SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) MARCH 27, 1996
SCHULLER CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 1-8247 84-0856796
(State of (Commission File No.) (IRS Employer
Incorporation) Identification No.)
717 17th Street,
Denver, Colorado
(Address of principal executive offices)
80202
(zip code)
(303) 978-2000
(Registrant's telephone number, including area code)
Item 2. Acquisition or Disposition of Assets
On March 27, 1996, the Registrant disposed of
its shares of common stock (the "Riverwood Common
Stock"), par value $.01 per share, of Riverwood
International Corporation ("Riverwood"), representing
approximately 81.3% of the outstanding shares of
Riverwood Common Stock (such disposition being herein
referred to as the "Riverwood Disposition"), as a result
of a merger of CDRO Acquisition Corporation (the
"Purchaser"), a wholly owned subsidiary of RIC Holding,
Inc. ("Parent"), formerly named CDRO Holding Corporation,
with and into Riverwood (the "Merger") pursuant to an
Agreement and Plan of Merger (the "Merger Agreement"),
dated as of October 25, 1995, by and among Riverwood,
Parent and the Purchaser. In the Merger, each share of
Riverwood Common Stock was converted into the right to
receive $20.25 per share in cash, without interest, or
approximately $1.08 billion in the aggregate for the
Riverwood Common Stock held by the Registrant.
In connection with the Merger Agreement, the
Registrant has agreed to provide certain indemnities to
Parent and the Purchaser pursuant to a Voting and
Indemnification Agreement, dated as of October 25, 1995,
by and among the Registrant, Parent and the Purchaser
(the "Voting and Indemnification Agreement"). The
Registrant has also agreed to make certain tax payments
and to provide certain tax indemnities to Parent and the
Purchaser, pursuant to a Tax Matters Agreement, dated as
of October 25, 1995, by and among the Registrant,
Riverwood, Parent and the Purchaser (the "Tax Matters
Agreement"). The Merger Agreement, the Voting and
Indemnification Agreement and the Tax Matters Agreement
were previously filed as exhibits to the Registrant's
Current Report on Form 8-K dated October 25, 1995 and
filed with the Securities and Exchange Commission on
November 1, 1995, and are incorporated herein by
reference. The foregoing descriptions of the Merger
Agreement, the Voting and Indemnification Agreement and
the Tax Matters Agreement do not purport to be complete
and are qualified in their entirety by reference to the
provisions of such agreements. The press release issued
in connection with the consummation of the Riverwood
Disposition was previously filed as an exhibit to the
Registrant's Current Report on Form 8-K dated March 28,
1996, and is incorporated herein by reference.
Item 5. Other Events
At the Registrant's Special Meeting of
Stockholders held on March 27, 1996 (the "Special
Meeting"), the Registrant's stockholders approved the
Profit Sharing Exchange Agreement, dated October 25, 1995
(the "Profit Sharing Exchange Agreement"), between the
Registrant and Manville Personal Injury Settlement Trust
(the "PI Trust") and the transactions contemplated
thereby. Pursuant to the terms of the Profit Sharing
Exchange Agreement, on April 5, 1996, the Registrant
issued to the PI Trust 32,527,110 newly issued shares
(the "Conversion Shares") of common stock, par value $.01
per share, of the Registrant (the "Common Stock")
representing 20% of the outstanding Common Stock on a
fully diluted basis as of April 5, 1996 (assuming
exercise of all then outstanding options, warrants and
other rights to acquire Common Stock and after giving
effect to such issuance) in exchange for the elimination
of the PI Trust's right to receive annually 20% of the
Registrant's adjusted net earnings and the elimination of
the PI Trust's right to receive, under certain
circumstances, a portion of the proceeds from certain
asset sales by the Registrant (such transaction being
herein referred to as the "Exchange"). In addition, as
contemplated by the Profit Sharing Exchange Agreement, on
March 27, 1996, the Registrant declared a dividend (the
"Dividend") in the amount of $6.00 per share of Common
Stock outstanding at the close of business on April 8,
1996, payable April 12, 1996. The foregoing description
of the Exchange and the Profit Sharing Exchange Agreement
does not purport to be complete and is qualified in its
entirety by reference to the provisions of the Profit
Sharing Exchange Agreement, which was previously filed as
an exhibit to the Registrant's Current Report on Form 8-K
dated October 25, 1995 and filed with the Securities and
Exchange Commission on November 1, 1995, and is
incorporated herein by reference. On April 8, 1996, the
Registrant issued the press release filed herewith as
Exhibit 99.1. Such press release is incorporated herein
by reference.
