and its counsel.
<PAGE> 56
47

ARTICLE VIII

Closing

SECTION 8.01. Time and Place. Subject to the provisions of
Articles VI, VII and IX hereof, the closing (the "Closing") of the transactions
contemplated hereby shall take place at the offices of Cravath, Swaine & Moore,
825 Eighth Avenue, New York, New York 10019 at 9:30 a.m., local time, on a date
(the "Closing Date") which is to be:

(a) as soon as practicable after the latest to occur of the
date by which the shareholders of the Company shall have approved the
Merger pursuant to Section 5.03, the date of expiration or termination
of any waiting period, including any extensions thereof, which may be
applicable to the Merger under the provisions of the HSR Act, or the
date of satisfaction of all other conditions to the Closing set forth
herein the satisfaction of which is not waived other than conditions
that, by their terms, are to be satisfied on the Closing Date; or

(b) such other place, at such other time, or on such other
date as Parent, Acquisition Sub and the Company may mutually agree
upon for the Closing to take place.

The Closing Date shall be the Effective Date.

SECTION 8.02. Deliveries at the Closing. Subject to the
provisions of Articles VI, VII and IX hereof, at the Closing:

(a) There shall be delivered to Parent, Acquisition Sub and
the Company the opinions, certificates and other documents and
instruments required to be delivered under Articles VI and VII hereof.

(b) Parent, Acquisition Sub and Company shall cause the
Articles of Merger to be filed in accordance with the provisions of
the MBCL and shall take any and all other lawful actions and do any
and all other lawful things necessary to effect the Merger and to
cause the Merger to become effective.

ARTICLE IX

Termination and Abandonment of the Merger

SECTION 9.01. Termination. (a) This Agreement shall be
terminated, and the Merger abandoned, if the shareholders of the Company fail
to approve the Merger as contemplated by Section 5.03 hereof.
<PAGE> 57
48

(b) Notwithstanding approval of this Agreement and the
transactions contemplated hereby by the shareholders of the Company or by the
sole stockholder of Acquisition Sub, this Agreement may be terminated, and the
Merger abandoned, at any time prior to the Effective Date:

(i) by the mutual consent of Parent, Acquisition Sub and the
Company; or

(ii) by Parent, Acquisition Sub or the Company at any time
after September 30, 1996; or

(iii) by Parent or Acquisition Sub, (A) if any of the
conditions set forth in Article VI hereof shall become impossible to
fulfill and shall not have been waived in accordance with the terms of
this Agreement or (B) if the Board of Directors pursuant to Section
5.12(b) withdraws or modifies its approval or recommendation of this
Agreement or the Merger; or

(iv) by the Company, if any of the conditions set forth in
Article VII hereof shall become impossible to fulfill, and shall not
have been waived in accordance with the terms of this Agreement; or

(v) by Parent or Acquisition Sub if the Company fails to
perform in any material respect any of its obligations hereunder or
breaches in any material respect any provision hereof, and the Company
has failed to perform such obligation or cure such breach, within 10
days of its receipt of written notice thereof from Parent or
Acquisition Sub, and such failure to perform shall not have been
waived in accordance with the terms of this Agreement;

(vi) by the Company if Parent or Acquisition Sub fails to
perform in any material respect any of its obligations hereunder or
breaches in any material respect any provision hereof, and Parent and
Acquisition Sub have failed to perform such obligation or cure such
breach, within 10 days of its receipt of written notice thereof from
the Company, and such failure to perform shall not have been waived in
accordance with the terms of this Agreement; or

(vii) by the Company if (A) the Board of Directors pursuant to
Section 5.12(b) withdraws or modifies its approval or recommendation
of this Agreement or the Merger and (B) the Company pays Parent all
Expenses and the Alternate Transaction Fee in cash, in each case as
provided in Section 10.01(b).
<PAGE> 58
49

SECTION 9.02. Effect of Termination. (a) In the event of
the termination and abandonment of this Agreement and the Merger:

(i) this Agreement shall become void and have no effect,
without any liability on the part of any party or its directors,
officers or shareholders, except Section 5.01(b) shall survive and
except as provided in Article X hereof; provided that, except as
provided in Sections 9.02(b) and 9.02(c), each party shall have the
right to bring suit against any other party for any breach of this
Agreement; and

(ii) each party will redeliver all documents, work papers and
other material and all copies thereof of any other party relating to
the transactions contemplated hereby, whether so obtained before or
after the execution hereof, to the party furnishing the same and, at
the request of any other party, will destroy any analyses,
compilations, studies or other documents prepared using such furnished
information.

