<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER , 1994
REGISTRATION NO. 33-55163
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
OWENS-CORNING FIBERGLAS CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
DELAWARE 34-4323452
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
FIBERGLAS TOWER
TOLEDO, OHIO 43659
(419) 248-8000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
WILLIAM W. COLVILLE, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
OWENS-CORNING FIBERGLAS CORPORATION
FIBERGLAS TOWER
TOLEDO, OHIO 43659
(419) 248-8000
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
----------------
COPY TO:
DANIEL M. TAITZ, ESQ.
FRIEDMAN & KAPLAN
875 THIRD AVENUE
NEW YORK, NEW YORK 10022
----------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: AS SOON AS
PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS OF AMOUNT MAXIMUM MAXIMUM AMOUNT OF
SECURITIES TO BE TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE FEE
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 855,556
$0.10 per share........ shares $34.75 $29,730,571 $10,252
- -------------------------------------------------------------------------------
Preferred Share Purchase 855,556
Rights................. rights(2) None(2) None(2) None(2)
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee, on the basis of the average of the high
and low sales prices per share of the Registrant's Common Stock as reported
on the New York Stock Exchange on August 16, 1994.
(2) Any value attributable to the Preferred Share Purchase Rights is reflected
in the value of the Common Stock. Because no separate consideration is paid
for the Preferred Share Purchase Rights, the registration fee for such
securities is included in the fee for the Common Stock.
----------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED SEPTEMBER , 1994
855,556 SHARES
OWENS-CORNING FIBERGLAS CORPORATION
COMMON STOCK
(PAR VALUE $0.10 PER SHARE)
-----------
The 855,556 shares of Common Stock, par value $0.10 per share (the "Common
Stock"), of Owens-Corning Fiberglas Corporation, a Delaware corporation (the
"Company" or "Owens-Corning"), offered hereby are owned by individuals and
entities unrelated to the Company. None of such 855,556 shares are offered by
the Company. Of such shares, 342,222 are held by 1984 Merchant Investment
Partnership, a New York limited partnership affiliated with CS First Boston
Corporation, and 513,334 are held by certain individuals and trusts. See
"Selling Stockholders."
The Selling Stockholders will receive all proceeds from the sale of the
shares. The Company will receive none of the proceeds from any sale of the
shares offered hereby. See "Selling Stockholders." All expenses of registration
and brokerage commissions incurred in connection herewith are being borne,
directly or indirectly, by the Company. The Company, the Selling Stockholders
and Goldman, Sachs & Co. have agreed to certain indemnification arrangements.
See "Plan of Distribution."
The last reported sale price of the Common Stock on the New York Stock
Exchange on September 29, 1994 was $ per share. See "Price Range of Common
Stock and Dividends."
-----------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
-----------
The shares being offered hereby will be sold to or through Goldman, Sachs &
Co. in one or more transactions at market prices prevailing at the time of sale
or in negotiated transactions, or otherwise, at varying prices to be determined
at the time of each sale. Goldman, Sachs & Co. will receive commissions in the
aggregate amount of approximately $ in connection with arranging the
distribution of the offered shares. The Selling Stockholders will receive in
the aggregate approximately $ in proceeds, based on the assumption
that the average sale price of the offered shares is the last reported sale
price of the Common Stock on the New York Stock Exchange on , 1994,
which was $ per share. See "Plan of Distribution."
GOLDMAN, SACHS & CO.
-----------
The date of this Prospectus is , 1994.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission may
be inspected and copied at the Commission's public reference facilities at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the Commission's
regional offices at Northwestern Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and 7 World Trade Center, 13th floor, New York,
New York 10048. Copies of such material can be obtained by mail from the
Commission's Public Reference Section at 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. Such reports, proxy statements and other
information also can be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005 on which the Common
Stock is listed.
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement") filed
by the Company with the Commission under the Securities Act of 1933, as amended
(the "Securities Act"). This Prospectus does not contain all the information
set forth in the Registration Statement, certain portions of which have been
omitted as permitted by the rules and regulations of the Commission, and each
such statement is qualified in all respects by such reference and the exhibits
and schedules thereto. Statements contained herein concerning the provisions of
any document are not necessarily complete and, in each instance, reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such statement is
qualified in its entirety by such reference. For further information with
respect to the Company and the Common Stock, reference is made to the
Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission and are
incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K (File No. 1-3660) for the
year ended December 31, 1993.
(2) The Company's Quarterly Report on Form 10-Q (File No. 1-3660) for the
quarter ended March 31, 1994.
(3) The Company's Quarterly Report on Form 10-Q (File No. 1-3660) for the
quarter ended June 30, 1994.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of the shares of Common Stock made by this
Prospectus shall be deemed to be incorporated by reference into this Prospectus
and to be a part of this Prospectus from the date of filing of such documents.
Any statement contained herein, or in a document all or a portion of which is
incorporated or deemed to be incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
any statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, on the written or oral request of such person, a copy
of any or all of the documents described above and incorporated by reference
herein (not including the exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents). Written or telephone
requests should be directed to: Owens-Corning Fiberglas Corporation, Fiberglas
Tower, Toledo, Ohio 43659, Attention: Secretary's Office (telephone: 419-248-
7248).
2
<PAGE>
THE COMPANY
The Company, a Delaware corporation incorporated in 1938, is a global
technology-based enterprise that develops, manufactures and markets materials
for consumers and business and industrial customers. These products are used in
industries such as construction, transportation, marine, aerospace, energy,
appliance, packaging and electronics. Many of these products are marketed under
the trademark FIBERGLAS. The Company operates in two industry segments--
Building Products and Industrial Materials--divided into ten strategic business
segments. The Company also has affiliate companies in a number of countries.
The following table summarizes selected information concerning the Company's
business segments. For further information, see Note 1 of Notes to Consolidated
Financial Statements of the Company as of December 31, 1993, incorporated
herein by reference, and Note 1 of Notes to Consolidated Financial Statements
of the Company as of June 30, 1994, incorporated herein by reference.
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEARS ENDED
JUNE 30, DECEMBER 31,
----------------- -----------------
1994(A,B) 1993(C) 1993(C,D) 1992(E)
--------- ------- --------- -------
(IN MILLIONS)
<S> <C> <C> <C> <C>
Net Sales:
Building Products....................... $ 997 $ 907 $1,946 $1,899
Industrial Materials.................... 532 498 998 979
------ ------ ------ ------
Consolidated Net Sales.................. $1,529 $1,405 $2,944 $2,878
------ ------ ------ ------
Income (Loss) from Operations:
Building Products....................... $ 25 $ 64 $ 175 $ 109
Industrial Materials.................... 42 40 98 138
General Corporate Expense............... (39) (11) (37) (34)
------ ------ ------ ------
Total Income from Operations.......... $ 28 $ 93 $ 236 $ 213
====== ====== ====== ======
</TABLE>
- --------
(a) Includes the results of operations of UC Industries, Inc. ("UCI") and
Pilkington Insulation Limited and Kitsons Insulation Products Limited
(collectively, "Pilkington") subsequent to May 31, 1994 and June 2, 1994,
respectively. For further information on these acquisitions, see Note 3 of
Notes to Consolidated Financial Statements of the Company as of June 30,
1994, incorporated herein by reference.
(b) Includes a $117 million charge for productivity initiatives and other
actions taken during the first quarter of 1994 to improve the Company's
speed, focus, and efficiency. The impact of this charge was to reduce
income from operations for Building Products and Industrial Materials by
$70 million and $22 million, respectively, and to increase general
corporate expense by $25 million. For further information, see Note 4 of
Notes to Consolidated Financial Statements of the Company as of June 30,
1994, incorporated herein by reference.
(c) Includes a $23 million charge for actions taken during the first quarter of
1993 to reorganize the Company's European operations, the full impact of
which was reflected as a reduction to income from operations for the
Industrial Materials segment. For further information, see Note 5 of Notes
to Consolidated Financial Statements of the Company as of December 31,
1993, incorporated herein by reference.
(d) Includes an $8 million charge for the writedown of the Company's
hydrocarbon ventures to their net realizable value.
(e) Includes a $16 million charge for actions taken during the fourth quarter
of 1992 to reorganize the Company's Building Products segment and to
centralize the Company's accounting and information systems. The impact of
this charge was to reduce income from operations for Building Products by
$9 million and to increase general corporate expense by $7 million. For
further information, see Note 5 of Notes to Consolidated Financial
Statements of the Company as of December 31, 1993, incorporated herein by
reference.
3
<PAGE>
The Company's principal executive offices are located at Fiberglas Tower,
Toledo, Ohio 43659, and its telephone number is (419) 248-8000. Unless the
context indicates otherwise, references in this Prospectus to the "Company"
include Owens-Corning Fiberglas Corporation and its consolidated subsidiaries.
RECENT DEVELOPMENTS
On September 22, 1994, the Company announced the development of MIRAFLEX(TM)
fiber, a new form of glass fiber composed of two different forms of glass fused
together in a single filament. MIRAFLEX fibers are randomly twisted, flexible,
soft to the touch, virtually itch-free and resilient. The first application of
MIRAFLEX fiber will be a home attic insulation to be introduced in October in
select North American markets.
While results for the third quarter of 1994 are not yet available, the
Company's percentage sales growth in the quarter, compared to the same period
of 1993, is expected to be in the high teens, including the effects of
acquisitions closed in the second quarter of 1994, and net income for the third
quarter of 1994 is expected to be near the upper end of analysts' consensus
estimates of $1.00 to $1.06 per share, fully diluted, compared to $.82 per
share, fully diluted, in the third quarter of 1993.
SELLING STOCKHOLDERS
All of the shares offered hereby are being offered on behalf of the
stockholders listed below (collectively, the "Selling Stockholders"). The
following table lists the Selling Stockholders and the number of shares of
Common Stock which each shall own as of the effective date of this Registration
Statement. Each such Selling Stockholder expects to sell all of such shares
owned by it and, assuming the sale of all of such shares, no Selling
Stockholder will own or have the right to acquire any shares of Common Stock.
One or more affiliates of any Selling Stockholder may own, manage or have the
right to acquire shares of Common Stock.
