As filed with the Securities and Exchange Commission on December 6, 1996
Registration No. 333-15063
______________________________________________________________________________
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
(Exact name of Registrant as specified in its charter)
Delaware 34-4323452
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Owens Corning World Headquarters
Toledo, Ohio 43659
(419) 248-8000
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
__________
Christian L. Campbell, Esq.
Senior Vice President, General Counsel and Secretary
Owens Corning
Owens Corning World Headquarters
Toledo, Ohio 43659
(419) 248-8000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
_________
Copy to:
Lyman F. Spitzer, Esq.
Shumaker, Loop & Kendrick
1000 Jackson
Toledo, Ohio 43624
__________
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. o[ ]
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[x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration number of the earlier effective
registration statement for the same offering. o[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier registration statement for the same
offering. o[ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. o[ ]
__________
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance
with Section 8(a) of the Securities Act of 1933 or until this
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a), may determine.
472,250 Shares
<PAGE>
Owens Corning
Common Stock
(par value $0.10 per share)
__________
The 472,250 shares of Common Stock, par value $0.10 per
share (the "Common Stock"), of Owens Corning, a Delaware
corporation (the "Company" or "Owens Corning"), offered
hereby are owned by Celfort Construction Materials, Inc., a
Canada corporation unrelated to the Company. See "Selling
Stockholder." None of such 472,250 shares are offered by the
Company.
The Selling Stockholder 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 Stockholder." All expenses of registration and
brokerage commissions incurred in connection herewith are
being borne, directly or indirectly, by the Company. The
Company, the Selling Stockholder 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 ________, 1996 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. See "Plan of
Distribution."
Goldman, Sachs & Co.
Goldman, Sachs & Co.
__________
The date of this Prospectus is ____________, 1996.
<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. The
Commission also maintains a Web site (http://www.sec.gov) that
contains reports, proxy and information statements and other
information regarding registrants (including the Company) that file
electronically with the Commission.
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. 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, 1995, filed on
February 23, 1996.
(2) The Company's Annual Report on Form 10-K/A (File No.
1-3660) for the year ended December 31, 1995, filed on
February 23, 1996.
(3) The Company's Annual Report on Form 10-K/A (File No.
1-3660) for the year ended December 31, 1995, filed on
March 5, 1996.
(4) The Company's Quarterly Report on Form 10-Q (File No.
1-3660) for the quarter ended March 31, 1996, filed on May
15, 1996.
(5) The Company's Quarterly Report on Form 10-Q/A (File No.
1-3660) for the quarter ended March 31, 1996, filed on May
21, 1996.
(6) The Company's Current Report on Form 8-K (File No. 1-
3660) dated June 20, 1996, filed on June 20, 1996.
(7) The Company's Quarterly Report on Form 10-Q (File No. 1-
3660) for the quarter ended June 30, 1996, filed on August
14, 1996.
(8) The Company's Quarterly Report on Form 10-Q (File No. 1-
3660) for the quarter ended September 30, 1996, filed on
October 28, 1996.
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, Owens Corning World Headquarters, Toledo, Ohio 43659, Attention:
Secretary's Office (telephone: (419) 248-8000).
<PAGE>
THE COMPANY
Owens Corning, a global company incorporated in Delaware in 1938,
serves consumers and industrial customers with high-performance glass
composites and building materials systems. These products are used in
industries such as home improvement, new construction, transportation,
marine, aerospace, energy, appliance, packaging and electronics. Many
of these products are marketed under the trademark FIBERGLAS (R). The
Company operates in two industry segments - Building Materials and
Composite Materials - divided into eleven businesses. The Company also
has affiliate companies in a number of countries.
The following table summarizes selected information concerning the
Company's industry segments. For further information, see Note 1 of
the Notes to Consolidated Financial Statements of the Company as of
December 31, 1995, incorporated herein by reference, and Note 1 of
Notes to Consolidated Financial Statements of the Company as of
September 30, 1996, incorporated herein by reference.
<TABLE>
<S> <C> <C> <C> <C>
Nine Months Ended Years Ended
September 30, December 31,
1996(a) 1995 1995 1994(b)
(in millions)
Net Sales:
Building Materials $1,969 $1,767 $2,404 $2,273
Composite Materials 861 881 1,208 1,078
Consolidated Net Sales $2,830 $2,648 $3,612 $3,351
Income (Loss) from Operations:
Building Materials $ 181 $ 183 $ 237 $ 189
Composite Materials 176 162 225 109
General Corporate Expense (919) (36) (50) (72)
Total Income (Loss) from
Operations $ (562) $ 309 $ 412 $ 226
</TABLE>
_________________
(a) Income from operations for the nine months ended September 30,
1996 includes the Company's net pretax charge of $875 million for
asbestos litigation claims that may be received after 1999 and
probable additional insurance recovery, all of which was recorded as
an increase in general corporate expense. Income from operations for
the nine months ended September 30, 1996 also includes the Company's
pretax gain of $37 million from the sale of its ownership interest
in its Japanese affiliate Asahi Fiber Glass Co. Ltd., all of which
was recorded as a reduction in general corporate expense. Also
included are special charges totaling $42 million including
valuation adjustments associated with prior divestitures, major
product line productivity initiatives and a contribution to the
Owens Corning Foundation. The impact of these special items was to
reduce income from operations for Building Materials by $22 million,
Composite Materials by $5 million, and to increase general corporate
expense by $15 million.
(b) Income from operations for the year ended December 31, 1994
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 Materials and
Composite Materials by $70 million and $22, million respectively,
and to increase general corporate expense by $25 million.
The Company's principal executive offices are located at Owens
Corning World Headquarters, 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
and its consolidated subsidiaries.
3
<PAGE>
SELLING STOCKHOLDER
All of the 472,250 shares offered hereby are being offered on behalf
of and are currently owned by Celfort Construction Materials, Inc., a
Canada corporation (the "Selling Stockholder"). Such shares constitute
all of the shares of Common Stock that the Selling Stockholder owns or
has the right to acquire as of the date of this Prospectus. The
Selling Stockholder expects to sell all of such shares in this
offering. One or more affiliates of the Selling Stockholder may own,
manage or have the right to acquire shares of Common Stock.
The Selling Stockholder acquired the shares offered hereby from the
Company in connection with an Asset Purchase Agreement dated as of
August 30, 1996 by and among the Company, OC Celfortec (as defined
below), the Selling Stockholder, and a corporate affiliate of the
Selling Stockholder. Under the Agreement, OC Celfortec Inc., a Canada
corporation and an indirect wholly-owned subsidiary of the Company
("OC Celfortec"), acquired substantially all the assets of the
extruded polystyrene insulation products business of the Selling
Stockholder (the "Acquisition") in consideration of, among other
things, delivery by OC Celfortec to the Selling Stockholder of OC
Celfortec's Promissory Note, which was subsequently exchanged for the
472,250 shares of Common Stock, par value $.10 per share, of the
Company being offered hereby. The Acquisition was consummated on
August 30, 1996. Pursuant to the terms of the Acquisition, the Selling
Stockholder will receive from the Company cash consideration equal to
the difference, if any, between (a) $45.00 multiplied by the number of
shares being offered hereby and (b) the net proceeds received by the
Selling Stockholder from the sale of such shares.
During the past three years, the Selling Stockholder has licensed
technology from the Company and has sold manufactured goods to the
Company in the ordinary course of business. The amounts involved in
these transactions were not material to the Company.
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 "OWC". 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>
<S> <C> <C>
High Low
1994
First Quarter 46 33-1/2
Second Quarter 36-1/8 30-1/2
Third Quarter 36-1/4 30-1/8
Fourth Quarter 33-1/2 27-3/4
1995
First Quarter 36-1/4 30-1/4
Second Quarter 40 34-5/8
Third Quarter 47-1/8 36-1/2
Fourth Quarter 46-3/4 40-3/8
1996
First Quarter 46 39-3/4
Second Quarter 43-1/8 37-5/8
Third Quarter 43 36
Fourth Quarter (through
December 6, 1996) 43-1/2 36-1/4
</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.
In June 1996, the Board of Directors of the Company approved an
annual dividend policy of $.25 per share of Common Stock and declared
a dividend of $.0625 per share of Common Stock to stockholders of
record on September 30, 1996, paid on October 15, 1996. The Company
had not previously declared any dividends since 1986.
4
<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of shares of
Common Stock by the Selling Stockholder.
CONDENSED CONSOLIDATED CAPITALIZATION
The following table summarizes the capitalization of the Company
and its consolidated subsidiaries at September 30, 1996, including the
issuance of 472,250 shares of Common Stock in connection with the
Acquisition. For further information, see Notes 2, 3, 4, 5, 18 and 19
of Notes to Consolidated Financial Statements of the Company as of
December 31, 1995, incorporated herein by reference, and Notes 6 and 7
of Notes to Consolidated Financial Statements of the Company as of
September 30, 1996, incorporated herein by reference.
