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FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
|_| 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 1-8247
JOHNS MANVILLE CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 84-0856796
- ------------------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
717 17th Street
Denver, Colorado 80202
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(Address of principal executive offices) (Zip Code)
(303) 978-2000
----------------------------------------------------
(Registrant's telephone number, including area code)
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 [ ]
At August 11, 1997, there were 161,546,135 shares of the registrant's
common stock outstanding.
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*PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
* "JM" or the "Company" when used in this report refers to Johns
Manville Corporation, incorporated in the State of Delaware in 1991,
and includes, where applicable, its consolidated subsidiaries.
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JOHNS MANVILLE CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(Thousands of dollars)
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1997 1996
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current Assets
Cash and equivalents $ 115,210 $ 206,605
Marketable securities, at cost, which
approximates market 26,430 42,690
Receivables 280,496 229,665
Inventories 115,108 101,041
Prepaid expenses 5,753 7,921
Deferred tax assets 24,895 30,001
------------------------------------
Total Current Assets 567,892 617,923
Property, Plant and Equipment,
net of accumulated depreciation
of $616,308 and $630,338, respectively 798,410 770,420
Deferred Tax Assets 212,161 212,161
Goodwill 185,147 127,994
Other Assets 235,271 218,228
------------------------------------
$1,998,881 $1,946,726
=========================================================================================================================
LIABILITIES
- -------------------------------------------------------------------------------------------------------------------------
Current Liabilities
Accounts and notes payable $ 111,865 $ 152,599
Compensation and employee benefits 103,144 105,629
Income taxes 35,245 35,837
Other accrued liabilities 71,914 68,888
------------------------------------
Total Current Liabilities 322,168 362,953
Long-Term Debt, less current portion 475,548 428,160
Postretirement Benefits Other Than Pensions 204,373 200,822
Deferred Income Taxes and Other Noncurrent
Liabilities 369,224 374,329
------------------------------------
1,371,313 1,366,264
------------------------------------
Contingencies (Note 3)
STOCKHOLDERS' EQUITY
- -------------------------------------------------------------------------------------------------------------------------
Common Stock 1,627 1,627
Capital in Excess of Par Value 539,856 539,423
Treasury Stock, at cost (16,332) (16,241)
Unearned Stock Compensation (7,881) (9,124)
Retained Earnings 93,083 38,106
Cumulative Currency Translation Adjustment 17,215 26,671
------------------------------------
627,568 580,462
------------------------------------
$1,998,881 $1,946,726
=========================================================================================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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JOHNS MANVILLE CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)
(Thousands of dollars, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
-------------------------------------------------------------
1997 1996 1997 1996
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Sales $428,036 $381,403 $807,046 $ 707,512
Cost of Sales 310,097 272,901 588,451 505,451
Selling, General and Administrative 44,042 42,197 84,503 79,027
Research, Development
and Engineering 7,611 8,530 14,888 15,583
Other Income (Expense), net (3,254) (1,476) (6,474) 4,139
-------------------------------------------------------------
Income from Operations 63,032 56,299 112,730 111,590
Interest Income 1,798 6,417 4,753 12,891
Interest Expense 12,292 12,364 25,099 24,952
Profit Sharing Expense 86 6,648
-------------------------------------------------------------
Income from Continuing Operations
before Income Taxes 52,538 50,266 92,384 92,881
Income Tax Expense (Benefit) 15,363 22,116 27,717 (63,647)
-------------------------------------------------------------
Income from Continuing Operations 37,175 28,150 64,667 156,528
Gain on Disposal of Discontinued
Operations, net of tax 177,159
-------------------------------------------------------------
Income before Extraordinary Items 37,175 28,150 64,667 333,687
Extraordinary Items (1,989) (316,285)
-------------------------------------------------------------
Net Income 37,175 26,161 64,667 17,402
Preference Stock Redemption
Premium/Dividends (54,110) (60,341)
-------------------------------------------------------------
Net Income (Loss) Applicable to
Common Stock $ 37,175 $(27,949) $ 64,667 $ (42,939)
====================================================================================================================
EARNINGS (LOSS) PER COMMON SHARE
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Primary and Fully Diluted:
Income (Loss) from Continuing
Operations $.23 $(.17) $.40 $ .68
Gain on Disposal of Discontinued
Operations, net of tax 1.24
---------------------------------------------------------
Income (Loss) before Extraordinary
Items .23 (.17) .40 1.92
Extraordinary Items (.01) (2.22)
---------------------------------------------------------
Net Income (Loss) Applicable to
Common Stock $.23 $(.18) $.40 $ (.30)
====================================================================================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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JOHNS MANVILLE CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Thousands of dollars)
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended June 30,
-----------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 1997 1996
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net income $ 64,667 $ 17,402
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 38,676 33,901
Deferred taxes 4,475 (103,343)
Gain on disposal of discontinued operations (177,159)
Extraordinary loss on trust settlements 314,296
Other, net 17,440 41,114
Profit sharing paid (34,309)
Change in net current assets and liabilities (76,081) (74,867)
Change in other noncurrent liabilities (24,185) (15,988)
-----------------------------------
Net cash provided by operating activities 24,992 1,047
-----------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
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Purchases of property, plant and equipment (47,099) (57,650)
Acquisitions (92,995) (57,007)
Proceeds from sales of assets 9,293 2,708
Proceeds from disposition of Riverwood 1,081,341
Purchases of held-to-maturity securities (644) (32,435)
Purchases of available-for-sale securities (727) (31,487)
Proceeds from maturities of held-to-maturity
securities 1,516 82,946
Proceeds from sales or maturities of
available-for-sale securities 15,606 50,034
(Increase) decrease in other assets (6,717) 7,911
-----------------------------------
Net cash provided by (used in) investing activities (121,767) 1,046,361
-----------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
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Issuance of debt 56,000 679
Payments on debt (40,138) (24,697)
Dividends on common stock (9,690) (970,425)
Redemption of/dividends on preference stock (241,056)
Stock warrants exercised 64,794
Treasury and other stock transactions 240 (11,484)
-----------------------------------
Net cash provided by (used in) financing activities 6,412 (1,182,189)
-----------------------------------
Effect of Exchange Rate Changes on Cash (1,032) (938)
-----------------------------------
Net Decrease in Cash and Equivalents (91,395) (135,719)
Cash and Equivalents at Beginning of Period 206,605 310,809
-----------------------------------
Cash and Equivalents at End of Period $ 115,210 $ 175,090
====================================================================================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
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JOHNS MANVILLE CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
On May 2, 1997, Johns Manville Corporation (the "Company") changed its name
from Schuller Corporation. The condensed consolidated financial statements as
of June 30, 1997 and December 31, 1996 and for the three and six month periods
ended June 30, 1997 and 1996 reflect all normal, recurring adjustments which
are, in the opinion of management, necessary for a fair presentation of the
financial condition and the results of operations for the periods presented.
The year-end condensed consolidated balance sheet was derived from audited
financial statements, and as presented does not include all disclosures
required by generally accepted accounting principles. The Company has
reclassified the presentation of certain prior period information to conform
with the current presentation format. Additional information regarding the
Company's accounting policies, operations and financial position is contained
or incorporated in the Company's Form 10-K for the year ended December 31, 1996
filed with the Securities and Exchange Commission.
Note 1 - Inventories
The major classes of inventories were as follows:
<TABLE>
<CAPTION>
(Thousands of dollars)
June 30, December 31,
1997 1996
-----------------------------------
<S> <C> <C>
Finished goods $ 75,279 $ 60,456
Raw materials and supplies 30,952 32,113
Work-in-process 8,877 8,472
-----------------------------------
$115,108 $101,041
===================================
</TABLE>
Note 2 - Income Taxes
The 1997 estimated effective tax rate of 30 percent reflects the Company's
ability to utilize foreign tax credits and prior years' general business
credits due to the Company's expected taxable income in 1997. For the six
months ended June 30, 1996, the net income tax benefit of $63.6 million
included a $104.5 million tax benefit on the portion of a special cash dividend
that was paid to the Manville Personal Injury Settlement Trust (the "Trust").
Exclusive of the tax benefit on the special cash dividend, the Company's tax
rate was 44 percent for the first six months of 1996.
Note 3 - Disposition of Riverwood International Corporation ("Riverwood")
During the first quarter of 1996, the Company disposed of its 81.3 percent
interest in Riverwood and received gross cash proceeds of $1.08 billion and
recorded a gain of $177.2 million, net of taxes of $177.8 million. In the
fourth quarter of 1996, an additional gain of $39.1 million was recognized,
adjusting the estimated taxes previously recorded from $177.8 million to $138.7
million, as the Company determined that it would be able to utilize foreign tax
credits
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applicable to the gain and other tax adjustments of the transaction.
Accordingly, the Company recognized a gain of $216.2 million, net of tax, for
the full year of 1996.
During the second quarter of 1997, certain of the Company's obligations to
indemnify the purchaser of Riverwood expired. The Company's remaining
obligations to indemnify the purchaser of Riverwood relate to certain Riverwood
U.S. federal, state and local tax liabilities to the extent, if any, they are
attributable to adjustments for tax periods ending prior to the disposition of
Riverwood and for certain potential environmental matters at two sites that
Riverwood or its predecessor previously operated in Louisiana. The Company is
currently preparing final tax returns with respect to the tax periods ending
prior to the disposition of Riverwood. Upon completion of these returns and
resolution of any related issues, the Company may make certain adjustments in
the amount recognized from the disposition of Riverwood, which may result in an
additional gain from such disposition.
Note 4 - Extraordinary Losses
During the second quarter of 1996, the Company redeemed its 9 Percent Sinking
Fund Debentures, due through 2003. The prepayment of the debentures at 100
percent of the principal amount of $27.7 million resulted in an extraordinary
loss on early extinguishment of debt of $2 million, net of taxes of $1.1
million.
During the first quarter of 1996, the Company recorded an extraordinary loss of
$314.3 million, net of taxes of $169.2 million, as the Company exchanged
approximately 32.5 million shares of its common stock for the settlement of the
Trust's profit sharing right to 20 percent of the Company's adjusted net
earnings.
Note 5 - Redemption of Cumulative Preference Stock, Series B
During the second quarter of 1996, the Company redeemed its Cumulative
Preference Stock, Series B, with cash of $230.8 million. The premium, or
excess of the redemption price over the carrying value, of $52.1 million was
charged directly to Capital in Excess of Par Value and was deducted from net
income to compute earnings and earnings per share applicable to common
stockholders.
Note 6 - Earnings (Loss) Per Common Share and Dividends
Primary and fully diluted earnings per common share amounts were determined
using the following common equivalent shares:
<TABLE>
<CAPTION>
Second Quarter First Six Months
1997 1996 1997 1996
-------------------------- --------------------------
<S> <C> <C> <C> <C>
Primary 162,959,000 159,554,000 163,018,000 142,177,000
Fully Diluted 163,207,000 159,554,000 163,179,000 142,251,000
</TABLE>
Earnings (loss) per share amounts during 1996 were calculated after the
deduction for preference stock dividends and the premium on the redemption of
preference stock. The Company paid quarterly dividends of $.03 per common
share totaling $4.8 million, and $.06 per common share totaling $9.7 million,
for the
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second quarter and first six months of 1997, respectively. During the second
quarter of 1996, the Company paid a special cash dividend of $6.00 per common
share totaling $970.4 million.
Note 7 - Acquisitions
During the first quarter of 1997, the Company acquired the assets of Ergon
Nonwovens, Inc., a manufacturer of synthetic meltblown nonwoven products.
During the second quarter of 1997, the Company acquired the Mitex group of
companies. Mitex manufactures fiber glass wall covering fabrics used primarily
in commercial and industrial buildings, and has manufacturing facilities in
Sweden and the United Kingdom. The combined purchase price for these
acquisitions was $93 million, net of cash acquired, financed from existing cash
balances and borrowings of $45 million, net, from international credit
facilities. These acquisitions, associated with businesses of the Engineered
Products Segment, are accounted for under the purchase method. The excess of
the combined purchase prices over the estimated fair value of net assets
acquired, or goodwill, amounted to approximately $60 million and is being
amortized over 20 years using the straight line method. This allocation was
based on estimates and may be revised in the future.
Note 8 - New Accounting Pronouncements
During 1997, the Financial Accounting Standards Board issued the following
Statements of Financial Accounting Standards: "Earnings Per Share" ("SFAS No.
128"); "Reporting Comprehensive Income" ("SFAS No. 130"); and "Disclosures
about Segments of an Enterprise and Related Information" ("SFAS No. 131").
SFAS No. 128 revises the computation and disclosure of earnings per share,
principally the replacement of primary earnings per share with basic earnings
per share which does not consider common stock equivalents. SFAS No. 128 also
modifies certain dilutive computations and replaces fully diluted earnings per
share with diluted earnings per share. Disclosure requirements include dual
presentation of basic and diluted earnings per share, along with a
reconciliation of the elements used in computing basic and diluted earnings per
share. The Company does not expect the adoption of SFAS No. 128 (effective
for periods ending after December 15, 1997) to have a material impact on the
Company's reported results. SFAS No. 130 (effective for periods beginning
after December 15, 1997) establishes standards for reporting and display of
comprehensive income and its components. Comprehensive income generally
includes changes in separately reported components of equity along with net
income. SFAS No. 131 (effective for periods beginning after December 15, 1997)
establishes standards for reporting information about operating segments, along
with related disclosures about products, services, geographic areas and major
customers, based on the Company's disaggregation of an entity for internal
operating decisions.
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Note 9 - Business Segment Information
Beginning in 1997, the Company reorganized its business segments and will
report separately its operating results in the following three principal
business segments: Insulation, consisting of the residential, commercial and
industrial and original equipment manufacturer ("OEM") insulation businesses;
Roofing Systems, consisting of the commercial and industrial roofing business;
and Engineered Products, consisting of the mats and fibers and filtration
businesses. The 1996 results were reclassified to conform with the current
presentation format.
<TABLE>
<CAPTION>
(Thousands of dollars)
Three Months
Ended June 30,
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NET SALES 1997 1996
- ----------------------------------------------------------------------------------------------------------------
Insulation $177,245 $167,340
Roofing Systems 136,553 100,185
Engineered Products 122,230 122,011
Corporate and Eliminations (7,992) (8,133)
- ----------------------------------------------------------------------------------------------------------------
Net Sales $428,036 $381,403
================================================================================================================
INCOME FROM OPERATIONS
- ----------------------------------------------------------------------------------------------------------------
Insulation $ 28,169 $ 27,703
Roofing Systems 18,646 11,984
Engineered Products 26,197 26,885
Corporate and Eliminations (9,980) (10,273)
- ----------------------------------------------------------------------------------------------------------------
Income from Operations $ 63,032 $ 56,299
================================================================================================================
Six Months
Ended June 30,
- ----------------------------------------------------------------------------------------------------------------
NET SALES 1997 1996
- ----------------------------------------------------------------------------------------------------------------
Insulation $351,403 $322,861
Roofing Systems 235,605 162,792
Engineered Products 238,341 237,878
Corporate and Eliminations (18,303) (16,019)
- ----------------------------------------------------------------------------------------------------------------
Net Sales $807,046 $707,512
================================================================================================================
INCOME FROM OPERATIONS
- ----------------------------------------------------------------------------------------------------------------
Insulation $ 54,066 $ 52,504
Roofing Systems 26,122 14,776
Engineered Products 51,093 55,722
Corporate and Eliminations (18,551) (11,412)
- ----------------------------------------------------------------------------------------------------------------
Income from Operations $112,730 $111,590
================================================================================================================
</TABLE>
Net sales included in Corporate and Eliminations relate principally to the
elimination of intersegment sales from the Engineered Products segment to the
Roofing Systems segment (at prices approximating market).