In connection with the Exchange, the Registrant
and the PI Trust have executed the Second Amended and
Restated Supplemental Agreement, dated as of April 5,
1996, and the Ninth Amendment, dated as of March 27,
1996, to the Manville Personal Injury Settlement Trust
Agreement, dated as of November 28, 1988. The Second
Amended and Restated Supplemental Agreement was
previously filed as an exhibit to the Registrant's 1995
Annual Report on Form 10-K filed with the Securities and
Exchange Commission on April 11, 1996, and is
incorporated herein by reference. The Ninth Amendment to
the Manville Personal Injury Settlement Trust Agreement
is filed herewith as Exhibit 10.6, and is incorporated
herein by reference.
At the Special Meeting, the Registrant's
stockholders also approved a proposal to amend the
Registrant's Restated Certificate of Incorporation to
effect a change in the name of the Registrant to
"Schuller Corporation" (the "Name Change"). On March 29,
1996, a Certificate of Amendment to the Restated
Certificate of Incorporation of the Registrant was filed
with the Secretary of State of the State of Delaware
to effect the Name Change. A copy of the Restated
Certificate of Incorporation of the Registrant and the
Certificate of Amendment to the Restated Certificate of
Incorporation were previously filed as exhibits to the
Registrant's 1995 Annual Report on Form 10-K filed with
the Securities and Exchange Commission on April 11, 1996,
and are incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial
Information and Exhibits
(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information.
The accompanying unaudited pro forma condensed
consolidated financial information and per share
financial data gives effect to (i) the Riverwood
Disposition and (ii) the Exchange, including the issuance
of the Conversion Shares. In addition, the pro forma
financial statements reflect certain related transactions
(the "Related Transactions") including, among other
things, permitted discretionary redemptions of certain
debt and preferred stock, the Dividend, and the exercise
of outstanding warrants (the "Warrants") to purchase
approximately 7 million shares of Common Stock. The
unaudited pro forma condensed consolidated statement of
income for the year ended December 31, 1995 give effect
to the Riverwood Disposition, the Exchange and the
Related Transactions as if they had occurred on January
1, 1995. The unaudited pro forma condensed consolidated
balance sheet as of December 31, 1995 gives effect to the
Riverwood Disposition, the Exchange and the Related
Transactions as if they had occurred on December 31,
1995.
The unaudited pro forma condensed consolidated
financial statements are based upon and should be read in
conjunction with the consolidated financial statements,
the related notes thereto and "Management's Discussion
and Analysis of Financial Condition and Results of
Operations," which were previously filed as an exhibit to
the Registrant's 1995 Annual Report on Form 10-K filed
with the Securities and Exchange Commission on April 11,
1996, and which are incorporated herein by reference.
The accompanying pro forma information is
presented for illustrative purposes only and is not
necessarily indicative of the Registrant's operating
results or financial position that would have been
reported had the transactions and assumptions described
in these notes been consummated on the dates indicated,
nor is it necessarily indicative of the Registrant's
future operating results or financial position.
<TABLE>
SCHULLER CORPORATION
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
December 31, 1995
(Thousands of dollars)
(Unaudited)
<CAPTION>
Pro Forma Adjustments (A)
------------------------------------------------
Riverwood Profit Sharing Related
Schuller Disposition Exchange Transactions
Corporation (Note 1) (Note 2) (Note 3) Pro Forma
----------- ---------- ------------- ------------ ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and equivalents $ 310,809 $1,021,086 (a) $ (1,797) (d) $(1,170,542) (f) $ 159,556
Marketable securities, at
cost which approximates
market 116,958 116,958
Receivables, net of allowances 195,780 195,780
Inventories 77,121 77,121
Prepaid expenses 5,807 5,807
Deferred tax assets 31,233 31,233
Total Current Assets 737,708 1,021,086 (1,797) (1,170,542) 586,455
Property, Plant and Equipment,
net 717,410 717,410
Deferred Tax Assets 414,711 (480,650) (b) 160,246 (d) 114,449 (h) 208,756
Other Assets 228,629 (18,080) (a) 210,549
Net Assets Held for Sale 375,601 (375,601) (b)
Total Assets $2,474,059 $ 146,755 $ 158,449 $(1,056,093) $1,723,170
LIABILITIES
Current Liabilities
Accounts and notes payable $ 95,282 $ (1,931) (g) $ 93,351
Compensation and employee
benefits 104,550 104,550
Income taxes 28,768 $ (8,335) (a) 20,433
Other accrued liabilities 103,005 (2,077) (f) 100,928
Total Current Liabilities 331,605 (8,335) (4,008) 319,262
Long-Term Debt, less
current portion 447,007 (22,746) (g) 424,261
Postretirement Benefits Other
than Pensions 204,445 204,445
Deferred Income Taxes and
Other Noncurrent Liabilities 310,536 310,536
Total Liabilities 1,293,593 (8,335) (26,754) 1,258,504
STOCKHOLDERS EQUITY
Cumulative Preference Stock,
Series B 178,638 (178,638) (f)
Common Stock 1,228 $ 326 (d) 70 (f) 1,624
Treasury Stock, at cost (1,999) (1,999)
Capital in Excess of Par Value 1,013,505 455,723 (d) (960,680) (f) 508,548
Unearned Restricted Stock
Compensation (3,427) (3,427)
(Accumulated Deficit)/Retained
Earnings (39,322) 155,090 (b) (297,600) (d) 109,909 (i) (71,923)
Pension Liability Adjustment (841) (841)
Cumulative Currency Translation
Adjustment 32,684 32,684
Total Stockholders Equity 1,180,466 155,090 158,449 (1,029,339) 464,666
Total Liabilities and
Stockholders Equity $2,474,059 $ 146,755 $ 158,449 $(1,056,093) $1,723,170
(A) The balance sheet gives effect to the pro forma adjustments as if they
had occurred on December 31, 1995.