<TABLE>
<S> <C>
At September 30, 1996
(in Millions)
Short-term debt, including current portion of
long-term debt $ 182
Long-term debt:
Senior 983
Less: Current portion (18)
Total long-term debt 965
Company obligated convertible security of subsidiary
holding solely parent debentures 194
Stockholders' equity:
Preferred stock, no par value; 8 million shares
authorized; none issued -
Common stock, $.10 par value; 100 million shares
authorized; 52,048,661 shares issued and
outstanding (a) 597
Deficit (1,138)
Foreign currency translation adjustments (8)
Other (19)
Total stockholders' equity (568)
Total capitalization $ 773
</TABLE>
_________________
(a) Does not include shares of Common Stock issuable or which may be
issued pursuant to various stock compensation plans of the Company
(see Note 18 of Notes to Consolidated Financial Statements of the
Company as of December 31, 1995, incorporated herein by reference).
5
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following table sets forth selected consolidated financial
information of the Company (i) for the nine months ended September 30,
1996 and 1995, which has been derived from the first, second and third
quarter 1996 and 1995 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, 1995, which has
been derived from the annual consolidated financial statements of the
Company and its subsidiaries audited by Arthur Andersen LLP,
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 nine months ended September 30, 1996 and 1995 reflects all
adjustments (consisting of normal recurring accruals) necessary for a
fair presentation of the Company's results. Operating results for the
nine months ended September 30, 1996 are not necessarily indicative of
the results that may be expected for the entire year ending December
31, 1996. 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>
<S> <C> <C> <C> <C> <C> <C> <C>
Nine Months
Ended
September 30, Year Ended December 31,
1996(a) 1995 1995(b) 1994(c) 1993(d) 1992(e) 1991(f)
(In millions of dollars, except per share data and where noted)
Income Statement Data:
Net sales $2,830 $2,648 $3,612 $3,351 $2,944 $2,878 $2,783
Gross margin 746 695 942 815 678 644 597
Income (loss) from
operations (562) 309 412 226 236 213 (628)
Cost of borrowed funds 56 69 87 94 89 110 131
Net income (loss) (354) 165 231 159 131 73 (742)
Net income (loss)
per share (primary) (6.86) 3.36 4.64 3.61 3.00 1.70 (18.13)
Net income (loss) per
share (fully diluted) (6.86) 3.18 4.40 3.35 2.81 1.67 (18.13)
Weighted average number
of shares outstanding
(in thousands of
shares) (primary) 51,616 49,060 49,711 44,209 43,593 43,013 040,924
Cash Flow Data:
Net cash flow from
operations 85 81 342 361 312 184 264
Capital expenditures 224 183 276 258 178 144 114
Balance Sheet Data:
Total assets 4,071 3,292 3,261 3,274 3,013 3,162 3,511
Total debt 1,147 953 893 1,212 1,004 1,099 1,172
Stockholders' equity
(deficit) (568) (295) (212) (680) (869) (1,008) (1,076)
</TABLE>
_________________
(a) As indicated in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," Iincome from operations for
the nine months ended September 30, 1996 includes the Company's net
pretax charge of $875 million for asbestos litigation claims
which may be received after 1999 and probable additional
insurance recovery. A pretax gain of $37 million from the sale of
the Company's ownership interest in its Japanese affiliate Asahi
Fiber Glass Co. Ltd is also included in income from operations for
the nine months ended September 30, 1996, as well as other one-
time special charges totaling $42 million which include valuation
adjustments associated with prior divestitures, major product line
productivity initiatives and a contribution to the Owens Corning
Foundation.
(b) As indicated in "Management's Discussion and Analysis of Financial
Condition and Results of Operations," net income for 1995 of $231
million, or $4.64 per share ($4.40 per share fully diluted),
included a one time gain of $8 million or $.16 per share ($.15 per
share fully diluted ), which was the result of a tax loss
carryback.
6
<PAGE>
(c) As indicated in "Management's Discussion and Analysis of
Financial Condition and Results of Operations," net income for 1994
of $159 million included the following offsetting special items: an
after-tax gain of $123 million, or $2.78 per share ($2.45 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 $1.92 per share ($1.69 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 $.63
per share ($.56 per share fully diluted), to reflect adoption of
SFAS No. 112, "Employers' Accounting for Postemployment Benefits."
(d) 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.
(e) 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).
(f) 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.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
NOTE: (All per share information in this section is on a fully
diluted basis. All references to results from ongoing operations
exclude the impact of special items reported for the relevant period.)
Results of Operations
Nine Months Ended September 30, 1996
For the third quarter of 1996, the Company reported net income of
$80 million, or $1.44 per share, an increase of 14 percent from net
income of $70 million, or $1.28 per share, for the quarter ended
September 30, 1995. The earnings growth from operations reflects
primarily the benefits of acquisitions, strong results from the
roofing and foam businesses, and a favorable litigation settlement
with a former supplier, partially offset by increased administrative
charges resulting from the Company's continuing implementation of its
global productivity initiative, Advantage 2000.
Net sales were $1,025 million for the quarter ended September 30,
1996, an 11 percent increase from the 1995 level of $927 million. The
growth is attributable to volume increases in the Building Materials
segment worldwide, particularly in the U.S., combined with the
incremental increases from acquisitions. Gross margin for the quarter
ended September 30 was 27 percent of sales in 1996, compared to 26
percent in 1995.
For the nine months ended September 30, 1996, the Company reported a
net loss of $354 million, or $6.86 per share, compared to net income
of $165 million, or $3.18 per share, for the comparable 1995 period.
The net loss was the result of a $1.1 billion charge taken during the
second quarter to quantify the Company's liability for asbestos claims
which may be received after 1999 as well as a probable $225 million
additional recovery from insurance carriers (collectively, the
"asbestos charge"), having a combined impact after taxes of $542
million. Excluding the impact of the asbestos charge and the special
items reported in the first quarter of 1996, net income for the first
nine months of 1996 was $188 million, or $3.42 per share, an increase
of 14% over the comparable prior year period. Net sales for the nine
months ended September 30, 1996 were $2.830 billion, a 7% increase
over the $2.648 billion reported in the first nine months of 1995.
This increase reflects the incremental sales from the Company's
acquisitions in combination with the improvement in the Building
Materials segment, particularly in the U.S., where increased demand
due to natural disasters in the East has required expansion of service
territories of several roofing plants.
Marketing and administrative expenses from ongoing operations for
the nine months ended September 30, 1996 increased approximately 13%
over the same period in 1995, primarily as a result of incremental
administrative expenses from the acquisitions late in 1995 and 1996 as
well as the impact of the continuing implementation of the Company's
Advantage 2000 program. Advantage 2000 is a business system designed
to accelerate the speed and simplify the processes of doing business
globally. When fully implemented, the Advantage 2000 program will
replace over 200 fragmented information systems with a fully
integrated system, leading to increased productivity and cost savings.
In the Building Materials segment, sales increased 17% and 11% for
the quarter and nine month periods ended September 30, 1996,
respectively, compared to the same periods of the prior year. This
growth reflects the incremental sales from acquisitions combined with
an increase in volume worldwide, particularly in the U.S. The third
quarter sales increase in the U.S. was largely driven by the roofing
business which benefited from an increase in demand. Additionally, the
Company continues to realize the benefits of integrating new products
into its distribution systems, improving the sales of products like
FOAMULAR (R) extruded polystyrene. The Company expects further
benefits from this integration combined with its newly introduced
System Thinking(TM) strategy, which links the Company's growing
product offering with technical expertise, to provide solution-
oriented systems.
Income from ongoing operations for Building Materials increased 23%
for the quarter and 11% for the nine months ended September 30, 1996
when compared to the same periods in 1995. The increase in the third
quarter is primarily due to productivity improvements in the roofing
business and improving profitability from Canadian operations.
8
<PAGE>
In the third quarter of 1996, the Company acquired substantially all
the assets of the foam insulation business of Celfort Celfort
Construction Materials, Inc. of Canada. Renamed OC Celfortec, the
Valleyfield, Quebec business, which produces FOAMULAR (R) rigid
polystyrene foam insulation, is an important part of the Company's
growth agenda into the foam insulation business. The acquisition of
Celfortec increases the Company's foam insulation plants to six, with
a seventh under construction in China.
Additionally, at the end of the third quarter the Company reached an
agreement to acquire a majority interest in Acoustical Fibreglass
Insulation (Mnfg) (Pty) Ltd., the largest South African manufacturer
of glass fiber reinforcements and glass fiber and rock wool
insulation. The new company, headquartered in Johannesburg, South
Africa, will be known as Owens Corning South Africa (Pty) Ltd.
In the second quarter of 1996, the Company acquired certain U.S.
assets of Partek Insulation, Inc., a subsidiary of Partek North
America, Inc. Partek's rockwool-based insulation will help the Company
extend its mechanical insulation product offering into higher-
temperature applications. Additionally the Company acquired the United
Kingdom-based Linpac Insulation. With production facilities in the
U.K. and Spain, Linpac's extruded polystyrene (XPS) PolyFoam(R)
insulation will be added to the Company's European building materials
product line.