(b) Notwithstanding any provisions to the contrary herein,
the sole remedy of Parent or Acquisition Sub for a breach by the Company of any
representation or warranty set forth in Article II of this Agreement shall be
the termination of this Agreement (if permitted by Section 9.01) unless such
breach was made with the actual knowledge of the President and Chief Executive
Officer of the Company, the Vice President of Finance and Administration of the
Company or the General Counsel of the Company, after due inquiry of other
managerial employees of the Company who would be reasonably expected to have
knowledge as to the matter represented (a "Company Willful Misrepresentation").

(c) Notwithstanding any provisions to the contrary herein,
the sole remedy of the Company for a breach by Parent or Acquisition Sub of any
representation or warranty set forth in Article III or IV, respectively, of
this Agreement shall be the termination of this Agreement (if permitted by
Section 9.01) unless such breach was made with the actual knowledge of the
President, Executive Vice President or Senior Vice President of Parent, after
due inquiry of other managerial employees of Parent who would be reasonably
expected to have knowledge as to the matter represented (a "Parent Willful
Misrepresentation").

ARTICLE X

Miscellaneous

SECTION 10.01. Expenses; Alternate Transaction Fee. (a)
Except as provided by Section 10.01(b), (c) or (d) each of the parties hereto
shall bear its own costs, fees and expenses in connection with the negotiation,
preparation, execution,
<PAGE> 59
50

delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, fees,
commissions and expenses (including, without limitation, all filing, printing,
copying, mailing, telephone, transportation and delivery charges) payable to
brokers, finders, investment bankers, consultants, exchange or transfer agents,
attorneys, accountants and other professionals, whether or not the Merger is
consummated.

(b) If the Board of Directors of the Company pursuant to
Section 5.12(b) wishes to withdraw or adversely modify its approval or
recommendation of this Agreement or the Merger, prior to exercising its rights
under Section 5.12(b), the Company shall pay in same day funds to Parent: (i)
its Expenses incurred to date and thereafter shall pay in same day funds to
Parent within one business day after demand therefor all subsequently incurred
Expenses, provided, that the Company shall not be obligated hereunder to pay
any such Expenses to the extent they exceed an aggregate of $1 million and (ii)
an alternative transaction fee of $1.5 million (the "Alternate Transaction
Fee"). For purposes of Sections 10.01(b) and (c), "Expenses" shall mean all
out-of-pocket fees and expenses (including without limitation all travel
expenses and all fees and expenses of counsel, investment banking firms,
accountants, experts and consultants to Parent or Acquisition Sub) incurred or
paid by or on behalf of Parent or Acquisition Sub during or after 1994 in
connection with or leading to this Agreement, the transactions contemplated
hereby, and performing or securing the performance of the obligations of the
parties hereunder, including, without limitation, such fees and expenses
related to preparation and negotiation of documentation and conducting due
diligence. Parent shall within 36 hours after request therefor advise the
Company of an estimate of its Expenses if the Company wishes to exercise its
rights under Section 5.12(b).

(c) In the event a takeover proposal from a party other than
Parent or one of its affiliates is received by the Company or publicly
disclosed prior to the Special Meeting (or, if earlier, termination of this
Agreement) and either at the Special Meeting the required approval of the
Merger by the Company's shareholders is not obtained, or this Agreement is
terminated (other than by the Company pursuant to Section 9.01(vi)) prior to a
vote on the Merger at the Special Meeting, the Company shall pay in same day
funds to Parent within two business days after the Special Meeting or such
termination of this Agreement (i) all Expenses incurred to date and thereafter
will pay in same day funds to Parent within one business day after demand
therefor all subsequently incurred Expenses, provided, that the Company shall
not be obligated hereunder to pay any such Expenses to the extent they exceed
an aggregate of $1 million, and (ii) the Alternate Transaction Fee.