<TABLE>
<CAPTION>
NUMBER OF SHARES OWNED
SELLING STOCKHOLDER AND EXPECTED TO BE SOLD
------------------- -----------------------
<S> <C>
1984 Merchant Investment Partnership.................... 342,222
R. Scott Schafler....................................... 339,453
Gerald Rosenberg........................................ 85,556
Jerry Weinstein......................................... 34,222
Article X Julie Trust u/w/o Norman I. Schafler.......... 13,525
Article X Scott Trust u/w/o Norman I. Schafler.......... 13,526
Article XI Julie Trust u/w/o Norman I. Schafler......... 13,526
Article XI Scott Trust u/w/o Norman I. Schafler......... 13,526
</TABLE>
Each Selling Stockholder set forth above acquired the shares being offered
hereby from the Company. The Company issued such shares as consideration for
all of the outstanding capital stock of UC Industries, Inc., a Delaware
corporation (the "Acquisition"). The Acquisition was consummated on May 31,
1994. The 342,222 shares held by 1984 Merchant Investment Partnership were
issued on such date and the other 513,334 shares being offered hereby were not
issued on such date, but will have been issued prior to the effective date of
the Registration Statement. Pursuant to the terms of the Acquisition, each
Selling Stockholder will receive from the Company cash consideration equal to
the difference, if any, between (a) $45 multiplied by the number of shares
being offered hereby sold by or on behalf of such Selling Stockholder and (b)
the net proceeds received by such Selling Stockholder from the sale of such
shares.
1984 Merchant Investment Partnership is a New York limited partnership, the
general partner of which is indirectly wholly owned by CS First Boston, Inc.
("CSFBI"). CSFBI is a holding company whose subsidiaries (including CS First
Boston Corporation) are principally engaged in the business of investment
banking, broker-dealer and asset management activities. CS Holding, a Swiss
corporation, indirectly owns approximately 76% of the outstanding voting common
stock of CSFBI and approximately 68% of the outstanding non-voting common stock
of CSFBI. CS Holding, in turn, owns approximately 99% of Credit Suisse. Credit
Suisse and its subsidiary, Credit Suisse Canada, have, and other affiliates of
CS Holding may have, provided various financial services to the Company in the
ordinary course of the Company's business.
4
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Common Stock is listed and traded on the New York Stock Exchange (the
"NYSE") and the Toronto Stock Exchange (the "TSE") under the symbol "OCF." The
following table sets forth, for the periods indicated, the high and low sales
prices in dollars per share of the Common Stock as reported in the NYSE
Composite Transactions Tape.
<TABLE>
<CAPTION>
HIGH LOW
---- ----
<S> <C> <C>
1992
First Quarter................................................ $39 3/4 $22 3/8
Second Quarter............................................... 37 3/8 29 3/4
Third Quarter................................................ 36 1/8 29 3/8
Fourth Quarter............................................... 36 5/8 27 3/4
1993
First Quarter................................................ $ 47 $34 3/8
Second Quarter............................................... 45 1/4 36 1/4
Third Quarter................................................ 45 5/8 40 1/4
Fourth Quarter............................................... 49 1/8 42 1/2
1994
First Quarter................................................ $ 46 $33 1/2
Second Quarter............................................... 36 1/8 30 1/2
Third Quarter (through September 28, 1994)................... 36 1/4 30 1/8
</TABLE>
A recent closing sale price for the Common Stock as reported on the NYSE
Composite Transactions Tape is set forth on the cover page of this Prospectus.
While the Company periodically evaluates the advisability of paying
dividends, it has not declared any dividends since 1986. In addition, certain
of the Company's current bank credit facilities contain restrictions limiting
the Company's ability to pay cash dividends.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of shares of Common
Stock by the Selling Stockholders.
5
<PAGE>
CONDENSED CONSOLIDATED CAPITALIZATION
The following table summarizes the capitalization of the Company and its
consolidated subsidiaries at June 30, 1994, assuming the issuance of 855,556
shares of Common Stock in connection with the Acquisition (only 342,222 of
which shares were actually issued and outstanding on such date), based on a
market price of $31 3/4 per share at the date of Acquisition. For further
information, see Notes 2, 3, 13 and 14 of Notes to Consolidated Financial
Statements of the Company as of December 31, 1993, incorporated herein by
reference and Note 3 of Notes to Consolidated Financial Statements of the
Company as of June 30, 1994, incorporated herein by reference.
<TABLE>
<CAPTION>
AT JUNE 30, 1994
----------------
(IN MILLIONS)
<S> <C>
Short-term debt, including current portion of long-term debt.. $ 214
------
Long-term debt:
Senior...................................................... 977
Convertible junior subordinated debentures(a)............... 173
Less: Current portion...................................... (28)
------
Total long-term debt........................................ 1,122
------
Stockholders' equity:
Preferred stock, no par value; 8 million shares authorized;
none issued................................................ --
Common stock, $.10 par value; 100 million shares authorized;
44.2 million shares issued and outstanding, as adjusted(b). 346
Deficit..................................................... (1,109)
Foreign currency translation adjustments.................... 1
Other....................................................... (16)
------
Total stockholders' equity.................................. (778)
------
Total capitalization.......................................... $ 558
======
</TABLE>
- --------
(a) The Company's 8% Convertible Junior Subordinated Debentures due 2005 are
convertible at any time into shares of Common Stock at a conversion price
of $29.75 per share, and, upon conversion in full, such Debentures would be
converted into approximately 5.8 million shares of Common Stock. Such
Debentures may be redeemed, at a premium, at the option of the Company.
(b) Does not include (i) shares of Common Stock issuable or which may be issued
pursuant to various stock compensation plans of the Company (see Note 13 of
Notes to Consolidated Financial Statements of the Company as of December
31, 1993, incorporated herein by reference) and (ii) approximately 5.8
million shares of Common Stock issuable upon conversion of the Company's 8%
Convertible Junior Subordinated Debentures due 2005, but has been adjusted
to reflect the subsequent issuance of the remaining 513,334 shares of
Common Stock in connection with the Acquisition.
6
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following table sets forth selected consolidated financial information of
the Company (i) for the six months ended June 30, 1994 and 1993, which has been
derived from the first and second quarter 1994 and 1993 unaudited quarterly
consolidated financial statements of the Company and its subsidiaries and (ii)
for each of the five fiscal years in the period ended December 31, 1993, which
has been derived from the annual consolidated financial statements of the
Company and its subsidiaries audited by Arthur Andersen & Co., independent
public accountants. This table should be read in conjunction with those
statements, all of which have been previously filed with the Commission. The
financial information presented below for the six months ended June 30, 1994
and 1993 reflects all adjustments (consisting of normal recurring accruals)
necessary for a fair presentation of the Company's results. Operating results
for the six months ended June 30, 1994 are not necessarily indicative of the
results that may be expected for the entire year ending December 31, 1994.
Results of Fiberglas Canada Inc., a Canadian corporation acquired by the
Company in 1989, are consolidated beginning in the fourth quarter of 1989. The
following table is qualified in its entirety by, and should be read in
conjunction with, "Management's Discussion and Analysis of Financial Condition
and Results of Operations" appearing elsewhere in this Prospectus and the
consolidated financial information and related notes of the Company included in
the documents incorporated herein by reference. See "Incorporation of Certain
Documents by Reference."
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEARS ENDED DECEMBER 31,
---------------------- --------------------------------------------------------
1994(A,B) 1993 1993(C) 1992(D) 1991(D) 1990 1989
------------ --------- ---------- ---------- ---------- --------- ---------
(IN MILLIONS OF DOLLARS, EXCEPT PER SHARE DATA AND WHERE NOTED)
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales............. $ 1,529 $ 1,405 $ 2,944 $ 2,878 $ 2,783 $ 3,069 $ 2,964
Gross margin.......... 362 315 651 617 597 765 803
Income (loss) from op-
erations............. 28 93 236 213 (628) 293 432
Cost of borrowed
funds................ (45) (45) (89) (110) (131) (165) (166)
Net income (loss)..... 63 50 131 73 (742) 73 172
Net income (loss) per
share (primary)...... 1.44 1.16 3.00 1.70 (18.13) 1.73 4.08
Net income (loss) per
share (fully diluted).. 1.35 1.11 2.81 1.67 (18.13) 1.73 4.08
Weighted average number
of shares outstanding
(in thousands of
shares) (primary)...... 43,956 43,445 43,593 43,013 40,924 42,019 42,170
Cash Flow Data:
Net cash flow from op-
erations............. $ (81) $ 30 $ 253 $ 192 $ 253 $ 361 $ 395
Capital
expenditures(e)...... 104 65 178 144 114 146 143
Balance Sheet Data:
Total assets(f)....... $ 3,388 $ 3,142 $ 3,013 $ 3,162 $ 3,511 $ 1,807 $ 1,924
Total debt............ 1,336 1,118 1,004 1,099 1,172 1,300 1,482
Stockholders' equity
(deficit)............ (778) (951) (869) (1,008) (1,076) (350) (435)
</TABLE>
- --------
(a) As indicated in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," net income of $63 million for the six
months ended June 30, 1994 includes the following offsetting items: an
after-tax gain of $123 million, or $2.80 per share ($2.46 per share fully
diluted), reflecting a change to the capital method of accounting for the
rebuilding of glass melting facilities; an after-tax charge of $85 million,
or $1.93 per share ($1.70 per share fully diluted), for productivity
initiatives and other actions; a non-cash, after-tax charge of $10 million,
or $.23 per share ($.20 per share fully diluted), to reflect adoption of
Statement of Financial Accounting Standards (SFAS) No. 106, "Employers'
Accounting for Postretirement Benefits Other Than Pensions" for the
Company's non-U.S. plans; and a non-cash, after-tax charge of $28 million,
or $.64 per share ($.56 per share fully diluted), to reflect adoption of
SFAS No. 112, "Employers' Accounting for Postemployment Benefits."
7
<PAGE>
(b) As indicated in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," the Company acquired UC Industries,
Inc. ("UCI"), a privately held foam board insulation manufacturer based in
New Jersey. The Company also acquired Pilkington Insulation Limited and
Kitsons Insulation Products Limited (collectively, "Pilkington"), the
United Kingdom-based insulation manufacturing and distribution businesses
of the Pilkington Group. The purchase prices of UCI and Pilkington were $44
million and $110 million, respectively. These acquisitions were accounted
for using the purchase method of accounting. Accordingly, the assets
acquired and liabilities assumed have been recorded at their fair values
and the results of operations of UCI and Pilkington have been included in
the consolidated financial statements subsequent to May 31, 1994 and June
2, 1994, respectively. For further information, see Note 3 of Notes to
Consolidated Financial Statements of the Company as of June 30, 1994,
incorporated herein by reference.