In the Composite Materials segment, sales decreased slightly for the
quarter and nine months ended September 30, 1996, compared to the same
periods of the prior year. Gains in Latin America, an identified
growth region, and in the U.S., were more than offset by declines in
Europe and Canada, attributable to a softening demand, as well as a
strengthening U.S. dollar. Composite Materials income from operations
in the third quarter of 1996 increased 9% compared to the third
quarter of 1995. For the nine months ended September 30, 1996, income
from ongoing operations increased 12% compared to the same period in
1995, primarily due to an improvement in pricing combined with
productivity initiatives, particularly in the U.S.
Fiscal Years 1995, 1994 and 1993
Net income for the year ended December 31, 1995 was $231 million, or
$4.40 per share, compared to net income of $159 million, or $3.35 per
share, and net income of $131 million, or $2.81 per share, for the
years ended December 31, 1994 and 1993, respectively. The 1995
earnings growth reflects pricing gains and the benefits of
acquisitions, as well as a one time gain of $8 million or $.15 per
share which was the result of a tax loss carryback. Excluding the
impact of the tax benefit, net income for the year ended December 31,
1995, was $223 million, or $4.25 per share. Please see Note 8 to the
Consolidated Financial Statements of the Company as of December 31,
1995, incorporated herein by reference.
Net income of $159 million for the year ended December 31, 1994,
included the following offsetting special items: an after-tax gain of
$123 million, or $2.45 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 $1.69 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," 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."
Please see Notes 6, 16, and 17 to the Consolidated Financial
Statements of the Company as of December 31, 1995, incorporated herein
by reference.
Excluding special items, net income for the year ended December 31,
1993 was $118 million, or $2.56 per share. The 1993 special items
included a credit of $26 million, or $.53 per share, for the
cumulative effect of adopting the accounting standard for income taxes
(SFAS No. 109); a one time gain of $14 million, or $.29 per share,
reflecting a tax benefit resulting from a revaluation of deferred
taxes, offset in part by an increase in the Company's corporate tax
liability, necessitated by the increase in the federal statutory tax
rate; an after-tax charge of $5 million, or $.10 per share, for the
write-down of the Company's hydrocarbon ventures to their net
realizable value; and a charge of $23 million, or $.47 per share, for
the restructuring of the Company's European operations. Please see
Notes 8 and 16 to the Consolidated Financial Statements of the Company
as of December 31, 1995, incorporated herein by reference.
9
<PAGE>
Net sales were $3.612 billion for the year ended December 31, 1995,
reflecting an 8% increase from the 1994 level of $3.351 billion. Net
sales in 1993 were $2.944 billion. Most of the 1995 growth is
attributable to pricing gains achieved worldwide, with incremental
growth resulting from acquisitions, which occurred mid year 1994 and
throughout 1995. Please see Note 5 to the Consolidated Financial
Statements of the Company as of December 31, 1995, incorporated herein
by reference. Sales outside the U.S. represented 27% of the total
sales for the year ended December 31, 1995 compared to 24% for the
years 1994 and 1993. Gross margin for the year ended December 31, 1995
increased to 26%, compared to 24% and 23% in 1994 and 1993,
respectively, reflecting primarily pricing gains worldwide.
In the Building Materials segment, sales increased 6% for the year
ended December 31, 1995 compared to 1994. This growth reflects pricing
gains, and incremental sales from the 1995 acquisitions partially
offset by a decline in volume, particularly in the Canadian markets.
Income from operations for Building Materials decreased 9% from 1994
levels, after excluding the 1994 charge for restructure and other
initiatives, primarily due to the weak economic conditions in Canada
and start up costs associated with the Company's new insulation plant
in Guangzhou, China.
Building Materials sales in Europe increased 45% over the 1994
level, primarily resulting from a full year of sales from the June
1994 acquisition of the United Kingdom based insulation and industrial
supply businesses of Pilkington plc (the "U.K. Acquisition"), and the
addition of a second production line at the Company's insulation plant
in Vise, Belgium. Late in the third quarter of 1995, the Company began
shipping product from its insulation manufacturing facility in
Guangzhou, China and announced plans for the construction of its
second insulation plant in China, to be built in Shanghai. Roofing
margins improved in 1995, driven primarily by improved pricing, and
volume growth, including the successful introduction of Prominence(R)
roofing shingles. The window business achieved significant sales
growth and productivity improvements during the year, but has not yet
reached break-even. In the foam insulation and related product
markets, the Company has expanded its position with the acquisition of
Falcon Manufacturing of Michigan, Inc. The Company also completed four
other acquisitions in 1995 which are expected to contribute to the
Company's overall growth strategy. These acquisitions increased the
Company's small furnace technology base, as well as expanded its
position in fabricated systems for the original equipment
manufacturing market and its product offering for the window market.
The Company further expanded its Building Materials multi-product
offering in 1995 with the introduction of two branded products,
Transitions(TM) vinyl siding and PinkWrap(TM) housewrap.
In 1995 Miraflex(TM), the revolutionary new form of glass fiber
developed by Owens Corning which combines two different glass
compositions into one fiber, was successfully introduced to North
American markets in its first commercial application, PinkPlus(R)
insulation featuring Miraflex(TM) fiber. The Miraflex(TM) fibers are
flexible, soft to the touch, virtually itch-free, resilient and form-
filling, characteristics not normally associated with glass or
inorganic fibers, which is driving the success of the new fiber.
In the Composite Materials segment, sales increased 12% for the year
ended December 31, 1995, or approximately 20% excluding the Company's
previously consolidated polyester resins business, discussed below.
The Composite Materials sales increase, driven by strong worldwide
market demand, is attributable to volume and pricing gains, coupled
with favorable currency impact from European markets. In the U.S.,
sales increased slightly, while in Europe, the Company's composites
operations benefited from European economic improvement which resulted
in increased demand, coupled with the positive effects of productivity
initiatives.
In 1995 the Company announced plans to expand global composites
capacity by 135,000 metric tons by 1997, with a significant portion of
the new capacity coming from the refiring of the second furnace at the
Company's Jackson, Tennessee facility. The remaining expansion will
be at other existing facilities in the U.S., Europe, Asia and Latin
America. The Company in 1995 began a new large diameter glass
reinforced plastic (GRP) pipe facility in China, pipe joint ventures
in Spain and Argentina, as well as a composite materials service
center in Colombia. Early in 1996 the Company announced the formation
of a pipe joint venture in Colombia, increasing the Company's global
presence.
During the third quarter of 1994, the Company entered into a joint
venture with Alpha Corporation of Tennessee, whereby the two companies
combined their existing resin businesses for fifty percent interests
in Alpha/Owens-Corning, L.L.C., the largest manufacturer of polyester
resins in North America. Please see Note 5 to the Consolidated
Financial Statements of the Company as of December 31, 1995,
incorporated herein by reference.
10
<PAGE>
The Company's cost of borrowed funds for the year ended December 31,
1995 was $7 million lower than 1994, reflecting decreased borrowings
resulting from the conversion of the Company's 8% convertible junior
subordinated debentures into shares of Common Stock. Additionally, the
proceeds from the issuance of $200 million of convertible preferred
securities were partially used to pay off the Company's short-term
credit facility, established during the second quarter of 1994 to
finance the U.K. Acquisition. Please see Notes 2, 3 and 4 to the
Consolidated Financial Statements of the Company as of December 31,
1995, incorporated herein by reference.
At December 31, 1995, certain of the Company's foreign subsidiaries
have tax net operating loss carryforwards of approximately $27
million. The company has $322 million in net deferred tax assets at
December 31, 1995, all of which management expects will be realized
through future income from operations. Please see Note 8 to the
Consolidated Financial Statements of the Company as of December 31,
1995, incorporated herein by reference.
Liquidity, Capital Resources and Other Related Matters
Nine Months Ended September 30, 1996
In June 1996 the Company announced that its Board of Directors had
approved an annual dividend policy of 25 cents per share and declared
a quarterly dividend of 6-1/4 cents per share payable on October 15,
1996 to shareholders of record as of September 30, 1996. Please see
Note 7 to the Consolidated Financial Statements of the Company as of
September 30, 1996, incorporated herein by reference.
Cash flow from operations, excluding asbestos-related activities,
was $114 million for the third quarter of 1996, compared to $135
million for the third quarter of 1995. The decrease is attributable
in part to an increase in working capital, particularly receivables,
due to strong September sales, coupled with increased composites
inventories, where short-term capacity is being modified as the
Company's customers adjust their inventory levels.
At September 30, 1996, the Company's net working capital was $34
million and its current ratio was 1.03, compared to negative $9
million and .99, respectively, at December 31, 1995. The increase in
1996 is in part due to an increased sales volume driving receivables
as well as incremental receivables from acquisitions, offset in large
part by increased short-term borrowings. Inventories at September 30,
1996 increased 38% over December 31, 1995 levels due to anticipated
fourth quarter demand together with the incremental inventories of
acquisitions as well as the item discussed in the preceding paragraph.
