Contingent Liabilities

3 Months Ended

Aug. 31, 2011

Contingent Liabilities

Contingent Liabilities

NOTE D – Contingent Liabilities

We were involved in a dispute with a former customer, the BernzOmatic business ("Bernz") of Irwin Industrial Tool Company, a subsidiary of Newell Rubbermaid, Inc. The dispute related primarily to our early termination of a three-year supply contract (the "Contract") on March 1, 2007 as a result of certain actions taken by Bernz that we believed breached the Contract, and the resulting price increases charged to Bernz during 2007 and 2008 after such early termination.

On July 1, 2011, we acquired Bernz for cash consideration of approximately $41,000,000. In connection with this transaction, both parties agreed to settle this dispute for $10,000,000, which was funded at closing. Reserves previously recognized in connection with this matter totaled $14,402,000. Refer to "NOTE M – Acquisitions" for additional information regarding our acquisition of Bernz.

We are defendants in certain other legal actions. In the opinion of management, the outcome of these actions, which is not clearly determinable at the present time, would not significantly affect our consolidated financial position or future results of operations. We believe that environmental issues will not have a material effect on our capital expenditures, consolidated financial position or future results of operations.