(c) As indicated in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," net income for 1993 of $131 million,
or $3.00 per share ($2.81 per share fully diluted), included a credit of
$26 million, or $.60 per share ($.53 per share fully diluted), for the
cumulative effect of adopting the new accounting standard for income taxes;
a one-time gain of $14 million, or $.33 per share ($.29 per share fully
diluted), reflecting a tax benefit resulting from a revaluation of deferred
taxes necessitated by the new federal tax law; an $8 million pre-tax
charge, or $.11 per share ($.10 per share fully diluted), for the writedown
of the Company's hydrocarbon ventures; and a $23 million charge, or $.53
per share ($.47 per share fully diluted), for the restructuring of the
Company's European operations.
(d) As indicated in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," net income for 1992 was $73 million,
or $1.70 per share ($1.67 per share fully diluted), and included a pre-tax
reorganization charge of $16 million, or $.25 per share ($.22 per share
fully diluted). In 1991, net income was $41 million, or $1.01 per share,
before the Company recorded a non-recurring pre-tax charge of $824 million,
or $13.25 per share, for uninsured asbestos litigation claims, a $5.55 per
share charge for the cumulative effect of the accounting change for other
postretirement benefits, and a $.34 per share charge for estimated taxes
payable on the undistributed earnings of foreign subsidiaries.
(e) Effective January 1, 1994, capital expenditures include spending for the
rebuilding of glass-melting facilities. Prior years have been reclassified
to conform with the 1994 presentation.
(f) As indicated in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," the Company adopted Financial
Accounting Standards Board Interpretation No. 39 (FIN 39) during 1993. FIN
39 requires the Company to present separately in the balance sheet its
estimated contingent liabilities and related insurance assets. Total assets
in 1992 and 1991 have been restated to conform to the 1993 presentation.
For further information, see Note 19 of Notes to Consolidated Financial
Statements of the Company as of December 31, 1993, incorporated herein by
reference.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
NOTE: (All per share information in this Item is on a fully diluted basis.)
RESULTS OF OPERATIONS
Six Months Ended June 30, 1994
Net income for the second quarter of 1994 was $45 million, or $.95 per share,
an increase of 34% compared to net income of $33 million, or $.71 per share, in
the second quarter of 1993. Net sales were $852 million, a 13% increase
compared to $754 million a year ago.
For the first six months of 1994, Owens-Corning reported net income before
special items of $63 million, or $1.35 per share, compared to net income of $47
million, or $1.04 per share, for the first six months of 1993. The 1994 special
items include an after-tax gain of $123 million, or $2.46 per share, reflecting
a change to the capital method of accounting for the rebuilding of glass
melting facilities, an after-tax charge of $85 million, or $1.70 per share, for
productivity initiatives and other actions, a non-cash, after-tax charge of $10
million, or $.20 per share, to reflect adoption of Statement of Financial
Accounting Standards (SFAS) No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" (SFAS No. 106), for plans outside the United
States, and a non-cash, after-tax charge of $28 million, or $.56 per share, to
reflect adoption of SFAS No. 112, "Employers' Accounting for Postemployment
Benefits" (SFAS No. 112). The 1993 special items included an after-tax credit
of $26 million, or $.54 per share, for the cumulative effect of adopting SFAS
No. 109, "Accounting for Income Taxes" (SFAS No. 109), offset by an after-tax
charge of $23 million, or $.47 per share, for actions taken to improve the
competitive position of the Company's European businesses. Please see Notes 4,
5, 6, 7 and 8 to the Consolidated Financial Statements of the Company as of
June 30, 1994, incorporated herein by reference.
Net sales were $1.529 billion in the first six months of 1994, compared to
$1.405 billion in the year earlier period. Gross margin for the second quarter
of 1994 increased to 24%, compared to 23% for the prior year's period,
reflecting improved pricing in many of the Company's worldwide markets.
In North America, the Building Products segment benefitted from a 30%
increase in insulation sales compared to the second quarter of 1993. In Europe,
insulation sales continued to exceed the Company's manufacturing capacity in
the region. In order to meet the demand in Europe, the Company acquired the
United Kingdom-based insulation business and the Kitsons distribution business
of Pilkington plc (Pilkington) in June 1994. The Company is also adding a
second production line at its insulation plant in Vise, Belgium. The purchase
price of Pilkington was $110 million and was financed with borrowings from the
Company's newly established $110 million short-term bank credit facility. In
addition, the Company acquired UC Industries, Inc. (UCI), a privately held
United States producer of pink extruded polystyrene foam products for $44
million, consummated by the exchange of 855,556 shares of the Company's common
stock for all the capital stock of UCI. This purchase extends the Company's
line of building products. During the second quarter of 1994, the Company also
established a joint venture to manufacture insulation products in Guangzhou,
China. Please see Note 3 to the Consolidated Financial Statements of the
Company as of June 30, 1994, incorporated herein by reference.
In the composites business, North American sales grew 10%, driven by the
automotive sector and an increase in activity across a broad range of the
Company's industrial markets. The Company activated its Jackson, Tennessee
plant in April 1994 to assist in meeting the demand for reinforcements. The
Company continues to import products from other worldwide operations, at an
added cost, as North American demand for the Company's reinforcements exceeds
capacity in its North American facilities. Volume held steady and pricing
stabilized in the Company's European composites business late in the quarter.
During the second quarter of 1994, the Company dedicated a new joint-venture
manufacturing plant for glass-reinforced plastic pipe in Mochau, Germany.
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<PAGE>
The Company's cost of borrowed funds for the second quarter of 1994 was $1
million higher than during the corresponding quarter of the prior year because
of increased borrowing and higher interest rates during the quarter compared to
a year ago.
Fiscal Years 1993, 1992 and 1991
The Company reported net income for 1993 of $131 million, or $2.81 per share,
compared to reported net income of $73 million, or $1.67 per share, and a net
loss of $742 million, or $18.13 per share, in 1992 and 1991, respectively. The
stronger earnings reflected the Company's ongoing productivity programs and
improving economic conditions in the United States. Excluding special items,
1993 net income from ongoing operations was $118 million, or $2.56 per share,
compared to $83 million, or $1.87 per share, in 1992, and $41 million, or $1.01
per share, in 1991.
The special items for 1993 included a) a credit of $26 million, or $.53 per
share, for the cumulative effect of adopting the new accounting standard for
income taxes (SFAS No. 109), b) a one-time gain of $14 million, or $.29 per
share, reflecting a tax benefit resulting from a re-evaluation of deferred
taxes necessitated by the new federal tax law, offset, in part, by c) an $8
million charge, or $.10 per share, for the writedown of the Company's
hydrocarbon ventures to their net realizable value, and d) a $23 million, or
$.47 per share, charge for a restructuring to improve the competitive position
of the Company's European Composites business.
The special items for 1992 included a) a charge of $16 million, or $.22 per
share, for costs related to the reorganization of the Building Products
businesses and centralization of the Company's accounting and information
systems, and b) a net extraordinary gain of $1 million, or $.02 per share,
resulting from the utilization of tax losses, partially offset by a loss on the
early retirement of debt. The reorganization in Building Products was designed
to strengthen its focus on customers, enhance its competitive position, and
further improve its efficiency. Please see Notes 2, 4 and 5 to the Consolidated
Financial Statements of the Company as of December 31, 1993, incorporated
herein by reference.
The 1991 special items included charges for uninsured asbestos litigation
claims and the adoption of the accounting standard for other postretirement
benefits (SFAS No. 106). Please see Notes 15 and 19 to the Consolidated
Financial Statements of the Company as of December 31, 1993, incorporated
herein by reference.
Net sales were $2.9 billion in 1993, an increase of $66 million, or 2
percent, from 1992. Excluding the currency exchange impact of a stronger
dollar, 1993 sales increased 4 percent. Sales in 1991 were $2.8 billion.
The Company's Building Products segment benefitted from an improving economy
in North America during 1993. Insulation sales were particularly strong,
increasing nearly ten percent from 1992 as a result of an increase in housing
starts and growth in the "do-it-yourself" market. In response to demand in
Europe, the Company has announced an expansion of its insulation facility in
Vise, Belgium, which is expected to be operational by early 1995. Roofing and
asphalt sales in 1993 were flat compared to 1992 when there was strong
reroofing activity and demand created by storm damage in Texas, Louisiana, and
Florida.
In the second half of 1993, the Company launched a nationwide roll-out of
PINKPLUS (TM), a new Pink Fiberglas (R) insulation product wrapped in pink
polyethylene. In September 1993, the Company introduced AURA(TM), a high R-
value vacuum panel insulation concept.
In 1993, the Company divested its rockwool insulation plant in Guararema,
Brazil, and closed its calcium silicate insulation facility in Berlin, New
Jersey. These businesses did not use core technologies and did not fit the
Company's long-term strategy for profitable growth.
In the Industrial Materials segment, demand for reinforcements during 1993
was strong and exceeded capacity in the Company's North American facilities.
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Economic conditions remained weak in Europe during 1993. The Company does not
expect significant improvement in the European industrial economy in 1994. As a
result of the European restructuring, which is expected to reduce costs and
increase productivity beginning in 1994, Owens-Corning expects to be well
positioned to benefit when the economic upturn does begin.
As part of its growth strategy, Owens-Corning established an Asia/Pacific
unit, headquartered in Hong Kong, with corporate-wide responsibility for
current operations and future developments in that market. The Company also
completed the acquisition of the assets of Vera A/S, a manufacturer of glass-
reinforced plastic pipe in Sandefjord, Norway.
The Company's gross margin percentage of net sales was 22% for 1993, compared
to 21% in both 1992 and 1991. The increase was primarily due to volume and
price increases in the insulation market and productivity improvements,
partially offset by the effects of currency exchange and the cost of importing
products into the United States from the Company's worldwide operations.
Earnings before interest and taxes (EBIT) from ongoing operations increased to
$267 million in 1993, from $229 million in 1992 and $196 million in 1991. As a
percentage of sales, EBIT from ongoing operations increased to 9.1% in 1993,
compared to 8.0% and 7.0% in 1992 and 1991, respectively.