Inventories as a percent of sales for the nine months ended September
30, 1996 and 1995 remained relatively unchanged at approximately 12%.
Please see Notes 4 and 5 to the Consolidated Financial Statements of
the Company as of September 30, 1996, incorporated herein by
reference.
The Company's total borrowings at September 30, 1996 were $1.147
billion, $254 million higher than at year-end 1995. The Company's
increased borrowings in 1996 are being driven by the build of
inventories for anticipated fourth quarter demand as well as other
working capital requirements.
As of September 30, 1996, the Company had unused lines of credit of
$231 million available under long-term bank loan facilities and an
additional $137 million under short-term facilities, compared to $358
million and $239 million, respectively, at year-end 1995. The decrease
in available lines of credit is primarily the result of increased
borrowings. Letters of credit issued under the Company's long-term
U.S. loan facility, most of which support appeals from asbestos
trials, reduce credit availability of that facility. The impact of
such reduction is reflected in the unused lines of credit discussed
above.
Capital spending for property, plant and equipment, excluding
acquisitions and investments in affiliates, was $57 million and $224
million for the quarter and nine months ended September 30, 1996,
respectively. For the year 1996, the Company anticipates capital
spending, exclusive of acquisitions and investments in affiliates, to
be approximately $285 million. The Company expects that funding for
these expenditures will be from the Company's operations and external
sources as required.
11
<PAGE>
Gross payments for asbestos litigation claims during the third
quarter of 1996, including $13 million in defense costs and $3 million
for appeal bond and other costs, were $57 million or $34 million after-
tax. During the third quarter of 1996, the Company received
approximately 5,400 new asbestos personal injury cases and closed
approximately 2,100 cases. Over the next twelve months, the Company's
total payments for asbestos litigation claims, including defense
costs, are expected to be approximately $325 million. Proceeds from
insurance of $100 million are expected to be available to cover these
costs, resulting in a net pretax cash outflow of $225 million, or $135
million after-tax. Please see Note 8 to the Consolidated Financial
Statements of the Company as of September 30, 1996, 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.
In June 1996 the Company filed a lawsuit in the U.S. District Court
for the Eastern District of Louisianafederal court in New Orleans
alleging a massive scheme to defraud the Company in connection with
asbestos litigation cases. The suit alleges that medical test results
in tens of thousands of asbestos claims were falsified by the owners
and operators of threecertain pulmonary function testing laboratories.
The Company believes that as many as 40,000 claims in its current
backlog involve plaintiffs whose pulmonary function tests were
improperly administered or manipulated by the testing laboratory or
otherwise inconsistent with proper medical practice.
Fiscal Years 1995, 1994 and 1993
Cash flow from operations, excluding asbestos-related activities,
was $342 million for 1995, compared to $361 million for 1994. The
decline in cash flow from operations from 1994 to 1995 was due in part
to funding of a Voluntary Employee's Beneficiary Association trust for
tax planning purposes. Total receivables at December 31, 1995 were $15
million lower than the December 31, 1994 level due to the sale of $50
million in receivables early in 1995, resulting in a total of $100
million of receivables sold under the 1994 sales agreement. The
receivables sold were largely offset by increased sales in 1995.
Please see Notes 6 and 10 to the Consolidated Financial Statements of
the Company as of December 31, 1995, incorporated herein by reference.
At December 31, 1995, the Company's net working capital was negative
$9 million and its current ratio was .99, compared to negative $143
million and .87 at December 31, 1994, and negative $49 million and .94
at December 31, 1993, respectively. The increase in 1995 was due in
part to decreased short-term borrowings as a result of the repayment
of the financing used for the U.K. Acquisition. Excluding the impact
of the short-term borrowings used to finance the U.K.Acquisition, the
Company's net working capital was negative $33 million and its current
ratio was .97 at December 31, 1994.
During 1995, virtually all of the Company's $173 million issue of 8%
convertible junior subordinated debentures were converted. Debentures
not converted were redeemed for cash. The conversion resulted in the
issuance of 5.8 million new shares of Common Stock. Also in 1995,
Owens-Corning Capital, L.L.C., a Delaware limited liability company,
of which all of the common limited company interests are indirectly
owned by the Company, issued $200 million of 6.5% cumulative
convertible preferred securities. The proceeds from the issuance were
loaned to the Company and partially used to repay its short-term
credit facility. Please see Notes 2 and 4 to the Consolidated
Financial Statements of the Company as of December 31, 1995,
incorporated herein by reference.
The Company's total borrowings at December 31, 1995 were $893
million, $319 million lower than at year-end 1994, primarily due to
the conversion of its 8% convertible junior subordinated debentures,
and the repayment of debt through the issuance of the above mentioned
preferred securities.
Capital spending for property, plant and equipment, excluding
acquisitions, was $276 million during 1995. At the end of 1995,
approved capital projects were $134 million. The Company expects that
funding for these expenditures will be from the Company's operations
and external sources as required.
12
<PAGE>
Gross payments for asbestos litigation claims during 1995, including
$48 million in defense costs and $6 million for appeal bond and other
costs, were $308 million. Proceeds from insurance were $251 million,
$100 million of which was received as a prepayment of a third quarter
1995 settlement with a major insurer, which confirmed the Company's
access to $330 million of insurance for payment of asbestos litigation
claims. Excluding the impact of the $100 million prepayment by the
carrier, cash flow from asbestos related activities was a net pretax
cash outflow of $157 million, or $94 million after-tax. During 1995,
the Company received approximately 55,900 new asbestos personal injury
cases and closed approximately 21,900 cases. Please see Note 21 to the
Consolidated Financial Statements of the Company as of December 31,
1995, incorporated herein by reference.
General Matters - as of September 30, 1996
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, including two state
Superfund sites where the Company is the primary generator. 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 third quarter of 1996, the Company was designated a PRP in
such federal, state, local or private proceedings for five additional
sites. At September 30, 1996, a total of 43 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 remediation at a number of other sites
at which it has not been designated a PRP. The Company has established
an $18 million reserve for its Superfund (and similar state, local and
private action) contingent liabilities. 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 to which the Act will affect it.The Company
anticipates that its sources to be regulated will include glass fiber
manufacturing and asphalt processing activities. The EPA's announced
schedule is to issue regulations covering glass fiber manufacturing by
late 1997 and asphalt processing activities by late 2000, with
implementation as to existing sources up to three years thereafter.
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 materially 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 September 30, 1996; 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 September 30, 1996, approximately 155,500 asbestos personal
injury claims were pending against the Company, of which 29,700 were
received in the first nine months of 1996. The Company received
approximately 55,900 such claims in 1995, 29,100 in 1994, and 32,400
in 1993.
13
<PAGE>
Many of the recent claims appear to be the product of mass screening
programs and not to involve malignancies or other significant asbestos
related impairment. The Company believes that as many as 40,000 of the
recent claims involve plaintiffs whose pulmonary function tests (PFTs)
were improperly administered or manipulated by the testing laboratory
or otherwise inconsistent with proper medical practice, and it is
investigating a number of testing organizations and their methods. On
June 19, 1996 the Company filed suit in federal court in New Orleans
against the owners and operators of certain pulmonary function testing
laboratories in the southeastern US challenging such improper testing
practices. This matter is now in active pre-trial discovery.
The Company is engaging in discussions with a group of approximately
30 leading plaintiffs' law firms to explore approaches toward
resolution of its asbestos liability. The discussions involve the
possible resolution of both pending claims and claims that may be
filed in the future. While discussions are ongoing, the law firms
involved in the talks have agreed to refrain from serving any further
asbestos claims on the Company unless they involve malignancies.
Unless extended, this agreement will expire on November 1, 1996. This
agreement may have impacted the number of cases received by the
Company during the second and third quarters of 1996.
Through September 30, 1996, the Company had resolved (by settlement or
otherwise) approximately 179,000 asbestos personal injury claims,
including the dismissal in May 1996, for lack of medical proof, of
approximately 15,000 maritime cases which named Owens Corning as a
defendant, resulting in an 11,700 case reduction in the backlog after
reduction for duplicate cases and cases previously settled. During
1993, 1994, and 1995, the Company resolved approximately 60,000
asbestos personal injury claims, over 99% without trial, and incurred
total indemnity payments of $641 million (an average of about $10,700
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 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.
Insurance
As of September 30, 1996, the Company had approximately $368 million
in unexhausted insurance 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. This insurance, which is substantially confirmed,
includes both products hazard coverage and primary level non-products
coverage. Portions of this coverage are not available until 1997 and
beyond under agreements with the carriers confirming such coverage.
All of the Company's liability insurance policies cover indemnity
payments and defense fees and expenses subject to applicable policy
limits.
In addition to its confirmed primary level non-products insurance, the
Company has a significant amount of unconfirmed potential non-products
coverage with excess level carriers. For purposes of calculating the
amount of insurance applicable to asbestos liabilities, the Company
has estimated its probable recoveries in respect of this additional
non-products coverage at $225 million, which amount was recorded in
the second quarter of 1996. This coverage is unconfirmed and the
amount and timing of recoveries from these excess level policies will
depend on subsequent negotiations or proceedings.