The accompanying notes are an integral part of the pro forma condensed
consolidated financial statements.
</TABLE>
<TABLE>
SCHULLER CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Twelve Months Ended December 31, 1995
(Thousands of dollars, except for per share amounts)
(Unaudited)
<CAPTION>
Pro Forma Adjustments (A)
---------------------------------------------
Riverwood Profit Sharing Related
Schuller Disposition Exchange Transactions
Corporation (Note 1) (Note 2) (Note 3) Pro Forma
<S> <C> <C> <C> <C> <C>
Net Sales $1,391,522 $1,391,522
Cost of Sales 993,111 993,111
Selling, General and Administrative 150,135 $(5,000) (c) 145,135
Research, Development and Engineering 29,988 29,988
Other Income (Expense), net (17,005) 369 (c) (16,636)
Income from Operations 201,283 5,369 206,652
Gain on Sale of Equity Investment 74,889 74,889
Interest Income 24,177 24,177
Interest Expense 48,265 1,004 (c) $(3,285) (j) 45,984
Profit Sharing Expense 27,661 $(27,661) (e)
Income from Continuing Operations
Before Income Taxes 224,423 4,365 27,661 3,285 259,734
Income Taxes 102,417 1,399 (c) 9,681 (e) 1,150 (j) 114,647
Income from Continuing Operations $ 122,006 $ 2,966 $ 17,980 $ 2,135 $ 145,087
Weighted Average Common Shares Outstanding
Primary 124,443 162,485(C)
Fully Diluted 124,960 162,512(C)
Earnings Per Common Share
on Income from Continuing
Operations
Primary $.78 (B) $.89
Fully Diluted $.78 (B) $.89
(A) The statement of income gives effect to the pro forma adjustments as
if they had occurred on January 1, 1995.
(B) Historical earnings per common share amounts are net of preference
stock dividends of $24.9 million.
(C) Pro forma weighted average common shares outstanding includes 32.5
million shares issued for the Profit Sharing Exchange and 7 million
shares for the assumed exercise of all outstanding warrants.
The accompanying notes are an integral part of the pro forma condensed
consolidated financial statements.
</TABLE>
Schuller Corporation
Notes to Unaudited Pro Forma Condensed Consolidated Financial
Information
Note 1 - Riverwood Disposition
Assumptions and adjustments used to reflect the Riverwood Disposition
in the unaudited pro forma financial statements include:
Balance sheet - pro forma adjustments (effective date December 31, 1995):
(a) To reflect the estimated net cash proceeds from the Riverwood
Disposition:
(Thousands of dollars)
* Sale of the Registrant's entire interest in
Riverwood of approximately 53.4 million shares
of Riverwood Common Stock at a price
of $20.25 per share $1,081,341
* Estimated cash taxes (25,000)
* Estimated costs resulting directly from the Riverwood
Disposition including transaction fees, legal and
accounting fees, termination benefits and expenses
related to the internal reorganization of the
Registrant. (45,000)
* Estimated cash settlement of intercompany balances:
Income Taxes (8,335)
Other Assets 18,080
* Net Estimated Cash Proceeds $1,021,086
(Thousands of dollars)
(b) To record the estimated net gain on disposition:
* Sale of the Registrant's entire interest in Riverwood
of approximately 53.4 million shares of Riverwood
Common Stock at a price of $20.25 per share. $1,081,341
* Estimated costs resulting directly from the Riverwood
Disposition including transaction fees, legal and
accounting fees, termination benefits and expenses
related to the internal reorganization of the
Registrant. (45,000)
* Basis in net investment of Riverwood:
Net Assets Held for Sale (375,601)
Deferred Income Taxes (233,539)
* Estimated pretax financial reporting gain on Riverwood
Disposition 427,201
* Estimated income taxes, assuming effective income tax
rate of 64%:
Cash Taxes (25,000)
Deferred Tax Assets (480,650)
Deferred Income Taxes 233,539
Total Income Taxes (272,111)
* Estimated gain to be recorded on the Riverwood Disposition,
net of taxes $ 155,090
For purposes of these statements, there have been included in the
estimated costs resulting directly from the Riverwood Disposition
nonrecurring expenses that may arise in connection with: the vesting
of certain supplemental retirement plans ($6.8 million), the
repurchase by the Registrant of vested stock options ($1.1 million),
and executive termination expenses ($6 million).