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ITEM 2.
JOHNS MANVILLE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company's net sales for the second quarter of 1997 increased $46.6 million,
or 12.2 percent, to $428 million from $381.4 million for the same period of
1996. Gross profit increased $9.4 million, or 8.7 percent, to $117.9 million
from $108.5 million. Lower gross profit margins for the second quarter of 1997
compared with the second quarter of 1996 were due principally to lower selling
prices in several businesses. Selling, general, administrative and research,
development and engineering expenses increased slightly and were lower as a
percentage of sales at 12.1 percent for 1997 compared with 13.3 percent for
1996, due primarily to acquisitions. Income from operations for the second
quarter of 1997 was $63 million, up 12 percent, compared with $56.3 million for
the second quarter of 1996.
The Company's net sales for the first six months of 1997 increased $99.5
million, or 14.1 percent, to $807 million from $707.5 million for the same
period of 1996. Gross profit increased $16.5 million, or 8.2 percent, to
$218.6 million from $202.1 million. Selling, general, administrative and
research, development and engineering expenses increased $4.8 million, or 5.1
percent, to $99.4 million, reflecting expenses of acquired companies. Income
from operations for the first six months of 1997 increased to $112.7 million
from $111.6 million for 1996. Exclusive of other income of $7.2 million from
the settlement of certain pension plans in 1996, income from operations for the
first six months of 1997 was up $8.3 million, or eight percent.
Insulation Segment
The Insulation segment's net sales increased $9.9 million, or 5.9 percent, and
$28.5 million, or 8.8 percent, for the second quarter and first six months of
1997 compared with the same periods of 1996. Income from operations for this
segment increased slightly for both the second quarter and first six months of
1997. During 1997, the residential, and commercial and industrial businesses
experienced volume gains, benefiting from strong U.S. construction markets.
Competitive pricing pressures related principally to excess industry capacity,
while being offset by improved productivity for commercial and industrial
insulation, led to lower margins and decreases in operating income for
residential insulation business compared with corresponding 1996 periods. OEM
insulation had significantly higher operating income on slightly lower sales
for both 1997 periods, reflecting improved product mix and productivity,
combined with lower overhead costs.
Roofing Systems Segment
Net sales for the Roofing Systems segment increased $36.4 million, or 36.3
percent, and $72.8 million, or 44.7 percent, for the second quarter and first
six months of 1997 compared with the same periods of 1996. Operating income
increased $6.7 million and $11.3 million for the same periods. These increases
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are driven primarily by the incremental 1997 operating results of acquisitions
completed throughout 1996. Manufacturing efficiencies and absorption of
expenses over higher sales levels raised operating income and also led to
improved margins during 1997.
Engineered Products Segment
The Engineered Products segment's net sales were essentially flat at $122.2
million, and $238.3 million, for the three and six month periods ended June 30,
1997, respectively. Income from operations decreased slightly to $26.2 million
for the second quarter, and $4.6 million, or 8.3 percent, to $51.1 million for
the first half of 1997. Net sales for the U.S. mats and fibers business
increased slightly for the first half of 1997 and decreased for the second
quarter, while operating profit decreased for both periods as volume gains and
reduced costs were more than offset by declining selling prices due to
competitive pressures. Slight improvements for the Company's German operations
on higher sales volumes and improved productivity were partially offset by the
impacts of the strength of the U.S. dollar against the German mark on reported
results. Net sales for filtration increased for both 1997 periods on higher
volumes due to recent acquisitions in the synthetic filtration media markets.
These improvements were partially offset by competitive pressures, including
lower pricing which led to flat second quarter operating income and
significantly decreased operating income and margins for the first half of
1997.
Compared with the corresponding quarter and six month periods of 1996, the
Company's interest income decreased $4.6 million and $8.1 million,
respectively, primarily due to lower average cash and marketable securities
balances.
The 1997 estimated effective tax rate of 30 percent reflects the Company's
ability to utilize foreign tax credits and prior years' general business
credits. For the six months ended June 30, 1996, the Company reported a net
income tax benefit of $63.6 million, which included a $104.5 million tax
benefit on the portion of the special cash dividend that was paid to the Trust.
Exclusive of the tax benefit on the special cash dividend, the Company's tax
rate for the first six months of 1996 was 44 percent.
During the first quarter of 1996, the Company recorded a net gain of $177.2
million ($1.24 per common share) on the disposition of its 81.3 percent
interest in Riverwood International Corporation. In the fourth quarter of
1996, an additional gain of $39.1 million was recognized for certain income tax
adjustments related to the disposition resulting in a total gain of $216.2
million for the full year.
During the second quarter of 1997, certain of the Company's obligations to
indemnify the purchaser of Riverwood expired. The Company's remaining
obligations to indemnify the purchaser of Riverwood relate to certain Riverwood
U.S. federal, state and local tax liabilities to the extent, if any, they are
attributable to adjustments for tax periods ending prior to the disposition of
Riverwood and for certain potential environmental matters at two sites that
Riverwood or its predecessor previously operated in Louisiana. The Company is
currently preparing final tax returns with respect to the tax periods ending
prior to the disposition of Riverwood. Upon completion of these returns and
resolution of any related issues, the Company
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may make certain adjustments in the amount recognized from the disposition of
Riverwood, which may result in an additional gain from such disposition.
During the second quarter of 1996, the Company redeemed its 9 Percent Sinking
Fund Debentures with cash of $27.7 million resulting in a net extraordinary
loss on early extinguishment of debt of $2 million ($.01 per share). During
the first quarter of 1996, the Company recorded an extraordinary net loss of
$314.3 million ($2.21 per common share) on the settlement of the Trust's profit
sharing right to 20 percent of the Company's adjusted net earnings.
Also during the second quarter of 1996, the Company redeemed its cumulative
preference stock, with cash of $230.8 million. The premium, or excess of the
redemption price over the carrying value of the preference stock, of $52.1
million was charged directly to Capital in Excess of Par Value and was deducted
from net income to compute earnings and earnings per share applicable to common
stockholders during 1996.
Due to the factors discussed above, net income applicable to common stock for
the second quarter of 1997 was $37.2 million, or $.23 per share based on
approximately 163 million weighted average shares, compared with a net loss for
the second quarter of 1996 of $27.9 million, or $.18 per share based on
approximately 160 million weighted average shares. Year-to-date net income
applicable to common stock for 1997 was $64.7 million, or $.40 per share based
on approximately 163 million weighted average shares, compared with a net loss
for the same period of 1996 of $42.9 million, or $.30 per share based on
approximately 142 million weighted average shares.
LIQUIDITY AND CAPITAL RESOURCES
The Company's agreements with its lenders contain a number of financial and
general covenants. These include, among other things, restrictions on
borrowings, investments, stock issuances and repurchases, dividends and other
distributions by Johns Manville International Group, Inc., the Company's
wholly-owned subsidiary that owns substantially all of the consolidated
operating companies, and restrictions on intercompany transactions, including
transfers of cash. As of June 30, 1997, the maximum amount available for
dividends to be paid to the Company by Johns Manville International Group, Inc.
under debt covenants of the Company's Senior Notes was approximately $250
million. Noncompliance with these or other covenants, or the occurrence of any
other event of default, could result in the termination of existing credit
agreements and the acceleration of debt owed by the Company and its
subsidiaries. At June 30, 1997, the Company was in compliance with these
covenants.
At June 30, 1997, the Company had net working capital of $245.7 million,
including cash and marketable securities totaling $141.6 million. Total cash
and marketable securities located outside the U.S. and Canada were
approximately $38.5 million. At December 31, 1996, the Company's cash and
marketable securities totaled $249.3 million. The decrease is due primarily to
acquisitions and seasonal working capital requirements. At June 30, 1997, the
Company had $100 million available under a receivables sale facility for its
domestic short-term working capital requirements. In addition, the Company's
international subsidiaries had borrowing and working capital facilities
totaling $85 million, of which approximately $31 million was available at June
30, 1997.
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Under these facilities, $45 million, net, was borrowed to partially finance
acquisitions.
The Company's net operating activities provided $25 million of cash during the
first six months of 1997. Net operating activities provided $1 million for the
same period of 1996 as continuing operations and proceeds from the settlement
of pension plans were offset by cash disbursements relating to final profit
sharing obligations and expenses associated with the Riverwood divestment. The
Company's cash flows from operating activities are primarily influenced by
sales volume and selling prices. As discussed in "Results of Operations," the
effects of sales volume increases during the first half of 1997 were partially
offset by selling price declines. Operating activities also included cash
usages for net working capital builds in anticipation of the construction
season which typically peaks during the third quarter. For the remainder of
1997, the Company's operating results are expected to benefit from the
integration of acquisitions. While U.S. housing starts during 1997 are
expected to be comparable to 1996, capacity-related selling price and other
competitive pressures are expected to continue for the residential insulation
business, as well as commercial and industrial insulation, mats and fibers and
filtration businesses for the remainder of the year.
The Company's investing activities for the first half of 1997 consisted of $93
million for acquisitions, net of cash acquired. The Company's capital
expenditures totaled $47.1 million for the first six months of 1997. The
Company estimates 1997 capital expenditures of approximately $100 million, of
which approximately $40 million relate to capacity expansion projects
principally to increase mats and fibers production. As of June 30, 1997,
outstanding purchase commitments for capital projects totaled $19 million.
Investing activities for 1997 also included proceeds from the Company's June
30, 1997 disposition of its automotive molded parts business, the assets of
which were written down to estimated fair values in 1996. Investing activities
for 1996 included the combined purchase prices for acquisitions of $57 million
and capital expenditures totaling $57.7 million. Investing activities for 1996
also reflected $1.08 billion of proceeds from the disposition of Riverwood.
In addition to borrowings to partially finance 1997 acquisitions, the Company's
financing activities for 1997 included repayments of debt totaling $30 million
assumed in connection with 1996 acquisitions. Also during 1997, the Company
paid two quarterly cash dividends, totaling $9.7 million, on its common stock.
Financing activities for 1996 included payment of a special common stock
dividend of $970.4 million; redemption of the Company's preference stock and
related final dividend payments of $230.8 million and $10.3 million,
respectively; proceeds totaling $64.8 million from exercises of warrants to
purchase common stock; and the redemption of $27.7 million of 9 Percent Sinking
Fund Debentures.
The Company believes that its current cash position, funds available under a
receivables facility and foreign working capital facilities, and cash generated
from operations will enable it to satisfy its debt service requirements, its
ongoing capital expansion program and its other ongoing operating costs.
I-12
<PAGE> 14
However, the Company may need to access capital markets to pay the principal of
the $400 million Senior Notes, or in connection with possible significant
future acquisitions.
FORWARD-LOOKING STATEMENTS
This report contains "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Statements of the Company
contained in this report concerning matters that are not historical facts,
including, without limitation, statements concerning (i) expected benefits from
the continuing integration of acquisitions and capacity expansions, (ii) effect
on the residential insulation business resulting from 1997 U.S. housing starts,
(iii) possible selling price decreases due to excess capacity and other
competitive pressures in the residential and commercial and industrial
insulation, mats and fibers and filtration industries and (iv) the Company's
expectations concerning levels of capital spending and funding of current
operations, debt service and future acquisitions, constitute such
forward-looking statements. See "Liquidity and Capital Resources."
Forward-looking statements of the Company are subject to risks and
uncertainties that could cause actual results to differ materially from those
expressed in such statements. Important factors relating to such risks and
uncertainties are set forth below.
Factors that could affect the forward-looking statements generally are related
to demand for the Company's products, overall capacity levels in the industry
and the overall competitive environment in which the Company operates. These
factors are discussed in detail in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" incorporated in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996.
Factors that could affect the Company's expected levels of capital spending and
funding of current operations, debt service and dividends, include, without
limitation, the contingencies and commitments discussed in the Company's
financial statements included in this report for the quarter and six months
ended June 30, 1997. The Company's ability to realize expected benefits from
acquisitions depends on a number of factors including, without limitation,
successful integration of newly acquired operations, technology, products,
employees and the overall economic factors referred to above. In addition, the
Company's ability to make future acquisitions depends upon the ability of the
Company to identify and reach agreement with viable acquisition candidates and
the availability of sources of financing for such acquisitions on terms which
are acceptable to the Company.
I-13
<PAGE> 15
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Not applicable.
ITEM 2. CHANGES IN SECURITIES.
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On May 2, 1997, the Company's Annual Meeting of Stockholders was held
in Defiance, Ohio and the following items were voted upon and approved by the
stockholders.
1. The following Directors were elected by the stockholders:
<TABLE>
<CAPTION>
NAME FOR VOTE WITHHELD
---- --- -------------
<S> <C> <C>
Leo Benatar 151,458,963 69,382
Robert A. Falise 151,457,212 71,133
Todd Goodwin 151,459,026 69,319
Michael N. Hammes 150,781,444 746,901
Kathryn Rudie Harrigan 151,457,717 70,628
Charles L. Henry 151,460,980 67,365
Louis Klein, Jr. 151,458,769 69,576
Frank J. Macchiarola 151,460,000 68,345
Christian E. Markey, Jr. 151,458,718 69,627
William E. Mayer 151,460,736 67,609
</TABLE>
2. Approval to amend the Company's Restated Certificate of Incorporation
to change the name of the Company to Johns Manville Corporation.
<TABLE>
<S> <C> <C> <C>
For: 151,032,586 Against: 102,034
Abstain: 15,436 Broker Non-Vote: -0-
</TABLE>
3. Approval to amended the Company's Restated Certificate of Incorporation to
increase the authorized shares of Common Stock of the Company by 125,000,000
shares.
<TABLE>
<S> <C> <C> <C>
For: 150,205,702 Against: 872,286
Abstain: 72,068 Broker Non-Vote: -0-
</TABLE>
II-1
<PAGE> 16
4. Approval of the appointment of Coopers & Lybrand L.L.P. as Independent
Accountants of the Company for the fiscal year ending December 31, 1997.
<TABLE>
<S> <C> <C> <C>
For: 151,099,980 Against: 26,830
Abstain: 23,246 Broker Non-Vote: -0-
</TABLE>
ITEM 5. OTHER INFORMATION.
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
Exhibit 10.1, Employment Agreement of Thomas L. Caltrider,
Senior Vice President, Roofing Systems Group
Exhibit 10.2, Amended and Restated Manville Personal Injury
Settlement Trust Agreement dated as of April 29, 1997
Exhibit 10.3, Amendment to Amended and Restated Receivables
Purchase Agreement dated as of June 6, 1997 among Johns Manville Funding
Corporation, Johns Manville International, Inc., the financial institutions
listed therein as Buyers, and Morgan Guaranty Trust Company of New York, as
Administrative Agent and Structuring and Collateral Agent
Exhibit 27.1, Financial Statement Schedules.
Exhibit 27.2, Financial Statement Schedules.
(b) Form 8-K.
None.
II-2
<PAGE> 17
SIGNATURE
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 thereunto duly authorized.