14
<PAGE>
Reserve
The Company's 1995 financial statements included a reserve for the
estimated cost associated with asbestos personal injury claims that
may be received through the year 1999. Such financial statements did
not include any provision for the cost of unasserted claims which
might be received in years subsequent to 1999 because management was
unable to predict the number of such claims and other factors which
would affect the cost of such claims. Throughout 1996, the Company
continued to review the feasibility of making provision for the cost
of unasserted asbestos personal injury claims with respect to claims
which may be received by the Company during and after the year 2000.
In conducting such review the Company took into account, among other
things, the effect of recent federal court decisions relating to
punitive damages and the certification of class actions in asbestos
cases, the pendency of the discussions with the group of plaintiffs'
law firms referred to above, the results of its continuing
investigations of medical screening practices of the kind at issue in
the New Orleans PFT law suit, recent developments as to the prospects
for federal and state tort reform, the continued rate of case filings
at historically - high levels, additional information on filings
received during the 1993-1995 period and other factors. As a result of
the review, the Company took a non-recurring, noncash charge to
earnings of $1.1 billion in the second quarter of 1996. This charge
represented the Company's estimate of the indemnity and defense costs
associated with unasserted asbestos personal injury claims that may be
received by the Company in years subsequent to 1999.
The combined effect of the $1.1 billion charge and the $225 million
probable additional non-products insurance recovery was an $875
million charge in the second quarter of 1996.
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 in the future (the "Liabilities"),
and its estimated insurance recoveries in respect of such claims (the
"Insurance"), are reported separately as follows:
<TABLE>
<S> <C> <C>
September 30, December 31,
1996 1995
(In millions of dollars)
Reserve for asbestos
litigation claims
Current $ 325 $ 250
Other 1,735 887
Total Reserve 2,060 1,137
Insurance for asbestos
litigation claims
Current 100 100
Other 493 330
Total Insurance 593 430
Net Asbestos Liability $1,467 $ 707
</TABLE>
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 insurance, including the additional $225 million
in non-products coverage 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. The Company believes that its
estimate of Liabilities and Insurance will be sufficient to provide
for the costs of all pending and future asbestos personal injury
claims that involve malignancies or significant asbestos-related
functional impairment. While such estimates cover unimpaired claims,
the number and cost of unimpaired claims are much harder to predict
and such estimates reflect the Company's belief that such claims have
little or no value. The Company 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.
15
<PAGE>
Management Opinion
Although any opinion is subject to the uncertainties described above
and must be based on information now known to the Company, in the
opinion of management, any 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. Management believes that any such additional costs
would not impair the ability of the Company to meet its obligations,
to reinvest in its business or to take advantage of attractive
opportunities for growth.
NON-ASBESTOS LIABILITIES
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 52,048,661 shares were issued and outstanding as of September
30, 1996 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.
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.
16
<PAGE>
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 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.
17
<PAGE>
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 the 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 The Chase Manhattan 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.
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.
18
<PAGE>
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 66-2/3% 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
ChaseMellon Shareholder Services, located in New York, New York.
PLAN OF DISTRIBUTION
The distribution of the shares offered hereby by the Selling
Stockholder 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 Stockholderamong the Company, the Selling
Stockholder and a corporate affiliate of the Selling Stockholder. Such
transactions may be effected on a stock exchange or the
over-the-counter market. The Selling Stockholder will effect such
transactions by selling shares to or through Goldman, Sachs & Co. The
Company has agreed to indemnify the Selling Stockholder and certain
control and other related persons in certain circumstances against
certain liabilities, including liabilities under the Securities Act.
The Selling Stockholder has 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 Stockholder having furnished
incorrect written information to the Company for use in the
Registration Statement. The Company and the Selling Stockholder 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
Stockholder. 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
Christian L. Campbell, Esq., Senior Vice President, General Counsel
and Secretary of the Company. Mr. Campbell is a direct or indirect
owner of 7,483 shares of Common Stock and 44,500 options to buy shares
of Common Stock, 10,833 of which are currently exercisable.
19
<PAGE>
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, 1995 have been audited by
Arthur Andersen LLP, 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 the 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.
20
<PAGE>
No person has been authorized to give any
information or to make any representations 472,250 Shares
other than those contained in this Prospectus
and, if given or made, such information or
representations must not be relied upon
as having been authorized. This Prospectus
does not constitute an offer to sell or the
solicitation 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 Owens Corning
information contained herein is
correct as of any time subsequent to the date
of such information.
Common Stock
(par value $0.10 per share)
TABLE OF CONTENTS
Page
Available information 2
Incorporation of Certain Documents by Reference 2
The Company 3
Selling Stockholder 4
Price Range of Common Stock and Dividends 4
Use of Proceeds 5
Condensed Consolidated Capitalization 5
Selected Consolidated Financial Information 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Asbestos and Other Litigation 13
Description of Capital Stock 16
Plan of Distribution 19 Goldman, Sachs & Co.
Validity of Shares 19
Experts 20
<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 and
the New York Stock Exchange and Toronto Stock Exchange listing fees.
Securities and Exchange Commission filing fee $ 5,438
New York Stock Exchange listing fee 1,653
Toronto Stock Exchange listing fee 1,263
Printing and engraving expenses -
Accountant's fees and expenses 15,000
Legal fees and expenses 7,000
Miscellaneous expenses 2,500
Total $ 32,854
___________
* No portion of these expenses will be borne by the Selling Stockholder.
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
Registrant of its directors and officers.
B. Article FOURTEENTH of the Registrant's Certificate of
Incorporation, as amended, provides as follows with respect to the
indemnification of the Registrant'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 Registrant's By-Laws provides as follows with
respect to the indemnification of the Registrant's directors and
officers:
II-1
<PAGE>
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 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 the 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 ofr 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 companies 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 Registrant has entered into an Indemnity Agreement with each
member of the Registrant'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 Registrant is required to indemnify the director to
the fullest extent authorized by the Registrant'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
Registrant advance to the director all expenses relating to Claims and
contains an undertaking by the director to reimburse the Registrant
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 Registrant are covered by
insurance policies, maintained by the Registrant 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.
Exhibit
No. Description
1 Form of agreement between Goldman, Sachs & Co.,
the Registrant and Celfort Construction Materials,
Inc.*
4(a) Certificate of Incorporation of the Registrant, as amended
(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, 1995).
4(b) By-laws of the Registrant, as amended
(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, 1995.)).
4(c) Specimen Certificate of Common Stock of the
Registrant (incorporated by reference to Exhibit 4(c) to
Registrant's Registration Statement on Form S-8,
Registration No. 333-09367).
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 (incorporated by
reference to Exhibit 4(f) to Registrant's Registration
Statement on Form S-3, Registration No. 33-55163).
4(g) Common Stock Registration Rights Agreement, dated
as of August 30, 1996, 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 LLP, independent public
accountants.
23(b) Consent of counsel (included in Exhibit 5).
24 Powers of Attorney.*
- ------------------
* Previously filed
Item 17. Undertakings.
(a) 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-3
<PAGE>
(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. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective 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.
(b) 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.
(c) Policy Regarding Indemnification.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the 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 Act and will be
governed by the final adjudication of such issue.
(d) Registration Statements Permitted by Rule 430A.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this registration statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
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 Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City
of Toledo, State of Ohio, on December 9, 1996.
OWENS CORNING
By: /s/ DAVID W. DEVONSHIRE
(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:
<TABLE>
<S> <C> <C>
SIGNATURES TITLE DATE
/s/ GLEN H. HINER* Chairman of the Board, Chief December 9, 1996
(Glen H. Hiner) Executive Officer, and Director
(principal executive officer)
/s/ DAVID W. DEVONSHIRE Senior Vice President and Chief December 9, 1996
(David W. Devonshire) Financial Officer (principal
financial officer)
/s/ STEVEN J. STROBEL Vice President and Controller December 9, 1996
(Steven J. Strobel)
/s/ NORMAN P. BLAKE, JR.* Director December 9, 1996
(Norman P. Blake, Jr.
________________________ Director December 9, 1996
(Leonard S. Coleman, Jr.)
/s/ WILLIAM W. COLVILLE* Director December 9, 1996
(William W. Colville)
/s/ JOHN H. DASBURG* Director December 9, 1996
(John H. Dasburg)
/s/ LANDON HILLIARD* Director December 9, 1996
(Landon Hilliard)
/s/ SIR TREVOR HOLDSWORTH* Director December 9, 1996
(Sir Trevor Holdsworth)
/s/ JON M. HUNTSMAN, JR.* Director December 9, 1996
(Jon M. Huntsman, Jr.)
/s/ ANN IVERSON* Director December 9, 1996
(Ann Iverson)
/s/ W. WALKER LEWIS* Director December 9, 1996
(W. Walker Lewis)
/s/ FURMAN C. MOSELEY, JR.* Director December 9, 1996
(Furman C. Moseley, Jr.)