Operating expenses were higher in 1993 due to the charge for the European
restructuring and the write-down of the Company's hydrocarbon ventures to net
realizable value. The Company continued to increase its research and
development spending for long-term projects, placing a greater emphasis on
developing new products and product applications. The decrease in "Other"
expenses in 1992 compared to 1991 reflects reduced charges for stock
appreciation rights, foreign exchange losses, and product liability expenses
related to the Company's non-asbestos products.
The Company continues to evaluate actions to manage rising health care
expenses. During 1993, the Company approved changes in its postretirement
health care plans for retirees and active employees which reduced ongoing
expenses by $18 million for 1993. Approximately three-quarters of the reduction
was reflected in cost of sales and the balance in operating expenses. Please
see Note 15 to the Consolidated Financial Statements of the Company as of
December 31, 1993, incorporated herein by reference.
In 1993, the Company changed its depreciable asset lives for certain assets
to be consistent with industry practice and actual experience. This change
reduced depreciation expense in 1993 and will result in lower ongoing
depreciation expense. Please see Note 6 to the Consolidated Financial
Statements of the Company as of December 31, 1993, incorporated herein by
reference.
Cost of borrowed funds declined by $21 million in 1993 compared to 1992. The
decrease was due to a $95 million reduction in debt since December 31, 1992,
and lower interest rates on the Company's debt. The reduction in debt was
funded by the Company's cash flow from operations. Please see Note 2 to the
Consolidated Financial Statements of the Company as of December 31, 1993,
incorporated herein by reference.
General corporate expenses, reported on a segment basis, increased slightly
in 1993 compared to 1992, but were $817 million lower in 1992 compared to 1991,
reflecting the charge of $824 million for uninsured asbestos personal injury
claims. Please see Notes 1 and 19 to the Consolidated Financial Statements of
the Company as of December 31, 1993, incorporated herein by reference.
Effective January 1, 1993, the Company adopted the new accounting standard
for income taxes (SFAS No. 109). The standard changes the criteria for
measuring the provision for income taxes and recognizing deferred tax assets
and liabilities. As noted above, the cumulative effect of adopting SFAS No. 109
increased earnings by $26 million (or $.53 per share). As discussed in Note 4
to the Consolidated Financial Statements of the Company as of December 31,
1993, incorporated herein by reference, the Company's net deferred tax assets
arise primarily as a result of the temporary differences associated with its
provisions for asbestos litigation claims and other postretirement benefits.
Management fully expects to realize its net deferred tax assets through income
from future operations.
11
<PAGE>
LIQUIDITY, CAPITAL RESOURCES AND OTHER RELATED MATTERS
Six Months Ended June 30, 1994
Cash flow from operations was a negative $6 million for the second quarter,
compared to $12 million for the second quarter of 1993. The decrease in cash
flow is primarily due to a $24 million increase in payments (net of insurance
proceeds) for uninsured asbestos litigation claims and increased working
capital needs compared to the prior year's quarter. Net inventories increased
from $221 million at year-end 1993 to $259 million at the end of the second
quarter primarily due to anticipated seasonal demand for building products and
the purchase of inventories from the above mentioned acquisitions. Total
receivables at June 30, 1994 were $447 million, $123 million higher than at
year-end 1993 because of acquisitions and high sales levels for building
products worldwide and composites in North America in the second quarter.
At June 30, 1994, the Company's working capital was a negative $15 million
and its current ratio was .99, compared to a negative $49 million and .94,
respectively, at December 31, 1993.
Total borrowings at June 30, 1994 were $332 million higher than at year-end
1993, primarily due to the Pilkington acquisition, capital expenditures, and
asbestos payments (net of tax). In connection with the Pilkington acquisition,
the Company established, effective June 1, 1994, a $110 million 364-day credit
facility with a syndicate of banks led by the Bank of New York. In addition,
effective July 18, 1994, the Company amended its long-term U.S. loan facility,
led by Credit Suisse, to increase the available lines of credit by $100
million. In July 1994, the Company established a Canadian credit facility with
a syndicate of banks, led by Credit Suisse Canada, serving as agent, replacing
the previous facility which expired in July 1994. The new facility has a
commitment of 95 million Canadian dollars (69 million U.S. dollars) and expires
in October 1997. As of July 31, 1994, the Company had unused lines of credit of
$186 million available under long-term bank loan facilities and an additional
$96 million under short-term facilities, compared to $376 million and $64
million, respectively, at year-end 1993. The decline in unused available lines
of credit reflects the Company's higher borrowings and an increase of
outstanding letters of credit, supporting appeals from asbestos trials, counted
against the Company's long-term U.S. loan facility.
Capital spending for property, plant and equipment, excluding acquisitions,
was $64 million during the second quarter. At the end of the quarter, approved
capital projects, including furnace rebuilds, were $125 million. The Company
expects that funding for these expenditures will be from the Company's
operations and external sources as required.
Payments for asbestos litigation claims during the second quarter of 1994,
including $15 million in defense costs, were $39 million. Proceeds from
insurance were $14 million. In the second quarter of 1994, the Company received
about 5,300 new asbestos personal injury cases and closed approximately 5,900
cases. Over the next twelve months, the Company's payments for asbestos
litigation claims, including defense costs, are expected to be approximately
$300 million and proceeds from insurance of $175 million are expected to be
available to cover these costs. Please see Note 12 to the Consolidated
Financial Statements of the Company as of June 30, 1994, incorporated herein by
reference.
The Company expects funds generated from operations, together with funds
available under long and short term bank loan facilities, to be sufficient to
satisfy its debt service obligations under its existing indebtedness, as well
as its contingent liabilities for uninsured asbestos personal injury claims.
Fiscal Years 1993, 1992 and 1991
Cash flow from operations was $253 million for 1993, compared to $192 million
for 1992 and $253 million for 1991. The increase in cash flow from operations,
compared to 1992, was primarily due to an
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<PAGE>
increase in trade payables. Receivables were $324 million at December 31, 1993,
compared to $309 million at the end of 1992 and $308 million at the end of
1991. Net inventories were $221 million at year-end 1993 compared to $233
million and $219 million at year-end 1992 and 1991, respectively. Inventories
at December 31, 1993, as a percentage of the fourth quarter's annualized sales,
were 7%, a one percentage point decrease from the end of 1992 and 1991.
During 1993, the Company adopted Financial Accounting Standards Board
Interpretation No. 39 (FIN 39). FIN 39 requires the Company to present
separately in the balance sheet its estimated contingent liabilities and
related insurance assets. Accordingly, the incorporated consolidated balance
sheet as of December 31, 1992 and consolidated statement of cash flows for the
years ended December 31, 1992 and 1991 have been restated to conform to the
1993 presentation. Please see Note 19 to the Consolidated Financial Statements
of the Company as of December 31, 1993 and the related Summary of Significant
Accounting Policies, both incorporated herein by reference.
At year-end 1993, the Company's working capital was a negative $49 million
and its current ratio decreased to .94, compared to working capital of $123
million and a current ratio of 1.2 at year-end 1992, and $171 million and 1.2,
respectively, at year-end 1991. The 1992 and 1991 working capital and current
ratios have been restated to conform to FIN 39. The decrease in 1993 was
primarily due to the increase in trade payables and the timing of receipt of
the insurance proceeds for asbestos litigation claims. Please see Note 19 to
the Consolidated Financial Statements of the Company as of December 31, 1993
and the related Summary of Significant Accounting Policies, both incorporated
herein by reference.
The Company's total borrowings at December 31, 1993, were $1.0 billion,
compared to $1.1 billion at December 31, 1992, and $1.2 billion at December 31,
1991. In the fourth quarter of 1993, the Company established a $375 million
credit facility with a syndicate of banks, replacing the previous facility due
to expire in July 1994. The facility agreement is for a four year term,
effective November 2, 1993. In 1992, the Company issued $300 million in 10 and
20 year debentures at an average interest rate of 9 1/8%. The majority of the
proceeds were used to redeem $240 million in higher cost debentures. Please see
Note 2 to the Consolidated Financial Statements of the Company as of December
31, 1993, incorporated herein by reference.
General corporate identifiable assets have been restated in 1992 and 1991 to
conform to the 1993 reporting format with the adoption of FIN 39. General
corporate identifiable assets for 1993 and 1992 decreased compared to 1991,
primarily due to the consumption of the insurance for asbestos litigation
claims asset. Please see Notes 1 and 19 to the Consolidated Financial
Statements of the Company as of December 31, 1993 and the related Summary of
Significant Accounting Policies, both incorporated herein by reference.
Capital spending for property, plant and equipment was $164 million in 1993,
compared to $130 million in 1992 and $96 million in 1991.
Payments for asbestos litigation claims in 1993, including defense costs,
were $283 million as 22,300 claims were resolved. Proceeds from insurance were
$224 million. Please see Note 19 to the Consolidated Financial Statements of
the Company as of December 31, 1993, incorporated herein by reference.
GENERAL MATTERS--AS OF JUNE 30, 1994
The Company has been deemed by the Environmental Protection Agency (EPA) to
be a potentially responsible party (PRP) with respect to certain sites under
the Comprehensive Environmental Response, Compensation and Liability Act
(Superfund). The Company has also been deemed a PRP under similar state or
local laws. In other instances, other PRPs have brought suits or claims against
the Company as a PRP for contribution under such federal, state or local laws.
During the second quarter of 1994, the Company was designated as a PRP in such
federal, state, local or private proceedings for no additional sites. At June
30, 1994, a total of 38 such PRP designations remained unresolved by the
Company, some of which designations the Company believes to be erroneous. The
Company is also involved with environmental investigation or
13
<PAGE>
remediation at a number of other sites at which it has not been designated a
PRP. The Company has established reserves for its Superfund (and similar state,
local and private action) contingent liabilities which are reflected in the
financial statements. The Company believes these reserves are adequate to cover
these liabilities and are not material to the financial position or results of
operations of the Company. In addition, based upon information presently
available to the Company, and without regard to the application of insurance,
the Company believes that, considered in the aggregate, the additional costs
associated with such contingent liabilities, including any related litigation
costs, will not have a materially adverse effect on the Company's financial
position or results of operations.