JOHNS MANVILLE CORPORATION
--------------------------
(Registrant)
Date: August 13, 1997 By: R. B. Von Wald
------------------------------------
R. B. Von Wald
Executive Vice President,
General Counsel and Secretary
Date: August 13, 1997 By: K. L. Jensen
------------------------------------
K. L. Jensen
Senior Vice President and
Chief Financial Officer
II-3
<PAGE> 18
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.1 Employment Agreement of Thomas L. Caltrider, Senior Vice
President, Roofing Systems Group
10.2 Amended and Restated Manville Personal Injury Settlement Trust
Agreement dated as of April 29, 1997
10.3 Amendment to Amended and Restated Receivables Purchase Agreement
dated as of June 6, 1997 among Johns Manville Funding
Corporation, Johns Manville International, Inc., the financial
institutions listed therein as Buyers, and Morgan Guaranty Trust
Company of New York, as Administrative Agent and Structuring and
Collateral Agent
27.1 Financial Statement Schedules.
27.2 Financial Statement Schedules.
<PAGE> 1
EXHIBIT 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of June 5, 1997 (the "Agreement") by and
between JOHNS MANVILLE INTERNATIONAL, INC., a Delaware corporation (the
"Company") and a subsidiary of JOHNS MANVILLE CORPORATION, a Delaware
corporation ("JM"), and Thomas L. Caltrider (the "Executive").
WHEREAS the Company desires to employ Executive and to enter into an
agreement embodying terms of such employment (the "Agreement"); and
WHEREAS Executive desires to accept such employment and to enter into such
an Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. The Executive's period of employment hereunder
shall commence on June 23, 1997 and, subject to the extension provisions and
the other terms and conditions provided herein, end on April 10, 2000. At the
April meeting of JM's Board of Directors (the "Board") or at the next meeting
thereafter at which the extension of employment agreements of executives of the
Company is considered, the Board and the Chief Executive Officer of the Company
shall review this Agreement and Executive's performance hereunder and shall
determine, in their sole discretion, whether or not to extend the period of
Executive's employment pursuant to this Agreement by one year. The period of
Executive's employment hereunder, including any extension or extensions
pursuant to the foregoing sentence, is referred to
<PAGE> 2
hereinafter as the "Employment Term". A failure to renew this Agreement shall
not constitute a termination of Executive's employment.
2. Position. Executive shall serve as Senior Vice President, Global
Roofing of the Company. Executive shall devote substantially all of his
business time and energies to the business of the Company. Notwithstanding the
foregoing, Executive may (a) continue to serve on the board of directors of any
business corporation on which he is serving as of the date of this Agreement
(as shown on Schedule A), (b) serve on the boards of directors or committees of
non-profit organizations and (c) with the prior approval of the Chief Executive
Officer of the Company or of the Board, serve on the boards of directors of
other business corporations, provided that in the Company's sole reasonable
discretion none of the foregoing activities materially interferes with the
performance of Executive's duties hereunder.
3. Base Salary. Company shall pay Executive a base salary at the rate
of not less than $275,000 per year, as the same may from time to time be
increased at the sole discretion of the Board or, prior to a Change in Control,
decreased in the event of across the board salary reductions within the
corporate staff group or the business division in which Executive is employed,
whichever is applicable ("Base Salary").
4. Incentive Compensation. Executive shall participate in the JM
executive incentive compensation plans, as in effect from time to time during
the Employment Term, for which his level of employment makes him eligible.
(References herein to "JM executive incentive compensation plans" whether
annual or long-term, shall include such plans maintained by JM and/or the
Company, as the case may be, from time to
2
<PAGE> 3
time.) The JM executive incentive compensation plans in effect on the date
hereof in which Executive participates are listed on Schedule B.
5. Employee Benefits. Executive shall be eligible to participate in
such other of the Company's employee benefit plans and to receive such benefits
for which his level of employment makes him eligible, in accordance with the
Company's policies as in effect from time to time during the Employment Term.
6. Business Expenses. Necessary and reasonable business expenses
incurred by Executive during the Employment Term shall be reimbursed in
accordance with Company policies.
7. Termination Prior to a Change in Control.
(a) Retirement. This Agreement shall terminate automatically upon
Executive's Retirement, as defined hereafter. For purposes of this Agreement,
"Retirement" means termination of Executive's employment initiated by
Executive, other than for Good Reason as defined in Section 7(e) or Section
8(e) hereof, whichever is applicable, whereby Executive is entitled to receive
an immediately payable benefit, including an early retirement benefit, under
the Company's retirement plan generally applicable to its salaried employees or
under any retirement arrangement established with respect to Executive with his
consent, in either case, whether or not Executive commences to receive such
benefit at the time of such termination. Upon termination of Executive's
employment by reason of Retirement prior to a Change in Control, Executive
shall be entitled to benefits determined in accordance with the Company's
retirement, benefit and insurance programs in effect at such time.
3
<PAGE> 4
(b) Death or Disability.
(i) Disability. Executive's employment hereunder may be
terminated by the Company if Executive becomes physically or mentally
incapacitated and is therefore unable for a period of six (6) consecutive
months to perform his duties (such incapacity is hereinafter referred to as
"Disability"). Any question as to the existence of the Disability of Executive
as to which Executive and the Company cannot agree shall be determined in
writing by a qualified independent physician mutually acceptable to Executive
and the Company. Upon any such termination for Disability prior to a Change in
Control, Executive shall be entitled to receive his Base Salary through the
date on which Executive is first eligible to receive payment of disability
benefits in lieu of salary under the Company's employee benefit plans as then
in effect.
(ii) Death. Upon termination for death prior to a Change in
Control, Executive shall be entitled to his Base Salary at the rate in effect
at the time of Executive's death through the end of the month in which his
death occurs.
(iii) Death or Disability Benefits. All other benefits to which
Executive may be entitled following Executive's termination for death or
Disability prior to a Change in Control shall be determined in accordance with
the plans, policies and practices of the Company.
(c) For Cause by the Company; Voluntary Termination by Executive.
Executive's employment hereunder may be terminated by the Company for "Cause".
For purposes of this Agreement, prior to a Change in Control, "Cause" shall
mean (i) Executive's willful and continued failure substantially to perform his
duties hereunder (other than as a result of total or partial incapacity due to
physical or mental illness or as
4
<PAGE> 5
a result of termination by Executive for Good Reason as defined in Section 7(e)
below), (ii) Executive's dishonesty in the performance of his duties hereunder
or (iii) Executive's conviction of a felony under the laws of the United States
or any state thereof. If Executive is terminated for Cause, or if Executive
voluntarily terminates employment hereunder other than for Good Reason, in
either case, prior to a Change in Control, he shall be entitled to receive his
Base Salary through the date of termination. All other benefits, if any,
payable to Executive following such termination of Executive's employment shall
be determined in accordance with the plans, policies and practices of the
Company.
(d) Without Cause by the Company or with Good Reason by Executive.
If prior to a Change in Control Executive's employment hereunder is terminated
on or before June 23, 1998 by the Company without Cause (other than by reason
of death or Disability) or by Executive with "Good Reason" (as defined in
Section 7(e) below), Executive shall be entitled to receive the following
benefits:
(x) The Company shall pay Executive at the time of such
termination in a lump sum a cash amount equal to one times his Base Salary in
effect at the time of such termination or, in the event of termination by
Executive on account of an event described in Section 7(e)(iv) below, the Base
Salary as in effect prior to the reduction or reductions referred to therein
plus the bonus Executive would have earned in respect of the year of
termination under the JM annual incentive compensation plan, if any, in effect
at the date of termination or, in the event of a termination by Executive by
reason of an event described in Section 7(e)(vi), the plan in effect prior to
the elimination referred to therein, determined as if Executive had been
employed by the
5
<PAGE> 6
Company for the full year and without regard to any right reserved by the
Company to decrease or eliminate such bonus, and assuming actual performance
had equaled 100% of the performance objective established for such year
pursuant to the terms of such plan.
(y) The Company shall provide Executive with outplacement
services from the firm of Executive's choice at a cost to the Company not to
exceed the lesser of (A) 20% of Executive's Base Salary in effect at the time
of Executive's termination of employment with the Company or (B) $50,000.
If prior to a Change in Control Executive's employment hereunder is
terminated after June 23, 1998 by the Company without Cause (other than by
reason of death or Disability) or by Executive with "Good Reason" (as defined
in Section 7(e) below), Executive shall be entitled to receive the following
benefits:
(i) The Company shall pay Executive at the time of such
termination in a lump sum a cash amount equal to two times his Base Salary in
effect at the time of such termination or, in the event of termination by
Executive on account of an event described in Section 7(e)(iv) below, the Base
Salary as in effect prior to the reduction or reductions referred to therein
plus the bonus Executive would have earned in respect of the year of
termination under the JM annual incentive compensation plan, if any, in effect
at the date of termination or, in the event of a termination by Executive by
reason of an event described in Section 7(e)(vi), the plan in effect prior to
the elimination referred to therein, determined as if Executive had been
employed by the Company for the full year and without regard to any right
reserved by the Company to decrease or eliminate such bonus, and assuming
actual performance had equaled
6
<PAGE> 7
100% of the performance objective established for such year pursuant to the
terms of such plan.
(ii) For a 24-month period after such termination, the Company
shall cause Executive to be provided with life, accident, medical, dental and
prescription insurance benefits substantially similar to, and on the same terms
as, those benefits elected and received by Executive under the Company's "Flex
Benefit" program immediately prior to such termination; provided that,
Executive shall be charged an amount equal to any monthly payroll deduction
charged for similar benefits to executives in positions similar to that which
Executive held before his termination; and provided further that, if Executive
receives medical benefits under the JM Retiree Comprehensive Health Care Plan
and post-retirement life insurance benefits (collectively, "Retiree Medical and
Life Insurance Benefits"), at any time during the 24-month period referred to
above, once such benefits begin Executive shall be entitled only to Retiree
Medical and Life Insurance Benefits.
(iii) For a period of 24 months after such termination, the
Company shall provide or cause Executive to be provided with the perquisites
listed on Schedule C, attached hereto, as may be amended by the Company from
time to time without Executive's consent prior to such termination (provided
that nothing herein shall be deemed to permit such an amendment without
Executive's consent following a Change in Control), on the same terms and
conditions on which such perquisites were provided prior to Executive's
termination.
(iv) In addition to all other amounts payable to Executive under
this Section 7(d), Executive shall be entitled to receive all benefits payable
to Executive
7
<PAGE> 8
under any other plan, policy or agreement relating to retirement or other
benefits in accordance with the terms of such plans, policies or agreements;
provided, however that, amounts paid pursuant to this Section 7(d) shall be in
lieu of any payments under any JM separation policy.
(v) The Company shall provide Executive with outplacement
services from the firm of Executive's choice at a cost to the Company not to
exceed the lesser of (A) 20% of Executive's Base Salary in effect at the time
of Executive's termination of employment with the Company or (B) $50,000.
(e) Good Reason. For purposes of this Agreement, prior to a Change in
Control, "Good Reason" shall mean:
(i) a material reduction in Executive's responsibilities,
authorities or duties, all as contemplated by Section 2 hereof; provided,
however, that such reduction by reason of a termination for Cause or Disability
shall not constitute Good Reason;
(ii) Executive's job is eliminated other than by reason of
promotion or termination for Cause or Disability.
(iii) the Company fails to pay Executive any amount otherwise
vested and due hereunder or under any plan or policy of the Company;
(iv) a reduction in Executive's Base Salary except in the event
of an across the board salary reduction within the corporate staff group or the
business division in which Executive is employed, whichever is applicable;
(v) a reduction in Executive's aggregate level of benefits under
the Company's pension, life insurance, medical, health and accident, disability,
deferred
8
<PAGE> 9
compensation or savings or similar plans, except in the event of an across the
board reduction in such benefits within the corporate staff group or the
business division in which Executive is employed, whichever is applicable;
(vi) the elimination of an annual incentive compensation plan
or a material reduction in such a plan not applicable to other executives of
the Company; or
(vii) Executive's office is relocated outside of a 50-mile
radius of Denver, Colorado without his written consent.
If Executive provides to the Company a Notice of Termination, as defined
in Section 13(f), in connection with an event described in clauses (i) through
(vii) of this Section 7(e), the Company shall have ten (10) business days from
the date of receipt of such notice to effect a cure of the event described
therein, and upon cure thereof by the Company to Executive's reasonable
satisfaction, such event shall no longer constitute Good Reason for purposes of
this Agreement.
(f) Mitigation. In the event of termination of Executive's employment
hereunder by the Company without Cause or by Executive with Good Reason prior
to a Change in Control, benefits otherwise receivable by Executive pursuant to
subsection 7(d)(ii) shall be reduced to the extent comparable benefits are
received by Executive during the 24-month period following such termination.
Executive shall report to the Company any such benefits actually received by
Executive.
8. Termination Following a Change in Control.
(a) Retirement. This Agreement shall terminate automatically upon
Executive's Retirement. Upon a termination of Executive's employment by reason
of
9
<PAGE> 10
Retirement following a Change in Control, Executive shall be entitled to
benefits determined in accordance with the Company's retirement, benefit and
insurance programs in effect immediately prior to the Change in Control or, if
more generous, such programs in effect at the time of such Retirement.
(b) Death or Disability.
(i) Disability. Executive's employment hereunder may be
terminated by reason of Executive's Disability, subject to the procedure for
determining such Disability outlined in Section 7(b)(i). Upon any termination
for Disability following a Change in Control, Executive shall be entitled to
receive his Base Salary for a two-year period ending on the second anniversary
of Executive's date of termination. Such Base Salary shall be paid in equal
monthly installments and shall be reduced by any amounts received as disability
benefits in lieu of salary under the Company's employee benefit plans.
(ii) Death. Upon termination for death following a Change in
Control, Executive shall be entitled to (x) his Base Salary at the rate in
effect at the time of Executive's death through the end of the month in which
his death occurs and (y) if and to the extent the death benefits provided
Executive by the Company are less than would have been paid immediately prior
to a Change in Control, a lump sum payment of cash in an amount equal to the
value of such shortfall. Any such lump sum payment shall be made within ten
(10) business days following Executive's death.
(iii) Death or Disability Benefits. All other benefits to which
Executive may be entitled upon Executive's termination for death or Disability
following a Change in Control shall be determined in accordance with the plans,
policies and
10
<PAGE> 11
practices of the Company in effect immediately prior to the Change in Control
or, if more generous, such plans, policies and practices as in effect at any
time following the Change in Control; provided that, nothing in this Section
8(b)(iii) shall be interpreted so as to result in the duplication of the
benefits provided under Section 8(b)(i) or (ii).
(c) For Cause by the Company; Voluntary Termination by Executive. For
purposes of this Agreement, following a Change in Control, "Cause" shall mean
(i) Executive's willful and continued failure substantially to perform his
duties hereunder (other than as a result of total or partial incapacity due to
physical or mental illness or as a result of termination by Executive for Good
Reason as defined in Section 8(e) below) after a written demand for substantial
performance is delivered to Executive personally and Executive shall have
failed during the 60-day period following such written demand to have corrected
such failure, (ii) Executive's dishonesty in the performance of his duties
hereunder or (iii) Executive's conviction of a felony under the laws of the
United States or any state thereof. For purposes of this Section 8(c) no act or
failure to act on Executive's part shall be deemed willful unless done or
omitted to be done by Executive not in good faith and without reasonable belief
that Executive's action or omission was in the best interest of the Company.
If Executive is terminated for Cause, or if Executive voluntarily
terminates his employment with the Company other than for Good Reason, in
either case, following a Change in Control, he shall be entitled to receive his
Base Salary through the date of termination. All other benefits, if any,
payable to Executive following such termination of Executive's employment shall
be determined in accordance with the plans, policies and practices of the
Company.