/s/ W. ANN REYNOLDS* Director December 9, 1996
(W. Ann Reynolds)
*BY: /s/ DAVID W. DEVONSHIRE
Attorney-in-fact
II-5
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description Page
1 -Form of agreement between Goldman, Sachs & Co., the Registrant and
Celfort Construction Materials, Inc.*
4(a) -Certificate of Incorporation of the Registrant, as amended (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, 1995).
4(b) -By-laws of the Registrant, as amended (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, 1995.) ).
4(c) -Specimen Certificate of Common Stock of the Registrant (incorporated by
reference to Exhibit 4(c) to Registrant's Registration Statement on Form
S-8, Registration No. 333-09367).
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 (incorporated by reference to Exhibit 4(f) to Registrant's
Registration Statement on Form S-3, Registration No. 33-55163).
4(g) -Common Stock Registration Rights Agreement, dated as of August 30,
1996, 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 LLP, independent public accountants.
23(b) -Consent of counsel (included in Exhibit 5).
24 -Powers of Attorney.*
- ------------------
*Previously filed
</TABLE>
27191.4
<PAGE>
Exhibit 4(g)
COMMON STOCK REGISTRATION RIGHTS AGREEMENT
Dated as of August 30, 1996
by and among
OWENS CORNING,
JANNOCK LIMITED
and
CELFORT CONSTRUCTION MATERIALS INC.
<PAGE>
COMMON STOCK REGISTRATION RIGHTS AGREEMENT
THIS COMMON STOCK REGISTRATION RIGHTS AGREEMENT (the
"Agreement") is made and entered into as of August 30, 1996 among
Owens Corning, a Delaware corporation (the "Company"), Jannock
Limited, an Ontario corporation ("Jannock"), and Celfort
Construction Materials Inc., a Canada corporation and an indirect
subsidiary of Jannock (the "Purchaser").
This Agreement is made pursuant to the Asset Purchase
Agreement, dated as of August 30, 1996 (the "Purchase
Agreement"), between the Purchaser, Jannock, the Company and OC
Celfortec Inc., a Canada corporation and an indirect wholly owned
subsidiary of the Company ("OC Sub"), relating to the acquisition
by OC Sub of substantially all the assets of the Purchaser's
extruded polystyrene insulation products business in
consideration of (among other things) the delivery by OC Sub to
the Purchaser of OC Sub's promissory note in the form set forth
in the Purchase Agreement, which the parties contemplate will be
exchanged for an aggregate of 472,250 shares of Common Stock, par
value $.10 per share, of the Company.
In order to induce the Purchaser to enter into the
Purchase Agreement and to accept such consideration, the Company
agrees with Jannock and the Purchaser as follows:
1. Definitions. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Broker" shall mean the New York city office of
Goldman, Sachs & Co.
"Business Day" shall mean a day that is not a
Legal Holiday.
"Closing Date" shall mean the Date of Closing as
defined in the Purchase Agreement.
"Common Stock" shall mean the common stock, par
value $.10 per share, of the Company.
"Company" shall have the meaning set forth in the
preamble and shall also include the Company's
successors.
"Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended from time to time.
"Holder" shall mean the Purchaser, for so long as
it owns any Registrable Securities, and each of its
successors, assigns and direct and indirect transferees
who become registered owners of Registrable Securities.
<PAGE>
"Legal Holiday" shall mean a Saturday, a Sunday or
a day on which banking institutions in New York, New
York are required by law, regulation or executive order
to remain closed.
"Majority of the Registrable Securities" shall
mean holders of a majority of the Shares.
"Person" shall mean an individual, partnership,
corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in
any Registration Statement (including, without
limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of
an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any
portion of the Registrable Securities covered by such
Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such
Prospectus.
"Purchase Agreement" shall have the meaning set
forth in the preamble.
"Purchaser" shall have the meaning set forth in
the preamble.
"Registrable Securities" shall mean any of (i) the
Shares and (ii) Common Stock or other securities issued
or issuable with respect to any Registrable Securities
by way of stock dividend or stock split or in
connection with a combination of shares,
recapitalization, merger, consolidation or other
reorganization or otherwise. As to any particular
Registrable Securities, such securities shall cease to
be Registrable Securities when (i) a Registration
Statement with respect to such securities shall have
been declared effective under the Securities Act and
such securities shall have been disposed of pursuant to
such Registration Statement, (ii) such securities have
been sold to the public pursuant to Rule 144(k) (or any
similar provision then in force, but not Rule 144A)
under the Securities Act, (iii) such securities shall
have been otherwise transferred by such Holder and new
<PAGE>
certificates for such securities not bearing a legend
restricting further transfer shall have been delivered
by the Company or its transfer agent and subsequent
disposition of such securities shall not require
registration or qualification under the Securities Act
or any similar state law then in force or (iv) such
securities shall have ceased to be outstanding.
"Registration Statement" shall mean any
registration statement of the Company, that covers any
of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus,
amendments and supplements to such registration
statement, including post-effective amendments, all
exhibits and all material incorporated by reference in
such registration statement.
"Restricted Security" shall have the meaning set
forth in Rule 144(a)(3) under the Securities Act as
modified by applicable SEC interpretations.
"Rule 144" shall mean Rule 144 under the
Securities Act, or any similar rule (other than
Rule 144A) or regulation hereafter adopted by the SEC
providing for offers and sales of securities made in
compliance therewith resulting in offers and sales by
subsequent holders that are not affiliates of an issuer
of such securities being free of the registration and
prospectus delivery requirements of the Securities Act.
"Rule 144A" shall mean Rule 144A under the
Securities Act, as such Rule may be amended from time
to time, or any successor thereto.
"SEC" shall mean the Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of
1933, as amended from time to time.
"Shares" shall mean the shares of Common Stock
delivered to the Purchaser pursuant to the Share
Subscription Agreement of even date herewith between
the Purchaser and the Company.
"Transfer Agent" shall mean Chemical Bank and any
successor transfer agent or registrar for the Common
Stock.
2. Registration and Manner of Sale. (a) No later than
sixty (60) days after the Closing Date, the Company shall prepare
and file with the SEC a registration statement with respect to
<PAGE>
all of the Registrable Securities. The Company thereafter shall
use reasonable efforts to have such registration statement
declared effective by the SEC: (i) two Business Days following
the first date on which the closing price of the Registrable
Securities equals or exceeds $45.00 per share, but in any event
(ii) no later than seventy-five (75) days after the Closing Date
(the "Effectiveness Date"), and in either case shall use
reasonable best efforts to take all other actions reasonably
necessary to permit public resale of the Registrable Securities
in accordance with the order referred to in Section 2(b) until
all Registrable Securities are sold.
(b) Promptly following the Closing Date, the Purchaser
shall arrange to have an order placed with the Broker, which
order shall authorize and direct the Broker to sell the
Registrable Securities (conditioned upon a registration statement
covering the Registrable Securities being effective at the time
of sale): (i) at any time, if the sale can be effected at or
above a price of $45.00 per share, and (ii) to the extent not
sold prior to the Effectiveness Date, as promptly as practicable,
but in any event within fifteen (15) Business Days after the
Effectiveness Date, at the then prevailing market price, in the
case of clause (i) or (ii) without materially affecting the
market price.
(c) In the event that on the date (the "Sale
Termination Date") that is fifteen (15) Business Days after the
Effectiveness Date any of the Registrable Securities have not
been sold in accordance with Section 2(b) (other than as a result
of a breach by the Holder(s)), within five Business Days after
the Sale Termination Date, but in no event later than December
15, 1996, (i) the Company shall cause a Person which is not an
Affiliate of the Company (an "Unaffiliated Purchaser") to
purchase for its own account, in cash in immediately available
funds, any and all of the Registrable Securities then remaining
unsold, and (ii) to the extent that the aggregate net proceeds
received by the Holder(s) from the Unaffiliated Purchaser and
from any sales of Registrable Securities theretofore sold by the
Holder(s) pursuant to Section 2(b) (net of all brokerage
commissions) is less than Cdn. $29,000,000, the Company shall
cause OC Sub to pay to the Holder(s) the applicable Share
Proceeds Adjustment Amount in accordance with Section 4.4 of the
Purchase Agreement.
(d) Notwithstanding anything in this Section 2 or
Section 3, no Holder shall, for a period of 12 months after the
Closing Date, sell any Shares or Registrable Securities to or for
the benefit of any resident of Canada or through the facilities
of The Toronto Stock Exchange and any Holder shall instruct the
Broker (or any other broker or dealer acting as its agent in
respect of any such sale during such 12 month period) not to sell
any Shares or Registrable Securities to or for the benefit of any
resident of Canada or through the facilities of The Toronto Stock
Exchange.
3. Compliance with the Securities Act.
3.1 Sales and Transfers of Registrable Securities.
(a) None of the Registrable Securities may be sold, transferred
or otherwise disposed of (any such sale, transfer or other
disposition, a "sale"), except (x) in a registration effected
pursuant to Section 2 or (y) in compliance with this Section 3.