The 1990 Clean Air Act Amendments (Act) provide that the EPA will issue
regulations on a number of air pollutants over a period of years. Until these
regulations are developed, the Company cannot determine the extent the Act will
affect it. The Company anticipates that its sources to be regulated will
include glass fiber manufacturing, resin manufacturing and asphalt processing
activities. The Company currently expects glass fiber manufacturing to be
regulated by 1997. Based on information now known to the Company, including the
nature and limited number of regulated materials it emits, the Company does not
expect the Act to have a material adverse effect on the Company's results of
operations, financial condition, or long-term liquidity.
ASBESTOS AND OTHER LITIGATION
The following is a discussion of the status of the asbestos and other
litigation as of June 30, 1994; see also "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity, Capital Resources
and Other Related Matters."
ASBESTOS LIABILITIES
The Company is a co-defendant with other former manufacturers, distributors
and installers of products containing asbestos and with miners and suppliers of
asbestos fibers (collectively, the "Producers") in personal injury and property
damage litigation. The personal injury claimants generally allege injuries to
their health caused by inhalation of asbestos fibers from the Company's
products. Most of the claimants seek punitive damages as well as compensatory
damages. The property damage claims generally allege property damage to school,
public and commercial buildings resulting from the presence of products
containing asbestos. Virtually all of the asbestos-related lawsuits against the
Company arise out of its manufacture, distribution, sale or installation of an
asbestos-containing calcium silicate, high temperature insulation product, the
manufacture of which was discontinued in 1972.
Status
As of June 30, 1994, approximately 98,300 asbestos personal injury claims
were pending against the Company, 5,300 of which were received in the second
quarter of 1994. The Company received approximately 31,700 such claims in 1993,
and 26,600 in 1992.
Through June 30, 1994, the Company had resolved (by settlement or otherwise)
approximately 131,100 asbestos personal injury claims. During 1992, 1993 and
the first two quarters of 1994, the Company resolved approximately 58,500 such
claims and incurred total indemnity payments of $560 million (an average of
about $10,000 per case). The Company's indemnity payments have varied
considerably over time and from case to case, and are affected by a multitude
of factors. These include the type and severity of the disease sustained by the
claimant (i.e., mesothelioma, lung cancer, other types of cancer, asbestosis or
pleural changes); the occupation of the claimant; the extent of the claimant's
exposure to asbestos-containing products manufactured, sold or installed by the
Company; the extent of the claimant's exposure to asbestos-containing products
manufactured, sold or installed by other Producers; the number and financial
resources of other Producer defendants; the jurisdiction of suit; the presence
or absence of other possible causes of the claimant's illness; the availability
or not of legal defenses such as the statute of limitations or state of the
art; whether
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<PAGE>
the claim was resolved on an individual basis or as part of a group settlement;
and whether the claim proceeded to an adverse verdict or judgment.
Certain of the Company's principal co-defendants, the 20 members of the
Center for Claims Resolution, have entered into a proposed "global" settlement
which would require future claimants to satisfy certain medical criteria
indicative of significant asbestos-related impairment as a pre-condition to
their eligibility for settlement payments. The Company is using similar
criteria in the implementation of its own settlement and litigation strategy
and is also seeking to require more careful proof than in the past that
claimants had significant exposure to the Company's asbestos-containing product
or operations. The Company believes that this strategy will reduce the overall
cost of asbestos personal injury claims in the long run by channeling indemnity
payments to claimants who can establish significant asbestos-related impairment
and exposure to the Company's asbestos-containing product or operations and by
substantially reducing indemnity payments to individuals who are unimpaired or
who did not have significant such exposure. The Company's strategy has resulted
in an increased level of trial activity and an increase in the number and
amount of compensatory and punitive damage verdicts and judgments against the
Company. This strategy may have the effect of increasing average per-case
indemnity costs for claims resolved with payment, while also increasing the
number of claims dismissed without payment.
Insurance
As of June 30, 1994, the Company had approximately $401 million in
unexhausted products hazard coverage (net of deductibles and self-insured
retentions and excluding coverage issued by insolvent carriers) under its
liability insurance policies applicable to asbestos personal injury claims. Of
this amount, $144 million will not be available until the years 1996 through
2000 under an agreement with the carrier confirming such insurance. An
additional $48 million (out of the $401 million coverage) is presently the
subject of coverage litigation or alternate dispute resolution procedures. All
of the Company's liability insurance policies cover indemnity payments and
defense fees and expenses subject to applicable policy limits.
In addition, the Company has substantial unexhausted non-products coverage
under such liability insurance policies; an as yet undetermined amount of such
non-products coverage is expected to be available for payment of asbestos
personal injury claims and associated defense fees and expenses. The Company
has commenced arbitration with its primary level insurance carrier seeking to
confirm the availability of certain of its non-products coverage for payment of
certain asbestos personal injury liabilities, involving the activities of the
Company's former insulation contracting business. The Company is seeking prompt
rulings on the issues presented, and the arbitration agreement contemplates a
schedule that would result in resolution (subject to appeal) in 1994. For
purposes of calculating the amount of insurance applicable to asbestos
liabilities, the Company has estimated its recoveries in respect of non-
products coverage for claims received through 1999 at approximately $310
million, which represents the Company's best estimate of such recoveries for
such claims. The Company cautions, however, that this coverage is unconfirmed
and that the actual amounts recovered by the Company could, depending upon the
outcome of the arbitration, be much higher or much lower.
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<PAGE>
Reserve
The Company's estimated total liabilities in respect of indemnity and defense
costs associated with pending and unasserted asbestos personal injury claims
that may be received through the year 1999 (the "Liabilities"), and its
estimated insurance recoveries in respect of such claims (the "Insurance"), are
reported separately as follows:
<TABLE>
<CAPTION>
ASBESTOS LITIGATION CLAIMS
-------------------------------
JUNE 30, 1994 DECEMBER 31, 1993
------------- -----------------
(IN MILLIONS OF DOLLARS)
<S> <C> <C>
Reserve for asbestos litigation claims
Current....................................... $ 300 $ 275
Other......................................... 1,248 1,385
------ ------
Total Reserve................................. 1,548 1,660
Insurance for asbestos litigation claims
Current....................................... 175 125
Other......................................... 565 643
------ ------
Total Insurance............................... 740 768
Net Asbestos Liability........................ $ 808 $ 892
====== ======
</TABLE>
Case filing rates were at historically high levels in 1992 and 1993
(approximately 26,600 new claims in 1992 and approximately 31,700 claims in
1993) and an additional 10,700 new claims were received during the first two
quarters of 1994. Many of these new claims appear to be the product of mass
screening programs and not to involve significant asbestos-related impairment.
The large number of recent filings and the uncertain value of these claims have
added to the uncertainties involved in estimating the Company's asbestos
Liabilities.
The Company cautions that such factors as the number of future asbestos
personal injury claims received by it, the rate of receipt of such claims, and
the indemnity and defense costs associated with asbestos personal injury
claims, as well as the prospects for confirming additional, applicable
insurance coverage beyond the $401 million referenced above, are influenced by
numerous variables that are difficult to predict, and that estimates, such as
the Company's, which attempt to take account of such variables, are subject to
considerable uncertainty. Depending upon the outcome of the various
uncertainties described above, particularly as they relate to unimpaired
claims, it may be necessary at some point in the future for the Company to make
additional provision for the uninsured costs of asbestos personal injury claims
received through the year 1999 (although no such amounts are reasonably
estimable at this time). The Company remains confident that its estimate of
Liabilities and Insurance will be sufficient to provide for the costs of all
such claims that involve malignancies or significant asbestos-related
functional impairment. The Company has reviewed and will continue to review the
adequacy of its estimate of Liabilities and Insurance on a periodic basis and
make such adjustments as may be appropriate.
The Company cannot estimate and is not providing for the cost of unasserted
claims which may be received by the Company after the year 1999 because
management is unable to predict the number of claims to be received after 1999,
the severity of disease which may be involved and other factors which would
affect the cost of such claims.
Cash Expenditures
The Company's anticipated cash expenditures for uninsured asbestos-related
costs of claims received through 1999 are expected to approximate $808 million,
the Company's Liabilities, net of Insurance. Cash payments will vary annually
depending upon a number of factors, including the pace of the Company's
resolution of claims and the timing of payment of its Insurance.
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<PAGE>
Management Opinion
Although any opinion is necessarily judgmental and must be based on
information now known to the Company, in the opinion of management, the
additional uninsured and unreserved costs which may arise out of pending
personal injury and property damage asbestos claims and additional similar
asbestos claims filed in the future will not have a materially adverse effect
on the Company's financial position. While such additional uninsured and
unreserved costs incurred in and after the year 2000 may be substantial over
time, management believes that any such additional costs will not impair the
ability of the Company to meet its obligations, to reinvest in its businesses
or to take advantage of attractive opportunities for growth.
NON-ASBESTOS LIABILITIES
In October 1991, the Company and certain of its officers and directors were
named as defendants in a lawsuit captioned Gaetana Lavalle v. Owens-Corning
Fiberglas Corporation, et al. in the United States District Court for the
Northern District of Ohio. Lavalle purports to be a securities class action on
behalf of all purchasers of the Company's common stock during the period
November 1, 1988 through October 18, 1991. The complaint alleges that the
Company's disclosures during the alleged class period contained material
misstatements and omissions concerning its contingent liabilities for asbestos
claims. The complaint seeks an unspecified amount of damages (including
punitive damages) on the theory that such alleged misstatements and omissions
artificially inflated the price of the Company's stock. Various other lawsuits
and claims arising in the normal course of business are pending against the
Company, some of which allege substantial damages. Management believes that the
outcome of these lawsuits and claims will not have a materially adverse effect
on the Company's financial position or results of operations.
DESCRIPTION OF CAPITAL STOCK
The Company's Certificate of Incorporation, as amended (the "Charter"),
currently authorizes the issuance of two classes of stock: (i) 100 million
shares of Common Stock, par value $0.10 per share, of which 43,662,236 shares
were issued and outstanding as of July 31, 1994 and (ii) 8 million shares of
Preferred Stock, without par value, of which no shares were issued and
outstanding on such date.