11
<PAGE> 12
(d) Without Cause by the Company or with Good Reason by Executive. If
Executive's employment is terminated by the Company following a Change in
Control without Cause (other than by reason of death or Disability) or by
Executive with "Good Reason" (which following a Change in Control shall have
the meaning set forth in Section 8(e) below), Executive shall be entitled to
receive the following benefits:
(i) The Company shall pay Executive at the time of such
termination in a lump sum a cash amount equal to two times the sum of (A) his
Base Salary in effect at the time of such termination or, in the event of
termination by Executive by reason of an event described in Section 8(e)(iv)
below, the Base Salary as in effect prior to the reduction or reductions
referred to therein plus (B) the bonus Executive would have earned in respect
of the year of termination under the JM annual incentive compensation plan, if
any, in effect at the date of termination or in the event of a termination by
Executive by reason of an event described in Section 8(e)(v), the plan in
effect immediately prior to the reduction or reductions referred to therein,
determined as if Executive had been employed by the Company for the full year
and without regard to any right reserved by the Company to decrease or
eliminate such bonus, and assuming actual performance had equaled 100% of the
performance objective established for such year pursuant to the terms of such
plan.
(ii) The Company shall pay Executive in a lump sum a cash
amount equal to a fraction of the annual bonus which (absent such termination
and without regard to any right reserved by the Company to decrease or
eliminate such bonus) Executive would have earned with respect to the year of
termination under the JM annual executive incentive compensation plan, if any,
in effect at the date of
12
<PAGE> 13
termination or, in the event of a termination by Executive by
reason of an event described in Section 8(e)(v), the plan in effect prior to
the reduction or reductions referred to therein, assuming actual performance
had equaled 100% of the performance objective established for such year
pursuant to the terms of such plan, the numerator of which fraction is the
number of days in such year during which the Executive was employed by the
Company and the denominator of which is 365. Such payment shall be made at the
time of Executive's termination.
(iii) [Reserved.]
(iv) Executive shall receive
credit under the Supplemental Plan for Participants in the JM Salaried
Retirement Plan for two additional years of service for purposes of both
vesting and accrual of benefits.
(v) For a 36-month period following
Executive's termination, the Company shall pay Executive in monthly
installments the sum of the monthly costs to Executive of purchasing life,
accident, medical, dental and prescription insurance benefits substantially
similar to such benefits elected and received by Executive under the Company's
"Flex Benefit" program immediately prior to Executive's termination or, if more
generous, immediately prior to the Change in Control ("Continued Benefits")
less the monthly payroll deduction, if any, charged to Executive immediately
prior to Executive's termination, or, if applicable, immediately prior to the
Change in Control, for any of such Continued Benefits; notwithstanding the
foregoing, if Executive begins to receive Retiree Medical and Life Insurance
Benefits at any time during the 36-month period referred to above, once such
benefits begin, the monthly payment due Executive under the preceding clause
shall equal the monthly costs to Executive of purchasing
13
<PAGE> 14
Continued Benefits not provided by the Company to Executive as Retiree Medical
and Life Insurance Benefits.
(vi) For a 24-month period after such termination, the Company
shall provide or cause Executive to be provided with the perquisites listed on
Schedule C, attached hereto (which the Company may amend from time to time
prior to a Change in Control, without Executive's consent), on the same terms
and conditions on which such perquisites were provided at the time of
Executive's termination or, if more generous, immediately prior to such
termination.
(vii) In addition to all other amounts payable to Executive
under this Section 8(d), Executive shall be entitled to receive all benefits
payable to Executive under any other plan, policy or agreement relating to
retirement or other benefits, in accordance with the terms of such plans,
policies or agreements; provided, however that, amounts paid pursuant to this
Section 8(d) shall be in lieu of any payments under any JM separation policy.
(viii) The Company shall provide Executive with outplacement
services from the firm of Executive's choice at a cost to the Company not to
exceed 20% of Executive's Base Salary in effect at the time of such termination
or, in the event of termination by Executive by reason of an event described in
Section 8(e)(iv) below, the Base Salary as in effect prior to the reduction or
reductions referred to therein.
(e) Good Reason Following a Change in Control. For purposes of this
Agreement, following a Change in Control, "Good Reason" shall mean:
(i) a material adverse change in the nature or scope of
Executive's responsibilities, authorities, duties and/or position (including by
reason of a
14
<PAGE> 15
substantial reduction in the size of the Company or other substantial change in
the character or scope of the Company's operations);
(ii) Executive no longer serves in the position described in
Section 2, other than by reason of a promotion or a termination for Cause or
Disability;
(iii) the Company fails to pay Executive any amounts otherwise
vested and due hereunder or under any plan or policy of the Company;
(iv) a reduction in Executive's Base Salary in effect
immediately prior to the Change in Control or as the same may be increased from
time to time;
(v) a reduction in Executive's incentive compensation
opportunity, as defined below, under the JM executive incentive compensation
plans as in effect immediately prior to the Change in Control or as the same
may be increased from time to time (absent, in the case of any such reduction
relative to Executive's annual bonus, a corresponding increase in his Base
Salary);
(vi) the failure of the Company, to continue to provide
Executive with benefits and perquisites which are substantially similar in the
aggregate to those enjoyed by Executive under the Company's pension, life
insurance, medical, health and accident, disability, deferred compensation or
savings or similar plans and fringe benefit programs (including vacation) in
which Executive was participating immediately prior to the Change in Control;
or the failure by the Company to continue to provide Executive with directors'
or officers' insurance, as applicable, at the level maintained immediately
prior to the Change in Control;
(vii) the Executive's office is relocated outside of a 50-mile
radius of Denver, Colorado without his written consent;
15
<PAGE> 16
(viii) the failure of the Company to obtain an agreement from
any successor to assume and agree to perform this Agreement, as contemplated in
Section 13(e) hereof; or
(ix) any purported termination of Executive's employment by the
Company which is not effected pursuant to a Notice of Termination satisfying
the requirements of Section 13(f) and, if applicable, following the written
demand described in Section 8(c) and the relevant cure period.
If Executive provides a Notice of Termination, as defined in Section
13(f), in connection with an event described in clauses (i) through (vii) of
this Section 8(e), to the Company, the Company shall have ten (10) business
days from the date of receipt of such notice to effect a cure of the event
described therein, and upon cure thereof by the Company to Executive's
reasonable satisfaction, such event shall no longer constitute Good Reason for
purposes of this Agreement.
(f) Reduction in Incentive Compensation Opportunity. For purposes of
this Agreement, a "reduction in Executive's incentive compensation opportunity"
under the JM executive incentive compensation plans shall include:
(i) the failure to maintain both an annual and a long-term
incentive plan;
(ii) any reduction or elimination by the Company of Executive's
annual or long-term incentive compensation pursuant to any reserved right under
any such plan to decrease or eliminate such bonus or award;
(iii) any reduction in Executive's participation level under any
such plan; and
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(iv) any adverse change in the payout schedule or its
equivalent or in the manner of assessing actual performance under any such plan
and/or any extraordinary change in the applicable performance criteria
thereunder.
(g) Change in Control. For purposes of this Agreement, the phrase
"Change in Control" shall mean the following and shall be deemed to have
occurred if any of the following events shall have occurred:
(i) any Person (as defined below) (other than JM, any trustee
or other fiduciary holding securities under any employee benefit plan of JM, or
any company owned, directly or indirectly, by the stockholders of JM in
substantially the same proportions as their ownership of the common stock of
JM) becomes the Beneficial Owner (as defined below) (except that a Person shall
be deemed to be the Beneficial Owner of all shares that any such Person has the
right to acquire pursuant to any agreement or arrangement or upon exercise of
conversion rights, warrants or options or otherwise, without regard to the
sixty day period referred to in Rule 13d-3 under the Exchange Act (as defined
below)), directly or indirectly, of securities of JM or any Significant
Subsidiary (as defined below), representing 30 percent or more of the combined
voting power of JM's or such subsidiary's then outstanding securities;
provided, however, that such event shall not constitute a Change in Control
unless or until the percentage of such securities owned beneficially, directly
or indirectly, by such Person is equal to or more than all such securities
owned beneficially, directly or indirectly, by Manville Personal Injury
Settlement Trust (the "Trust");
(ii) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board, and any new director
(other than a
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director designated by a person who has entered into an agreement with JM to
effect a transaction described in clause (i), (iii), or (iv) of this paragraph)
whose election by the Board or nomination for election by JM's stockholders was
approved by a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the two-year period or whose
election or nomination for election was previously so approved but excluding
for this purpose any such new director whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act) or other actual or threatened solicitation of proxies or consents by or on
behalf of an individual, corporation, partnership, group, associate or other
entity or Person other than the Board, cease for any reason to constitute at
least a majority of the Board; provided, however, that such event shall not
constitute a Change in Control unless or until the percentage of voting
securities of JM owned beneficially, directly or indirectly, by the Trust is
less than 50 percent of all such outstanding securities;
(iii) the consummation of a merger or consolidation of JM or any
subsidiary owning directly or indirectly all or substantially all of the
consolidated assets of JM (a "Significant Subsidiary") with any other
corporation, other than a merger or consolidation which would result in the
voting securities of JM or a Significant Subsidiary outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving or resulting entity)
more than 50 percent of the combined voting power of the surviving or resulting
entity outstanding immediately after such merger or consolidation;
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(iv) the stockholders of JM or any affiliate approve a plan or
agreement for the sale or disposition of all or substantially all of the
consolidated assets of JM (other than such a sale or disposition immediately
after which such assets will be owned directly or indirectly by the
stockholders of JM in substantially the same proportions as their ownership of
the common stock of JM immediately prior to such sale or disposition) in which
case the Board shall determine the effective date of the Change in Control
resulting therefrom; or
(v) any other event occurs which the Board determines, in its
discretion, would materially alter the structure of JM or its ownership.
(vi) Defined terms.
(A) "Beneficial Owner" shall have the meaning ascribed to
such term in Rule 13d-3 under the Exchange Act and any successor to such Rule.
(B) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, including rules thereunder and successor
provisions and rules thereto.
(C) "Person" shall have the meaning ascribed to such term
in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, and shall include a "group" as defined in Section 13(d) thereof.
9. [Reserved.]
10. Indemnification. The Company will indemnify Executive (and his
heirs, legal representatives or other successors) to the fullest extent
permitted (including payment of expenses in advance of final disposition of a
proceeding) by the laws of the jurisdiction of incorporation of the Company, as
in effect at the time of the subject act or
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<PAGE> 20
omission, or by the Restated Certificate of Incorporation and By-Laws of the
Company, as in effect at such time or on the effective date of this Agreement,
or by the terms of any indemnification agreement between the Company and
Executive, whichever affords or afforded greatest protection to Executive, and
Executive shall be entitled to the protection of any insurance policies the
Company may elect to maintain generally for the benefit of its directors and
officers (and to the extent the Company maintains such an insurance policy or
policies, Executive shall be covered by such policy or policies, in accordance
with its or their terms, to the maximum extent of the coverage available for
any Company officer or director), against all costs, charges and expenses
whatsoever incurred or sustained by him or his legal representatives at the
time such costs, charges and expenses are incurred or sustained, in connection
with any action, suit or proceeding to which he (or his legal representatives
or other successors) may be made a party by reason of his being or having been
a director, officer or employee of the Company, JM or any subsidiary of either
of them, or his serving or having served any other enterprise as a director,
officer or employee at the request of the Company or JM.
11. Legal Fees. In the event of a dispute between Executive and the
Company with respect to any of Executive's rights under this Agreement, the
Company shall reimburse Executive for any and all legal fees and related
expenses incurred by him in connection with enforcing such rights, at the time
such fees and related expenses are incurred; provided that, if Executive's
claim is found by a court of competent jurisdiction to have been frivolous,
Executive shall reimburse the Company for all amounts paid by it under this
Section.
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12. Noncompetition; Confidentiality; Specific Performance.
(a) In consideration of the agreements herein of the Company,
Executive acknowledges and herein recognizes the competitive nature of the
businesses of the Company and its affiliates and agrees that he will not at any
time during his employment with the Company or for a period of two years after
termination of his employment, without the Company's written consent, serve as
an employee, owner, officer, agent, director or consultant of any firm or
business which competes with a line of business (i) then being conducted by the
Company or one of its affiliates, in any geographic area in which the Company
or any of its affiliates conducts such line of business, and (ii) that at any
time during Executive's employment by the Company is or was conducted, or is or
was actively being developed, by the Company or any affiliate of the Company.
(b) Executive will not at any time (whether during or after his
employment with the Company) disclose or use for his own benefit or purposes,
or the benefit or purposes of any other person, firm, partnership, joint
venture, association, corporation or other business organization, entity or
enterprise other than the Company and any of its subsidiaries or affiliates,
any Trade Secrets of the Company without first obtaining the written consent of
the Company.
Executive will not at any time during his employment with the Company or
for a period of two years after termination of his employment, disclose or use
for his own benefit or purposes or the benefit or purposes, of any other
person, firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise other than the Company and any of
its subsidiaries or affiliates, any
21
<PAGE> 22
Confidential Information of the Company which is disclosed to or learned by
Employee during employment with the Company. Employee acknowledges that
Confidential Information and materials developed by Employee, or Confidential
Information and materials received by the Company in confidence from third
parties, are also included within the meaning of this Section.
As used herein "Trade Secret" means the whole or any portion or phrase of
any technical information, design, process, procedure, formula or improvement
known or used by the Company that is valuable and secret (in the sense that it
is not generally known to competitors of the Company). To the extent consistent
with the foregoing, Trade Secrets include (without limitation) the specialized
information and technology that provide the Company with an advantage over
competitors or potential competitors in its industry.
As used herein "Confidential Information" means any data or information
known by the Company related to the business of the Company, other than Trade
Secrets, that is of competitive significance to the Company and not generally
known by the public. To the extent consistent with the foregoing, "Confidential
Information" includes (without limitation): cost data (such as labor or
material costs pertaining to the products or services) of the Company; data
relating to efficiency of the Company's operations; the identity and location
of vendors and the terms of sale (including prices) negotiated with such
vendors; data relating to sales -- by customer, by location, by product
category, by sales price, or by end-use application; customer lists; financial
information hat has not been released to the public; future business plans,
marketing strategies, or advertising campaigns; and personnel files.
22
<PAGE> 23
Executive agrees that upon termination of his employment with the Company for
any reason, he will return to the Company immediately all memoranda, books,
papers, plans, information, letters and other data, and all copies thereof or
therefrom, in any way relating to the business of the Company and its
affiliates, except that he may retain personal notes, notebooks and diaries.
Executive further agrees that he will not retain or use for his account at any
time any trade names, trademark or other proprietary business designation used
or owned in connection with the business of the Company or its affiliates.
(c) Executive acknowledges and agrees that the Company's remedies at
law for a breach or threatened breach of any of the provisions of this Section
would be inadequate and, in recognition of this fact, Executive agrees that, in
the event of such a breach or threatened breach, in addition to any remedies at
law, the Company, without posting any bond, shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining
order, temporary or permanent injunction or any other equitable remedy which
may then be available.
13. Miscellaneous.
(a) Governing Law; Liability of the Executive. This Agreement shall be
governed by and construed in accordance with the laws of the State of Colorado.
Executive shall not be subject to liability for breach of this Agreement by
reason of his termination of his employment hereunder.