(d) In the event this Agreement is terminated or the Merger
does not occur (i) solely due to a breach by Parent or Acquisition Sub of any
of its covenants or obligations hereunder or
<PAGE> 60
51

due to a Willful Parent Misrepresentation or (ii) solely due to a breach by the
Company of any of its covenants or obligations hereunder or due to a Willful
Company Misrepresentation, then in the case of a termination pursuant to clause
(i) above, Parent and Acquisition Sub shall promptly pay to the Company, and in
the case of termination pursuant to clause (ii) above, the Company shall
promptly pay to Parent and Acquisition Sub, in same day funds all Expenses
incurred to date (after giving credit for any reimbursement already made under
Section 10.01(b) or (c)) and thereafter shall pay in same day funds within one
business day after demand therefor all subsequently incurred Expenses. For
purposes of this paragraph 10.01(d) "Expenses" shall mean all out-of-pocket
fees and expenses (including without limitation all travel expenses and all
fees and expenses of counsel, investment banking firms, accountants, experts
and consultants to Parent or the Company, as the case may be) incurred or paid
by or on behalf of Parent, Acquisition Sub or the Company, as the case may be,
during or after 1994 in connection with or leading to this Agreement, the
transactions contemplated hereby, and performing or securing performance of the
obligations of the parties hereunder, including, without limitation, such fees
and expenses related to preparation and negotiation of documentation and
conducting due diligence. This Section shall not limit damages that would
otherwise be recoverable for breaches hereunder.

SECTION 10.02. Non-Survival of Representations and
Warranties. The respective representations and warranties, obligations,
covenants and agreements of the Company, Parent and Acquisition Sub contained
herein or in any Schedule, certificate or letter delivered pursuant hereto
(other than those contained in Section 10.01 hereof and those which by their
terms extend beyond the Effective Date or termination of this Agreement) shall
expire with, and be terminated and extinguished by the effectiveness of the
Merger and shall not survive the Effective Date or, if earlier, the date of
termination of this Agreement pursuant to Article IX hereof.

SECTION 10.03. Headings. The descriptive headings of the
several Articles and Sections of this Agreement are inserted for convenience
only and do not constitute a part of this Agreement and shall not in any manner
affect the meaning or interpretation of the terms of this Agreement.
<PAGE> 61
52

SECTION 10.04. Notices. (a) Any notices or other
communications required or permitted hereunder shall be addressed as follows:

If to Parent or Acquisition Sub to:

CertainTeed Corporation
750 E. Swedesford Road
Valley Forge, Pennsylvania 19482
Attn: Thomas A. Decker, Esq.
Executive Vice President and
General Counsel
Tel: (610) 341-7424
Fax: (610) 341-7087

Cravath, Swaine & Moore
825 Eighth Avenue
New York, New York 10019
Attn: Philip A. Gelston
Tel: (212) 474-1548
Fax: (212) 474-3700

If to the Company to:

Bird Corporation
1077 Pleasant Street
Norwood, Massachusetts 02062-6714
Attn: President
Tel: (617) 461-1414
Fax: (617) 461-1619

Copy to:

Bart Friedman, Esq.
Cahill, Gordon & Reindel
80 Pine Street
New York, NY 10005
Tel: (212) 701-3000
Fax: (212) 269-5420

or such other address as shall be furnished in writing by either party in
accordance with this Section 10.04, and any such notice or communication shall
be deemed to have been given as of the date so mailed.
<PAGE> 62
53

(b) Notices or other communications shall be deemed given (i)
if delivered personally, upon delivery, (ii) if delivered by registered or
certified mail (return receipt requested), upon the earlier of actual delivery
or three business days after being mailed, (iii) if delivered by overnight
courier or similar service, upon delivery, or (iv) if given by fax, upon
confirmation of transmission by fax; provided that if such notice or other
communications would be otherwise deemed given on a day which is not a business
day, the delivery shall be deemed given the first business day following such
day.

SECTION 10.05. Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns, but neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any of the parties hereto, either in whole or in part, without the
prior written consent of the other parties hereto.

SECTION 10.06. Complete Agreement. This Agreement, including
the Schedules, exhibits and other writings referred to herein or delivered
pursuant hereto, contains the entire understanding among the parties with
respect to the Merger and the related transaction and supersedes all prior
arrangements or understandings with respect thereto, except for the
Confidentiality Agreement. There are no restrictions, agreements, promises,
warranties, covenants or undertakings other than those expressly set forth
herein.

SECTION 10.07. Amendments and Waivers. (a) Subject to the
provisions contained in Articles VI and VII hereof, at any time prior to the
Effective Date if authorized by their respective Boards of Directors and to the
extent permitted by law, the parties hereto may, by written agreement, modify,
amend, or supplement any term or provision of this Agreement. Any written
instrument or agreement referred to in this paragraph shall be validly and
sufficiently authorized for the purposes of this Agreement if signed on behalf
of the Company, Parent and Acquisition Sub by a person authorized to sign this
Agreement on their behalf.