The following descriptions of the classes of the Company's capital stock are
summaries, do not purport to be complete, and are subject, in all respects, to
the applicable provisions of the General Corporation Law of Delaware, the
Charter, the Certificate of Designation of Series A Participating Preferred
Stock (and the Certificate of Increase of Designation of Series A Participating
Preferred Stock (the "Certificate of Increase")) and the Rights Agreement (as
hereinafter defined) which, in the case of the Charter, the Certificate of
Designation (and the Certificate of Increase) and the Rights Agreement, are
included as Exhibits to the Registration Statement of which this Prospectus
forms a part.
COMMON STOCK
Each holder of Common Stock is entitled to one vote for every share standing
in his or her name on the books of the Company. The Common Stock does not have
cumulative voting rights for the election of directors, which means that
holders of more than 50% of the shares voting for the election of directors can
elect 100% of the directors if they choose to do so, and, in such event, the
holders of the remaining shares voting for the election of directors will not
be able to elect any person or persons to the Board of Directors.
Subject to the limitations contained in the Company's debt instruments and
after provision for the payment of dividends on any series of Preferred Stock
which might be issued and which has a preference with respect to the payment of
dividends, holders of Common Stock are entitled to receive such dividends as
may be declared by the Board. See "Price Range of Common Stock and Dividends"
above.
The Common Stock has no conversion rights and is not redeemable. No holder of
Common Stock has any preemptive right to subscribe for any stock or other
securities of the Company which may be issued.
17
<PAGE>
In the event of dissolution, liquidation or winding up of the Company, or
upon any distribution of its assets, the holders of Common Stock are entitled
to receive pro rata all of the assets available for distribution to
stockholders, subject to any preferential right which may be accorded to any
series of Preferred Stock which might be issued.
The Company's Common Stock is listed on the NYSE and the TSE. The outstanding
shares of Common Stock are validly issued, fully paid and non-assessable.
PREFERRED STOCK
The Board of Directors of the Company has the authority, without further
action by stockholders, to determine the principal rights, preferences and
privileges of any unissued Preferred Stock. Provisions may be included in the
shares of Preferred Stock, such as extraordinary voting, dividend, redemption
or conversion rights, which could discourage an unsolicited tender offer or
takeover proposal.
Out of the authorized Preferred Stock, the Company has designated 750,000
shares of Series A Participating Preferred Stock ("Series A Preferred Stock"),
the terms of which are summarized below under "Series A Preferred Stock." Each
outstanding share of Common Stock includes a right to purchase one one-
hundredth of a share of Series A Preferred Stock ("Preferred Share Purchase
Rights"), which Rights are registered on the New York Stock Exchange and the
terms of which are summarized below under "Preferred Share Purchase Rights."
SERIES A PREFERRED STOCK
Dividends
Holders of shares of Series A Preferred Stock are entitled to receive, when,
as and if declared by the Board of Directors out of funds legally available for
the purpose, dividends, payable in cash quarterly in arrears on January 1,
April 1, July 1 and October 1 of each year (each a "Quarterly Dividend Payment
Date"), at an annual rate per share of the greater of (i) $10.00 or (ii) 100
times the aggregate per share amount of all cash and non-cash dividends or
other distributions (other than dividends payable in Common Stock or
subdivisions of outstanding shares of Common Stock) declared on the Common
Stock since the last Quarterly Dividend Payment Date. Accrued but unpaid
dividends accumulate but do not bear interest.
The Series A Preferred Stock will be junior as to dividends to any series or
class of Preferred Stock (or any similar stock) that ranks senior as to
dividends to the Series A Preferred Stock. The Series A Preferred Stock has
priority as to dividends over the Common Stock and any other series or class of
the Company's stock thereafter issued that ranks junior as to dividends to the
Series A Preferred Stock. If dividends or distributions payable on the Series A
Preferred Stock are in arrears, the Company (i) may not declare or pay
dividends or other distributions on the Common Stock (or any other stock of the
Company that ranks junior to the Series A Preferred Stock) and (ii) is
restricted in its declaration and payment of dividends or other distributions
on any stock of the Company that ranks on a parity with the Series A Preferred
Stock except for dividends paid ratably in accordance with the respective
preferential amounts payable on the Series A Preferred Stock and all such
parity stock.
Liquidation Rights
In the case of the voluntary or involuntary liquidation, dissolution or
winding-up of the Company, holders of shares of Series A Preferred Stock are
entitled to receive the liquidation preference of the higher of (i) $100.00 per
share, plus an amount equal to the accrued and unpaid dividends to the payment
date, or (ii) 100 times the aggregate per share amount to be distributed to
holders of shares of Common Stock, before any payment or distribution is made
to the holders of shares of Common Stock (or any other stock of the Company
that ranks junior to the Series A Preferred Stock). The holders of shares of
Series A Preferred Stock and of any other stock of the Company that ranks on a
parity with the Series A Preferred Stock are
18
<PAGE>
entitled to share ratably, in accordance with the respective preferential
amounts payable on such stock, in any distribution that is not sufficient to
pay in full the aggregate of the amounts payable thereon.
Consolidation and Merger Rights
In case the Company enters into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are changed into or
exchanged for other stock or securities, cash and/or any other property, each
share of Series A Preferred Stock at the same time will be similarly changed
into or exchanged for an amount per share equal to 100 times the aggregate
amount of stock or securities, cash and/or any other property into which or for
which each share of Common Stock is changed or exchanged.
Limitation on Share Repurchase
If dividends or distributions payable on the Series A Preferred Stock are in
arrears, the Company may not redeem, purchase or otherwise acquire for
consideration (i) any stock of the Company that ranks on a parity with the
Series A Preferred Stock, except in exchange for shares of any stock of the
Company ranking junior to the Series A Preferred Stock or (ii) any shares of
Series A Preferred Stock or any stock of the Company that ranks on a parity
with the Series A Preferred Stock, except through a purchase offer made in
writing or by publication to all holders of such shares on terms that the Board
of Directors determines will result in fair and equitable treatment among the
respective series or classes of shares.
Voting Rights
Each share of Series A Preferred Stock entitles the holder thereof to 100
votes on all matters submitted to a vote of the Company's stockholders, and the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Company having general voting
rights will vote together as one class on all matters submitted to a vote of
the Company's stockholders.
If, at the time of any annual stockholders' meeting for the election of
directors, the equivalent of at least six quarterly dividends payable on any
shares of Series A Preferred Stock are in default, the number of members of the
Company's Board of Directors will be increased by two, and the holders of the
Series A Preferred Stock, voting separately as a class, will be entitled at
such meeting (and each subsequent annual stockholders' meeting) to elect such
two additional directors. Such voting rights will terminate when all such
dividends in arrears have been paid or declared and set apart for payment. Upon
the termination of such voting rights, the terms of office of all directors so
elected will terminate immediately and the number of members of the Company's
Board of Directors will be reduced by two.
Other Features
The shares of Series A Preferred Stock are not redeemable. Unless otherwise
provided in the Company's Restated Certificate of Incorporation or the
designation of a subsequent series of Preferred Stock, the Series A Preferred
Stock will rank junior to all of the Company's other series of Preferred Stock
as to the payment of dividends and the distribution of assets on liquidation,
dissolution or winding-up, and senior to the Company's Common Stock. Series A
Preferred Stock may be issued in fractions of a share (in one one-hundredths
(1/100) of a share and integral multiples thereof).
PREFERRED SHARE PURCHASE RIGHTS
Under a Rights Agreement, dated as of December 18, 1986 (the "Rights
Agreement"), between the Company and Chemical Bank (as successor by merger to
Manufacturers Hanover Trust Company), as Rights Agent, each outstanding share
of Common Stock is coupled with a Preferred Share Purchase Right. Each Right
entitles the holder to buy from the Company one one-hundredth of a share of
Series A Preferred Stock at a price of $50. The Board of Directors has
designated 750,000 shares of the Company's authorized preferred stock as Series
A Preferred Stock. There are currently no shares of Preferred Stock
outstanding.
19
<PAGE>
Rights become exercisable and detach from the Common Stock ten days after a
person or group acquires, or announces a tender offer for, 20% or more of the
Company's outstanding shares of Common Stock. The rights expire on December 30,
1996, unless redeemed earlier by the Company. The rights are redeemable by the
Company at one cent each at any time prior to ten days following public
announcement or notice to the Company that an acquiring person or group has
purchased 20% or more of the Company's outstanding Common Stock. If the Company
is acquired in a merger or other business combination at any time after the
rights become exercisable, each right would entitle its holder to buy shares of
the acquiring or surviving company having a market value of twice the exercise
price of the right. Until the Preferred Share Purchase Rights detach from the
Common Stock (or the earlier termination or redemption of the Preferred Share
Purchase Rights), an additional Preferred Share Purchase Right will be issued
with every share of newly issued Common Stock.
DELAWARE LAW AND CERTAIN CHARTER PROVISIONS
The Company is subject to the provisions of Section 203 of the General
Corporation Law of Delaware. In general, this statute prohibits a publicly held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person becomes an interested stockholder, unless the
business combination is approved in a prescribed manner. An "interested
stockholder" is a person who, together with affiliates and associates, owns (or
within the prior three years did own) 15% or more of the corporation's voting
stock.
In addition to Section 203 of the General Corporation Law of Delaware and the
Preferred Share Purchase Rights, the Charter contains several provisions that
may discourage certain transactions involving an actual or threatened change of
control of the Company.
For example, the Charter requires that certain business combinations and
other combinations involving the Company and a holder of 10% or more of its
voting securities be approved by at least 66% of all shares having voting
rights.
The foregoing provisions of the General Corporation Law of Delaware and the
Charter are intended to encourage persons seeking to acquire control of the
Company to consult first with the Board of Directors to permit negotiation of
the terms of any proposed business combination or offer. They may, however,
also have the effect of discouraging a third party from attempting to acquire
control of the Company. In addition, since these provisions are designed to
discourage accumulations of large blocks of stock by third parties who wish to
gain control of the Company, such provisions may reduce the temporary market
price fluctuations caused by such accumulations.
TRANSFER AGENT AND REGISTRAR
The primary Transfer Agent and Registrar for the Common Stock is Chemical
Bank, located in New York, New York.