(b) The Purchaser may sell its Registrable Securities
only pursuant to Section 2 hereof or if:
(i) such sale is made in reliance on an exemption from
the registration requirements of the Securities Act and
the Purchaser delivers to the Company an Opinion of
Counsel reasonably acceptable to the Company to the
effect that such transfer is in compliance with the
Securities Act; and
(ii) the transferee of such Registrable Securities
agrees to be bound by the provisions of this Section 3
with respect to any sale of any of such Registrable
Securities.
3.2 Certificates Evidencing the Registrable
Securities. (a) Upon original issuance thereof, and until such
time as the same is no longer a Restricted Security, the
Registrable Securities shall bear the following legend:
THE SHARES OF COMMON STOCK REPRESENTED HEREBY WERE
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), AND THE COMMON STOCK
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. THE HOLDER OF THE
COMMON STOCK REPRESENTED HEREBY AGREES FOR THE BENEFIT
OF THE ISSUER THAT (A) SUCH COMMON STOCK MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) PURSUANT
TO EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
ACT (AND, UPON AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE COMPANY), (b) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (c) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND
(2) IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY
ANY PURCHASER OF THE COMMON STOCK REPRESENTED HEREBY OF
<PAGE>
THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.
(b) The certificates representing such Securities and
each certificate issued in transfer thereof, shall also bear any
legend required under any applicable state securities or "blue
sky" laws.
4. Registration Procedures. In connection with the
obligations of the Company with respect to any Registration
Statement pursuant to Section 2 hereof, the Company shall:
(a) prepare and file with the SEC a Registration
Statement on the appropriate form under the Securities Act, which
form (i) shall be selected by the Company and (ii) shall comply
as to form in all material respects with the requirements of the
applicable form and include all financial statements required by
the SEC to be filed therewith, and the Company shall use all
reasonable efforts to cause such Registration Statement to become
effective and remain effective in accordance with Section 2
hereof.
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement effective as
provided in Section 2, cause each related Prospectus to be
supplemented by any required prospectus supplement and, as so
supplemented, to be filed pursuant to Rule 424 under the
Securities Act;
(c) furnish to each Holder of Registrable Securities,
without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto
and such other documents as such Holder may reasonably request,
in order to facilitate the public sale or other disposition of
the Registrable Securities;
(d) use all reasonable efforts to register or qualify
the Registrable Securities under all applicable state securities
or Blue Sky laws of such jurisdictions as any Holder thereof
covered by a Registration Statement shall reasonably request in
writing by the time the applicable Registration Statement is
declared effective by the SEC, and do any and all other acts and
things which may be reasonably necessary or advisable to enable
such Holder to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such Holder;
provided, however, that the Company shall not be required to
(i) qualify as a foreign corporation or as a dealer in securities
in any jurisdiction where it would not otherwise be required to
qualify but for this Section 4(d), (ii) file any general consent
to service of process or (iii) subject itself to taxation in any
such jurisdiction if it is not so subject;
<PAGE>
(e) advise each Holder of Registrable Securities (and
the Broker) promptly (and, if required by such Holder, confirm
such advice in writing):
(i) when a Registration Statement has become effective
and when any post-effective amendments and supplements
thereto become effective, (ii) of any request by the
SEC or any state securities authority for amendments
and supplements to a Registration Statement and
Prospectus or for additional information after the
Registration Statement has become effective, (iii) of
the issuance by the SEC or any state securities
authority of any stop order suspending the
effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose,
(iv) if, between the effective date of a Registration
Statement and the closing of any sale of Registrable
Securities covered thereby, the Company receives any
notification with respect to the suspension of the
qualification of the Registrable Securities for sale in
any jurisdiction or the initiation of any proceeding
for such purpose and (v) of the happening of any event
during the period a Registration Statement is effective
which makes any statement made in such Registration
Statement or the related Prospectus untrue in any
material respect or which requires the making of any
changes in such Registration Statement or Prospectus in
order to make the statements therein not misleading;
(f) make every reasonable effort to obtain the
withdrawal of any order suspending the effectiveness of a
Registration Statement at the earliest possible moment;
(g) furnish to each Holder of Registrable Securities
and to the Purchaser, without charge, at least one conformed copy
of each Registration Statement and any post-effective amendment
thereto (with documents incorporated therein by reference or
exhibits thereto);
(h) cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold
pursuant to such Registration Statement and not bearing any
restrictive legends and registered in such names as the selling
Holders may reasonably request at least two Business Days prior
to the closing of any sale of Registrable Securities;
(i) upon the occurrence of any event contemplated by
Section 4(e)(v) hereof, use reasonable efforts to prepare a
supplement or post-effective amendment to a Registration
Statement or the related Prospectus or any document incorporated
therein by reference or file any other required document so that,
<PAGE>
as thereafter delivered to the Purchaser of the Registrable
Securities, such Prospectus will not contain any untrue statement
of a material fact or omit to state a material fact necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading. The Company agrees to
notify each Holder to suspend use of the Prospectus as soon as
reasonably practicable and each Holder hereby agrees to suspend
use of the Prospectus until the Company has amended or
supplemented the Prospectus to correct such misstatement or
omission. At such time as such public disclosure is otherwise
made or the Company determines in good faith that such disclosure
is not necessary, the Company agrees promptly to notify each
Holder of such determination, to amend or supplement the
Prospectus if necessary to correct any untrue statement or
omission therein and to furnish each Holder such numbers of
copies of the Prospectus as so amended or supplemented as each
Holder may reasonably request;
(j) a reasonable time prior to the filing of any
Registration Statement, any Prospectus, any amendment to a
Registration Statement or amendment or supplement to a Prospectus
or any document which is to be incorporated by reference into a
Registration Statement or a Prospectus after initial filing of a
Registration Statement, provide copies of such documents to the
Holders and make available for discussion of such document the
representatives of the Company as shall be reasonably requested
by the Holders of Registrable Securities;
(k) obtain a CUSIP number for the Common Stock; and
(l) shall use its best efforts to cause the
Registrable Securities to be listed on the New York Stock
Exchange and the Toronto Stock Exchange.
The Company may, as a condition to such Holder's
participation in any Registration Statement, require each Holder
of Registrable Securities to (i) furnish to the Company such
information regarding the Holder and the proposed distribution by
such Holder of such Registrable Securities as the Company may
from time to time reasonably request in writing and (ii) agree in
writing to be bound by this Agreement.
5. Registration Expenses. (a) All fees and expenses
incident to the performance of or compliance with this Agreement
by the Company shall be borne by the Company, whether or not the
Registration Statement is filed or becomes effective, including,
without limitation, (i) all registration and filing fees
(including, without limitation, (A) fees with respect to filings
required to be made with the National Association of Securities
Dealers, Inc. in connection with an underwritten offering and
(B) fees and expenses of compliance with state securities or Blue
Sky laws (including, without limitation, reasonable fees and
<PAGE>
disbursements of counsel in connection with Blue Sky
qualifications of the Registrable Securities and determination of
the eligibility of the Registrable Securities for investment
under the laws of such jurisdictions), (ii) printing expenses
(including, without limitation, expenses of printing certificates
for Registrable Securities in a form eligible for deposit with
The Depository Trust Company and of printing prospectuses if the
printing of prospectuses is required by the managing
underwriters, if any,) (iii) messenger, telephone and delivery
expenses, (iv) fees and disbursements of counsel for the Company,
(v) fees and disbursements of all independent certified public
accountants for the Company, (vi) Securities Act liability
insurance, if the Company desires such insurance, (vii) fees and
expenses of all other Persons retained by the Company,
(viii) internal expenses of the Company (including, without
limitation, all salaries and expenses of officers and employees
of the Company performing legal or accounting duties), (ix) the
expense of any annual audit, (x) the fees and expenses incurred
in connection with the listing of the securities to be registered
on any securities exchange and (xi) the expenses relating to
printing, word processing and distributing all Registration
Statements, underwriting agreements, securities sales agreements,
indentures and any other documents necessary in order to comply
with this Agreement.
(b) Notwithstanding the terms of Section 5(a), the
Company shall not pay for the fees and disbursements of counsel
or other advisors retained by the Holders of Registrable
Securities in connection with the registration of the Registrable
Securities.
6. Indemnification and Contribution. (a) The Company
agrees to indemnify and hold harmless each Holder and each
person, if any, who controls such Holder within the meaning of
either Section 15 of the Securities Act or Section 20 of the
Exchange Act, or is under common control with, or is controlled
by, such Holder, including without limitation Jannock, and each
of their respective directors, officers, partners, agents and
employees from and against all losses, claims, damages and
liabilities (including, without limitation, any legal or other
expenses reasonably incurred by any Holder or any such
controlling or affiliated person, director, officer, partner,
agent or employee in connection with defending or investigating
any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) pursuant to
which Registrable Securities were registered under the Securities
Act, or caused by any omission or alleged omission to state
therein a material fact necessary to make the statements therein
not misleading, or caused by any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus
(as amended or supplemented if the Company shall have furnished
<PAGE>
any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact necessary to
make the statements therein in light of the circumstances under
which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such
untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Holder furnished
to the Company in writing by such Holder expressly for use in any
such Registration Statement or Prospectus.
