-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Fb+YhTXqS1SKbnccXR87fe3yme3YgnLht1feOQHy+OmNWdEC1WiAem5bDFKpntOh TUgUBu9frykPwu7CqFvHVw== 0000075234-96-000032.txt : 19961210 0000075234-96-000032.hdr.sgml : 19961210 ACCESSION NUMBER: 0000075234-96-000032 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19961209 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: OWENS CORNING CENTRAL INDEX KEY: 0000075234 STANDARD INDUSTRIAL CLASSIFICATION: ABRASIVE ASBESTOS & MISC NONMETALLIC MINERAL PRODUCTS [3290] IRS NUMBER: 344323452 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-15063 FILM NUMBER: 96677892 BUSINESS ADDRESS: STREET 1: OWENS CORNING WORLD HEADQUARTERS STREET 2: ONE OWENS CORNING PARKWAY CITY: TOLEDO STATE: OH ZIP: 43659 BUSINESS PHONE: 4192488000 MAIL ADDRESS: STREET 1: OWENS CORNING WORLD HEADQUARTERS STREET 2: ONE OWENS CORNING PARKWAY CITY: TOLEDO STATE: OH ZIP: 43659 FORMER COMPANY: FORMER CONFORMED NAME: OWENS CORNING FIBERGLAS CORP DATE OF NAME CHANGE: 19920703 S-3/A 1 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 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. 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). 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. 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
_________________ (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 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. 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
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 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. 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
_________________ (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 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." 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)
_________________ (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 (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 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 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 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 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 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 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 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 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: 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
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 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 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 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 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 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 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 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 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 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 (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 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: 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 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
EX-4 2 27191.4 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. 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. "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 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 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 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; (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, 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 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 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 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 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 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, 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. * * * 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 EX-5 3 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 EX-23 4 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 -----END PRIVACY-ENHANCED MESSAGE-----