PLAN OF DISTRIBUTION
The distribution of the shares offered hereby by the Selling Stockholders may
be effected promptly after the effective date of the Registration Statement of
which this Prospectus is a part in one or more transactions at market prices
prevailing at the time of sale or in negotiated transactions, or otherwise, at
varying prices to be determined at the time of each sale, in each case in
accordance with the terms of the Common Stock Registration Rights Agreement
between the Company and the Selling Stockholders. Such transactions may be
effected on a stock exchange or the over-the-counter market. The Selling
Stockholders will effect such transactions by selling shares to or through
Goldman, Sachs & Co., and Goldman, Sachs & Co. will receive compensation in the
form of discounts or commissions from the Company and commissions from
purchasers of shares for whom they may act as agent. Such discounts or
commissions will not exceed those customary
20
<PAGE>
for the types of transactions involved and are expected to be approximately
$ . The Company has agreed to indemnify the Selling Stockholders and certain
control and other related persons in certain circumstances against certain
liabilities, including liabilities under the Securities Act. The Selling
Stockholders have agreed to indemnify the Company and certain control and
related persons against certain liabilities, including liabilities under the
Securities Act, but only in limited circumstances arising out of such Selling
Stockholders having furnished incorrect written information to the Company for
use in this Registration Statement. The Company and the Selling Stockholders
have also agreed to indemnify Goldman, Sachs & Co. from certain liabilities,
including liabilities under the Securities Act.
The Company is directly or indirectly bearing all costs relating to the
registration of the shares offered hereby, including any underwriting discounts
or commissions directly attributable to the sale of the shares offered hereby
by or on behalf of the Selling Stockholders. Goldman, Sachs & Co. may be deemed
to be an "underwriter" within the meaning of the Securities Act, and any
commissions and discounts received by Goldman, Sachs & Co. and any profit on
the resale of the shares offered hereby by Goldman, Sachs & Co. might be deemed
to be underwriting discounts and commissions under the Securities Act.
VALIDITY OF SHARES
The validity of the shares of Common Stock offered hereby and of the related
Preferred Share Purchase Rights will be passed upon by William W. Colville,
Esq., Senior Vice President, General Counsel and Secretary of the Company. Mr.
Colville is a direct or indirect owner of 19,199 shares of Common Stock and
51,000 options to buy shares of Common Stock, 34,000 of which are currently
exercisable.
EXPERTS
The financial statements and schedules incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of the Company for the year ended
December 31, 1993 have been audited by Arthur Andersen & Co., independent
public accountants, as indicated in their report with respect thereto, and are
incorporated in this Prospectus by reference in reliance upon the authority of
said firm as experts in giving said reports.
The consolidated financial statements of the Company included in any
subsequent Annual Report of the Company on Form 10-K and incorporated by
reference in this Prospectus will have been examined by the independent public
accountants whose report thereon appears in such Annual Report. Such
consolidated financial statements of the Company shall be deemed to be
incorporated herein from the date of filing of the applicable report on Form
10-K in reliance on the reports of such independent public accountants, given
on the authority of such firm as experts in auditing and accounting.
21
<PAGE>
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- -------------------------------------------------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH IN-
FORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHO-
RIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITA-
TION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN
THIS PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE OF THIS PROSPECTUS OR THAT
THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE
DATE OF SUCH INFORMATION.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents by Reference......................... . 2
The Company............................................................... 3
Recent Developments....................................................... 4
Selling Stockholders...................................................... 4
Price Range of Common Stock and Dividends................................. 5
Use of Proceeds........................................................... 5
Condensed Consolidated Capitalization..................................... 6
Selected Consolidated Financial Information............................... 7
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 9
Asbestos and Other Litigation............................................. 14
Description of Capital Stock.............................................. 17
Plan of Distribution...................................................... 20
Validity of Shares........................................................ 21
Experts................................................................... 21
</TABLE>
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- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
855,556 SHARES
OWENS-CORNING
FIBERGLAS
CORPORATION
COMMON STOCK
(PAR VALUE $0.10 PER SHARE)
----------------
OWENS CORNING (TM) LOGO
----------------
GOLDMAN, SACHS & CO.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.*
The following table sets forth the expenses (other than brokerage fees and
commissions) expected to be incurred in connection with the offering described
in this Registration Statement. All amounts are estimated except the Securities
and Exchange Commission filing fee.
<TABLE>
<S> <C>
Securities and Exchange Commission filing fee.......................... $10,252
New York Stock Exchange listing fee.................................... 3,000
Toronto Stock Exchange listing fee..................................... 1,697
Printing and engraving expenses........................................ 32,000
Accountant's fees and expenses......................................... 21,500
Legal fees and expenses................................................ 25,000
Miscellaneous expenses................................................. 2,500
-------
Total................................................................ $95,949
=======
</TABLE>
- --------
* No portion of these expenses will be borne by the Selling Stockholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
A. Reference is made to Section 102(b)(7) of the General Corporation Law of
the State of Delaware as to the limitation of personal liability of directors
and officers and to Section 145 of the General Corporation Law of the State of
Delaware as to indemnification by the Company of its directors and officers.
B. Article FOURTEENTH of the Company's Certificate of Incorporation, as
amended, provides as follows with respect to the indemnification of the
Company's directors and officers and the limitation of personal liability of
its directors and officers:
FOURTEENTH: The corporation shall indemnify to the full extent authorized
or permitted by law any person made, or threatened to be made, a party to
any action or proceeding (whether civil or criminal or otherwise) by reason
of the fact that he, his testator or intestate, is or was a director or
officer of the corporation or by reason of the fact that such director or
officer, at the request of the corporation, is or was serving any other
corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, in any capacity. Nothing contained herein shall affect
any rights to indemnification to which employees other than directors and
officers may be entitled by law. No director of the corporation shall be
personally liable to the corporation or its stockholders for monetary
damages for any breach of fiduciary duty by such a director as a director.
Notwithstanding the foregoing sentence, a director shall be liable to the
extent provided by applicable law (i) for any breach of the director's duty
of loyalty to the corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from which such
director derived an improper personal benefit. No amendment to or repeal of
this Article FOURTEENTH shall apply to or have any effect on the liability
or alleged liability of any director of the corporation for or with respect
to any acts or omissions of such director occurring prior to such
amendment.
C. Article IX of the Company's By-Laws provides as follows with respect to
the indemnification of the Company's directors and officers:
ARTICLE IX
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Corporation shall, to the fullest extent permitted by applicable law from
time to time in effect (but, in the case of any amendment of such law, only to
the extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide prior
to such
II-1
<PAGE>
amendment), indemnify any and all persons who may serve or who have served at
any time as directors or officers of the Corporation, or who at the request of
the Corporation may serve or at any time have served as directors, officers,
employees or agents of another corporation (including subsidiaries of the
Corporation) or of any partnership, joint venture, trust or other enterprise,
and any directors or officers of the Corporation who at the request of the
Corporation may serve or at any time have served as agents or fiduciaries of an
employee benefit plan of the Corporation or any of its subsidiaries, from and
against any and all of the expenses, liabilities or other matters referred to
in or covered by law whether the basis of such proceeding is alleged action in
an official capacity as a director, officer, employee or agent or in any other
capacity while serving as a director, officer, employee or agent. The
Corporation may also indemnify any and all other persons whom it shall have
power to indemnify under any applicable law from time to time in effect to the
extent permitted by such law. The indemnification provided by this Article IX
shall not be deemed exclusive of any other rights to which any person may be
entitled under any provision of the Certificate of Incorporation, other By-Law,
agreement, vote of stockholders or disinterested directors, or otherwise, both
as to action in an official capacity and as to action in another capacity while
holding such office, and shall be contract rights and continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
If a claim under this Article IX is not paid in full by the Corporation
within sixty days after a written claim has been received by the Corporation,
except in the case of a claim for an advancement of expenses, in which case the
applicable period shall be twenty days, the director or officer may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim. If successful in whole or in part in any such suit, or in a suit
brought by the Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the director or officer shall be entitled to be
paid also the expense of prosecuting or defending such suit. In (i) any suit
brought by the director or officer to enforce a right to indemnification
hereunder (but not in a suit brought by the director or officer to enforce a
right to an advancement of expenses) it shall be a defense that, and (ii) any
suit by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the Corporation shall be entitled to recover such
expenses upon a final adjudication that, the director or officer has not met
any applicable standard for indemnification set forth in the Delaware General
Corporation Law. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination prior to the commencement of such suit that indemnification of
the director or officer is proper in the circumstances because the director or
officer has met the applicable standard of conduct set forth in the Delaware
General Corporation Law, nor an actual determination by the Corporation
(including its Board, independent legal counsel, or its stockholders) that the
director or officer has not met such applicable standard of conduct, shall
create a presumption that the director or officer has not met the applicable
standard of conduct or, in the case of such a suit brought by the director or
officer, be a defense to such suit. In any suit brought by the director or
officer to enforce a right to indemnification or to an advancement of expenses
hereunder, or by the Corporation to recover an advancement of expenses pursuant
to the terms of an undertaking, the burden of proving that the director or
officer is not entitled to be indemnified, or to such advancement of expenses,
under this Article IX or otherwise shall be on the Corporation.
The indemnification provided in this Article IX shall inure to each person
referred to herein, whether or not the person is serving in any of the
enumerated capacities at the time such expenses (including attorneys' fees),
judgments, fines or amounts paid in settlement are imposed or incurred, and
whether or not the claim asserted against him is based on matters which
antedate the adoption of this Article IX. None of the provisions of this
Article IX shall be construed as a limitation upon the right of the Corporation
to exercise its general power to enter into a contract or understanding of
indemnity with a director, officer, employee, agent or any other person in any
proper case not provided for herein. Each person who shall act or have acted as
a director or officer of the Corporation shall be deemed to be doing so in
reliance upon such right of indemnification.
For purposes of this Article IX, the term "Corporation" shall include
constituent corporations referred to in subsection (h) of Section 145 of the
General Corporation Law of the State of Delaware (or any similar provision of
applicable law at the time in effect).
II-2
<PAGE>
D. The Company has entered into an Indemnity Agreement with each member of
the Company's Board of Directors. Each Indemnity Agreement provides, among
other things, that in the event the director was, is or becomes a party,
witness or other participant in a Claim (as defined in the Indemnity Agreement)
by reason of (or arising in part out of) an Indemnifiable Event (as defined in
the Indemnity Agreement), the Company is required to indemnify the director to
the fullest extent authorized by the Company's By-Laws as in effect on the date
of the Indemnification Agreement notwithstanding any subsequent amendment,
repeal or modification of such By-Laws, against any and all expenses,
judgments, fines, penalties and amounts paid in settlement of such Claim. The
Indemnity Agreement requires that the Company advance to the director all
expenses relating to Claims and contains an undertaking by the director to
reimburse the Company for any such advances that are subsequently determined in
a final judicial determination to have been impermissible under applicable law.