(b) In addition to the indemnification provided in
Section 6(a) hereof, the Company agrees to indemnify and hold
harmless the Purchaser and Jannock from and against Indemnifiable
Tax Liabilities. For purposes of this Agreement, the term
"Indemnifiable Tax Liabilities" means all liabilities for taxes
(including interest and penalties thereon, and any reasonable
legal and other fees and expenses incurred in investigating or
defending any claim therefor) assessed against the Purchaser
solely to the extent that said liabilities in such amount would
not have been incurred if the Purchase Price (as defined in the
Purchase Agreement) paid to the Purchaser pursuant to Section 4.1
of the Purchase Agreement had been paid in cash on the Closing
Date in the amount of Cdn. $29,000,000, as adjusted in accordance
with Section 4.3 thereof. Each of the Purchaser and Jannock
hereby represents to the Company that, to its knowledge after due
inquiry and consultation with its professional advisors, there is
no reasonable basis to believe that there exist any facts that
would be reasonably likely to give rise to or result in a final
assessment against the Purchaser for taxes in respect of which
the Purchaser would be entitled to make a claim for
indemnification pursuant to this paragraph (b). Each of the
Purchaser and Jannock acknowledges that the Company would not
have agreed to provide the indemnification set forth in this
paragraph (b) except (i) in reliance on the information set forth
in the tax returns of the Purchaser that have been provided to
the Company and (ii) for the represention made by the Purchaser
and Jannock in the immediately preceding sentence.
(c) Each Holder agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its
officers and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Holder, but only
with reference to information relating to such Holder furnished
to the Company in writing by such Holder expressly for use in any
Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto).
(d) In case any proceeding (including any governmental
investigation or other claim or assessment) shall be instituted
or made involving any person in respect of which indemnity may be
<PAGE>
sought pursuant to either paragraph (a), (b) or (c) above, such
person (the "indemnified party") shall promptly notify the person
against which such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request of
the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the reasonable fees
and disbursements of such counsel relating to such proceeding.
In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall
have mutually agreed in writing to the retention of such counsel
or (ii) the indemnifying party fails promptly to assume the
defense of such proceeding or fails to employ counsel reasonably
satisfactory to such indemnified party or parties or (iii) the
named parties to any such proceeding (including any impleaded
parties) include both such indemnified party or parties and the
indemnifying parties or an affiliate of the indemnifying parties
or such indemnified parties, and there may be one or more
defenses available to such indemnified party or parties that are
different from or additional to those available to the
indemnifying parties, in which case, if such indemnified party or
parties notifies the indemnifying parties in writing that it
elects to employ separate counsel of its choice at the expense of
the indemnifying parties, the indemnifying parties shall not have
the right to assume the defense thereof and such counsel shall be
at the expense of the indemnifying parties, it being understood,
however, that unless there exists a conflict among indemnified
parties, the indemnifying parties shall not, in connection with
any one such proceeding or separate but substantially similar or
related proceedings in the same jurisdiction, arising out of the
same general allegations or circumstances, be liable for the fees
and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for such
indemnified party or parties. The indemnifying party shall not
be liable for any settlement of any proceeding effected without
its written consent but, if settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party
agrees to indemnify the indemnified party from and against any
loss or liability by reason of such settlement or judgment. No
indemnifying party shall, without the prior written consent of
the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party
is a party, and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all
liability on claims that are the subject matter of such
proceeding.
(e) To the extent the indemnification provided for in
<PAGE>
paragraph (a) or (c) of this Section 6 is unavailable to an
indemnified party or insufficient in respect of any losses,
claims, damages or liabilities, then each indemnifying party
under such paragraph, in lieu of indemnifying such indemnified
party thereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate
to reflect the relative benefits received by, in the case of a
claim under paragraph (a) of this Section 6, the Company on the
one hand and the Holders on the other hand and, in the case of a
claim under paragraph (c) of this Section 6, by the Company on
the one hand and each Holder who may be an indemnifying party on
the other hand from the offering of such Registrable Securities
or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault, in the case of a claim
under paragraph (a) of this Section 6, of the Company on the one
hand and the Holders on the other hand and, in the case of a
claim under paragraph (c) of this Section 6, by the Company on
the one hand and each Holder who may be an indemnifying party on
the other hand in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The
relative fault of the Company on the one hand and the Holders on
the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact relates to information supplied by the Company or
by the Holders and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such
statement or omission.
(f) The Company and each Holder agrees that it would
not be just or equitable if contribution pursuant to this
Section 6 were determined by pro rata allocation or by any other
method of allocation that does not take account of the equitable
considerations referred to in paragraph (e) above. The amount
paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in
paragraph (e) above shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses
reasonably incurred (and not otherwise reimbursed) by such
indemnified party in connection with investigating or defending
any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 6 are not exclusive and
shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(g) At the request of the Broker, the Company shall
<PAGE>
enter into indemnification arrangements customarily requested by
the Broker.
7. Miscellaneous.
(a) No Inconsistent Agreements. The Company has not
entered into nor will the Company on or after the date of this
Agreement enter into any agreement which is inconsistent with the
rights granted to the Holders of Registrable Securities in this
Agreement or otherwise conflicts with the provisions hereof. The
rights granted to the Holders hereunder do not in any way
conflict with and are not inconsistent with the rights granted to
the holders of the Company's other issued and outstanding
securities, if any, under any such agreements.
(b) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given unless the
Company has obtained the written consent of Holders of at least a
Majority of the outstanding Registrable Securities affected by
such amendment, modification, supplement, waiver or consent;
provided, however, a waiver or consent to departure from the
provisions hereof that relates exclusively to the rights of
Holders of Registrable Securities whose securities are being sold
pursuant to a registration statement and that does not directly
or indirectly affect the rights of other Holders of Registrable
Securities may be given by the Holders of a majority of the
Registrable Securities proposed to be sold.
(c) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by
hand delivery, registered first-class mail, telecopier, or any
courier guaranteeing overnight delivery (i) if to a Holder, at
the most current address given by such Holder to the Company by
means of a notice (with copies) given in accordance with the
provisions of this Section 7(c), which address initially is with
respect to the Purchaser, the address set forth in the Purchase
Agreement; and (ii) if to the Company, at the Company's address
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to
have been duly given: at the time delivered by hand, if
personally delivered, five Business Days after being deposited in
the mail, postage prepaid, if mailed; when receipt is
acknowledged, if telecopied; and on the next Business Day, if
timely delivered to an air courier guaranteeing overnight
delivery.
(d) Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors,
assigns and transferees of each of the parties, including,
<PAGE>
without limitation and without the need for an express
assignment, any subsequent Holder; provided, however, that
nothing herein shall be deemed to permit any assignment, transfer
or other disposition of Registrable Securities in violation of
the terms of the Purchase Agreement or this Agreement. If any
transferee of any Holder shall acquire Registrable Securities, in
any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms
of this Agreement, and by taking and holding such Registrable
Securities such person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and
provisions of this Agreement and such person shall be entitled to
receive the benefits hereof.
(e) Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute
one and the same agreement.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise
affect the meaning hereof.
(g) Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Ohio, without regard to principles of conflicts of laws.
(h) Severability. In the event that any one or more
of the provisions contained herein, or the application thereof in
any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in
every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby.
* * *
<PAGE>
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
OWENS CORNING
By:______________________________
Name
Title
JANNOCK LIMITED
By:______________________________
Name
Title
CELFORT CONSTRUCTION MATERIALS INC.
By:______________________________
Name
Title
EXHIBIT 5
CHRISTIAN L. CAMPBELL,
SENIOR VICE PRESIDENT,
GENERAL COUNSEL & SECRETARY
Owens Corning
Owens Corning World Headquarters
Toledo, OH 43659
Re: Registration Statement on Form S-3
Dear Sirs:
I am Senior Vice President, General Counsel and Secretary of Owens
Corning (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 472,250 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 an
indirect, wholly owned subsidiary of the Company of substantially all
of the assets of the extruded polystyrene insulation products business
of Celfort Construction Materials, Inc., a Canada corporation,
pursuant to an Asset Purchase Agreement dated as of August 30, 1996,
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, or other members of the Company's Law Department or 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.
Based upon the foregoing, I am of the opinion that the Covered Shares
are legally 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 Illinois 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,
Date: December 6, 1996 By /s/Christian L. Campbell
Christian L. Campbell
Exhibit 23(a)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to
the incorporation by reference in this Registration
Statement of our report dated January 20, 1996, included in
Owens Corning's Form 10-K for the year ended December 31,
1995, and to all references to our Firm included in this
Registration Statement.
ARTHUR ANDERSEN LLP
Toledo, Ohio
December 6, 1996