(b) Entire Agreement/Amendments/Effectiveness. This Agreement shall
supersede any and all existing employment, change-in-control or severance
agreements between Executive and the Company or any of its affiliates and
contains
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<PAGE> 24
the entire understanding of the parties with respect to the employment of
Executive by the Company. There are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth herein. This
Agreement and any amendment hereto shall not be effective unless and until
signed by the Chief Executive Officer of the Company and attested to by the
General Counsel of the Company.
(c) No Waiver. The failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
of such party's rights or deprive such party of the right thereafter to insist
upon strict adherence to that term or any other term of this Agreement.
(d) Severability. It is expressly understood and agreed that although
Executive and the Company consider the restrictions contained in Section 12 to
be reasonable, if a final judicial determination is made by a court of
competent jurisdiction that the time or territory restriction in Section 12 is
an unenforceable restriction against Executive, such provision shall not be
rendered void but shall be deemed amended to apply to such maximum time and
territory, if applicable, or otherwise to such maximum extent as such court may
judicially determine or indicate to be enforceable. Alternatively, if any court
of competent jurisdiction finds that any restriction contained in Section 12 is
unenforceable, and such restriction cannot be amended so as to make it
enforceable, such finding shall not affect the enforceability of any of the
other restrictions contained herein. In the event that any one or more of the
other provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect,
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<PAGE> 25
the validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby.
(e) Successors; Binding Agreement. (i) In the event of a Change in
Control, the Company will require the successor to the Company as Executive's
employer (whether such succession is direct or indirect, by purchase, merger,
consolidation or otherwise, to any portion of the business and/or assets of JM
or the Company) to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this Agreement,
"Company", shall mean the Company as hereinbefore defined and any successor to
its business and/or assets. Prior to a Change in Control, the term "Company",
shall also mean any affiliate of the Company to which Executive may be
transferred and the Company shall cause such successor employer to be
considered the "Company" bound by the terms of this Agreement and this
Agreement shall be amended so to provide. Following a Change in Control the
term "Company" shall not mean any affiliate of the Company to which Executive
may be transferred unless Executive shall have previously approved of such
transfer in writing, in which case the Company shall cause such successor
employer to be considered the "Company" bound by the terms of this Agreement
and this Agreement shall be amended so to provide.
(ii) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Executive should die while any amount would still be payable to Executive
hereunder if Executive had continued to
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live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Executive's heirs, devisee,
legatee or other designee or, if there is no such designee, to Executive's
estate. This Agreement shall not be assignable by Executive.
(f) Notice; Notice of Termination. (i) For the purpose of this
Agreement, notices and all other communications provided for in the Agreement
shall be in writing and, except as otherwise provided in paragraph (iii) below,
shall be deemed to have been duly given when delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the signature page of this Agreement;
provided that all notices to the Company shall be directed to the attention of
the General Counsel of JM, or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
(ii) Any purported termination of Executive's employment by the
Company or by Executive shall not be effective unless communicated by written
Notice of Termination to the other party hereto in accordance with paragraph
(i) above. For purposes of this Agreement, a "Notice of Termination" in the
case of a termination for Cause following a Change in Control shall mean a
notice given within ten (10) business days of the Company's having actual
knowledge of the events giving rise to such termination and in all cases shall
mean a notice which indicates the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated.
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(iii) The date of termination of Executive's employment shall
be the date of receipt of the Notice of Termination, except in the case of (A)
Executive's death, in which case the date of termination of employment shall be
the date of death or (B) Executive's termination for Cause following a Change
in Control, in which case the date of termination shall be ten (10) business
days after actual receipt by Executive of the Notice of Termination; provided
that, if within thirty (30) days after any Notice of Termination following a
Change in Control is received, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
date of termination of Executive's employment shall be the date on which the
dispute is finally determined, either by mutual written agreement of the
parties, by a binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (which is not appealable or the
time for appeal therefrom has expired and no appeal has been perfected); and
provided further that the date of termination of Executive's employment shall
be extended by a notice of dispute only if such notice is given in good faith
and the party giving such notice pursues the resolution of such dispute with
reasonable diligence. Notwithstanding the pendency of any such dispute, the
Company will continue to pay Executive his full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to,
Base Salary and incentive compensation) or, if higher, the compensation in
effect immediately prior to the Change in Control, and continue Executive as a
participant in all compensation, benefit (including fringe benefits and
perquisites) and insurance plans in which Executive was participating when the
notice giving rise to the dispute was given, until the dispute is finally
resolved in accordance with this paragraph (iii).
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<PAGE> 28
Amounts paid under this paragraph are in addition to all other amounts
due under this Agreement and shall not be offset against or reduce any other
amounts due under this Agreement.
(g) Arbitration. The parties hereby agree to submit all controversies,
claims and matters of difference in any way related to this Agreement or the
performance or breach of the whole or any part hereof, to arbitration in
Denver, Colorado, according to the rules and practices of the American
Arbitration Association from time to time in force. If such rules and practices
shall conflict with the Colorado Rules of Civil Procedure or any other
provisions of Colorado law then in force, such Colorado rules and provisions
shall govern. Arbitration of any such controversy, claim or matter of
difference shall be a condition precedent to any legal action thereon. This
submission and agreement to arbitration shall be specifically enforceable.
Awards shall be final and binding on all parties to the extent and in the
manner provided by Colorado law; provided that an arbitration award shall not
be binding on the Company to the extent such award exceeds the maximum amount
the Company would be required to pay Executive pursuant to the express terms of
this Agreement. All awards may be filed by any party with the Clerk of the
District Court in the County of Denver, Colorado and an appropriate judgment
entered thereon and execution issued therefor. At the election of any party,
said award may also be filed, and judgment entered thereon and execution issued
therefor, with the clerk of one or more other courts, state or federal, having
jurisdiction over the party against whom such award is rendered or its
property.
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(h) Counterparts. This Agreement may be signed in several
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
(i) Non-Disparagement. The Company and the Executive shall each use
its respective best efforts not to make any statements or take any action that
may be derogatory or disparaging to the reputation of the other or, in the case
of the Executive, to the reputation of any of the Company's affiliates.
Notwithstanding the foregoing, nothing in this Agreement shall preclude either
party from truthful statements or disclosures that are required by applicable
law or regulation, or from taking any position or from disclosing the terms of
this Agreement in prosecuting or defending any judicial, administrative or
arbitration proceeding arising hereunder.
(j) Cooperation. Executive agrees that following termination of
Executive's employment with the Company prior to a Change in Control for a
period ending on the earlier to occur of the fifth anniversary of such
termination or a Change in Control, Executive shall make himself reasonably
available to the Company and its legal counsel, taking into consideration
Executive's other obligations, and shall cooperate with the Company in
connection with any litigation, investigation or other proceeding relating to
events occurring during Executive's employment hereunder or facts as to which
he has knowledge; provided that Executive shall be entitled to reimbursement of
necessary and reasonable expenses incurred in connection therewith subject to
provision of receipts therefor and provided further that (i) nothing herein
shall require Executive to make any but truthful statements and (ii) Executive
will not be required so to cooperate to the extent his position is in conflict
with that of the Company.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
/s/ THOMAS L. CALTRIDER
---------------------------------------
Thomas L. Caltrider
JOHNS MANVILLE INTERNATIONAL, INC.
/s/ C. L. HENRY
---------------------------------------
C.L. Henry
Chairman, Chief Executive Officer
and President
ATTEST: /s/ RICHARD B. VON WALD
-------------------------------------------
Richard B. Von Wald
Executive Vice President, General Counsel
and Secretary
30
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Thomas L. Caltrider
Schedule A
Outside Directorships Held
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Thomas L. Caltrider
Schedule B
Incentive Compensation Plans in Effect
Annual Incentive Compensation Plan for Johns Manville Corporation.
Johns Manville Corporation 1996 Executive Incentive Compensation Plan.
Johns Manville Corporation 1996 Deferred Compensation Plan.
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Thomas L. Caltrider
Schedule C
Fringe Benefit Arrangements and Perquisites in Effect
Club Initiation Fee & Dues
The Company will pay the initial fee and dues for one country club
and one luncheon or city club of the Executive's choice. The
initiation fee and first year's dues will be "grossed up" for tax
purposes.
Financial & Estate Planning
The Company will pay the reasonable cost of periodic financial and
estate planning.
Annual Executive Physical Exam Program
Income Tax Return Preparation
The Company will pay annual income tax return preparation fees up to
$2,000 plus additional fees if incurred on account of job-related
circumstances including the cost of representation by return preparer
during an audit.
33
<PAGE> 1
EXHIBIT 10.2
AMENDED AND RESTATED MANVILLE PERSONAL INJURY
SETTLEMENT TRUST AGREEMENT
Amended and Restated Manville Personal Injury Settlement Trust Agreement,
dated as of April 29, 1997, among Schuller Corporation, f/k/a Manville
Corporation (the "Company"), as successor to the Trustors (as hereinafter
defined), and Robert A. Falise, Louis Klein, Jr., Frank J. Macchiarola and
Christian E. Markey, Jr., as trustees (such persons and their successors
appointed pursuant hereto, the "Trustees") and successors to the Original
Trustees (as hereinafter defined).
WHEREAS, Johns-Manville Corporation, Manville Corporation, Manville Sales
Corporation, Manville Canada Inc., Manville Investment Corporation, Ken-Caryl
Ranch Corporation and SAL Contract & Supply, Inc., (the "Trustors"), filed
petitions for reorganization under chapter 11 of the Code on August 26, 1982;
and
WHEREAS, in order to effectuate the Plan, to provide for the payment of
Trust Claims and to receive the benefits under the Internal Revenue Code of so
providing for certain of such payments, the Trustors, as trustors, entered into
the Manville Personal Injury Settlement Trust Agreement dated as of November
28, 1988 (the "Original Trust Agreement") with Donald M. Blinken, Daniel Fogel,
Francis H. Hare, Jr., Christian E. Markey, Jr., and John C. Sawhill, as
trustees, (the "Original Trustees"), and transferred the Trust Estate to the
Trust pursuant thereto; and
WHEREAS, the Original Trust Agreement has previously been amended by an
Amendment to Trust Agreement dated as of February 14, 1989, a Second Amendment
dated as of November 15, 1990, a Third Amendment dated as of December 6, 1991,
a Fourth Amendment dated as of August 6, 1992, a Fifth Amendment dated as of
December 9, 1992, a Sixth Amendment dated as of November 5, 1993, a Seventh
Amendment dated as of September 22, 1994, an Eight Amendment dated as of August
15, 1995, a Ninth Amendment dated as of March 27, 1996, and a Tenth Amendment
dated as of November 21, 1995; and
WHEREAS, the Company and the Trustees wish to amend and restate the
Original Trust Agreement, as previously amended and as further amended pursuant
hereto, in the form set forth hereinbelow;
NOW, THEREFORE, THIS TRUST AGREEMENT WITNESSETH AND IT IS
HEREBY DECLARED as follows:
<PAGE> 2
ARTICLE I
DEFINITIONS
Unless the context requires otherwise, all capitalized terms used herein
and not otherwise defined have the meanings assigned to them in Exhibit A
hereto.
ARTICLE II
DECLARATION OF TRUST
2.01 Name. The Trust shall be known as "Manville Personal Injury
Settlement Trust", and the Trustees may transact the business and affairs of
the Trust in that name.
2.02 Purposes. The purposes of the Trust are:
(i) to use the assets in the Trust Estate to deliver fair,
adequate and equitable compensation to bona fide Beneficiaries,
whether presently known or unknown, without overpaying or
underpaying any claims and with settlement to be preferred over
arbitration, arbitration to be preferred over resort to the tort
system, and fair and efficient resolution of claims to be preferred
over all else;
(ii) to enhance and preserve the Trust Estate;
(iii) otherwise to carry out the provisions of this Trust
Agreement, the Supplemental Agreement, as amended by the Second
Amended and Restated Supplemental Agreement, Annex D to this
Agreement, the PD Supplemental Agreement and any other agreements
into which the Trustees have entered or will enter in connection
with the Plan.
In furtherance of the foregoing purposes, the Trustees shall be responsible for
supervising and administering the Claims Resolution Facility, unless such
facility is an Industry-Wide Claims Handling Facility, in which event the
Trustees shall be responsible for monitoring and supervising the Trust's
participation in such facility.
2.03 Transfer of Assets. The Trustors transferred and assigned to the
Trust the assets listed in Part A of Schedule I hereto, having theretofore
obtained all consents and taken all other steps prerequisite to such transfer
and assignment. The Company, as the successor of the Trustors for this
purpose, shall take any and all steps as may be further necessary to effectuate
fully the transfer and assignment of such assets to the Trust. Upon execution
and delivery by the Original Trustees of the Supplemental Agreement, as amended
by the Second Amended and Restated Supplemental Agreement, the Trust in
addition received or became entitled to receive from the Company the assets
listed in Parts B and C of Schedule I hereto in accordance with the
<PAGE> 3
terms of the Supplemental Agreement, as amended by the Second Amended and
Restated Supplemental Agreement.
2.04 Acceptance of Assets and Assumption of Liabilities. In connection
with and in furtherance of its purposes and subject to Section 5.04, the
Original Trustees hereby expressly accepted the transfer and assignment to the
Trust of the assets listed on Schedule I hereto and the Trust hereby further
expressly assumes or undertakes all Trust Claims and all Indemnification
Liabilities. Except as otherwise provided in the Claims Resolution Procedures
as such procedures are amended by the Trust Distribution Process, Annex C to
this Agreement, and the Co-Defendants' Procedures as such procedures are
amended by the Trust Distribution Process, the Trust shall have all defenses,
cross claims, and rights to liens, offsets and recoupment that the Company and
other Debtors would have had under applicable nonbankruptcy law with respect to
the Trust Claims and Indemnification Liabilities assumed by the Trust. Except
as amended by the Trust Distribution Process, (a) the Trust shall not have any
obligation with respect to any warranty, guarantee or indemnification liability
or obligation constituting an AH Claim or an Other Asbestos Obligation or an
Indemnification Liability under Clause (b) of the definition thereof, unless
(i) the Trust is notified of the assertion of the underlying claim giving rise
to the warranty, guarantee or indemnification liability or obligation against
the Person entitled to the benefits of such warranty, guarantee or
indemnification promptly after the later of the Consummation Date and the date
on which such Person becomes aware of the underlying claim, (ii) following the
Consummation Date the Trust is provided the opportunity to conduct the defense
of such claim and (iii) neither any of the Trustors nor such other Person
settles such claim without the consent of the Trust and (b) the Trust shall not
pay any contribution liability or obligation constituting an AH Claim or an
Other Asbestos Obligation, other than an Indemnity Claim or a Contribution
Claim, or constituting an Indemnification Liability unless and until the
aggregate liability of the Trust in respect of the claim underlying such
contribution liability or obligation, whether directly or through contribution,
has been Liquidated. Following assertion of any claim against any past or
present officer, director or employee of any of the Trustors that gives rise to
a Trust Claim by such officer, director or employee for indemnification from
the Trust or of any claim that gives rise to an Indemnification Liability, the
Trust shall assume and conduct the defense of the underlying claim, provided
that the conditions set forth in Clauses (a)(i) and (iii) of this Section 2.04
are satisfied.
ARTICLE III
POWERS; TRUST ADMIMSTRATION
3.01 Powers. (a) Subject to the limitations set forth in this Trust
Agreement, the Trustees shall have the power to take any and all such actions
as in the judgment of the Trustees are necessary or convenient to effectuate
the purposes of the Trust, including, without limitation, each power expressly
granted in Subsection (b) below and any power reasonably incidental thereto.