The estimated effective tax rate on the sale is higher than statutory
tax rates due to differences in the book and tax basis of the
investment being sold for which deferred taxes had not been
previously provided in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
No. 109"). Additionally, in accordance with the Internal Revenue
Code, the Registrant will be responsible for federal income taxes
resulting from the election under Section 338(h) (10) of the Internal
Revenue Code to treat the Riverwood Disposition as an asset sale for
tax purposes.
Income statement - pro forma adjustments (effective date January 1,
1995):
(c) To reflect adjustments to other costs and expenses for the year
ended December 31, 1995:
* Reduction of specific selling, general and
administrative costs related to the Registrant's
management of its investment in Riverwood $ 5,000
* Elimination of the amortization of goodwill related to
Riverwood 369
* Elimination of intercompany interest income (1,004)
4,365
* Estimated income taxes 1,399
* Estimated increase in income from continuing operations $ 2,966
Note 2 - Profit Sharing Exchange
Assumptions and adjustments used to reflect the Exchange include the
following:
Balance sheet - pro forma adjustments (effective date December 31,
1995):
(d) To record the Exchange:
(Thousands of dollars)
* To reflect the issuance of approximately 32.5
million shares of Common Stock, par value $0.01,
with an assumed fair market value of $14.00
per share:
Common Stock $ 326
Capital in Excess of Par Value 455,723
456,049
* Estimated cash expenses of the Exchange 1,797
457,846
* Estimated income taxes 160,246
* Estimated increase in accumulated deficit $297,600
Income Statement - pro forma adjustments (effective date January 1, 1995):
(e) To reflect the elimination of profit sharing expense for the year
ended December 31, 1995:
(Thousands of dollars)
* Profit sharing expense $(27,661)
* Estimated income taxes 9,681
* Estimated increase in income from continuing operations $ 17,980
Fair market value of the Common Stock at the date of issuance was
assumed to be $14.00 per share which was based on the New York Stock
Exchange closing sales price for the Common Stock on March 29, 1996.
Based on this assumption, the Exchange would result in an
extraordinary loss of approximately $297.6 million, net of income
taxes of $160.2 million.
The Registrant will receive a tax deduction when the PI Trust sells
some or all of its shares of Common Stock and distributes the
proceeds to its beneficiaries or transfers the proceeds to a specific
settlement fund. If the PI Trust were to sell the stock at a price
greater than the average carrying value, the Registrant may receive a
tax benefit in excess of the deferred tax asset reflected for
financial reporting purposes. Likewise, if the PI Trust were to sell
the stock at a price lower than the average carrying value, the
Registrant would receive a tax benefit less than the deferred tax
asset reflected for financial reporting purposes.