E. The directors and officers of the Company are covered by insurance
policies, maintained by the Company at its expense, insuring the directors and
officers against certain liabilities which might be incurred by them in such
capacities, including liabilities arising under the Securities Act of 1933.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
4(a) --Certificate of Incorporation of the Registrant (incorporated by
reference to Exhibit (3) to Registrant's annual report on Form 10-K
(File No. 1-3660) for the fiscal year ended December 31, 1986).
4(b) --By-laws of the Registrant (incorporated by reference to Exhibit (19)
to Registrant's quarterly report on Form 10-Q (File No. 1-3660) for
the fiscal quarter ended March 31, 1988).
4(c) --Specimen Certificate of Common Stock of the Registrant.
4(d) --Rights Agreement (incorporated by reference to Exhibit 1 to
Registrant's Registration Statement on Form 8-A (File No. 1-3660),
dated December 23, 1986).
4(e) --Copy of Certificate of Designation of Series A Participating
Preferred Stock (incorporated by reference to Exhibit B to the
Rights Agreement, which is Exhibit 1 to Registrant's Registration
Statement on Form 8-A (File No. 1-3660), dated December 23, 1986).
4(f)* --Copy of Certificate of Increase of Designation of Series A
Participating Preferred Stock.
4(g)* --Registration Rights Agreement, dated as of May 31, 1994, among the
Registrant and the parties thereto.
--Opinion of counsel as to the legality of the securities being
5 registered.
23(a)* --Consent of Arthur Andersen & Co., independent auditors.
23(b) --Consent of counsel (included in Exhibit 5).
24* --Powers of Attorney.
</TABLE>
- --------
* Previously filed.
ITEM 17. UNDERTAKINGS.
(a) Filings Incorporating Subsequent Exchange Act Documents by Reference.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(b) Policy Regarding Indemnification.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
II-3
<PAGE>
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
(c) Rule 415 Offering
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required in Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 1 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Toledo, State of Ohio, on September
29, 1994.
OWENS-CORNING FIBERGLAS CORPORATION
/s/ David W. Devonshire
By:
--------------------------------
(David W. Devonshire)
Senior Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 1 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated:
SIGNATURES TITLE DATE
* Chairman of the
/s/ Glen H. Hiner Board, Chief September 29,
- ------------------------------------- Executive Officer 1994
(GLEN H. HINER) and Director
(principal executive
officer)
Senior Vice
President and Chief September 29,
Financial Officer 1994
/s/ David W. Devonshire (principal financial
- ------------------------------------- officer)
(DAVID W. DEVONSHIRE)
* Vice President and
/s/ Domenico Cecere Controller September 29,
- ------------------------------------- 1994
(DOMENICO CECERE)
* Director
/s/ Norman P. Blake, Jr. September 29,
- ------------------------------------- 1994
(NORMAN P. BLAKE, JR.)
* Director
/s/ W.W. Boeschenstein September 29,
- ------------------------------------- 1994
(W.W. BOESCHENSTEIN)
* Director
/s/ Landon Hilliard September 29,
- ------------------------------------- 1994
(LANDON HILLIARD)
* Director
/s/ Jon M. Huntsman, Jr. September 29,
- ------------------------------------- 1994
(JON M. HUNTSMAN, JR.)
* Director
/s/ W. Walker Lewis September 29,
- ------------------------------------- 1994
(W. WALKER LEWIS)
* Director
/s/ David T. McGovern September 29,
- ------------------------------------- 1994
(DAVID T. MCGOVERN)
* Director
/s/ Furman C. Moseley, Jr. September 29,
- ------------------------------------- 1994
(FURMAN C. MOSELEY, JR.)
* Director
/s/ W. Ann Reynolds September 29,
- ------------------------------------- 1994
(W. ANN REYNOLDS)
- ------------------------------------- Director
(TREVOR HOLDSWORTH)
*By: /s/ David W. Devonshire
---------------------------------
Attorney-in-fact
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION PAGE
------- ----------- ----
<C> <S> <C>
4(a) --Certificate of Incorporation of the Registrant (incorporated
by reference to Exhibit (3) to Registrant's annual report on
Form 10-K (File No. 1-3660) for the fiscal year ended December
31, 1986).
4(b) --By-laws of the Registrant (incorporated by reference to
Exhibit (19) to Registrant's quarterly report on Form 10-Q
(File No. 1-3660) for the fiscal quarter ended March 31,
1988).
4(c) --Specimen Certificate of Common Stock of the Registrant.
4(d) --Rights Agreement (incorporated by reference to Exhibit 1 to
Registrant's Registration Statement on Form 8-A (File No. 1-
3660), dated December 23, 1986).
4(e) --Copy of Certificate of Designation of Series A Participating
Preferred Stock (incorporated by reference to Exhibit B to the
Rights Agreement, which is Exhibit 1 to Registrant's
Registration Statement on Form 8-A (File No. 1-3660), dated
December 23, 1986).
4(f)* --Copy of Certificate of Increase of Designation of Series A
Participating Preferred Stock.
4(g)* --Registration Rights Agreement, dated as of May 31, 1994,
among the Registrant and the parties thereto.
5 --Opinion of counsel as to the legality of the securities being
registered.
23(a)* --Consent of Arthur Andersen & Co., independent auditors.
23(b) --Consent of counsel (included in Exhibit 5).
24* --Powers of Attorney.
</TABLE>
- --------
* Previously filed.
<PAGE>
EXHIBIT 4(c)
COMMON STOCK 7-12055-156 -89 COMMON STOCK
NUMBER SHARES
NR
SPECIMEN OWENS-CORNING FIBERGLAS CORPORATION
CORPORATE
DELAWARE 1938
SEAL
CUSIP 690734 20 7
SEE REVERSE FOR CERTAIN DEFINITIONS
OWENS-CORNING FIBERGLAS CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
THIS IS TO CERTIFY THAT
S P E C I M E N
IS THE OWNER OF
FULL-PAID AND NON-ASSESSABLE SHARES OF THE PAR VALUE OF 10c EACH OF THE COMMON
STOCK OF
Owens-Corning Fiberglas Corporation (hereinafter referred to as the
"Corporation") transferable on the books of the Corporation by the holder hereof
in person or by duly authorized attorney upon surrender of this certificate
properly endorsed. This certificate and the shares represented hereby are issued
and shall be held subject to all of the provisions of the Certificate of
Incorporation, as amended, of the Corporation (a copy of which certificate is on
file with the Transfer Agent), to all of which the holder by acceptance hereof
assents. This certificate is not valid until countersigned by the Transfer Agent
and registered by the Registrar.
Witness the seal of the Corporation and the signatures of its duly authorized
officers.
SPECIMEN SPECIMEN SPECIMEN SPECIMEN SPECIMEN
Dated
Countersigned and Registered:
MANUFACTURERS HANOVER TRUST COMPANY,
Transfer Agent
and Registrar,
/s/ /s/
Authorized Officer Secretary Chairman of the Board and
Chief Executive Officer
<PAGE>
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -as tenants in common UNIF GIFT MIN ACT- _____Custodian_____
TEN ENT -as tenants by the entireties (Cust) (Minor)
JT TEN -as joint tenants with right under Uniform Gifts
of survivorship and not as to Minors
tenants in common Act________________
(State)
Additional abbreviations may also be used though not in the above list.
For value received,________________hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
________________________________________________________________________________
________________________________________________________________________________
__________________________________________________________________________Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint______________________________________________
________________________________________________________________________________
Attorney to transfer the said stock on the books of the within-named Corporation
with full power of substitution in the premises.
Dated____________________
X_______________________________________
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between the Company and Manufacturers
Hanover Trust Company dated as of December 18, 1986 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a copy of
the Rights Agreement without charge promptly after receipt of a written request
therefor. Under certain circumstances set forth in the Rights Agreement, Rights
beneficially owned by an Acquiring Person or an Associate or Affiliate thereof
(as such terms are defined in the Rights Agreement) will become null and void.
<PAGE>
[LETTERHEAD OF OWENS-CORNING] EXHIBIT 5
WILLIAM W. COLVILLE
SENIOR VICE PRESIDENT,
GENERAL COUNSEL & SECRETARY
[LOGO OF OWENS-CORNING]
September 29, 1994
Owens-Corning Fiberglas Corporation
Fiberglas Tower
Toledo, Ohio 43659
Re: Registration Statement on Form S-3
----------------------------------
Dear Sirs:
I am Senior Vice President, General Counsel and Secretary of Owens-Corning
Fiberglas Corporation (the "Company"), a Delaware corporation, and have acted as
counsel to the Company in connection with the Company's preparation of the
registration statement on Form S-3 (the "Registration Statement"), filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, to register 855,556 shares (the "Covered Shares") of the Company's
Common Stock, par value $.10 per share (the "Common Stock"), issued in
connection with the acquisition by the Company of UC Industries, Inc., a
Delaware corporation, pursuant to an Amended and Restated Stock Purchase
Agreement, dated as of May 9, 1994, each of which Covered Shares includes a
Preferred Share Purchase Right relating to the Company's Series A Participating
Preferred Stock, no par value.
In so acting, I have supervised other members of the Company's Law Department
and outside counsel who have performed work in connection with the Registration
Statement.
I and other members of the Company's Law Department and such outside counsel
have examined and relied upon the originals, or copies certified or otherwise
identified to our satisfaction, of such corporate records, documents,
certificates and other instruments, and have made such other investigations, as
in our judgment are necessary or appropriate to enable me to render the opinion
expressed below. In our examination, we have assumed the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies, the genuineness of all signatures,
and the due authority of the parties (other than the Company) executing any such
documents.
<PAGE>
Based upon the foregoing, I am of the opinion that the Covered Shares are
validly issued, fully paid and non-assessable shares of the Common Stock of the
Company.
I am a member of the Bar of the State of Ohio and do not hold myself out as an
expert on the laws of any other state except the corporate laws of the State of
Delaware, and my opinion is limited to the corporate laws of the State of
Delaware and the federal laws of the United States.
I consent to the use of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
/s/ William M. Colville
- -----------------------
William M. Colville