(b) Without limiting the generality of Subsection (a) above, the
Trustees shall have the power to:
(i) receive and hold the Trust Estate, and invest and re-invest
monies, other assets and proceeds held from time to time therein;
<PAGE> 4
(ii) supervise and administer the Claims Resolution Facility, or if
such facility is an Industry-Wide Claims Handling Facility, monitor and
supervise the Trust's participation in such facility, or create, own or
acquire an ownership interest in a claims resolution facility as
described in Clause (xvii) below and supervise and administer such claims
resolution facility or monitor and supervise the Trust's participation
therein;
(iii) pay Indemnification Liabilities and other Trust Expenses and
Trust Claims either Liquidated in accordance with the Claims Resolution
Facility or the Co-Defendants' Procedures, as such procedures are amended
by the Trust Distribution Process, as applicable, or otherwise Allowed;
(iv) borrow money and issue notes and other evidences of
indebtedness (which notes or other evidences of indebtedness may
exonerate the Trustees from personal liability with respect thereto) in
the ordinary course of operations for payment of Indemnification
Liabilities and other Trust Expenses and Trust Claims and secure any of
its obligations by mortgage, pledge or other encumbrance of all or any of
its property or income;
(v) enter into the Supplemental Agreement, as amended by the Second
Amended and Restated Supplemental Agreement, the PD Supplemental
Agreement and any other agreements required by the Plan and perform all
of the Trust's obligations thereunder;
(vi) exercise all rights and benefits available to the Trust with
respect to the Insurance Coverage, subject to the provisions of the
Supplemental Agreement, as amended by the Second Amended and Restated
Supplemental Agreement;
(vii) exercise all rights and benefits accruing to the Trust as
owner of any shares the Trust may own from time to time of Manville
Common Stock, subject to the provisions of the Supplemental Agreement, as
amended by the Second Amended and Restated Supplemental Agreement, and
any other securities or instruments of the Company or of any other
issuer;
(viii) take all actions contemplated hereunder with respect to the
funds created hereby and, subject to Section 4.01(d), establish such
funds, reserves and accounts within the Trust Estate, in addition to the
funds created hereby, as deemed by the Trustees to be useful in carrying
out the purposes of the Trust;
(ix) sue and be sued and participate, as a party or otherwise, in
any judicial, administrative, arbitrative or other proceeding, including,
without limitation, in connection with the Claims Resolution Facility;
(x) amend the Bylaws;
<PAGE> 5
(xi) appoint such officers, including a Managing Trustee, and hire
such employees and engage such legal, financial, investment and other
advisors, managers and agents as, in the judgment of the Trustees, the
business of the Trust requires, and pay the Trustees (subject to Section
5.05) and such officers (subject to Section 5.05 in the case of the
Managing Trustee), employees, advisors, managers and agents reasonable
compensation;
(xii) enter into such other arrangements with third parties as are
deemed by the Trustees to be useful in carrying out the purposes of the
Trust (possibly including, without limitation, engaging a Person having
trust powers to act as paying agent, depositary, custodian, or trustee
with respect to funds, reserves or accounts created hereby or established
pursuant hereto);
(xiii) indemnify (and purchase insurance indemnifying or in lieu of
or in addition to such insurance, escrow monies out of the assets of the
Trust to establish self-insurance funds indemnifying) (A) the Trustees
and officers, employees, agents and representatives of the Trust to the
fullest extent that a corporation organized under Delaware law is from
time to time entitled to indemnify its directors, officers, employees,
agents and representatives, and (B) financial advisors, independent
auditors, and investment bankers engaged by the Trust where such
indemnification is determined by the Trustees to be necessary or
appropriate to serve the objectives of the Trust, which indemnification
and insurance may also cover, without limitation, claims based on
occurrences during the period from January 9, 1987 to the Consummation
Date; and without limiting the foregoing, to establish a segregated
security fund of up to $30,000,000, to be set aside out of the assets of
the Trust and devoted exclusively to securing the obligations of the
Trust to indemnify such of the Trustees and officers, employees, agents,
representatives, financial advisors, independent auditors, and investment
bankers of the Trust as may be specified in the instrument or instruments
governing such fund or in amendments thereto;
(xiv) enter into any contract or otherwise engage in any transaction
with any Trustee or any Person affiliated with any Trustee provided that
such contract or such transaction is approved by the majority vote of not
less than 80% of the Trustees none of whom is a party to or otherwise
involved in, or has an interest in, such contract or transaction, it
being understood that to the extent permitted by law the usual rules
prohibiting fiduciaries from dealing with themselves as individuals or
from dealing with respect to any matter in which they have a personal
interest shall not apply to the Trustees;
(xv) delegate any or all of the discretionary power and authority
herein conferred at any time with respect to all or any portion of the
Trust Estate to any one or more reputable individuals or recognized
institutional advisers or investment managers without liability for any
action taken or omission made because of any such delegation;
(xvi) consult with the Company at such times and with respect to
such issues relating to the conduct of the Trust as the Trustees consider
desirable;
<PAGE> 6
(xvii) at any time after the second anniversary of the Consummation
Date, withdraw from the Claims Resolution Facility and create, enter
into, participate with others in or merge with, any other claims
resolution facility (including, without limitation, a claims resolution
facility that handles personal injury and/or property damage claims
related to asbestos brought against one or more Persons other than the
Trust, in addition to handling Trust Claims for the Trust) or an
Industry-Wide Claims Handling Facility, if the Trustees shall determine
by unanimous vote, after consultation with the Selected Counsel for the
Beneficiaries and any other interested parties whom the Trustees desire
to consult, that the purposes and substantive procedures of such other
claims resolution facility or such Industry-Wide Claims Handling Facility
are consistent with those of the Claims Resolution Facility, which
determination by the Trustees shall be final, binding and non-appealable;
(xviii) make any investment or carry on any activity permitted by
Section 4.03 hereof;
(xix) serve as a director of any corporation (including, without
limitation, the Company or any of its Affiliates) in which the Trust
directly or indirectly holds an equity or debt investment (a "Portfolio
Company"), including, without limitation, service on any committees or
subcommittees of the board of directors of any such Portfolio Company;
provided that, commencing on October 1, 1993, any Trustee who also serves
concurrently as a director of any Portfolio Company at the request of the
Trust (a "Trustee Director") will instruct such Portfolio Company to pay
directly to the Trust all meeting fees and annual retainers which such
Trustee-Director is entitled to receive in his or her capacity as a
director or board committee member of such Portfolio Company, so long as
such Trustee remains both a Trustee and a director of such Portfolio
Company. For the foregoing purposes, any person who is serving
concurrently as a Trustee of the Trust and a director of Schuller
Corporation or any majority-owned subsidiary of Schuller Corporation
(each, a "Manville Company") will, so long as the Trust continues to own
directly or indirectly more than 50% of the outstanding common stock of
Schuller Corporation, be conclusively presumed to be serving as a
director of such Manville Company at the request of the Trust.
(c) The Trustees shall not have the power to Guarantee any Debt of other
Persons.
3.02 Administration. (a) The Trustees have adopted the Bylaws (Annex A
to this Trust Agreement) and may make such amendments thereto as the Trustees
may approve by resolution adopted by all of the Trustees or by written
instrument signed by all of the Trustees. To the extent not inconsistent with
the terms of this Trust Agreement, the Bylaws govern the affairs of the Trust.
(b) The accounting period for the Trust shall be the Fiscal Year.
(c) The Trustees shall timely file, or shall deliver to the Company such
documents and other information as the Company may reasonably require in order
to permit it to timely file, such income tax and other returns and statements
as are required to comply with applicable provisionsof the Internal Revenue
Code and of any state law and the regulations promulgated thereunder.
<PAGE> 7
(d) (i) The Trustees shall cause to be prepared and filed with the Court,
as soon as available and in any event within 60 days following the end of
each Fiscal Year, an annual report containing financial statements of the
Trust (including, without limitation, a balance sheet of the Trust as of
the end of such Fiscal Year and a statement of operations for such Fiscal
Year) audited by a nationally recognized firm of Independent public
accountants selected by the Trustees and certified by such firm as to
fairness of presentation and consistency.
(ii) The Trustees shall cause to be prepared and filed with the
Court as soon as available and in any event within 30 days following the
end of each of the first three quarters of each Fiscal Year, a quarterly
report containing financial statements of the Trust (including, without
limitation, an unaudited balance sheet of the Trust as of the end of such
quarter and a statement of operations for such quarter), certified
(subject to normal year-end adjustments) as to the fairness of
presentation and consistency by an appropriate officer of the Trust.
(iii) Simultaneously with delivery of each set of financial
statements referred to in Subsections (i) and (ii) above, the Trustees
shall cause to be prepared and filed with the Court a report containing a
summary (in reasonable detail) of the following information with respect
to the period covered by the financial statement:
(A) if the Trustees are not participating in an Industry-Wide
Claims Handling Facility, the number of Trust Claims Liquidated and
the average amount per Trust Claim paid or payable;
(B) if the Trustees are participating in an Industry-Wide
Claims Handling Facility or a claims resolution facility that
handles claims against other Persons in addition to Trust claims,
the information called for by Clause (A) above, modified as
necessary to account for the degree and manner in which information
is supplied to the Trustees by such facility with respect to
liquidation and payment of Trust Claims;
(C) the amount of investment income earned by the Trust; and
(D) the amount of Trust Expenses incurred by the Trust.
(e) The Trustees shall cause to be prepared as soon as practicable prior
to the commencement of each Fiscal Year a budget and cash flow projections
covering such Fiscal Year and the succeeding four Fiscal Years.
<PAGE> 8
ARTICLE IV
FUNDS, PAYMENTS AND INVESTMENTS
4.01 Funds. (a) There is hereby created within the Trust Estate the "Basic
Trust Fund" consisting of those assets listed in Part A of Schedule I hereto.
(b) There is hereby created within the Trust Estate the "Stock Proceeds
Fund" to consist of all proceeds from the sale or other disposition (other than
by conversion of Series A Preferred Stock) by the Trustees of any of the assets
listed in Part C of Schedule I hereto (including Manville Common Stock issued
on conversion of Series A Preferred Stock).
(c) Subject to Section 2.02 hereof, the Trustees may, from time to time,
create additional funds, reserves and accounts within the Trust Estate as they
may deem necessary, prudent or useful in order to provide for the payment of
Trust Expenses and Trust Claims and may, with respect to any such fund, reserve
or account, restrict the use of monies therein; provided that the establishment
and use of such funds, reserves and accounts shall not in any event result in
any transfer, direct or indirect, of assets between the Basic Trust Fund and
any other fund, reserve or account or between the Stock Proceeds Fund and any
other fund, reserve or account.
(d) Any investment earnings received with respect to, or other proceeds
of, any asset held within any fund created hereby or pursuant hereto shall be
credited to such fund (except for investment earnings, including capital gains,
on the Stock Proceeds Fund, which shall be credited to the general fund of the
Trust Estate).
4.02 Payments. Payments out of the Trust Estate, other than pursuant to
Section 2.04(a) of the Supplemental Agreement, as amended by the Second Amended
and Restated Supplemental Agreement, must be made from the Basic Trust Fund, to
the extent that the funds therein are available, until such fund has been
depleted.
4.03 Investments. The Trustees shall have the power to invest or reinvest
in such securities (including, without limitation, interests in any entity
registered as an investment company under the Investment Company Act of 1940),
instruments or other property, real or personal, within or without the United
States, and to acquire and hold property for such periods as they may
determine, whether or not the same be income-producing, all in accordance with
the New York Prudent Investor Act (N.Y.E.P.T.L. Section 11.-2.3) as it may be
amended or superseded from time to time (the "Prudent Investor Act").
Notwithstanding anything to the contrary set forth in this Trust Agreement or
in the Prudent Investor Act, the Trust may acquire and hold any securities or
instruments of, and make any other investments in, (i) the Company and/or any
of its Affiliates and (ii) any entity created with the approval of the Trustees
to conduct any activities permitted by this Trust Agreement (including, without
limitation, a claims resolution facility as described in Section
3.01(b)(xvii)).
<PAGE> 9
4.04 Source of Payments. All Trust Expenses and payments in respect of
Trust Claims shall be payable solely out of the Trust Estate. Neither the
Trustees nor any officer, agent or employee of the Trust nor any of the
Trustors nor any of their Subsidiaries nor any director, officer, employee or
agent of any of the Trustors or any of their Subsidiaries shall be liable for
the payment of any Trust Expense or Trust Claim or other liability of the
Trust, and no Person shall look to any of the foregoing Persons for payment of
any such expense or liability.
ARTICLE V
TRUSTEES
5.01 Number. Except during the period contemplated by Section 5.03(b),
there shall be no fewer than four Trustees and no more than six Trustees.
5.02 Term of Service. (a) The Trustees shall serve until death or
resignation pursuant to Subsection (b) below or removal pursuant to Subsection
(c) below, subject to mandatory retirement at age 70 unless (and for so long
as) it is waived by a majority vote of the remaining Trustees.
(b) Any Trustee may resign at any time by written notice to each of the
remaining Trustees and the Company. Such notice shall specify a date when such
resignation shall take effect, which shall not be less than 90 days after the
date such notice is given unless (and only for so long as) waived by a majority
of the remaining Trustees.
(c) Any Trustee may be removed for cause (which shall be deemed to include
any failure to comply with Section 5.09(a) or (b) by the majority vote of the
other Trustees, such removal to take effect at such time as the Trustees shall
by such vote determine.
5.03 Appointment of successor Trustee. (a) In the event of a vacancy in
the position of a Trustee, the vacancy shall be filled by unanimous vote of the
remaining Trustees, who shall take into account the relevant provisions hereof,
consult with the Selected Counsel for the Beneficiaries and refrain from making
any appointment which may result in the appearance of impropriety.
(b) If the Trustees are unable to appoint a successor Trustee pursuant to
Subsection (a) above who accepts such an appointment in writing within 90 days
after the occurrence of the vacancy in the position of a Trustee and after
notice to the Company and publication of notice in the national edition of The
Wall Street Journal or The New York Times, the Trustees shall apply to the
Court, which shall appoint a successor Trustee or successor Trustees.
(c) Immediately upon the appointment of any successor Trustee, all rights,
titles, duties, powers and authority of the predecessor Trustee hereunder shall
be vested in and undertaken by the successor Trustee without any further act.
No successor Trustee shall be liable personally for any act or omission of his
predecessor.
<PAGE> 10
5.04 Liability of Trustees, Officers and Employees. No Trustee, officer
or employee of the Trust shall be liable to the Trust, any Beneficiary or any
other Person except for his own gross negligence or willful misconduct. No
Trustee, officer or employee of the Trust shall be liable for any act or
omission of any other officer, agent or employee of the Trust unless the
Trustee, officer or employee acted with gross negligence or willful misconduct
in the selection or retention of such officer, agent or employee.