Note 3 - Related Transactions
The Profit Sharing Exchange Agreement permits the Registrant, at the
discretion of the Board of Directors, to redeem its Cumulative
Preference Stock, Series B and prepay its outstanding 9 percent
Sinking Fund Debentures out of the proceeds of the Riverwood
Disposition. In addition, the Profit Sharing Exchange Agreement
contemplates that the Registrant will declare and pay, and the
Exchange will occur only in connection with the declaration of the
Dividend. On March 27, 1996, the Registrant declared a $6.00 per
Common Share dividend, and announced the redemption of its Cumulative
Preference Stock, Series B, for $25 per share plus accrued dividends,
effective April 30, 1996. In addition, the Registrant announced its
intention to redeem the 9 percent Sinking Fund Debentures on July 1,
1996. The following assumptions and adjustments were used to reflect
the Related Transactions:
Balance sheet - pro forma adjustment (effective date December 31,
1995):
(f) To record the net cash used for the Related Transactions:
(Thousands of dollars)
* Redemption of 9.2 million shares of Cumulative
Preference Stock, Series B at a stated redemption
price of $25 per share:
Cumulative Preference Stock, Series B $ (178,638)
Capital in Excess of Par Value (52,127)
(230,765)
* Prepayment of Cumulative Preference Stock, Series B
dividend accrued through December 31, 1995 (2,077)
* Prepayment of outstanding 9 percent Sinking Fund
Debentures (29,217)
* Payment of a Common Stock dividend of $6.00 per share
on approximately 162.3 million shares Common Stock:
Capital in Excess of Par Value (973,955)
* Exercise of warrants for the purchase of seven million
shares of Common Stock, par value $0.01, at an exercise
price of $9.40 per share:
Common Stock 70
Capital in Excess of Par Value 65,402
65,472
Net Cash Used in Related Transactions $(1,170,542)
(g) Prepayment of outstanding 9 percent Sinking Fund Debentures:
(Thousands of dollars)
* Accounts and notes payable $ (1,931)
* Long-Term Debt, less current portion (22,746)
* Reduction in Debt (24,677)
* Pretax extraordinary loss on early extinguishment
of debt (4,540)
* Cash used for prepayment of outstanding 9 percent
Sinking Fund Debentures $ (29,217)
(h) To recognize tax benefits on the Related Transactions:
* Estimated tax benefit on the dividend $ 112,860
* Estimated tax benefit on the prepayment of the 9
percent Sinking Fund Debentures 1,589
* Net increase in deferred tax assets $ 114,449
(i) To record the net effects on (accumulated deficit)/retained
earnings of the Related Transactions:
* Prepayment of outstanding 9 percent Sinking Fund
Debentures: Extraordinary loss on early extinguishment
of debt, net of estimated income taxes of $1.9 million $ (2,951)
* Estimated tax benefit on the dividend 112,860
* Net increase in retained earnings $109,909
Income statement - pro forma adjustment (effective date January 1,
1995):
(j) Elimination of interest expense on the 9 percent Sinking Fund
Debentures for the year ended December 31, 1995:
* Interest expense $ (3,285)
* Estimated income taxes 1,150
* Estimated increase in income from continuing operations $ (2,135)
In addition to the effects of the redemption of 9.2 million
shares of Cumulative Preference Stock, Series B, the Registrant has
also reflected the elimination of related preference stock dividends
paid in 1995 from income applicable to common stockholders for the
purposes of computing pro forma earnings per share. The excess of
the redemption price over the carrying value of the Cumulative
Preference Stock, Series B, of approximately $52 million will be
charged directly to capital in excess of par value. Although not
reflected in the pro forma income statement, this $52 million charge
to capital in excess of par value will be deducted from net income at
the time this transaction occurs to compute earnings per share
applicable to common stockholders. This charge will result in a
reduction of approximately $0.32 per share in earnings per share
applicable to common stockholders.
The prepayment of outstanding 9 percent Sinking Fund
Debentures will result in an estimated extraordinary loss on early
extinguishment of debt, net of taxes of approximately $3 million
using an effective income tax rate of 35 percent.
As further described in the Registrant's 1995 Annual Report on
Form 10-K, that portion of any dividend payments made to the PI Trust
represent a tax benefit to the Registrant that will become a current
deduction when and to the extent the PI Trust pays such amount to
claimants or transfers such amount to a specific settlement fund.
The Registrant expects the PI Trust to transfer its entire Dividend
proceeds to the settlement fund in the year of receipt which will
result in a current tax deduction for the Registrant. This current
tax deduction will be utilized to shelter the tax gain on the
Riverwood Disposition which will result in cash tax payments to be
made in conjunction with the sale at rates significantly lower than
normal statutory cash tax rates.
The tax benefit for financial reporting purposes on the
Dividend will be realized at less than normal statutory rates. Due
to the size of the Dividend in relation to the Registrant s equity,
the Registrant will make a corresponding pro rata reduction in the
carrying value of its deferred tax asset related to Common Stock held
by the PI Trust based on the percentage of Dividend paid to the fair
value of the Common Stock before the Dividend. The pro rata
reduction in the deferred tax asset related to Common Stock held by
the PI Trust will partially offset the tax benefit on the dividend
resulting in an effective tax rate related to the portion of the
Dividend paid to the PI Trust of approximately 15 percent.
At the time the Registrant recognizes the net tax benefit on
the Dividend, the Registrant expects to present this benefit as a tax
benefit on continuing operations in accordance with SFAS No. 109.
Due to the magnitude and unusual nature of this Dividend, the net tax
benefit on the Dividend has been excluded from the pro forma income
statement to present the Registrant s income taxes on continuing
operations on a more representative basis of the Registrant s ongoing
effective tax rate.