(b) This Agreement may be amended at any time only by a
written instrument executed by the Company, Parent and Acquisition Sub. No
delay on the part of any party hereto in exercising any right hereunder shall
operate as a waiver of such right, nor shall any waiver, express or implied, by
any party hereto of any right hereunder or of any failure to provide and
perform hereunder or breach hereof by either party hereto constitute or be
deemed to constitute a waiver of any other failure to provide and perform
hereunder or breach hereof by any party hereto whether of a similar or
dissimilar nature thereto.
<PAGE> 63
54

SECTION 10.08. Counterparts. This Agreement may be executed
in two or more counterparts, all of which shall be considered one and the same
agreement and each of which shall be deemed an original.

SECTION 10.09. Governing Law. EXCEPT AS TO THE PROVISIONS OF
ARTICLE I (WHICH SHALL BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS), THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
NEW YORK (WITHOUT GIVING EFFECT TO ITS CONFLICT OF LAWS RULES) AS TO ALL
MATTERS, INCLUDING, BUT NOT LIMITED TO, MATTERS OF VALIDITY, CONSTRUCTION,
EFFECT AND PERFORMANCE.

SECTION 10.10. Accounting Terms. All accounting terms used
herein that are not expressly defined in this Agreement shall have the meanings
given to them in accordance with GAAP.

SECTION 10.11. Parties. Nothing in this Agreement is
intended to confer any rights or remedies under or by reason of this Agreement
on any persons or entities other than the parties hereto and their respective
successors and permitted assigns in accordance with Section 10.05 hereof,
except for the provisions of Section 5.15. Without limiting the foregoing, no
third Person shall be a beneficiary of any provision of this Agreement, except
for the provisions of Section 5.15.
<PAGE> 64
55

IN WITNESS WHEREOF, each of Parent, Acquisition Sub and the
Company has executed this Agreement, or has caused this Agreement to be
executed on its behalf by a representative duly authorized, all as of the day
and year first above written.

BIRD CORPORATION,

by /s/ Joseph D. Vecchiolla
----------------------------------------
Name: Joseph D. Vecchiolla
[Seal] Title: Chairman

by /s/ Frank Anthony
----------------------------------------
Name: Frank Anthony
Title: Vice President

by /s/ Elizabeth Arcieri
----------------------------------------
Name: Elizabeth Arcieri
Title: Treasurer

CERTAINTEED CORPORATION,

by /s/ Thomas A. Decker
----------------------------------------
Name: Thomas A. Decker
Title: Executive Vice President
<PAGE> 65
56

BI EXPANSION CORP.,

by
----------------------------------------
Name: Thomas A. Decker
[Seal] Title: Vice President

by /s/ John R. Mesher
----------------------------------------
Name: John R. Mesher
Title: Assistant Treasurer

<PAGE> 1
EXHIBIT 11

BIRD CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE (1)
(In thousands, except share and per share amounts)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994 1993
----------- ----------- -----------
Primary earnings per share
<S> <C> <C> <C>
Earnings (loss) from continuing operations $ (797) $ 1,083 $ (1,908)
Deduct dividend requirements:
Preferred stock (30) (30) (30)
Convertible preference stock (1,506) (1,506) (1,506)
----------- ----------- -----------
Net loss from continuing operations (2,333) (453) (3,444)

Net loss from discontinued operations (11,252) (4,766) (26,414)
----------- ----------- -----------

Net loss applicable to common stock $ (13,585) $ (5,219) $ (29,858)
=========== =========== ===========

Weighted average number of common
shares outstanding (1) 4,104,965 3,992,251 4,097,999
Assuming exercise of options reduced by
the number of shares which could have
been purchased with the proceeds from
exercise of such options (3) 0 0 0
----------- ----------- -----------

Weighted average number of common
shares outstanding as adjusted 4,104,965 3,992,251 4,097,999
=========== =========== ===========

Primary earnings (loss) per common share:
Continuing operations $ (0.57) $ (0.11) $ (1.51)
Discontinued operations (2.74) (1.20) (6.45)
Cumulative effect of accounting change 0.00 0.00 0.67
----------- ----------- -----------

Applicable to common stock $ (3.31) $ (1.31) $ (7.29)
=========== =========== ===========
</TABLE>

(1) See Note 1 of Notes to Consolidated Financial Statements.