5.05 Compensation and Expenses of Trustees. (a) Each of the Trustees shall
receive compensation for his or her services as Trustee in the amount of $3 0,
000 per annum (as increased in the case of Trustee-Directors in the manner
provided in the next sentence) plus $1,000 per them for each meeting of the
Trustees or any committee or subcommittee thereof attended by such Trustee or
for special duties performed by such Trustee on behalf of the Trust, and $1,000
for each day of transcontinental travel in connection with attendance at any
such meeting or performance of any such special duties. Each Trustee-Director
shall receive from the Trust the per them and travel allowances referred to in
the immediately preceding sentence for such Trustee-Director's attendance at
each board, committee and subcommittee meeting of each Portfolio Company of
which he or she serves as a director at the request of the Trust; and
commencing October 1, 1993 the annual retainer amount referred to in the
immediately preceding sentence shall be increased in the case of a
Trustee-Director by $18,750 for each Portfolio Company directorship, and by
$1,875 for each Portfolio Company committee chairmanship, held by such
Trustee-Director at the request of the Trust, In addition, the Managing Trustee
(if one is elected pursuant to the Bylaws) shall receive, for his or her
part-time services on behalf of the Trust, the sum of $1,500 for each day on
which the services rendered by him or her in such capacity occupy a majority of
his or her time, All compensation amounts referred to above shall be increased
or decreased annually after November 28, 1988 (except the incremental annual
amounts payable to Trustee-Directors in respect of each Portfolio Company
directorship and committee chairmanship, which amounts shall be increased or
decreased annually after October 1, 1993) at the rate of the Consumer Price
Index for urban wage earners and clerical workers (U.S. City Average)
unadjusted for seasonal variation, published by the Bureau of labor Statistics
of the United States Department of labor, or otherwise by the Trustees with the
approval of the Court. In addition to and notwithstanding the foregoing, any
such compensation amounts may be increased by the Trustees to such greater
amounts as the Trustees may reasonably determine from time to time to be
appropriate to provide compensation to the Trustees for their services as
Trustees and for their service as directors and committee chairmen of portfolio
companies at levels comparable to the compensation paid to directors of major
U.S. industrial corporations.
(b) All out-of-pocket costs and expenses incurred by the Trustees in
connection with the performance of their duties hereunder (including, without
limitation, the performance by Trustee-Directors of their duties as directors
and committee and subcommittee members of Portfolio Companies) will be promptly
reimbursed to the Trustees by the Trust.
5.06 Indemnification of Trustees, Officers and Employees. The Trustees,
officers and employees of the Trust shall be indemnified by the Trust to the
fullest extent that a corporation organized under Delaware law is from time to
time entitled to indemnify its directors against any and all liabilities,
expenses, claims, damages or losses incurred by them in the performance of
their
<PAGE> 11
duties hereunder, except any such liability, expense, claim, damage or loss as
to which they are liable under Section 5.04. Without limiting the generality
of the foregoing, any person who is serving or has served at the request of the
Trust as a director of any Portfolio Company while also serving as a Trustee of
the Trust shall be indemnified by the Trust in the same manner as he or she is
indemnified as a Trustee, to the fullest extent that a corporation organized
under Delaware law is from time to time entitled to indemnify a person who is
or was serving at the request of such corporation as a director of another
corporation, against any and all liabilities, expenses, claims, damages or
losses incurred by such person as a result of or in connection with such
persons service, actions, omissions or capacity as a director of such Portfolio
Company (including, without limitation, as a member of a board committee or
subcommittee of such Portfolio Company) while such person was serving both as a
Trustee and as a director of such Portfolio Company, except for any such
liability, expense, claim, damage or loss as to which such person is liable
under Section 5.04.
5.07 Trustees' Lien. The Trustees shall have a prior lien upon the Trust
Estate to secure the payment of any amounts payable to them pursuant to Section
5.05 or 5.06.
5.08 Trustees' Employment of Experts. The Trustees may, but shall not be
required to, consult with counsel, accountants, appraisers and other parties
deemed by the Trustees to be qualified as experts on the matters submitted to
them (regardless of whether any such party is a Related Party of any Trustee or
is otherwise affiliated with any of the Trustees in any manner, except as
otherwise expressly provided in this Trust Agreement or the Supplemental
Agreement, as amended by the Second Amended and Restated Supplemental
Agreement), and the opinion of any such parties on any matters submitted to
them by the Trustees shall be full and complete authorization and protection in
respect of any action taken or not taken by the Trustees hereunder in good
faith and in accordance with the written opinion of any such party.
5.09 Additional Qualifications. (a) No Trustee or Related Party of a
Trustee shall represent or shall have represented any of the Trustors or any
Person who asserts or has asserted a Trust Claim.
(b) No Trustee shall own any securities of the Company or any of its
Affiliates or have any other financial interest, direct or indirect, in the
Company or any of its Affiliates.
(c) If there has been a violation of Subsection (a) or (b) above, the
Trustee involved is subject to removal pursuant to Section 5.02(c) above.
ARTICLE VI
GENERAL PROVISIONS
6.01 Irrevocability. The Trust is irrevocable.
6.02 Termination.. (a) The Trust shall automatically terminate on the
date (the "Termination Date") 90 days after the first to occur of the following
events:
<PAGE> 12
(i) all Trust Claims duly filed with the Trust have been Liquidated
and paid in full, and twelve consecutive months have elapsed during which
no Trust Claim has been filed with the Trust;
(ii) (x) in the judgment of 80% of the Trustees after consultation
with Selected Counsel for the Beneficiaries, a de minimis number of Trust
Claims are then pending and new Trust Claims are being filed at a de
minimis rate and (y) the Company and the Legal Representative shall have
consented in writing to such dissolution;
(iii) the Company procures from one or more responsible insurance
companies acceptable to the Trustees one or more irrevocable liability
insurance policies covering all Trust Claims;
(iv) 21 years less 91 days pass after the death of the last survivor
of all of the descendants of Joseph P. Kennedy living on the date hereof;
or
(v) the Company and the Trustees after consultation with Selected
Counsel for the Beneficiaries and with the written consent of the Legal
Representative, agree in writing to the termination of the Trust.
(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 the
Company or any designees of the Company, 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.
(c) If any of the events referred to in Section 6.02(a) of the PD Trust
Agreement shall have occurred prior to the Termination Date, then as soon as
practicable after the occurrence of any of the events referred to in Section
6.02(a) hereof, but in no event later than the Termination Date, all monies
(not including unused Insurance Coverage in place) remaining in the Basic Trust
Fund shall be applied to such charitable purposes as the Trustees in their
reasonable discretion shall determine, which charitable purposes, if
practicable, shall be related to the treatment of asbestos-caused disorders.
6.03 Amendments. (a) The Company (as successor to the Trustors for this
purpose) and the Trustees (by vote of 80% of the Trustees) may, after
consultation with Selected Counsel for the Beneficiaries, modify, supplement or
amend this Trust Agreement (other than Sections 2.02, 4.01 (a), the proviso to
4.01(c), 4.02, 6.01, 6.02(c), and 6.03(a)) in any respect, such modification,
supplement or amendment to be evidenced in writing.
<PAGE> 13
(b) The Company and the Trust shall each promptly notify the other and
Selected Counsel for the Beneficiaries of any changes in generally accepted
accounting principles known to it which are likely to materially affect the
size or timing of payments from the Company to the Trust under this Agreement
and the Annexes hereto. Promptly after delivery of such notice, the Company
and the Trust shall consult with each other and Selected Counsel for the
Beneficiaries to determine whether it is desirable to amend this Agreement or
any of the Annexes hereto in any manner in response to such changes. Neither
party shall be legally bound by virtue of this Section 6.03(b) to agree to, or
to negotiate with respect to, any amendments proposed by the other.
6.04 Cooperation. The Company and the Trust shall each cooperate to the
extent reasonably requested by the other in the handling of Trust Claims and
generally in the operation of the Trust for the purposes set forth herein.
6.05 Severability. Should any provision in this Trust Agreement be
determined to be unenforceable, such determination shall in no way limit or
affect the enforceability and operative effect of any and all other provisions
of this Trust Agreement.
6.06 Notices. Notices to Persons asserting Trust Claims shall be given at
the address of such Person, or, where applicable, such Person's legal
representative, in each case as provided on such Person's Proof of Claim (as
defined in Annex B hereto). Any notices or other communications required or
permitted hereunder shall be in writing and delivered at the addresses
designated below, or sent by telecopy pursuant to the instructions listed
below, or mailed by registered or certified mail, return receipt requested,
postage prepaid, addressed as follows, or to such other address or addresses as
may hereafter be furnished by the Company to the Trustees or by the Trustees to
the Company in compliance with the terms hereof.
To the Trust or the Trustees:
Manville Personal Injury Settlement Trust
8260 Willow Oaks Corporate Drive, Suite 600
P.O. Box 10415
Fairfax, Virginia 22031
Attention: David T. Austern, General Counsel
Telecopy No.: (703) 205-6248
with a copy (which shall not constitute delivery of notice) to:
Donovan Leisure Newton & Irvine
30 Rockefeller Plaza
New York, New York 10112
Attention: John J. McCann
Telecopy No.: (212) 632-3315
<PAGE> 14
To the Company:
Schuller Corporation
717 Seventeenth Street
Denver, Colorado 80202
Attention: Richard B. Von Wald,
Senior Vice President and General Counsel
Telecopy No.: (303) 978-4842
with a copy (which shall not constitute delivery of notice) to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Stephen H. Case
Telecopy No.: (212) 450-5565
All such notices and communications shall be effective when delivered at
the designated addresses or when the telecopy communication is received at the
designated addresses and confirmed by the recipient by return telecopy in
conformity with the provisions hereof.
6.07 Counterparts. This Trust Agreement may be executed in any number of
counterparts, each of which shall constitute an original, and such counterparts
shall together constitute but one and the same instrument.
6.08 Successors and assigns. The provisions of this Trust Agreement shall
be binding upon and inure to the benefit of the Trustors, the Trust and the
Trustees and their respective successors and assigns, except that neither any
of the Trustors nor the Trust nor any Trustee may assign or otherwise transfer
any of its or his rights or obligations under this Trust Agreement except, in
the case oft he Trust and the Trustees, as contemplated by Section 6.02.
6.09 Entire Agreement; No Waiver. The entire agreement of the parties
relating to the subject matter of this Trust Agreement is contained herein, and
this Trust Agreement supersedes any prior oral or written agreements concerning
the subject matter hereof. No failure to exercise or delay in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, power or privilege hereunder
preclude any further exercise thereof or of any other fight, power or
privilege. The rights and remedies herein provided are cumulative and are not
exclusive of rights under law or in equity.
6.10 Headings. The headings used in this Trust Agreement are inserted for
convenience only and neither constitute a portion of this Trust Agreement nor
in any manner affect the construction of the provisions of this Trust
Agreement.
<PAGE> 15
6.11 Governing Law. This Trust Agreement shall be governed by,
administered under and construed in accordance with, the laws of the State of
New York.
6.12 Dispute Resolution. Any disputes which arise under this Agreement
shall be resolved by the Court pursuant to Section 10.1.B of the Plan.
6.13 Enforcement and Administration. The provisions of this Agreement and
each Annex hereto shall be enforced and administered by the Court pursuant to
Section 10.1.G of the Plan. Notwithstanding anything to the contrary contained
herein or any state law to the contrary, the United States Bankruptcy Court for
the Southern District of New York shall have exclusive jurisdiction to hear and
resolve any and all matters relating to the powers and authority of the
Trustees hereunder, any actions or omissions by them, the operations or
activities of the Trust and the interpretation of this Agreement.
6.14 Settlement of Trustees' Accounts. Notwithstanding any state law to
the contrary, the Court shall have exclusive jurisdiction over the settlement
of the accounts of the Trustees, whether such account is rendered by the
Trustees themselves or is sought by any Beneficiary or other Person. The
Trustees shall render successive accounts covering periods of not more than
five years, commencing on the Consummation Date or the last day of the prior
accounting period, as the case may be, except that an account shall be rendered
for the period ending on the date of the death, resignation, removal or
retirement of any Trustee, Upon the acceptance of any such account by the court
after hearing on notice to the Company, Selected Counsel for the Beneficiaries
and such other parties as the Court shall designate, the Trustees shall be
discharged from any further liability or responsibility to any Beneficiary or
other Person as to all matters embraced in such account.
6.15 No Bond Required.. Notwithstanding any state law to the contrary,
each Trustee (including any successor Trustee) shall be exempt from giving any
bond or other security in any jurisdiction.
6.16 Appointment of Clerk as Agent for Service of Process. Each of the
Trustees hereby designates and appoints the Clerk of the Court (the "Clerk") as
his agent upon whom process against such Trustee may be served in any action or
proceeding under Section 6.12, 6.13 or 6.14 of this Agreement or as to which
the Court has otherwise retained jurisdiction pursuant to the Plan. The Clerk
shall forthwith mail a copy of any such process served upon him to such Trustee
at the address to which notices to the Trustee shall be sent pursuant to
Section 6.06 of this Agreement. Successor Trustees, by acceptance of their
appointment as such, shall be deemed to have designated and appointed the Clerk
in like manner.
<PAGE> 16
IN WITNESS WHEREOF, the Company, as successor to the Trustors, has caused
this Agreement to be executed by a duly authorized officer and the Trustees
have each executed this Agreement, all as of the day and year first above
written.
SCHULLER CORPORATION
By: /s/ Richard B. Von Wald
-----------------------------------
Name: Richard B. Von Wald
-----------------------------------
Title: Executive Vice President,
General Counsel and
Secretary
TRUSTEES
/s/ Robert A. Falise , as Trustee
--------------------------------
Name: Robert A. Falise
/s/ Louis Klein, Jr. , as Trustee
--------------------------------
Name: Louis Klein, Jr.
, as Trustee
--------------------------------
Name: Frank J. Macchiarola
/s/ Christian E. Markey, Jr. , as Trustee
--------------------------------
Name: Christian E. Markey, Jr.
<PAGE> 1
EXHIBIT 10.3
AMENDMENT TO AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
AMENDMENT TO AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT dated
as of June 6, 1997 among JOHNS MANVILLE FUNDING CORPORATION, (formerly known as
Schuller Funding Corporation, "Funding"), JOHNS MANVILLE INTERNATIONAL, INC.
(formerly known as Schuller International, Inc., "Parent"), the financial
institutions listed on the signature pages hereof, as Buyers, and MORGAN
GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent and Structuring and
Collateral Agent.
W I T N E S S E T H :
WHEREAS, the parties hereto have heretofore entered into an Amended
and Restated Receivables Purchase Agreement (as heretofore amended, the
"Agreement") dated as of August 15, 1994, and
WHEREAS, the parties hereto desire to amend the Agreement as set forth
herein and to restate the Agreement in its entirety to read as set forth in the
Agreement with the amendments specified below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each capitalized term used herein which is defined in the
Agreement shall have the meaning assigned to such term in the Agreement. Each
reference to "hereof", "hereunder", "herein" and "hereby" and each other
similar reference and each reference to "this Agreement" and each other similar
reference contained in the Agreement shall from and after the date hereof refer
to the Agreement as amended and restated hereby.
SECTION 2. Amendments to Definitions. Section 1.01 of the Agreement
is amended as follows:
(a) The definition of "A-Rated Obligor" is amended and restated to
read in its entirety as follows:
"A-Rated Obligor" means, during any Report Month, an Obligor:
<PAGE> 2
(i) whose outstanding senior unsecured short-term debt
securities were rated A-1 or higher by S&P as of the end of the
immediately preceding Report Month; or
(ii) who did not have a senior unsecured short-term debt
rating by S&P as of the end of the immediately preceding Report Month,
but had a senior unsecured long-term debt rating of A+ or higher by
S&P as of the end of the immediately preceding Report Month.
(b) The definition of "Adjusted Reserve Percentage" is amended by
replacing "23%" in each place where it appears with "19%".
(c) The definition of "Collateral Agent" is amended by replacing
"J.P. Morgan Delaware" with "Morgan Guaranty Trust Company of New York".
(d) The definition of "Commitment Fee" is amended by replacing
".1875%" with ".125%".