The exercise of the Warrants is at the Warrant holder s option
and not a specific requirement of the transactions contemplated in
these pro forma financial statements. However, the Registrant has
assumed that before the Dividend is paid all Warrant holders would
exercise their Warrants allowing them to receive the Dividend. The
outstanding Warrants would be exercised for the purchase of seven
million shares of Common Stock, par value $0.01, at an exercise price
of $9.40 per share.
(c) Exhibits.
Exhibit Description
Number
3(a) Restated Certificate of Incorporation
of the Registrant
3(b) Certificate of Amendment to Restated
Certificate of Incorporation
10.1 Agreement and Plan of Merger, dated as
of October 25, 1995, by and among
Riverwood International Corporation,
CDRO Holding Corporation and CDRO
Acquisition Corporation
10.2 Voting and Indemnification Agreement,
dated as of October 25, 1995, by and
among Manville Corporation, CDRO
Holding Corporation and CDRO
Acquisition Corporation
10.3 Tax Matters Agreement, dated as of
October 25, 1995, by and among
Manville Corporation, Riverwood
International Corporation, CDRO
Holding Corporation and CDRO
Acquisition Corporation
10.4 Profit Sharing Exchange Agreement,
dated October 25, 1995, between
Manville Corporation and Manville
Personal Injury Settlement Trust
10.5 Second Amended and Restated
Supplemental Agreement, dated as of
April 5, 1996, between Manville
Personal Injury Settlement Trust and
Schuller Corporation (formerly known
as Manville Corporation)
10.6 Ninth Amendment, dated as of March 27,
1996, to the Manville Personal Injury
Settlement Trust Agreement, dated as
of November 28, 1988, by and among
Johns-Manville Corporation, Manville
Corporation, Manville Canada Inc.,
Manville Investment Corporation, Ken-
Caryl Ranch Corporation and SAL
Contract & Supply, Inc. as Trustors
and Donald M. Blinken, Daniel Fogel,
Francis H. Hare, Jr., John C. Sawhill
and Christian E. Markey, Jr. as
Trustees
13.1 Pages 21 through 83 of the
Registrant's 1995 Annual Report to
Securityholders
99.1 Press Release issued by the Registrant
on April 8, 1996
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunto duly authorized.
SCHULLER CORPORATION
By: /s/ Richard B. Von Wald
Name: Richard B. Von Wald
Title: Senior Vice President,
General Counsel and Secretary
Date: April 11, 1996
EXHIBIT INDEX
Exhibit Description
Number
3(a) Restated Certificate of Incorporation
of the Registrant (incorporated by
reference to Exhibit 3(a) to the
Registrant's Annual Report on Form 10-
K filed with the Securities and
Exchange Commission on April 11, 1996
(File No. 1-8247))
3(b) Certificate of Amendment to Restated
Certificate of Incorporation
(incorporated by reference to Exhibit
3(b) to the Registrant's Annual Report
on Form 10-K filed with the Securities
and Exchange Commission on April 11,
1996 (File No. 1-8247))
10.1 Agreement and Plan of Merger, dated as
of October 25, 1995, by and among
Riverwood International Corporation,
CDRO Holding Corporation and CDRO
Acquisition Corporation (incorporated
by reference to Exhibit 10.4 to the
Registrant's Current Report on Form 8-
K dated October 25, 1995 and filed
with the Securities and Exchange
Commission on November 1, 1995 (File
No. 1-8247))
10.2 Voting and Indemnification Agreement,
dated as of October 25, 1995, by and
among Manville Corporation, CDRO
Holding Corporation and CDRO
Acquisition Corporation (incorporated
by reference to Exhibit 10.2 to the
Registrant's Current Report on Form 8-
K dated October 25, 1995 and filed
with the Securities and Exchange
Commission on November 1, 1995 (File
No. 1-8247))
10.3 Tax Matters Agreement, dated as of
October 25, 1995, by and among
Manville Corporation, Riverwood
International Corporation, CDRO
Holding Corporation and CDRO
Acquisition Corporation (incorporated
by reference to Exhibit 10.3 to the
Registrant's Current Report on Form 8-
K dated October 25, 1995 and filed
with the Securities and Exchange
Commission on November 1, 1995 (File
No. 1-8247))
10.4 Profit Sharing Exchange Agreement,
dated October 25, 1995, between
Manville Corporation and Manville
Personal Injury Settlement Trust
(incorporated by reference to Exhibit
10.1 to the Registrant's Current
Report on Form 8-K dated October 25,
1995 and filed with the Securities and
Exchange Commission on November 1,
1995 (File No. 1-8247))