(3) APB 15 paragraph 30 indicates computation of primary earnings per share
should not give effect to common stock equivalents if their inclusion
has the effect of decreasing the loss per share amount otherwise
computed or is anti-dilutive.
<PAGE> 2
EXHIBIT 11

BIRD CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE (1)
(In thousands, except share and per share amounts)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1995 1994 1993
----------- ----------- -----------

Fully diluted earnings per share (2)

<S> <C> <C> <C>
Earnings from (loss) continuing operations $ (797) $ 1,083 $ (1,908)
Deduct dividend requirements of
preferred stock (30) (30) (30)
----------- ----------- -----------
Net earnings (loss) from continuing operations (827) 1,053 (1,938)

Net loss from discontinued operations (11,252) (4,766) (26,414)
----------- ----------- -----------

Net loss applicable to common stock $ (12,079) $ (3,713) $ (28,352)
=========== =========== ===========

Weighted average number of common
shares outstanding as adjusted 4,836,920 4,724,206 4,829,954
=========== =========== ===========
Fully diluted earnings (loss) per common share:
Continuing operations $ (0.17) $ 0.22 $ (0.97)
Discontinued operations (2.33) (1.01) (5.57)
Cumulative effect of accounting change 0.00 0.00 0.67
----------- ----------- -----------

Applicable to common stock $ (2.50) $ (0.79) $ (5.87)
=========== =========== ===========
</TABLE>

(1) See Note 1 of Notes to Consolidated Financial Statements.

(2) These calculations are submitted in accordance with Securities Exchange
Act of 1934, Release No. 9083, although in certain instances, it is
contrary to paragraph 40 of APB Opinion No. 15 because it produces an
anti-dilutive result.

<PAGE> 1

EXHIBIT 22

BIRD CORPORATION

Significant Subsidiaries:

All subsidiaries are majority owned and are included in the
Consolidated Financial Statements.

State in Which
Incorporated or Organized

Bird Incorporated Massachusetts

<PAGE> 1
EXHIBIT 23 (a)

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectuses
constituting part of these Registration Statements on Form S-3 (No. 33-44475);
Form S-4(No. 33-44403) and Forms S-8(Nos. 33-36304, 33-67826, 33-67828 and
33-36305) of our report dated March 15, 1996 appearing on Page F2 of Bird
Corporation's Annual Report on Form 10-K for the year ended December 31, 1995.

Price Waterhouse LLP
Boston, Massachusetts
March 27, 1996

<PAGE> 1
EXHIBIT 23(b)

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectuses
constituting part of these Registration Statements on Form S-3 (No. 33-44475);
Form S-4 (No. 33-44403) and Forms S-8 (Nos. 33-36304, 33-67826, 33-67828 and
33-36305) of our report dated February 10, 1995; appearing on Page F3 of Bird
Corporation's Form 10-K for the year ended December 31, 1995.

Alpern, Rosenthal & Company
Pittsburgh, Pennsylvania
March 25, 1996

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
DECEMBER 31, 1995 FINANCIAL STATEMENTS LOCATED IN THE FORM 10-K AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-K
</LEGEND>
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 3,679,000
<SECURITIES> 0
<RECEIVABLES> 5,614,000
<ALLOWANCES> 153,000
<INVENTORY> 4,701,000
<CURRENT-ASSETS> 16,454,000
<PP&E> 39,646,000
<DEPRECIATION> 16,127,000
<TOTAL-ASSETS> 43,703,000
<CURRENT-LIABILITIES> 10,476,000
<BONDS> 4,869,000
0
1,396,000
<COMMON> 4,395,000
<OTHER-SE> 21,616,000
<TOTAL-LIABILITY-AND-EQUITY> 43,703,000
<SALES> 54,180,000
<TOTAL-REVENUES> 54,180,000
<CGS> 48,007,000
<TOTAL-COSTS> 48,007,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 927,000
<INCOME-PRETAX> 10,627,000
<INCOME-TAX> 11,424,000
<INCOME-CONTINUING> (797,000)
<DISCONTINUED> (11,252,000)
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (12,049,000)
<EPS-PRIMARY> (3.31)
<EPS-DILUTED> (2.50)

</TABLE>