(e) The definition of "Concentration Limit" is amended and restated
to read in its entirety as follows:
"Concentration Limit" means (i) for each A-Rated Obligor and such
Obligor's Affiliates considered as a whole, 15%, (ii) for each B-Rated Obligor
and such Obligor's Affiliates (which are not A-Rated Obligors) considered as a
whole, 7.5%, (iii) for each C-Rated Obligor and such Obligor's Affiliates
(which are not A-Rated or B-Rated Obligors) considered as a whole, 5% and (iv)
for each other Obligor and such Obligor's Affiliates (which are not A-Rated,
B-Rated or C-Rated Obligors) considered as a whole, 3%.
(f) The definitions of "Dilution Horizon" and "Dilution Ratio" are
amended by replacing "Dilution Adjustment" in each place where it appears with
"Variable Dilution Adjustment".
(g) The definition of "Eurodollar Rate" is amended by replacing
".50%" with ".375%" and "2.50% with "2.375%" in clause (ii)(C) of such
definition.
(h) The definition of "Expiration Date" is amended by replacing
"August 29, 2000" with the date "August 29, 2002".
(i) The definition of "Fixed CD Rate" is amended by replacing ".625%"
with ".50%" and "2.625%" with "2.50%" in clause (ii)(C) of such definition.
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<PAGE> 3
(j) The definition of "Net Pool Balance" is amended and restated to
read in its entirety as follows:
"Net Pool Balance" means, at any time, the Outstanding Balance of the
Eligible Receivables at such time, reduced by the Contractual Dilution Reserve
at such time, less the aggregate amount by which the Outstanding Balance of
Eligible Receivables of each Obligor and its Affiliates considered as a whole
at such time, as so reduced, exceeds (x) the aggregate Outstanding Balance of
all Eligible Receivables at such time, as so reduced, multiplied by (y) the
Concentration Limit for such Obligor and its Affiliates.
(k) The following definitions are added:
"Additional Qualified Dilution Adjustment" means any Dilution
Adjustment that is attributable to a customer incentive program of Parent (i)
which is reported and calculated with a comparable level of accuracy to the
Roofing Dilution Adjustment, (ii) that is approved by the Agent and would not
result in a reduction or withdrawal of the current rating by S&P, (iii) for
which prior notice of inclusion in the Contractual Dilution Reserve calculation
has been provided to the Purchase Parties and (iv) which will be calculated and
set forth under section "E" of the "Net Pool Balance" calculation in both
Exhibits D and E as such exhibits are amended to reflect such calculations.
"B-Rated Obligor" means, during any Report Month, an Obligor (which is
not an A-Rated Obligor):
(i) whose outstanding senior unsecured short-term debt
securities were rated A-2 by S&P as of the end of the immediately
preceding Report Month, or
(ii) who did not have a senior unsecured short-term rating by
S&P as of the end of the immediately preceding Report Month, but had a
senior unsecured long-term debt rating of BBB+ or higher by S&P as of
the end of the immediately preceding Report Month.
"Building Insulation Dilution Adjustment" means the Dilution
Adjustments attributable to quarterly and annual rebate programs for Parent's
building insulation business as calculated and set forth under section "E" of
the "Net Pool Balance" calculation in both Exhibits D and E; provided that the
Building Insulation Dilution Adjustment shall not be part of the Contractual
Dilution Reserve until Johns Manville Funding Corporation and the Servicer
represent, to the satisfaction of S&P and the Agent, that the reported
calculations contained in the Building Insulation Dilution Adjustment meet the
standards of accuracy in all
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<PAGE> 4
material respects consistent with the other calculations provided in the Daily
and Monthly Reports.
"C-Rated Obligor" means, during any Report Month, an Obligor (which
is not an A-Rated or B-Rated Obligor):
(i) whose outstanding senior unsecured short-term debt
securities were rated A-3 by S&P as of the end of the immediately
preceding Report Month, or
(ii) who did not have a senior unsecured short-term debt
rating by S&P as of the end of the immediately preceding Report Month,
but had a senior unsecured long-term debt rating of BBB- or higher by
S&P as of the end of the immediately preceding Report Month.
"Contractual Dilution Reserve" means (i) Dilution Adjustments
attributable to cash discounts set forth under section "E" of the "Net Pool
Balance" calculation in Exhibits D and E, (ii) the Roofing Dilution Adjustment,
(iii) the Building Insulation Dilution Adjustment and (iv) any Additional
Qualified Dilution Adjustment; provided that the Roofing Dilution Adjustment
and Building Insulation Dilution Adjustment shall not be part of Contractual
Dilution Reserve until Johns Manville Funding Corporation and the Servicer
represent, to the satisfaction of S&P and the Agent, that the reported
calculations contained in the Roofing Dilution Adjustment and Building
Insulation Dilution Adjustment meet the standards of accuracy in all material
respects consistent with the other calculations provided in the Daily and
Monthly Reports.
"Roofing Dilution Adjustment" means the Dilution Adjustments
attributable to quarterly and annual rebate programs for Parent's roofing
business as calculated and set forth under section "E" of the "Net Pool
Balance" calculation in both Exhibits D and E; provided that the Roofing
Dilution Adjustment shall not be part of the Contractual Dilution Reserve until
Johns Manville Funding Corporation and the Servicer represent, to the
satisfaction of S&P and the Agent, that the reported calculations contained in
the Roofing Dilution Adjustment meet the standards of accuracy in all material
respects consistent with the other calculations provided in the Daily and
Monthly Reports.
"Variable Dilution Adjustments" means Dilution Adjustments which are
not part of Contractual Dilution Reserve.
(l) The definitions of SFC, Schuller and Schuller Group are changed to
be definitions of "Funding", "Parent" and "Johns Manville Group", respectively,
and
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<PAGE> 5
references in the Program Documents to SFC, Schuller and Schuller Group are
deemed to be references to Funding, Parent and Johns Manville Group.
SECTION 2. Amendment of Section 2.14. Section 2.14 is amended
by extending each of the dates contained therein by two years.
SECTION 3. Amendment of Section 4.03. Section 4.03(i) is
amended by replacing "June 30, 1994" in each place where it appears with "March
31, 1997."
SECTION 4. Addition of Notice of Change in Rebate Programs.
Section 5.01 of the Agreement is amended to include the following:
(s) Notice of Change in Rebate Programs. Funding shall give
the Purchase Parties and S&P prior notice of any material changes to
its rebate or other programs or policies that constitute Dilution
Adjustments.
SECTION 5. Replacement of Exhibits D and E. Exhibits D and E
are deleted and replaced with Exhibits D and E to this Amendment.
SECTION 6. Changes in Commitments. With effect from and
including the date this Amendment and Restatement becomes effective in
accordance with Section 9, (i) the Person listed on the signature pages hereof
which is not a party to the Agreement (the "New Buyer") shall become a Buyer
party to the Agreement and (ii) the Commitment of each Buyer shall be the
amount set forth opposite the name of such Buyer on the signature pages hereof.
Any Buyer whose Commitment is changed to zero shall upon such effectiveness
cease to be a Buyer party to the Agreement, and all accrued fees and other
amounts (other than such Buyer's interest in the Aggregate Net Investment)
payable under the Agreement for the account of such Buyer shall be due and
payable on such date; provided that the provisions of Sections 8.02 and 8.03 of
the Agreement shall continue to inure to the benefit of each such Buyer. If
any Tranches are outstanding on such date and, as a result of changes in the
Commitments of the Banks, the interests in such Tranches are not held by the
continuing Banks ratably in proportion to their Commitments, the Banks shall,
as appropriate, buy and sell the interests in such Tranches such that, after
giving effect to such purchases, the interests in such Tranches are held
ratably, and Section 2.13 of the Agreement shall apply to any such purchases.
SECTION 7. Representations and Warranties. Funding hereby
represents and warrants that as of the date hereof and after giving effect
thereto:
(a) no Termination Event or Potential Termination Event has occurred
and is continuing; and
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<PAGE> 6
(b) each representation and warranty of Funding set forth in the
Agreement after giving effect to this Amendment and Restatement is true and
correct as though made on and as of such date.
SECTION 8. Governing Law. This Amendment and Restatement shall
be governed by and construed in accordance with the laws of the State of New
York.
SECTION 9. Counterparts; Effectiveness. This Amendment and
Restatement may be signed in any number of counterparts, each of which shall be
an original, with the same effect as if the signatures thereto and hereto were
upon the same instrument. This Amendment and Restatement shall become
effective on the date that each of the following conditions shall have been
satisfied:
(i) receipt by the Administrative Agent of duly executed
counterparts hereof signed by each of the parties hereto (or, in the
case of any party as to which an executed counterpart shall not have
been received, the Administrative Agent shall have received
telegraphic, telex or other written confirmation from such party of
execution of a counterpart hereof by such party);
(ii) the Administrative Agent shall have received new
Buyers' Certificates for the Buyers;
(iii) S&P shall have rated the Buyer's Certificates AAA and
Funding shall have paid any fees and expenses of S&P in connection
with the rating of the Buyers' Certificates;
(iv) an amendment to the Purchase and Sale Agreement in
the form of Annex I hereto shall have been executed;
(v) the filings and other actions necessary in connection
with the change of name of the Parent and Funding, as listed in Annex
II, shall have been made or taken;
(vi) receipt by the Administrative Agent of all documents
it may reasonably request relating to the existence of Funding and
Parent, the corporate authority for and the validity of the Agreement
as amended and restated hereby, and any other matters relevant hereto,
all in form and substance satisfactory to the Administrative Agent;
and
(vii) receipt by the Administrative Agent of an opinion of
the General Counsel of Parent substantially to the effect that the
conditions in paragraphs (v) & (vi) of this section have been
satisfied;
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<PAGE> 7
provided that this Amendment and Restatement shall not become effective or
binding on any party hereto unless all of the foregoing conditions are
satisfied not later than June 30, 1997. The Administrative Agent shall
promptly notify the parties hereto of the effectiveness of this Amendment and
Restatement, and such notice shall be conclusive and binding on all parties
hereto.
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<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
JOHNS MANVILLE
FUNDING CORPORATION
By /s/ W. S. BULLOCK
-------------------------------
Title: President
JOHNS MANVILLE
INTERNATIONAL, INC.
By /s/ W. S. BULLOCK
-------------------------------
Title: Treasurer
MORGAN GUARANTY
TRUST COMPANY OF NEW YORK,
as Administrative Agent and
Structuring and Collateral Agent
By /s/ ROBERT J. HENCHEY
-------------------------------
Title: Robert J. Henchey
Vice President
500 Stanton Christiana Road
Newark, DE 19713
<PAGE> 9
BUYERS:
Commitment: $20,000,000 MORGAN GUARANTY
TRUST COMPANY OF NEW YORK
By /s/ ROBERT J. HENCHEY
-------------------------------
Title: Vice President
Commitment: $20,000,000 MELLON BANK, N.A.
By /s/ JAMES M. WILBER
-------------------------------
Title: Vice President
Commitment: $20,000,000 BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By /s/ RAHUL ARORA
-------------------------------
Title: as Attorney-in-Fact
Commitment: $20,000,000 THE BANK OF NEW YORK
By /s/ ROBERT LOUK
-------------------------------
Title: Vice President
<PAGE> 10
Commitment: $10,000,000 NATIONSBANK OF TEXAS, N.A.
By /s/ NATALIE HEBERT
-------------------------------
Title: Vice President
Commitment: $0 NATIONSBANK, N.A. (formerly known as
NATIONSBANK, N.A., (CAROLINAS))
By /s/ NATALIE HEBERT
-------------------------------
Title: Vice President
Commitment: $10,000,000 THE FIRST NATIONAL BANK
OF CHICAGO
By /s/ ILLEGIBLE
-------------------------------
Title: FVP
TOTAL
COMMITMENTS: $100,000,000
<PAGE> 11
Annex I
AMENDMENT TO PURCHASE AND SALE AGREEMENT
AMENDMENT dated as of June 6, 1997 to the Purchase and Sale Agreement
dated as of August 15, 1994 (the "Agreement") between JOHNS MANVILLE
INTERNATIONAL, INC. (formerly known as Schuller International, Inc.) and JOHNS
MANVILLE FUNDING CORPORATION (formerly known as Schuller Funding Corporation).
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Agreement has the
meaning assigned to such term in the Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Agreement shall, after this Amendment becomes effective, refer to the Agreement
as amended hereby.
SECTION 2. Amendment of Sections 4.01 and 4.02 of the Agreement.
Sections 4.01(g) and 4.02(h) of the Agreement are amended by replacing "June
30, 1994" in each place where it appears with "March 31, 1997".
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signature thereto and hereon were upon the same instrument.
SECTION 5. Effectiveness. This Amendment shall become effective as
of the date hereof on the date when it has been executed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
<PAGE> 12
JOHNS MANVILLE INTERNATIONAL, INC.
By:
------------------------------------
Name:
Title:
JOHNS MANVILLE FUNDING CORPORATION
By:
------------------------------------
Name:
Title:
<PAGE> 13
Annex II
[Actions to be taken in connection with name change]
1. UCC-1s - amend existing UCC-1s for debtor name change
2. Accounts - directions to change names on Lockbox Accounts and Collection
Account from SFC to Funding
3. Authority - to provide corporate documents authorizing and evidencing name
change
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE 30,
1997 FORM 10Q OF JOHNS MANVILLE CORPORATION AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 115,210
<SECURITIES> 26,430
<RECEIVABLES> 282,319
<ALLOWANCES> 7,722
<INVENTORY> 115,108
<CURRENT-ASSETS> 567,892
<PP&E> 1,414,718
<DEPRECIATION> 616,308
<TOTAL-ASSETS> 1,998,881
<CURRENT-LIABILITIES> 322,168
<BONDS> 475,548
0
0
<COMMON> 1,627
<OTHER-SE> 625,941
<TOTAL-LIABILITY-AND-EQUITY> 1,998,881
<SALES> 807,046
<TOTAL-REVENUES> 807,046
<CGS> 588,451
<TOTAL-COSTS> 588,451
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 486
<INTEREST-EXPENSE> 25,099
<INCOME-PRETAX> 92,384
<INCOME-TAX> 27,717
<INCOME-CONTINUING> 64,667
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 64,667
<EPS-PRIMARY> .40
<EPS-DILUTED> .40
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE
30, 1997 FORM 10Q OF JOHNS MANVILLE CORPORATION AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 175,090
<SECURITIES> 48,008
<RECEIVABLES> 243,789
<ALLOWANCES> 7,037
<INVENTORY> 104,094
<CURRENT-ASSETS> 602,326
<PP&E> 1,344,844
<DEPRECIATION> 590,841
<TOTAL-ASSETS> 1,819,358
<CURRENT-LIABILITIES> 328,363
<BONDS> 426,913
0
0
<COMMON> 1,616
<OTHER-SE> 512,744
<TOTAL-LIABILITY-AND-EQUITY> 1,819,358
<SALES> 707,512
<TOTAL-REVENUES> 707,512
<CGS> 505,451
<TOTAL-COSTS> 505,451
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,052
<INTEREST-EXPENSE> 24,952
<INCOME-PRETAX> 92,881
<INCOME-TAX> (63,647)
<INCOME-CONTINUING> 156,528
<DISCONTINUED> 177,159
<EXTRAORDINARY> (316,285)
<CHANGES> 0
<NET-INCOME> 17,402
<EPS-PRIMARY> (.30)
<EPS-DILUTED> (.30)
</TABLE>