10.5 Second Amended and Restated
Supplemental Agreement, dated as of
April 5, 1996, between Manville
Personal Injury Settlement Trust and
Schuller Corporation (formerly known
as Manville Corporation) (incorporated
by reference to Exhibit 10(o) to the
Registrant's Annual Report on Form 10-
K filed with the Securities and
Exchange Commission on April 10, 1996
(File No. 1-8247))
10.6 Ninth Amendment, dated as of March 27,
1996, to the Manville Personal Injury
Settlement Trust Agreement, dated as
of November 28, 1988, by and among
Johns-Manville Corporation, Manville
Corporation, Manville Canada Inc.,
Manville Investment Corporation, Ken-
Caryl Ranch Corporation and SAL
Contract & Supply, Inc. as Trustors
and Donald M. Blinken, Daniel Fogel,
Francis H. Hare, Jr., John C. Sawhill
and Christian E. Markey, Jr. as
Trustees
13.1 Pages 21 through 83 of the
Registrant's 1995 Annual Report to
Securityholders (incorporated by
reference to Exhibit 13 to the
Registrant's Annual Report on Form 10-
K filed with the Securities and
Exchange Commission on April 11, 1996
(File No. 1-8247))
99.1 Press Release issued by the Registrant
on April 8, 1996
Exhibit 10.6
NINTH AMENDMENT TO
MANVILLE PERSONAL INJURY
SETTLEMENT TRUST AGREEMENT
NINTH AMENDMENT, dated as of March 27, 1996
(the "Ninth Amendment") to the Trust Agreement, dated as
of November 28, 1988 by and among Johns-Manville
Corporation, Manville Corporation (the "Company"),
Manville Sales Corporation, Manville Canada Inc.,
Manville Investment Corporation, Ken-Caryl Ranch
Corporation and SAL Contract & Supply, Inc. as Trustors
(collectively, the "Trustors") and Donald M. Blinken,
Daniel Fogel, Francis H. Hare, Jr., John C. Sawhill (the
"Former Trustees") and Christian E. Markey, Jr., as
trustees for the Manville Personal Injury Settlement
Trust (the "Trust"), as amended by the First, Second and
Third Amendments to the Trust Agreement dated as of
February 14, 1989, November 15, 1990, and December 6,
1991, respectively between the Company, Mr. Markey and
the Former Trustees, and as further amended by the
Fourth, Fifth, Sixth, Seventh, Eighth and Tenth
Amendments to the Trust Agreement dated as of August 6,
1992, December 9, 1992, November 5, 1993, September 22,
1994, August 15, 1995 and November 21, 1995, respectively
between the Company, Mr. Markey, Robert A. Falise, Louis
Klein, Jr., and Frank J. Macchiarola, and, in the case of
the Seventh Amendment, Charles T. Hagel, as trustees of
the Trust (the Trust Agreement and all nine prior
Amendments being collectively referred to herein as the
"Trust Agreement").
WHEREAS, Section 6.03(a) of the Trust Agreement
provides for the amendment of the Trust Agreement by the
Company (as successor to the Trustors for such purpose)
and the Trustees of the Trust after consultation with
Selected Counsel for the Beneficiaries (as defined in
Exhibit A to the Second Amended and Restated Plan of
Reorganization of the Company and the other Debtors (as
therein defined)(the "Plan of Reorganization")); and
WHEREAS, the Trustees of the Trust and the
Company (as successor to the Trustors for this purpose
pursuant to Section 6.03(a) of the Trust Agreement) wish
to amend the Trust Agreement in the manner provided
herein; and
WHEREAS, the Selected Counsel for the
Beneficiaries have been consulted and have given their
concurrence with respect to the amendment to the Trust
Agreement effectuated hereby; and
WHEREAS, the Profit Sharing Exchange Agreement,
dated October 25, 1995, between the Company and the Trust
(the "Exchange Agreement") contemplates the execution of
this Ninth Amendment, and in accordance with such Profit
Sharing Exchange Agreement, the execution and performance
by the Trustees of this Ninth Amendment and the
transactions contemplated hereby have been approved by
order of the United States Bankruptcy Court for the
Southern District of New York pursuant to the
jurisdiction retained by such Court under the Plan of
Reorganization; and
WHEREAS, the execution, delivery and
effectiveness of this Ninth Amendment is a condition
precedent to the Company's obligation to declare a
dividend or other payment from Proceeds (as defined in
the Exchange Agreement) pursuant to the terms of Section
3.03 of the Exchange Agreement, notice of the intended
declaration of which on the date hereof has been provided
to the Trust (the "Dividend").
NOW THEREFORE, the parties hereto agree to
amend the Trust Agreement as follows:
1. Section 6.02(b) of the Trust Agreement is
hereby amended to read in its entirety as follows:
"(b) On the Termination Date, all Trust
Claims shall be extinguished, the Trust shall
be dissolved, the Company shall assume all of
the Trust's liabilities other than Trust Claims
and the injunction provided for in Paragraph
9.2.A.3 of the Plan shall be modified in
accordance with the order issuing such
injunction, and all of the Trust's assets
shall, except as provided in Subsections (c)
and (d) below, be transferred and assigned to
(i) the PD Trust, if the PD Trust is then in
existence, or (ii) the Company or any designees
of the Company, if the PD Trust is not then in
existence, and the Trustees and the Company
agree to execute and deliver, or cause to be
executed and delivered, such agreements,
instruments and other documents as may be
necessary or advisable to implement the
foregoing."
2. Except as specifically amended pursuant to
Paragraph 1 above, the Trust Agreement shall remain in
full force and effect and is ratified and confirmed in
all respects.
3. This Ninth Amendment shall be governed by
and construed in accordance with the laws of the State of
New York and for all purposes shall be governed by and
construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely
within such State.
4. This Ninth Amendment may be executed in
any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute
one and the same instrument. Terms not defined herein
shall, unless the context otherwise requires, have the
meanings assigned to such terms in the Trust Agreement.
5. The terms of this Ninth Amendment shall be
effective as of the date first above written; provided,
however, that if the Dividend is not declared by the
Company on the date first above written, then on the day
immediately following such date this Ninth Amendment
shall terminate and be of no further force and effect and
Section 6.02(b) shall re-enter into effect as it read
immediately prior to the effectiveness of this Ninth
Amendment.
IN WITNESS WHEREOF, the Company as successor to
the Trustors, has caused this Ninth Amendment to be
executed by its duly authorized officer and attested by
another duly authorized officer, and the Trustees of the
Trust have executed this Ninth Amendment, all as of the
day and year first above written.
MANVILLE CORPORATION
By: /s/ W.T. Stephens
Name: W.T. Stephens
Title: President and Chief Executive
Officer
Attest:
/s/ Richard B. Von Wald
TRUSTEES
/s/ Robert A. Falise as Trustee
Robert A. Falise
/s/ Louis Klein, Jr. as Trustee
Louis Klein, Jr.
/s/ Frank J. Macchiarola as Trustee
Frank J. Macchiarola
/s/ Christian E. Markey, Jr. as Trustee
Christian E. Markey, Jr.
Exhibit 99.1
[SCHULLER LOGO]
NEWS RELEASE
Contact: Sharon Sweet
(303) 978-4694
SCHULLER ISSUES 32.5 MILLION SHARES IN
PROFIT SHARING EXCHANGE WITH MANVILLE TRUST
Denver, Colo. (April 8, 1996) -- Schuller Corporation today
announced the consummation of the previously announced Profit
Sharing Exchange Agreement with Manville Personal Injury
Settlement Trust (Trust). In the transaction, the Trust
received 32.5 million shares of Schuller Corporation's common
stock in exchange for the elimination of the Trust's right to
receive annually 20 percent of Schuller's adjusted net
earnings.
"Restructuring the profit sharing arrangement with the Trust
is vital to the normalization of our company," said Tom
Stephens, Schuller chief executive officer. "By exchanging
that obligation for common stock, we are able to create more
understandable financial statements, to strengthen our
financial position, to simplify our relationship with the
Trust, and to eliminate an important cause of investor
resistance to our stock. And the Trust, in turn, has received
a more liquid security."
Added Robert A. Falise, chairman and managing trustee of the
Trust, "This transaction achieves our goal of fully aligning
the Trust's ownership interests with those of all Schuller
shareholders going forward. We are confident that
unencumbered ownership of a strong asset will benefit
shareholders and Trust beneficiaries alike."
As a result of the exchange, Schuller expects to record an
extraordinary loss of approximately $310 million, net of
taxes, during the first quarter of 1996. In addition,
Schuller will be required to pay profit sharing to the Trust
for the period from January 1, 1996 to April 5, 1996.
Calculation of the 1996 profit sharing payment will not
include the loss referred to above or the net gain from the
disposition of the company's shares of Riverwood International
Corporation. In 1995 the pretax profit sharing expense
totaled $27.7 million.
Schuller Corporation (NYSE:GLS) is a leading manufacturer of
insulation and building products, with 1995 sales of $1.4
billion. Schuller produces and markets insulation products
for buildings and equipment, commercial and industrial roofing
systems, high-efficiency air filtration media, and fibers and
nonwoven mats used as reinforcements in building and
industrial applications. Schuller employs approximately 7,500
people and operates 43 manufacturing facilities in North
America, Europe and China. Its home page on the worldwide web
can be found at http://www.schuller.com. Schuller is
headquartered in Denver, Colo.
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